Document:

<PAGE>

                                                                    Exhibit 10.2

                                                                  Execution Copy

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

                                  $385,000,000

                                   THREE-YEAR
           COMPETITIVE ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT

                                   dated as of

                                  July 22, 2002

                                      among

                                  SUNOCO, INC.

                            The Lenders Party Hereto,

                              JPMORGAN CHASE BANK,
                            as Administrative Agent,

                         BANC OF AMERICA SECURITIES LLC
                              as Syndication Agent,

                                      and

                              BANK OF NOVA SCOTIA,

                                      and

                       THE BANK OF TOKYO-MITSUBISHI, LTD.

                           as Co-Documentation Agents

                          ___________________________

                          J.P. MORGAN SECURITIES INC.

                                       and

                         BANC OF AMERICA SECURITIES LLC
           as Joint Advisors, Co-Lead Arrangers and Joint Bookrunners

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

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                       Page
<S>                                                                                    <C>
                                    ARTICLE I

                                   Definitions

SECTION 1.01.     Defined Terms .....................................................     1
SECTION 1.02.     Classification of Loans and Borrowings ............................    12
SECTION 1.03.     Terms Generally ...................................................    13
SECTION 1.04.     Accounting Terms; GAAP ............................................    13

                                    ARTICLE II

                                    The Credits

SECTION 2.01.     Commitments .......................................................    13
SECTION 2.02.     Loans and Borrowings ..............................................    13
SECTION 2.03.     Requests for Revolving Borrowings .................................    14
SECTION 2.04.     Competitive Bid Procedure .........................................    14
SECTION 2.05.     Letters of Credit .................................................    16
SECTION 2.06.     Funding of Borrowings .............................................    19
SECTION 2.07.     Interest Elections ................................................    20
SECTION 2.08.     Termination of Commitments; Reductions and Increases of
                  Commitments .......................................................    21
SECTION 2.09.     Repayment of Loans; Evidence of Debt ..............................    22
SECTION 2.10.     Prepayment of Loans ...............................................    23
SECTION 2.11.     Fees ..............................................................    23
SECTION 2.12.     Interest ..........................................................    24
SECTION 2.13.     Alternate Rate of Interest ........................................    25
SECTION 2.14.     Increased Costs ...................................................    25
SECTION 2.15.     Break Funding Payments ............................................    26
SECTION 2.16.     Taxes .............................................................    27
SECTION 2.17.     Payments Generally; Pro Rata Treatment; Sharing of Set-offs .......    28
SECTION 2.18.     Mitigation Obligations; Replacement of Lenders ....................    29
</TABLE>

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                                                                               2

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                                   ARTICLE III

                         Representations and Warranties

SECTION 3.01.     Organization; Powers ....................................   30
SECTION 3.02.     Authorization; Enforceability ...........................   30
SECTION 3.03.     Governmental Approvals; No Conflicts ....................   30
SECTION 3.04.     Financial Condition; No Material Adverse Change .........   30
SECTION 3.05.     Properties ..............................................   31
SECTION 3.06.     Litigation and Environmental Matters ....................   31
SECTION 3.07.     Compliance with Laws and Agreements .....................   31
SECTION 3.08.     Investment and Holding Company Status ...................   31
SECTION 3.09.     Taxes ...................................................   31
SECTION 3.10.     ERISA ...................................................   32
SECTION 3.11.     Disclosure ..............................................   32

                                       ARTICLE IV

                                       Conditions

SECTION 4.01.     Effective Date ..........................................   32
SECTION 4.02.     Each Credit Event .......................................   33

                                        ARTICLE V

                                  Affirmative Covenants

SECTION 5.01.     Financial Statements; Ratings Change
                  and Other Information ...................................   34
SECTION 5.02.     Notices of Material Events ..............................   35
SECTION 5.03.     Existence; Conduct of Business ..........................   35
SECTION 5.04.     Payment of Obligations ..................................   35
SECTION 5.05.     Maintenance of Properties; Insurance ....................   35
SECTION 5.06.     Books and Records; Inspection Rights ....................   35
SECTION 5.07.     Compliance with Laws ....................................   36
SECTION 5.08.     Use of Proceeds and Letters of Credit ...................   36
</TABLE>

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                                                                               3

<TABLE>
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                                   ARTICLE VI

                               Negative Covenants

SECTION 6.01.       Indebtedness and Preferred Stock of Subsidiaries .........  36
SECTION 6.02.       Liens ....................................................  37
SECTION 6.03.       Sale and Leaseback Transactions ..........................  38
SECTION 6.04.       Fundamental Changes ......................................  38
SECTION 6.05.       Restrictive Agreements ...................................  38
SECTION 6.06.       Consolidated Tangible Net Worth ..........................  38
SECTION 6.07.       Leverage Ratio ...........................................  38

                                   ARTICLE VII

                    Events of Default ........................................  39

                                  ARTICLE VIII

                    The Administrative Agent .................................  41

                                   ARTICLE IX

                                  Miscellaneous

SECTION 9.01.       Notices ..................................................  42
SECTION 9.02.       Waivers; Amendments ......................................  43
SECTION 9.03.       Expenses; Indemnity; Damage Waiver                          44
SECTION 9.04.       Successors and Assigns ...................................  45
SECTION 9.05.       Survival .................................................  48
SECTION 9.06.       Counterparts; Integration; Effectiveness .................  48
SECTION 9.07.       Severability .............................................  48
SECTION 9.08.       Right of Setoff ..........................................  48
SECTION 9.09.       Governing Law; Jurisdiction; Consent
                    to Service of Process ....................................  49
SECTION 9.10.       WAIVER OF JURY TRIAL .....................................  49
SECTION 9.11.       Headings .................................................  49
SECTION 9.12.       Confidentiality ..........................................  50
SECTION 9.13.       Interest Rate Limitation .................................  50
</TABLE>

SCHEDULES:

Schedule 2.01 -- Commitments
Schedule 6.01 -- Existing Indebtedness
Schedule 6.02 -- Existing Liens

EXHIBITS:

Exhibit A -- Form of Assignment and Assumption
Exhibit B -- Form of Opinion of Borrower's Counsel

<PAGE>

                         THREE-YEAR COMPETITIVE ADVANCE AND REVOLVING CREDIT
                    FACILITY AGREEMENT dated as of July 22, 2002, among SUNOCO,
                    INC.; the LENDERS party hereto; JPMORGAN CHASE BANK, as
                    Administrative Agent; BANC OF AMERICA SECURITIES LLC, as
                    Syndication Agent; and BANK OF NOVA SCOTIA and THE BANK OF
                    TOKYO-MITSUBISHI, LTD., as Co-Documentation Agents.

          The Borrower (such term and each other capitalized term used and not
otherwise defined herein having the meaning assigned to it in Article I) has
requested the Lenders to extend credit to enable it to borrow on a revolving
credit basis on and after the date hereof and at any time and from time to time
prior to the Maturity Date a principal amount not in excess of $400,000,000 at
any time outstanding. The Borrower has also requested the Lenders to establish
procedures pursuant to which the Borrower may invite the Lenders to bid on an
uncommitted basis on short-term borrowings by the Borrower maturing on or prior
to the Maturity Date. The Borrower has further requested the Issuing Bank to
issue Letters of Credit in an aggregate face amount at any time outstanding not
in excess of $200,000,000 to support payment obligations of the Borrower and the
Subsidiaries. The proceeds of borrowings hereunder are to be used for general
corporate purposes, including the financing of working capital requirements and
the payment of maturing commercial paper, and the Letters of Credit are to be
used for general corporate purposes, including replacement of outstanding
letters of credit.

          The Lenders are willing to extend such credit to the Borrower on the
terms and subject to the conditions herein set forth.

          Accordingly, the parties hereto agree as follows:

                                    ARTICLE I

                                   Definitions

          SECTION 1.01. Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:

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

          "Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/100 of 1%) equal to (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate.

          "Adjusted Net Income" means, for any fiscal quarter, 25% of the amount
by which (a) Consolidated Net Income for the period of four fiscal quarters
ended at the end of such quarter exceeds (b) amounts expended by the Borrower
during such period of four fiscal quarters to repurchase shares of the
Borrower's capital stock.

          "Administrative Agent" means JPMorgan Chase Bank, in its capacity as
administrative agent for the Lenders hereunder.

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

<PAGE>

                                                                               2

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

          "Agents" means the Administrative Agent, the Syndication Agent and the
Co-Documentation Agents.

          "Agreement" means this Three-Year Competitive Advance and Revolving
Credit Facility Agreement as the same may hereafter be modified, supplemented or
amended from time to time.

          "Alternate Base Rate" means, for any day, a rate per annum equal to
the higher of (a) the Prime Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus 1\2 of 1%. Any change in the Alternate
Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate
shall be effective from and including the effective date of such change in the
Prime Rate or the Federal Funds Effective Rate, respectively.

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

          "Applicable Rate" means, for any day, (a) with respect to any
Eurodollar Revolving Loan, or with respect to the facility fees payable
hereunder, the applicable rate per annum set forth below under the caption
"Eurodollar Spread" or "Facility Fee Rate", as the case may be, based upon the
ratings by Moody's and S&P, respectively, applicable on such date to the Index
Debt, and (b) with respect to any ABR Revolving Loan, the applicable rate per
annum set forth below under the caption "Eurodollar Spread" minus 1.00% per
annum (but in no event less than zero):

  ===========================================================================
                                               Eurodollar     Facility Fee
       Index Debt Ratings:                       Spread           Rate
  ---------------------------------------------------------------------------
          Category 1                              .475%           .150%
      BBB+/Baa1 or higher

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

          Category 2                              .575%           .175%
          BBB/Baa2

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

          Category 3                              .800%           .200%
          BBB-/Baa3

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

          Category 4                             1.075%           .300%
           BB+/Ba1

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

          Category 5                             1.225%           .400%
  lower than BB+/Ba1 or unrated

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

          For purposes of the foregoing, (i) if either Moody's or S&P shall not
have in effect a rating for the Index Debt (other than by reason of the
circumstances referred to in the last sentence of this definition), then such
rating agency shall be deemed to have established a rating in Category 5; (ii)
if the ratings established or deemed to have been established by Moody's and S&P
for the Index Debt shall fall within different Categories, the Applicable Rate
shall be based on the higher of the two ratings unless one of the two ratings is
two or more Categories lower than the other, in which case the Applicable Rate
shall be determined by reference to the Category one level above the Category
corresponding to the lower rating; and (iii) if the ratings

<PAGE>

                                                                               3

established or deemed to have been established by Moody's and S&P for the Index
Debt shall be changed (other than as a result of a change in the rating system
of Moody's or S&P), such change shall be effective as of the date on which it is
first announced by the applicable rating agency, irrespective of when notice of
such change shall have been furnished by the Borrower to the Agent and the
Lenders. Each change in the Applicable Rate shall apply during the period
commencing on the effective date of such change and ending on the date
immediately preceding the effective date of the next such change. If the rating
system of Moody's or S&P shall change, or if either such rating agency shall
cease to be in the business of rating corporate debt obligations, the Borrower
and the Lenders shall negotiate in good faith to amend this definition to
reflect such changed rating system or the unavailability of ratings from such
rating agency and, pending the effectiveness of any such amendment, the
Applicable Rate shall be determined by reference to the rating most recently in
effect prior to such change or cessation.

          "Approved Fund" has the meaning assigned to such term in Section 9.04.

          "Assignment and Assumption" means an assignment and assumption entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.04), and accepted by the Administrative Agent, in the form
of Exhibit A or any other form approved by the Administrative Agent.

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

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

          "Borrower" means Sunoco, Inc., a Pennsylvania corporation.

          "Borrowing" means (a) Revolving Loans of the same Type, made,
converted or continued on the same date and, in the case of Eurodollar Loans, as
to which a single Interest Period is in effect or (b) a Competitive Loan or
group of Competitive Loans of the same Type made on the same date and as to
which a single Interest Period is in effect

          "Borrowing Request" means a request by the Borrower for a Revolving
Borrowing in accordance with Section 2.03.

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

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

          "Change in Control" means (a) the acquisition of ownership, directly
or indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder), other than an employee benefit or stock
ownership plan of the Borrower, of Equity Interests representing more than 25%
of the aggregate ordinary voting power represented by the issued and outstanding
Equity Interests of the Borrower or (b) occupation of a majority of the seats
(other

<PAGE>

                                                                               4

than vacant seats) on the board of directors of the Borrower by Persons who were
neither (i) nominated by the board of directors of the Borrower nor (ii)
appointed by directors so nominated.

          "Change in Law" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender or the Issuing
Bank (or, for purposes of Section 2.14(b), by any lending office of such Lender
or by such Lender's or the Issuing Bank's holding company, if any) with any
request, guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.

          "Class", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans
or Competitive Loans.

          "CLO" has the meaning assigned to such term in Section 9.04.

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

          "Co-Documentation Agents" means Bank of Nova Scotia and The Bank of
Tokyo-Mitsubishi, Ltd. in their capacities as co-documentation agents hereunder.

          "Commitment" means, with respect to each Lender, the commitment of
such Lender to make Revolving Loans and to acquire participations in Letters of
Credit hereunder, expressed as an amount representing the maximum aggregate
permitted amount of such Lender's Revolving Credit Exposure hereunder, as such
commitment may be reduced or increased from time to time pursuant to Section
2.08 or pursuant to assignments by or to such Lender pursuant to Section 9.04.
The initial amount of each Lender's Commitment is set forth on Schedule 2.01, or
in the Assignment and Assumption pursuant to which such Lender shall have
assumed its Commitment, as applicable. The initial aggregate amount of the
Lenders' Commitments is $385,000,000.

          "Competitive Bid" means an offer by a Lender to make a Competitive
Loan in accordance with Section 2.04.

          "Competitive Bid Rate" means, with respect to any Competitive Bid, the
Margin or the Fixed Rate, as applicable, offered by the Lender making such
Competitive Bid.

          "Competitive Bid Request" means a request by the Borrower for
Competitive Bids in accordance with Section 2.04.

          "Competitive Loan" means a Loan made pursuant to Section 2.04.

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

          "Consolidated Capitalization" means the shareholders' equity of the
Borrower plus minority interests in Sunoco Logistics Partners L.P. plus
Consolidated Net Indebtedness, all determined on a consolidated basis in
accordance with GAAP.

          "Consolidated Net Income" means, for any period, the net income (or
net deficit) of the Borrower and the Subsidiaries for such period, determined on
a consolidated basis in accordance with GAAP.

<PAGE>

                                                                               5

          "Consolidated Net Indebtedness" means (a) all Indebtedness of the
Borrower and the Subsidiaries (other than Indebtedness under Swap Agreements),
minus (b) all cash and cash equivalents of the Borrower and the Subsidiaries,
all determined on a consolidated basis in accordance with GAAP.

          "Consolidated Net Tangible Assets" means, on any date, the aggregate
amount of assets (less applicable accumulated depreciation, depletion and
amortization and other reserves and other properly deductible items) of the
Borrower and the Subsidiaries, minus (a) all current liabilities of the Borrower
and its Subsidiaries (excluding current maturities of long-term debt) and (b)
all goodwill of the Borrower and the Subsidiaries, all determined on a
consolidated basis in accordance with GAAP.

          "Consolidated Revenue" means, for any period, the revenue of the
Borrower and the Subsidiaries for such period, determined on a consolidated
basis in accordance with GAAP.

          "Consolidated Tangible Net Worth" means, on any date, the excess of
(a) the aggregate amount of assets (less applicable accumulated depreciation,
depletion and amortization and other reserves and other properly deductible
items) of the Borrower and the Subsidiaries minus all goodwill of the Borrower
and the Subsidiaries over (b) the sum of (i) Consolidated Total Liabilities and
(ii) minority interests other than minority interest in Sunoco Logistics
Partners L.P., all determined on a consolidated basis in accordance with GAAP.

          "Consolidated Total Liabilities" means, on any date, the consolidated
total liabilities of the Borrower and the Subsidiaries as such amount would
appear on a consolidated balance sheet of the Borrower and the Subsidiaries
prepared as of such date in accordance with GAAP.

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

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

          "Effective Date" means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).

          "Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.

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

          "Equity Interests" means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person, and any
warrants, options or other rights entitling the holder thereof to purchase or
acquire any such equity interest.

<PAGE>

                                                                               6

               "ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.

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

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

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

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

               "Excluded Taxes" means, with respect to the Administrative Agent,
any Lender, the Issuing Bank or any other recipient of any payment to be made by
or on account of any obligation of the Borrower hereunder, (a) income or
franchise taxes imposed on (or measured by) its net income by the United States
of America or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which any such recipient is located, (c) in the
case of a Foreign Lender (other than an assignee pursuant to a request by the
Borrower under Section 2.18(b)), any withholding tax that is imposed by the
United States of America on amounts payable to such Foreign Lender at the time
such Foreign Lender becomes a party to this Agreement (or designates a new
lending office), except to the extent that such Foreign Lender (or its assignor,
if any) was entitled, at the time of designation of a new lending office (or
assignment), to receive additional amounts from the Borrower with respect to
such withholding tax pursuant to Section 2.16(a) and (d) in the case of any
Lender, any withholding tax that is imposed by the United States of America on
amounts payable to such Lender that are attributable to such Lender's failure to
comply with Section 2.16(e).

               "Existing Credit Agreement" means the Revolving Credit Agreement
dated as of October 3, 1995 among the Borrower, certain financial institutions
and Bankers Trust Company, as agent, as amended and in effect on the date
hereof.

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

<PAGE>

                                                                               7

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

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

               "Fixed Rate" means, with respect to any Competitive Loan (other
than a Eurodollar Competitive Loan), the fixed rate of interest per annum
specified by the Lender making such Competitive Loan in its related Competitive
Bid.

               "Fixed Rate Loan" means a Competitive Loan bearing interest at a
Fixed Rate.

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

               "GAAP" means generally accepted accounting principles in the
United States of America.

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

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

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

               "Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) the
principal amounts (as defined in the definition of "Swap" herein) of the
obligations of such Person under Swap Agreements, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase

<PAGE>

                                                                               8

price of property or services, (f) all Indebtedness of others secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the Indebtedness secured thereby has been assumed, (g)
all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease
Obligations of such Person, (i) all Securitization Transactions of such Person,
(j) all obligations of such Person in respect of the mandatory redemption of
preferred stock or other preferred equity interests and (k) all obligations,
contingent or otherwise, of such Person as an account party in respect of
letters of credit, letters of guaranty and banker's acceptances; provided,
however, that Indebtedness of any Person shall not include (i) trade payables,
(ii) any obligations of such Person incurred in connection with letters of
credit, letters of guaranty or similar instruments obtained or created in the
ordinary course of business to support obligations of such Person that do not
constitute Indebtedness or (iii) endorsements of checks, bills of exchange and
other instruments for deposit or collection in the ordinary course of business.

               "Indemnified Taxes" means Taxes other than Excluded Taxes and
Other Taxes.

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

               "Information Memorandum" means the Confidential Information
Memorandum dated June, 2002 relating to the Borrower and the Transactions.

               "Interest Election Request" means a request by the Borrower to
convert or continue a Revolving Borrowing in accordance with Section 2.07.

               "Interest Payment Date" means (a) with respect to any ABR Loan,
the last day of each March, June, September and December, (b) with respect to
any Eurodollar Loan, the last day of the Interest Period applicable to the
Borrowing of which such Loan is a part and, in the case of a Eurodollar
Borrowing with an Interest Period of more than three months' duration, each day
prior to the last day of such Interest Period that occurs at intervals of three
months' duration after the first day of such Interest Period and (c) with
respect to any Fixed Rate Loan, the last day of the Interest Period applicable
to the Borrowing of which such Loan is a part and, in the case of a Fixed Rate
Borrowing with an Interest Period of more than 90 days' duration (unless
otherwise specified in the applicable Competitive Bid Request), each day prior
to the last day of such Interest Period that occurs at intervals of 90 days'
duration after the first day of such Interest Period, and any other dates that
are specified in the applicable Competitive Bid Request as Interest Payment
Dates with respect to such Borrowing.

               "Interest Period" means (a) with respect to any Eurodollar
Borrowing, the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months thereafter, as the Borrower may elect and (b) with respect to any
Fixed Rate Borrowing, the period (which shall not be less than 7 days or more
than 360 days) commencing on the date of such Borrowing and ending on the date
specified in the applicable Competitive Bid Request; provided, that (i) if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless, in the case
of a Eurodollar Borrowing only, such next succeeding Business Day would fall in
the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day and (ii) any Interest Period pertaining to a
Eurodollar Borrowing that commences on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period. For purposes hereof, the date
of a Borrowing initially shall be the date on which such Borrowing is made and,
in the case of a Revolving Borrowing, thereafter shall be the effective date of
the most recent conversion or continuation of such Borrowing.

<PAGE>

                                                                               9

               "Issuing Bank" means JPMorgan Chase Bank, in its capacity as the
issuer of Letters of Credit hereunder, and its successors in such capacity as
provided in Section 2.05(i). The Issuing Bank may, in its discretion, arrange
for one or more Letters of Credit to be issued by Affiliates of the Issuing
Bank, in which case the term "Issuing Bank" shall include any such Affiliate
with respect to Letters of Credit issued by such Affiliate.

               "LC Disbursement" means a payment made by the Issuing Bank
pursuant to a Letter of Credit.

               "LC Exposure" means, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (b) the
aggregate amount of all LC Disbursements that have not yet been reimbursed by or
on behalf of the Borrower at such time. The LC Exposure of any Lender at any
time shall be its Applicable Percentage of the total LC Exposure at such time.

               "Lenders" means (a) the Persons listed on Schedule 2.01, (b) any
Person that shall have become a party hereto pursuant to Section 2.08 and (c)
any other Person that shall have become a party hereto pursuant to an Assignment
and Assumption, other than any such Person that ceases to be a party hereto
pursuant to an Assignment and Assumption.

               "Letter of Credit" means any letter of credit issued pursuant to
this Agreement.

          "Leverage Ratio" means, on any date, the ratio of (a) Consolidated Net
Indebtedness as of such date to (b) Consolidated Capitalization as of such date.

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

               "Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset. For the purposes of this Agreement, the Borrower or any Subsidiary shall
be deemed to own subject to a Lien any asset which it has acquired or holds
subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement relating to such
asset.

               "Loans" means the loans made by the Lenders to the Borrower
pursuant to this Agreement.

               "Loan Documents" means this Agreement and any promissory note
issued hereunder.

               "Margin" means, with respect to any Competitive Loan bearing
interest at a rate based on the LIBO Rate, the marginal rate of interest, if
any, to be added to or subtracted from the LIBO Rate to determine the rate of
interest applicable to such Loan, as specified by the Lender making such Loan in
its related Competitive Bid.

<PAGE>

                                                                              10

          "Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations, prospects or condition, financial or otherwise, of
the Borrower and the Subsidiaries taken as a whole, (b) the ability of the
Borrower to perform any of its obligations under this Agreement or (c) the
legality, validity, binding effect or enforceability against the Borrower of
this Agreement.

          "Material Indebtedness" means Indebtedness (other than the Loans and
Letters of Credit), or obligations in respect of one or more Swap Agreements, of
any one or more of the Borrower and its Subsidiaries in an aggregate principal
amount exceeding $25,000,000. For purposes of determining Material Indebtedness,
the "principal amount" of the obligations of the Borrower or any Subsidiary in
respect of any Swap Agreement at any time shall be the maximum aggregate amount
(giving effect to any netting agreements) that the Borrower or such Subsidiary
would be required to pay if such Swap Agreement were terminated at such time.

          "Material Subsidiary" means, at any time, each Subsidiary other than
Subsidiaries that do not represent more than 1% for any such Subsidiary, or more
than 5% in the aggregate for all such Subsidiaries, of either (a) Consolidated
Net Tangible Assets or (b) Consolidated Revenue for the period of four fiscal
quarters most recently ended, and that do not own Equity Interests of any
Material Subsidiary.

          "Maturity Date" means July 22, 2005.

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

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

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

          "Participant" has the meaning set forth in Section 9.04.

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

          "Person" means an individual, a corporation, a partnership, a limited
liability company, a limited liability partnership, an association, a trust or
any other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.

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

          "Prime Rate" means the rate of interest per annum publicly announced
from time to time by JPMorgan Chase Bank as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.

          "Register" has the meaning set forth in Section 9.04.

<PAGE>

                                                                              11

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

          "Required Lenders" means, at any time, Lenders having Revolving Credit
Exposures and unused Commitments representing more than 50% of the sum of the
total Revolving Credit Exposures and unused Commitments at such time; provided
that, for purposes of declaring the Loans to be due and payable pursuant to
Article VII, and for all purposes after the Loans become due and payable
pursuant to Article VII and the Commitments expire or terminate, the outstanding
Competitive Loans of the Lenders shall be included in their respective Revolving
Credit Exposures in determining the Required Lenders.

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

          "Revolving Loan" means a Loan made pursuant to Section 2.03.

          "S&P" means Standard & Poor's.

          "Securitization Transaction" means any transfer by the Borrower or any
Subsidiary of accounts receivable or interests therein (a) to a trust,
partnership, corporation or other entity, which transfer is funded in whole or
in part, directly or indirectly, by the incurrence or issuance by the transferee
or any successor transferee of Indebtedness or securities that are to receive
payments from, or that represent interests in, the cash flow derived from such
accounts receivable or interests, or (b) directly to one or more investors or
other purchasers. The amount of any Securitization Transaction shall be deemed
at any time to be the aggregate principal or stated amount of the Indebtedness
or other securities referred to in the preceding sentence or, if there shall be
no such principal or stated amount, the uncollected amount of the accounts
receivable transferred pursuant to such Securitization Transaction net of any
such accounts receivable that have been written off as uncollectible.

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

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

          "Subsidiary" means any subsidiary of the Borrower.

<PAGE>

                                                                              12

          "Swap Agreement" means any agreement with respect to any swap,
forward, future or derivative transaction or option or similar agreement
involving, or settled by reference to, one or more rates, currencies or prices
of commodities, equity or debt instruments or securities, or economic, financial
or pricing indices or measures of economic, financial or pricing risk or value,
or any similar transaction or any combination of such transactions; provided
that no phantom stock or similar plan providing for payments only on account of
services provided by current or former directors, officers, employees or
consultants of the Borrower or the Subsidiaries shall be a Swap Agreement. The
"principal amount" of the obligations of the Borrower or any Subsidiary in
respect of any Swap Agreement at any time shall be the maximum aggregate amount
(giving effect to any netting agreements) that the Borrower or such Subsidiary
would be required to pay if such Swap Agreement were terminated at such time.

          "Syndication Agent" means Banc of America Securities LLC, in its
capacity as syndication agent hereunder.

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

          "364-Day Credit Agreement" means the 364-Day Competitive Advance and
Revolving Credit Facility Agreement dated as of July 22, 2002 among the
Borrower, certain financial institutions and JPMorgan Chase Bank, as
administrative agent, as such agreement may be amended and restated from time to
time.

          "Transactions" means the execution, delivery and performance by the
Borrower of this Agreement, the borrowing of Loans, the use of the proceeds
thereof and the issuance of Letters of Credit hereunder.

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

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

          SECTION 1.02. Classification of Loans and Borrowings. For purposes of
this Agreement, Loans may be classified and referred to by Class (e.g., a
"Revolving Loan") or by Type (e.g., a "Eurodollar Loan") or by Class and Type
(e.g., a "Eurodollar Revolving Loan"). Borrowings also may be classified and
referred to by Class (e.g., a "Revolving Borrowing") or by Type (e.g., a
"Eurodollar Borrowing") or by Class and Type (e.g., a "Eurodollar Revolving
Borrowing").

          SECTION 1.03. Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to

<PAGE>

                                                                              13

Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e)
the words "asset" and "property" shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights.

          SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.

                                   ARTICLE II

                                   The Credits

          SECTION 2.01. Commitments. Subject to the terms and conditions set
forth herein, each Lender agrees to make Revolving Loans to the Borrower from
time to time during the Availability Period in an aggregate principal amount
that will not result in (a) such Lender's Revolving Credit Exposure exceeding
such Lender's Commitment or (b) the sum of the total Revolving Credit Exposures
plus the aggregate principal amount of outstanding Competitive Loans exceeding
the total Commitments. Within the foregoing limits and subject to the terms and
conditions set forth herein, the Borrower may borrow, prepay and reborrow
Revolving Loans.

          SECTION 2.02. Loans and Borrowings. (a) Each Revolving Loan shall be
made as part of a Borrowing consisting of Revolving Loans made by the Lenders
ratably in accordance with their respective Commitments. Each Competitive Loan
shall be made in accordance with the procedures set forth in Section 2.04. The
failure of any Lender to make any Loan required to be made by it shall not
relieve any other Lender of its obligations hereunder; provided that the
Commitments and Competitive Bids of the Lenders are several and no Lender shall
be responsible for any other Lender's failure to make Loans as required.

          (b) Subject to Section 2.13, (i) each Revolving Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request
in accordance herewith, and (ii) each Competitive Borrowing shall be comprised
entirely of Eurodollar Loans or Fixed Rate Loans as the Borrower may request in
accordance herewith. Each Lender at its option may make any Eurodollar Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make such
Loan; provided that any exercise of such option shall not affect the obligation
of the Borrower to repay such Loan in accordance with the terms of this
Agreement.

          (c) At the commencement of each Interest Period for any Eurodollar
Revolving Borrowing, such Borrowing shall be in an aggregate amount that is an
integral multiple of $1,000,000 and not less than $10,000,000. At the time that
each ABR Revolving Borrowing is made, such Borrowing shall be in an aggregate
amount that is an integral multiple of $1,000,000 and not less than $10,000,000;
provided that an ABR Revolving Borrowing may be in an aggregate amount that is
equal to the entire unused balance of the total Commitments or that is required
to finance the reimbursement of an LC Disbursement as contemplated by Section
2.05(e). Each Competitive Borrowing shall be in an aggregate amount that is an
integral multiple of $1,000,000 and not less than $25,000,000. Borrowings of
more than one Type and Class may

<PAGE>

                                                                              14

be outstanding at the same time; provided that there shall not at any time be
more than a total of 10 Eurodollar Revolving Borrowings outstanding.

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

          SECTION 2.03. Requests for Revolving Borrowings. To request a
Revolving Borrowing, the Borrower shall notify the Administrative Agent of such
request by telephone (a) in the case of a Eurodollar Borrowing, not later than
11:00 a.m., New York City time, three Business Days before the date of the
proposed Borrowing or (b) in the case of an ABR Borrowing, not later than 12:00
noon, New York City time, on the Business Day of the proposed Borrowing. Each
such telephonic Borrowing Request shall be irrevocable and shall be confirmed
promptly by hand delivery or telecopy to the Administrative Agent of a written
Borrowing Request in a form approved by the Administrative Agent and signed by
the Borrower. Each such telephonic and written Borrowing Request shall specify
the following information in compliance with Section 2.02:

          (i) the aggregate amount of the requested Borrowing;

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

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

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

          (v) the location and number of the Borrower's account to which funds
     are to be disbursed, which shall comply with the requirements of Section
     2.06.

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

          SECTION 2.04. Competitive Bid Procedure. (a) Subject to the terms and
conditions set forth herein, from time to time during the Availability Period
the Borrower may request Competitive Bids and may (but shall not have any
obligation to) accept Competitive Bids and borrow Competitive Loans; provided
that the sum of the total Revolving Credit Exposures plus the aggregate
principal amount of outstanding Competitive Loans at any time shall not exceed
the total Commitments. To request Competitive Bids, the Borrower shall notify
the Administrative Agent of such request by telephone, in the case of a
Eurodollar Borrowing, not later than 11:00 a.m., New York City time, four
Business Days before the date of the proposed Borrowing and, in the case of a
Fixed Rate Borrowing, not later than 10:00 a.m., New York City time, one
Business Day before the date of the proposed Borrowing; provided that the
Borrower may submit up to (but not more than) three Competitive Bid Requests on
the same day, but a Competitive Bid Request shall not be made within five
Business Days after the date of any previous Competitive Bid Request, unless any
and all such previous Competitive Bid Requests shall have been withdrawn or all
Competitive Bids received in response thereto rejected. Each such telephonic
Competitive Bid Request shall be confirmed promptly by hand delivery or telecopy
to the Administrative Agent of a written Competitive Bid Request in a form
approved by the Administrative Agent and signed by the Borrower. Each such
telephonic and written

<PAGE>

                                                                              15

Competitive Bid Request shall specify the following information in compliance
with Section 2.02:

          (i) the aggregate amount of the requested Borrowing;

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

          (iii) whether such Borrowing is to be a Eurodollar Borrowing or a
     Fixed Rate Borrowing;

          (iv) the Interest Period to be applicable to such Borrowing, which
     shall be a period contemplated by the definition of the term "Interest
     Period"; and

          (v) the location and number of the Borrower's account to which funds
     are to be disbursed, which shall comply with the requirements of Section
     2.06.

Promptly following receipt of a Competitive Bid Request in accordance with this
Section, the Administrative Agent shall notify the Lenders of the details
thereof by telecopy, inviting the Lenders to submit Competitive Bids.

          (b) Each Lender may (but shall not have any obligation to) make one or
more Competitive Bids to the Borrower in response to a Competitive Bid Request.
Each Competitive Bid by a Lender must be in a form approved by the
Administrative Agent and must be received by the Administrative Agent by
telecopy, in the case of a Eurodollar Competitive Borrowing, not later than 9:30
a.m., New York City time, three Business Days before the proposed date of such
Competitive Borrowing, and in the case of a Fixed Rate Borrowing, not later than
9:30 a.m., New York City time, on the proposed date of such Competitive
Borrowing. Competitive Bids that do not conform substantially to the form
approved by the Administrative Agent may be rejected by the Administrative
Agent, and the Administrative Agent shall notify the applicable Lender as
promptly as practicable. Each Competitive Bid shall specify (i) the principal
amount (which shall be a minimum of $5,000,000 and an integral multiple of
$1,000,000 and which may equal the entire principal amount of the Competitive
Borrowing requested by the Borrower) of the Competitive Loan or Loans that the
Lender is willing to make, (ii) the Competitive Bid Rate or Rates at which the
Lender is prepared to make such Loan or Loans (expressed as a percentage rate
per annum in the form of a decimal to no more than four decimal places) and
(iii) the Interest Period applicable to each such Loan and the last day thereof.

          (c) The Administrative Agent shall promptly notify the Borrower by
telecopy of the Competitive Bid Rate and the principal amount specified in each
Competitive Bid and the identity of the Lender that shall have made such
Competitive Bid.

          (d) Subject only to the provisions of this paragraph, the Borrower may
accept or reject any Competitive Bid. The Borrower shall notify the
Administrative Agent by telephone, confirmed by telecopy in a form approved by
the Administrative Agent, whether and to what extent it has decided to accept or
reject each Competitive Bid, in the case of a Eurodollar Competitive Borrowing,
not later than 10:30 a.m., New York City time, three Business Days before the
date of the proposed Competitive Borrowing, and in the case of a Fixed Rate
Borrowing, not later than 10:30 a.m., New York City time, on the proposed date
of the Competitive Borrowing; provided that (i) the failure of the Borrower to
give such notice shall be deemed to be a rejection of each Competitive Bid, (ii)
the Borrower shall not accept a Competitive Bid made at a particular Competitive
Bid Rate if the Borrower rejects a Competitive Bid made at a lower Competitive
Bid Rate, (iii) the aggregate amount of the Competitive Bids accepted by the
Borrower shall not exceed the aggregate amount of the requested Competitive
Borrowing specified in the related Competitive Bid Request, (iv) to the extent
necessary to comply with clause (iii) above, the Borrower may accept Competitive
Bids at the same Competitive Bid Rate in part, which acceptance, in the case of
multiple Competitive Bids at such Competitive Bid Rate, shall

<PAGE>

                                                                              16

be made pro rata in accordance with the amount of each such Competitive Bid, and
(v) except pursuant to clause (iv) above, no Competitive Bid shall be accepted
for a Competitive Loan unless such Competitive Loan is in a minimum principal
amount of $5,000,000 and an integral multiple of $1,000,000; provided further
that if a Competitive Loan must be in an amount less than $5,000,000 because of
the provisions of clause (iv) above, such Competitive Loan may be for a minimum
of $1,000,000 or any integral multiple thereof, and in calculating the pro rata
allocation of acceptances of portions of multiple Competitive Bids at a
particular Competitive Bid Rate pursuant to clause (iv) the amounts shall be
rounded to integral multiples of $1,000,000 in a manner determined by the
Borrower. A notice given by the Borrower pursuant to this paragraph shall be
irrevocable.

          (e) The Administrative Agent shall promptly notify each bidding Lender
by telecopy whether or not its Competitive Bid has been accepted (and, if so,
the amount and Competitive Bid Rate so accepted), and each successful bidder
will thereupon become bound, subject to the terms and conditions hereof, to make
the Competitive Loan in respect of which its Competitive Bid has been accepted.

          (f) If the Administrative Agent shall elect to submit a Competitive
Bid in its capacity as a Lender, it shall submit such Competitive Bid directly
to the Borrower at least one quarter of an hour earlier than the time by which
the other Lenders are required to submit their Competitive Bids to the
Administrative Agent pursuant to paragraph (b) of this Section.

          SECTION 2.05. Letters of Credit. (a) General. Subject to the terms and
conditions set forth herein, the Borrower may request the issuance of Letters of
Credit for its own account, in a form reasonably acceptable to the
Administrative Agent and the Issuing Bank, at any time and from time to time
during the Availability Period. In the event of any inconsistency (including any
additional terms requiring the posting of collateral) between the terms and
conditions of this Agreement and the terms and conditions of any form of letter
of credit application or other agreement submitted by the Borrower to, or
entered into by the Borrower with, the Issuing Bank relating to any Letter of
Credit, the terms and conditions of this Agreement shall control.

          (b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower shall
hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the Issuing Bank) to the Issuing
Bank and the Administrative Agent (reasonably in advance of the requested date
of issuance, amendment, renewal or extension) a notice requesting the issuance
of a Letter of Credit, or identifying the Letter of Credit to be amended,
renewed or extended, and specifying the date of issuance, amendment, renewal or
extension (which shall be a Business Day), the date on which such Letter of
Credit is to expire (which shall comply with paragraph (c) of this Section), the
amount of such Letter of Credit, the name and address of the beneficiary thereof
and such other information as shall be necessary to prepare, amend, renew or
extend such Letter of Credit. If requested by the Issuing Bank, the Borrower
also shall submit a letter of credit application on the Issuing Bank's standard
form in connection with any request for a Letter of Credit. A Letter of Credit
shall be issued, amended, renewed or extended only if (and upon issuance,
amendment, renewal or extension of each Letter of Credit the Borrower shall be
deemed to represent and warrant that), after giving effect to such issuance,
amendment, renewal or extension (i) the LC Exposure shall not exceed
$200,000,000 and (ii) the sum of the total Revolving Credit Exposures plus the
aggregate principal amount of outstanding Competitive Loans shall not exceed the
total Commitments.

          (c) Expiration Date. Each Letter of Credit shall expire at or prior to
the close of business on the earlier of (i) the date one year after the date of
the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension) and (ii) the date
that is five Business Days prior to the Maturity Date.

<PAGE>

                                                                              17

          (d) Participations. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the Issuing Bank or the Lenders, the Issuing Bank
hereby grants to each Lender, and each Lender hereby acquires from the Issuing
Bank, a participation in such Letter of Credit equal to such Lender's Applicable
Percentage of the aggregate amount available to be drawn under such Letter of
Credit. In consideration and in furtherance of the foregoing, each Lender hereby
absolutely and unconditionally agrees to pay to the Administrative Agent, for
the account of the Issuing Bank, such Lender's Applicable Percentage of each LC
Disbursement made by the Issuing Bank and not reimbursed by the Borrower on the
date due as provided in paragraph (e) of this Section, or of any reimbursement
payment required to be refunded to the Borrower for any reason. Each Lender
acknowledges and agrees that its obligation to acquire participations pursuant
to this paragraph in respect of Letters of Credit is absolute and unconditional
and shall not be affected by any circumstance whatsoever, including any
amendment, renewal or extension of any Letter of Credit or the occurrence and
continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever.

          (e) Reimbursement. If the Issuing Bank shall make any LC Disbursement
in respect of a Letter of Credit, the Borrower shall reimburse such LC
Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 12:00 noon, New York City time, on the date that
such LC Disbursement is made, if the Borrower shall have received notice of such
LC Disbursement prior to 10:00 a.m., New York City time, on such date, or, if
such notice has not been received by the Borrower prior to such time on such
date, then not later than 12:00 noon, New York City time, on (i) the Business
Day that the Borrower receives such notice, if such notice is received prior to
10:00 a.m., New York City time, on the day of receipt, or (ii) the Business Day
immediately following the day that the Borrower receives such notice, if such
notice is not received prior to such time on the day of receipt; provided that
the Borrower may, subject to the conditions to borrowing set forth herein,
request in accordance with Section 2.03 that such payment be financed with an
ABR Revolving Borrowing in an equivalent amount and, to the extent so financed,
the Borrower's obligation to make such payment shall be discharged and replaced
by the resulting ABR Revolving Borrowing. If the Borrower fails to make such
payment when due, the Administrative Agent shall notify each Lender of the
applicable LC Disbursement, the payment then due from the Borrower in respect
thereof and such Lender's Applicable Percentage thereof. Promptly following
receipt of such notice, each Lender shall pay to the Administrative Agent its
Applicable Percentage of the payment then due from the Borrower, in the same
manner as provided in Section 2.06 with respect to Loans made by such Lender
(and Section 2.06 shall apply, mutatis mutandis, to the payment obligations of
the Lenders), and the Administrative Agent shall promptly pay to the Issuing
Bank the amounts so received by it from the Lenders. Promptly following receipt
by the Administrative Agent of any payment from the Borrower pursuant to this
paragraph, the Administrative Agent shall distribute such payment to the Issuing
Bank or, to the extent that Lenders have made payments pursuant to this
paragraph to reimburse the Issuing Bank, then to such Lenders and the Issuing
Bank as their interests may appear. Any payment made by a Lender pursuant to
this paragraph to reimburse the Issuing Bank for any LC Disbursement (other than
the funding of ABR Revolving Loans as contemplated above) shall not constitute a
Loan and shall not relieve the Borrower of its obligation to reimburse such LC
Disbursement.

          (f) Obligations Absolute. The Borrower's obligation to reimburse LC
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance

<PAGE>

                                                                              18

whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrower's obligations hereunder. Neither
the Administrative Agent, the Lenders nor the Issuing Bank, nor any of their
Related Parties, shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
Issuing Bank; provided that nothing in this Section shall be construed to excuse
the Issuing Bank from liability to the Borrower to the extent of any direct
damages (as opposed to consequential damages, claims in respect of which are
hereby waived by the Borrower to the extent permitted by applicable law)
suffered by the Borrower that are caused by the Issuing Bank's failure to
exercise care when determining whether drafts and other documents presented
under a Letter of Credit comply with the terms thereof. The parties hereto
expressly agree that, in the absence of gross negligence or wilful misconduct on
the part of the Issuing Bank (as finally determined by a court of competent
jurisdiction), the Issuing Bank shall be deemed to have exercised care in each
such determination. In furtherance of the foregoing and without limiting the
generality thereof, the parties agree that, with respect to documents presented
which appear on their face to be in substantial compliance with the terms of a
Letter of Credit, the Issuing Bank may, in its sole discretion, either accept
and make payment upon such documents without responsibility for further
investigation, regardless of any notice or information to the contrary, or
refuse to accept and make payment upon such documents if such documents are not
in strict compliance with the terms of such Letter of Credit.

          (g) Disbursement Procedures. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall promptly
notify the Administrative Agent and the Borrower by telephone (confirmed by
telecopy) of such demand for payment and whether the Issuing Bank has made or
will make an LC Disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve the Borrower of its obligation to
reimburse the Issuing Bank and the Lenders with respect to any such LC
Disbursement.

          (h) Interim Interest. If the Issuing Bank shall make any LC
Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that the Borrower reimburses such LC
Disbursement, at the rate per annum then applicable to ABR Revolving Loans;
provided that, if the Borrower fails to reimburse such LC Disbursement when due
pursuant to paragraph (e) of this Section, then Section 2.12(d) shall apply.
Interest accrued pursuant to this paragraph shall be for the account of the
Issuing Bank, except that interest accrued on and after the date of payment by
any Lender pursuant to paragraph (e) of this Section to reimburse the Issuing
Bank shall be for the account of such Lender to the extent of such payment.

          (i) Replacement of the Issuing Bank. The Issuing Bank may be replaced
at any time by written agreement among the Borrower, the Administrative Agent,
the replaced Issuing Bank and the successor Issuing Bank. The Administrative
Agent shall notify the Lenders of any such replacement of the Issuing Bank. At
the time any such replacement shall become effective, the Borrower shall pay all
unpaid fees accrued for the account of the replaced Issuing Bank pursuant to
Section 2.11(b). From and after the effective date of any such replacement, (i)
the successor Issuing Bank shall have all the rights and obligations of the
Issuing Bank under this Agreement with respect to Letters of Credit to be issued
thereafter and (ii) references herein to the term "Issuing Bank" shall be deemed
to refer to such successor or to any previous Issuing Bank, or to such successor
and all previous Issuing Banks, as the context shall require. After the
replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain
a party hereto

<PAGE>

                                                                              19

and shall continue to have all the rights and obligations of an Issuing Bank
under this Agreement with respect to Letters of Credit issued by it prior to
such replacement, but shall not be required to issue additional Letters of
Credit.

          (j) Cash Collateralization. If any Event of Default shall occur and be
continuing, on the Business Day that the Borrower receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Lenders with LC Exposure representing greater than 50% of
the total LC Exposure) demanding the deposit of cash collateral pursuant to this
paragraph, the Borrower shall deposit in an account with the Administrative
Agent, in the name of the Administrative Agent and for the benefit of the
Lenders, an amount in cash equal to the LC Exposure as of such date plus any
accrued and unpaid interest thereon; provided that the obligation to deposit
such cash collateral shall become effective immediately, and such deposit shall
become immediately due and payable, without demand or other notice of any kind,
upon the occurrence of any Event of Default with respect to the Borrower
described in clause (h) or (i) of Article VII. Such deposit shall be held by the
Administrative Agent as collateral for the payment and performance of the
obligations of the Borrower under this Agreement. The Administrative Agent shall
have exclusive dominion and control, including the exclusive right of
withdrawal, over such account. Other than any interest earned on the investment
of such deposits, which investments shall be made at the option and sole
discretion of the Administrative Agent and at the Borrower's risk and expense,
such deposits shall not bear interest. Interest or profits, if any, on such
investments shall accumulate in such account. Moneys in such account shall be
applied by the Administrative Agent to reimburse the Issuing Bank for LC
Disbursements for which it has not been reimbursed and, to the extent not so
applied, shall be held for the satisfaction of the reimbursement obligations of
the Borrower for the LC Exposure at such time or, if the maturity of the Loans
has been accelerated (but subject to the consent of Lenders with LC Exposure
representing greater than 50% of the total LC Exposure), be applied to satisfy
other obligations of the Borrower under this Agreement. If the Borrower is
required to provide an amount of cash collateral hereunder as a result of the
occurrence of an Event of Default, such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower within three Business Days after
all Events of Default have been cured or waived.

          SECTION 2.06. Funding of Borrowings. (a) Each Lender shall make each
Loan to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 2:00 p.m., New York City time, to the account of
the Administrative Agent most recently designated by it for such purpose by
notice to the Lenders. The Administrative Agent will make such Loans available
to the Borrower by promptly crediting the amounts so received, in like funds, to
an account designated by the Borrower in the applicable Borrowing Request or
Competitive Bid Request; provided that ABR Revolving Loans made to finance the
reimbursement of an LC Disbursement as provided in Section 2.05(e) shall be
remitted by the Administrative Agent to the Issuing Bank.

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

<PAGE>

                                                                              20

          SECTION 2.07. Interest Elections. (a) Each Revolving Borrowing
initially shall be of the Type specified in the applicable Borrowing Request
and, in the case of a Eurodollar Revolving Borrowing, shall have an initial
Interest Period as specified in such Borrowing Request. Thereafter, the Borrower
may elect to convert such Borrowing to a different Type or to continue such
Borrowing and, in the case of a Eurodollar Revolving Borrowing, may elect
Interest Periods therefor, all as provided in this Section. The Borrower may
elect different options with respect to different portions of the affected
Borrowing, in which case each such portion shall be allocated ratably among the
Lenders holding the Loans comprising such Borrowing, and the Loans comprising
each such portion shall be considered a separate Borrowing. This Section shall
not apply to Competitive Borrowings, which may not be converted or continued.

          (b)   To make an election pursuant to this Section, the Borrower shall
notify the Administrative Agent of such election by telephone by the time that a
Borrowing Request would be required under Section 2.03 if the Borrower were
requesting a Revolving Borrowing of the Type resulting from such election to be
made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Interest Election
Request in a form approved by the Administrative Agent and signed by the
Borrower.

          (c)   Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02:

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

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

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

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

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

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

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

<PAGE>

                                                                              21

          SECTION 2.08. Termination of Commitments; Reductions and Increases of
Commitments. (a) Unless previously terminated, the Commitments shall terminate
on the Maturity Date.

          (b) The Borrower may at any time terminate, or from time to time
reduce, the Commitments; provided that (i) each reduction of the Commitments
shall be in an amount that is an integral multiple of $10,000,000 and (ii) the
Borrower shall not terminate or reduce the Commitments if, after giving effect
to any concurrent prepayment of the Loans in accordance with Section 2.10, the
sum of the Revolving Credit Exposures plus the aggregate principal amount of
outstanding Competitive Loans would exceed the total Commitments.

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

          (d) The Borrower may on one or more occasions, by written notice to
the Administrative Agent, executed by the Borrower and one or more financial
institutions (any such financial institution referred to in this Section being
called an "Increasing Lender"), which may include any Lender, cause Commitments
to be extended by the Increasing Lenders (or cause the Commitments of the
Increasing Lenders to be increased, as the case may be) in an amount for each
Increasing Lender (which shall not be less than $10,000,000) set forth in such
notice; provided, that (i) no extension of new Commitments or increase in
existing Commitments pursuant to this paragraph may result in the aggregate
Commitments exceeding $400,000,000, (ii) an increase in Commitments under this
Agreement shall only occur if the Commitments under the 364-Day Credit Agreement
shall be simultaneously increased by a like amount, (iii) each Increasing
Lender, if not already a Lender hereunder, shall be subject to the approval of
the Administrative Agent (which approval shall not be unreasonably withheld) and
(iv) each Increasing Lender, if not already a Lender hereunder, shall become a
party to this Agreement by completing and delivering to the Administrative Agent
a duly executed accession agreement in a form satisfactory to the Administrative
Agent and the Borrower (an "Accession Agreement"). New Commitments and increases
in Commitments shall become effective on the date specified in the applicable
notices delivered pursuant to this paragraph. Upon the effectiveness of any
Accession Agreement to which any Increasing Lender is a party, (i) such
Increasing Lender shall thereafter be deemed to be a party to this Agreement and
shall be entitled to all rights, benefits and privileges accorded a Lender
hereunder and subject to all obligations of a Lender hereunder and (ii) Schedule
2.01 shall be deemed to have been amended to reflect the Commitment of such
Increasing Lender as provided in such Accession Agreement. Upon the
effectiveness of any increase pursuant to this Section in the Commitment of a
Lender already a party hereto, Schedule 2.01 shall be deemed to have been
amended to reflect the increased Commitment of such Lender. Notwithstanding the
foregoing, no increase in the aggregate Commitments (or in the Commitment of any
Lender) shall become effective under this Section unless, on the date of such
increase, the Administrative Agent shall have received a certificate, dated as
of the effective date of such increase and executed by a Financial Officer of
the Borrower, to the effect that the conditions set forth in paragraphs (a) and
(b) of Section 4.02 shall be satisfied (with all references in such paragraphs
to a Borrowing being deemed to be references to such increase). Following any
extension of a new Commitment or increase of a Lender's Commitment pursuant to
this paragraph, any Revolving Loans outstanding prior to the effectiveness of
such increase or

<PAGE>

                                                                              22

extension shall continue outstanding until the ends of the respective Interests
Periods applicable thereto, and shall then be repaid and, if the Borrower shall
so elect, refinanced with new Revolving Loans made pursuant to Section 2.01(a)
ratably in accordance with the Commitments in effect following such extension or
increase.

          SECTION 2.09. Repayment of Loans; Evidence of Debt. (a) The Borrower
hereby unconditionally promises to pay (i) to the Administrative Agent for the
account of each Lender the then unpaid principal amount of each Revolving Loan
on the Maturity Date and (ii) to the Administrative Agent for the account of
each Lender the then unpaid principal amount of each Competitive Loan on the
last day of the Interest Period applicable to such Loan.

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

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

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

          (e) Any Lender may request that Loans made by it be evidenced by a
promissory note. In such event, the Borrower shall prepare, execute and deliver
to such Lender a promissory note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered assigns) and in a
form approved by the Administrative Agent. Thereafter, the Loans evidenced by
such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 9.04) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).

          SECTION 2.10. Prepayment of Loans. (a) The Borrower shall have the
right at any time and from time to time to prepay any Borrowing in whole or in
part, subject to prior notice in accordance with paragraph (b) of this Section;
provided that the Borrower shall not have the right to prepay any Competitive
Loan without the prior consent of the Lender thereof.

          (b) The Borrower shall notify the Administrative Agent by telephone
(confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Revolving Borrowing, not later than 11:00 a.m., New
York City time, three Business Days before the date of prepayment or (ii) in the
case of prepayment of an ABR Revolving Borrowing, not later than 12:00 noon, New
York City time, on the date of prepayment. Each such notice shall be irrevocable
and shall specify the prepayment date and the principal amount of each Borrowing
or portion thereof to be prepaid; provided that, if a notice of prepayment is
given in connection with a conditional notice of termination of the Commitments
as contemplated by Section 2.08, then such notice of prepayment may be revoked
if such notice of termination is revoked in accordance with Section 2.08.
Promptly following receipt of any such notice relating to a Revolving Borrowing,
the Administrative Agent shall advise the Lenders of the contents thereof. Each
partial prepayment of any Revolving Borrowing shall be in an amount that would
be permitted in the case of an advance of a Revolving Borrowing of the same Type
as provided in

<PAGE>

                                                                              23

Section 2.02. Each prepayment of a Revolving Borrowing shall be applied ratably
to the Loans included in the prepaid Borrowing. Prepayments shall be accompanied
by accrued interest to the extent required by Section 2.12.

          SECTION 2.11. Fees. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a facility fee, which shall
accrue at the Applicable Rate on the daily amount of the Commitment of such
Lender (whether used or unused) during the period from and including the
Effective Date of this Agreement to but excluding the date on which such
Commitment terminates; provided that, if such Lender continues to have any
Revolving Credit Exposure after its Commitment terminates, then such facility
fee shall continue to accrue on the daily amount of such Lender's Revolving
Credit Exposure from and including the date on which its Commitment terminates
to but excluding the date on which such Lender ceases to have any Revolving
Credit Exposure. Accrued facility fees shall be payable in arrears on the last
day of March, June, September and December of each year and on the date on which
the Commitments terminate, commencing on the first such date to occur after the
date hereof; provided that any facility fees accruing after the date on which
the Commitments terminate shall be payable on demand. All facility fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day).

          (b) The Borrower shall pay to the Administrative Agent, for the
account of each Lender, a utilization fee at the rate of 0.125% per annum on the
Revolving Credit Exposure of such Lender for each day, from and including the
Effective Date to but excluding the later of the date on which the Commitment of
such Lender is terminated and the date on which such Lender ceases to have any
Revolving Credit Exposure, on which the aggregate amount of the Lenders'
Revolving Credit Exposures exceeds 33.33% of the aggregate amount of the
Commitments. Accrued utilization fees shall be payable quarterly in arrears on
the last day of March, June, September and December of each year, on the
Maturity Date and, if there shall be any Revolving Credit Exposure after the
Maturity Date, on any later date on which there shall cease to be any Revolving
Credit Exposure. All utilization fees shall be computed on the basis of a year
of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).

          (c) The Borrower agrees to pay (i) to the Administrative Agent for the
account of each Lender a participation fee with respect to its participations in
Letters of Credit, which shall accrue at the Applicable Rate used to determine
the interest rate applicable to Eurodollar Revolving Loans, on the average daily
amount of such Lender's LC Exposure (excluding any portion thereof attributable
to unreimbursed LC Disbursements) during the period from and including the
Effective Date to but excluding the later of the date on which such Lender's
Commitment terminates and the date on which such Lender ceases to have any LC
Exposure, and (ii) to the Issuing Bank a fronting fee, which shall accrue at the
rate of 0.125% per annum on the average daily amount of the LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements)
during the period from and including the Effective Date to but excluding the
later of the date of termination of the Commitments and the date on which there
ceases to be any LC Exposure, as well as the Issuing Bank's standard fees with
respect to the issuance, amendment, renewal or extension of any Letter of Credit
or processing of drawings thereunder. Participation fees and fronting fees
accrued through and including the last day of March, June, September and
December of each year shall be payable on the third Business Day following such
last day, commencing on the first such date to occur after the Effective Date;
provided that all such fees shall be payable on the date on which the
Commitments terminate and any such fees accruing after the date on which the
Commitments terminate shall be payable on demand. Any other fees payable to the
Issuing Bank pursuant to this paragraph shall be payable within 10 days after a
request shall have been submitted therefor. All participation fees and fronting
fees shall be computed on the basis of a year of 360 days and shall be payable
for the actual number of days elapsed (including the first day but excluding the
last day).

<PAGE>

                                                                              24

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

          (e) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent (or to the Issuing
Bank, in the case of fees payable to it) for distribution, in the case of
facility fees, utilization fees and participation fees, to the Lenders. Fees
paid shall not be refundable under any circumstances.

          SECTION 2.12. Interest. (a) The Loans comprising each ABR Borrowing
shall bear interest at the Alternate Base Rate plus the Applicable Rate.

          (b) The Loans comprising each Eurodollar Borrowing shall bear interest
(i) in the case of a Eurodollar Revolving Loan, at the Adjusted LIBO Rate for
the Interest Period in effect for the Borrowing of which such Loan is a part
plus the Applicable Rate, or (ii) in the case of a Eurodollar Competitive Loan,
at the LIBO Rate for the Interest Period in effect for the Borrowing of which
such Loan is a part plus (or minus, as applicable) the Margin applicable to such
Loan.

          (c) Each Fixed Rate Loan shall bear interest at the Fixed Rate
applicable to such Loan.

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

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

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

          SECTION 2.13. Alternate Rate of Interest. If prior to the commencement
of any Interest Period for a Eurodollar Borrowing:

          (a) the Administrative Agent determines (which determination shall be
     conclusive absent manifest error) that adequate and reasonable means do not
     exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as
     applicable, for such Interest Period; or

<PAGE>

                                                                              25

              (b)  the Administrative Agent is advised by the Required Lenders
       (or, in the case of a Eurodollar Competitive Loan, the Lender that is
       required to make such Loan) that the Adjusted LIBO Rate or the LIBO Rate,
       as applicable, for such Interest Period will not adequately and fairly
       reflect the cost to such Lenders (or Lender) of making or maintaining
       their Loans (or its Loan) included in such Borrowing for such Interest
       Period;

then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Revolving Borrowing to, or
continuation of any Revolving Borrowing as, a Eurodollar Borrowing shall be
ineffective, (ii) if any Borrowing Request requests a Eurodollar Revolving
Borrowing, such Borrowing shall be made as an ABR Borrowing and (iii) any
request by the Borrower for a Eurodollar Competitive Borrowing shall be
ineffective; provided that (A) if the circumstances giving rise to such notice
do not affect all the Lenders, then requests by the Borrower for Eurodollar
Competitive Borrowings may be made to Lenders that are not affected thereby and
(B) if the circumstances giving rise to such notice affect only one Type of
Borrowings, then the other Type of Borrowings shall be permitted.

              SECTION 2.14. Increased Costs. (a) If any Change in Law shall:

              (i)  impose, modify or deem applicable any reserve, special
       deposit or similar requirement against assets of, deposits with or for
       the account of, or credit extended by, any Lender (except any such
       reserve requirement reflected in the Adjusted LIBO Rate) or the Issuing
       Bank; or

              (ii) impose on any Lender or the Issuing Bank or the London
       interbank market any other condition, cost or expense, affecting this
       Agreement or Eurodollar Loans or Fixed Rate Loans made by such Lender or
       any Letter of Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan or Fixed Rate Loan (or of
maintaining its obligation to make any such Loan) or to increase the cost to
such Lender or the Issuing Bank of participating in, issuing or maintaining any
Letter of Credit or to reduce the amount of any sum received or receivable by
such Lender or the Issuing Bank hereunder (whether of principal, interest or
otherwise), then the Borrower will pay to such Lender or the Issuing Bank, as
the case may be, such additional amount or amounts as will compensate such
Lender or the Issuing Bank, as the case may be, for such additional costs
incurred or reduction suffered.

              (b)  If any Lender or the Issuing Bank determines that any Change
in Law regarding capital requirements has or would have the effect of reducing
the rate of return on such Lender's or the Issuing Bank's capital or on the
capital of such Lender's or the Issuing Bank's holding company, if any, as a
consequence of this Agreement, the Commitments hereunder or the Loans made by,
or participations in Letters of Credit held by, such Lender, or the Letters of
Credit issued by the Issuing Bank, to a level below that which such Lender or
the Issuing Bank or such Lender's or the Issuing Bank's holding company could
have achieved but for such Change in Law (taking into consideration such
Lender's or the Issuing Bank's policies and the policies of such Lender's or the
Issuing Bank's holding company with respect to capital adequacy), then from time
to time the Borrower will pay to such Lender or the Issuing Bank, as the case
may be, such additional amount or amounts as will compensate such Lender or the
Issuing Bank or such Lender's or the Issuing Bank's holding company for any such
reduction suffered.

              (c)  A certificate of a Lender or the Issuing Bank setting forth
the amount or amounts necessary to compensate such Lender or the Issuing Bank
or its holding company, as the case may be, as specified in paragraph (a) or (b)
of this Section, and explaining in reasonable

<PAGE>

                                                                              26

detail the method by which such amount or amounts shall have been determined,
shall be delivered to the Borrower and shall be conclusive absent manifest
error. The Borrower shall pay such Lender or the Issuing Bank, as the case may
be, the amount shown as due on any such certificate within 10 days after receipt
thereof.

              (d) Failure or delay on the part of any Lender or the Issuing Bank
to demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's or the Issuing Bank's right to demand such compensation; provided
that the Borrower shall not be required to compensate a Lender or the Issuing
Bank pursuant to this Section for any increased costs or reductions incurred
more than 270 days prior to the date that such Lender or the Issuing Bank, as
the case may be, notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender's or the Issuing Bank's
intention to claim compensation therefor; provided further that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 270-day period referred to above shall be extended to include the period of
retroactive effect thereof.

              (e) Notwithstanding the foregoing provisions of this Section, a
Lender shall not be entitled to compensation pursuant to this Section in respect
of any Competitive Loan if the Change in Law that would otherwise entitle it to
such compensation shall have been publicly announced prior to submission of the
Competitive Bid pursuant to which such Loan was made.

              SECTION 2.15. Break Funding Payments. In the event of (a) the
payment of any principal of any Eurodollar Loan or Fixed Rate Loan other than on
the last day of an Interest Period applicable thereto (including as a result of
an Event of Default), (b) the conversion of any Eurodollar Loan other than on
the last day of the Interest Period applicable thereto, (c) the failure to
borrow, convert, continue or prepay any Eurodollar Loan or Fixed Rate Loan on
the date specified in any notice delivered pursuant hereto (regardless of
whether such notice may be revoked under Section 2.10(b) and is revoked in
accordance therewith), (d) the failure to borrow any Competitive Loan after
accepting the Competitive Bid to make such Loan, or (e) the assignment of any
Eurodollar Loan or Fixed Rate Loan other than on the last day of the Interest
Period applicable thereto as a result of a request by the Borrower pursuant to
Section 2.18, then, in any such event, the Borrower shall compensate each Lender
for the loss, cost and expense attributable to such event. In the case of a
Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to
include an amount determined by such Lender to be the excess, if any, of (i) the
amount of interest which would have accrued on the principal amount of such Loan
had such event not occurred, at the Adjusted LIBO Rate that would have been
applicable to such Loan, for the period from the date of such event to the last
day of the then current Interest Period therefor (or, in the case of a failure
to borrow, convert or continue, for the period that would have been the Interest
Period for such Loan), over (ii) the amount of interest which would accrue on
such principal amount for such period at the interest rate which such Lender
would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the eurodollar
market. A certificate of any Lender setting forth any amount or amounts that
such Lender is entitled to receive pursuant to this Section and explaining in
reasonable detail the method by which such amount or amounts shall have been
determined shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender the amount shown as due on
any such certificate within 10 days after receipt thereof.

              SECTION 2.16. Taxes. (a) Any and all payments by or on account of
any obligation of the Borrower hereunder shall be made free and clear of and
without deduction for any Indemnified Taxes or Other Taxes; provided that if the
Borrower shall be required by applicable law to deduct any Indemnified Taxes or
Other Taxes from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section) the Administrative
Agent, Lender or Issuing Bank (as the case may be) receives an amount equal to
the sum it would have received had no such deductions been made, (ii) the
Borrower shall make

<PAGE>

                                                                              27

such deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.

          (b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.

          (c) The Borrower shall indemnify the Administrative Agent, each Lender
and the Issuing Bank, within 10 days after written demand therefor, for the full
amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent,
such Lender or the Issuing Bank, as the case may be, on or with respect to any
payment by or on account of any obligation of the Borrower hereunder (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
amounts payable under this Section) and any penalties, interest, additions to
tax and reasonable expenses arising therefrom or with respect thereto, whether
or not such Indemnified Taxes or Other Taxes were correctly or legally imposed
or asserted by the relevant Governmental Authority. A certificate as to the
amount of such payment or liability delivered to the Borrower by a Lender or the
Issuing Bank, or by the Administrative Agent on its own behalf or on behalf of a
Lender or the Issuing Bank, shall be conclusive absent manifest error.

          (d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrower to a Governmental Authority, the Borrower shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.

          (e) Any Lender that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which the Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law, such
properly completed and executed documentation, if any, as shall be prescribed by
applicable law or reasonably requested by the Borrower to permit such payments
to be made without withholding or at a reduced rate.

          (f) If the Administrative Agent or a Lender determines, in its sole
discretion, that it has received a refund of any Taxes or Other Taxes as to
which it has been indemnified by the Borrower or with respect to which the
Borrower has paid additional amounts pursuant to this Section 2.16, it shall pay
over such refund to the Borrower (but only to the extent of indemnity payments
made, or additional amounts paid, by the Borrower under this Section 2.16 with
respect to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of the Administrative Agent or such Lender and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund); provided, that the Borrower, upon the request of
the Administrative Agent or such Lender, agrees to repay the amount paid over to
the Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Lender in
the event the Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority. This Section shall not be construed to
require the Administrative Agent or any Lender to make available its tax returns
(or any other information relating to its taxes which it deems confidential) to
the Borrower or any other Person.

          SECTION 2.17. Payments Generally; Pro Rata Treatment; Sharing of
Set-offs. (a) The Borrower shall make each payment required to be made by it
hereunder (whether of principal, interest, fees or reimbursement of LC
Disbursements, or of amounts payable under Section 2.14, 2.15 or 2.16, or
otherwise) prior to 12:00 noon, New York City time, on the date when due, in
immediately available funds, without set-off or counterclaim. Any amounts
received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at

<PAGE>

                                                                              28

270 Park Avenue, New York, New York, except payments to be made directly to the
Issuing Bank as expressly provided herein and except that payments pursuant to
Sections 2.14, 2.15, 2.16 and 9.03 shall be made directly to the Persons
entitled thereto. The Administrative Agent shall distribute any such payments
received by it for the account of any other Person to the appropriate recipient
promptly following receipt thereof. If any payment hereunder shall be due on a
day that is not a Business Day, the date for payment shall be extended to the
next succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All payments
hereunder shall be made in dollars.

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

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

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

          (e) If any Lender shall fail to make any payment required to be made
by it pursuant to Section 2.05, 2.06(b) or 2.17(d), then the Administrative
Agent may, in its discretion

<PAGE>

                                                                              29

(notwithstanding any contrary provision hereof), apply any amounts thereafter
received by the Administrative Agent for the account of such Lender to satisfy
such Lender's obligations under such Sections until all such unsatisfied
obligations are fully paid.

          SECTION 2.18. Mitigation Obligations; Replacement of Lenders. (a) If
any Lender requests compensation under Section 2.14, or if the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.16, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.14 or 2.16, as the case may be, in the
future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Borrower
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.

          (b) If any Lender requests compensation under Section 2.14, or if the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.16,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Agreement
(other than any outstanding Competitive Loans held by it) to an assignee that
shall assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that (i) the Borrower shall have received the
prior written consent of the Administrative Agent, which consent shall not
unreasonably be withheld, (ii) such Lender shall have received payment of an
amount equal to the outstanding principal of its Loans (other than Competitive
Loans) and participations in LC Disbursements, accrued interest thereon, accrued
fees and all other amounts payable to it hereunder, from the assignee (to the
extent of such outstanding principal and accrued interest and fees) or the
Borrower (in the case of all other amounts) and (iii) in the case of any such
assignment resulting from a claim for compensation under Section 2.14 or
payments required to be made pursuant to Section 2.16, such assignment will
result in a reduction in such compensation or payments. A Lender shall not be
required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the
Borrower to require such assignment and delegation cease to apply.

                                   ARTICLE III

                         Representations and Warranties

          The Borrower represents and warrants to the Lenders that:

          SECTION 3.01. Organization; Powers. The Borrower and each Subsidiary
is duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, has all requisite power and authority to carry
on its business as now conducted and is qualified to do business in, and is in
good standing in, every jurisdiction where such qualification is required,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.

          SECTION 3.02. Authorization; Enforceability. The Transactions are
within the Borrower's corporate powers and have been duly authorized by all
necessary corporate and, if required, stockholder action. This Agreement has
been duly executed and delivered by the Borrower and constitutes a legal, valid
and binding obligation of the Borrower, enforceable in

<PAGE>

                                                                              30

accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights generally
and subject to general principles of equity, regardless of whether considered in
a proceeding in equity or at law.

                  SECTION 3.03. Governmental Approvals; No Conflicts. The
Transactions (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority, except such as
have been obtained or made and are in full force and effect, (b) will not
violate any applicable law or regulation or the charter, by-laws or other
organizational documents of the Borrower or any of its Subsidiaries or any order
of any Governmental Authority, (c) will not violate or result in a default under
any indenture, agreement or other instrument binding upon the Borrower or any of
its Subsidiaries or its assets, or give rise to a right thereunder to require
any payment to be made by the Borrower or any of its Subsidiaries, and (d) will
not result in the creation or imposition of any Lien on any asset of the
Borrower or any of its Subsidiaries.

                  SECTION 3.04. Financial Condition; No Material Adverse Change.
(a) The Borrower has heretofore furnished to the Lenders (i) its consolidated
balance sheet and statements of income, stockholders' equity and cash flows as
of and for the fiscal year ended December 31, 2001, reported on by independent
public accountants, and (ii) its consolidated balance sheet and statements of
income and cash flows as of and for the fiscal quarter and the portion of the
fiscal year ended March 31, 2002, certified by its chief financial officer. Such
financial statements present fairly, in all material respects, the financial
position and results of operations and cash flows of the Borrower and its
consolidated Subsidiaries as of such dates and for such periods in accordance
with GAAP, subject to year-end audit adjustments and the absence of footnotes in
the case of the statements referred to in clause (ii) above.

                  (b) Since December 31, 2001, there has been no material
adverse change in the business, assets, operations, prospects or condition,
financial or otherwise, of the Borrower and its Subsidiaries, taken as a whole.

                  SECTION 3.05. Properties. (a) Each of the Borrower and its
Subsidiaries has good title to, or valid leasehold interests in, all its real
and personal property necessary or used in the ordinary conduct of its business,
except for such defects in title as would not, individually or in aggregate,
result in a Material Adverse Effect.

                  (b) Each of the Borrower and its Subsidiaries owns, or is
licensed to use, all trademarks, tradenames, copyrights, patents and other
intellectual property material to its business, and the use thereof by the
Borrower and its Subsidiaries does not infringe upon the rights of any other
Person, except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.

                  SECTION 3.06. Litigation and Environmental Matters. (a) Except
as disclosed in the Borrower's periodic reports filed prior to the date hereof
under the Securities Exchange Act of 1934, there are no actions, suits or
proceedings by or before any arbitrator or Governmental Authority pending
against or, to the knowledge of the Borrower, threatened in writing against the
Borrower or any of its Subsidiaries (i) that are reasonably likely to result in
a Material Adverse Effect or (ii) that involve this Agreement or the
Transactions.

                  (b) Except as disclosed in the Borrower's periodic reports
filed prior to the date hereof under the Securities Exchange Act of 1934, and
except with respect to any other matters that, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect, neither
the Borrower nor any of its Subsidiaries (i) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required under any Environmental Law, (ii) has become subject to
any Environmental Liability,

<PAGE>

                                                                              31

(iii) has received notice of any claim with respect to any Environmental
Liability or (iv) knows of any basis for any Environmental Liability.

                  SECTION 3.07. Compliance with Laws and Agreements. The
Borrower and each Subsidiary is in compliance with all laws, regulations and
orders of any Governmental Authority applicable to it or its property and all
indentures, agreements and other instruments binding upon it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. No Default has
occurred and is continuing.

                  SECTION 3.08. Investment and Holding Company Status. Neither
the Borrower nor any of its Subsidiaries is (a) an "investment company" as
defined in, or subject to regulation under, the Investment Company Act of 1940
or (b) a "holding company" as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935.

                  SECTION 3.09. Taxes. The Borrower and each Subsidiary has
timely filed or caused to be filed all Tax returns and reports required to have
been filed and has paid or caused to be paid all Taxes required to have been
paid by it, except (a) Taxes that are being contested in good faith by
appropriate proceedings and for which the Borrower or such Subsidiary, as
applicable, has set aside on its books adequate reserves or (b) to the extent
that the failure to do so could not reasonably be expected to result in a
Material Adverse Effect.

                  SECTION 3.10. ERISA. No ERISA Event has occurred or is
reasonably expected to occur that, when taken together with all other ERISA
Events since December 31, 1995, for which liability is reasonably expected to
occur, could reasonably be expected to result in a Material Adverse Effect. The
present value of all accumulated benefit obligations under each Plan (based on
the assumptions used for purposes of Statement of Financial Accounting Standards
No. 87) did not, as of the date of the most recent financial statements
reflecting such amounts, exceed by more than $25,000,000 the fair market value
of the assets of such Plan, and the present value of all accumulated benefit
obligations of all underfunded Plans (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed by more
than $25,000,000 the fair market value of the assets of all such underfunded
Plans.

                  SECTION 3.11. Disclosure. The Borrower has disclosed to the
Lenders all agreements, instruments, judgments or orders of Governmental
Authorities and corporate restrictions to which it or any of its Subsidiaries is
subject, and all other matters known to it, that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.
Neither the Information Memorandum nor any of the other reports, financial
statements, certificates or other information furnished to the Administrative
Agent or any Lender in connection with the negotiation of this Agreement or
delivered hereunder (as modified or supplemented by other information so
furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that, with
respect to projected financial information, the Borrower represents only that
such information was prepared in good faith based upon assumptions believed to
be reasonable at the time.

                                   ARTICLE IV

                                   Conditions

                  SECTION 4.01. Effective Date. The obligations of the Lenders
to make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall
not become effective until the date on which each of the following conditions is
satisfied (or waived in accordance with Section 9.02):

<PAGE>

                                                                              32

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

                  (b) The Administrative Agent shall have received a favorable
         written opinion (addressed to the Administrative Agent and the Lenders
         and dated the Effective Date) of Ann C. Mule, Assistant General Counsel
         of the Borrower, substantially in the form of Exhibit B, and covering
         such other matters relating to the Borrower, this Agreement or the
         Transactions as the Required Lenders shall reasonably request. The
         Borrower hereby requests such counsel to deliver such opinion.

                  (c) The Administrative Agent shall have received such
         documents and certificates as the Administrative Agent or its counsel
         may reasonably request relating to the organization, existence and good
         standing of the Borrower, the authorization of the Transactions and any
         other legal matters relating to the Borrower, this Agreement or the
         Transactions, all in form and substance satisfactory to the
         Administrative Agent and its counsel.

                  (d) The Administrative Agent shall have received a
         certificate, dated the Effective Date and signed by the President, a
         Vice President or a Financial Officer of the Borrower, confirming
         compliance with the conditions set forth in paragraphs (a) and (b) of
         Section 4.02.

                  (e) The Administrative Agent shall have received all fees and
         other amounts due and payable on or prior to the Effective Date,
         including, to the extent invoiced, reimbursement or payment of all
         out-of-pocket expenses required to be reimbursed or paid by the
         Borrower hereunder.

                  (f) The commitments of the lenders under the Existing Credit
         Agreement shall have been terminated, the principal of and interest
         accrued on all loans, and all other amounts accrued for the accounts of
         the lenders, thereunder shall have been paid and no letters of credit
         shall be outstanding thereunder.

                  (g) The representations and warranties of the Borrower set
         forth in this Agreement shall be true and correct on and as of the
         Effective Date.

The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans and of the Issuing
Bank to issue Letters of Credit hereunder shall not become effective unless each
of the foregoing conditions is satisfied (or waived pursuant to Section 9.02) at
or prior to 5:00 p.m., New York City time, on August 15, 2002 (and, in the event
such conditions are not so satisfied or waived, the Commitments shall terminate
at such time).

                  SECTION 4.02. Each Credit Event. The obligation of each Lender
to make a Loan on the occasion of any Borrowing, and of the Issuing Bank to
issue, amend, renew or extend any Letter of Credit, is subject to the
satisfaction of the following conditions:

                  (a) The representations and warranties of the Borrower set
         forth in this Agreement (other than those set forth in Sections 3.04(b)
         and 3.06(a)) shall be true and correct on and as of the date of such
         Borrowing or the date of issuance, amendment, renewal or extension of
         such Letter of Credit, as applicable.

<PAGE>

                                                                              33

                  (b) At the time of and immediately after giving effect to such
         Borrowing or the issuance, amendment, renewal or extension of such
         Letter of Credit, as applicable, no Default shall have occurred and be
         continuing.

Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in paragraphs (a) and
(b) of this Section.

                                    ARTICLE V

                              Affirmative Covenants

                  Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full and all Letters of Credit shall have expired or terminated and
all LC Disbursements shall have been reimbursed, the Borrower covenants and
agrees with the Lenders that:

                  SECTION 5.01. Financial Statements; Ratings Change and Other
Information. The Borrower will furnish to the Administrative Agent and each
Lender:

                  (a) within 90 days after the end of each fiscal year of the
         Borrower, its audited consolidated balance sheet and related statements
         of operations, stockholders' equity and cash flows as of the end of and
         for such year, setting forth in each case in comparative form the
         figures for the previous fiscal year, all reported on by Ernst & Young
         LLP or other independent public accountants of recognized national
         standing (without a "going concern" or like qualification or exception
         and without any qualification or exception as to the scope of such
         audit) to the effect that such consolidated financial statements
         present fairly in all material respects the financial condition and
         results of operations of the Borrower and its consolidated Subsidiaries
         on a consolidated basis in accordance with GAAP;

                  (b) within 45 days after the end of each of the first three
         fiscal quarters of each fiscal year of the Borrower, its consolidated
         balance sheet and related statements of operations and cash flows as of
         the end of and for such fiscal quarter and the then elapsed portion of
         the fiscal year, setting forth in each case in comparative form the
         figures for the corresponding period or periods of (or, in the case of
         the balance sheet, as of the end of) the previous fiscal year, all
         certified by one of its Financial Officers as presenting fairly in all
         material respects the financial condition and results of operations of
         the Borrower and its consolidated Subsidiaries on a consolidated basis
         in accordance with GAAP, subject to normal year-end audit adjustments
         and the absence of footnotes;

                  (c) concurrently with any delivery of financial statements
         under clause (a) or (b) above, a certificate of a Financial Officer of
         the Borrower (i) certifying as to whether a Default has occurred and,
         if a Default has occurred, specifying the details thereof and any
         action taken or proposed to be taken with respect thereto, (ii) setting
         forth reasonably detailed calculations demonstrating compliance with
         Sections 6.06 and 6.07 and (iii) stating whether any change in GAAP or
         in the application thereof has occurred since the date of the audited
         financial statements referred to in Section 3.04 and, if any such
         change has occurred, specifying the effect of such change on the
         financial statements accompanying such certificate or stating that such
         change did not affect Consolidated Tangible Net Worth or the Leverage
         Ratio;

                  (d) promptly after the same become publicly available, copies
         of all reports on Forms 10-K, 10-Q and 8-K (or any substitute or
         successor forms), and all proxy statements, filed by the Borrower with
         the Securities and Exchange Commission, or any

<PAGE>

                                                                              34

           Governmental Authority succeeding to any or all of the functions of
           said Commission, or distributed by the Borrower to its shareholders
           generally, as the case may be;

                   (e) promptly after Moody's or S&P shall have announced a
           change in the rating established or deemed to have been established
           for the Index Debt, written notice of such rating change;

                   and (f) promptly following any request therefor, such other
           information regarding the operations, business affairs and financial
           condition of the Borrower or any Subsidiary, or compliance with the
           terms of this Agreement, as the Administrative Agent or any Lender
           may reasonably request.

Information required to be delivered pursuant to this Section 5.01 shall be
deemed to have been delivered if such information, or one or more annual or
quarterly reports containing such information, shall have been posted by the
Administrative Agent on an IntraLinks or similar site to which the Lenders have
been granted access or shall be available on the website of the Securities and
Exchange Commission at http://www.sec.gov (and a confirming electronic
correspondence shall have been delivered or caused to be delivered to the
Lenders providing notice of such posting or availability); provided that the
Borrower shall deliver paper copies of such information to any Lender that
requests such delivery. Information required to be delivered pursuant to this
Section 5.01 may also be delivered by electronic communications pursuant to
procedures approved by the Administrative Agent.

                   SECTION 5.02. Notices of Material Events. The Borrower will
furnish to the Administrative Agent and each Lender prompt written notice of the
following:

                   (a) the occurrence of any Default;

                   (b) the filing or commencement of any action, suit or
           proceeding by or before any arbitrator or Governmental Authority
           against or affecting the Borrower or any Subsidiary that is
           reasonably likely to result in a Material Adverse Effect;

                   (c) the occurrence of any ERISA Event that, alone or together
           with any other ERISA Events that have occurred, could reasonably be
           expected to result in liability of the Borrower and its Subsidiaries
           in an aggregate amount exceeding $25,000,000; and

                   (d) any other development that results in, or could
           reasonably be expected to result in, a Material Adverse Effect.

Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.

                   SECTION 5.03. Existence; Conduct of Business. The Borrower
will, and will cause each of the Material Subsidiaries to, do or cause to be
done all things necessary to preserve, renew and keep in full force and effect
its legal existence and the rights, licenses, permits, privileges and franchises
material to the conduct of its business; provided that the foregoing shall not
prohibit any merger or consolidation of the Borrower permitted under Section
6.04 or any merger, consolidation, liquidation or dissolution of a Subsidiary
that is not otherwise prohibited by the terms of this Agreement.

                   SECTION 5.04. Payment of Obligations. The Borrower will, and
will cause each of the Subsidiaries to, pay its obligations, including Tax
liabilities, that, if not paid, could result in a Material Adverse Effect before
the same shall become delinquent or in default, except where (a) the validity or
amount thereof is being contested in good faith by appropriate

<PAGE>

                                                                              35

proceedings, (b) the Borrower or such Subsidiary has set aside on its books
adequate reserves with respect thereto in accordance with GAAP and (c) the
failure to make payment pending such contest could not reasonably be expected to
result in a Material Adverse Effect.

                  SECTION 5.05. Maintenance of Properties; Insurance. The
Borrower will, and will cause each of the Subsidiaries to, (a) keep and maintain
all property material to the conduct of its business in good working order and
condition, ordinary wear and tear excepted, and (b) maintain, with financially
sound and reputable insurance companies, insurance in such amounts and against
such risks as are customarily maintained by companies engaged in the same or
similar businesses operating in the same or similar locations (including without
limitation by the maintenance of adequate self-insurance reserves to the extent
customary among such companies).

                  SECTION 5.06. Books and Records; Inspection Rights. The
Borrower will, and will cause each of the Subsidiaries to, keep proper books of
record and account in which full, true and correct entries are made of all
dealings and transactions in relation to its business and activities. The
Borrower will, and will cause each of the Subsidiaries to, permit any
representatives designated by the Administrative Agent or any Lender, upon
reasonable prior notice, to visit and inspect its properties, to examine and
make extracts from its books and records, and to discuss its affairs, finances
and condition with its officers and independent accountants, all at such
reasonable times and as often as reasonably requested.

                  SECTION 5.07. Compliance with Laws. The Borrower will, and
will cause each of the Subsidiaries to, comply with all laws, rules, regulations
and orders of any Governmental Authority applicable to it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.

                  SECTION 5.08. Use of Proceeds and Letters of Credit. The
proceeds of the Loans and the Letters of Credit will be used only for the
purposes set forth in the preamble to this Agreement. No part of the proceeds of
any Loan will be used, whether directly or indirectly, for any purpose that
entails a violation of any of the Regulations of the Board, including
Regulations T, U and X.

                                   ARTICLE VI

                               Negative Covenants

                  Until the Commitments have expired or terminated and the
    principal of and interest on each Loan and all fees payable hereunder have
    been paid in full and all Letters of Credit have expired or terminated and
    all LC Disbursements shall have been reimbursed, the Borrower covenants and
    agrees with the Lenders that:

                  SECTION 6.01. Indebtedness and Preferred Stock of
    Subsidiaries. (a) The Borrower will not permit any Subsidiary to create,
    incur, assume or permit to exist any Indebtedness, except:

                  (i)   Indebtedness outstanding on the date hereof and set
           forth on Schedule 6.01;

                  (ii)  Indebtedness incurred under credit facilities in effect
           on the date hereof and set forth on Schedule 6.01 to the extent the
           amount of Indebtedness under any such credit facility does not exceed
           the maximum amount of such credit facility on the date hereof;

                  (iii) Indebtedness owed to the Borrower or any other
           Subsidiary that in either case shall not have been transferred or
           pledged to any third party;

<PAGE>

                                                                              36

                  (iv)   Indebtedness incurred to finance the acquisition,
         construction or improvement of any fixed or capital assets or secured
         by a Lien on any such assets and assumed in connection with the
         acquisition thereof, including Capital Lease Obligations; provided that
         (A) such Indebtedness is incurred or assumed prior to or within 18
         months after such acquisition or the completion of such construction or
         improvement and (B) the amount of such Indebtedness does not exceed the
         cost of the related assets;

                  (v)    Indebtedness of any Person that becomes a Subsidiary
         after the date hereof; provided that such Indebtedness exists at the
         time such Person becomes a Subsidiary and is not created in
         contemplation of or in connection with such Person becoming a
         Subsidiary;

                  (vi)   Indebtedness refinancing or replacing any of the
         Indebtedness referred to in the preceding clauses (i) through (v);
         provided that (A) the principal amount of such refinancing or
         replacement Indebtedness shall not exceed that of the Indebtedness
         refinanced or replaced and (B) the obligors on such refinancing or
         replacement Indebtedness shall not include Subsidiaries that were not
         obligors in respect of the Indebtedness refinanced or replaced;

                  (vii)  Indebtedness under Securitization Transactions in an
         aggregate amount at any time not greater than $200,000,000;

                  (viii) Indebtedness of Sunoco Logistics Partners L.P. and its
         subsidiaries; and

                  (ix)   other Indebtedness that, when aggregated with the
         aggregate outstanding Indebtedness of the Borrower secured by Liens and
         Securitization Transactions permitted pursuant to Section 6.02(g) and
         the aggregate sale price of the assets sold in sale and leaseback
         transactions permitted pursuant to Section 6.03, shall at no time
         exceed 15% of Consolidated Net Tangible Assets.

                  (b)    The Borrower will not permit any Subsidiary to issue
any preferred stock or other preferred Equity Interest other than any preferred
stock or other preferred Equity Interest held by the Borrower or another
Subsidiary.

                  SECTION 6.02. Liens. The Borrower will not, and will not
permit any Subsidiary to, create, incur, assume or permit to exist any Lien
securing Indebtedness on any property or asset now owned or hereafter acquired
by it, or assign or sell any income or revenues (including accounts receivable)
or rights in respect of any thereof, except:

                  (a)    any Lien on any property or asset of the Borrower or
         any Subsidiary existing on the date hereof and set forth in Schedule
         6.02; provided that (i) such Lien shall not apply to any other
         property or asset of the Borrower or any Subsidiary and (ii) such Lien
         shall secure only those obligations which it secures on the date
         hereof and extensions, renewals and replacements thereof that do not
         increase the outstanding principal amount thereof as of the date
         hereof;

                  (b)    any Lien existing on any property or asset prior to the
         acquisition thereof by the Borrower or any Subsidiary or existing on
         any property or asset of any Person that becomes a Subsidiary after
         the date hereof prior to the time such Person becomes a Subsidiary;
         provided that (i) such Lien is not created in contemplation of or in
         connection with such acquisition or such Person becoming a Subsidiary,
         as the case may be, (ii) such Lien shall not apply to any other
         property or assets of the Borrower or any Subsidiary and (iii) such
         Lien shall secure only those obligations which it secures on the date
         of such acquisition or the date such Person becomes a Subsidiary, as
         the case may be, and extensions, renewals and replacements thereof that
         do not increase the outstanding principal amount thereof as of such
         date;

<PAGE>

                                                                             37

           (c) any Lien on fixed or capital assets acquired, constructed or
     improved by the Borrower or any Subsidiary, and extensions, renewals and
     replacements thereof that do not increase the outstanding principal amount
     thereof; provided that (i) such Lien and the Indebtedness secured thereby
     are incurred prior to or within 18 months after such acquisition or the
     completion of such construction or improvement, (ii) the Indebtedness
     secured thereby was incurred to pay, and does not exceed, the cost of
     acquiring, constructing or improving such fixed or capital assets and (iii)
     such Lien shall not apply to any other property or assets of the Borrower
     or any Subsidiary;

           (d) any Lien on property or assets of the Borrower or any Subsidiary
     in favor of the Borrower or any Subsidiary;

           (e) accounts receivable balances of up to $300,000,000 at any time at
     Sunoco Receivables Corporation as part of Securitization Transactions;

           (f) Liens on assets of Sunoco Logistics Partners L.P. and its
     subsidiaries securing Indebtedness permitted under Section 6.01(a)(viii);
     and

           (g) other Liens securing Indebtedness and Securitization Transactions
     that, when aggregated with the Indebtedness of Subsidiaries permitted under
     Section 6.01(a)(ix) and the aggregate sale price of the assets sold in sale
     and leaseback transactions permitted under Section 6.03, do not exceed 15%
     of Consolidated Net Tangible Assets at any time.

           SECTION 6.03. Sale and Leaseback Transactions. The Borrower will not,
and will not permit any Subsidiary to, enter into any arrangement, directly or
indirectly, with any Person whereby it shall sell or transfer any property, real
or personal, used or useful in its business, whether now owned or hereafter
acquired, and thereafter rent or lease such property; provided, however, that,
notwithstanding the above, the Borrower or any Subsidiary may engage in any sale
and leaseback transactions if the aggregate sale price of the assets sold in
such transactions, when aggregated with the Indebtedness of Subsidiaries
permitted under Section 6.01(a)(ix) and the Indebtedness secured by Liens and
Securitization Transactions permitted pursuant to Section 6.02(g), does not
exceed 15% of Consolidated Net Tangible Assets at any time.

           SECTION 6.04. Fundamental Changes. (a) The Borrower will not merge
into or consolidate with any other Person, or permit any other Person to merge
into or consolidate with it, or sell, transfer, lease or otherwise dispose of
(in one transaction or in a series of transactions and including by means of any
merger or sale of capital stock or otherwise) all or substantially all of its
assets (whether now owned or hereafter acquired), or liquidate or dissolve,
except that, if at the time thereof and immediately after giving effect thereto
no Default shall have occurred and be continuing, any Person may merge with or
into or consolidate with the Borrower if (i) the Borrower is the surviving
Person and (ii) after giving effect to such transaction no Default shall exist.

           (b) The Borrower and the Subsidiaries, taken as a whole, will not
cease to be primarily engaged in the petroleum refining and chemicals
businesses.

           SECTION 6.05. Restrictive Agreements. The Borrower will not, and will
not permit the Subsidiaries to, enter into agreements that materially restrict
the ability of the Subsidiaries, taken as a whole, to pay dividends or other
distributions to the Borrower or to make or repay loans or advances to the
Borrower; provided that the foregoing shall not apply to (a) restrictions
existing on the date hereof, (b) restrictions imposed by law or (b) restrictions
with respect to a Person that is not a Subsidiary on the date hereof that are in
existence at the time such Person becomes a Subsidiary and are not incurred in
connection with, or in contemplation of, such Person becoming a Subsidiary.

<PAGE>

                                                                              38

           SECTION 6.06. Consolidated Tangible Net Worth. The Borrower will not
permit Consolidated Tangible Net Worth to be less at any time than the sum of
(a) $1,000,000,000 plus (b) 50% of Adjusted Net Income for each fiscal quarter
ended after March 31, 2002 (excluding quarters in which Adjusted Net Income
shall have been negative).

           SECTION 6.07. Leverage Ratio. The Borrower will not permit the
Leverage Ratio at any time to exceed 0.6 to 1.0.

                                   ARTICLE VII

                                Events of Default

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

           (a) the Borrower shall fail to pay any principal of any Loan or any
     reimbursement obligation in respect of any LC Disbursement when and as the
     same shall become due and payable, whether at the due date thereof or at a
     date fixed for prepayment thereof or otherwise;

           (b) the Borrower shall fail to pay any interest on any Loan or any
     fee or any other amount (other than an amount referred to in clause (a) of
     this Article) payable under this Agreement, when and as the same shall
     become due and payable, and such failure shall continue unremedied for a
     period of five days;

           (c) any representation or warranty made or deemed made by or on
     behalf of the Borrower or any Subsidiary in or in connection with this
     Agreement or any amendment or modification hereof or waiver hereunder, or
     in any report, certificate, financial statement or other document furnished
     pursuant to or in connection with this Agreement or any amendment or
     modification hereof or waiver hereunder, shall prove to have been incorrect
     in any material respect when made or deemed made;

           (d) the Borrower shall fail to observe or perform any covenant,
     condition or agreement contained in Section 5.02, 5.03 (with respect to the
     Borrower's existence) or 5.08 or in Article VI;

           (e) the Borrower shall fail to observe or perform any covenant,
     condition or agreement contained in this Agreement (other than those
     specified in clause (a), (b) or (d) of this Article), and such failure
     shall continue unremedied for a period of 30 days after notice thereof from
     the Administrative Agent to the Borrower (which notice will be given at the
     request of any Lender);

           (f) the Borrower or any Subsidiary shall fail to make any payment
     (whether of principal or interest and regardless of amount) in respect of
     any Material Indebtedness, when and as the same shall become due and
     payable;

           (g) any event or condition occurs that results in any Material
     Indebtedness becoming due prior to its scheduled maturity or that enables
     or permits (with or without the giving of notice, the lapse of time or
     both) the holder or holders of any Material Indebtedness or any trustee or
     agent on its or their behalf to cause any Material Indebtedness to become
     due, or to require the prepayment, repurchase, redemption or defeasance
     thereof, prior to its scheduled maturity; provided that this clause (g)
     shall not apply to secured Indebtedness that becomes due as a result of the
     voluntary sale or transfer of the property or assets securing such
     Indebtedness or to Capital Leases that terminate as a result of a casualty
     or condemnation affecting the property or assets subject thereto;

<PAGE>

                                                                              39

                (h) an involuntary proceeding shall be commenced or an
         involuntary petition shall be filed seeking (i) liquidation,
         reorganization or other relief in respect of the Borrower or any
         Material Subsidiary or its debts, or of a substantial part of its
         assets, under any Federal, state or foreign bankruptcy, insolvency,
         receivership or similar law now or hereafter in effect or (ii) the
         appointment of a receiver, trustee, custodian, sequestrator,
         conservator or similar official for the Borrower or any Material
         Subsidiary or for a substantial part of its assets, and, in any such
         case, such proceeding or petition shall continue undismissed for 60
         days or an order or decree approving or ordering any of the foregoing
         shall be entered;

                (i) the Borrower or any Material Subsidiary shall (i)
         voluntarily commence any proceeding or file any petition seeking
         liquidation, reorganization or other relief under any Federal, state or
         foreign bankruptcy, insolvency, receivership or similar law now or
         hereafter in effect, (ii) consent to the institution of, or fail to
         contest in a timely and appropriate manner, any proceeding or petition
         described in clause (h) of this Article, (iii) apply for or consent to
         the appointment of a receiver, trustee, custodian, sequestrator,
         conservator or similar official for the Borrower or any Material
         Subsidiary or for a substantial part of its assets, (iv) file an answer
         admitting the material allegations of a petition filed against it in
         any such proceeding, (v) make a general assignment for the benefit of
         creditors or (vi) take any action for the purpose of effecting any of
         the foregoing;

                (j) the Borrower or any Material Subsidiary shall become unable,
         admit in writing its inability or fail generally to pay its debts as
         they become due;

                (k) one or more judgments for the payment of money in an
         aggregate amount in excess of $25,000,000 shall be rendered against the
         Borrower, any Subsidiary or any combination thereof and the same shall
         remain undischarged for a period of 30 consecutive days during which
         execution shall not be effectively stayed, or any action shall be
         legally taken by a judgment creditor to attach or levy upon any assets
         of the Borrower or any Subsidiary to enforce any such judgment;

                (l) an ERISA Event shall have occurred that when taken together
         with all other ERISA Events that have occurred, could reasonably be
         expected to result in a Material Adverse Effect; or

                (m) a Change in Control shall occur;

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

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                                                                              40

                                  ARTICLE VIII

                            The Administrative Agent

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

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

         The Administrative Agent shall not have any duties or obligations
except those expressly set forth herein. Without limiting the generality of the
foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is
continuing, (b) the Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby that the Administrative Agent is
required to exercise in writing as directed by the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.02), and (c) except as expressly set
forth herein, the Administrative Agent shall not have any duty to disclose, and
shall not be liable for the failure to disclose, any information relating to the
Borrower or any of its Subsidiaries that is communicated to or obtained by the
bank serving as Administrative Agent or any of its Affiliates in any capacity.
The Administrative Agent shall not be liable for any action taken or not taken
by it with the consent or at the request of the Required Lenders (or such other
number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.02) or in the absence of its own gross
negligence or wilful misconduct. The Administrative Agent shall be deemed not to
have knowledge of any Default unless and until written notice thereof is given
to the Administrative Agent by the Borrower or a Lender, and the Administrative
Agent shall not be responsible for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made in or in connection with this
Agreement, (ii) the contents of any certificate, report or other document
delivered hereunder or in connection herewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein, (iv) the validity, enforceability, effectiveness or genuineness of
this Agreement or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article IV or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.

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

         The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related

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                                                                              41

Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.

         Subject to the appointment and acceptance of a successor Administrative
Agent as provided in this paragraph, the Administrative Agent may resign at any
time by notifying the Lenders, the Issuing Bank and the Borrower. Upon any such
resignation, the Required Lenders shall have the right, in consultation with the
Borrower, to appoint a successor. If no successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent may, on behalf of the Lenders and the Issuing
Bank, appoint a successor Administrative Agent which shall be a bank with an
office in New York, New York, or an Affiliate of any such bank. Upon the
acceptance of its appointment as Administrative Agent hereunder by a successor,
such successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. The fees payable by the Borrower to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. After the Administrative Agent's
resignation hereunder, the provisions of this Article and Section 9.03 shall
continue in effect for the benefit of such retiring Administrative Agent, its
sub-agents and their respective Related Parties in respect of any actions taken
or omitted to be taken by any of them while it was acting as Administrative
Agent.

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

         It is agreed that the Syndication Agent and Co-Documentation Agents
shall, in their capacities as such, have no duties or responsibilities under
this Agreement.

                                   ARTICLE IX

                                  Miscellaneous

         SECTION 9.01. Notices. (a) Except in the case of notices and other
communications expressly permitted to be given by telephone (and subject to
paragraph (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by telecopy, as follows:

         (i)  if to the Borrower, to it at Ten Penn Center, 1801 Market Street,
    Philadelphia, Pennsylvania 19103, Attention of Mr. Paul Mulholland (Telecopy
    No. (215) 977-3559) with a copy to the General Counsel;

         (ii) if to the Administrative Agent, to JPMorgan Chase Bank, Loan and
    Agency Services Group, One Chase Manhattan Plaza, 8th Floor, New York, New
    York 10081, Attention of Muniram Appanna (Telecopy No. (212) 552-2261), with
    a copy to JPMorgan Chase Bank, 600 Travis Street, 20th Floor, Houston, Texas
    77002, Attention of Mr. Russell Johnson (Telecopy No. (713) 216-8870);

<PAGE>

                                                                              42

         (iii) if to the Issuing Bank, to it at JPMorgan Chase Bank, 600 Travis
    Street, 20th Floor, Houston, Texas 77002, Attention of Mr. Russell Johnson
    (Telecopy No. (713) 216-8870); and

         (iv)  if to any other Lender, to it at its address (or telecopy number)
    set forth in its Administrative Questionnaire.

         (b)   Notices and other communications to the Lenders hereunder may be
delivered or furnished by electronic communications pursuant to procedures
approved by the Administrative Agent; provided that the foregoing shall not
apply to notices pursuant to Article II unless otherwise agreed by the
Administrative Agent and the applicable Lender. The Administrative Agent or the
Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications.

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

         SECTION 9.02. Waivers; Amendments. (a) No failure or delay by the
Administrative Agent, the Issuing Bank or any Lender in exercising any right or
power hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Administrative Agent, the Issuing Bank and the Lenders
hereunder are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of this Agreement or
consent to any departure by the Borrower therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) of this Section,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Loan or issuance of a Letter of Credit shall not be
construed as a waiver of any Default, regardless of whether the Administrative
Agent, any Lender or the Issuing Bank may have had notice or knowledge of such
Default at the time.

         (b)   Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders or by the Borrower and the
Administrative Agent with the consent of the Required Lenders; provided that no
such agreement shall (i) increase the Commitment of any Lender, without the
written consent of such Lender, (ii) reduce the principal amount of any Loan or
LC Disbursement or reduce the rate of interest thereon, or reduce any fees
payable hereunder, without the written consent of each Lender affected thereby,
(iii) postpone the scheduled date of payment of the principal amount of any Loan
or LC Disbursement, or any interest thereon, or any fees payable hereunder, or
reduce the amount of, waive or excuse any such payment, or postpone the
scheduled date of expiration of any Commitment, without the written consent of
each Lender affected thereby, (iv) change Section 2.17(b) or (c), or any other
provision of this Agreement, in a manner that would alter the pro rata sharing
of payments required thereby, without the written consent of each Lender, or (v)
change any of the provisions of this Section or the definition of "Required
Lenders" or any other provision hereof specifying the number or percentage of
Lenders required to waive, amend or modify any rights hereunder or make any
determination or grant any consent hereunder, without the written consent of
each Lender; provided further that no such agreement shall amend, modify or
otherwise affect the rights or duties of the Administrative Agent or the Issuing
Bank hereunder without the prior written consent of the Administrative Agent or
the Issuing Bank, as the case may be.

<PAGE>

                                                                              43

                  SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The
Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the
Agents and their Affiliates, including the reasonable fees, charges and
disbursements of Cravath, Swaine & Moore, counsel for the Agents, in connection
with the syndication of the credit facilities provided for herein, the
preparation and administration of this Agreement or any amendments,
modifications or waivers of the provisions hereof (whether or not the
transactions contemplated hereby or thereby shall be consummated), (ii) all
reasonable out-of-pocket expenses incurred by the Issuing Bank in connection
with the issuance, amendment, renewal or extension of any Letter of Credit or
any demand for payment thereunder and (iii) all out-of-pocket expenses incurred
by the Agents, the Issuing Bank or any Lender, including the fees, charges and
disbursements of any counsel for the Agents, the Issuing Bank or any Lender, in
connection with the enforcement or protection of its rights in connection with
this Agreement, including its rights under this Section, or in connection with
the Loans made or Letters of Credit issued hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.

                  (b) The Borrower shall indemnify the Agents, the Issuing Bank
and each Lender, and each Related Party of any of the foregoing Persons (each
such Person being called an "Indemnitee") against, and hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including the fees, charges and disbursements of any counsel for any
Indemnitee, incurred by or asserted against any Indemnitee arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement or any agreement or instrument contemplated hereby, the performance by
the parties hereto of their respective obligations hereunder or the consummation
of the Transactions or any other transactions contemplated hereby, (ii) any Loan
or Letter of Credit or the use of the proceeds therefrom (including any refusal
by the Issuing Bank to honor a demand for payment under a Letter of Credit if
the documents presented in connection with such demand do not strictly comply
with the terms of such Letter of Credit), (iii) any actual or alleged presence
or release of Hazardous Materials on or from any property owned or operated by
the Borrower or any of its Subsidiaries, or any Environmental Liability related
in any way to the Borrower or any of its Subsidiaries, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or wilful misconduct of such Indemnitee.

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

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

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

                  SECTION 9.04. Successors and Assigns. (a) The provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors

<PAGE>

                                                                              44

and assigns permitted hereby, (including any Affiliate of the Issuing Bank that
issues any Letter of Credit), except that (i) the Borrower may not assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of each Lender (and any attempted assignment or transfer by the
Borrower without such consent shall be null and void) and (ii) no Lender may
assign or otherwise transfer its rights or obligations hereunder except in
accordance with this Section. Nothing in this Agreement, expressed or implied,
shall be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby (including any
Affiliate of the Issuing Bank that issues any Letter of Credit), Participants
(to the extent provided in paragraph (c) of this Section) and, to the extent
expressly contemplated hereby, the Related Parties of each of the Administrative
Agent, the Issuing Bank and the Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.

          (b)(i) Subject to the conditions set forth in paragraph (b)(ii) below,
any Lender may assign to one or more assignees all or a portion of its rights
and obligations under this Agreement (including all or a portion of its
Commitments and the Loans at the time owing to it) with the prior written
consent (such consent not to be unreasonably withheld or delayed) of:

          (A)  the Borrower; provided that no consent of the Borrower shall be
required for an assignment to a Lender, an Affiliate of a Lender, an Approved
Fund (as defined below) or, if an Event of Default has occurred and is
continuing, any other assignee; and

          (B)  the Administrative Agent, provided that no consent of the
Administrative Agent shall be required for an assignment to an assignee that is
a Lender immediately prior to giving effect to such assignment.

          (ii) Assignments shall be subject to the following additional
conditions:

          (A)  except in the case of an assignment to a Lender or an Affiliate
of a Lender, the amount of the Commitment of the assigning Lender subject to
each such assignment (determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the Administrative Agent) shall
not be less than $5,000,000 or, if smaller, the entire remaining amount of the
assigning Lender's Commitment, unless the Borrower and the Administrative Agent
shall otherwise consent, provided that (i) in the event of concurrent
assignments to two or more assignees that are Affiliates of one another, or to
two or more Approved Funds managed by the same investment advisor or by
affiliated investment advisors, all such concurrent assignments shall be
aggregated in determining compliance with this subsection and (ii) no such
consent of the Borrower shall be required if an Event of Default has occurred
and is continuing;

          (B)  each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations under
this Agreement, provided that this clause shall not apply to rights in respect
of outstanding Competitive Loans.

          (C)  the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee of $3,500; provided that in the event of concurrent
assignments to two or more assignees that are Affiliates of one another, or to
two or more Approved Funds managed by the same investment advisor or by
affiliated investment advisors, only one such fee shall be payable;

          (D)  the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire; and

          (E)  in the case of an assignment to a CLO (as defined below), unless
such assignment (or an assignment to a CLO managed by the same manager or an
Affiliate of such manager) shall have been approved by the Borrower (the
Borrower hereby agreeing that such approval, if requested, will not be
unreasonably withheld or delayed), the assigning Lender shall

<PAGE>

                                                                              45

retain the sole right to approve any amendment, modification or waiver of any
provision of this Agreement, except that the Assignment and Assumption between
such Lender and such CLO may provide that such Lender will not, without the
consent of such CLO, agree to any amendment, modification or waiver described in
the first proviso to Section 9.02(b) that affects such CLO.

          For the purposes of this Section 9.04(b), the terms "Approved Fund"
and "CLO" have the following meanings:

          "Approved Fund" means (a) a CLO and (b) with respect to any Lender
that is a fund which invests in bank loans and similar extensions of credit, any
other fund that invests in bank loans and similar extensions of credit and is
managed by the same investment advisor as such Lender or by an Affiliate of such
investment advisor.

          "CLO" means any entity (whether a corporation, partnership, trust or
otherwise) that is engaged in making, purchasing, holding or otherwise investing
in bank loans and similar extensions of credit in the ordinary course of its
business and is administered or managed by a Lender or an Affiliate of such
Lender.

          (iii) Subject to acceptance and recording thereof pursuant to
paragraph (b)(iv) of this Section, from and after the effective date specified
in each Assignment and Assumption the assignee thereunder shall be a party
hereto and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Assumption, be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption covering
all of the assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.14, 2.15, 2.16 and 9.03). Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this Section 9.04 shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance with
paragraph (c) of this Section.

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

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

          (c)(i) Any Lender may, without notice to or the consent of the
Borrower, the Administrative Agent, or Issuing Bank sell participations to one
or more banks or other entities (a "Participant") in all or a portion of such
Lender's rights and obligations under this Agreement

<PAGE>

                                                                              46

(including all or a portion of its Commitment and the Loans owing to it);
provided that (A) such Lender's obligations under this Agreement shall remain
unchanged, (B) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (C) the Borrower, the
Administrative Agent, the Issuing Bank and the Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 9.02(b) that affects such Participant.
Subject to paragraph (c)(ii) of this Section, the Borrower agrees that each
Participant shall be entitled to the benefits of Sections 2.14, 2.15 and 2.16 to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section. To the extent permitted by
law, each Participant also shall be entitled to the benefits of Section 9.08 as
though it were a Lender, provided such Participant agrees to be subject to
Section 2.17(c) as though it were a Lender.

                  (ii) A Participant shall not be entitled to receive any
greater payment under Section 2.14, 2.15 or 2.16 than the applicable Lender
would have been entitled to receive with respect to the participation sold to
such Participant, unless the sale of the participation to such Participant is
made with the Borrower's prior written consent. A Participant that would be a
Foreign Lender if it were a Lender shall not be entitled to the benefits of
Section 2.16 unless the Borrower is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the Borrower, to
comply with Section 2.16(e) as though it were a Lender.

                  (d) Any Lender, without notice to or the consent of the
Borrower or the Administrative Agent, may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.

                  (e) By executing and delivering an Assignment and Assumption,
the assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim and that
its Commitments and the outstanding balances of its Loans, in each case without
giving effect to assignments thereof that have not become effective, are as set
forth in such Assignment and Assumption; (ii) except as set forth in clause (i)
above, such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement or any other Loan Document or any
other instrument or document furnished pursuant hereto or thereto, or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of any of the foregoing, or the financial condition of the Borrower or the
performance or observance by the Borrower of any of its obligations under this
Agreement or under any other Loan Document or any other instrument or document
furnished pursuant hereto or thereto; (iii) each of the assignee and the
assignor represents and warrants that it is legally authorized to enter into
such Assignment and Assumption; (iv) such assignee confirms that it has received
a copy of this Agreement, together with copies of any amendments or consents
entered into prior to the date of such Assignment and Assumption and copies of
the most recent financial statements delivered pursuant to Section 5.01 and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Assumption; (v)
such assignee will independently and without reliance upon the Agents, such
assigning Lender or any other Lender and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under

<PAGE>

                                                                              47

this Agreement; (vi) such assignee appoints and authorizes the Agents to take
such action as agents on its behalf and to exercise such powers under this
Agreement and the other Loan Documents as are delegated to them by the terms
hereof and thereof, together with such powers as are reasonably incidental
thereto; and (vii) such assignee agrees that it will perform in accordance with
their terms all the obligations that by the terms of this Agreement are required
to be performed by it as a Lender.

                  SECTION 9.05. Survival. All covenants, agreements,
representations and warranties made by the Borrower herein and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement shall be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of this Agreement and the
making of any Loans and issuance of any Letters of Credit, regardless of any
investigation made by any such other party or on its behalf and notwithstanding
that the Administrative Agent, the Issuing Bank or any Lender may have had
notice or knowledge of any Default or incorrect representation or warranty at
the time any credit is extended hereunder, and shall continue in full force and
effect as long as the principal of or any accrued interest on any Loan or any
fee or any other amount payable under this Agreement is outstanding and unpaid
or any Letter of Credit is outstanding and so long as the Commitments have not
expired or terminated. The provisions of Sections 2.14, 2.15, 2.16 and 9.03 and
Article VIII shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement or any provision hereof.

                  SECTION 9.06. Counterparts; Integration; Effectiveness. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement and
any separate letter agreements with respect to fees payable to the
Administrative Agent constitute the entire contract among the parties relating
to the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 4.01, this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the Administrative Agent
shall have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page
of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.

                  SECTION 9.07. Severability. Any provision of this Agreement
held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.

                  SECTION 9.08. Right of Setoff. If an Event of Default shall
have occurred and be continuing, each Lender and each of its Affiliates is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other obligations at
any time owing by such Lender or Affiliate to or for the credit or the account
of the Borrower against any of and all the obligations of the Borrower now or
hereafter existing under this Agreement held by such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement and
although such obligations may be unmatured. The rights of each Lender under this
Section are in addition to other rights and remedies (including other rights of
setoff) which such Lender may have.

<PAGE>

                                                                              48

                  SECTION 9.09. Governing Law; Jurisdiction; Consent to Service
of Process. (a) This Agreement shall be construed in accordance with and
governed by the law of the State of New York.

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

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

                  (d) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 9.01. Nothing
in this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.

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

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

                  SECTION 9.12. Confidentiality. Each of the Administrative
Agent, the Issuing Bank and the Lenders agrees to maintain the confidentiality
of the Information (as defined below), except that Information may be disclosed
(a) to its and its Affiliates' directors, officers, employees and agents,
including accountants, legal counsel and other advisors (it being understood
that the Persons to whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority, (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party to this Agreement, (e) in
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or the enforcement of rights hereunder,
(f) subject to an agreement containing

<PAGE>

                                                                              49

provisions substantially the same as those of this Section, to (i) any assignee
of or Participant in, or any prospective assignee of or Participant in, any of
its rights or obligations under this Agreement or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
the Borrower and its obligations, (g) with the consent of the Borrower or (h) to
the extent such Information (i) becomes publicly available other than as a
result of a breach of this Section or (ii) becomes available to the
Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis
from a source other than the Borrower. For the purposes of this Section,
"Information" means all information received from the Borrower relating to the
Borrower or its business, other than any such information that is available to
the Administrative Agent, the Issuing Bank or any Lender on a nonconfidential
basis prior to disclosure by the Borrower; provided that, in the case of
information received from the Borrower after the date hereof, such information
is clearly identified at the time of delivery as confidential. Any Person
required to maintain the confidentiality of Information as provided in this
Section shall be considered to have complied with its obligation to do so if
such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.

                  SECTION 9.13. Interest Rate Limitation. Notwithstanding
anything herein to the contrary, if at any time the interest rate applicable to
any Loan, together with all fees, charges and other amounts which are treated as
interest on such Loan under applicable law (collectively the "Charges"), shall
exceed the maximum lawful rate (the "Maximum Rate") which may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan in
accordance with applicable law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans or periods shall be
increased (but not above the Maximum Rate therefor) until such cumulated amount,
together with interest thereon at the Federal Funds Effective Rate to the date
of repayment, shall have been received by such Lender.

<PAGE>

                                                                              50

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

                                       SUNOCO, INC.,

                                          by /s/ PAUL MULHOLLAND
                                             ---------------------------------
                                             Name:  Paul Mulholland
                                             Title: Treasurer

                                       JPMORGAN CHASE BANK, individually and
                                       as Administrative Agent,

                                          by /s/ RUSSELL A. JOHNSON
                                             ---------------------------------
                                             Name:  Russell A. Johnson
                                             Title: Vice President

<PAGE>

                                                                              51

                                        BANC OF AMERICA SECURITIES LLC, as
                                        Syndication Agent,

                                           by /s/ DARYL G. PATTERSON
                                              ---------------------------------
                                              Name:  Daryl G. Patterson
                                              Title: Managing Director

                                        BANK OF NOVA SCOTIA, individually and as
                                        Co-Documentation Agent,

                                           by /s/ N. BELL
                                              ---------------------------------
                                              Name:  N. Bell
                                              Title: Senior Manager

                                        THE BANK OF TOKYO-MITSUBISHI, LTD.,
                                        individually and as Co-Documentation
                                        Agent,

                                           by /s/ M. R. MARRON
                                              ---------------------------------
                                              Name:  M. R. Marron
                                              Title: Vice President & Mgr.

                                        BANK OF AMERICA, N.A.,

                                           by /s/ RONALD E. MCKAIG
                                              ---------------------------------
                                              Name:  Ronald E. McKaig
                                              Title: Managing Director

<PAGE>

Signature Page to Sunoco, Inc. Three-Year Competitive Advance and Revolving
Credit Facility Agreement dated as of July 22, 2002.

                                JPMORGAN CHASE BANK

                                by: /s/ RUSSELL A. JOHNSON
                                Name: Russell A. Johnson
                                Title: Vice President

                                BANK OF AMERICA, N.A.

                                by: /s/ RONALD E. MCKAIG
                                Name: Ronald E. McKaig
                                Title: Managing Director

                                THE BANK OF NOVA SCOTIA

                                by: /s/ N. BELL
                                Name: N. Bell
                                Title: Senior Manager

                                BANK OF TOKYO - MITSUBISHI TRUST COMPANY

                                by: /s/ M. R. MARRON
                                Name: M. R. Marron
                                Title: Vice President & Mgr.

                                BARCLAYS BANK PLC

                                by: /s/ NICHOLAS A. BELL
                                Name: Nicholas A. Bell
                                Title: Director, Loan Transaction Management

                                MELLON BANK, N.A.

                                by: /s/ RICHARD A. MATTHEWS
                                Name: Richard A. Matthews
                                Title: First Vice President

                                CITIBANK, N.A.

                                by: /s/ DANIEL BRILL
                                Name: Daniel Brill
                                Title: Managing Director

<PAGE>

                                CREDIT LYONNAIS NEW YORK BRANCH

                                by: /s/ OLIVIER AUDEMARD
                                Name:  Olivier Audemard
                                Title:  Senior Vice President

                                CREDIT SUISSE FIRST BOSTON,
                                acting through the New York Branch

                                by: /s/ JAMES P. MORAN
                                Name: James P. Moran
                                Title: Director

                                by: /s/ VANESSA GOMEZ
                                Name: Vanessa Gomez
                                Title: Associate

                                KEY BANK NATIONAL ASSOCIATION

                                by: /s/ LAWRENCE A. MACK
                                Name: Lawrence A. Mack
                                Title: Senior Vice President

                                THE ROYAL BANK OF SCOTLAND PLC

                                by: /s/ Paul McDonagh
                                Name: Paul McDonagh
                                Title: Sr. Vice President

                                WACHOVIA BANK, N.A.

                                by: /s/ SHANNAN TOWNSEND
                                Name: Shannan Townsend
                                Title: Vice President

                                BANK ONE, NA (MAIN OFFICE - CHICAGO)

                                by: /s/ DANIEL A. DAVIS
                                Name: Daniel A. Davis
                                Title: Director

<PAGE>

                                LEHMAN COMMERCIAL PAPER, INC.

                                by: /s/ MICHELE SWANSON
                                Name: Michele Swanson
                                Title: Authorized Signatory

                                PNC BANK, NATIONAL ASSOCIATION

                                by: /s/ FRANK A. PUGLIESE
                                Name: Frank A Pugliese
                                Title: Vice President

                                FIFTH THIRD BANK

                                by: /s/ CHRISTINE L. WAGNER
                                Name: Christine L. Wagner
                                Title: Assistant Vice President<PAGE>
                                                               Exhibit 10(i)A(1)

                       LIMITED LIABILITY COMPANY AGREEMENT
                                       FOR
                              731 RESIDENTIAL LLC,
                      A DELAWARE LIMITED LIABILITY COMPANY
                              (RESIDENTIAL PARCEL)

         This Limited Liability Company Agreement ("AGREEMENT") of 731
RESIDENTIAL LLC, a Delaware limited liability company (the "COMPANY") is made as
of and is effective the 3rd day of July, 2002, by 731 Residential Holding
LLC, a Delaware limited liability company, as the sole member ("MEMBER"),
Domenic A. Borriello (in his capacity as the initial "INDEPENDENT MANAGER 1"),
and Kim E. Lutthans (in her capacity as the initial "INDEPENDENT MANAGER 2").

                                    RECITALS

         A. A Certificate (as hereinafter defined) for the Company was executed
and delivered on May 31, 2002 and filed on June 3, 2002 with the Secretary of
State of the State of Delaware, thereby forming the Company as a limited
liability company pursuant to the provisions of the Act (as hereinafter
defined).

         B. The Member, Special Member 1 and Special Member 2 wish to operate
the Company in accordance with the terms and conditions set forth herein.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein (the receipt and sufficiency of which are acknowledged by each
party hereto), the parties hereto, intending to be legally bound, do hereby
agree as follows:

1.       DEFINITIONS.

         When used in this Agreement, the following terms shall have the
meanings set forth below (terms used in this Agreement that are not defined in
this Article 1 shall have the meanings set forth elsewhere in this Agreement or
in Section 18-101 of the Act):

         1.1 "ACT" shall mean the Delaware Limited Liability Company Act (6 Del.
C. Section 18-101, et. seq.), as the same may be amended from time to time.

         1.2 "AFFILIATE" shall mean a Person or Persons directly or indirectly,
through one or more intermediaries, controlling, controlled by or under common
control with the Person or Persons in question. The term "control", as used in
the immediately preceding sentence, shall mean, with respect to a Person that is
a corporation, the right to exercise, directly or indirectly, more than 20% of
the voting rights attributable to the shares of the controlled corporation and,
with respect to a Person that is not a corporation, the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of the controlled Person.

                                       1
<PAGE>
         1.3 "AGREEMENT" shall mean this Limited Liability Company Agreement for
731 Residential LLC, as originally executed and as amended from time to time.

         1.4 "ALEXANDER'S" shall mean Alexander's, Inc., a Delaware corporation.

         1.5 "ALEXANDER'S REIMBURSEMENT AGREEMENT" shall have the meaning
provided in the Loan Agreement.

         1.6 "BANKRUPTCY ACTION" shall have the meaning set forth in Section
2.6(d) hereof.

         1.7 "BOARD OF MANAGERS" shall have the meaning set forth in Section 5.5
hereof.

         1.8 "CAPITAL CONTRIBUTION" shall mean the total of cash and other
assets contributed to the Company by the Member.

         1.9 "CERTIFICATE" shall mean the Certificate of Formation of the
Company, executed and delivered on May 31, 2002 and filed with the Secretary of
State of the State of Delaware on June 3, 2002 (which is hereby ratified and
approved in all respects), as amended from time to time.

         1.10 "CODE" shall mean the Internal Revenue Code of 1986, as amended
from time to time, the provisions of succeeding law, and to the extent
applicable, the Regulations.

         1.11 "COMMERCIAL SPE" shall mean 731 Commercial LLC, a Delaware limited
liability company.

         1.12 "COMPANY" shall mean 731 Residential LLC, a Delaware limited
liability company.

         1.13 "DISTRIBUTABLE CASH" shall mean the amount of cash which the
Principal Manager deems available for distribution, taking into account all
Company debts, liabilities, and obligations then due (including, without
limitation, the Loan) and amounts necessary to place into reserves for customary
and usual claims with respect to the Company's business.

         1.14 "FISCAL YEAR" shall mean the Company's fiscal year, which shall be
the calendar year.

         1.15 "GUARANTIES" shall have the meaning provided in the Loan
Agreement.

         1.16 "INDEPENDENT MANAGER" shall have the meaning given to that term in
Section 2.6(c) hereof.

         1.17 "INDEPENDENT MANAGER 1" shall mean the person from time to time
appointed by the Member as an Independent Manager who shall be designated by the
Member as "Independent Manager 1".

                                       2
<PAGE>
         1.18 "INDEPENDENT MANAGER 2" shall mean the person from time to time
appointed by the Member as an Independent Manager who shall be designated by the
Member as "Independent Manager 2".

         1.19 "LENDER" shall mean Bayerische Hypo- und Vereinsbank AG and other
co-lenders that hold an interest in the Loan to Company together with any of
their successors and assigns, each during such time as it is the holder of such
interest.

         1.20 "LOAN" shall mean the loan in the original principal amount of
$490,000,000 made by Lender to Company and Commercial SPE or any loan made for
the purposes of refinancing such loan or any portion thereof.

         1.21 "LOAN AGREEMENT" shall mean the loan agreements between Lender,
Company and Commercial SPE pursuant to which the Loan is made.

         1.22 "LOAN DOCUMENTS" shall mean any and all documentation in
connection with the Loan, as amended from time to time, and any other agreement
to be entered into in connection with such documents and any financing documents
in replacement thereof to be entered into by the Company and Commercial SPE in
connection with the acquisition and ownership of the Property, including,
without limitation, the documents listed on Schedule 1.22 attached hereto and
incorporated herein.

         1.23 "MEMBER" shall mean 731 Residential Holding LLC, a Delaware
limited liability company, in its capacity as a member of the Company, or any
other Person that succeeds Member in that capacity. A "Special Member" is not a
"Member" as that term is used in this Agreement.

         1.24 "MEMBERSHIP INTEREST" shall mean all of the Member's right, title
and interest in, to and against the Company, including rights to Distributable
Cash of the Company, and all other rights of the Member to participate in the
business, affairs and management of the Company, including without limitation,
the right to vote on or grant consent or approval with respect to matters coming
before the Company.

         1.25 "NET PROFITS" and "NET LOSSES" shall mean the net profits and net
losses of the Company for a period (or from a transaction) as determined in
accordance with generally accepted accounting principles, consistently applied.

         1.26 "PERCENTAGE INTEREST" shall mean the limited liability interest in
the Company expressed as a percentage of the total limited liability interests
outstanding. The Percentage Interest of the Member is 100.00%.

         1.27 "PERMITTED INDEBTEDNESS" shall mean the Loan and the other
indebtedness of the Company that is permitted under the Loan Documents.

         1.28 "PERSON" shall mean any individual, sole proprietorship,
corporation, general partnership, limited partnership, limited liability company
or partnership, joint venture, association, joint stock company, bank, trust,
estate, unincorporated organization, any federal,

                                       3
<PAGE>
state, county or municipal government (or any agency or political subdivision
thereof), endowment fund or any other form of entity.

         1.29 "PRINCIPAL MANAGER" shall mean Member, who is appointed as a
manager within the meaning of the Act, except to the extent that the Board of
Managers is provided with management responsibility pursuant to Section 5.3.

         1.30 "PROPERTY" shall mean that certain real property (together with
improvements, fixtures, and other appurtenances thereto) commonly known as the
residential parcel at 731 Lexington Avenue, in the City of New York, County of
New York, State of New York, as more specifically set forth on Schedule 1.30
attached hereto and incorporated herein.

         1.31 "REGULATIONS" shall, unless the context clearly indicates
otherwise, mean the regulations currently in force as final or temporary that
have been issued by the U.S. Department of Treasury pursuant to its authority
under the Code.

         1.32 "SPECIAL MEMBER 1" shall mean the Independent Manager 1 in his
capacity as Special Member.

         1.33 "SPECIAL MEMBER 2" shall mean the Independent Manager 2 in his
capacity as Special Member.

         1.34 "VORNADO" shall mean Vornado Realty L.P., a Delaware limited
partnership.

         1.35 "VORNADO REIMBURSEMENT AGREEMENT" shall have the meaning provided
in the Loan Agreement.

         1.36 "VACANCY" shall have the meaning set forth in Section 5.6 hereof.

2.       ORGANIZATIONAL MATTERS.

         2.1 FORMATION AND CONTINUATION. Larry Portal, is hereby designated as
an "authorized person" within the meaning of the Act, and has executed,
delivered and filed the Certificate of the Company with the Secretary of State
of the State of Delaware and the qualification to do business in the State of
New York. Upon the filing of the Certificate of the Company with the Secretary
of State of the State of Delaware and the qualification to do business in the
State of New York, his powers as an "authorized person" ceased, and the Member
thereupon became the designated "authorized person" within the meaning of the
Act. The Member shall execute, deliver and file any other certificates (and any
amendments and/or restatements thereof) necessary for the Company to qualify to
do business in any jurisdiction (other than the State of New York) in which the
Company may wish to conduct business.

         2.2 NAME. The name of the Company shall be "731 RESIDENTIAL LLC". The
business of the Company may be conducted under that name or, upon compliance
with applicable laws, any other name that Member deems appropriate or advisable.
The Principal Manager shall qualify the Company to do business in the State of
New York and shall file any qualification instruments and fictitious name
certificates and similar filings, and any amendments

                                       4
<PAGE>
thereto, as necessary to qualify the Company to conduct business in the State of
New York or which Principal Manager otherwise considers appropriate or advisable
in accordance with Section 5 of this Agreement. Notwithstanding the foregoing,
for so long as any obligation to Lender under the Loan remains outstanding the
Company shall maintain the name "731 RESIDENTIAL LLC".

         2.3 TERM. The term of the Company and this Agreement shall commence
from the date of filing of the Certificate with the Secretary of State of the
State of Delaware as aforesaid and shall continue until the dissolution of the
Company pursuant to Section 9.1 hereof.

         2.4 REGISTERED OFFICE; REGISTERED AGENT; PRINCIPAL OFFICE. The Company
shall continuously maintain a registered office and registered agent in the
State of Delaware as required by the Act. The registered office and registered
agent of the Company in Delaware are c/o The Corporation Trust Company,
Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801, County
of New Castle. In addition, the Company shall maintain its principal office at
c/o Alexander's, Inc., 888 Seventh Avenue, New York, New York 10019, or at such
other place as Principal Manager may determine. The registered office,
registered agent and principal office of the Company may be changed at any time
and from time to time by Principal Manager.

         2.5 ADDRESS OF MEMBER. The address of Member as the sole Member as of
the date of this Agreement is c/o Alexander's, Inc., 888 Seventh Avenue, New
York, New York 10019, Attention: Chief Executive Officer. Any successor Member
who is admitted shall notify the Member and the Company of its address upon
admission to the Company as a Member. The Member may change its address at any
time by notice given to the Company.

         2.6 PURPOSE OF COMPANY.

                  (a) The purpose of the Company is limited solely to owning,
holding, managing, developing, leasing, operating and disposing of the Property,
entering into the Loan Documents, refinancing the Property in connection with a
permitted repayment or refinancing of the Loan, and transacting any and all
lawful business that is incident, necessary and appropriate to accomplish the
foregoing.

                  (b) Notwithstanding any other provision of this Agreement to
the contrary (but subject to Section 2.6(d)), the Company shall not do any of
the following, so long as any obligation of the Company to the Lender under Loan
is outstanding:

                     (1) the Company will not engage in any business or activity
other than as expressly set forth under the heading "Purpose of Company" in
Section 2.6(a) of this Agreement.

                     (2) the Company will not acquire or own any material assets
other than (i) the Property, and (ii) such incidental personal property as may
be necessary for the ownership, construction, management and operation of the
Property.

                                       5
<PAGE>
                           (3) the Company will maintain books, financial
records and bank accounts (including checking and other bank accounts and
custodian and other securities safekeeping accounts) that are separate and
distinct from the books, financial records and bank accounts of any other person
or entity; provided that it may have a joint bank account with Commercial SPE as
co-borrower under the Loan.

                           (4) the Company will maintain books, financial
records and bank accounts in a manner so that it will not be difficult or costly
to segregate, ascertain and otherwise identify the assets and liabilities of the
Company.

                           (5) the Company will not commingle any of its assets,
funds, liabilities or business functions with the assets, funds, liabilities or
business functions of any other person or entity (other than (i) Commercial SPE
(a) as co-borrower under the Loan and (b) as co-obligor to Alexander's, Inc.
under the Alexander's Reimbursement Agreement for the reimbursement of payments
under the Guaranties and (ii) Alexander's and Commercial SPE as co-obligors to
Vornado under the Vornado Reimbursement Agreement for the reimbursement of
payments under the Guaranties).

                           (6) the Company will observe all appropriate limited
liability company procedures and formalities.

                           (7) the Company will pay its own liabilities, losses
and expenses only out of its own funds (except to the extent otherwise permitted
or provided for under (i) the Loan Documents, (ii) the Vornado Reimbursement
Agreement for reimbursement of payments under the Guaranties and (iii)
Alexander's Reimbursement Agreement for reimbursement of payments under the
Guaranties).

                           (8) subject to clause (9) below, the Company will
maintain separate annual financial statements prepared in accordance with
generally accepted accounting principles, consistently applied, showing its
assets and liabilities separate and distinct from those of any other person or
entity.

                           (9) in the event the financial statements of the
Company are consolidated with the financial statements of any other entity, then
in addition to maintaining separate financial statements as required above, the
Company will cause to be included in such consolidated financial statements a
note stating that "the Company is a separate entity that has separate assets and
liabilities as shown on the Company's separate financial statement".

                           (10) the Company will pay or bear the cost of the
preparation of its financial statements, and have such financial statements
audited by a certified public accounting firm that is not affiliated with the
Company or its affiliates.

                           (11) the Company will not guarantee or become
obligated for the debts or obligations of any other entity or person (other than
(i) Commercial SPE (a) as co-borrower under the Loan and (b) as co-obligor to
Alexander's under the Alexander's Reimbursement Agreement for the reimbursement
of payments under the Guaranties and (ii) Alexander's and

                                       6
<PAGE>
Commercial SPE as co-obligors to Vornado under the Vornado Reimbursement
Agreement for the reimbursement of payments under the Guaranties).

                           (12) the Company will not hold out its credit as
being available to satisfy the debts or obligations of any other person or
entity (other than (i) Commercial SPE (a) as co-borrower under the Loan and (b)
as co-obligor to Alexander's under the Alexander's Reimbursement Agreement for
the reimbursement of payments under the Guaranties and (ii) Alexander's and
Commercial SPE as co-obligors to Vornado under the Vornado Reimbursement
Agreement for the reimbursement of payments under the Guaranties).

                           (13) the Company will hold itself out as an entity
separate and distinct from any other person or entity (including its
affiliates).

                           (14) the Company will correct any known
misrepresentation or misunderstanding regarding its separate identity.

                           (15) the Company will use separate stationery,
business cards, purchase orders, invoices, checks and the like bearing its own
name to the extent it will use such items.

                           (16) the Company will maintain a sufficient number of
employees or outside consultants in light of its contemplated business
operations and pay their salaries out of its own funds (and the funds of
Commercial SPE as co-borrower under the Loan).

                           (17) the Company will compensate all consultants,
independent contractors, employees and agents from its own funds (or those of
Commercial SPE as co-borrower under the Loan) for services provided to it by
such consultants, independent contractors, employees and agents.

                           (18) the Company will, to the extent that the Company
and any of its affiliates occupy any premises in the same location, allocate
fairly, appropriately and nonarbitrarily any rent and overhead expenses among
and between such entities with the result that each entity bears its fair share
of all such rent and expenses.

                           (19) the Company will, to the extent that the Company
and any of its affiliates share the same officers and other employees, allocate
fairly, appropriately and nonarbitrarily any salaries and expenses to the extent
actually incurred by such parties related to providing benefits to such officers
and other employees between or among such entities, with the result that each
such entity will bear its fair share of the salary and benefit costs associated
with all such common or shared officers or other employees.

                           (20) the Company will, to the extent that the Company
and any of its affiliates jointly contract or do business with vendors or
service providers or share overhead expenses, allocate fairly, appropriately and
nonarbitrarily any costs and expenses incurred in so doing between or among such
entities, with the result that each such entity bears its fair share of all such
costs and expenses.

                                       7
<PAGE>
                           (21) the Company will, to the extent the Company
contracts or does business with vendors or service providers where the goods or
services are wholly or partially for the benefit of its affiliates, allocate
fairly, appropriately and nonarbitrarily any costs incurred in so doing to the
entity for whose benefit such goods or services are provided, with the result
that each such entity bears its fair share of all such costs.

                           (22) the Company will not make any loans to any
person or entity or buy or hold any indebtedness issued by any other person or
entity (except for cash and investment-grade securities and each of the
permitted investments and exceptions expressly permitted by the Loan Documents).

                           (23) the Company will conduct its own business solely
in its own name, through its duly authorized officers or agents.

                           (24) the Company will hold all of its assets in its
own name (except for assets held jointly with Commercial SPE as co-borrower
under the Loan).

                           (25) the Company will maintain an arm's-length like
relationship with its affiliates and enter into transactions with affiliates
only on terms at least as favorable to the Company as could be obtained at arm's
length.

                           (26) the Company will not pledge its assets to secure
the liabilities of any other person or entity (other than Commercial SPE as
co-borrower under the Loan).

                           (27) the Company will not identify itself as a
division or department of any other entity.

                           (28) the Company intends to maintain adequate capital
in light of its contemplated business operations.

                           (29) the Company will conduct transactions between
the Company and third parties in the name of the Company and as an entity
separate and independent from its affiliates.

                           (30) the Company will cause representatives,
employees and agents of the Company to hold themselves out to third parties as
being representatives, employees or agents, as the case may be, of the Company.

                           (31) the Company will cause transactions and
agreements between the Company, on the one hand, and any one or more of its
affiliates, on the other hand (including transactions and agreements pursuant to
which the assets or property of one is used or to be used by the other), to be
entered into in the names of the entities that are parties to the transaction or
agreement and to be formally documented in writing.

                           (32) the Company will cause the pricing and other
material terms of all transactions and agreements described in the immediately
preceding clause (29) above to be established by written agreement (by formula
or otherwise) at the inception of the particular

                                       8
<PAGE>
transaction or agreement on terms at least as favorable to the Company as could
be obtained at arm's length.

                           (33) the Company will not acquire or assume the
obligations of its affiliates (other than (i) Commercial SPE (a) as co-borrower
under the Loan and (b) as co-obligor to Alexander's under the Alexander's
Reimbursement Agreement for the reimbursement of payments under the Guaranties
and (ii) Alexander's and Commercial SPE as co-obligors to Vornado under the
Vornado Reimbursement Agreement for the reimbursement of payments under the
Guaranties).

                           (34) the Company will not form, hold, or acquire any
subsidiary or own any other equity interest in any other Person except as
expressly permitted in the Loan Documents.

                           (35) the Company will file any required tax returns
and will make any required payments under applicable tax law.

                  (c) The Company shall at all times cause there to be at least
two (2) duly appointed members of the Board of Managers who are independent
managers (each an "INDEPENDENT MANAGER") who shall not have been or be at the
time of such individual's appointment, or at any time while serving as an
Independent Manager of the Company, and may not have been at any time during the
preceding five (5) years preceding his or her appointment (A) a member (with the
exception of serving as Special Member of the Company or Commercial SPE),
shareholder, partner, director, manager (with the exception of serving as
Independent Manager of the Company or Commercial SPE), officer or employee of
Company, or of Member or any Affiliate of any of them; (B) a customer of,
creditor of, or supplier or service provider (including professionals) to,
Company or its Member or any of Company's or Member's members, shareholders,
partners, or subsidiaries, or any Affiliate of any of them, if the revenues
therefrom to such director account for any of such director's gross annual
revenues; (C) a Person controlling any of the foregoing; (D) any other Person
receiving a material portion of his or her compensation or other financial
remuneration from, or who is otherwise financially dependent on, an officer,
director or employee of Company or Member, or any of their Affiliates or an
officer's, director's or employee's family member by blood or marriage or a
business entity owned or controlled by any of the foregoing; or (E) a spouse,
parent, sibling or child of any Person described by (A), (B), (C) or (D) above.
A natural person who satisfies the foregoing definition other than subparagraph
(B) shall not be disqualified from serving as an Independent Manager of the
Company if such individual is an independent manager provided by a
nationally-recognized company that provides professional independent managers
and that also provides other corporate services in the ordinary course of its
business. A natural person who otherwise satisfies the foregoing except for
serving as an independent manager of a "special purpose" Affiliate that does not
own a direct or indirect interest in the Company or Residential SPE shall not be
disqualified from serving as an Independent Manager of the Company if such
individual is at the time of initial appointment, or at any time while serving
as a Independent Manager of the Company, an Independent Manager of a "special
purpose entity" affiliated with the Company (other than any entity that owns a
direct or indirect equity interest in the Company or Commercial SPE) if such
individual is an independent manager provided by a nationally-

                                       9
<PAGE>
recognized company that provides professional independent managers. For purposes
of this paragraph, a "special purpose entity" is an entity, whose organizational
documents contain restrictions on its activities and impose requirements
intended to preserve the Company's separateness that are substantially similar
to those of the Company and provide, inter alia, that it: (a) is organized for
the limited purpose of owning and operating one or more properties or is a
member of an entity which is organized for the limited purpose of owning and
operating one or more properties; (b) has restrictions on its ability to incur
indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c)
may not file voluntarily a bankruptcy petition on its own behalf or on behalf of
such entity without the consent of the Independent Manager and (d) shall conduct
itself and cause such entity to conduct itself in accordance with certain
"separateness covenants", including, but not limited to, the maintenance of its
and such entity's books, records, bank accounts and assets separate from those
of any other person or entity. The initial Independent Managers shall be Domenic
A. Borriello, initially designated as "Independent Manager 1", and Kim E.
Lutthans, initially designated as "Independent Manager 2". As used in this
Section 2.6 (c), the term "CONTROLLED" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person whether through ownership of voting securities, by contract
or otherwise.

                  (d) Notwithstanding any other provision of this Agreement
(other than Section 2.6(f) below) or the Certificate or of law that otherwise so
empowers Company, Company shall not take any of the following actions (w)
without the consent of the Member, (x) without the vote or written consent of
both members of the Board of Managers which are Independent Managers, (y) if one
or more of the other members of the Board of Managers vote against or disapprove
such actions, and (z) if the obligation of the Company to Lender under the Loan
is outstanding, without the written consent of Lender: (i) to the fullest extent
permitted by law, the dissolution, winding up, liquidation, consolidation,
conversion to another form of business association or state of formation, or
change in the legal structure of Company including, but not limited to,
permitting the transfer of the limited liability company interests of any Member
in whole or in part (if such transfer is restricted by the Loan Documents and,
in such instance, a transfer may be made only in accordance with the Loan
Documents), the merger of Company or the sale, transfer or other disposition of
all or substantially all of the properties and assets of Company; (ii) the
engagement by Company in any business other than the ownership, management,
development, leasing, financing, maintenance and operation of the Property; or
(iii) the amendment or modification of Sections 2.2, 2.3, 2.6, 4.2, 4.3, 4.8,
5.1, 5.2, 5.5, 5.6, 7, 8.1, 8.4, 8.5, 9.1, 9.6, 10, 11.10 and 11.13 or the
defined terms referenced therein. Notwithstanding another provision of this
Agreement or the Certificate or of law that otherwise so empowers Company,
Company shall not take any of the following actions (w) without the consent of
the Member, (x) without the vote or written consent of both members of the Board
of Managers which are Independent Managers and (y) if one or more of the other
members of the Board of Managers vote against or disapprove such actions: (A)
the filing, or consent to the filing, of a bankruptcy, insolvency or
reorganization case or proceeding; instituting any proceedings under any
applicable insolvency law or otherwise seek any relief under the laws relating
to the relief from debts or the protection of debtors generally; seeking or
consenting to appointment of a receiver, liquidator, assignee, trustee,
sequestrator, custodian or any similar official for the Borrower or a
substantial portion of its properties; making any assignment for the benefit of
the Borrower's creditors; taking any action in furtherance of any of the
foregoing

                                       10
<PAGE>
(collectively, "Bankruptcy Action") or (B) the amendment or modification of any
provision of this Agreement (subject to the prior sentence of this Section
2.6(d)) or the Certificate; and any purported action of Company which violates
this sentence shall be void ab initio and of no force or effect.

                  (e) The Company shall have no liabilities, contingent or
otherwise, other than the Permitted Indebtedness.

                  (f) Notwithstanding any other provision of this Agreement or
the Certificate or of law that otherwise so empowers Company, in the event that
Commercial SPE shall take, or become subject to, a Bankruptcy Action, then, upon
receiving written notice from Lender, all of the members of the Board of
Managers (including both Independent Managers) shall take a vote on the
commencement of a Bankruptcy Action with respect to the Company and shall vote,
to the fullest extent permitted by law, as specifically directed and instructed
by the Lender for so long as the obligation of the Company to Lender under the
Loan is outstanding. If so directed by the Lender, the Company shall seek
procedural consolidation of the bankruptcy proceedings of the Company and
Commercial SPE.

                  (g) THE COMPANY ACKNOWLEDGES AND AGREES THAT THE LENDER WOULD
NOT HAVE AGREED TO MAKE THE LOAN BUT FOR THE INCLUSION OF THE BANKRUPTCY CONTROL
PROVISIONS SET FORTH IN SECTION 2.6(f) HEREIN. THE BANKRUPTCY CONTROL PROVISIONS
CONTAINED IN THIS AGREEMENT ARE DESIGNED TO REFLECT THE AGREEMENT AND
UNDERSTANDING OF THE TRANSACTION PARTIES WITH THE LENDER THAT THE LOAN TO THE
COMPANY AND RESIDENTIAL SPE AS CO-BORROWERS IS A SINGLE TRANSACTION SECURED BY
THE ENTIRE PROPERTY AND LENDER MADE THE LOAN IN RELIANCE ON ITS ABILITY TO
REALIZE UPON THE BENEFIT OF SUCH AGREEMENT AND UNDERSTANDING.

3.       CAPITAL CONTRIBUTIONS.

         3.1 INITIAL CAPITAL CONTRIBUTION. Member has contributed the Property
to the Company pursuant to that certain bargain and sale deed without covenant
against grantor's acts dated July 3, 2002 (subject to all exceptions thereof)
executed by Member in favor of Company.

         3.2 ADDITIONAL CAPITAL CONTRIBUTIONS. Member may, but shall not be
obligated to, contribute additional capital to the Company in such amounts and
at such times as Member shall determine in its sole and absolute discretion.

         3.3 NO INTEREST. Member shall not be entitled to receive interest on
any Capital Contributions.

         3.4 CAPITAL ACCOUNT. The Company shall establish and maintain a capital
account for Member to which it shall credit the amount of its Capital
Contributions and Net Profits of the Company from time to time and to which it
shall charge such Member's share of distributions

                                       11
<PAGE>
and Net Losses. The initial capital account of Member shall be equal to the fair
market value of the Property.

4.       MEMBER.

         4.1 LIMITED LIABILITY. Except as otherwise provided by the Act, the
debts, obligations and liabilities of the Company, whether arising in contract,
tort or otherwise, shall be solely the debts, obligations and liabilities of the
Company, and neither the Member nor the Special Members shall be obligated
personally for any such debt, obligation or liability of the Company solely by
reason of being a member of the Company.

         4.2 ADMISSION OF ADDITIONAL MEMBERS. Except as contemplated by Section
4.8, no additional members shall be admitted to the Company, it being the intent
of Member that the Company shall at all times be a single member limited
liability company. Without the need for the consent of any Person, upon a
transfer of the limited liability company interest in accordance with this
Agreement, the transferee shall be deemed admitted as a Member of the Company
upon the effective date of such transfer.

         4.3 RESIGNATIONS. Member shall not resign as the member of the Company.

         4.4 TRANSACTION WITH THE COMPANY. Subject to any limitations set forth
in this Agreement, including without limitation, Section 2.6 hereof, Member may
lend money to, act as a surety, guarantor or endorser for, guarantee or assume
one or more obligations of, provide collateral for, and transact other business
with the Company. Subject to this Agreement and applicable law, Member has the
same rights and obligations with respect to any transaction with Company as a
Person who is not a member or manager.

         4.5 REMUNERATION TO MEMBER. Except as otherwise authorized in or
pursuant to this Agreement, Member is not entitled to remuneration for acting on
Company business.

         4.6 VOTING RIGHTS. Except as expressly modified in this Agreement,
Member shall have the voting, approval and consent rights provided in the Act.

         4.7 MEETINGS OF THE MEMBER. No annual or regular meeting of Member is
required.

         4.8 SPECIAL MEMBER.

                  (a) Upon the occurrence of any event that causes the Member to
cease to be a member of the Company (other than upon an assignment by the Member
of all of its limited liability company interest in the Company and the
admission of the transferee pursuant to Section 4.2 (a "MEMBER CESSATION
EVENT")), Independent Manager 1 shall, without any action of any Person and
simultaneously with the Member's ceasing to be a member of the Company,
automatically be admitted to the Company as a member of the Company (in such
capacity, a "SPECIAL MEMBER") and shall continue the Company without
dissolution. If, however, at the time of a Member Cessation Event, Independent
Manager 1 has died or is otherwise no longer able to step into the role of
Special Member, then, in such event, Independent Manager 2 shall concurrently
with the Member Cessation Event, and without any action of any Person and

                                       12
<PAGE>
simultaneously with the Member Cessation Event, automatically be admitted to the
Company as Special Member and shall continue the Company without dissolution. It
is the intent of these provisions that the Company never have more than one
Special Member at any particular point in time.

                  (b) No Special Member may resign from the Company or transfer
its rights as Special Member unless (i) a successor Special Member has been
admitted to the Company as Special Member by executing a counterpart to this
Agreement, and (ii) such successor has also accepted its appointment as
Independent Manager pursuant to Section 2.6(c); provided, however, the Special
Members shall automatically cease to be members of the Company upon the
admission to the Company of a substitute Member appointed by the personal
representative (as defined in the Act) of the last remaining Member who ceased
to be a member of the Company. The Special Member shall be a member of the
Company that has no interest in the profits, losses and capital of the Company
and has no right to receive any distributions of Company assets. Pursuant to
Section 18-301 of the Act, a Special Member shall not be required to make any
capital contributions to the Company and shall not receive a limited liability
company interest in the Company. A Special Member, in its capacity as Special
Member, may not bind the Company. Except as required by any mandatory provisions
of the Act, the Special Member, in its capacity as Special Member, shall have no
right to vote on, approve or otherwise consent to any action by, or matter
relating to, the Company, including, without limitation, the merger,
consolidation or conversion of the Company. In order to implement the admission
to the Company of each Special Member, each person acting as an Independent
Manager pursuant to Section 2.6(c) shall execute a counterpart to this
Agreement. Prior to its admission to the Company as Special Member, each person
acting as an Independent Manager pursuant to Section 2.6(c) shall not be a
member of the Company.

5.       MANAGEMENT AND CONTROL OF THE COMPANY; LIMITED LIABILITY.

         5.1 MANAGEMENT OF THE COMPANY BY PRINCIPAL MANAGER. The business,
property and affairs of the Company shall be managed and all powers of the
Company shall be exercised by or under the direction of Principal Manager except
only for the powers granted to the Board of Managers under this Article 5.
Principal Manager shall, on behalf of and in the name of the Company, and in
addition to the general management obligations for the operation of the Company
and the obligations of Principal Manager provided for elsewhere in this
Agreement or by law, cause the Company to perform the obligations and otherwise
comply with the requirements set forth in Section 2.6 of this Agreement.
Principal Manager shall conduct the affairs of the Company in the best interest
of the Company and Member, including the safekeeping and use of all Company
funds for the benefit of the Company and Member.

         5.2 POWERS WITH RESPECT TO MANAGEMENT OF THE COMPANY. Subject to the
limitations set forth in Section 2.6 and in Section 5.3 or expressly provided
elsewhere in this Agreement, Principal Manager shall have all necessary powers
to manage and carry out the management of the Company and the power to sign
contracts and obligations on behalf of the Company, including without
limitation, the power to exercise on behalf and in the name of the Company all
of the powers of a manager described in the Act. Notwithstanding any other
provision of this Agreement, the Company, the Principal Manager, or the Member,
on behalf of

                                       13
<PAGE>
the Company, may enter into and perform the Loan Documents, the Alexander's
Reimbursement Agreement, the Reimbursement Documents (as defined in the
Alexander's Reimbursement Agreement) in connection with the Alexander's
Reimbursement Agreement, the Vornado Reimbursement Agreement and the
Reimbursement Documents (as defined in the Vornado Reimbursement Agreement) in
connection with the Vornado Reimbursement Agreement, without any further act,
vote or approval. The Principal Manager is hereby authorized to enter into the
Loan Documents, the Alexander's Reimbursement Agreement, the Reimbursement
Documents in connection with the Alexander's Reimbursement Agreement, the
Vornado Reimbursement Agreement and the Reimbursement Documents in connection
with the Vornado Reimbursement Agreement on behalf of the Company. The foregoing
authorization shall not be deemed a restriction on the power of the Principal
Manager to enter into other agreements on behalf of the Company.

         5.3 BOARD OF MANAGERS POWERS. Subject to the terms of the Act and as
otherwise provided under this Section 5, the Company shall be managed by the
Board of Managers to the extent, and only to the extent, of the matters
described in Sections 2.6(d) and 2.6(f) hereof, and in accordance with Sections
2.6(d) and 2.6(f) hereof. Each member of the Board of Managers is hereby
designated as a manager within the meaning of the Act but shall have only the
rights and powers as are set forth in this Section 5.3 and shall not otherwise
have the authority, acting alone or together, to bind the Company.

         5.4 NUMBER OF MANAGERS. The authorized number of Persons constituting
the Board of Managers shall initially be five (5). Subject to Section 5.5(a),
the Member may change the number of Persons constituting the Board of Managers
at any time.

         5.5 ELECTION OF PERSONS TO BOARD OF MANAGERS.

                  (a) Subject to the requirement that at least two (2) of the
members of the Board of Managers shall be Independent Managers, as defined in
Section 2.6(c) hereof, Member may determine at any time in its sole and absolute
discretion the number of members of the Board of Managers and whom to appoint as
members of the Board of Managers. Subject to the provisions of the prior
sentence, any member of the Board of Managers (including, without limitation,
any Independent Manager) may be removed or expelled, with or without cause, at
any time by Member, with or without notice.

                  (b) The following named persons shall be, and they hereby are,
appointed as the initial members of the Board of Managers of the Company ("BOARD
OF MANAGERS"), their terms of office to commence upon the acceptance of their
appointment and to continue until the earlier of their resignation or removal by
the Member or their respective successor(s) shall have been duly appointed and
such successor(s) have accepted their appointment in accordance with this
Article 5:

            Steven Roth
            Michael Fascitelli
            Russell B. Wight, Jr.

                                       14
<PAGE>
            Domenic A. Borriello (Independent Manager 1)
            Kim E. Lutthans (Independent Manager 2)

         5.6 VACANCIES ON BOARD OF MANAGERS. A vacancy ("VACANCY") on the Board
of Managers shall be deemed to exist (i) if an appointed member of the Board of
Managers dies or resigns, (ii) if an appointed member of the Board of Managers
is convicted of a felony or any other crime punishable by imprisonment or
declared of unsound mind by an order of court, in which case, without further
action by any Person, such Person shall cease to be a member of the Board of
Managers, or (iii) if, subject to the requirements of Section 2.6(c) hereof, an
appointed member is removed or expelled, with or without cause, at any time by
Member. A Vacancy on the Board of Managers shall be filled in accordance with
the appointment procedure set forth in Section 5.5 hereof by Member.

         5.7 BOARD OF MANAGERS MEETINGS. It shall be unnecessary for the Board
of Managers to meet unless meeting to address and vote on the matters described
under Sections 2.6(d) and 2.6(f) hereof. All Board of Managers meetings shall be
held at the principal office of the Company. Such Board of Managers meetings
shall be held on four (4) days' notice by mail or 48 hours' notice delivered
personally or by telephone, including voice messaging system or other technology
designed to record and communicate messages, facsimile, electronic mail, or
other electronic means. Notices hereunder shall be communicated to each member
of the Board of Managers at the address, telephone number or electronic mail
address shown on the Company's records. Notwithstanding anything to the contrary
contained herein, any action required or permitted to be taken at any meeting of
the Board of Managers may be taken without a meeting, if (x) both of the members
of the Board of Managers which are Independent Managers consent thereto in
writing to such action and (y) the other members of the Board of Managers do not
raise any written objection thereto within five (5) days of being notified
thereof in writing, and the consent or consents are filed with the minutes of
proceedings of the Board of Managers.

         5.8 QUORUM. It shall be necessary for all of the appointed members of
the Board of Managers to be present in order to constitute a quorum for the
transaction of business, and all of the appointed members of the Board of
Managers must be present at any meeting of the Board of Managers in order for
any act or decision made by the appointed members of the Board of Managers to be
regarded as the official act of the Board of Managers. Even though a quorum is
initially present, if the number of members of the Board of Managers present at
a meeting is reduced to less than a quorum, no further business, except
adjournment may be transacted at the meeting until a quorum is present. Members
of the Board of Managers may participate in a meeting of the Board of Managers
by means of conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other, and such
participation in a meeting shall constitute presence in person at the meeting.
If all the participants are participating by conference telephone or similar
communications equipment, the meeting shall be deemed to be held at the
principal office of the Company.

         5.9 PERFORMANCE OF DUTIES; LIABILITY OF PRINCIPAL MANAGER AND BOARD OF
MANAGERS. None of the Principal Manager, the Member or any member of the Board
of Managers shall be liable to Company for any loss or damage sustained by
Company, unless the

                                       15
<PAGE>
loss or damage shall have been the result of an act performed, or omitted to be
performed, in bad faith or with gross negligence or willful misconduct by
Principal Manager, the Member or by such member of the Board of Managers, as the
case may be. To the extent that, at law or in equity, the Principal Manager, the
Member or any member of the Board of Managers has duties (including fiduciary
duties) and liabilities relating thereto to the Company or to the Member, the
Principal Manager, the Member and any member of the Board of Managers acting
under this Agreement shall not be liable to the Company or to the Member for its
good faith reliance on the provisions of this Agreement. The provisions of this
Agreement, to the extent that they restrict the duties and liabilities of the
Principal Manager, the Member or any member of the Board of Managers otherwise
existing at law or in equity, are agreed by the parties hereto to replace, to
the fullest extent permitted by law, such other duties and liabilities of the
Principal Manager, the Member and any member of the Board of Managers.

         5.10 LIMITED LIABILITY. Except as otherwise provided by the Act, the
debts, obligations and liabilities of the Company, whether arising in contract,
tort or otherwise, shall be solely the debts, obligations and liabilities of the
Company, and none of the Principal Manager, the Member or any member of the
Board of Managers shall be obligated personally for any such debt, obligation or
liability of the Company solely by reason of being a manager or member of the
Company or a member of the Board of Managers.

6.       ALLOCATIONS OF NET PROFITS AND NET LOSSES AND DISTRIBUTIONS.

         6.1 ALLOCATIONS OF NET PROFITS AND NET LOSSES. Net Profits and Net
Losses shall be allocated to the Member.

         6.2 DISTRIBUTIONS OF THE COMPANY. Distributable Cash shall be
distributed to the Member upon demand of the Member but not less frequently than
monthly. All such distributions shall be made only to the Person who, according
to the books and records of the Company, is the holder of record of the
Membership Interest in respect of which such distributions are made on the
actual date of distribution. Notwithstanding any provision to the contrary
contained in this Agreement, the Company shall not make a distribution which
would violate the Act or other applicable law. Except as required by the Act,
neither the Company nor Member shall incur any liability for making
distributions in accordance with Section 2.6 and this Section 6.2.

         6.3 FORM OF DISTRIBUTION. Member has no right to demand and receive any
distribution from the Company in any form other than money. Except upon a
dissolution and winding-up of the Company, Member may not be compelled to accept
from the Company a distribution of any asset in kind.

         6.4 RETURN OF DISTRIBUTIONS. Except as required by law or this
Agreement, Member shall not be obligated to return any distribution to the
Company or pay the amount of any distribution for the account of the Company or
to any creditor of the Company. The amount of any distribution returned to the
Company by Member or paid by Member for the account of the Company or to a
creditor of the Company shall be added to the account or accounts from which it
was subtracted when it was distributed to Member.

                                       16
<PAGE>
7.   TRANSFER OF INTERESTS. Subject to Section 2.6, Member shall not be entitled
to directly or indirectly transfer, assign, convey, sell, encumber or in any way
alienate all or any part of its Membership Interest (a "TRANSFER"), except to
the extent such Transfer is otherwise permitted under the Loan Documents to the
extent obligations thereunder to Lender are outstanding. To the fullest extent
permitted by law, transfers in violation of this Article 7 shall be null and
void ab initio.

8.       ACCOUNTING, RECORDS, REPORTING BY MEMBERS.

         8.1 BOOKS AND RECORDS. The books and records of the Company shall be
kept, and the financial position and the results of its operations recorded, in
accordance with generally accepted accounting principles or such other commonly
accepted accounting methods, consistently applied, as may be selected by
Principal Manager from time to time. The books and records of the Company shall
reflect all the Company transactions and shall be appropriate and adequate for
the Company's business. The Company shall maintain at its principal office all
of the following:

                           (1) MEMBERS. A record of the full name and last known
business address of the Member, together with the capital account, Capital
Contributions, and Percentage Interest of such Member;

                           (2) CERTIFICATE. A copy of the Certificate and any
and all amendments thereto together with executed copies of any powers of
attorney pursuant to which the Certificate or any amendments thereto have been
executed;

                           (3) TAX RETURNS. Copies of the Company's federal,
state, and local income tax or information returns and reports, if any;

                           (4) AGREEMENT. A copy of this Agreement and any and
all amendments thereto together with executed copies of any powers of attorney
pursuant to which this Agreement or any amendments thereto have been executed;

                           (5) FINANCIAL STATEMENTS. Copies of the financial
statements of the Company, if any, for the six (6) most recent Fiscal Years (but
if for less than six (6) years, then for the number of Fiscal Years the Company
has been in existence); and

                           (6) BOOKS AND RECORDS. The Company's books and
records as they relate to the affairs of the Company (including, without
limitation, accounting records, leases, contracts and other agreements, and
minutes of meetings of the Board of Managers) for at least the current and past
six (6) Fiscal Years (but if for less than six (6) years, then for the number of
Fiscal Years the Company has been in existence).

         8.2 DELIVERY TO MEMBER AND INSPECTION. Member has the right to inspect
and copy during normal business hours any of the Company records described in
Sections 8.1(1) through (6).

                                       17
<PAGE>
         8.3 ANNUAL STATEMENTS. Principal Manager shall cause to be prepared at
least annually, at Company expense, information necessary for the preparation of
Member's federal and state income tax returns. Within ninety (90) days after the
end of each Fiscal Year or earlier to otherwise comply if necessary with the
Loan Documents, such information as is necessary to complete federal and state
income tax or information returns shall be made available to Member, and a copy
of the Company's federal, state, and local income tax or information returns, if
any, for that year.

         8.4 FILINGS. Principal Manager, at Company expense, shall cause the
income tax and information returns, if any, for the Company to be prepared and
timely filed with the appropriate authorities. For tax purposes, the Company
shall be treated as a disregarded entity. Principal Manager, at Company expense,
shall also cause to be prepared and timely filed, with appropriate federal and
state regulatory and administrative bodies, amendments to or restatements of the
Certificate and all reports required to be filed by the Company with those
entities under the Act or other then current applicable laws, rules, and
regulations.

         8.5 BANK ACCOUNTS. Subject to the requirements under Section 2.6 of
this Agreement, Principal Manager shall maintain the funds of the Company in one
or more separate bank accounts.

         8.6 ACCOUNTING DECISIONS AND RELIANCE ON OTHERS. All decisions as to
accounting matters, except as otherwise specifically set forth herein, shall be
made by Principal Manager. Principal Manager may rely upon the advice of its
accountants as to whether such decisions are in accordance with generally
accepted accounting principles or other accounting methods appropriate for the
Company and authorized hereby.

         8.7 TAX MATTERS FOR THE COMPANY HANDLED BY MEMBER. Principal Manager
shall from time to time cause the Company to make such tax elections, if any, as
it deems to be in the best interests of the Company and Member. Member shall be
the "TAX MATTERS PARTNER" as defined in Code Section 6231, shall represent the
Company (at the Company's expense) in connection with all examinations of the
Company's affairs by tax authorities, including resulting judicial and
administrative proceedings, and shall expend the Company funds for professional
services and costs associated therewith. Member shall oversee the Company tax
affairs in the overall best interests of the Company and Member.

9.       DISSOLUTION AND WINDING-UP.

         9.1 DISSOLUTION. Subject to Section 2.6, the Company shall be
dissolved, its assets shall be disposed of, and its affairs wound up on the
first to occur of the following:

                  (a) Upon the entry of a decree of judicial dissolution under
the Act; or

                  (b) At any time there is no member of the Company, unless the
Company is otherwise continued in accordance with the Act or this Agreement.
Upon the occurrence of any event that causes the last remaining member of the
Company to cease to be a member of the Company, to the fullest extent permitted
by law, the personal representative of such member is

                                       18
<PAGE>
hereby authorized to, and shall, within 90 days after the occurrence of the
event that terminated the continued membership of such member in the Company,
agree in writing (i) to continue the Company and (ii) to the admission of the
personal representative or its nominee or designee, as the case may be, as a
substitute member of the Company, effective as of the occurrence of the event
that terminated the continued membership of the last remaining member of the
Company in the Company.

The filing of a petition in bankruptcy, the filing of a petition or answer
seeking reorganization, arrangement, composition, liquidation, readjustment,
dissolution or similar relief under any statute, law or regulation, or the
occurrence of any other event or circumstance involving or relating to Member or
a Special Member contemplated by or described in Section 18-304 of the Act,
shall not, under any circumstances, cause Member or Special Member, as the case
may be, to cease being a member of the Company and shall not cause the
dissolution of the Company.

         9.2 WINDING-UP. Upon the dissolution of the Company, the Company shall
continue solely for the purpose of winding-up its affairs in an orderly manner,
liquidating its assets, and satisfying the claims of its creditors. Principal
Manager shall be responsible for overseeing the winding-up and liquidation of
the Company, shall take full account of the liabilities of the Company and its
assets, shall either cause its assets to be sold or distributed, and if sold (as
promptly as is consistent with obtaining the fair market value thereof) shall
cause the proceeds therefrom, to the extent sufficient therefor, to be applied
and distributed as provided in Section 9.3 hereof.

         9.3 ORDER OF PAYMENT OF LIABILITIES UPON DISSOLUTION. Upon dissolution,
the assets of the Company shall be liquidated, and the proceeds from such
liquidation shall be allocated and distributed in the following order of
priority:

                  (a) First, to the satisfaction of creditors of the Company,
including Member or Principal Manager if a creditor (to the extent otherwise
permitted by law and the Loan Documents), in satisfaction of the liabilities of
the Company (whether by payment or the making of reasonable provision for
payment thereof);

                  (b) Second, to the satisfaction of all debts, liabilities and
other obligations owed to Member and not paid pursuant to clause (a) above
(whether by payment or the making of reasonable provision for payment thereof);
and

                  (c) The balance to Member.

         9.4 NO DEFICIT RESTORATION. If, upon liquidation, Member has a deficit
balance in its capital account, after taking into account all capital account
adjustments for the Company Fiscal Year during which liquidation occurs, Member
shall have no obligation to contribute cash to the capital of the Company to
restore such deficit balance.

         9.5 CERTIFICATE OF CANCELLATION. Principal Manager, as an authorized
person, shall cause to be filed in the office of, and on a form prescribed by,
the Secretary of State of the State

                                       19
<PAGE>
of Delaware, a certificate of cancellation of the Certificate upon completion of
the winding-up of the affairs of the Company.

         9.6 NO ACTION FOR DISSOLUTION. To the fullest extent permitted by law,
neither Member nor the Board of Managers shall take any voluntary action that
directly or indirectly causes a dissolution of the Company. Member acknowledges
that irreparable damage would be done to the goodwill and reputation of the
Company if Member should bring an action in court to dissolve the Company under
circumstances where dissolution is not required by Section 9.1. This Agreement
has been drawn carefully to provide fair treatment of all parties and equitable
payment in liquidation of the Membership Interests. Accordingly, to the fullest
extent permitted by law, Member hereby waives and renounces its right to
initiate legal action to seek the appointment of a receiver or trustee to
liquidate the Company or to seek a decree of judicial dissolution of the Company
(including, but not limited to, any right which Member may have under Section
18-802 of the Act).

10. INDEMNIFICATION. The Company shall defend, indemnify and save harmless
Member (including in its capacity as Principal Manager), and each member of the
Board of Managers from and against all claims, losses, damages, cost, expense,
demands, liabilities, obligations, liens, encumbrances, rights of action or
attorneys' fees ("CLAIMS") sustained by reason of any act performed, or omitted
to be performed, in good faith and without gross negligence or willful
misconduct, within the scope of its authority expressly conferred by this
Agreement, to the fullest extent permitted by applicable law in effect on the
date hereof and to such greater extent as applicable law may hereafter from time
to time permit. Such indemnity shall not be construed to limit or diminish the
coverage of Member or such members of the Board of Managers under any insurance
obtained by the Company. Payment shall not be a condition precedent to any
indemnification provided in this Agreement. Notwithstanding the foregoing
provisions, no payment may be made under this indemnity during the period in
which there is an "Event of Default" under the Loan Agreement.

11.      MISCELLANEOUS.

         11.1 COMPLETE AGREEMENT. This Agreement constitutes the complete and
exclusive statement of agreement of Member with respect to the subject matter
herein and therein and replace and supersede all prior written and oral
agreements or statements by Member. No representation, statement, condition or
warranty not contained in this Agreement will be binding on Member or has any
force or effect whatsoever.

         11.2 BINDING EFFECT. Subject to the provisions of this Agreement
relating to transferability, this Agreement will be binding upon and inure to
the benefit of Member, and its respective successors and assigns.

         11.3 PARTIES IN INTEREST. Except for the Lender, its successors or
assigns as holders of the Loan or as expressly provided in the Act or in this
Agreement, nothing in this Agreement shall confer any rights or remedies under
or by reason of this Agreement on any Person other than Member and its
successors and assigns nor shall anything in this Agreement relieve or discharge
the obligation or liability of any third Person to Company or any party to this

                                       20
<PAGE>
Agreement, nor shall any provision hereof give any third Person any right of
subrogation or action over or against Company or any party to this Agreement.

         11.4 PRONOUNS; STATUTORY REFERENCES. All pronouns and all variations
thereof shall be deemed to refer to the masculine, feminine, or neuter, singular
or plural, as the context in which they are used may require. Any reference to
the Code, the Regulations, the Act, or other statutes or laws will include all
amendments, modifications, or replacements of the specific sections and
provisions concerned.

         11.5 HEADINGS. All headings herein are inserted only for convenience
and ease of reference and are not to be considered in the construction or
interpretation of any provision of this Agreement.

         11.6 REFERENCES TO THIS AGREEMENT. Numbered or lettered articles,
sections and subsections herein contained refer to articles, sections and
subsections of this Agreement unless otherwise expressly stated.

         11.7 SEVERABILITY. If any provision of this Agreement or the
application of such provision to any Person or circumstance shall be held
invalid, the remainder of this Agreement or the application of such provision to
Persons or circumstances other than those to which it is held invalid shall not
be affected thereby.

         11.8 ADDITIONAL DOCUMENTS AND ACTS. Member agrees to execute and
deliver such additional documents and instruments and to perform such additional
acts as may be necessary or appropriate to effectuate, carry out and perform all
of the terms, provisions, and conditions of this Agreement and the transactions
contemplated hereby.

         11.9 NOTICES. Unless otherwise specified in this Agreement, all notices
and other communications provided for hereunder shall be in writing (including
by facsimile transmission) and mailed or sent or delivered at the addresses
specified below. All such notices and communications shall be given by hand or
facsimile transmission; provided that, in the event that facsimile transmission
facilities are not operational, such notices and communications may be given by
mail, but the sender shall use reasonable efforts to confirm facsimile
transmission facilities shall become operational. All such notices and
communications shall be effective when delivered by hand, or, in the case of
mail, upon the earlier of receipt and confirmation by facsimile transmission as
provided below, or, in the case of facsimile transmission, when sent as
addressed as set forth herein and confirmation of delivery is received. The
addresses of the Company and Member shall be as set forth in Section 2.5,
provided that each party to this Agreement may, from time to time, change its
notice address, by giving notice to the Company and the other parties herein in
the manner provided in this Section.

         11.10 AMENDMENTS. Subject to Section 2.6, all amendments to this
Agreement will be in writing and signed by the Member and approved by the Board
of Managers; provided that no amendment to this Agreement will be made to the
extent prohibited by the Loan Documents if obligations of the Company and its
Affiliates to the Lenders thereof are outstanding or if it would give rise to a
breach or default thereunder.

                                       21
<PAGE>
         11.11 MULTIPLE COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same instrument.

         11.12 REMEDIES CUMULATIVE. The remedies under this Agreement are
cumulative and shall not exclude any other remedies to which any Person may be
lawfully entitled.

         11.13 CHOICE OF LAW. This Agreement shall be governed by, and shall be
construed in accordance with, the laws of the State of Delaware (without regard
to conflict of laws principles).

         11.14 BINDING AGREEMENT. Notwithstanding any other provision of this
Agreement, the Member agrees that this Agreement constitutes a legal, valid and
binding agreement of the Member and is enforceable against the Member by the
Independent Managers, in accordance with its terms. In addition, the Independent
Managers shall be intended beneficiaries of this Agreement.

                                       22
<PAGE>
         IN WITNESS WHEREOF, Member and the Independent Managers have executed
this Agreement, effective as of the date first written above.

731 RESIDENTIAL HOLDING LLC
a Delaware limited liability company

By: Alexander's, Inc., member

        By: /s/ Brian Kurtz
            ---------------------------
            Name:  Brian Kurtz
                 ----------------------
            Title:  Assistant Secretary
                 ----------------------

INDEPENDENT MANAGERS:

/s/ Domenic A. Borriello
---------------------------
Name:  Domenic A. Borriello

/s/ Kim Lutthans
---------------------------
Name:  Kim E. Lutthans

                                       23
<PAGE>
                                  SCHEDULE 1.22

1.       Gap Note (the "Gap Note") made by the Company and Commercial SPE to
         Lender in the principal amount of $500,000;

2.       Consolidated, Amended and Restated Building Loan Note (the "Building
         Loan Note") made by the Company and Commercial SPE to each Lender in
         the aggregate principal amount of $55,500,000;

3.       Building Loan Agreement (the "Building Loan Agreement") made by and
         between the Company, Commercial SPE and Lender with respect to the
         Building Loan (as defined in the Building Loan Agreement);

4.       Gap Mortgage (the "Gap Mortgage") given by the Company and Commercial
         SPE to Lender as security for the Gap Note and covering the Property;

5.       Consolidated, Amended and Restated Building Loan Mortgage, Assignment
         of Leases and Rents and Security Agreement (the "Building Loan
         Mortgage") given by the Company and Commercial SPE to Lender as
         security for the Building Loan Note and covering the Property;

6.       Assignment of Leases and Rents made by the Company and Commercial SPE
         in favor of Lender as further security for the Building Loan Note;

7.       Project Loan Agreement made by and between the Company, Commercial SPE
         and Lender with respect to the Project Loan (as defined in the Building
         Loan Agreement);

8.       Supplemental Loan Agreement made by and between the Company, Commercial
         SPE and Lender with respect to the Supplemental Loan (as defined in the
         Building Loan Agreement);

9.       Environmental Indemnity Agreement made by the Company, Commercial SPE
         and Alexander's, Inc. for the benefit of Lender;

10.      UCC-1 Fixture Financing Statements delivered by the Company and
         Commercial SPE, as debtor, to Lender, as secured party relating to the
         Building Loan Mortgage;

11.      UCC-1 Financing Statements delivered by the Company and Commercial SPE,
         as debtor, to Lender, as secured party relating to the Building Loan
         Mortgage;

12.      Subordination of Property Management and Development Agreement and Fees
         by and among the Company, Commercial SPE, Lender and Vornado Management
         Corp.;

13.      Cash Collateral Agreement between the Company, Commercial SPE and
         Lender;

                                       24
<PAGE>
14.      Assignment of Contracts, Licenses and Permits made by the Company and
         Commercial SPE in favor of Lender; and

15.      Loan Fee Letter from the Company and Commercial SPE to Lender.

                                       25
<PAGE>
                                  SCHEDULE 1.30

ALL THAT CERTAIN volume of space, situate, lying and being in the Borough of
Manhattan, County, City and State of New York, bounded and described as follows:

         ALL that portion of the below described parcel lying between a lower
horizontal plane drawn at elevation 512'-2" above the datum level used by the
Topographical Bureau, Borough of Manhattan, which is 2'-9" above National
Geodetic Survey Vertical Datum of 1929, mean sea level, Sandy Hook, New Jersey
and an upper horizontal plane drawn at 809'-2" above such datum level bounded
and described as follows:

         BEGINNING at a point distant 48'-8" north of the northerly line of East
58th Street and 30'-9" east of the easterly line of Lexington Avenue;

         RUNNING THENCE northerly, parallel with the easterly line of Lexington
Avenue, 12'-6";

         THENCE westerly, parallel with the northerly line of East 58th Street,
5'-10";

         THENCE northerly, parallel with the easterly line of Lexington Ave,
78'-6";

         THENCE easterly, parallel with the northerly line of East 58th Street,
5'-10";

         THENCE northerly, parallel with the easterly line of Lexington Avenue,
12'-6";

         THENCE easterly, parallel with the northerly line of East 58th Street,
103'-6";

         THENCE southerly, parallel with the easterly line of Lexington Avenue,
7'-6";

         THENCE easterly, parallel with the northerly line of East 58th Street,
35'-0";

         THENCE southerly, parallel with the easterly line of Lexington Avenue,
88'-6";

         THENCE westerly, parallel with the northerly line of East 58th Street,
35'-0";

         THENCE southerly, parallel with the easterly line of Lexington Avenue,
7'-6";

         THENCE westerly, parallel with the northerly line of East 58th Street,
103'-6" to the point or place of BEGINNING.

                                       26

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