Document:

<PAGE>
                                                                    EXHIBIT 10.1

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

                                  $175,000,000

                                CREDIT AGREEMENT

                                      AMONG

                       THE MERIDIAN RESOURCE CORPORATION,
                                  AS BORROWER,

                               THE SEVERAL LENDERS
                        FROM TIME TO TIME PARTIES HERETO,

                                SOCIETE GENERALE,
              AS ADMINISTRATIVE AGENT, LEAD ARRANGER AND BOOKRUNNER

                                       AND

                              FORTIS CAPITAL CORP.,
                   AS CO-LEAD ARRANGER AND DOCUMENTATION AGENT

                           DATED AS OF AUGUST 13, 2002

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

<PAGE>

                                TABLE OF CONTENTS

<Table>
<S>        <C>                                                                                                   <C>
SECTION 1. DEFINITIONS............................................................................................1
   1.1            Defined Terms...................................................................................1
   1.2            Other Definitional Provisions..................................................................19

SECTION 2. AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENTS......................................................20
   2.1            Revolving Credit Commitments...................................................................20
   2.2            Procedure for Revolving Credit Borrowing.......................................................21
   2.3            Repayment of Loans; Evidence of Debt...........................................................22

SECTION 3. LETTERS OF CREDIT.....................................................................................23
   3.1            The L/C Commitment.............................................................................23
   3.2            Procedure for Issuance of Letters of Credit....................................................23
   3.3            Fees, Commissions and Other Charges............................................................24
   3.4            L/C Participations.............................................................................24
   3.5            Reimbursement Obligation of the Borrower.......................................................25
   3.6            Obligations Absolute...........................................................................26
   3.7            Letter of Credit Payments......................................................................26
   3.8            L/C Applications...............................................................................26

SECTION 4. GENERAL PROVISIONS....................................................................................26
   4.1            Interest Rates and Payment Dates...............................................................26
   4.2            Computation of Interest and Fees...............................................................27
   4.3            Conversion and Continuation Options............................................................27
   4.4            Minimum Amounts Maximum Number of Tranches.....................................................28
   4.5            Optional Prepayments and Commitment Reductions.................................................28
   4.6            Commitment Fee; Administrative Agent's Fee; Other Fees.........................................29
   4.7            Inability to Determine Interest Rate...........................................................30
   4.8            Pro Rata Treatment and Payments................................................................30
   4.9            Computation of Borrowing Base..................................................................31
   4.10           Borrowing Base Compliance......................................................................34
   4.11           Illegality.....................................................................................34
   4.12           Requirements of Law............................................................................34
   4.13           Taxes..........................................................................................35
   4.14           Indemnity......................................................................................36
   4.15           Change of Lending Office.......................................................................37

SECTION 5. REPRESENTATIONS AND WARRANTIES........................................................................37
   5.1            Financial Condition............................................................................38
   5.2            No Change......................................................................................38
   5.3            Corporate Existence; Compliance with Law.......................................................38
   5.4            Corporate Power; Authorization; Enforceable Obligations........................................39
   5.5            No Legal Bar...................................................................................39
   5.6            No Material Litigation.........................................................................39
   5.7            No Default.....................................................................................39
   5.8            Ownership of Property; Liens...................................................................39
   5.9            Intellectual Property..........................................................................40
   5.10           No Burdensome Restrictions.....................................................................40
   5.11           Taxes..........................................................................................40
</Table>

                                       i
<PAGE>

<Table>
<S>        <C>                                                                                                   <C>
   5.12           Federal Reserve Regulations....................................................................41
   5.13           ERISA..........................................................................................41
   5.14           Investment Company Act; Other Regulations......................................................41
   5.15           Subsidiaries...................................................................................41
   5.16           Purpose of Loans...............................................................................41
   5.17           Environmental Matters..........................................................................41
   5.18           No Material Misstatements......................................................................42
   5.19           Insurance......................................................................................43
   5.20           Future Commitments.............................................................................43
   5.21           Security Documents.............................................................................43
   5.22           Immaterial Subsidiaries........................................................................44

SECTION 6. CONDITIONS PRECEDENT..................................................................................44
   6.1            Conditions to Closing Date.....................................................................44
   6.2            Conditions to Initial Borrowing Date...........................................................46
   6.3            Conditions to Each Extension of Credit.........................................................49

SECTION 7. AFFIRMATIVE COVENANTS.................................................................................49
   7.1            Financial Statements...........................................................................49
   7.2            Certificates; Other Information................................................................50
   7.3            Payment of Obligations.........................................................................51
   7.4            Conduct of Business and Maintenance of Existence; Compliance with Law and Contractual
                  Obligations....................................................................................51
   7.5            Maintenance of Property; Insurance.............................................................51
   7.6            Inspection of Property; Books and Records; Discussions.........................................52
   7.7            Notices........................................................................................52
   7.8            Environmental Laws.............................................................................52
   7.9            Additional Collateral..........................................................................53
   7.10           Maintenance and Operation of Property..........................................................54
   7.11           Further Assurances.............................................................................54
   7.12           Maintenance of Mortgages.......................................................................55

SECTION 8. NEGATIVE COVENANTS....................................................................................55
   8.1            Financial Covenant Conditions..................................................................55
   8.2            Limitation on Indebtedness.....................................................................55
   8.3            Limitation on Liens............................................................................56
   8.4            Limitation on Guarantee Obligations............................................................59
   8.5            Limitation on Fundamental Change...............................................................59
   8.6            Limitation on Sale of Assets...................................................................59
   8.7            Limitation on Dividends........................................................................60
   8.8            Limitation on Investments, Loans and Advances..................................................61
   8.9            Limitation on Optional Payments and Modifications of Debt Instruments, Other Documents.........62
   8.10           Limitation on Transactions with Affiliates.....................................................63
   8.11           Limitation on Sales and Leasebacks.............................................................63
   8.12           Limitation on Changes in Fiscal Year...........................................................63
   8.13           Limitation on Negative Pledge Clauses..........................................................63
   8.14           Limitation on Lines of Business................................................................63
   8.15           Forward Sales..................................................................................63
   8.16           Hedging Agreements.............................................................................63
   8.17           Limitation on Leases...........................................................................64
   8.18           Limitation on Immaterial Subsidiaries..........................................................64
</Table>

                                       ii
<PAGE>

<Table>
<S>               <C>                                                                                            <C>
SECTION 9. EVENTS OF DEFAULT.....................................................................................64

SECTION 10. THE ADMINISTRATIVE AGENT; OTHERS.....................................................................67
   10.1           Appointment....................................................................................67
   10.2           Delegation of Duties...........................................................................68
   10.3           Exculpatory Provisions.........................................................................68
   10.4           Reliance by Administrative Agent...............................................................68
   10.5           Notice of Default..............................................................................69
   10.6           Non-Reliance on Administrative Agent and Other Lenders.........................................69
   10.7           Indemnification................................................................................69
   10.8           Administrative Agent in Its Individual Capacity................................................70
   10.9           Successor Administrative Agent.................................................................70
   10.10          Issuing Lender.................................................................................70
   10.11          Others.........................................................................................70

SECTION 11. MISCELLANEOUS........................................................................................70
   11.1           Amendments and Waivers.........................................................................70
   11.2           Notices........................................................................................71
   11.3           No Waiver; Cumulative Remedies.................................................................72
   11.4           Survival of Representations and Warranties.....................................................72
   11.5           Payment of Expenses and Taxes..................................................................72
   11.6           Successors and Assigns; Participations and Assignments.........................................73
   11.7           Adjustments; Set-off...........................................................................76
   11.8           Counterparts...................................................................................77
   11.9           Severability...................................................................................77
   11.10          Integration....................................................................................77
   11.11          GOVERNING LAW..................................................................................77
   11.12          Submission To Jurisdiction; Waivers............................................................78
   11.13          Acknowledgments................................................................................78
   11.14          WAIVERS OF JURY TRIAL..........................................................................78
   11.15          Production Proceeds............................................................................79
   11.16          Release of Mortgaged Properties................................................................79
   11.17          Limitation on Interest.........................................................................79
</Table>

                                      iii
<PAGE>

SCHEDULES

1.1(a)        Commitments
1.1(b)        [Reserved]
1.1(c)        [Reserved]
1.1(d)        Immaterial Subsidiaries
5.2           Capital Stock Redemptions
5.15          Subsidiaries
5.20          Future Commitments
8.2           Existing Indebtedness
8.3           Existing Liens
8.4           Guarantee Obligations
8.8           Existing Investments
11.2          Addresses for Notices

EXHIBITS

A          Form of Revolving Credit Note
B          Form of Guarantee Agreement
C-1        Form of Pledge Agreement
C-2        Form of Security Agreement
D          [Reserved]
E          [Reserved]
F          Form of Closing Certificate
G          Form of Assignment and Acceptance
H          Form of Additional Mortgage
I          Form of Subordination Agreement

                                       iv
<PAGE>
                  CREDIT AGREEMENT, dated as of August 13, 2002 (this
"Agreement"), among The Meridian Resource Corporation, a Texas corporation (the
"Borrower"), the several banks, financial institutions and other entities from
time to time parties to this Agreement (collectively, the "Lenders"), Societe
Generale ("SG"), as administrative agent for the Lenders (in such capacity, the
"Administrative Agent"), Societe Generale, as lead arranger (in such capacity,
the "Lead Arranger") and bookrunner (in such capacity, a "Bookrunner"), and
Fortis Capital Corp., as co-lead arranger (in such capacity, the "Co-Lead
Arranger"), and as documentation agent (in such capacity, a "Documentation
Agent").

                                   WITNESSETH:

                  WHEREAS, the Borrower is, as of the date hereof, party to an
Amended and Restated Credit Agreement dated as of May 22, 1998 (as heretofore
amended or otherwise modified, the "Existing Credit Facility"), with the lenders
from time to time parties thereto, and JPMorgan Chase Bank, formerly known as
The Chase Manhattan Bank, as administrative agent, and pursuant hereto the
Borrower and the Administrative Agent desire to refinance the indebtedness and
obligations arising under the Existing Credit Facility, and the indebtedness and
liens arising under the Existing Credit Facility shall be assigned to the
Administrative Agent and the Lenders pursuant hereto, so that all indebtedness
and obligations arising hereunder shall be secured by such liens and security
interests as were created pursuant to the Existing Credit Facility and such
other liens as provided for herein, and the terms of Borrower's financing shall
hereafter be exclusively as set forth herein;

                  NOW, THEREFORE, in consideration of the premises and the
mutual agreements hereinafter set forth, the parties hereby agree as follows:

                             SECTION 1. DEFINITIONS

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

         "ABR": for any day, a rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) equal to the greatest 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%. For purposes hereof: "Prime Rate" shall mean the rate of interest per
annum publicly announced from time to time by SG as its prime rate in effect at
its principal office in New York City (the Prime Rate not being intended to be
the lowest rate of interest charged by SG in connection with extensions of
credit to debtors); and "Federal Funds Effective Rate" shall mean, for any day,
the weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published 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 which is a Business Day,
the average of the quotations for the day of such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing
selected by it. Any change in the ABR due to a change in the Prime Rate or the
Federal Funds Effective Rate shall be effective as of the opening of business on
the effective day of such change in the Prime Rate or the Federal Funds
Effective Rate, respectively.

<PAGE>

         "ABR Loans": Loans the rate of interest applicable to which is based
upon the ABR.

         "Additional Mortgage": additional mortgages and deeds of trust on Oil
and Gas Properties consisting of additional properties made by any Loan Party in
favor of, or for the benefit of, the Administrative Agent for the benefit of the
Lenders, substantially in the form of Exhibit H attached hereto, as the same may
be amended, supplemented or otherwise modified from time to time.

         "Administrative Agent":  as defined in the Preamble to this Agreement.

         "Affiliate": as to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is controlled by,
or is under common control with, such Person. For purposes of this definition,
"control" of a Person means the power, directly or indirectly, either to (a)
vote 10% or more of the securities having ordinary voting power for the election
of directors of such Person or (b) direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise.

         "Aggregate Revolving Credit Exposure": as to any Lender at any time, an
amount equal to the sum of (a) the aggregate principal amount of all Loans made
by such Lender then outstanding and (b) such Lender's Commitment Percentage of
the Letter of Credit Outstandings at such time. For purposes of the foregoing,
and for the avoidance of doubt, Loans shall not include the contingent
obligations of the Borrower or any Affiliate thereof owed to a Lender in
connection with Commodity Hedging Agreements.

         "Agreement": this Credit Agreement, as further amended, supplemented or
otherwise modified from time to time.

         "Applicable Margin": for any day with respect to Eurodollar Loans and
ABR Loans, the applicable per annum rate set forth below opposite the Borrowing
Base Usage in effect on any such day:

<Table>
<Caption>
                                                                   Eurodollar            ABR
                     Borrowing Base Usage                            Margin             Margin
                     --------------------                            ------             ------
<S>                                                                <C>                  <C>
Less than or equal to 25%                                             1.50%              .50%

Greater than 25% and less than or equal to 50%                        1.75%              .75%

Greater than 50% and less than or equal to 75%                        2.00%             1.00%

Greater than 75% and less than or equal to 90%                        2.25%             1.25%

Greater than 90%                                                      2.50%             1.50%
</Table>

                                       2
<PAGE>
As used herein, "Borrowing Base Usage" on any day means the percentage
equivalent to the ratio of (i) the sum of the aggregate principal amount of the
Loans then outstanding and Letter of Credit Outstandings on such day to (ii) the
Borrowing Base in effect on such day.

         "Assignee": as defined in subsection 11.6(c).

         "Available Commitment": as to any Lender at any time, an amount equal
to the excess, if any, of (a) the amount of such Lender's Revolving Credit
Commitment over (b) such Lender's Aggregate Revolving Credit Exposure.

         "Bookrunner": as defined in the Preamble to this Agreement.

         "Borrower": as defined in the preamble to this Agreement.

         "Borrower Redetermination Notice": a notice from the Borrower to the
Administrative Agent requesting that the Administrative Agent redetermine the
Borrowing Base, which notice may be sent by the Borrower at any time, provided
that no more than one such notice may be delivered by the Borrower during any
consecutive 12 month period.

         "Borrowing Base": at any time of determination, the amount then in
effect as determined in accordance with Section 4.9.

         "Borrowing Base Availability": as to any Lender at any time, an amount
equal to the excess, if any, of (a) such Lender's Commitment Percentage of the
Borrowing Base in effect at such time over (b) such Lender's Aggregate Revolving
Credit Exposure.

         "Borrowing Base Deficiency": as defined in subsection 4.10.

         "Borrowing Base Usage": as defined under the definition of Applicable
Margin.

         "Borrowing Date": any Business Day specified in a notice pursuant to
subsection 2.2 or 3.2 as a date on which the Borrower requests the Lenders to
make Loans or the Issuing Lender to issue a Letter of Credit hereunder.

         "Business Day": 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": any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance with
GAAP to be capitalized on a balance sheet of the lessee.

         "Capital Stock": any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, including,
without limitation, any preferred stock of a corporation, any and all equivalent
ownership interests in a Person (other than a corporation) and any and all
warrants or options to purchase any of the foregoing.

                                       3
<PAGE>

         "Cash Equivalents": (a) securities with maturities of one year or less
from the date of acquisition issued or fully guaranteed or insured by the United
States Government or any agency thereof, (b) certificates of deposit and
eurodollar time deposits with maturities of one year or less from the date of
acquisition and overnight bank deposits of any Lender or of any commercial bank
(i) having capital and surplus in excess of $500,000,000 or (ii) which has a
short-term commercial paper rating which satisfies the requirements set forth in
clause (d) below, (c) repurchase obligations of any Lender or of any commercial
bank satisfying the requirements of clause (b) of this definition, having a term
of not more than 30 days with respect to securities issued, fully guaranteed or
insured by the United States Government or any agency thereof, (d) commercial
paper of a domestic issuer rated at least A-2 by Standard and Poor's Ratings
Group ("S&P") or P-2 by Moody's Investors Service, Inc. ("Moody's"), (e)
securities with maturities of one year or less from the date of acquisition
issued or fully guaranteed by any state, commonwealth or territory of the United
States, by any political subdivision or taxing authority of any such state,
commonwealth or territory or by any foreign government, the securities of which
state, commonwealth, territory, political subdivision, taxing authority or
foreign government (as the case may be) are rated at least A by S&P or A by
Moody's, (f) securities with maturities of one year or less from the date of
acquisition backed by standby letters of credit issued by any Lender or any
commercial bank satisfying the requirements of clause (b) of this definition or
(g) shares of money market mutual or similar funds which invest exclusively in
assets satisfying the requirements of clauses (a) through (f) of this
definition.

         "Change in Control": (a) any Person or "group" (within the meaning of
Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended) (i)
shall have acquired beneficial ownership of 35% or more of any outstanding class
of Capital Stock having ordinary voting power in the election of directors of
the Borrower or (ii) shall obtain the power (whether or not exercised) to elect
a majority of the Borrower's directors; or (b) the Board of Directors of the
Borrower shall not consist of a majority of Continuing Directors. "Continuing
Directors" shall mean the directors of the Borrower on the Closing Date and each
other director, if such other director's nomination for election to the Board of
Directors of the Borrower is recommended by a majority of the then Continuing
Directors.

         "Closing Date": the date on which the conditions precedent set forth in
subsection 6.1 shall be satisfied.

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

         "Co-Lead Arranger": as defined in the Preamble to this Agreement.

         "Commitment Fee Rate": for any day, a rate per annum equal to (a) .375%
if the Borrowing Base Usage in effect on such date is less than or equal to 50%,
and (b) .50% if the Borrowing Base Usage in effect on such day is greater than
50%.

         "Commitment Percentage": as to any Lender at any time, the percentage
which such Lender's Revolving Credit Commitment then constitutes of the
aggregate Revolving Credit Commitments (or, at any time after the Revolving
Credit Commitments shall have expired or terminated, the percentage which such
Lender's Aggregate Revolving Credit Exposure then

                                       4
<PAGE>

outstanding constitutes of the Aggregate Revolving Credit Exposure then
outstanding for all of the Lenders).

         "Commitment Period": the period from and including the date hereof to
but not including the Termination Date or such earlier date on which the
Commitments shall terminate as provided herein.

         "Commitments": the collective reference to the Revolving Credit
Commitments and the L/C Commitment.

         "Commodity Hedging Agreement": a commodity hedging or purchase
agreement or similar arrangement entered into with the intent of protecting
against fluctuations in commodity prices or the exchange of notional commodity
obligations, either generally or under specific contingencies.

         "Commonly Controlled Entity": an entity, whether or not incorporated,
which is under common control with the Borrower within the meaning of Section
4001 of ERISA or is part of a group which includes the Borrower and which is
treated as a single employer under Section 414 of the Code.

         "Consolidated Interest Expense": with respect to the Borrower and its
Subsidiaries on a consolidated basis for any period, the sum of (i) gross
interest expense (including all cash and accrued interest expense) of the
Borrower and its Subsidiaries for such period on a consolidated basis, including
to the extent included in interest expense in accordance with GAAP (x) the
amortization of debt discounts and other fees related to credit facilities of
the Borrower and its Subsidiaries, and (y) the portion of any payments or
accruals with respect to Capital Leases allocable to interest expense and (ii)
capitalized interest of the Borrower and its Subsidiaries on a consolidated
basis; provided however, that to the extent otherwise included in gross interest
expense, "Consolidated Interest Expense" shall be reduced by (A) such amounts as
are attributable to dividends payable with respect to the Series C Preferred
Stock, (B) upfront fees payable to the Administrative Agent pursuant to the Fee
Letter and (C) other fees and expenses payable or reimbursed to the
Administrative Agent, the Lenders or any other Person pursuant to Sections
4.6(c) or 11.5 of this Agreement or any other Loan Document or pursuant to the
terms of any amendment to any of the Loan Documents or waiver of any term
thereof.

         "Consolidated Lease Expense": for any period, the aggregate amount of
fixed and contingent rentals payable by the Borrower and any of its
Subsidiaries, determined on a consolidated basis in accordance with GAAP, for
such period with respect to leases (other than oil and gas leases) of real and
personal property which are not capitalized under GAAP.

         "Consolidated Net Income": for any period, net income of the Borrower
and its Subsidiaries determined on a consolidated basis in accordance with GAAP.

         "Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.

                                       5
<PAGE>

         "Control": 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.

         "Default": any of the events specified in Section 8, whether or not any
requirement for the giving of notice, the lapse of time, or both, or any other
condition, has been satisfied.

         "Disposition": the sale, issuance, conveyance, transfer, lease or other
disposition (including, without limitation, through a sale and leaseback
transaction or as a result of casualty or condemnation) of any Property.

         "Disqualified Stock": any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable) or upon the happening of any event, matures or is mandatorily
redeemable for any consideration other than Capital Stock, pursuant to a sinking
fund obligation or otherwise, is convertible or is exchangeable for Indebtedness
or Disqualified Stock or redeemable for any consideration other than Capital
Stock at the option of the holder thereof, in whole or in part on or prior to
the date that is one year after the earlier of (x) the Termination Date or (y)
the date on which there are no Loans or other obligations hereunder outstanding
and the Commitments are terminated.

         "Documentation Agent": as defined in the Preamble to this Agreement.

         "Dollars" and "$": dollars in lawful currency of the United States of
America.

         "Domestic Subsidiary": any Subsidiary organized under the laws of any
jurisdiction within the United States of America (including territories
thereof).

         "EBITDA": with respect to the Borrower and its Subsidiaries, for any
period, Consolidated Net Income for that period, plus, without duplication and
to the extent deducted from revenues in determining Consolidated Net Income for
that period, the sum of (a) the aggregate amount of Consolidated Interest
Expense for that period, (b) the aggregate amount of letter of credit fees paid
during that period, (c) the aggregate amount of income tax expense for that
period, (d) all amounts attributable to depreciation, depletion and amortization
for that period, and (e) all non-cash expenses (including without limitation,
non-cash charges and expenses relating to (i) full cost ceiling write-downs and
(ii) Commodity Hedging Agreements) during that period, and minus to the extent
added to revenues in determining Consolidated Net Income for that period, all
non-cash income during that period, in each case determined in accordance with
GAAP and without duplication of amounts.

         "Environmental Laws": any and all laws, rules, orders, regulations,
statutes, ordinances, codes, decrees, or other legally enforceable requirement
(including, without limitation, common law) of any foreign government, the
United States, or any state, local, municipal or other Governmental Authority,
regulating, relating to or imposing liability or standards of conduct concerning
protection of the environment or of human health, as has been, is now, or may at
any time hereafter be, in effect.

         "Environmental Permits": any and all permits, licenses, registrations,
notifications, approvals, exemptions and any other authorization required under
any Environmental Law.

                                       6
<PAGE>
         "ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.

         "Eurocurrency Reserve Requirements": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the rates (expressed as
a decimal) of reserve requirements in effect on such day (including, without
limitation, basic, supplemental, marginal and emergency reserves under any
regulations of the Board of Governors of the Federal Reserve System or other
Governmental Authority having jurisdiction with respect thereto) dealing with
reserve requirements prescribed for eurocurrency funding (currently referred to
as "Eurocurrency Liabilities" in Regulation D of such Board) maintained by a
member bank of such System.

         "Eurodollar Base Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum equal to the rate per
annum for Dollar deposits with a maturity comparable to such Interest Period
which appears on the Telerate British Bankers Assoc. Interest Settlement Rates
Page at approximately 10:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period; provided that if there shall no longer
exist a Telerate British Bankers Assoc. Interest Settlement Rates Page (or if
such page is not available on the relevant Business Day), the Eurodollar Base
Rate shall mean an interest rate per annum equal to the average (rounded upward,
if necessary, to the next 1/16th of 1%) of the respective rates per annum
notified to the Administrative Agent by each of the Reference Banks as the
average of the rates at which Dollar deposits (in an amount comparable to the
amount of SG's Eurodollar Loan to be outstanding during such Interest Period and
for a maturity comparable to such Interest Period) are offered to such Reference
Bank in immediately available funds by prime banks in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period. "Telerate British Bankers Assoc. Interest
Settlement Rates Page" shall mean the display designated as Page 3750 on
Teleratesystem Incorporated (or such other replacement page thereof used to
display London interbank offered rates of major banks).

         "Eurodollar Loans": Loans the rate of interest applicable to which is
based upon the Eurodollar Rate.

         "Eurodollar Rate": with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, a rate per annum determined for such day in
accordance with the following formula (rounded upward to the nearest 1/100th of
1%):

                               Eurodollar Base Rate
                 -----------------------------------------------
                    1.00 -- Eurocurrency Reserve Requirements

         "Event of Default": any of the events specified in Section 9, provided
that any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.

         "Existing Mortgages": the collective reference to every Deed of Trust,
Mortgage, Assignment, Security Agreement and Financing Statement from (i) Cairn
Energy USA, Inc., (ii) Louisiana Onshore Properties LLC, and (iii) The Meridian
Resource & Exploration LLC, to the Trustee named therein and The Chase Manhattan
Bank (or any successor thereto), covering the

                                       7
<PAGE>

assets of the Borrower located in the offshore continental shelf areas offshore
Texas and Louisiana, as amended prior to the Closing Date.

         "Extension of Credit": as to any Lender, the making of, or the issuance
of, or participation in, a Loan by such Lender, or the issuance of, or
participation in, a Letter of Credit by such Lender.

         "Fee Letter" means the fee letter agreement dated July 29, 2002 between
the Borrower and SG.

         "Financial Letter of Credit" means a Letter of Credit qualifying as a
"financial guarantee-type letter of credit" under 12 C.F.R. Part 3, Appendix A,
Section 3(b)(1)(i) or any successor U.S. Comptroller of the Currency regulation
and issued by an Issuing Bank under the terms of this Agreement.

         "Foreign Subsidiary": any Subsidiary which is organized and existing
under the laws of any jurisdiction outside of the United States of America.

         "Fortis Subordinated Debt": the Indebtedness evidenced by the
Subordinated Credit Agreement dated as of January 5, 2001, as subsequently
amended through the Closing Date, between Fortis Capital Corp. and the Borrower.

         "GAAP": generally accepted accounting principles in the United States
of America in effect from time to time, provided that for purposes of
determining compliance with the covenants contained in Section 8, "GAAP" shall
mean generally accepted accounting principles in the United States of America as
in effect on the date hereof and applied on a basis consistent with the
application used in the financial statements referred to in subsection 5.1.

         "Governmental Authority": any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.

         "Guarantee Agreement": the Guarantee Agreement to be executed and
delivered by each Guarantor substantially in the form of Exhibit B, as the same
may be amended, modified or supplemented from time to time.

         "Guarantee Obligation": as to any Person (the "guaranteeing person"),
any obligation of (a) the guaranteeing person or (b) another Person (including,
without limitation, any bank under any letter of credit) to induce the creation
of which the guaranteeing person has issued a reimbursement, counterindemnity or
similar obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary obligations")
of any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security therefor,
(ii) to advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services primarily
for the purpose of assuring the owner of any

                                       8
<PAGE>

such primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (iv) otherwise to assure or hold harmless the owner
of any such primary obligation against loss in respect thereof; provided,
however, that the term Guarantee Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Guarantee Obligation of any guaranteeing person shall be deemed to
be the lower of (a) an amount equal to the stated or determinable amount of the
primary obligation in respect of which such Guarantee Obligation is made and (b)
the maximum amount for which such guaranteeing person may be liable pursuant to
the terms of the instrument embodying such Guarantee Obligation, unless such
primary obligation and the maximum amount for which such guaranteeing person may
be liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by the Borrower in good
faith. Obligations of the Borrower or any Subsidiary pursuant to indemnities
which (a) are granted in the ordinary course of business, including, without
limitation, (i) such obligations in connection with stock purchase agreements or
asset purchase and sale agreements and (ii) such obligations in connection with
the conduct of the Oil and Gas Business in the ordinary course of business and
(b) do not cover Indebtedness of the types described in clauses (a) through (f)
of the definition of Indebtedness, shall not constitute "Guarantee Obligations"
for purposes of this Agreement.

         "Guarantor": Each of the Borrower's direct or indirect Domestic
Subsidiaries, other than the Immaterial Subsidiaries.

         "Hedging Agreement": any Interest Rate Protection Agreement, Commodity
Hedging Agreement, foreign currency exchange agreement, commodity price
protection agreement or other interest or currency exchange rate or commodity
price hedging arrangement.

         "Hydrocarbon Interests": all rights, titles, interests and estates now
owned or hereafter acquired in and to oil and gas leases, oil, gas and mineral
leases, or other liquid or gaseous hydrocarbon leases, mineral fee or lease
interests, farm-outs overriding royalty and royalty interests, net profit
interests, oil payments, production payment interests and similar mineral
interests, including any reserved or residual interest of whatever nature.

         "Hydrocarbons": oil, gas, casinghead gas, condensate, distillate,
liquid hydrocarbons, gaseous hydrocarbons, all products refined, separated,
settled and dehydrated therefrom and all products refined therefrom, including,
without limitation, kerosene, liquefied petroleum gas, refined lubricating oils,
diesel fuel, drip gasoline, natural gasoline, helium, sulfur and all other
minerals.

         "Immaterial Subsidiaries": the Subsidiaries of the Borrower listed on
Schedule 1.1(d).

         "Indebtedness": of any Person at any date, without duplication, (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (other than current trade liabilities incurred in
the ordinary course of business and payable in accordance with customary
practices and accrued current liabilities incurred in the ordinary course of
business), (b) any other indebtedness of such Person which is evidenced by a
note, bond, debenture or similar instrument, (c) all obligations of such Person
under Capital Leases, (d) all obligations of such Person in respect of letters
of credit and acceptances issued or created

                                       9
<PAGE>

for the account of such Person, (e) all obligations of such Person under
Commodity Hedging Agreements and Interest Rate Protection Agreements, (f) all
obligations of others of the type referred to in clauses (a) through (e) above
and which are secured by any Lien on any property owned by such Person even
though such Person has not assumed or otherwise become liable for the payment
thereof, except that the amount of any nonrecourse obligation shall be deemed to
be the lesser of the value of the property securing such obligation and the
amount of such obligation so secured, (g) all Guarantee Obligations with respect
to the items described in clauses (a) through (e) above, and (h) obligations of
such Person to purchase or repurchase securities, accounts or other Property
arising out of or in connection with the sale of the same or substantially
similar securities or Property; provided, that for the purposes of subsection
8.1(b) only, the definition of Indebtedness shall not include the obligations
described in clause (e) above, and provided further, that Indebtedness shall not
include any amounts due or payable in connection with the Series C Preferred
Stock, whether as dividends at any date, or upon redemption or repurchase of any
shares thereof after the Termination Date.

         "Insolvency": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.

         "Insolvent": pertaining to a condition of Insolvency.

         "Interest Payment Date": (a) as to any ABR Loan, the last day of each
March, June, September and December, commencing September 30, 2002 and the
Termination Date, (b) as to any Eurodollar Loan having an Interest Period of
three months or less, the last day of such Interest Period, and (c) as to any
Eurodollar Loan having an Interest Period longer than three months, each day
which is three months, or a whole multiple thereof, after the first day of such
Interest Period and the last day of such Interest Period.

         "Interest Period": with respect to any Eurodollar Loan:

                  (i) initially, the period commencing on the borrowing or
conversion date, as the case may be, with respect to such Eurodollar Loan and
ending one, two, three or six (or, to the extent available to all of the
Lenders, nine or twelve) months thereafter, as selected by the Borrower in its
notice of borrowing or notice of conversion, as the case may be, given with
respect thereto; and

                  (ii) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such Eurodollar Loan and ending
one, two, three or six (or, to the extent available to all of the Lenders, nine
or twelve) months thereafter, as selected by the Borrower by irrevocable notice
to the Administrative Agent not less than three Business Days prior to the last
day of the then current Interest Period with respect thereto;

provided that, all of the foregoing provisions relating to Interest Periods are
subject to the following:

                  (1) if any Interest Period pertaining to a Eurodollar Loan
would otherwise end on a day that is not a Business Day, such Interest Period
shall be extended to the next succeeding Business Day unless the result of such
extension would be to carry such Interest Period into

                                       10
<PAGE>

another calendar month in which event such Interest Period shall end on the
immediately preceding Business Day;

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

                  (3) the Borrower shall select Interest Periods so as not to
require a payment or prepayment of any Eurodollar Loan during an Interest Period
for such Loan; and

                  (4) any Interest Period that would otherwise extend beyond the
Termination Date shall end on the Termination Date.

         "Interest Rate Protection Agreement": an interest rate swap, cap or
collar agreement or similar arrangement entered into with the intent of
protecting against fluctuations in interest rates or the exchange of notional
interest obligations, either generally or under specific contingencies.

         "Investments": as defined in subsection 8.8.

         "Issuing Lender": SG or any of its respective Affiliates, in its
capacity as issuer of a Letter of Credit, and any other Lender to whom SG or any
of its respective Affiliates assigns (with the prior written consent of the
Required Lenders) its obligations to issue Letters of Credit hereunder.

         "L/C Application": as defined in subsection 3.2.

         "L/C Commitment": the Issuing Lender's obligation to issue Letters of
Credit pursuant to Section 3 of this Agreement.

         "L/C Participating Interest": with respect to any Letter of Credit (a)
in the case of the Issuing Lender with respect thereto, its interest in such
Letter of Credit and any L/C Application relating thereto after giving effect to
the granting of participating interests therein, if any, pursuant hereto and (b)
in the case of each Participating Lender, its undivided participating interest
in such Letter of Credit and any L/C Application relating thereto.

         "Lead Arranger": as defined in the Preamble to this Agreement.

         "Lender Redetermination Notice": a notice from the Supermajority
Lenders to the Borrower giving notice of their election to redetermine the
Borrowing Base, which notice may be sent by the Supermajority Lenders at any
time they so elect, provided that such an election (excluding any mandatory
redetermination of the Borrowing Base made in connection with the issuance of
Subordinated Indebtedness pursuant to subsection 4.9(d)(iii)) can be made by the
Supermajority Lenders no more than once during any consecutive 12 month period.

         "Letters of Credit": as defined in subsection 3.1(a).

                                       11
<PAGE>

         "Letter of Credit Outstandings": at any time, the sum of (a) the
aggregate amount available for drawing under Letters of Credit then outstanding
and (b) the aggregate amount of drawings under Letters of Credit which have not
then been reimbursed pursuant to subsection 3.5.

         "Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement and any Capital Lease having
substantially the same economic effect as any of the foregoing), but excluding
set-off arrangements under Hedging Agreements.

         "Loan": as defined in subsection 2.1(a).

         "Loan Documents": the collective reference to this Agreement, any
Notes, the L/C Applications, the Fee Letter, the Guarantee Agreement, the
Security Documents and any Hedging Agreement between the Borrower or any of its
Subsidiaries and any Lender or any Affiliate of any Lender (including, any
Hedging Agreement between the Borrower or any of its Subsidiaries and any
commercial bank or other financial institution that was at the time such Hedging
Agreement was entered into a Lender or an Affiliate of a Lender).

         "Loan Parties": the collective reference to the Borrower, each
Guarantor and any other Subsidiary from time to time party to any Loan Document.

         "Material Adverse Effect": a material adverse effect on (a) the
business, assets, liabilities, property, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole, (b) the ability
of the Borrower or any of the other Loan Parties to perform their respective
obligations under the Loan Documents, or (c) the validity or enforceability of
this or any of the other Loan Documents or the rights and remedies of the
Administrative Agent or the Lenders hereunder or thereunder.

         "Material Environmental Amount": an amount not covered by insurance
that is payable by the Borrower or any of its Subsidiaries in excess of
$5,000,000 for remedial costs, compliance costs, compensatory damages, punitive
damages, fines, penalties or any combination thereof.

         "Materials of Environmental Concern": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials, or wastes, defined or regulated as
such in or under any Environmental Law, including, without limitation, asbestos
or asbestos containing material, polychlorinated biphenyls, urea-formaldehyde
insulation, and any other substance that is regulated under any Environmental
Law.

         "Mortgage Amendment": the Mortgage Amendment to be entered into on the
initial Borrowing Date to amend the Existing Mortgages, in form and substance
reasonably acceptable to the Borrower, the Lenders and the Administrative Agent.

         "Mortgaged Property": all of the Oil and Gas Properties and other
collateral purported to be subject to the Lien of the Mortgages.

                                       12
<PAGE>

         "Mortgage": collectively, (i) the Existing Mortgages, as amended by the
Mortgage Amendments, and (ii) each other mortgage (including without limitation,
the Additional Mortgage), deed of trust, assignment, security agreement or
mortgage executed by the Borrower or any other Loan Party and in form and
substance reasonably satisfactory to the Administrative Agent which purports to
create a Lien in favor of the Administrative Agent, in each case as amended,
supplemented or otherwise modified from time to time.

         "Multiemployer Plan": a Plan which is a multiemployer plan as defined
in Section 400 1(a)(3) of ERISA.

         "Net Proceeds": with respect to any Disposition by the Borrower or any
Subsidiary, an amount equal to the gross proceeds in cash (including cash
equivalents and any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or purchase price
adjustment receivable or otherwise, but only as and when received) of such
Disposition, net of attorneys' fees, accountants' fees, brokerage, consultant
and other fees, underwriting commissions and other fees and expenses actually
incurred in connection with such Disposition.

         "Non-Excluded Taxes": as defined in subsection 4.13(a).

         "Non-U.S. Lender": as defined in subsection 4.13(b).

         "Notes": as defined in subsection 2.3(e).

         "November 2002 Redetermination": the redetermination of the Borrowing
Base scheduled for November 2002, pursuant to subsection 4.9(c), utilizing the
Reserve Report required to be delivered prior to September 15, 2002.

         "Obligations": the collective reference to the unpaid principal of and
interest on the Loans and the Reimbursement Obligations and all other
obligations and liabilities of the Borrower (including, without limitation,
interest accruing at the then applicable rate provided in this Agreement after
the maturity of the Loans and interest accruing at the then applicable rate
provided in this Agreement after the filing of any petition in bankruptcy, or
the commencement of any insolvency, reorganization or like proceeding, relating
to the Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) to the Administrative Agent or any of
the Lenders.

         "Oil and Gas Business": (a) the acquisition, exploration, exploitation,
development, operation and disposition of interests in Oil and Gas Properties
and Hydrocarbons, (b) the gathering, marketing, treating, processing, storage,
selling and transporting of any production from such interests or Oil and Gas
Properties, including, without limitation, the marketing of Hydrocarbons
obtained from unrelated Persons; (c) any business relating to or arising from
exploration for or development, production, treatment, processing, storage,
transportation or marketing of oil, gas and other minerals and products produced
in association therewith (d) any business relating to oilfield sales and
service, and (e) any activity that is ancillary or necessary or desirable to
facilitate the activities described in clauses (a) through (d) of this
definition.

                                       13
<PAGE>

         "Oil and Gas Properties": Hydrocarbon Interests; the Properties now or
hereafter pooled or unitized with Hydrocarbon Interests; all presently existing
or future unitization, pooling agreements and declarations of pooled units and
the units created thereby (including without limitation all units created under
orders, regulations and rules of any Governmental Authority having jurisdiction)
which may affect all or any portion of the Hydrocarbon Interests; all pipelines,
gathering lines, compression facilities, tanks and processing plants; all
interests held in royalty trusts whether presently existing or hereafter
created; all Hydrocarbons in and under and which may be produced, saved,
processed or attributable to the Hydrocarbon Interests, the lands covered
thereby and all hydrocarbons in pipelines, gathering lines, tanks and processing
plants and all rents, issues, profits, proceeds, products, revenues and other
incomes from or attributable to the Hydrocarbon Interests; all tenements,
hereditaments, appurtenances and Properties in any way appertaining, belonging,
affixed or incidental to the Hydrocarbon Interests, and all rights, titles,
interests and estates described or referred to above, including any and all real
property, now owned or hereafter acquired, used or held for use in connection
with the operating, working or development of any of such Hydrocarbon Interests
or Property and including any and all surface leases, rights-of-way, easements
and servitude together with all additions, substitutions, replacements,
accessions and attachments to any and all of the foregoing; all oil, gas and
mineral leasehold and fee interests, all overriding royalty interests, mineral
interests, royalty interests, net profits interests, net revenue interests, oil
payments, production payments, carried interests and any and all other interests
in Hydrocarbons; in each case whether now owned or hereafter acquired directly
or indirectly.

         "Participants": as defined in subsection 11.6(b).

         "Participating Lender": with respect to any Letter of Credit, any
Lender (other than the Issuing Lender with respect to such Letter of Credit)
with respect to its L/C Participating Interest in such Letter of Credit.

         "PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA.

         "Performance Letter of Credit" means a Letter of Credit qualifying as a
"performance-based standby letter of credit" under 12 C.F.R. Part 3, Appendix A,
Section 3(b)(2)(i) or any successor U.S. Comptroller of the Currency regulation
and issued by an Issuing Lender under the terms of this Agreement.

         "Permitted Business Acquisition": the formation of a new Subsidiary or
any acquisition of all or substantially all the assets of, or shares of capital
stock, partnership interests, joint venture interests, limited liability company
interests or other similar equity interests in, a Person or division or line of
business of a Person (or any subsequent investment made in a Person previously
acquired in a Permitted Business Acquisition), if immediately after giving
effect thereto: (a) no Default or Event of Default shall have occurred and be
continuing or would result therefrom, (b) all transactions related thereto shall
be consummated in accordance with applicable laws, (c) such acquired or newly
formed corporation, partnership, association or other business entity shall be a
Guarantor and all of the Capital Stock of such acquired or newly formed
corporation, partnership, association or other business entity are owned
directly by the Borrower or a domestic Wholly-Owned Subsidiary and all actions
required to be taken, if any,

                                       14
<PAGE>

with respect to such acquired or newly formed Subsidiary under subsection 7.9
shall have been taken, (d)(i) the Borrower shall be in compliance, on a pro
forma basis after giving effect to such acquisition or formation, with the
covenants contained in subsection 8.1 recomputed as at the last day of the most
recently ended fiscal quarter of the Borrower as if such acquisition had
occurred on the first day of each relevant period for testing such compliance,
and the Borrower shall have delivered to the Administrative Agent an officers'
certificate to such effect, together with all relevant financial information for
such Person or assets and (ii) any acquired or newly formed Subsidiary
(including its direct and indirect Subsidiaries) shall not be liable for any
Indebtedness or Guarantee Obligations (except for Indebtedness and Guarantee
Obligations permitted by subsections 8.2 and 8.4) and (e) any acquired or newly
formed Subsidiary (including its direct and indirect Subsidiaries) shall not
have any liabilities (contingent or otherwise, and including, without
limitation, liabilities under Environmental Laws and liabilities with respect to
any Plan) other than (x) Indebtedness and Guarantee Obligations permitted by
subsections 8.2 and 8.4 and (y) such liabilities which could not have a Material
Adverse Effect, and the Borrower shall have delivered to the Administrative
Agent a certificate, signed by a Responsible Officer, that to the best of such
officer's knowledge, the conditions set forth in this clause (e) have been met.

         "Permitted Business Investments": investments made in the ordinary
course of, and of a nature that is or shall have become customary in, the Oil
and Gas Business as a means of actively exploiting, exploring for, acquiring,
developing, processing, gathering, marketing or transporting oil and gas through
agreements, transactions, interests or arrangements which permit one to share
risks or costs, comply with regulatory requirements regarding local ownership or
satisfy other objectives customarily achieved through the conduct of Oil and Gas
Business jointly with third parties, including, without limitation, the entry
into operating agreements, working interests, royalty interests, mineral leases,
processing agreements, farm-out and farm-in agreements, division orders,
contracts for the sale, transportation or exchange of oil or natural gas,
unitization and pooling declarations and agreements and area of mutual interest
agreements, production sharing agreements or other similar or customary
agreements, transactions, properties, interests, and investments and
expenditures in connection therewith; provided that an investment in capital
stock, partnership interests, joint venture interests, limited liability company
interests or other similar equity interests in a Person shall not constitute a
Permitted Business Investment.

         "Person": an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture, limited
liability company, Governmental Authority or other entity of whatever nature.

         "Plan": at a particular time, any employee benefit plan which is
subject to Title IV of ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5)
of ERISA.

         "Pledge Agreement": the Pledge Agreement to be executed and delivered
by each of the Loan Parties, substantially in the form of Exhibit C-1, as the
same may be amended, modified or supplemented from time to time.

         "Pledged Securities": the Capital Stock of each direct and indirect
Subsidiary of the Borrower listed on Schedule 5.15 which is a Guarantor, and
each other Subsidiary of the

                                       15
<PAGE>

Borrower (whether now formed or hereafter acquired) whose Capital Stock is
pledged to the Lenders pursuant to the Pledge Agreement or subsection 7.9.

         "Pledgors": the Borrower and each of its Subsidiaries which is a party
to the Pledge Agreement on the initial Borrowing Date or which becomes a party
to a pledge agreement pursuant to subsection 7.9.

         "Preferred Stock": with respect to any Person, shares of such Person
which shall be entitled to preference or priority over any other shares of such
corporation in respect of either the payment of dividends or the distribution of
assets upon liquidation.

         "Present Value": the present value of the Oil and Gas Properties owned
by the Borrower and its Subsidiaries, as set forth on the most recent Reserve
Report delivered pursuant to Section 4.9.

         "Properties": any kind of facility, fixture, property or asset, whether
real, personal or mixed, or tangible or intangible owned, leased or operated by
the Borrower or any Subsidiary.

         "Proved Reserves": the estimated quantities of crude oil, condensate,
natural gas and natural gas liquids that adequate geological and engineering
data demonstrate with reasonable certainty to be recoverable in future years
from proved reservoirs under existing economic and operating conditions (i.e.,
prices and costs as of the date the estimate is made).

         "Redeemable Preferred Stock": any Preferred Stock which (a) the issuer
undertakes to redeem at a fixed or determinable date or dates (other than
pursuant to the exercise of an option to redeem by the issuer, if the failure to
exercise such option would not materially adversely affect the business,
consolidated financial position or consolidated results of operations of the
issuer and its subsidiaries taken as a whole), whether by operation of a sinking
fund or otherwise, or upon the occurrence of a condition not solely within the
control of the issuer, or (b) is redeemable at the option of the holder.

         "Redetermination Date": each date that the redetermined Borrowing Base
becomes effective subject to the notice requirements specified in subsection
4.9.

         "Reference Banks": four major banks in the London interbank market
selected by the Administrative Agent.

         "Register": as defined in subsection 11.6(d).

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

         "Regulations T and X" means the corresponding regulation of the Board
of Governors of the Federal Reserve System as from time to time in effect and
any successor or other regulation or official interpretation of said Board of
Governors, and all official rulings and interpretations thereunder or thereof.

                                       16
<PAGE>

         "Reimbursement Obligations": the obligation of the Borrower to
reimburse the Issuing Lender pursuant to subsection 3.5 for amounts drawn under
Letters of Credit issued by the Issuing Lender in accordance with the terms of
this Agreement and the related L/C Applications.

         "Reorganization": with respect to any Multiemployer Plan, the condition
that such plan is in reorganization within the meaning of Section 4241 of ERISA.

         "Reportable Event": any of the events set forth in Section 4043(b) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg. Section
2615.

         "Required Lenders": (a) until such time as no one Lender, together with
its Affiliates, has a Commitment Percentage which aggregates (for such one
Lender and its Affiliates) at least 51%, all of the Lenders and (b) thereafter,
Lenders the Commitment Percentages of which aggregate at least 51%.

         "Requirement of Law": as to any Person, the certificate or articles of
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its Property or to which such Person or
any of its Property is subject.

         "Reserve Report": a report in form and substance acceptable to the
Administrative Agent and with attachments with respect to the Oil and Gas
Properties of the Borrower and its Subsidiaries (a) for the reserve report
required to be delivered in connection with the November 2002 Redetermination,
prepared by engineers employed by the Borrower and certified by a Responsible
Officer of the Borrower and audited by T.J. Smith & Company Inc. with respect to
the following three categories: (i) new discoveries since the December 31, 2001
Reserve Report, (ii) properties experiencing material deviations from the
December 31, 2001 Reserve Report, as determined by the Administration Agent in
its reasonable discretion, (iii) any material reserve reclassifications from the
December 31, 2001 Reserve Report, as determined by the Administrative Agent in
its reasonable discretion and (iv) material confirmations of existing reserve
classifications with respect to the Borrower's CL&F number 65 well (generally
known by the Borrower as Kent Bayou) from the December 31, 2001 Reserve Report,
as determined by the Administrative Agent in its reasonable discretion, (b) for
the reserve reports required to be delivered on or before March 15 of each year
with respect to the immediately preceding year ended December 31, prepared by
the Borrower and audited by T.J. Smith & Company Inc. or another independent
engineering firm selected by the Borrower and reasonably acceptable to the
Administrative Agent and (c) for all other reports, except as otherwise provided
in Section 4.9, prepared by engineers employed by the Borrower and certified by
a Responsible Officer of the Borrower.

         "Responsible Officer": of any Loan Party, the chief executive officer
or the president of such Loan Party or, with respect to financial matters, the
chief financial officer or treasurer of such Loan Party.

                                       17
<PAGE>

         "Revolving Credit Commitment": as to any Lender, the obligation of such
Lender to make Loans to the Borrower hereunder in an aggregate principal amount
at any one time outstanding not to exceed the amount set forth opposite such
Lender's name on Schedule 1.1(a) (which amount, with respect to the Lenders,
shall equal $175,000,000), as such amount may be reduced from time to time in
accordance with the provisions of this Agreement, or as the same may be
increased pursuant to Section 2.1(c) hereof.

         "Revolving Credit Loans": as defined in subsection 2.1(a).

         "Revolving Credit Note": as defined in subsection 2.3(e).

         "Security Agreement": the Security Agreement to be executed and
delivered by each of the Loan Parties, substantially in the form of Exhibit C-2,
as the same may be amended, modified or supplemented from time to time.

         "Security Documents": the collective reference to the Pledge Agreement,
the Mortgages, the Security Agreement and all other security documents hereafter
delivered to the Administrative Agent granting a Lien on any asset or assets of
any Person to secure the obligations and liabilities of the Borrower hereunder
and under any of the other Loan Documents or to secure any guarantee of any such
obligations and liabilities.

         "Series C Preferred Stock": the Borrower's Series C Redeemable
Convertible Preferred Stock issued pursuant to the terms and conditions of the
Private Placement Memorandum dated March 25, 2002 and the Series C Preferred
Stock Designation.

         "Series C Preferred Stock Designation": the Statement of Designation
describing the terms and conditions of the Series C Preferred Stock.

         "SG": Societe Generale.

         "Single Employer Plan": any Plan which is covered by Title IV of ERISA,
but which is not a Multiemployer Plan.

         "Subordinated Indebtedness": any Indebtedness of the Borrower
contractually subordinated to the prior payment in full of the Loans,
Reimbursement Obligations and any other obligations hereunder in a manner
acceptable to the Required Lenders as evidenced by their written approval.

         "Subordination Agreement": the Subordination Agreement dated as of the
initial Borrowing Date among the Borrower, Fortis Capital Corp. and the
Administrative Agent, with respect to the Fortis Subordinated Debt,
substantially in the form of Exhibit I attached hereto, as the same may be
amended, supplemented or otherwise modified from time to time.

         "Subsidiary": as to any Person, a corporation, partnership or other
entity of which more than 50% of the total voting power of shares of stock or
other equity ownership interests having ordinary voting power (other than stock
or such other ownership interests having such power only by reason of the
happening of a contingency) to vote in the election of directors, a managing
general partner, or majority of general partners or other managers or trustees
thereof, is at the

                                       18
<PAGE>

time owned or controlled, directly or indirectly by such Person or one or more
of the other Subsidiaries of such Person (or a combination thereof). Unless
otherwise qualified, all references to a "Subsidiary" or to "Subsidiaries" in
this Agreement shall refer to any direct or indirect Subsidiary or Subsidiaries
of the Borrower.

         "Supermajority Lenders": (a) until such time as no one Lender, together
with its Affiliates, has a Commitment Percentage which aggregates (for such one
Lender and its Affiliates) at least 75%, all of the Lenders and (b) thereafter,
Lenders the Commitment Percentages of which aggregate at least 75%.

         "Termination Date": the date which is the third anniversary of the
Closing Date; provided, however that if the Borrower does not either refinance
its 9 1/2% Subordinated Notes on terms reasonably acceptable to the
Administrative Agent and Required Lenders or convert such Notes to Capital Stock
on or prior to May 1, 2005, then the Termination Date shall be June 1, 2005.

         "Tranche": the collective reference to Eurodollar Loans the then
current Interest Periods with respect to all of which begin on the same date and
end on the same later date (whether or not such Loans shall originally have been
made on the same day); Tranches may be identified as "Eurodollar Tranches":

         "Transferee": as defined in subsection 11.6(f).

         "Type": as to any Loan, its nature as an ABR Loan or a Eurodollar Loan.

         "Uniform Customs": the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No. 500,
as the same may be amended from time to time.

         "Wholly-Owned Subsidiary": a Subsidiary of the Borrower, all of the
outstanding Capital Stock of which (other than directors' qualifying shares) is
owned, directly or indirectly, by the Borrower or one or more other Wholly-Owned
Subsidiaries of the Borrower; provided that each of the Persons listed on
Schedule 1.1(d) shall be deemed not to be Wholly-Owned Subsidiaries.

         1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in any Loan Document or any certificate or other document made or
delivered pursuant hereto or thereto.

             (b) As used herein and in any Loan Document, and any certificate or
other document made or delivered pursuant hereto or thereto, accounting terms
relating to the Borrower or any Subsidiary of the Borrower not defined in
subsection 1.1 and accounting terms partly defined in subsection 1.1, to the
extent not defined, shall have the respective meanings given to them under GAAP.
References in this Agreement or any other Loan Document to financial statements
shall be deemed to include all related schedules and notes thereto.

             (c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular

                                       19
<PAGE>

provision of this Agreement, and Section, subsection, Schedule and Exhibit
references are to this Agreement unless otherwise specified.

             (d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.

             (e) References in this Agreement or any other Loan Document to
knowledge of any Loan Party of events or circumstances shall be deemed to refer
to events or circumstances of which a Responsible Officer has knowledge or
should have had knowledge.

           SECTION 2. AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENTS

         2.1 Revolving Credit Commitments. (a) Subject to the terms and
conditions hereof, including, without limitation, the satisfaction of the
conditions precedent set forth in Section 6 hereof, each Lender severally agrees
to make revolving credit loans ("Revolving Credit Loans" or "Loans") to the
Borrower from time to time during the Commitment Period in an aggregate
principal amount at any one time outstanding not to exceed the amount of such
Lender's Revolving Credit Commitment, provided that no Lender shall make any
Revolving Credit Loans if, after giving effect thereto, the sum of such Lender's
Revolving Credit Loans and Commitment Percentage of Letter of Credit
Outstandings (in each case, after giving effect to the Loans requested to be
made and the Letters of Credit requested to be issued on such date) exceeds the
lesser of (i) such Lender's Revolving Credit Commitment and (ii) such Lender's
Commitment Percentage of the Borrowing Base then in effect. During the
Commitment Period, the Borrower may use the Revolving Credit Commitments by
borrowing, prepaying the Revolving Credit Loans in whole or in part, and
reborrowing, all in accordance with the terms and conditions hereof.

             (b) The Revolving Credit Loans may from time to time be (i)
Eurodollar Loans, (ii) ABR Loans or (iii) a combination thereof, as determined
by the Borrower and notified to the Administrative Agent in accordance with
subsections 2.2 and 4.3, provided that no Revolving Credit Loan shall be made as
a Eurodollar Loan after the day that is one month prior to the Termination Date.

             (c) The Borrower may, at its option and subject to the conditions
described in this Section, without the consent of the Lenders but subject to the
consent of the Administrative Agent, increase the aggregate Revolving Credit
Commitment one time by adding to this Agreement one or more commercial banks or
other financial institutions (who shall, upon completion of the requirements
stated in this Section 2.1(c), constitute Lenders hereunder), or by allowing one
or more Lenders to increase their Revolving Credit Commitments hereunder, so
that such added and increased Revolving Credit Commitments shall equal the
increase in aggregate Revolving Credit Commitments effectuated pursuant to this
Section 2.1(c); provided that (i) without the consent of all the Lenders, no
increase in the aggregate Revolving Credit Commitments pursuant to this Section
2.1(c) shall result in the aggregate Revolving Credit Commitments exceeding
$200,000,000, and (ii) no Lender shall be obligated to increase its Revolving
Credit Commitment amount, without the consent of such Lender. The Borrower may
exercise its option to so increase the aggregate Revolving Credit Commitment
only if the following conditions are satisfied:

                                       20
<PAGE>

                  (i) no Default or Event of Default exists hereunder, and the
Borrower shall have delivered a certificate to the Administrative Agent from a
Responsible Officer of Borrower stating that no Default or Event of Default
exists;

                  (ii) the representations and warranties of the Borrower
contained in Section 5 shall be true and correct except to the extent any such
representation or warranty is stated to relate solely to an earlier date, in
which case such representation or warranty shall have been true and correct on
such earlier date;

                  (iii) the Guarantors shall have consented to such increase in
writing; and

                  (iv) the Borrower shall execute new Notes evidencing the
increased Revolving Credit Commitments of the Lenders, at the Lenders' request.

The Borrower shall give the Administrative Agent ten Business Days' notice of
the Borrower's intention to increase the aggregate Revolving Credit Commitments
pursuant to this Section 2.1(c). Such notice shall specify each new commercial
bank or other financial institution, if any, the changes in amounts of Revolving
Credit Commitments that will result, and such other information as is reasonably
requested by the Administrative Agent. Each new commercial bank or other
financial institution, and each Lender agreeing to increase its Revolving Credit
Commitment, shall execute and deliver to the Administrative Agent a document in
form and substance satisfactory to the Administrative Agent pursuant to which it
becomes a party hereto or increases its Revolving Credit Commitment, as the case
may be, which document, in the case of a new commercial bank or other financial
institution, shall (among other matters) specify the lending office of such new
commercial bank or other financial institution. Upon execution and delivery of
such documents, such new commercial bank or other financial institution shall
constitute a "Lender" hereunder with a Revolving Credit Commitment as specified
therein, or such Lender's Revolving Credit Commitment shall increase as
specified therein, as the case may be. Notwithstanding the foregoing, after
giving effect to this Section, the terms and conditions hereof shall remain
substantially the same as in effect prior to such increase in the Revolving
Credit Commitment.

         2.2 Procedure for Revolving Credit Borrowing. The Borrower may borrow
under the Revolving Credit Commitments during the Commitment Period on any
Business Day, provided that the Borrower shall give the Administrative Agent
irrevocable notice (which notice must be received by the Administrative Agent
prior to 10:00 a.m., New York City time, (a) three Business Days prior to the
requested Borrowing Date, if all or any part of the requested Revolving Credit
Loans initially are to be Eurodollar Loans or (b) one Business Day prior to the
requested Borrowing Date, otherwise), specifying (i) the amount to be borrowed,
(ii) the requested Borrowing Date, (iii) whether the borrowing is to be of
Eurodollar Loans, ABR Loans or a combination thereof and (iv) if the borrowing
is to be entirely or partly of Eurodollar Loans, the respective amounts of each
such Type of Loan and the respective lengths of the initial Interest Periods
therefor. Each borrowing under the Revolving Credit Commitments shall be in an
amount equal to (x) in the case of ABR Loans, $5,000,000 or a whole multiple of
$1,000,000 in excess thereof (or, if the then Available Commitments, or the
amount of outstanding Eurodollar Loans after any repayment of any Eurodollar
Loans, are less than $5,000,000, such

                                       21
<PAGE>

lesser amount) and (y) in the case of Eurodollar Loans, $5,000,000 or a whole
multiple of $1,000,000 in excess thereof. Upon receipt of any such notice from
the Borrower, the Administrative Agent shall promptly notify each Lender
thereof. Each Lender will make the amount of its pro rata share of each
borrowing available to the Administrative Agent for the account of the Borrower
at the office of the Administrative Agent specified in subsection 11.2 prior to
11:00 A.M., New York City time, on the Borrowing Date requested by the Borrower
in funds immediately available to the Administrative Agent. Such borrowing will
then be made available to the Borrower by the Administrative Agent crediting the
account of the Borrower on the books of such office with the aggregate of the
amounts made available to the Administrative Agent by the Lenders and in like
funds as received by the Administrative Agent.

         2.3 Repayment of Loans; Evidence of Debt. (a) The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
each Lender the then unpaid principal amount of each Loan of such Lender on the
Termination Date (or such earlier date on which the Loans become due and payable
pursuant to Section 9). The Borrower hereby further agrees to pay interest on
the unpaid principal amount of the Loans from time to time outstanding from the
date hereof to but not including the date the Loans are paid in full at the
rates per annum, and on the dates, set forth in subsection 4.1.

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

             (c) The Administrative Agent shall maintain the Register pursuant
to subsection 11.6(d), and a subaccount therein for each Lender, in which shall
be recorded (i) the amount of each Loan made hereunder, the Type thereof and
each 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) both the amount of any sum received by the
Administrative Agent hereunder from the Borrower and each Lender's share
thereof.

             (d) The entries made in the Register and the accounts of each
Lender maintained pursuant to subsection 2.3(b) shall, to the extent permitted
by applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of the Administrative Agent or any Lender to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans made to
such Borrower by such Lender in accordance with the terms of this Agreement.

             (e) The Borrower agrees that, upon the request to the
Administrative Agent by any Lender, the Borrower will execute and deliver to
such Lender a promissory note of the Borrower evidencing the Revolving Credit
Loans of such Lender, substantially in the form of Exhibit A with appropriate
insertions as to date and principal amount (a "Revolving Credit Note" or
"Note").

                                       22
<PAGE>

                          SECTION 3. LETTERS OF CREDIT

         3.1 The L/C Commitment. (a) Subject to the terms and conditions hereof,
including, without limitation, the satisfaction of the conditions precedent set
forth in Section 6 hereof, the Issuing Lender, in reliance on the agreements of
the other Lenders set forth in subsection 3.4(a), agrees to issue letters of
credit (the "Letters of Credit") for the account of the Borrower on any Business
Day during the Commitment Period in such form as may be approved from time to
time by the Issuing Lender; provided that the Issuing Lender shall not issue any
Letter of Credit if, after giving effect to such issuance and after giving
effect to any Loans requested to be made or Letters of Credit requested to be
issued on such date, (i) the Letter of Credit Outstandings would exceed
$15,000,000 or (ii) the sum of the Revolving Credit Loans and Letter of Credit
Outstandings would exceed the lesser of (x) the Revolving Credit Commitments and
(y) the Borrowing Base then in effect. Each Letter of Credit shall (i) be issued
to support obligations of the Borrower or any of its Subsidiaries, contingent or
otherwise, which finance the working capital and business needs of the Borrower
and its Subsidiaries, and (ii) shall expire no later than the earlier of (x) one
year (or such later date agreed to by the Issuing Lender) after the date of
issuance and (y) five Business Days prior to the Termination Date, provided that
any Letter of Credit with a one-year tenor may provide for the extension thereof
for additional one-year periods (which shall in no event extend beyond the date
referred to in clause (y) above). Each Letter of Credit shall be denominated in
Dollars.

             (b) Each Letter of Credit shall be subject to the Uniform Customs
and, to the extent not inconsistent therewith, the laws of the State of New
York.

             (c) The Issuing Lender shall not at any time be obligated to issue
any Letter of Credit hereunder if such issuance would conflict with, or cause
the Issuing Lender or any Participating Lender to exceed any limits imposed by,
any applicable Requirement of Law.

         3.2 Procedure for Issuance of Letters of Credit. The Borrower may from
time to time request that the Issuing Lender issue a Letter of Credit by
delivering to the Issuing Lender and the Administrative Agent at their
respective addresses for notices specified herein a letter of credit application
in the Issuing Lender's then customary form (an "L/C Application") completed to
the satisfaction of the Issuing Lender, and such other certificates, documents
and other papers and information as may be customary and as the Issuing Lender
may reasonably request. Upon receipt of any L/C Application, the Issuing Lender
will process such L/C Application and the certificates, documents and other
papers and information delivered to it in connection therewith in accordance
with its customary procedures and, upon receipt by the Issuing Lender of
confirmation from the Administrative Agent that issuance of such Letter of
Credit will not contravene subsection 3.1, the Issuing Lender shall promptly
issue the Letter of Credit requested thereby (but in no event shall the Issuing
Lender be required to issue any Letter of Credit earlier than three Business
Days after its receipt of the L/C Application therefor and all such other
certificates, documents and other papers and information relating thereto) by
issuing the original of such Letter of Credit to the beneficiary thereof or as
otherwise may be agreed by the Issuing Lender and the Borrower. The Issuing
Lender shall furnish a copy of such Letter of Credit to the Borrower and the
Administrative Agent promptly following the issuance thereof, and, thereafter,
the Administrative Agent shall promptly furnish a copy thereof to the Lenders.

                                       23
<PAGE>

         3.3 Fees, Commissions and Other Charges. (a) The Borrower shall pay to
the Administrative Agent, for the account of (i) the Issuing Lender and the
Participating Lenders, a letter of credit commission with respect to each Letter
of Credit, computed for the period from the date such Letter of Credit is issued
to the date upon which the next payment is due under this subsection (and,
thereafter, from the date of payment under this subsection to the date upon
which the next payment is due under this subsection) at the rate per annum equal
to (A) for Financial Letters of Credit, the Applicable Margin in effect from
time to time for Eurodollar Loans of the daily aggregate amount available to be
drawn under such Financial Letter of Credit during such period or (B) for
Performance Letters of Credit, the Applicable Margin in effect from time to time
for Eurodollar Loans of the daily aggregate amount available to be drawn under
such Performance Letter of Credit during such period, and (ii) the Issuing
Lender, a letter of credit commission with respect to each Letter of Credit in
an amount equal to .125% per annum of the daily aggregate amount available to be
drawn under such Letter of Credit. The letter of credit commissions payable
pursuant to clause (i) and (ii) above shall be payable quarterly in arrears on
the last day of each March, June, September and December, commencing September
30, 2002, and on the Termination Date.

             (b) In addition to the foregoing fees and commissions, the Borrower
shall pay or reimburse the Issuing Lender for such normal and customary costs
and expenses as are incurred or charged by the Issuing Lender in issuing,
effecting payment under, amending, negotiating or otherwise administering any
Letter of Credit.

             (c) The Administrative Agent shall, promptly following its receipt
thereof, distribute to the Issuing Lender and the Participating Lenders all fees
and commissions received by the Administrative Agent for their respective
accounts pursuant to this subsection.

         3.4 L/C Participations. (a) Effective on the date of issuance of each
Letter of Credit issued after the Closing Date, the Issuing Lender irrevocably
agrees to grant and hereby grants to each Participating Lender, and each
Participating Lender irrevocably agrees to accept and purchase and hereby
accepts and purchases from the Issuing Lender, on the terms and conditions
hereinafter stated, for such Participating Lender's own account and risk an
undivided interest equal to such Participating Lender's Commitment Percentage in
the Issuing Lender's obligations and rights under each Letter of Credit issued
by the Issuing Lender and the amount of each draft paid by the Issuing Lender
thereunder. Each Participating Lender unconditionally and irrevocably agrees
with the Issuing Lender that, if a draft is paid under any Letter of Credit for
which such Issuing Lender is not reimbursed in full by the Borrower in
accordance with the terms of this Agreement, such Participating Lender shall pay
to the Administrative Agent, for the account of the Issuing Lender, upon demand
at the Administrative Agent's address specified in subsection 11.2, an amount
equal to such Participating Lender's Commitment Percentage of the amount of such
draft, or any part thereof, which is not so reimbursed. On the date that any
Assignee becomes a Lender party to this Agreement in accordance with subsection
11.6, participating interests in any outstanding Letters of Credit held by the
transferor Lender from which such Assignee acquired its interest hereunder shall
be proportionately reallotted between such Assignee and such transferor Lender.
Each Participating Lender hereby agrees that its obligation to participate in
each Letter of Credit, and to pay or to reimburse the Issuing Lender for its
participating share of the drafts drawn or amounts otherwise paid thereunder, is
absolute, irrevocable and unconditional and shall not be affected by any
circumstances whatsoever

                                       24
<PAGE>

(including, without limitation, the occurrence or continuance of any Default or
Event of Default), and that each such payment shall be made without offset,
abatement, withholding or other reduction whatsoever.

             (b) If any amount required to be paid by any Participating Lender
to the Issuing Lender pursuant to subsection 3.4(a) in respect of any
unreimbursed portion of any draft paid by the Issuing Lender under any Letter of
Credit is paid to the Issuing Lender within three Business Days after the date
such payment is due, such Participating Lender shall pay to the Administrative
Agent, for the account of the Issuing Lender, on demand, an amount equal to the
product of (i) such amount, times (ii) the daily average Federal Funds Effective
Rate during the period from and including the date such draft is paid to the
date on which such payment is immediately available to the Issuing Lender, times
(iii) a fraction the numerator of which is the number of days that elapse during
such period and the denominator of which is 360. If any such amount required to
be paid by any Participating Lender pursuant to subsection 3.4(a) is not in fact
made available to the Administrative Agent, for the account of the Issuing
Lender, by such Participating Lender within three Business Days after the date
such payment is due, the Issuing Lender shall be entitled to recover from such
Participating Lender, on demand, such amount with interest thereon calculated
from such due date at the rate per annum applicable to ABR Loans hereunder. A
certificate of the Issuing Lender submitted to any Participating Lender with
respect to any amounts owing under this subsection shall be conclusive in the
absence of manifest error.

             (c) Whenever, at any time after the Issuing Lender has paid a draft
under any Letter of Credit and has received from any Participating Lender its
pro rata share of such payment in accordance with subsection 3.4(a), the Issuing
Lender receives any reimbursement on account of such unreimbursed portion, or
any payment of interest on account thereof, the Issuing Lender will pay to the
Administrative Agent, for the account of such Participating Lender, its pro rata
share thereof provided, however, that in the event that any such payment
received by the Issuing Lender shall be required to be returned by the Issuing
Lender, such Participating Lender shall return to the Administrative Agent for
the account of the Issuing Lender, the portion thereof previously distributed to
it.

         3.5 Reimbursement Obligation of the Borrower. If any draft shall be
presented for payment under any Letter of Credit, the Issuing Lender shall
notify the Borrower and the Administrative Agent of the date and the amount
thereof. The Borrower agrees to reimburse the Issuing Lender (whether with its
own funds or with proceeds of the Revolving Credit Loans) on each date on which
the Issuing Lender pays a draft so presented under any Letter of Credit for the
amount of (i) such draft so paid and (ii) any taxes, fees, charges or other
costs or expenses incurred by the Issuing Lender in connection with such
payment. Each such payment shall be made to the Issuing Lender at its address
for notices specified herein in lawful money of the United States of America and
in immediately available funds. Interest shall be payable on any and all amounts
remaining unpaid by the Borrower under this subsection from the date of payment
of the applicable draft until payment in full thereof, (x) for the period
commencing on the date of payment of the applicable draft to the date which is 3
days thereafter, at the rate which would be payable on ABR Loans at such time
and (y) thereafter, at the rate which would be payable on ABR Loans at such time
plus 2%.

                                       25
<PAGE>

         3.6 Obligations Absolute. The Borrower's obligations under this Section
3 shall be absolute and unconditional under any and all circumstances and
irrespective of any set-off, counterclaim or defense to payment which the
Borrower or any other Person may have or have had against the Issuing Lender or
any other Lender or any beneficiary of a Letter of Credit. The Borrower also
agrees with the Issuing Lender that the Issuing Lender shall not be responsible
for, and the Borrower's obligations under subsection 3.5 shall not be affected
by, among other things, the validity or genuineness of documents or of any
endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, or any dispute between or among the Borrower and
any beneficiary of any Letter of Credit or any other party to which such Letter
of Credit may be transferred or any claims whatsoever of the Borrower against
any beneficiary of such Letter of Credit or any such transferee. The Issuing
Lender shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions caused by the Issuing Lender's gross negligence or willful misconduct.
The Borrower agrees that any action taken or omitted by the Issuing Lender under
or in connection with any Letter of Credit or the related drafts or documents,
if done in the absence of gross negligence or willful misconduct and in
accordance with the standards of care specified in the Uniform Commercial Code
of the State of New York, including, without limitation, Article V thereof,
shall be binding on the Borrower and shall not result in any liability of such
Issuing Lender to the Borrower.

         3.7 Letter of Credit Payments. Without limitation of subsection 3.6,
the responsibility of the Issuing Lender to the Borrower in connection with any
draft presented for payment under any Letter of Credit shall, in addition to any
payment obligation expressly provided for in such Letter of Credit, be limited
to determining that the documents (including each draft) delivered under such
Letter of Credit in connection with such presentment are in conformity with such
Letter of Credit.

         3.8 L/C Applications. To the extent that any provision of any L/C
Application, including any reimbursement provisions contained therein, related
to any Letter of Credit is inconsistent with the provisions of this Section 3,
the provisions of this Section 3 shall prevail.

                          SECTION 4. GENERAL PROVISIONS

         4.1 Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall
bear interest for each day during each Interest Period with respect thereto at a
rate per annum equal to the Eurodollar Rate determined for such Interest Period
plus the Applicable Margin in effect on such day.

             (b) Each ABR Loan shall bear interest for each day at a rate per
annum equal to the ABR in effect on such day plus the Applicable Margin in
effect on such date.

             (c) If all or a portion of (i) any principal of any Loan, (ii) any
interest payable thereon, (iii) any commitment fee or (iv) any other amount
payable hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), the principal of the Loans and any such overdue
interest, commitment fee or other amount shall bear interest at a rate per annum
which is (x) in the case of principal, the rate that would otherwise be
applicable

                                       26
<PAGE>

thereto pursuant to the foregoing provisions of this subsection plus 2% or (y)
in the case of any such overdue interest, commitment fee or other amount, the
ABR plus the Applicable Margin in effect on such date plus 2%, in each case from
the date of such non-payment until such overdue principal, interest, commitment
fee or other amount is paid in full (as well after as before judgment).

             (d) Interest shall be payable in arrears on each Interest Payment
Date, provided that interest accruing pursuant to subsection 4.1(c) shall be
payable from time to time on demand.

         4.2 Computation of Interest and Fees. (a) Whenever, in the case of ABR
Loans, it is calculated on the basis of the Prime Rate, interest shall be
calculated on the basis of a 365- (or 366-, as the case may be) day year for the
actual days elapsed; and, otherwise, interest and fees shall be calculated on
the basis of a 360-day year for the actual days elapsed. The Administrative
Agent shall as soon as practicable notify the Borrower and the Lenders of each
determination of a Eurodollar Rate. Any change in the interest rate on a Loan
resulting from a change in the ABR or the Eurocurrency Reserve Requirements
shall become effective as of the opening of business on the day on which such
change becomes effective. The Administrative Agent shall as soon as practicable
notify the Borrower and the Lenders of the effective date and the amount of each
such change in interest rate.

             (b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations and calculations used by the
Administrative Agent in determining any interest rate pursuant to subsection
4.1(a).

         4.3 Conversion and Continuation Options. (a) The Borrower may elect
from time to time to convert Eurodollar Loans to ABR Loans by giving the
Administrative Agent at least one Business Day's prior irrevocable notice of
such election, provided that any such conversion of Eurodollar Loans may only be
made on the last day of an Interest Period with respect thereto. The Borrower
may elect from time to time to convert ABR Loans to Eurodollar Loans by giving
the Administrative Agent at least three Business Days' prior irrevocable notice
of such election. Any such notice of conversion to Eurodollar Loans shall
specify the length of the initial Interest Period or Interest Periods therefor.
Upon receipt of any such notice the Administrative Agent shall promptly notify
each Lender thereof. All or any part of outstanding Eurodollar Loans and ABR
Loans may be converted as provided herein, provided that (i) no Loan may be
converted into a Eurodollar Loan when any Event of Default has occurred and is
continuing and the Administrative Agent has or the Required Lenders have
determined that such a conversion is not appropriate and (ii) no Loan may be
converted into a Eurodollar Loan after the date that is one month prior to the
Termination Date.

             (b) Any Eurodollar Loans may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Borrower giving notice to the Administrative Agent, in accordance with the
applicable provisions of the term "Interest Period" set forth in subsection 1.1,
of the length of the next Interest Period to be applicable to such Loans,
provided that no Eurodollar Loan may be continued as such (i) when any Event of

                                       27
<PAGE>

Default has occurred and is continuing and the Administrative Agent has or the
Required Lenders have determined that such a continuation is not appropriate or
(ii) after the date that is one month prior to the Termination Date and
provided, further, that if the Borrower shall fail to give such notice or if
such continuation is not permitted such Loans shall be automatically converted
to ABR Loans on the last day of such then expiring Interest Period.

         4.4 Minimum Amounts Maximum Number of Tranches. All borrowings,
conversions and continuations of Loans hereunder and all selections of Interest
Periods hereunder shall be in such amounts and be made pursuant to such
elections so that, after giving effect thereto, the aggregate principal amount
of the Loans comprising each Eurodollar Tranche shall be equal to $5,000,000 or
a whole multiple of $1,000,000 in excess thereof. In no event shall there be
more than five Eurodollar Tranches outstanding at any time.

         4.5 Optional Prepayments and Commitment Reductions. (a) The Borrower
may, on the last day of any Interest Period with respect thereto, in the case of
Eurodollar Loans, or at any time and from time to time, in the case of ABR
Loans, prepay the Loans, in whole or in part, without premium or penalty, upon
at least one Business Day's irrevocable notice to the Administrative Agent in
the case of ABR Loans, and upon at least three Business Days' irrevocable notice
to the Administrative Agent in the case of Eurodollar Loans, in each case
specifying the date and amount of prepayment and whether the prepayment is of
Eurodollar Loans, ABR Loans or a combination thereof, and, in each case if of a
combination thereof, the amount allocable to each. Upon receipt of any such
notice the Administrative Agent shall promptly notify each Lender thereof. If
any such notice is given, the amount specified in such notice shall be due and
payable on the date specified therein, together with any amounts payable
pursuant to subsection 4.14. Partial prepayments shall be in an aggregate
principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess
thereof.

             (b) Subject to subsection 4.5(c), the Borrower shall have the
right, upon not less than three Business Days' notice to the Administrative
Agent, to terminate the Revolving Credit Commitments or, from time to time, to
reduce the amount of the Revolving Credit Commitments. Any such reduction shall
be in an amount equal to $5,000,000 or a whole multiple of $1,000,000 in excess
thereof and shall reduce permanently the Revolving Credit Commitments then in
effect. Termination of the Revolving Credit Commitments shall also terminate the
obligation of the Issuing Lender to issue Letters of Credit.

             (c) In the event of any termination of the Revolving Credit
Commitments, the Borrower shall on the date of such termination repay or prepay
all of its outstanding Revolving Credit Loans (together with accrued and unpaid
interest on the Revolving Credit Loans and any amounts payable pursuant to
subsection 4.14 and any other amounts payable hereunder), reduce the Letter of
Credit Outstandings to zero and cause all Letters of Credit to be canceled and
returned to the Issuing Lender (or shall cash collateralize the Letter of Credit
Outstandings (or provide supporting letters of credit from an institution
reasonably acceptable to the Administrative Agent) on terms and pursuant to
documentation reasonably satisfactory to the Issuing Lender and the
Administrative Agent). In the event of any partial reduction of the Revolving
Credit Commitments, then (i) at or prior to the effective date of such
reduction, the Administrative Agent shall notify the Borrower and the Lenders of
the Aggregate Revolving Credit Exposure of all the Lenders and (ii) if the
Aggregate Revolving Credit Exposure of all the

                                       28
<PAGE>

Lenders would exceed the aggregate Commitments after giving effect to such
reduction, then, prior to giving effect to such reduction, the Borrower shall,
on the date of such reduction, then, repay or prepay Revolving Credit Loans and,
second, reduce the Letter of Credit Outstandings (or cash collateralize the
Letter of Credit Outstandings (or provide supporting letters of credit from an
institution reasonably acceptable to the Administrative Agent) on terms and
pursuant to documentation reasonably satisfactory to the Issuing Lender and the
Administrative Agent), in an aggregate amount sufficient to eliminate such
excess.

             (d) The Loans shall be repaid, and the Letter of Credit
Outstandings shall be reduced or cash collateralized, to the extent required by
subsection 4.10. All such repayments and cash collateralization shall be made in
accordance with this subsection 4.5.

             (e) In the event the amount of any prepayment of the Loans required
to be made above shall exceed the aggregate principal amount of the outstanding
ABR Loans (the amount of any such excess being called the "Excess Amount"), the
Borrower shall have the right, in lieu of making such prepayment in full, to
prepay all the outstanding applicable ABR Loans and to deposit an amount equal
to the Excess Amount with, and (ii) in the event that Letter of Credit
Outstandings are required to be cash collateralized, the Borrower shall deposit
an amount equal to the aggregate amount of Letter of Credit Outstandings to be
cash collateralized with, the Administrative Agent in a cash collateral account
maintained (pursuant to documentation reasonably satisfactory to the
Administrative Agent) by and in the sole dominion and control of the
Administrative Agent. Any amounts so deposited shall be held by the
Administrative Agent as collateral for the obligations of the Borrower under
this Agreement and applied to the prepayment of the applicable Eurodollar Loans
at the end of the current Interest Periods applicable thereto or Letter of
Credit Outstandings, as the case may be, or, during an Event of Default, to
payment of any obligations under this Agreement (including obligations in
respect of the Letters of Credit). On any Business Day on which (i) collected
amounts remain on deposit in or to the credit of such cash collateral account
after giving effect to the payments made on such day pursuant to this subsection
4.5(e) and (ii) the Borrower shall have delivered to the Administrative Agent a
written request or a telephonic request (which shall be promptly confirmed in
writing) that such remaining collected amounts be invested in the Cash
Equivalent specified in such request, the Administrative Agent shall use its
reasonable efforts to invest such remaining collected amounts in such Cash
Equivalent, provided, however, that the Administrative Agent shall have
continuous dominion and full control over any such investments (and over any
interest that accrues thereon) to the same extent that it has dominion and
control over such cash collateral account and no Cash Equivalent shall mature
after the end of the Interest Period for which it is to be applied. The Borrower
shall not have the right to withdraw any amount from such cash collateral
account until the applicable Eurodollar Loans and accrued interest thereon and
Letter of Credit Outstandings are paid in full or if a Default or Event of
Default then exists or would result. Any prepayment or collateralization
pursuant to this subsection 4.5(e) shall be applied in the order set forth in
clause (ii) of the second sentence of subsection 4.5(c).

         4.6 Commitment Fee; Administrative Agent's Fee; Other Fees. (a) The
Borrower agrees to pay to the Administrative Agent for the account of each
Lender a commitment fee for the period from and including, for each Lender, the
Closing Date to but not including the Termination Date, computed at the
Commitment Fee Rate on the average daily amount of the

                                       29
<PAGE>

lesser of (i) the Available Commitment of such Lender and (ii) the Borrowing
Base Availability with respect to such Lender, during the period for which
payment is made, payable quarterly in arrears on the last day of each March,
June, September and December (commencing on September 30, 2002) and on the
Termination Date or such earlier date as the Revolving Credit Commitments shall
terminate as provided herein, commencing on the first of such dates to occur
after the date hereof. Commitment fees shall be nonrefundable when paid.

             (b) The Borrower shall pay to the Administrative Agent the fees set
forth in the Fee Letter.

             (c) Upon any increase to the aggregate Revolving Credit Commitments
pursuant to Section 2.1(c), on the date such increase is effective the Borrower
shall pay to the Administrative Agent (i) for the account of each Lender a fee
based on the amount of such increase in an amount to be agreed upon and (ii) the
fees set forth in the fee letter agreement dated the Closing Date between the
Borrower and SG.

         4.7 Inability to Determine Interest Rate. If prior to the first day of
any Interest Period:

             (a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that, by reason
of circumstances affecting the relevant market, adequate and reasonable means do
not exist for ascertaining the Eurodollar Rate for such Interest Period, or

             (b) the Administrative Agent shall have received notice from the
Required Lenders that the Eurodollar Rate determined or to be determined for
such Interest Period will not adequately and fairly reflect the cost to such
Lenders (as conclusively certified by such Lenders) of making or maintaining
their affected Loans during such Interest Period,

the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the Lenders as soon as practicable thereafter. If such notice is
given (x) any Eurodollar Loans requested to be made on the first day of such
Interest Period shall be made as ABR Loans, (y) any Loans that were to have been
converted on the first day of such Interest Period to Eurodollar Loans shall be
continued as ABR Loans and (z) any outstanding Eurodollar Loans shall be
converted, on the first day of such Interest Period, to ABR Loans. Until such
notice has been withdrawn by the Administrative Agent, no further Eurodollar
Loans shall be made or continued as such, nor shall the Borrower have the right
to convert Loans to Eurodollar Loans.

         4.8 Pro Rata Treatment and Payments. (a) Each borrowing by the Borrower
from the Lenders hereunder, each payment by the Borrower on account of any
commitment fee hereunder and any reduction of the Revolving Credit Commitments
of the Lenders shall be made pro rata according to the respective Commitment
Percentages of the Lenders. Each payment (including each prepayment) by the
Borrower on account of principal of and interest on the Loans shall be made pro
rata according to the respective outstanding principal amounts of the Loans then
held by the Lenders. All payments (including prepayments) to be made by the
Borrower hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without set off or counterclaim and shall be made prior
to 12:00 Noon, New York City time, on the due date

                                       30
<PAGE>

thereof to the Administrative Agent, for the account of the Lenders, at the
Administrative Agent's office specified in subsection 11.2, in Dollars and in
immediately available funds. The Administrative Agent shall distribute such
payments to the Lenders promptly upon receipt in like funds as received. If any
payment hereunder becomes due and payable on a day other than a Business Day,
such payment shall be extended to the next succeeding Business Day, and, with
respect to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension.

             (b) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its Commitment Percentage of such borrowing
available to the Administrative Agent, the Administrative Agent may assume that
such Lender is making such amount available to the Administrative Agent, and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. If such amount is not made available to the
Administrative Agent by the required time on the Borrowing Date therefor, such
Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon at a rate equal to the daily average Federal Funds Effective
Rate for the period until such Lender makes such amount immediately available to
the Administrative Agent. A certificate of the Administrative Agent submitted to
any Lender with respect to any amounts owing under this subsection shall be
conclusive in the absence of manifest error. If such Lender's Commitment
Percentage of such borrowing is not made available to the Administrative Agent
by such Lender within three Business Days after such Borrowing Date, the
Administrative Agent shall also be entitled to recover such amount with interest
thereon at the rate per annum applicable to ABR Loans hereunder, on demand, from
the Borrower.

         4.9 Computation of Borrowing Base. (a) Borrowing Base. (i) The
Borrowing Base in effect from time to time shall represent the maximum principal
amount (subject to the aggregate amount of the Revolving Credit Commitments) of
Loans and Letter of Credit Outstandings that the Lenders will allow to remain
outstanding during the Commitment Period. The Borrowing Base will be based upon
the value of certain Proved Reserves attributable to the Oil and Gas Properties
of the Borrower and its Subsidiaries and other assets of the Borrower and its
Subsidiaries acceptable to the Administrative Agent in its sole discretion, and
will be determined by the Administrative Agent in accordance with paragraph (d)
of this subsection 4.9, subject to approval by Supermajority Lenders or all of
the Lenders, as the case may be. Until the Commitments are no longer in effect,
all Letters of Credit have terminated and all of the Loans and all other
obligations under this Agreement are paid in full, this Agreement shall be
subject to the then effective Borrowing Base.

             (b) Reserve Reports. Prior to March 15 and September 15 of each
year, the Borrower shall, at its own expense, furnish to the Administrative
Agent and to each Lender Reserve Reports, which Reserve Reports shall be dated
no earlier than the immediately preceding December 31 (in the case of Reserve
Reports due on March 15) and June 30 (in the case of Reserve Reports due on
September 15 (or, with respect to the Reserve Report prepared in connection with
the November 2002 Redetermination, such later date as requested by the
Administrative Agent), and shall set forth, among other things, (i) the Oil and
Gas Properties, then owned by the Borrower and its Subsidiaries, (ii) the Proved
Reserves attributable to such Oil and Gas Properties and (iii) a projection of
the rate of production and net income of the

                                       31
<PAGE>

Proved Reserves as of the date of such Reserve Report, all in accordance with
the guidelines published by the Securities and Exchange Commission and such
assumptions as the Administrative Agent shall provide. Concurrently with the
delivery of the Reserve Reports, the Borrower shall furnish to the
Administrative Agent and to each Lender a certificate of a Responsible Officer
showing any material additions to or material deletions from the Oil and Gas
Properties listed in the Reserve Report, which additions or deletions were made
by the Borrower and its Subsidiaries since the date of the previous Reserve
Report.

             (c) Redetermination of the Borrowing Base. The Borrowing Base shall
be redetermined (i) after receipt by the Administrative Agent of each scheduled
Reserve Report, commencing with the Reserve Report prepared in connection with
the November 2002 Redetermination, (ii) upon the delivery of a Lender
Redetermination Notice to the Borrower and (iii) upon the delivery of a Borrower
Redetermination Notice (which shall not be delivered until after the November
2002 Redetermination) to the Administrative Agent, all as provided in this
subsection 4.9. Within 15 days after the delivery of a Borrower Redetermination
Notice or a Lender Redetermination Notice, the Borrower shall furnish to the
Administrative Agent and to each Lender a Reserve Report prepared by engineers
employed by the Borrower and certified by a Responsible Officer of the Borrower
as of the most recent practicable date and if requested by the Supermajority
Lenders, within 30 days after the delivery of a Borrower Redetermination Notice
or a Lender Redetermination Notice, a Reserve Report prepared by the Borrower
and audited by T.J. Smith & Company Inc. or another independent engineering firm
selected by the Borrower and reasonably acceptable to the Administrative Agent.
If the Borrower fails to deliver a Reserve Report within the time period
provided for in either the preceding sentence or in subsection 4.9(b) above,
then the Administrative Agent shall have the right to rely on the last Reserve
Report previously delivered by the Borrower with any such adjustments and taking
into account any additional information as the Administrative Agent may deem
appropriate, in its sole discretion. The Administrative Agent shall redetermine
the Borrowing Base in its sole discretion, and the Administrative Agent shall
notify the Borrower and the Lenders of its redetermination of the Borrowing Base
(i) with respect to regularly scheduled Reserve Reports, (A) on or before May 1
(in the case of Reserve Reports due on March 15) and (B) on or before November 1
(in the case of Reserve Reports due on September 15), and (ii) with respect to a
Lender Redetermination Notice or a Borrower Redetermination Notice, as promptly
as practicable following delivery to the Administrative Agent of all information
(including Reserve Reports) requested from the Borrower, or if no such
information is delivered by Borrower following such request, then at such time
as the Administrative Agent determines is practicable. Within 15 Business Days
after receipt from the Administrative Agent of the amount of its redetermination
of the Borrowing Base, each Lender shall notify the Administrative Agent stating
whether or not such Lender agrees with that redetermination. Failure of any
Lender to give such notice within such period of time shall be deemed to
constitute an acceptance of such redetermination. The Borrowing Base may be
decreased from the then effective Borrowing Base with the consent of
Supermajority Lenders but may only be increased from the then effective
Borrowing Base with the consent of all of the Lenders. If Supermajority Lenders
or all of the Lenders, as the case may be, agree with that redetermination, then
the Administrative Agent promptly shall notify the Borrower of the Borrowing
Base as so redetermined, whereupon, with respect to redeterminations made in
connection with regularly scheduled Reserve Reports, that redetermined value
shall become effective (and shall remain effective until the Borrowing Base is
again redetermined as provided in this subsection (c)) on May 31 (in the case of
Reserve

                                       32
<PAGE>

Reports due on March 15) and November 30 (in the case of Reserve Reports due on
September 15). If Supermajority Lenders or all of the Lenders, as the case may
be, have not approved or are not deemed to have approved the Borrowing Base
within the 15 Business Day period following their receipt of the proposed amount
from the Administrative Agent, the Borrowing Base shall be set at the amount of
the then current Borrowing Base and the Borrowing Base shall remain at such
level until Supermajority Lenders or all of the Lenders, as the case may be,
utilizing the procedure outlined herein, agree on a new Borrowing Base. Each
redetermination provided for by this subsection 4.9(c) shall be made in
accordance with the provisions of subsection 4.9(d). It is the intention of the
Borrower and the Lenders that the redetermination of the Borrowing Base be
administratively completed by the Lenders within 45 days after the furnishing of
each Reserve Report, subject to the provisions of this paragraph (c) but
effective (notwithstanding the date that redetermination is completed) only on
the applicable date provided in Section 4.9(d)(ii) hereof.

             (d) Criteria. (i) All determinations and redeterminations by the
Administrative Agent provided for in this subsection 4.9 (and any determinations
and decisions by either or both of the Administrative Agent and Supermajority
Lenders or all of the Lenders, as the case may be, in connection therewith,
including effecting any redetermination of the value of any component contained
in a Reserve Report) shall be made by the Administrative Agent and the Lenders
in their sole discretion and shall be made on a reasonable basis and in good
faith based upon the application by the Administrative Agent and the Lenders of
their respective normal oil and gas lending criteria as they exist at the time
of determination.

                 (ii) All redeterminations (other than those arising from a
Borrower Redetermination Notice or a Lender Redetermination Notice) of the
Borrowing Base referred to in this subsection 4.9 shall become effective on May
31 (in the case of Reserve Reports due on March 15) and November 30 (in the case
of Reserve Reports due on September 15). Borrowing Base redeterminations arising
from a Borrower Redetermination Notice or a Lender Redetermination Notice shall
become effective upon written notice by the Administrative Agent to the Borrower
and the Lenders of the redetermined Borrowing Base as redetermined in accordance
with the terms hereof.

                 (iii) Upon the issuance of Subordinated Indebtedness, the
Borrowing Base shall be redetermined in accordance with the procedures set forth
in subsection 4.9 which would have applied had a Borrower Redetermination Notice
or a Lender Redetermination Notice been delivered.

             (e) Title. Concurrently with the delivery to the Administrative
Agent of each Reserve Report, the Administrative Agent may request that the
Borrower furnish to the Administrative Agent reasonable evidence of the
Borrower's title to the Oil and Gas Properties which have been developed or
acquired by the Borrower subsequent to the Reserve Report immediately preceding
such Reserve Report.

             (f) Mandatory Reductions. The Borrowing Base shall automatically be
reduced by the loan value assigned to each Oil and Gas Property in the Borrowing
Base (as determined by the Administrative Agent in its sole discretion) that is
Disposed by the Borrower in accordance with Section 8.6(d).

                                       33
<PAGE>

         4.10 Borrowing Base Compliance. If at any time the Aggregate Revolving
Credit Exposure of the Lenders exceeds the Borrowing Base then in effect (any
such excess, the "Borrowing Base Deficiency") (including as a result of a
redetermination in connection with the incurrence of Subordinated Indebtedness
provided for in subsection 8.2(f)), the Borrower shall prepay the Revolving
Credit Loans and then to the extent necessary, cash collateralize the Letter of
Credit Outstandings in an amount equal to 100% of such Borrowing Base Deficiency
within 90 days after the effective date of the redetermination resulting in such
Borrowing Base Deficiency, together with (i) interest accrued to the date of
such payment or prepayment and (ii) any amounts payable under subsection 4.14.
Prepayments and collateralization pursuant to this subsection 4.10 shall be made
as set forth in subsection 4.5(c).

         4.11 Illegality. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof after the date hereof shall make it unlawful for any Lender
to make or maintain Eurodollar Loans as contemplated by this Agreement (a) the
commitment of such Lender hereunder to make Eurodollar Loans, continue
Eurodollar Loans as such and convert ABR Loans to Eurodollar Loans shall
forthwith be canceled and (b) such Lender's Loans then outstanding as Eurodollar
Loans, if any, shall be converted automatically to ABR Loans on the respective
last days of the then current Interest Periods with respect to such Loans or
within such earlier period as required by law. If any such conversion of a
Eurodollar Loan occurs on a day which is not the last day of the then current
Interest Period with respect thereto, the Borrower shall pay to such Lender such
amounts, if any, as may be required pursuant to subsection 4.14.

         4.12 Requirements of Law. (a) If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof after the
date hereof or compliance by any Lender with any request or directive (whether
or not having the force of law) from any central bank or other Governmental
Authority made subsequent to the date hereof:

                  (i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, any Note, any Letter of Credit, any L/C
Application or any Eurodollar Loan made by it, or change the basis of taxation
of payments to such Lender in respect thereof (except for Non-Excluded Taxes
covered by subsection 4.13, changes in the rate or computation of tax on the
overall net income of such Lender, franchise taxes imposed in lieu of net income
taxes and doing business taxes);

                  (ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or other
extensions of credit by, or any other acquisition of funds by, any office of
such Lender which is not otherwise included in the determination of the
Eurodollar Rate hereunder, or

                  (iii) shall impose on such Lender any other condition;

and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay

                                       34
<PAGE>

such Lender such additional amount or amounts as will compensate such Lender for
such increased cost or reduced amount receivable.

             (b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under any Letter of Credit to a
level below that which such Lender or such corporation could have achieved but
for such adoption, change or compliance (taking into consideration such Lender's
or such corporation's policies with respect to capital adequacy) by an amount
deemed by such Lender to be material, then from time to time, the Borrower shall
promptly pay to such Lender such additional amount or amounts as will compensate
such Lender for such reduction.

              (c) If any Lender becomes entitled to claim any additional amounts
pursuant to this subsection, it shall promptly notify the Borrower (with a copy
to the Administrative Agent) of the event by reason of which it has become so
entitled. A certificate as to any additional amounts payable pursuant to this
subsection submitted by such Lender to the Borrower (with a copy to the
Administrative Agent) shall be conclusive in the absence of manifest error. The
agreements in this subsection shall survive the termination of this Agreement
and the payment of the Loans and all other amounts payable hereunder.

         4.13 Taxes. (a) All payments made by the Borrower under this Agreement
and any Notes shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding net income taxes, franchise taxes (imposed in
lieu of net income taxes) and doing business taxes imposed on the Administrative
Agent or any Lender as a result of a present or former connection between the
Administrative Agent or such Lender and the jurisdiction of the Governmental
Authority imposing such tax or any political subdivision or taxing authority
thereof or therein (other than any such connection arising solely from the
Administrative Agent or such Lender having executed, delivered or performed its
obligations or received a payment under, or enforced, this Agreement or any
Note). If any such non-excluded taxes, levies, imposts, duties, charges, fees
deductions or withholdings ("Non-Excluded Taxes") are required to be withheld
from any amounts payable to the Administrative Agent or any Lender hereunder or
under any Note, the amounts so payable to the Administrative Agent or such
Lender shall be increased to the extent necessary to yield to the Administrative
Agent or such Lender (after payment of all Non-Excluded Taxes) interest or any
such other amounts payable hereunder at the rates or in the amounts specified in
this Agreement, provided, however, that the Borrower shall not be required to
increase any such amounts payable to any Non-U.S. Lender if such Non-U.S. Lender
fails to comply with the requirements of paragraph (b) of this subsection.
Whenever any Non-Excluded Taxes are payable by the Borrower, as promptly as
possible thereafter the Borrower shall send to the Administrative Agent for its
own account or for the account of such Lender, as the case may be, a certified
copy of an original official receipt received by the Borrower showing payment
thereof. If, when the Borrower is required by this

                                       35
<PAGE>

subsection 4.13(a) to pay any Non-Excluded Taxes, the Borrower fails to pay any
Non-Excluded Taxes when due to the appropriate taxing authority or fails to
remit to the Administrative Agent the required receipts or other required
documentary evidence, the Borrower shall indemnify the Administrative Agent and
the Lenders for any incremental taxes, interest or penalties that may become
payable by the Administrative Agent or any Lender as a result of any such
failure. The agreements in this subsection shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.

              (b) Each Lender (or Transferee) that is not a citizen or resident
of the United States of America, a corporation, partnership or other entity
created or organized in or under the laws of the United States of America, or
any estate or trust that is subject to federal income taxation regardless of the
source of its income (a "Non-U.S. Lender") shall deliver to the Borrower and the
Administrative Agent (or, in the case of a Participant, to the Lender from which
the related participation shall have been purchased) two copies of either U.S.
Internal Revenue Service form W-8BEN, Form W-8ECI or successors forms, and is
otherwise exempt from IRS interest withholding obligations, or, in the case of a
Non-U.S. Lender claiming exemption from U.S. federal withholding tax under
Section 871(h) or 881(c) of the Code with respect to payments of "portfolio
interest," a Form W-8, or any subsequent versions thereof or successors thereto
(and, if such Non-U.S. Lender delivers a Form W-8, an annual certificate
representing that such Non-U.S. Lender (i) is not a "bank" for purposes of
Section 881(c) of the Code (and is not subject to regulatory or other legal
requirements as a bank in any jurisdiction, and has not been treated as a bank
in any filing with or submission made to any Governmental Authority or rating
agency), (ii) is not a 10% shareholder (within the meaning of Section
871(h)(3)(B) of the Code) of the Borrower and (iii) is not a controlled foreign
corporation related to the Borrower (within the meaning of Section 864(d)(4) of
the Code)), properly completed and duly executed by such Non-U.S. Lender
claiming complete exemption from U.S. federal withholding tax on all payments by
the Borrower under this Agreement and the other Loan Documents, along with such
other additional forms as the Borrower, the Administrative Agent (or, in the
case of a Participant, the Lender from which the related participation shall
have been purchased) may reasonably request to establish the availability of
such exemption. Such forms shall be delivered by each Non-U.S. Lender on or
before the date it becomes a party to this Agreement (or, in the case of any
Participant, on or before the date such Participant purchases the related
participation).

         4.14 Indemnity. The Borrower agrees to indemnify each Lender and to
hold each Lender harmless from any loss or expense which such Lender may sustain
or incur (other than through such Lender's gross negligence or willful
misconduct) as a consequence of (a) default by the Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in making any
prepayment of a Eurodollar Loan after the Borrower has given a notice thereof in
accordance with the provisions of this Agreement or (c) the making of a
prepayment of or a conversion of Eurodollar Loans on a day which is not the last
day of an Interest Period with respect thereto. Such indemnification may include
an amount equal to the excess, if any, of (i) the amount of interest which would
have accrued on the amount so prepaid, or converted, or not so borrowed,
converted or continued, for the period from the date of such prepayment or
conversion or of such failure to borrow, convert or continue to the last day of
the applicable Interest Period (or, in the case of a failure to borrow,

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<PAGE>
convert or continue, the Interest Period that would have commenced on the date
of such failure) in each case at the applicable rate of interest for such
Eurodollar Loans provided for herein (excluding, however, the percentage added
to the Eurodollar Rate pursuant to subsection 4.1, (a) to the extent included
therein) over (ii) the amount of interest (as reasonably determined by such
Lender) which would have accrued to such Lender on such amount by placing such
amount on deposit for a comparable period with leading banks in the interbank
eurodollar market. This covenant shall survive the termination of this Agreement
and the payment of the Loans and all other amounts payable hereunder.

         4.15 Change of Lending Office. (a) Each Lender agrees that if it makes
any demand for payment under subsection 4.12 or 4.13(a), or if any adoption or
change of the type described in subsection 4.11 shall occur with respect to it,
it will use reasonable efforts (consistent with its internal policy and legal
and regulatory restrictions and so long as such efforts would not be
disadvantageous to it, as determined in its sole discretion) to designate a
different lending office if the making of such a designation would reduce or
obviate the need for the Borrower to make payments under subsection 4.12 or
4.13(a), or would eliminate or reduce the effect of any adoption or change
described in subsection 4.11.

              (b) If any Lender requests compensation under subsection 4.12, or
if the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to subsection
4.13, or if any Lender defaults in its obligation to fund Loans hereunder, then
the Borrower may, at its expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to, and such Lender promptly shall,
assign and delegate, without recourse (in accordance with and subject to the
restrictions contained in subsection 11.6), all its interests, rights and
obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (i) if such assignee is not a Lender or an Affiliate
thereof, the Borrower shall have received the prior written consents of the
Administrative Agent and Issuing Lender which consents shall not unreasonably be
withheld, (ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and participations in Letters of Credit,
accrued interest thereon, accrued fees and all other amounts payable to it
hereunder, from the assignee (at least to the extent of such outstanding
principal) and 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
subsection 4.12 or payments required to be made pursuant to subsection 4.13,
such assignment will result in a reduction in such compensation or payments
compared to the compensation or payments payable to the assigning Lender, 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
no longer exist or cease to apply.

                    SECTION 5. REPRESENTATIONS AND WARRANTIES

              To induce the Administrative Agent and the Lenders to enter into
this Agreement and to make the Loans and issue or participate in the Letters of
Credit, the Borrower hereby represents and warrants to the Administrative Agent
and each Lender that:

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<PAGE>

         5.1 Financial Condition. (a) (i) The consolidated balance sheet of the
Borrower and its consolidated Subsidiaries at December 31, 2001 and the related
consolidated statements of operations, of cash flows and of changes in
stockholders' equity for the fiscal year ended on such date, together with the
related notes and schedules thereto, reported on by Ernst & Young LLP, and (ii)
(A) the unaudited consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at March 31, 2002, (B) from the Closing Date until
such balance sheet is delivered pursuant to Section 7.1(b), the draft unaudited
consolidated balance sheet of the Borrower and its consolidated Subsidiaries as
at June 30, 2002, and (C) thereafter, the unaudited consolidated balance sheet
of the Borrower and its consolidated Subsidiaries as at June 30, 2002, and in
each case, together with the related consolidated statements of operations, of
cash flow, and of changes in stockholders' equity for each of the fiscal
quarters then ended, in each case copies of which have heretofore been furnished
to each Lender, present fairly in all material respects the consolidated
financial condition of the Borrower and its consolidated Subsidiaries as at such
dates, and the consolidated results of their operations and their consolidated
cash flows for the respective periods then ended, in conformity with GAAP.

              (b) All such financial statements referred to in subsection
5.1(a), including the related schedules and notes thereto, have been prepared in
accordance with GAAP applied consistently throughout the periods involved
(except as approved by such accountants or Responsible Officer, as the case may
be, and as disclosed therein). On the Closing Date, neither the Borrower nor any
of its consolidated Subsidiaries have, at the date of the most recent balance
sheet referred to above, any material Guarantee Obligation, contingent liability
or liability for taxes, or any long-term lease, outstanding debt or Lien or
unusual forward or long-term commitment, including, without limitation, any
interest rate or foreign currency swap or exchange transaction, which is not
disclosed in the financial statements referred to in subsection 5.1(a) or in the
notes thereto to the extent required by GAAP.

         5.2 No Change. (a) Since December 31, 2001, there has been no
development, circumstance or event which has had or could reasonably be expected
to have a Material Adverse Effect (provided that any change in non-cash charges
or expenses accrued by the Borrower to meet ceiling test levels in conformity
with Securities and Exchange Commission Regulation S-X article 4-10(C)(4), in
and of itself, shall not be deemed to be a violation of this subsection 5.2(a)),
and (b) during the period from January 1, 2002 to and including the date hereof,
no dividends or other distributions have been declared, paid or made upon the
Capital Stock of the Borrower nor, except as set forth on Schedule 5.2, has any
of the Capital Stock of the Borrower been redeemed, retired, purchased or
otherwise acquired for value by the Borrower or any of its Subsidiaries.

         5.3 Corporate Existence; Compliance with Law. Each of the Borrower and
its Subsidiaries (a) is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (b) has the corporate
power and authority, and the legal right, to own and operate its Property, to
lease the Property it operates as lessee and to conduct the business in which it
is currently engaged, (c) is duly qualified as a foreign corporation and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of Property or the conduct of its business requires such qualification
except to the extent that the failure to be so qualified and in good standing
could not reasonably be expected to have, in the aggregate, a Material Adverse
Effect and (d) is in compliance with all applicable Requirements

                                       38
<PAGE>

of Law (including, without limitation, Environmental Laws) except to the extent
that the failure to comply therewith could not reasonably be expected to have,
in the aggregate, a Material Adverse Effect.

         5.4 Corporate Power; Authorization; Enforceable Obligations. The
Borrower and each of the other Loan Parties has the corporate power and
authority, and the legal right, to make, deliver and perform the Loan Documents
to which it is a party and, in the case of the Borrower, to borrow hereunder and
has taken all necessary corporate action to authorize the execution, delivery
and performance of the Loan Documents to which it is a party. No consent or
authorization of, filing with, notice to or other act by or in respect of, any
Governmental Authority or any other Person is required in connection with the
borrowings hereunder or the delivery, performance, validity or enforceability of
the Loan Documents to which each Loan Party is a party other than those which
have been obtained and are in full force and effect. This Agreement has been,
and each other Loan Document to which any Loan Party is a party will be, duly
executed and delivered on behalf of such Loan Party. This Agreement constitutes,
and each other Loan Document to which any Loan Party is a party when executed
and delivered will constitute, a legal, valid and binding obligation of such
Loan Party enforceable against such Loan Party in accordance with its terms,
subject to the effects of bankruptcy, insolvency, fraudulent transfer or
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.

         5.5 No Legal Bar. The execution, delivery and performance of the Loan
Documents, the granting of the Liens under the Security Documents, the
borrowings hereunder and the use of the proceeds thereof will not violate any
applicable Requirement of Law or Contractual Obligation of the Borrower or of
any of its Subsidiaries and will not result in, or require, the creation or
imposition of any Lien on any of its or their respective Properties or revenues
pursuant to any such Requirement of Law or Contractual Obligation, other than
any Lien created pursuant to the Security Documents.

         5.6 No Material Litigation. No litigation, investigation or proceeding
of or before any arbitrator or Governmental Authority is pending or, to the
knowledge of the Borrower, threatened by or against the Borrower or any of its
Subsidiaries or against any of its or their respective Properties or revenues
(a) with respect to any of the Loan Documents or any of the transactions
contemplated hereby or thereby, or (b) which could reasonably be expected to
have a Material Adverse Effect.

         5.7 No Default. Neither the Borrower nor any of its Subsidiaries is in
default under or with respect to any of its Contractual Obligations in any
respect which could reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.

         5.8 Ownership of Property; Liens. (a) Except for the Oil and Gas
Properties, the Borrower and its Subsidiaries each have good title in fee simple
to, or a valid leasehold interest in, all its material real Property and
material interests in real Property, and good title to, or a valid leasehold
interest in, all its other material Property, and none of such Property is
subject to any Lien except as permitted by subsection 8.3.

                                       39
<PAGE>

             (b) The Borrower and its Subsidiaries each have good and defensible
title to all of its Oil and Gas Properties which are not personal property and
good title to all such Oil and Gas Properties which are personal property and
material to the Borrower and its Subsidiaries taken as a whole, except for (i)
such imperfections of title as do not in the aggregate materially detract from
the value thereof to, or the use thereof in, the business of the Borrower or any
of its Subsidiaries, (ii) Oil and Gas Properties and interests therein disposed
of since the date of the most recent Reserve Report as permitted by subsection
8.6 hereof, and (iii) Liens permitted by subsection 8.3 hereof. The quantum and
nature of the interest of the Borrower and its Subsidiaries in and to the Oil
and Gas Properties as set forth in each Reserve Report includes the entire
interest of the Borrower and its Subsidiaries in such Oil and Gas Properties as
of the date of such Reserve Report and are complete and accurate in all material
respects as of the date of such Reserve Report; and there are no "back-in" or
"reversionary" interests held by third parties which could materially reduce the
interest of the Borrower and its Subsidiaries in such Oil and Gas Properties
except as expressly set forth in such Reserve Report. The ownership of the Oil
and Gas Properties by the Borrower and its Subsidiaries shall not in any
material respect obligate any such Person to bear the costs and expenses
relating to the maintenance, development or operations of each such Oil and Gas
Property in an amount in excess of the working interest of such Person in each
Oil and Gas Property set forth in the most recent Reserve Report.

         5.9 Intellectual Property. Each of the Borrower and its Subsidiaries
owns, or is licensed to use, all trademarks, tradenames, copyrights, technology,
know-how and processes necessary for the conduct of its business as currently
conducted except for those the failure to own or license which could not
reasonably be expected to have a Material Adverse Effect (the "Intellectual
Property"). No claim has been asserted and is pending by any Person challenging
or questioning the use of any such Intellectual Property or the validity or
effectiveness of any such Intellectual Property, nor does the Borrower know of
any valid basis for any such claim which could reasonably be expected to have a
Material Adverse Effect. The use of such Intellectual Property by the Borrower
and its Subsidiaries does not infringe on the rights of any Person, except for
such claims and infringements that, in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.

         5.10 No Burdensome Restrictions. No applicable Requirement of Law or
Contractual Obligation of the Borrower or any of its Subsidiaries has had during
the last fiscal year of the Borrower, or could reasonable be expected to have, a
Material Adverse Effect.

         5.11 Taxes. Each of the Borrower and its Subsidiaries has filed all
material tax returns which, to the knowledge of such Loan Party, are required to
be filed by it and has paid or caused to be paid all taxes shown on said returns
and all assessments, fees and other governmental charges levied upon it or upon
any of its Property or income which are due and payable, other than such taxes,
assessments, fees and other governmental charges, if any, as are being
diligently contested in good faith and by appropriate proceedings and with
respect to which there have been established adequate reserves on the books of
the Borrower or its Subsidiaries, as the case may be, in accordance with GAAP.
No tax lien has been filed and, to the knowledge of the Borrower, no claim is
being asserted, with respect to any such taxes or assessments, fees or other
governmental charges.

                                       40
<PAGE>

         5.12 Federal Reserve Regulations. No part of the proceeds of any Loans
will be used for "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation U of the Board
of Governors of the Federal Reserve System as now and from time to time
hereafter in effect. If requested by any Lender or the Administrative Agent, the
Borrower will furnish to the Administrative Agent and each Lender a statement to
the foregoing effect in conformity with the requirements of FR Form U-1 referred
to in said Regulation U. The Loans and other transactions contemplated hereunder
will not violate the provisions of Regulations T and X.

         5.13 ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code. No termination of a Single Employer Plan has occurred, and no Lien
in favor of the PBGC or a Plan has arisen, during such five-year period. The
present value of all accrued benefits under each Single Employer Plan (based on
those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such accrued
benefits. Neither the Borrower nor any Commonly Controlled Entity has had a
complete or partial withdrawal from any Multiemployer Plan, and neither the
Borrower nor any Commonly Controlled Entity would become subject to any
liability under ERISA if the Borrower or any such Commonly Controlled Entity
were to withdraw completely from all Multiemployer Plans as of the valuation
date most closely preceding the date on which this representation is made or
deemed made. No such Multiemployer Plan is in Reorganization or Insolvent.

         5.14 Investment Company Act; Other Regulations. Neither the Borrower
nor any of its Subsidiaries is (a) an "investment company", or a company
"controlled" by an "investment company", within the meaning of the Investment
Company Act of 1940, as amended or (b) a "holding company" as defined in, or
subject to regulation under, the Public Utility Holding Company Act of 1935.
Neither the Borrower nor any of its Subsidiaries is subject to regulation under
any Federal or State statute or regulation (other than Regulation X of the Board
of Governors of the Federal Reserve System) which limits its ability to incur
Indebtedness.

         5.15 Subsidiaries. The Persons listed on Schedule 5.15 constitute all
the Subsidiaries of the Borrower at the date hereof.

         5.16 Purpose of Loans. The proceeds of the Loans and the Letters of
Credit will be used (a) to refinance certain indebtedness of the Borrower
arising under the Existing Credit Facility, and to pay fees and expenses related
thereto and (b) after the Closing Date, for working capital and for the general
corporate purposes of the Borrower and its Subsidiaries in the ordinary course
of business.

         5.17 Environmental Matters. Other than exceptions to any of the
following that could not, in the aggregate, reasonably be expected to either (a)
result in the existence of an unsatisfied liability in excess of a Material
Environmental Amount or (b) give rise to a Material Adverse Effect or materially
adversely affect the value of the Mortgaged Properties taken as a whole:

                                       41
<PAGE>

              (a) each of the Borrower and its Subsidiaries: (i) is, and within
the period of all applicable statutes of limitation has been in compliance with
all applicable Environmental Laws; (ii) holds all Environmental Permits (each of
which is in full force and effect) required for any of its current or planned
operations or for any Property owned, leased, or otherwise operated by it; (iii)
is, and within the period of all applicable statutes of limitation has been, in
compliance with all of its Environmental Permits; and (iv) reasonably believes
that (A) each of its Environmental Permits will be timely renewed without
expense, (B) any additional Environmental Permits which it has reason to believe
will be required will be timely obtained without expense, and (C) the costs of
complying with such renewed or additional Environmental Permits and any other
Environmental Laws applicable to or reasonably expected to apply to the Borrower
and its Subsidiaries will not exceed the Borrower's and its Subsidiaries'
existing costs of complying with Environmental Permits and Environmental Laws.

              (b) Materials of Environmental Concern have not been transported,
disposed of, emitted, discharged, or otherwise released or threatened to be
released, to or at any real Property presently or formerly owned, leased or
operated by the Borrower or any Subsidiary or at any other location, which could
reasonably be expected to (i) give rise to liability of the Borrower or any
Subsidiary under any applicable Environmental Law or (ii) interfere with the
Borrower's continued operations.

              (c) no judicial, administrative, or arbitral proceeding (including
any notice of violation or alleged violation) under or relating to any
Environmental Law to which the Borrower or any Subsidiary is, or to the
knowledge of the Borrower will be, named as a party is pending or, to the
knowledge of the Borrower, threatened.

              (d) the Borrower has not received any written request for
information, or been notified that it or any Subsidiary is a potentially
responsible party under the federal Comprehensive Environmental Response,
Compensation, and Liability Act or any similar Environmental Law, or with
respect to any Materials of Environmental Concern.

              (e) neither the Borrower nor any Subsidiary has entered into or
agreed to any consent decree, order, or settlement or other agreement, nor is
subject to any judgment, decree, or order or other agreement, in any judicial,
administrative, arbitral, or other forum, relating to compliance with or
liability under any Environmental Law.

              (f) neither the Borrower nor any Subsidiary has assumed or
retained, by contract or operation of law, any liabilities of any kind, fixed,
contingent or otherwise, under any Environmental Law.

         5.18 No Material Misstatements. (a) All written information, reports,
financial statements, exhibits and schedules (including, without limitation, the
Borrower's report on Form 10-K for the year ended December 31, 2001, as filed
with the Securities and Exchange Commission) furnished to the Administrative
Agent or any Lender by or on behalf of the Borrower or any of its Subsidiaries
in connection with the negotiation of any Loan Document or included therein or
delivered pursuant thereto, when taken as a whole, did not contain, and as they
may be amended, supplemented or modified from time to time, will not contain, as
of the date such statements were made, any untrue statements of a material fact
and did not omit, and as

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<PAGE>

they may be amended, supplemented or modified from time to time, will not omit,
to state as of the date such statements were made, any material fact necessary
in order to make the statements contained therein, in the light of the
circumstances under which they were, are or will be made, not materially
misleading.

              (b) All projections and estimates concerning the Borrower and its
Subsidiaries that are or have been made available to the Administrative Agent or
any Lender by or on behalf of the Borrower or any of its Subsidiaries have been
or will be prepared based on good faith estimates and based upon assumptions
believed by the Borrower to be reasonable in all material respects at the time
of such preparation.

         5.19 Insurance. Each of the Borrower and its Subsidiaries carries and
maintains with respect to its insurable properties insurance (including, to the
extent consistent with past practices, self-insurance) with financially sound
and reputable insurers of the types, to such extent and against such risks as is
customary with companies in the same or similar businesses.

         5.20 Future Commitments. As of the date hereof and as of the Closing
Date, except as set forth on Schedule 5.20, on a net basis there are no material
gas imbalances, material take-or-pay or other prepayments with respect to any
Oil and Gas Property of the Borrower or any Subsidiary (or, in the case of Oil
and Gas Properties operated by operators other than the Borrower or its
Subsidiaries, to the Borrower's knowledge after reasonable investigation) which
would require the Borrower or any Subsidiary to deliver Hydrocarbons produced
from Oil and Gas Properties at some future time without then or thereafter
receiving full payment therefor.

         5.21 Security Documents. (a) The provisions of the Pledge Agreement
delivered to the Administrative Agent are effective to create in favor of the
Administrative Agent, for the ratable benefit of the Lenders, a legal, valid and
enforceable security interest in the Pledged Securities and proceeds thereof
and, when certificates representing or constituting the Pledged Securities are
delivered to the Administrative Agent, the Pledge Agreement shall constitute a
fully perfected first priority lien on, and security interest in, all right,
title and interest of the pledgor party therein in such Pledged Securities and
the proceeds thereof, in each case prior and superior in right to any other
Person.

              (b) On the initial Borrowing Date, the shares of Capital Stock
listed on Schedule I to the Pledge Agreement will constitute all the issued and
outstanding shares of Capital Stock of the direct and indirect Subsidiaries of
the Borrower; all such shares have been duly and validly issued and are fully
paid and nonassessable; and the relevant Pledgor of said shares is the record
and beneficial owner of said shares.

              (c) The provisions of the Mortgages will be effective to grant to
the Administrative Agent, for the ratable benefit of the Lenders, legal, valid
and enforceable mortgage liens on all of the right, title and interest of the
Borrower and its Subsidiaries in the mortgaged property described therein. Such
Mortgages have been recorded in the appropriate recording office and constitute
perfected first liens on, and security interest in, such mortgaged property.

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<PAGE>

              (d) The provisions of the Security Agreement delivered to the
Administrative Agent are effective to create in favor of the Administrative
Agent, for the ratable benefit of the Lenders, a legal, valid and enforceable
security interest in the collateral described therein and proceeds thereof and,
upon the filing of UCC-1 Financing Statements with the secretary of state of
each jurisdiction of formation for each of the Loan Parties, the Security
Agreement shall constitute a fully perfected first priority lien on, and
security interest in, all right, title and interest of the applicable Loan Party
in such collateral and the proceeds thereof, in each case prior and superior in
right to any other Person.

         5.22 Immaterial Subsidiaries. The value of the assets owned by the
Immaterial Subsidiaries does not exceed $1,000,000 in the aggregate.

                         SECTION 6. CONDITIONS PRECEDENT

         6.1 Conditions to Closing Date. The Closing Date shall occur upon, and
the obligations of the Lenders to make Extensions of Credit hereunder shall be
subject to, the satisfaction of the following conditions precedent:

              (a) Loan Documents. The Administrative Agent shall have received
(with the number of original counterparts requested by the Administrative Agent)
(i) this Agreement, executed and delivered by a duly authorized officer of the
Borrower, (ii) the Guarantee Agreement, executed and delivered by a duly
authorized officer of each Loan Party thereto and (iii) any Revolving Credit
Note requested by a Lender pursuant to Section 2.3(e) payable to the order of
such requesting Lender in the amount of its Revolving Credit Commitment.

              (b) Closing Certificate. The Administrative Agent shall have
received (with the number of original counterparts requested by the
Administrative Agent), a certificate of the Borrower, dated the Closing Date,
substantially in the form of Exhibit F, with appropriate insertions and
attachments, satisfactory in form and substance to the Administrative Agent,
executed by a Responsible Officer of the Borrower.

              (c) Corporate Proceedings of the Loan Parties. The Administrative
Agent shall have received (with the number of original counterparts requested by
the Administrative Agent), a copy of the resolutions, in form and substance
satisfactory to the Administrative Agent, of the Board of Directors of each Loan
Party authorizing (i) the execution, delivery and performance of this Agreement
and the Loan Documents to which it is a party, (ii) in the case of the Borrower,
the borrowings contemplated hereunder and (iii) the granting by it of the Liens
created pursuant to the Loan Documents, certified by the Secretary or an
Assistant Secretary of such Loan Party as of the Closing Date, which certificate
shall be in form and substance reasonably satisfactory to the Administrative
Agent and shall state that the resolutions thereby certified have not been
amended, modified, revoked or rescinded.

              (d) Loan Party Incumbency Certificates. The Administrative Agent
shall have received (with the number of original counterparts requested by the
Administrative Agent), a certificate of each Loan Party, dated the Closing Date,
as to the incumbency and signature of the officers of such Loan Party executing
any Loan Document reasonably satisfactory in form and

                                       44
<PAGE>
substance to the Administrative Agent, executed by the President or any Vice
President and the Secretary or any Assistant Secretary of such Loan Party.

              (e) Corporate Documents. The Administrative Agent shall have
received (with the number of original counterparts requested by the
Administrative Agent), true and complete copies of the certificate of
incorporation and by-laws of each Loan Party, certified as of the Closing Date
as complete and correct copies thereof by the Secretary or an Assistant
Secretary of such Loan Party. The Administrative Agent shall have received
certificates from the appropriate Governmental Authority certifying as to the
good standing, existence and authority of each of the Loan Parties in all
jurisdictions where required by the Administrative Agent.

              (f) Consents, Licenses and Approvals. All governmental and third
party approvals (including consents) necessary or, in the discretion of the
Administrative Agent, advisable in connection with the continuing operations of
the Borrower and its Subsidiaries and the execution, delivery and performance of
the Loan Documents shall have been obtained and be in full force and effect, and
all applicable waiting periods shall have expired without any action being taken
or threatened by any competent authority which would restrain, prevent or
otherwise impose adverse conditions on this Agreement and the other Loan
Documents and the transactions contemplated hereby and thereby. The
Administrative Agent shall have received, with a counterpart for each Lender, a
certificate of the Borrower as to the foregoing.

              (g) Due Diligence. The Administrative Agent and the Lenders shall
have completed satisfactory due diligence review of the assets, liabilities,
business, operations and condition (financial or otherwise) of the Borrower and
its Subsidiaries, including, but not limited, to a review of their Oil and Gas
Properties, Subordinated Indebtedness, and all legal, financial, accounting,
governmental, environmental, tax and regulatory matters, and fiduciary aspects
of the proposed financing.

              (h) Legal Structure and Capitalization. The Administrative Agent
and the Lenders shall be satisfied with the organization, corporate and legal
structure and capitalization of the Borrower and its Subsidiaries.

              (i) Projections; Financial Statements. The Administrative Agent
and the Lenders shall have received true and correct copies of the Borrower and
its Subsidiaries' business and financial plan for the years 2002 and 2003 (the
"Projections"), in form and substance satisfactory to the Administrative Agent.
The Administrative Agent and the Lenders shall have received true and correct
copies of the financial statements referred to in Section 5.1(a).

              (j) Fees. The Lenders, the Administrative Agent and the Lead
Arranger shall have received all fees and expenses required to be paid on or
before the Closing Date pursuant to the Fee Letter and for which invoices have
been presented.

              (k) Representations and Warranties. Each of the representations
and warranties made by each Loan Party in or pursuant to the Loan Documents
shall be true and correct on and as of such date as if made on and as of such
date (unless such representations and

                                       45
<PAGE>
warranties are stated to relate to a specific earlier date, in which case such
representations and warranties shall be true and correct as of such earlier
date).

              (l) No Default. No Default or Event of Default shall have occurred
and be continuing on such date.

              (m) No Material Adverse Effect. No event or events which,
individually or in the aggregate, has had or is reasonably likely to have a
Material Adverse Effect shall have occurred.

         6.2 Conditions to Initial Borrowing Date. The agreement of each Lender
to make the initial Extension of Credit requested to be made by it on the
initial Borrowing Date is subject to the satisfaction of the following
conditions precedent:

             (a) Loan Documents. The Administrative Agent shall have received
(with the number of original counterparts requested by the Administrative Agent)
(i) the Pledge Agreement, executed and delivered by a duly authorized officer of
each Loan Party thereto, together with certificates representing the Pledged
Securities accompanied by undated stock powers executed in blank, (ii) the
Mortgage Amendment, executed and delivered by a duly authorized officer of each
Loan Party thereto, (iii) the Security Agreement, executed and delivered by a
duly authorized officer of each Loan Party thereto, and (iv) acknowledgment
copies or other evidence of the proper filing of Financing Statements (Form
UCC-1) under the Uniform Commercial Code of all jurisdictions to the extent
necessary or desirable or required, in the reasonable judgment of the
Administrative Agent, to perfect the security interests created or purported to
be created by the Pledge Agreement or the Security Agreement.

             (b) Closing Certificate. The Administrative Agent shall have
received (with the number of original counterparts requested by the
Administrative Agent), a certificate of the Borrower, dated the initial
Borrowing Date, substantially in the form of Exhibit F, with appropriate
insertions and attachments, satisfactory in form and substance to the
Administrative Agent, executed by a Responsible Officer of the Borrower.

             (c) Officer's Certificate. The Borrower shall certify that the
documentation previously delivered by the Loan Parties pursuant to Sections
6.1(c), (d), (e) and (f) is true and correct as of the initial Borrowing Date as
if made on and as of such date.

             (d) Fees. The Lenders, the Administrative Agent and the Lead
Arranger shall have received all fees and expenses required to be paid on or
before the initial Borrowing Date pursuant to the Fee Letter and for which
invoices have been presented.

             (e) Legal Opinions. (i) The Administrative Agent shall have
received the executed legal opinion of Fulbright & Jaworski L.L.P., counsel to
the Borrower and each other Loan Party, in form and substance reasonably
acceptable to the Administrative Agent.

                                       46
<PAGE>

                 (ii) The Administrative Agent shall have received the executed
legal opinion of Bracewell & Patterson, L.L.P., Texas counsel to the
Administrative Agent, in form and substance reasonably acceptable to the
Administrative Agent.

                 (iii) The Administrative Agent shall have received the executed
legal opinion (other than as to title opinion matters) of Lapeyre & Lapeyre,
Louisiana counsel to the Administrative Agent, in form and substance reasonably
acceptable to the Administrative Agent.

Such legal opinions shall cover such other matters incident to the transactions
contemplated by this Agreement and the other Loan Documents as the
Administrative Agent may reasonably require.

             (f) Insurance Certificates. Certificate(s) of insurance naming the
Administrative Agent as loss payee or additional insured evidencing insurance
which meets the requirements of this Agreement and the Security Documents and
which is in amount, form and substance and from an issuer satisfactory to the
Administrative Agent.

             (g) Lien Searches. Results of lien, tax and judgment searches of
the UCC Records of the Secretary of State and applicable counties of the States
of Delaware, Louisiana and Texas from a source acceptable to the Administrative
Agent and reflecting no Liens against any of the Collateral as to which
perfection of a Lien is accomplished by the filing of a financing statement
other than in favor of the Administrative Agent.

             (h) Representations and Warranties. Each of the representations and
warranties made by each Loan Party in or pursuant to the Loan Documents (other
than the representations and warranties made in Section 5.2(a)) shall be true
and correct on and as of such date as if made on and as of such date (unless
such representations and warranties are stated to relate to a specific earlier
date, in which case such representations and warranties shall be true and
correct as of such earlier date).

             (i) No Default. No Default or Event of Default shall have occurred
and be continuing on such date.

             (j) Consents, Licenses, Approvals, etc. The Administrative Agent
shall have received true copies (certified to be such by the Borrower or other
appropriate party) of all consents, licenses and approvals required in
accordance with applicable law in connection with the execution, delivery,
performance, validity and enforceability of this Agreement and the other Loan
Documents. In addition, the Borrower and Subsidiaries shall have all such
material consents, licenses and approvals, including, without limitation,
Environmental Permits, required in connection with the continued operation of
the Borrower and its Subsidiaries, and such consents, licenses and approvals
shall be in full force and effect, and all applicable waiting periods shall have
expired without any action being taken or threatened by any competent authority
which would restrain, prevent or otherwise impose adverse conditions on this
Agreement and the actions contemplated hereby.

             (k) Assignment of Existing Credit Facility. The Administrative
Agent and the Lenders shall have received sufficient evidence indicating that
simultaneously with the making of the initial Loans hereunder, the obligations
of the Borrower and its Subsidiaries under the

                                       47
<PAGE>

Existing Credit Facility (including, without limitation, any obligations of any
Subsidiary of the Borrower in respect of guaranties and security agreements
executed in connection with such Existing Credit Facility) and the Liens
securing the same shall have been assigned to the Administrative Agent for the
benefit of the Lenders and encumbering the same Property.

             (l) Liens. The Administrative Agent shall have received
satisfactory evidence that (i) the Liens granted under the Security Documents
(A) exist in favor of the Administrative Agent for its benefit and the ratable
benefit of itself and the Lenders, (B) are (or will be upon filing the
appropriate financing statements) superior to all other Liens, except Liens
permitted by this Agreement, (C) secure the Obligations, (D) are (or will be
upon filing the appropriate financing statements) perfected and enforceable, and
(e) are (or will be upon filing the appropriate financing statements) in full
force and effect and (ii) all actions or filings necessary to protect, preserve
and validly perfect such Liens have been (or will be upon filing the appropriate
financing statements) made, taken or obtained, as the case may be.

             (m) Title. The Administrative Agent shall be satisfied in its sole
discretion as to the status of the Loan Parties' title to the mortgaged
properties described in the Existing Mortgages.

             (n) Initial Borrowing Date. The initial Borrowing Date shall occur
on or before September 23, 2002.

             (o) Borrowing Base Conditions. On the initial Borrowing Date, the
Borrowing Base shall be $150,000,000; provided, however that if at least ten
days prior to the initial Borrowing Date (i) the Borrower shall have entered
into a hedging program in form and substance satisfactory to the Administrative
Agent and the Lenders in their sole discretion, (ii) new Proven Reserves or
substantiated drilling success on existing Oil and Gas Properties included in
the Borrowing Base shall have been audited by T.J. Smith & Company or another
independent engineering firm selected by the Borrower and reasonably acceptable
to the Administrative Agent and approved by the Administrative Agent and the
Lenders in their sole discretion or (iii) a combination of (i) and (ii) in form
and substance satisfactory to the Administrative Agent and the Lenders in their
sole discretion, then the Borrowing Base shall be up to $175,000,000.

             (p) Subordination Agreement. The Administrative Agent shall have
received (with the number of original counterparts requested by the
Administrative Agent) the Subordination Agreement, executed and delivered by a
duly authorized officer of each party thereto.

             (q) Additional Matters. All corporate and other proceedings, and
all documents, instruments and other legal matters in connection with the
transactions contemplated by this Agreement and the other Loan Documents shall
be reasonably satisfactory in form and substance to the Administrative Agent,
and the Administrative Agent shall have received such other documents and legal
opinions in respect of any aspect or consequence of the transactions
contemplated hereby or thereby as it shall reasonably request.

                                       48
<PAGE>
         6.3 Conditions to Each Extension of Credit. The agreement of each
Lender to make any Extension of Credit requested to be made by it on any date
(including, without limitation, its initial Loans) is subject to the
satisfaction of the following conditions precedent:

             (a) Representations and Warranties. Each of the representations and
warranties made by each Loan Party in or pursuant to the Loan Documents shall be
true and correct on and as of such date as if made on and as of such date
(unless such representations and warranties are stated to relate to a specific
earlier date, in which case such representations and warranties shall be true
and correct as of such earlier date).

             (b) No Default. No Default or Event of Default shall have occurred
and be continuing on such date or after giving effect to the Extensions of
Credit requested to be made on such date.

             (c) Maintenance of Borrowing Base. After giving effect to the
Extensions of Credit requested to be made on any date, the Aggregate Revolving
Credit Exposure of the Lenders shall not exceed the Borrowing Base then in
effect.

             (d) Additional Matters. All corporate and other proceedings, and
all documents, instruments and other legal matters in connection with the
transactions contemplated by this Agreement and the other Loan Documents shall
be reasonably satisfactory in form and substance to the Administrative Agent,
and the Administrative Agent shall have received such other documents and legal
opinions in respect of any aspect or consequence of the transactions
contemplated hereby or thereby as it shall reasonably request.

Each borrowing by, and Letter of Credit issued on behalf of, the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date thereof that the conditions contained in (a), (b) and (c) of this
subsection have been satisfied.

         6.4 Determinations Under Article III. For purposes of determining
compliance with the conditions specified in Section 6.1, each Lender shall be
deemed to have consented to, approved or accepted or to be satisfied with each
document or other matter required thereunder to be consented to or approved by
or acceptable or satisfactory to the Lenders if such Lender has executed and
delivered its signature page to this Agreement to the Administrative Agent.

                         SECTION 7. AFFIRMATIVE COVENANTS

The Borrower hereby agrees that, so long as the Commitments remain in effect,
any Loan, or Letter of Credit or Note remains outstanding and unpaid or any
amount is owing to any Lender or the Administrative Agent hereunder or under any
other Loan Document, the Borrower shall and (except in the case of delivery of
financial information, reports and notices) shall cause each of its Subsidiaries
to:

         7.1 Financial Statements. Furnish to the Administrative Agent and to
each of the Lenders:

                                       49
<PAGE>

             (a) as soon as available, but in any event within 105 days after
the end of each fiscal year of the Borrower, a copy of the consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at the end of such
year and the related consolidated statements of operations, cash flows and
changes in stockholders' equity for such year, setting forth in each case in
comparative form the figures for the previous year, reported on without a "going
concern" or like qualification or exception, or qualification arising out of the
scope of the audit, by Ernst & Young LLP or other independent certified public
accountants of nationally recognized standing reasonably acceptable to the
Required Lenders; and

             (b) as soon as available, but in any event not later than 50 days
after the end of each of the first three quarterly fiscal periods of each fiscal
year of the Borrower and its consolidated Subsidiaries, the unaudited
consolidated balance sheet of the Borrower and its consolidated Subsidiaries as
at the end of such quarter and the related unaudited consolidated statements of
operations, cash flows and changes in stockholders' equity of the Borrower and
its consolidated Subsidiaries for such quarter and the portion of the fiscal
year through the end of such quarter, setting forth in each case in comparative
form the figures for the previous year, certified by a Responsible Officer as
being fairly stated in all material respects (subject to normal year-end and
audit adjustments);

all such financial statements shall be complete and correct in all material
respects and shall be prepared in accordance with GAAP applied consistently
throughout the periods reflected therein and with prior periods (except as
approved by such accountants or officer, as the case may be, and disclosed
therein).

         7.2 Certificates; Other Information. Furnish to the Administrative
Agent and to each of the Lenders:

             (a) concurrently with the delivery of the audited financial
statements referred to in subsection 5.1(a)(i), a certificate of the independent
certified public accountants reporting on such financial statements stating that
in making the examination necessary therefor no knowledge was obtained of any
Default or Event of Default, except as specified in such certificate;

             (b) concurrently with the delivery of the financial statements
referred to in subsections 7.1(a) and (b), a certificate of a Responsible
Officer stating that, to the best of such Officer's knowledge, during such
period (i) no Subsidiary has been formed or acquired (or, if any such Subsidiary
has been formed or acquired, the Borrower has complied with the requirements of
subsection 7.9 with respect thereto) and (ii) the Borrower has observed or
performed all of its covenants (and setting forth the calculations used to
determine compliance with the covenants set forth in subsection 8.1) and other
agreements, and satisfied every condition, contained in this Agreement and the
other Loan Documents to be observed, performed or satisfied by it, and that such
officer has obtained no knowledge of any Default or Event of Default except as
specified in such certificate;

             (c) within five Business Days after the same are sent, copies of
all financial statements and reports which the Borrower sends to its
stockholders, and within five days after the same are filed, copies of all
financial statements and reports, if any, which the Borrower may

                                       50
<PAGE>

make to, or file with, the Securities and Exchange Commission or any successor
or analogous Governmental Authority;

             (d) promptly upon receipt thereof, copies of all reports and
management letters submitted to the Borrower or any Subsidiary by independent
public accountants in connection with any interim or special audit of the books
or operations of the Borrower or such Subsidiary made by such accountants;

             (e) together with any Reserve Report delivered pursuant to Section
4.9, (i) a schedule identifying as of the last day of the fiscal period for
which the financial statements are delivered or as of the date of delivery of
such Reserve Report, as the case may be, each commodity fixed price contract
having a term longer than one year then in effect as to which the Borrower or
any of its Subsidiaries is bound which provides for payments during any year of
such contract of $1,000,000 or more, and setting forth the names of the parties
thereto and of any guarantees thereof, and the volumes attributable to each such
contract and (ii) and beginning with the Reserve Report required to be delivered
in connection with the November 2002 Redetermination, a schedule demonstrating
compliance with Section 7.12, such schedule to set forth the location and filing
information of the recorded Mortgages and the Present Value of the Oil and Gas
Properties subject to each Mortgage; and

             (f) promptly, such additional financial and other information
concerning the Borrower and its Subsidiaries as any Lender (acting through the
Administrative Agent) may from time to time reasonably request.

         7.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all of its
obligations of whatever nature, including, without limitation, taxes,
assessments, fees and other governmental charges, except where (x) the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of the Borrower or the applicable Subsidiary, as the case
may be, or (y) the failure to pay, discharge or otherwise satisfy such
obligations, in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.

         7.4 Conduct of Business and Maintenance of Existence; Compliance with
Law and Contractual Obligations. Continue to engage in business of the same
general type as now conducted by it and preserve, renew and keep in full force
and effect its corporate existence and take all reasonable action to maintain
all rights, privileges and franchises necessary or desirable in the normal
conduct of its business, except as otherwise permitted by subsection 8.5; comply
with all Contractual Obligations and Requirements of Law except to the extent
that failure to comply therewith could not reasonably be expected to have, in
the aggregate, a Material Adverse Effect.

         7.5 Maintenance of Property; Insurance. Maintain all Property useful
and necessary in its business in accordance with past practices and customary
industry norms, (x) ordinary wear and tear and (y) casualty events which could
not reasonably be expected to have a Material Adverse Effect excepted; maintain
with financially sound and reputable insurance companies insurance of such
types, in such amounts and against such risks as is customary to be maintained

                                       51
<PAGE>

by companies engaged in the same or a similar business in the same general area;
and furnish to the Administrative Agent, upon written request, full information
as to the insurance carried.

         7.6 Inspection of Property; Books and Records; Discussions. Keep proper
books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities; and permit
representatives of any Lender to visit and inspect any of its properties and
examine and make abstracts from any of its books and records at any reasonable
time and as often as may reasonably be requested through the Administrative
Agent and to discuss the business, operations, properties and financial and
other condition of the Borrower and its Subsidiaries with officers and employees
of the Borrower and its Subsidiaries and with its independent certified public
accountants.

         7.7 Notices. Promptly give notice to the Administrative Agent of:

             (a) the occurrence of any Default or Event of Default;

             (b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries or (ii) litigation,
investigation or proceeding which may exist at any time between the Borrower or
any of its Subsidiaries and any Governmental Authority, which in the case of
either clause (i) or (ii), if not cured or if adversely determined, as the case
may be, could have, in the opinion of a Responsible Officer, a Material Adverse
Effect;

             (c) any litigation or proceeding affecting the Borrower or any of
its Subsidiaries which could reasonably be expected, in the opinion of a
Responsible Officer, to result in an adverse judgment of $3,000,000 or more not
covered by insurance or in which injunctive or similar relief is sought;

             (d) the following events, as soon as possible and in any event
within 30 days after the Borrower knows or has reason to know thereof: (i) the
occurrence or expected occurrence of any Reportable Event with respect to any
Plan, a failure to make any required contribution to a Plan, the creation of any
Lien in favor of the PBGC or a Plan or any withdrawal from, or the termination,
Reorganization or Insolvency of, any Multiemployer Plan or (ii) the institution
of proceedings or the taking of any other action by the PBGC or the Borrower or
any Commonly Controlled Entity or any Multiemployer Plan with respect to the
withdrawal from, or the terminating, Reorganization or Insolvency of, any Plan;
and

             (e) any event or circumstance which has had a Material Adverse
Effect.

Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what the Borrower and its Subsidiaries have taken or propose to take
with respect thereto.

         7.8 Environmental Laws. (a) Except as, individually or in the
aggregate, could not reasonably be expected to either (i) result in the payment
of a Material Environmental Amount or (ii) have a Material Adverse Effect, (x)
comply with all Environmental Laws, and obtain, comply with and maintain any and
all Environmental Permits necessary for its operations as conducted and as
planned; and (y) take all reasonable efforts to ensure that all of its tenants,
subtenants,

                                       52
<PAGE>

contractors, subcontractors, and invitees comply with all Environmental Laws,
and obtain, comply with and maintain any and all Environmental Permits,
applicable to any of them.

             (a) Except to the extent that the failure to comply could not
reasonably be expected either to (i) result in the payment of a Material
Environmental Amount or (ii) give rise to a Material Adverse Effect, comply with
all orders and directives of all Governmental Authorities regarding
Environmental Laws, other than such orders and directives as to which an appeal
or other appropriate action to contest such order or directive has been timely
and properly taken in good faith.

             (b) Prior to acquiring any ownership or leasehold interest in real
property or other interest in any real property that could give rise to the
Borrower being subject to potential significant liability under or violations of
any Environmental Law, which potential liabilities or violations, if incurred,
could reasonably be expected to have a Material Adverse Effect: (i) notify the
Administrative Agent; and (ii) if requested by the Administrative Agent, provide
to the Administrative Agent a written report by an environmental consultant
reasonably acceptable to the Administrative Agent assessing the presence or
potential presence of significant levels of any Materials of Environmental
Concern on, under, in, or about the property, or of other conditions that could
give rise to potentially significant liability or violations of any
Environmental Law.

         7.9 Additional Collateral. (a) With respect to any Person that,
subsequent to the Closing Date, becomes a Subsidiary (other than a Foreign
Subsidiary) promptly: (i) cause such Person to become a party to the Guarantee
Agreement and the Security Agreement, pursuant to documentation which is in form
and substance reasonably satisfactory to the Administrative Agent, (ii) cause
the Capital Stock of such Person owned by the Borrower or any Subsidiary to be
pledged to the Administrative Agent, for the ratable benefit of the Lenders,
pursuant to documentation reasonably satisfactory to the Administrative Agent,
and take all actions reasonably necessary or advisable to cause the Lien thereon
to be duly perfected in accordance with all applicable Requirements of Law, and
deliver any certificates representing such Capital Stock to the Administrative
Agent, together with undated stock powers executed and delivered in blank by a
duly authorized officer of the Borrower or such Subsidiary, as the case may be,
and (iii) if requested by the Administrative Agent, deliver to the
Administrative Agent legal opinions relating to the matters described in clauses
(i) and (ii) immediately preceding, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.

             (b) With respect to any Person that, subsequent to the Closing
Date, becomes a Subsidiary and is a Foreign Subsidiary, promptly: (i) execute
and deliver to the Administrative Agent a new pledge agreement and security
agreement as the Administrative Agent shall deem reasonably necessary or
advisable to grant to the Administrative Agent, for the benefit of the Lenders,
a Lien on the Capital Stock of such Subsidiary which is owned by the Borrower or
any Subsidiary (provided that in no event shall more than 65% of the Capital
Stock of any such Subsidiary be required to be so pledged), (ii) deliver to the
Administrative Agent any certificates representing such Capital Stock, together
with undated stock powers executed and delivered in blank by a duly authorized
officer of the Borrower or such Subsidiary, as the case may be, and take or
cause to be taken all such other actions under the law of the jurisdiction of
organization of such Foreign Subsidiary as may be reasonably necessary or
advisable to perfect such Lien on

                                       53
<PAGE>

such Capital Stock and (iii) if requested by the Administrative Agent, deliver
to the Administrative Agent legal opinions relating to the matters described in
clauses (i) and (ii) immediately preceding, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.

         7.10 Maintenance and Operation of Property. Except to the extent that
the failure to comply could not reasonably be expected to have a Material
Adverse Effect and consistent with the standards of a reasonably prudent
operator under the same circumstances:

              (a) Maintain, develop, and operate Borrower's and the Guarantors'
Oil and Gas Properties, and oil and gas gathering assets in a good and
workmanlike manner, and observe and comply with all of the terms and provisions,
express or implied, of all oil and gas leases relating to the Properties so long
as the oil and gas leases are capable of producing Hydrocarbons in quantities
and at prices providing for continued efficient and profitable operation of
business;

              (b) Comply in all material respects with all contracts and
agreements applicable to or relating to Borrower's and the Guarantors' Oil and
Gas Properties or the production and sale of hydrocarbons and accompanying
elements therefrom;

              (c) At all times, maintain, preserve, and keep all operating
equipment used with respect to Borrower's and the Guarantors' Oil and Gas
Properties, and oil and gas gathering assets in proper repair, working order and
condition, and make all necessary or appropriate repairs, renewals,
replacements, additions and improvements thereto so that the efficiency of the
operating equipment shall at all times be properly preserved and maintained,
provided that no item of operating equipment need be so repaired, renewed,
replaced, added to or improved, if Borrower or its Subsidiaries shall in good
faith determine that the action is not necessary or desirable for such Person's
continued efficient and profitable operation of business.

              (d) With respect to Borrower's and the Guarantors' Oil and Gas
Properties, and oil and gas gathering assets which are operated by operators
other than Borrower or a Subsidiary, seek to enforce the operators' contractual
obligations to maintain, develop, and operate such Properties subject to the
applicable operating agreements.

              (e) If and when any of the wells located on the Oil and Gas
Properties of the Borrower or its Subsidiaries ceases producing Hydrocarbons in
paying quantities and is of no further use and the Borrower or any other Person
is required to do so under any agreement or law or when doing so would be in
conformity with generally accepted practices then prevalent in the Borrower's
industry, the Borrower will plug and abandon, or cause to be plugged and
abandoned, any and all such wells in accordance in all material respects with
industry practice and the local state and/or federal laws and regulations then
in force and regulating the plugging of Hydrocarbon wells.

         7.11 Further Assurances. Upon the request of the Administrative Agent,
promptly perform or cause to be performed any and all acts and execute or cause
to be executed any and all documents (including, without limitation, financing
statements and continuation statements) for filing under the provisions of the
Uniform Commercial Code or any other Requirement of Law which are necessary or
advisable to maintain in favor of the Administrative Agent, for the

                                       54
<PAGE>

benefit of the Lenders, Liens on the Pledged Securities and on the Oil and Gas
Properties subject to the Mortgages that are duly perfected in accordance with
all applicable Requirements of Law.

7.12 Maintenance of Mortgages. Cause to be performed any and all acts to ensure
that Mortgages are recorded in the appropriate recording offices such that the
Administrative Agent, for the ratable benefit of the Lenders, shall have at all
times first priority perfected liens on, and security interests in, Oil and Gas
Properties of the Borrower or its consolidated Subsidiaries, equal to at least
ninety percent (90%) of the Present Value.

                          SECTION 8. NEGATIVE COVENANTS

         The Borrower hereby agrees that, so long as the Commitments remain in
effect, any Loan, Letter of Credit or any Note remains outstanding and unpaid or
any amount is owing to any Lender or the Administrative Agent hereunder or under
any other Loan Document, the Borrower shall not, and shall not (except with
respect to subsection 8.1) permit any Subsidiary to, directly or indirectly:

         8.1 Financial Covenant Conditions. (a) Interest Coverage Ratio. Permit
as of the end of any fiscal quarter, for any period of four consecutive fiscal
quarters (commencing September 30, 2002), the ratio of EBITDA to Consolidated
Interest Expense of the Borrower and its Subsidiaries for such four consecutive
fiscal quarters then ended to be less than 2.5 to 1.0.

             (b) Total Debt Leverage Ratio. Permit the ratio of total
Indebtedness to EBITDA, determined on a consolidated basis, of the Borrower and
its Subsidiaries, as of the last day of any fiscal quarter (commencing September
30, 2002) of the Borrower, for the period of four consecutive fiscal quarters
then ended, to be greater than (i) for fiscal quarters ending on or before March
31, 2003, 3.75 to 1.0 and (ii) for any fiscal quarter thereafter, 3.0 to 1.0.

             (c) Current Ratio. Permit, as of the end of any fiscal quarter
(commencing September 30, 2002), the ratio of the consolidated current assets,
but including therein the amount of all Loans available but undrawn hereunder as
current assets, of the Borrower and its Subsidiaries to the consolidated current
liabilities of the Borrower and its Subsidiaries (other than (A) current
maturities of the Fortis Subordinated Debt and (B) current maturities of
Indebtedness arising under this Agreement) to be less than (i) for fiscal
quarters ending on or before March 31, 2003, 0.85 to 1.0 and (ii) for any fiscal
quarter thereafter, 1.0 to 1.0.

         8.2 Limitation on Indebtedness. Create, incur, assume or suffer to
exist any Indebtedness, except:

             (a) Indebtedness of the Borrower or any Guarantor under any Loan
Document;

             (b) Indebtedness outstanding on the date hereof and listed on
Schedule 8.2 and any refinancings, refundings, renewals or extensions thereof on
terms and conditions reasonably acceptable to the Administrative Agent;

                                       55
<PAGE>

             (c) Indebtedness of the Borrower under Interest Rate Protection
Agreements entered into in the ordinary course of business of the Borrower and
not for speculative purposes, in each case having terms and conditions
reasonably satisfactory to the Administrative Agent;

             (d) Indebtedness of the Borrower under Commodity Hedging Agreements
entered into in the ordinary course of business of the Borrower and not for
speculative purposes, in each case having terms and conditions reasonably
satisfactory to the Administrative Agent; provided that the aggregate amount of
the total volumes to be hedged for any year shall not exceed (i) for oil, 75% of
expected oil production of the Borrower for such year (determined by reference
to the most recent Reserve Report) and (ii) for gas, 75% of expected gas
production of the Borrower for such year (determined by reference to the most
recent Reserve Report), unless, in each case, as otherwise required by Section
6.2(o);

             (e) Indebtedness of the Borrower issued or owed to any Wholly-Owned
Subsidiary which is a Guarantor (other than Indebtedness incurred at any time
when a Default or Event of Default shall have occurred and be continuing) and
Indebtedness of any Wholly-Owned Subsidiary which is a Guarantor issued or owed
to the Borrower or to any other Wholly-Owned Subsidiary which is a Guarantor;

             (f) Fortis Subordinated Debt and any other Subordinated
Indebtedness that is issued on terms which are satisfactory to the
Administrative Agent and the Required Lenders with respect to provisions
regarding maturity, interest rate, covenants, events of default and
subordination language, provided that (i) after giving effect to the issuance of
such Subordinated Indebtedness, the Borrower is in compliance with the covenants
contained in subsection 8.1 hereof and (ii) the proceeds of such Subordinated
Indebtedness are used to prepay the Fortis Subordinated Debt to the extent of
outstandings thereunder and thereafter, applied toward the prepayment of the
Loans;

             (g) Guarantee Obligations permitted by subsection 8.4;

             (h) [Reserved];

             (i) [Reserved]; and

             (j) Indebtedness of the Borrower and its Wholly-Owned Subsidiaries
created, incurred or assumed after the date hereof not otherwise permitted
pursuant to this subsection 8.2, provided that the aggregate outstanding
principal amount of such Indebtedness shall not exceed $10,000,000 at any one
time outstanding.

         8.3 Limitation on Liens. Create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for:

             (a) Liens for taxes, assessments or other governmental charges or
levies not yet due or which are being contested in good faith by appropriate
proceedings, provided that adequate reserves with respect thereto are maintained
on the books of the Borrower or its applicable Subsidiary, as the case may be,
in conformity with GAAP;

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<PAGE>

             (b) carriers', warehousemen's, mechanics', materialmen's,
landlords', repairmen's or other like Liens arising in the ordinary course of
business securing obligations which are not overdue for a period of more than 60
days or which are being contested in good faith by appropriate proceedings,
which proceedings would have the effect of preventing the forfeiture or sale of
the property or assets subject to any such Lien;

             (c) pledges or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other social
security legislation;

             (d) deposits made to secure the performance of bids, tenders, trade
contracts (other than for borrowed money), leases, statutory obligations, surety
and appeal bonds, performance and return-of-money bonds and other obligations of
a like nature incurred in the ordinary course of business;

             (e) easements, rights-of-way, servitudes, permits, reservations,
exceptions, covenants and other restrictions as to the use of real property and
other similar encumbrances incurred in the ordinary course of business which,
with respect to all of the foregoing, do not secure the payment of Indebtedness
of the type described in clauses (a)-(d) of the definition thereof and which, in
the aggregate, are not substantial in amount and which do not in any case
materially detract from the value of the Property subject thereto or materially
interfere with the ordinary conduct of the business of the Borrower or any
Subsidiary;

             (f) Liens in existence on the date hereof listed on Schedule 8.3,
securing Indebtedness permitted by subsection 8.2(b), provided that no such Lien
is amended after the date of this Agreement to cover any additional Property or
to secure additional Indebtedness and that the amount of Indebtedness secured
thereby is not increased;

             (g) Liens created pursuant to the Security Documents and other
Liens created after the date hereof and securing Indebtedness hereunder or under
any other Loan Document;

             (h) Liens reserved in customary oil, gas and/or mineral leases for
bonus or rental payments and for compliance with the terms of such leases and
Liens reserved in customary operating agreements, farm-out and farm-in
agreements, exploration agreements, development agreements and other similar
agreements for compliance with the terms of such agreements, to the extent that
(x) any such Lien referred to in this clause (h) does not materially impair the
use or value of the property subject to such Lien for the purposes for which
such property is held and (y) in the case of customary operating agreements,
farm-out and farm-in agreements, exploration agreements, development agreements
and other similar agreements, the amount of any obligations secured thereby that
are delinquent, that are not diligently contested in good faith and for which
adequate reserves are not maintained by the Borrower or the applicable
Subsidiary, as the case may be, do not exceed, at any time outstanding, the
amount owing by the Borrower or any Subsidiary, as applicable, for one month's
billed operating expenses or other expenditures attributable to such entity's
interest in the Property covered thereby;

             (i) defects, irregularities and deficiencies in the title of any
rights of way or other Property of the Borrower or any Subsidiary of the
Borrower which in the aggregate do not materially impair the use of such rights
of way or other property for the purposes for which such

                                       57
<PAGE>

rights of way and other Property are held by the Borrower or any Subsidiary of
the Borrower, and defects, irregularities and deficiencies in title to any
property of the Borrower or any Subsidiary of the Borrower, which defects,
irregularities or deficiencies have been cured by possession under applicable
statutes of limitation;

             (j) royalties, overriding royalties, revenue interests, net revenue
interests, production payments (other than production payments granted or
created in connection with the incurrence of Indebtedness) and advance payment
obligations (other than obligations in respect of advance payments received in
connection with the incurrence of Indebtedness), provided that the value of the
Oil and Gas Properties shown on the Borrower's Reserve Reports is net of such
Liens;

             (k) any Lien securing Indebtedness, neither assumed nor guaranteed
by the Borrower or any of its Subsidiaries nor on which it customarily pays
interest, existing upon real estate or rights in or relating to real estate
acquired by the Borrower for substation, metering station, pump station, storage
gathering line, transmission line, transportation line, distribution line or for
right-of-way purposes, and any Liens reserved in leases for rent and for
compliance with the terms of the leases in the case of leasehold estates, to the
extent that any such Lien referred to in this paragraph (k) does not materially
impair the use or value of the property subject to such Lien for the purposes
for which such property is held;

             (l) Liens on Property of a Subsidiary of the Borrower, provided
that such Liens secure only obligations owing to the Borrower;

             (m) judgment and other similar Liens arising in connection with
court proceedings, provided that the judgment relating thereto shall have been
stayed or bonded pending appeal, provided that no such Lien shall encumber any
Oil and Gas Property;

             (n) Liens arising out of all presently existing and future division
and transfer orders, advance payment agreements, processing contracts, gas
processing plant agreements, operating agreements, gas balancing or deferred
production agreements, pooling, unitization or communitization agreements,
pipeline, gathering or transportation agreements, platform agreements, drilling
contracts, injection or repressuring agreements, cycling agreements,
construction agreements, salt water or other disposal agreements, leases or
rental agreements, farm-out and farm-in agreements, exploration and development
agreements, and any and all other contracts or agreements covering, arising out
of, used or useful in connection with or pertaining to the exploration,
development, operation, production, sale, use, purchase, exchange, storage,
separation, dehydration, treatment, compression, gathering, transportation,
processing, improvement, marketing, disposal or handling of any property of the
Borrower or any Subsidiary of the Borrower, provided that such agreements are
entered into in the ordinary course of business and contain terms customary for
such agreements in the industry and provided further that no Liens described in
this paragraph (n) shall be granted or created in connection with the incurrence
of Indebtedness;

             (o) customary preferential rights to purchase and calls on
productions by sellers relating to Properties acquired by the Borrower or any
Subsidiary of the Borrower after the date hereof;

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<PAGE>

             (p) [Reserved]; and

             (q) Liens securing any other Indebtedness expressly permitted by
subsection 8.2 provided that (i) the aggregate outstanding principal amount of
such Indebtedness does not exceed $5,000,000 at any one time and (ii) no such
Lien shall encumber any Oil and Gas Property.

         8.4 Limitation on Guarantee Obligations. Create, incur, assume or
suffer to exist any Guarantee Obligation except (a) Guarantee Obligations in
existence on the date hereof and listed on Schedule 8.4, (b) Guarantee
Obligations arising under the Loan Documents, (c) Guarantee Obligations with
respect to Indebtedness permitted by subsection 8.2 (other than subsection (g)
thereof) and (d) Guarantee Obligations issued by the Borrower or by any of its
Subsidiaries in the ordinary course of business of obligations of other Persons
(other than in respect of Indebtedness) in connection with current oil and gas
drilling, oil and gas production, oil and gas transportation, crude oil
purchasing, oil and gas exploration or other similar programs or operations.

         8.5 Limitation on Fundamental Change. Enter into any merger,
consolidation or amalgamation as a constituent party, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
lease, assign, transfer or otherwise dispose of, all or substantially all of its
property, business or assets, or make any material change in its present method
of conducting business except:

             (a) (i) any Subsidiary of the Borrower (including a Foreign
Subsidiary) may be merged or consolidated with or into the Borrower (provided
that the Borrower shall be the continuing or surviving corporation) or with or
into any one or more Wholly-Owned Subsidiaries which are Domestic Subsidiaries
(provided that such Wholly-Owned Subsidiary or Subsidiaries shall be the
continuing or surviving Person) and (ii) any Foreign Subsidiary of the Borrower
may be merged or consolidated with or into any one or more Wholly-Owned
Subsidiaries which are Foreign Subsidiaries (provided that such Wholly-Owned
Subsidiary or Subsidiaries shall be the continuing or surviving Person);

             (b) (i) any Wholly-Owned Subsidiary (including a Wholly-Owned
Subsidiary which is a Foreign Subsidiary) of the Borrower may sell, lease,
transfer or otherwise dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to the Borrower or any Wholly-Owned Subsidiary which
is a Domestic Subsidiary and (ii) any Wholly-Owned Subsidiary of the Borrower
which is a Foreign Subsidiary may sell, lease, transfer or otherwise dispose of
any or all of its assets (upon voluntary liquidation or otherwise) to any
Wholly-Owned Subsidiary which is a Foreign Subsidiary; and

             (c) any Wholly-Owned Subsidiary may be merged or consolidated with
any Person acquired in connection with a Permitted Business Acquisition, which
acquisition complies with subsection 8.8(g) and is made in the ordinary course
of the Oil and Gas Business, provided that such Wholly-Owned Subsidiary shall be
the continuing or surviving Person.

         8.6 Limitation on Sale of Assets. Convey, sell, lease, assign, transfer
or otherwise dispose of any of its property, business or assets (including,
without limitation, receivables and

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<PAGE>

leasehold interests), whether now owned or hereafter acquired, or issue or sell
any shares of the Borrower's Disqualified Stock or such Subsidiary's Capital
Stock to any Person other than the Borrower or any domestic Wholly-Owned
Subsidiary, except:

             (a) the sale or other disposition of obsolete or worn out property
in the ordinary course of business;

             (b) the sale of inventory (including Hydrocarbons or other mineral
products or surplus) in the ordinary course of business;

             (c) as permitted by subsection 8.5(b);

             (d) the Disposition of any Oil and Gas Properties included in the
Borrowing Base, provided that (i) if the aggregate value (determined by
reference to the most recent Reserve Report) of all such Oil and Gas Properties
so Disposed of in any fiscal year of the Borrower exceeds $5,000,000, then 100%
of the Net Proceeds of such Disposition shall be applied within three Business
Days after the receipt of such Net Proceeds toward the prepayment of the Loans,
(ii) if the aggregate value (determined by reference to the most recent Reserve
Report) of such Oil and Gas Properties so Disposed of is less than $5,000,000 in
any fiscal year, then the Net Proceeds thereof shall be reinvested within 270
days after the closing of such Disposition in Oil and Gas Properties and (iii)
the aggregate value (determined by reference to the most recent Reserve Report)
of all Oil and Gas Properties so Disposed of in any fiscal year of the Borrower
shall not exceed 10% of the most recent and effective Borrowing Base;

             (e) [Reserved];

             (f) sales or other Dispositions of Property not constituting Oil
and Gas Properties included in the Borrowing Base (other than the Capital Stock
of any direct or indirect Subsidiaries of the Borrower), provided that the Net
Proceeds of such Dispositions are reinvested in assets used or useful in the
business of the Borrower and its Subsidiaries; and

             (g) Dispositions of Oil and Gas Properties not constituting Proved
Reserves pursuant to farm-ins and farm-outs and transfers of royalty interests,
overriding royalty interests, net revenue interests and other similar transfers,
all pursuant to exploration and development activity in the ordinary course of
business of the Borrower and its Subsidiaries.

         8.7 Limitation on Dividends. Declare or pay any dividend on (other than
dividends payable solely in common stock of the Borrower), or make any payment
on account of, or set apart assets for a sinking or other analogous fund for,
the purchase, redemption, defeasance, retirement or other acquisition of, any
shares of any class of Capital Stock of the Borrower or any Subsidiary or any
warrants or options to purchase any such Capital Stock, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either directly
or indirectly, whether in cash or property or in obligations of the Borrower or
any Subsidiary, except that:

             (a) any Subsidiary may declare and pay dividends to or make other
distributions to the Borrower or to any other Wholly-Owned Subsidiary which is a
Guarantor; and

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<PAGE>

             (b) so long as no Default or Event of Default shall have occurred
and be continuing or would result therefrom, (i) the Borrower may redeem or
purchase Capital Stock or rights to acquire Capital Stock using proceeds from
the issuance of Capital Stock or rights to acquire Capital Stock, (ii) the
Borrower may use and issue its own Capital Stock (other than Disqualified Stock)
(A) to purchase or acquire issued and outstanding shares of its Capital Stock,
warrants, options, debt instruments convertible into or other rights to purchase
the Borrower's Capital Stock, (B) to satisfy the exercise of stock options or
warrants or (C) in connection with any employee benefit plan of the Borrower or
its Subsidiaries, (iii) the Borrower may redeem rights to purchase preferred
stock or common stock issued to the Borrower's shareholders for an aggregate
amount not to exceed $250,000 during the term of this Agreement, and (iv) the
Borrower may pay dividends on the Series C Preferred Stock so long as no more
than $8,500,000 in the aggregate is expended for such purpose during any fiscal
year of the Borrower; provided, that the annual dividend payable on the Series C
Preferred Stock shall not exceed $8.50 per $100 of par value.

         8.8 Limitation on Investments, Loans and Advances. Make any advance,
loan, extension of credit or capital contribution to, or incur any Guarantee
Obligation on behalf or for the benefit of, or purchase any stock, bonds, notes,
debentures or other securities of or any assets constituting a business unit of,
or make any other investment (including by the issuance of letters of credit) in
(collectively, "Investments"), any Person, except:

             (a) extensions of trade credit in the ordinary course of business;

             (b) Investments in Cash Equivalents;

             (c) loans and advances to officers and employees of the Borrower or
any Subsidiary for travel, entertainment and relocation expenses in the ordinary
course of business in an aggregate amount for the Borrower and its Subsidiaries
not to exceed $1,000,000 at any one time outstanding;

             (d) investments, loans or advances, the material details of which
have been set forth on Schedule 8.8;

             (e) so long as no Default or Event of Default shall have occurred
and be continuing, Investments by the Borrower in any Wholly-Owned Subsidiary
which is a Guarantor and Investments by any Wholly-Owned Subsidiary which is a
Guarantor in the Borrower or in other Wholly-Owned Subsidiaries which are
Guarantors;

             (f) (i) Investments constituting Permitted Business Investments
constituting Dispositions of Oil and Gas Properties which are not Proved
Reserves in connection with the farm-out of such Oil and Gas Properties pursuant
to farm-out agreements entered into in the ordinary course of business of the
Borrower and its Subsidiaries, and (ii) other Investments constituting Permitted
Business Investments made or entered into in the ordinary course of the Oil and
Gas Business in an amount (valued at the time of making thereof) not to exceed,
in the aggregate, $5,000,000 during any fiscal year of the Borrower;

             (g) Investments constituting Permitted Business Acquisitions made
or entered into in the ordinary course of the Oil and Gas Business; provided
that with respect to a Permitted

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<PAGE>

Business Acquisition which is not an acquisition funded entirely with the common
stock of the Borrower, (i) after giving effect to the consummation of the
transactions contemplated by such Permitted Business Acquisition and the Loans
to be made and the Letters of Credit to be issued hereunder in connection
therewith, the sum of (A) the cash and Cash Equivalents then held by the
Borrower and (B) an amount equal to the difference between (x) the aggregate
Revolving Credit Commitments (or, if less, the Borrowing Base) in effect at such
time and (y) the Aggregate Revolving Credit Exposure of all the Lenders at such
time, equals at least $10,000,000 and (ii) the aggregate amount of such
Investments does not exceed in the aggregate $30,000,000 since the Closing Date;

             (h) obligations (in each case not outstanding for more than 90
days) owed by or to Affiliates under operating agreements relating to Oil and
Gas Properties in an aggregate amount not to exceed $10,000,000 at any time;

             (i) transactions expressly permitted under (i) subsection 8.2
(provided, that no loans may be made by the Borrower pursuant to subsection
8.2(e) at any time when a Default or Event of Default shall have occurred and be
continuing), (ii) subsection 8.3, (iii) subsection 8.4, (iv) subsection 8.5 or
(v) subsection 8.16, as applicable;

             (j) Investments in joint ventures made pursuant to exploration and
development activity in the ordinary course of business of the Borrower and its
Subsidiaries to the extent that the Borrower's or a Subsidiary's Investment
therein is limited to the contribution by the Borrower or such Subsidiary of (i)
Oil and Gas Properties which are not Proved Reserves and (ii) seismic data to
the extent that an interest is retained in such data by the Borrower or its
Subsidiaries;

             (k) [Reserved]; and

             (l) Investments not otherwise permitted hereunder in an amount at
any time not in excess of $2,500,000.

         8.9 Limitation on Optional Payments and Modifications of Debt
Instruments, Other Documents. (a) Make any optional payment or prepayment on or
redemption, defeasance or purchase of (i) any Indebtedness (other than
Indebtedness under this Agreement) which has an aggregate principal amount in
excess of $5,000,000 or (ii) any Subordinated Indebtedness (other than (i) as
permitted pursuant to Section 8.2(f) and (ii) fees, interest and principal
permitted to be paid under the terms of the Subordination Agreement), or (b)
amend, modify or change, or consent or agree to any amendment, modification or
change to any of the terms (including the subordination provisions) of any such
Indebtedness described in clauses (i) or (ii) immediately preceding (other than
any such amendment, modification or change which would extend the maturity or
reduce the amount of any payment of principal thereof or which would reduce the
rate or extend the date for payment of interest thereon).

             (b) Amend or modify the certificate of incorporation (including,
without limitation, the Series C Preferred Stock Designation) or bylaws of the
Borrower, unless such amendment or modification is immaterial to the interests
of the Lenders.

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<PAGE>

         8.10 Limitation on Transactions with Affiliates. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of Property or the rendering of any service, with any Affiliate (other
than transactions between or among the Borrower and its Wholly-Owned
Subsidiaries which are Domestic Subsidiaries) unless such transaction is (a)
otherwise permitted under this Agreement, (b) in the ordinary course of the
Borrower's or the applicable Subsidiary's business and (c) upon fair and
reasonable terms no less favorable to the Borrower or the applicable Subsidiary,
as the case may be, than it would obtain in a comparable arm's length
transaction with a Person which is not an Affiliate or, in the event no
comparable transaction with an unaffiliated Person is available, on terms that
are fair from a financial point of view to the Borrower or the applicable
Subsidiary provided, however, this subsection 8.10 shall not apply to (i) the
payment of reasonable and customary fees to directors of the Borrower who are
not employees of the Borrower; (ii) loans or advances made pursuant to
subsection 8.8(c); or (iii) any other transaction with any employee, officer or
director of the Borrower pursuant to drilling arrangements, exploration and
production arrangements, Plans, compensation or other similar arrangements
entered into the ordinary course of business and approved by a majority of the
disinterested members of the Board of Directors of the Borrower.

         8.11 Limitation on Sales and Leasebacks. Enter into any arrangement (a
"Sale and Leaseback Transaction") with any Person providing for the leasing by
the Borrower or any Subsidiary of real or personal property which has been or is
to be sold or transferred by the Borrower or such Subsidiary to such Person or
to any other Person to whom funds have been or are to be advanced by such Person
on the security of such property or rental obligations of the Borrower or any
Subsidiary.

         8.12 Limitation on Changes in Fiscal Year. Permit the fiscal year of
the Borrower and its Subsidiaries to end on a day other than December 31.

         8.13 Limitation on Negative Pledge Clauses. Enter into with any Person
any agreement, other than this Agreement, which prohibits or limits the ability
of the Borrower or any of its Subsidiaries to create, incur, assume or suffer to
exist any Lien upon any of its property, assets or revenues, whether now owned
or hereafter acquired.

         8.14 Limitation on Lines of Business. Enter into any business, either
directly or through any Subsidiary, except for those businesses in which the
Borrower and its Subsidiaries are engaged on the date of this Agreement or which
are directly related thereto or to the Oil and Gas Business.

         8.15 Forward Sales. Except in accordance with ordinary practice in the
Oil and Gas Business, enter into or permit to exist any advance payment
agreement or other arrangement pursuant to which the Borrower or any of its
Subsidiaries, having received full or substantial payment of the purchase price
for a specified quantity of Hydrocarbons upon entering such agreement or
arrangement, is required to deliver, in one or more installments subsequent to
the date of such agreement or arrangement, such quantity of Hydrocarbons
pursuant to and during the terms of such agreement or arrangement.

         8.16 Hedging Agreements. Enter into any Hedging Agreement, other than
Hedging Agreements (a) entered into in the ordinary course of business to hedge
or mitigate risks to

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<PAGE>

which the Borrower or any of its Subsidiaries is exposed in the conduct of its
business or the management of its liabilities and (b) Commodity Hedging
Agreements with a Lender or an Affiliate of a Lender as shall be required from
time to time by the Administrative Agent in form and substance reasonably
satisfactory to the Borrower; provided that the aggregate amount of Commodity
Hedging Agreements may not exceed (i) for oil, the total volumes to be hedged
for any year shall not exceed 75% of expected oil production of the Borrower for
such year (determined by reference to the most recent Reserve Report) and (ii)
for gas, the total volumes to be hedged for any year shall not exceed 75% of
expected gas production of the Borrower for such year (determined by reference
to the most recent Reserve Report), unless, in each case, as otherwise required
by Section 6.2(o);

         8.17 Limitation on Leases. Permit Consolidated Lease Expense for any
fiscal year of the Borrower to exceed $5,000,000.

         8.18 Limitation on Immaterial Subsidiaries. Permit each direct or
indirect Immaterial Subsidiary to acquire any additional assets or to conduct
any material additional business, either directly or indirectly, unless prior to
owning such assets or conducting such business such Immaterial Subsidiary
executes and delivers to the Administrative Agent those documents set forth in
subsection 7.9(a).

                          SECTION 9. EVENTS OF DEFAULT

         If any of the following events shall occur and be continuing:

             (a) The Borrower shall fail to pay any principal of any Loan or any
Reimbursement Obligation when due in accordance with the terms thereof or
hereof; or the Borrower shall fail to pay any interest on any Loan, or any other
amount payable hereunder, within three Business Days after any such interest or
other amount becomes due in accordance with the terms thereof or hereof; or

             (b) Any representation or warranty made or deemed made by any Loan
Party herein or in any other Loan Document or which is contained in any
certificate, document or financial or other statement furnished by it at any
time under or in connection with this Agreement or any such other Loan Document
shall prove to have been incorrect in any material respect on or as of the date
made or deemed made; or

             (c) The Borrower or any of its Subsidiaries shall default in the
observance or performance of any agreement applicable to it contained in
subsections 4.10, 7.7(a), 7.9 or 7.12 of this Agreement, Section 8 of this
Agreement or Section 5(b) of the Pledge Agreement; or

             (d) The Borrower or any of its Subsidiaries shall default in the
observance or performance of any other agreement applicable to it contained in
this Agreement or any other Loan Document (other than as provided in paragraphs
(a) through (c) of this Section, and such default shall continue unremedied for
a period of 30 consecutive days; or

             (e) The Borrower or any of its Subsidiaries shall (i) default in
any payment of principal of or interest of any Indebtedness (excluding the Loans
or any guarantee thereof), or in the payment of any Guarantee Obligation, beyond
the period of grace (not to exceed 30 days), if

                                       64
<PAGE>

any, provided in the instrument or agreement under which such Indebtedness or
Guarantee Obligation was created; provided that the aggregate principal amount
of such Indebtedness and Guarantee Obligations equals or exceeds $4,000,000;
(ii) default in the observance or performance of any other agreement or
condition relating to any such Indebtedness or Guarantee Obligation or contained
in any instrument or agreement evidencing, securing or relating thereto, or any
other event shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Guarantee Obligation (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or such Guarantee
Obligation to become payable, provided that the aggregate principal amount of
all such Indebtedness and Guarantee Obligations which would then become due and
payable would equal or exceed $4,000,000; or (iii) default in any payment
required to be made with respect to any Redeemable Preferred Stock of the
Borrower; or

             (f) (i) The Borrower or any of its Subsidiaries shall commence any
case, proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian, conservator or other
similar official for it or for all or any substantial part of its assets, or the
Borrower or any of its Subsidiaries shall make a general assignment for the
benefit of its creditors; or (ii) there shall be commenced against the Borrower
or any of its Subsidiaries any case, proceeding or other action of a nature
referred to in clause (i) above which (A) results in the entry of an order for
relief or any such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days; or (iii) there shall be
commenced against the Borrower or any of its Subsidiaries any case, proceeding
or other action seeking issuance of a warrant of attachment, execution,
restraint or similar process against all or any substantial part of its assets
which results in the entry of an order for any such relief which shall not have
been vacated, discharged, or stayed or bonded pending appeal within 60 days from
the entry thereof; or (iv) the Borrower or any of its Subsidiaries shall take
any action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above;
or (v) the Borrower or any of its Subsidiaries shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts as they
become due; or

             (g) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan,
(ii) any "accumulated funding deficiency" (as defined in Section 302 of ERISA),
whether or not waived, shall exist with respect to any Plan or any Lien in favor
of the PBGC or a Plan shall arise on the assets of the Borrower or any Commonly
Controlled Entity, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee shall be
appointed, to administer or to terminate, any Single Employer Plan, which
Reportable Event or commencement of proceedings or appointment of a trustee is,
in the reasonable opinion of the Required Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any Single
Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the

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Borrower or any Commonly Controlled Entity shall, or in the reasonable opinion
of the Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or
(vi) any other event or condition shall occur or exist with respect to a Plan;
and in each case in clauses (i) through (vi) above, such event or condition,
together with all other such events or conditions, if any, could have a Material
Adverse Effect; or

             (h) One or more judgments or decrees shall be entered against the
Borrower or any Subsidiary involving in the aggregate a liability (to the extent
not paid or covered by insurance) of $2,000,000 or more, and all such judgments
or decrees shall not have been vacated, discharged, stayed or bonded pending
appeal (or otherwise paid or satisfied in full) within 90 days after the entry
thereof; or

             (i) A material provision of any Loan Document or the guarantee of
any of the Guarantors under the Guarantee Agreement shall cease, for any reason,
to be in full force and effect, or any Loan Party, any of their Affiliates, or
any officer or employee of any of the foregoing, shall so assert; or

             (j) The subordination provisions contained in any Subordinated
Indebtedness shall cease, for any reason, to be in full force and effect, or any
Person that is a party thereto or holders of at least 25% of the aggregate
principal amount of such Subordinated Indebtedness shall so assert in writing;
or

             (k) Environmental liabilities aggregating in excess of a Material
Environmental Amount shall be outstanding at any time with respect to the
Borrower or any of its Subsidiaries and the Borrower and such Subsidiaries are
not using their best efforts to remedy the liability; or

             (l) Any Lien created by the Pledge Agreement, the Security
Agreement or any other Security Document shall cease to be enforceable and of
the same effect and priority purported to be created thereby; or

             (m) A Change of Control shall occur; or

             (n) Any court, government or governmental agency shall condemn,
seize or otherwise appropriate, or take custody or control of, all or any
material portion (such materiality determined by reference to the Borrower and
its Subsidiaries taken as a whole) of the Property of the Borrower or any
Guarantor; or

             (o) The Borrower shall fail to cure a Borrowing Base Deficiency
within 90 days thereof as required by Section 4.10;

then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) of this Section, automatically the
Commitments shall immediately terminate and the Loans hereunder (with accrued
and unpaid interest thereon) and all other amounts owing under this Agreement
(including, without limitation, all Letter of Credit Outstandings, whether or
not the beneficiaries of the then outstanding Letters of Credit shall have
presented the documents required thereunder) and the other Loan Documents shall
immediately become due

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and payable, and (B) if such event is any other Event of Default, either or both
of the following actions may be taken: (i) with the consent of the Required
Lenders, the Administrative Agent may, or upon the request of the Required
Lenders, the Administrative Agent shall, by written notice to the Borrower,
declare the Commitments to be terminated forthwith, whereupon the Commitments
shall immediately terminate; and (ii) with the consent of the Required Lenders,
the Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by written notice to the Borrower, declare the Loans
hereunder (with accrued and unpaid interest thereon) and all other amounts owing
under this Agreement (including, without limitation, all amounts of Letter of
Credit Outstandings, whether or not the beneficiaries of the then outstanding
Letters of Credit shall have presented the documents required thereunder) and
the other Loan Documents to be due and payable forthwith, whereupon the same
shall immediately become due and payable.

         With respect to all Letters of Credit with respect to which presentment
for honor shall not have occurred at the time of an acceleration pursuant to the
preceding paragraph, the Borrower shall at such time deposit in a cash
collateral account opened by the Administrative Agent an amount equal to the
aggregate then unexpired amount that is available to be drawn under such Letters
of Credit. The Borrower hereby grants to the Administrative Agent, for the
benefit of the Issuing Lender and the L/C Participants, a security interest in
such cash collateral to secure all obligations of the Borrower under this
Agreement and the other Loan Documents. Amounts held in such cash collateral
account shall be applied by the Administrative Agent to the payment of drafts
drawn under such Letters of Credit, and the unused portion thereof after all
such Letters of Credit shall have expired, been cancelled or been fully drawn
upon, if any, shall be applied to repay other obligations of the Borrower
hereunder and under the Notes. After all such Letters of Credit shall have
expired, been cancelled or been fully drawn upon, all Reimbursement Obligations
shall have been satisfied and all other obligations of the Borrower hereunder
and under the other Loan Documents shall have been paid in full, the balance, if
any, in such cash collateral account shall be returned to the Borrower. The
Borrower shall execute and deliver to the Administrative Agent, for the account
of the Issuing Lender and the L/C Participants, such further documents and
instruments as the Administrative Agent may reasonably request to evidence the
creation and perfection of the within security interest in such cash collateral
account. Except as expressly provided above in this Section, presentment,
demand, protest and all other notices of any kind are hereby expressly waived.

                  SECTION 10. THE ADMINISTRATIVE AGENT; OTHERS

         10.1 Appointment. Each Lender hereby irrevocably designates and
appoints SG as Administrative Agent of such Lender under this Agreement and the
other Loan Documents, and each such Lender irrevocably authorizes the
Administrative Agent, in such capacity, to take such action on its behalf under
the provisions of this Agreement and the other Loan Documents and to exercise
such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities

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<PAGE>

shall be read into this Agreement or any other Loan Document or otherwise exist
against the Administrative Agent.

         10.2 Delegation of Duties. The Administrative Agent may execute any of
its duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or attorneys
in-fact selected by it with reasonable care.

         10.3 Exculpatory Provisions. Neither the Administrative Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact or Affiliates
shall be (i) liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with this Agreement or any other Loan
Document (except for its or such Person's own gross negligence or willful
misconduct) or (ii) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by any Loan Party or
any officer thereof contained in this Agreement or any other Loan Document or in
any certificate, report, statement or other document referred to or provided for
in, or received by the Administrative Agent under or in connection with, this
Agreement or any other Loan Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or for any failure of any Loan Party to perform its obligations
hereunder or thereunder. The Administrative Agent shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of any Loan Party.

         10.4 Reliance by Administrative Agent. The Administrative Agent shall
be entitled to rely, and shall be fully protected in relying, upon any Note,
writing, resolution, notice, consent, certificate, affidavit, letter, telecopy,
telex or teletype message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Loan Parties), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders (or, where unanimous
consent of the Lenders is expressly required hereunder, such Lenders) as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The Administrative Agent
shall in all cases be fully protected in acting, or in refraining from acting,
under this Agreement and the other Loan Documents in accordance with a request
of the Required Lenders (or, where unanimous consent of the Lenders or the
Supermajority Lenders is expressly required hereunder, such Lenders or
Supermajority Lenders, as applicable), and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Loans.

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<PAGE>

         10.5 Notice of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received notice from a Lender or
the Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Administrative Agent receives such a notice, the Administrative Agent shall
give notice thereof to the Lenders. The Administrative Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders; provided that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders.

         10.6 Non-Reliance on Administrative Agent and Other Lenders. Each
Lender expressly acknowledges that neither the Administrative Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or Affiliates has
made any representations or warranties to it and that no act by the
Administrative Agent hereafter taken, including any review of the affairs of any
Loan Party, shall be deemed to constitute any representation or warranty by the
Administrative Agent to any Lender. Each Lender represents to the Administrative
Agent 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 appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of each Loan Party and made its own decision to make its
Extensions of Credit hereunder and enter into this Agreement. Each Lender also
represents 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 deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigation as
it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of each Loan Party. Except
for notices, reports and other documents expressly required to be furnished to
the Lenders by the Administrative Agent hereunder, the Administrative Agent
shall not have any duty or responsibility to provide any Lender with any credit
or other information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of any Loan Party which
may come into the possession of the Administrative Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates.

         10.7 Indemnification. The Lenders agree to indemnify the Administrative
Agent in its capacity as such (to the extent not reimbursed by the Borrower and
without limiting the obligation the Borrower to do so), ratably according to
their respective Commitment Percentages in effect on the date on which
indemnification is sought, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the
obligations under this Agreement) be imposed on, incurred by or asserted against
the Administrative Agent in any way relating to or arising out of, the
Commitments, this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the
Administrative Agent under or in connection with any of the foregoing; provided
that no Lender shall be liable for the payment of any portion of

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<PAGE>
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting solely from the Administrative
Agent's gross negligence or willful misconduct. The agreements in this
subsection shall survive the payment of all obligations under this Agreement and
all other amounts payable hereunder.

             10.8 Administrative Agent in Its Individual Capacity. The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with any Loan Party as though the
Administrative Agent were not the Administrative Agent hereunder and under the
other Loan Documents. With respect to the Extensions of Credit made by it, the
Administrative Agent shall have the same rights and powers under this Agreement
and the other Loan Documents as any Lender and may exercise the same as though
it were not the Administrative Agent, and the terms "Lender" and "Lenders" shall
include the Administrative Agent in its individual capacity.

             10.9 Successor Administrative Agent. The Administrative Agent may
resign as Administrative Agent upon 30 days' notice to the Lenders. If the
Administrative Agent shall resign as Administrative Agent under this Agreement
and the other Loan Documents, then the Required Lenders shall appoint from among
the Lenders a successor agent for the Lenders, which successor agent, with the
consent of the Borrower (such consent not to be unreasonably withheld or
delayed), shall succeed to the rights, powers and duties of the Administrative
Agent hereunder. Effective upon such appointment and approval, the term
"Administrative Agent" shall mean such successor agent, and the former
Administrative Agent's rights, powers and duties as Administrative Agent shall
be terminated, without any other or further act or deed on the part of such
former Administrative Agent or any of the parties to this Agreement or any
holders of the Loans. After any retiring Administrative Agent's resignation as
Administrative Agent, the provisions of this Section 10 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement and the other Loan Documents.

             10.10 Issuing Lender. The provisions of this Section 10 applicable
to the Administrative Agent shall apply to the Issuing Lender in the performance
of its duties under the Loan Documents, mutatis mutandis.

             10.11 Others. None of the Lead Arranger, the Co-Lead Arranger, the
Bookrunner, and the Documentation Agent, in such respective capacities, shall
have any duties or responsibilities, or incur any liabilities, under this
Agreement or the other Loan Documents.

                            SECTION 11. MISCELLANEOUS

             11.1 Amendments and Waivers. Neither this Agreement nor any other
Loan Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this subsection. The
Required Lenders may, or, with the written consent of the Required Lenders, the
Administrative Agent may, from time to time, (a) enter into with the applicable
Loan Parties written amendments, supplements or modifications hereto and to the
other Loan Documents for the purpose of adding any provisions to this Agreement
or the other Loan Documents or changing in any manner the rights of the Lenders
or of the applicable Loan Parties hereunder or thereunder or (b) waive, on such
terms and

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<PAGE>

conditions as the Required Lenders or the Administrative Agent, as the case may
be, may specify in such instrument, any of the requirements of this Agreement or
the other Loan Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment,
supplement or modification shall (i) reduce the principal amount, or extend the
scheduled date of final maturity, of any Loan, or reduce the stated rate of any
interest or fee payable hereunder or extend the scheduled date of any payment
thereof or increase the principal amount or extend the expiration date of any
Lender's Commitments, in each case without the consent of each Lender affected
thereby, (ii) amend, modify or waive any provision of this subsection or reduce
the percentage specified in the definition of Required Lenders or Supermajority
Lenders (or modify any provision of this Agreement or any other Loan Document to
provide that an action currently requiring the approval of or consent by the
Supermajority Lenders may be taken with the consent or approval by a lower
percentage of Lenders), or consent to the assignment or transfer by any Loan
Party of any of its rights and obligations under this Agreement and the other
Loan Documents other than in accordance with the terms of the applicable Loan
Documents, in each case without the written consent of all the Lenders, (iii)
release, or subordinate the interest of the Administrative Agent in, all or
substantially all of the collateral for the Obligations hereunder or release all
or substantially all of the Guarantors from their respective obligations under
the Guarantee Agreement without the written consent of each Lender, (iv) change
subsection 4.8(a) or subsection 11.7(a) in a manner that would alter the pro
rata sharing of payments required thereby, without the written consent of each
Lender, (v) amend, modify or waive any provision of Section 10 without the
written consent of the then Administrative Agent and Issuing Lender, (vi) amend,
modify or waive any provision of Section 8.16 without the written consent of
Supermajority Lenders or (vii) amend, modify or waive any provision of this
Agreement or any other Loan Document prior to the initial Borrowing Date without
the written consent of each Lender. Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the Lenders and shall
be binding upon the Loan Parties, the Lenders, the Administrative Agent and all
future holders of the Loans. In the case of any waiver, the Loan Parties, the
Lenders and the Administrative Agent shall be restored to their former positions
and rights hereunder and under the other Loan Documents, and any Default or
Event of Default waived shall be deemed to be cured and not continuing; no such
waiver shall extend to any subsequent or other Default or Event of Default or
impair any right consequent thereon.

         11.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) in the case of delivery by hand or
by courier service, when delivered, (b) in the case of delivery by mail, three
Business Days after being deposited in the mails, postage prepaid, or (c) in the
case of delivery by facsimile transmission, when sent and receipt has been
confirmed, addressed as follows in the case of the Borrower and the
Administrative Agent, and as set forth in Schedule 11.2 in the case of the other
parties hereto, or to such other address as may be hereafter notified by the
respective parties hereto:

The Borrower:              The Meridian Resource Corporation
                           1401 Enclave Parkway, Suite 300
                           Houston, Texas 77077
                           Attention:  Joseph A. Reeves, Jr.
                           Fax:  (713)-558-5744

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The Administrative Agent:  Societe Generale
                           560 Lexington Avenue
                           New York, New York 10022
                           Attention:  Nadira Tiwari
                           Fax:  (212) 278-5525

                           With a copy to:

                           Societe Generale
                           1111 Bagby, Suite 2020
                           Houston, Texas 77002
                           Attention:  Cary Hughes, Director
                           Fax:  (713) 650-0824

provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders pursuant to subsection 2.2, 4.3, 4.5 or 4.8 shall not be
effective until received.

         11.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent, the Issuing Lender
or any Lender, any right, remedy, power or privilege hereunder or under the
other Loan Documents shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges herein provided
are cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.

         11.4 Survival of Representations and Warranties. All representations
and warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Extensions of Credit hereunder.

         11.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay or
reimburse the Administrative Agent, the Lead Arranger, the Co-Lead Arranger, the
Bookrunner, the Documentation Agent and their Affiliates for all their
reasonable and documented out-of-pocket costs and expenses incurred in
connection with the development, syndication, preparation and execution of, and
any amendment, supplement or modification to, this Agreement and the other Loan
Documents and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, including, without limitation, the reasonable fees and
disbursements of (i) counsel to the Administrative Agent and (ii) the
Administrative Agent customarily charged by it in connection with syndicated
credits, (b) to pay or reimburse each Lender and the Administrative Agent for
all its reasonable and documented costs and expenses incurred in connection with
the enforcement or preservation of any rights under this Agreement, the other
Loan Documents and any such other documents, including, without limitation, the
reasonable fees and disbursements of counsel to the Administrative Agent and to
the several Lenders, (c) to pay, indemnify, and hold each Lender, the
Administrative Agent, the Lead Arranger, the Co-Lead Arranger, the Bookrunner

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and the Documentation Agent (and their respective Affiliates and their
respective directors, officers, employees and agents) harmless from, any and all
recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, stamp, excise and other taxes, if any, which
may be payable or determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, this Agreement, the other Loan Documents and
any such other documents, and (d) to pay, indemnify, and hold each Lender, the
Administrative Agent, the Lead Arranger, the Co-Lead Arranger, the Bookrunner
and the Documentation Agent (and their respective directors, officers,
employees, agents and affiliates) harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of this
Agreement, the other Loan Documents or the use or the proposed use of proceeds
contemplated by this Agreement, including, without limitation, any of the
foregoing relating to the violation of, noncompliance with or liability under,
any Environmental Law applicable to any Loan Party or any of the Properties (all
the foregoing in this clause (d), collectively, the "indemnified liabilities"),
provided that the Borrower shall have no obligation under this clause (d) to any
Administrative Agent, the Lead Arranger, the Co-Lead Arranger, the Bookrunner,
the Documentation Agent or any Lender (or any of their respective directors,
officers, employers, agents or affiliates), with respect to indemnified
liabilities to the extent such liabilities are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or willful misconduct of such Person. Without limiting the
foregoing, and to the extent permitted by applicable law, the Borrower agrees
not to assert, and hereby waives, and agrees to cause each of its Subsidiaries
not to assert and to so waive, all rights for contribution or any other rights
of recovery with respect to all claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature, under or
related to Environmental Laws, that any of them might have by statute or
otherwise against any Person entitled to indemnification under this subsection
11.5. The agreements in this subsection shall survive repayment of the Loans and
all other amounts payable hereunder and the termination of this Agreement.

         11.6 Successors and Assigns; Participations and Assignments. (a) This
Agreement shall be binding upon and inure to the benefit of the Borrower, the
Lenders, the Administrative Agent, all future holders of the Loans and any Notes
hereunder and their respective successors and assigns, except that the Borrower
may not assign or transfer any of its rights or obligations under this Agreement
without the prior written consent of each Lender.

              (b) Any Lender may, in the ordinary course of its commercial
banking or lending business and in accordance with applicable law and at no cost
or expense to the Borrower, at any time sell to one or more banks or other
entities ("Participants") participating interests in any Loan owing to such
Lender, any Commitment of such Lender or any other interest of such Lender
hereunder and under the other Loan Documents. In the event of any such sale by a
Lender of a participating interest to a Participant, (i) such Lender's
obligations under this Agreement to the other parties to this Agreement shall
remain unchanged, (ii) such Lender shall remain solely responsible for the
performance thereof, (iii) such Lender shall remain the holder of any such Loan
(and any Note evidencing such Loan) for all purposes under this

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Agreement and the other Loan Documents, (iv) the Borrower and the Administrative
Agent shall continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under this Agreement and the other
Loan Documents, and (v) in any proceeding under the Bankruptcy Code the Lender
shall be, to the extent permitted by law, the sole representative with respect
to the obligations held in the name of such Lender, whether for its own account
or for the account of any Participant No Lender shall be entitled to create in
favor of any Participant, in the participation agreement pursuant to which such
Participant's participating interest shall be created or otherwise, any right to
vote on, consent to or approve any matter relating to this Agreement or any
other Loan Document except for those specified in clauses (i) and (ii) of the
proviso to subsection 11.1. The Borrower agrees that each Participant shall be
entitled to the benefits of subsections 4.13 and 4.14 with respect to its
participation in the Commitments and the Loans and Letters of Credit outstanding
from time to time as if it was a Lender; provided that, in the case of
subsection 4.13, such Participant shall have complied with the requirements of
said subsection and provided, further, that no Participant shall be entitled to
receive any greater amount pursuant to any such subsection than the transferor
Lender would have been entitled to receive in respect of the amount of the
participation transferred by such transferor Lender to such Participant had no
such transfer occurred.

              (c) Any Lender may, in the ordinary course of its commercial
banking or lending business and in accordance with applicable law, at any time
and from time to time assign to any Lender or any Affiliate thereof or, with the
prior written consent of the Administrative Agent and the Borrower (which in
each case shall not be unreasonably withheld), to an additional bank or
financial institution or other entity (an "Assignee") all or any part of its
rights and obligations under this Agreement and the other Loan Documents
including, without limitation, its Revolving Credit Commitments, L/C
Commitments, Revolving Credit Loans and L/C Participating Interests, pursuant to
an Assignment and Acceptance, substantially in the form of Exhibit G, executed
by such Assignee, such assigning Lender (and, in the case of an Assignee that is
not then a Lender, by the Borrower, the Administrative Agent and each Issuing
Lender) and delivered to the Administrative Agent for its acceptance and
recording in the Register, provided that (i) (unless the Borrower and the
Administrative Agent otherwise consent in writing) no such transfer to an
Assignee (other, than a Lender or any Affiliate thereof) shall be in an
aggregate principal amount less than $1,000,000 in the aggregate (or, if less,
the full amount of such assigning Lender's Revolving Credit Loans, L/C
Participating Interests and Revolving Credit Commitments), and (ii) if any
Lender assigns all or any part of its rights and obligations under this
Agreement to one of its Affiliates in connection with or in contemplation of the
sale or other disposition of its interest in such Affiliate, the Borrower's
prior written consent shall be required for such assignment (which shall not be
unreasonably withheld). Upon such execution, delivery, acceptance and recording,
from and after the effective date determined pursuant to such Assignment and
Acceptance, (x) the Assignee thereunder shall be a party hereto and, to the
extent provided in such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder with a Revolving Credit Commitment and L/C
Commitment as set forth therein, and (y) the assigning Lender thereunder shall,
to the extent provided in such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such assigning Lender shall cease to be a
party hereto). Notwithstanding any provision of this paragraph (c) and paragraph
(e) of this subsection, the consent of the Borrower shall not be required, and,
unless requested by the

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Assignee and/or the assigning Lender, new Notes shall not be required to be
executed and delivered by the Borrower, for any assignment which occurs at any
time when any of the events described in Section 9 shall have occurred and be
continuing.

              (d) The Administrative Agent, on behalf of the Borrower, shall
maintain at the address of the Administrative Agent referred to in subsection
11.2 a copy of each Assignment and Acceptance delivered to it and a register
(the "Register") for the recordation of the names and addresses of the Lenders
and the Commitments of, and principal amounts of the Loans owing to, each Lender
from time to time. The entries in the Register shall be conclusive, in the
absence of manifest error, and the Borrower, the Administrative Agent and the
Lenders may (and, in the case of any Loan or other obligation hereunder not
evidenced by a Note, shall) treat each Person whose name is recorded in the
Register as the owner of a Loan or other obligation hereunder as the owner
thereof for all purposes of this Agreement and the other Loan Documents,
notwithstanding any notice to the contrary. Any assignment of any Loan or other
obligation hereunder not evidenced by a Note shall be effective only upon
appropriate entries with respect thereto being made in the Register. The
Register shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.

              (e) Notwithstanding anything in this Agreement to the contrary, no
assignment under subsection 11.6(c) of any rights or obligations under or in
respect of the Loans, the Notes or the Letters of Credit shall be effective
unless and until the Administrative Agent shall have recorded the assignment
pursuant to subsection 11.6(d). Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and an Assignee (and, in the case of an Assignee
that is not then a Lender or an affiliate thereof, by the Borrower and the
Administrative Agent) together with payment to the Administrative Agent of a
registration and processing fee of $3,500 (other than in the case of an
assignment by a Lender to an affiliate of such Lender), the Administrative Agent
shall (i) promptly accept such Assignment and Acceptance and (ii) on the
effective date determined pursuant thereto record the information contained
therein in the Register and give notice of such acceptance and recordation to
the Lenders and the Borrower. On or prior to such effective date, the assigning
Lender shall surrender any outstanding Notes held by it all or a portion of
which are being assigned, and the Borrower, at its own expense, shall, upon the
request to the Administrative Agent by the assigning Lender or the Assignee, as
applicable, execute and deliver to the Administrative Agent (in exchange for the
outstanding Notes of the assigning Lender) a new Revolving Credit Note to the
order of such Assignee in an amount equal to the lesser of (A) the amount of
such Assignee's Revolving Credit Commitment and (B) the aggregate principal
amount of all Revolving Credit Loans made by such Assignee, after giving effect
to such Assignment and Acceptance and, if the assigning Lender has retained a
Revolving Credit Commitment hereunder, a new Revolving Credit Note to the order
of the assigning Lender in an amount equal to the lesser of (A) the amount of
such Lender's Revolving Credit Commitment and (B) the aggregate principal amount
of all Revolving Credit Loans made by such Lender, after giving effect to such
Assignment and Acceptance. Any such new Notes shall be dated the Closing Date
and shall otherwise be in the form of the Note replaced thereby. Any Notes
surrendered by the assigning Lender shall be returned by the Administrative
Agent to the Borrower marked "canceled".

                                       75
<PAGE>

              (f) The Borrower authorizes each Lender to disclose to any
Participant or Assignee (each, a "Transferee") and any prospective Transferee,
any and all financial information in such Lender's possession concerning the
Loan Parties and their Affiliates which has been delivered to such Lender by or
on behalf of the Borrower pursuant to this Agreement or which has been delivered
to such Lender by or on behalf of the Borrower in connection with such Lender's
credit evaluation of the Loan Parties and their Affiliates prior to becoming a
party to this Agreement.

              (g) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this subsection concerning assignments of
Loans and Notes relate only to absolute assignments and that such provisions do
not prohibit assignments creating security interests, including, without
limitation, any pledge or assignment by a Lender of any Loan or Note to any
Federal Reserve Bank in accordance with applicable law.

              (h) Notwithstanding anything to the contrary contained herein, any
Lender (a "Granting Lender") may grant to a special purpose funding vehicle that
is an Affiliate of such Lender (a "SPC"), identified as such in writing from
time to time by the Granting Lender to the Administrative Agent and the
Borrower, the option to provide to the Borrower all or any part of any Loan that
such Granting Lender would otherwise be obligated to make to the Borrower
pursuant to this Agreement; provided that (i) nothing herein shall constitute a
commitment by any SPC to make any Loan, and (ii) if an SPC elects not to
exercise such option or otherwise fails to provide all or any part of such Loan,
the Granting Lender shall be obligated to make such Loan pursuant to the terms
hereof. The making of a Loan by an SPC hereunder shall utilize the Commitment of
the Granting Lender to the same extent, and as if, such Loan were made by such
Granting Lender. Each party hereto hereby agrees that no SPC shall be liable for
any indemnity or similar payment obligation under this Agreement (all liability
for which shall remain with the Granting Lender). In furtherance of the
foregoing, each party hereto hereby agrees (which agreement shall survive the
termination of this Agreement) that, prior to the date that is one year and one
day after the payment in full of all outstanding commercial paper or other
senior indebtedness of any SPC, it will not institute against, or join any other
person in instituting against, such SPC any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under the laws of the United
States or any State thereof. In addition, notwithstanding anything to the
contrary contained in this Section 11.6(h), any SPC may (i) with notice to, but
without the prior written consent of, the Borrower and the Administrative Agent
and without paying any processing fee therefor, assign all or a portion of its
interests in any Loans to the Granting Lender or to any financial institutions
(consented to by the Borrower and Agent) providing liquidity and/or credit
support to or for the account of such SPC to support the funding or maintenance
of Loans and (ii) disclose on a confidential basis any non-public information
relating to its Loans to any rating agency, commercial paper dealer or provider
of any surety, guarantee or credit or liquidity enhancement to such SPC. This
section may not be amended without the written consent of the SPC. Nothing in
this section in any way affects the Granting Lender's obligations under this
Agreement.

         11.7 Adjustments; Set-off. (a) If any Lender (a "Benefitted Lender")
shall at any time receive any payment of all or part of its Loans or
Reimbursement Obligations, or interest thereon, or receive any collateral in
respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to
events or proceedings of the nature referred to in subsection 9(f), or
otherwise),

                                       76
<PAGE>
in a greater proportion than any such payment to or collateral received by any
other Lender, if any, in respect of such other Lender's Loans or Reimbursement
Obligations, or interest thereon, such Benefitted Lender shall purchase for cash
from the other Lenders a participating interest in such portion of each such
other Lender's Loans or Reimbursement Obligations, or shall provide such other
Lenders with the benefits of any such collateral, or the proceeds thereof, as
shall be necessary to cause such Benefitted Lender to share the excess payment
or benefits of such collateral or proceeds ratably with each of the Lenders;
provided, however, that if all or any portion of such excess payment or benefits
is thereafter recovered from such Benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest.

              (b) In addition to any rights and remedies of the Lenders provided
by law, each Lender shall have the right, without prior notice to the Borrower,
any such notice being expressly waived by the Borrower to the extent permitted
by applicable law, upon any amount becoming due and payable by the Borrower
hereunder (whether at the stated maturity, by acceleration or otherwise) to
set-off and appropriate and apply against such amount any and all deposits
(general or special, time or demand, provisional or final), in any currency, and
any other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Lender or any branch or agency thereof to or for the
credit or the account of the Borrower, as the case may be. Each Lender agrees
promptly to notify the Borrower and the Administrative Agent after any such
set-off and application made by such Lender, provided that, to the extent
permitted by applicable law, the failure to give such notice shall not affect
the validity of such set-off and application.

         11.8 Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts (including by
facsimile transmission), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. A set of the copies of this
Agreement signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.

         11.9 Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

         11.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Borrower, the other Loan Parties, the
Administrative Agent and the Lenders with respect to the subject matter hereof,
and there are no promises, undertakings, representations or warranties by the
Administrative Agent or any Lender relative to subject matter hereof not
expressly set forth or referred to herein or in the other Loan Documents.

         11.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

                                       77
<PAGE>

         11.12 Submission To Jurisdiction; Waivers. The Borrower hereby
irrevocably and unconditionally:

               (a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which it
is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the Courts of the State of
New York, the courts of the United States of America for the Southern District
of New York, and appellate courts from any thereof;

               (b) consents that any such action or proceeding may be brought in
such court s and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;

               (c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to the
Borrower at its address set forth in subsection 11.2 or at such other address of
which the Administrative Agent shall have been notified pursuant thereto;

               (d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the right
to sue in any other jurisdiction; and

               (e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding referred
to in this subsection any special, exemplary, punitive or consequential damages.

         11.13 Acknowledgments. The Borrower hereby acknowledges that:

               (a) it has been advised by counsel in the negotiation, execution
and delivery of this Agreement and the other Loan Documents;

               (b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between Administrative Agent and Lenders, on one hand, and the
Borrower, on the other hand, in connection herewith or therewith is solely that
of debtor and creditor; and

               (c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated hereby
among the Lenders or among the Borrower and the Lenders.

         11.14 WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT AND
THE LENDERS HEREBY KNOWINGLY AND INTENTIONALLY, IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

                                       78
<PAGE>

         11.15 Production Proceeds. Notwithstanding that, by the terms of the
Mortgages, the Borrower is and will be assigning to the Administrative Agent and
Lenders all of the "Production Proceeds" (as defined in the Mortgage) accruing
to the property covered thereby, so long as no Event of Default has occurred the
Borrower may continue to receive from the purchasers of production all such
Production Proceeds, and the Administrative Agent shall reasonably cooperate
with the Borrower so that the purchasers of production pay such Production
Proceeds directly to the Borrower and not to the Administrative Agent nor the
Lenders. Upon the occurrence and continuation of an Event of Default, the
Administrative Agent and Lenders may exercise all rights and remedies granted
under the Mortgages, including the right to obtain possession of all Production
Proceeds then held by the Borrower or to receive directly from the purchasers of
production all other Production Proceeds. In no case shall any failure, whether
purposed or inadvertent, by the Administrative Agent or Lenders to collect
directly any such Production Proceeds constitute in any way a waiver, remission
or release of any of their rights under the Mortgages, nor shall any release of
any Production Proceeds by Administrative Agent or Lenders to the Borrower
constitute a waiver, remission, or release of any other Production Proceeds or
of any rights of Administrative Agent or Lenders to collect other Production
Proceeds thereunder.

         11.16 Release of Mortgaged Properties. The Administrative Agent is
hereby authorized by the Lenders to execute, at the cost and expense of the
Borrower and pursuant to documentation reasonably acceptable to the
Administrative Agent, partial releases of the Mortgaged Properties to the extent
such Mortgaged Properties are sold in accordance with the terms of the Mortgage
and subsection 8.6.

         11.17 Limitation on Interest. The Borrower, the Loan Parties, the
Administrative Agent and the Lenders intend to contract in strict compliance
with applicable usury law from time to time in effect. In furtherance thereof
such persons stipulate and agree that none of the terms and provisions contained
in the Loan Documents shall ever be construed to provide for interest in excess
of the maximum amount of interest permitted to be charged by applicable law from
time to time in effect. Neither any Loan Party nor any present or future
guarantors, endorsers, or other Persons hereafter becoming liable for payment of
any Obligation shall ever be liable for unearned interest thereon or shall ever
be required to pay interest thereon in excess of the maximum amount that may be
lawfully charged under applicable law from time to time in effect, and the
provisions of this section shall control over all other provisions of the Loan
Documents which may be in conflict or apparent conflict herewith. The
Administrative Agent and the Lenders expressly disavow any intention to charge
or collect excessive unearned interest or finance charges in the event the
maturity of any Obligation is accelerated. If (a) the maturity of any Obligation
is accelerated for any reason, (b) any Obligation is prepaid and as a result any
amounts held to constitute interest are determined to be in excess of the legal
maximum, or (c) any Lender or may other holder of any or all of the Obligations
shall otherwise collect moneys which are determined to constitute interest which
would otherwise increase the interest on any or all of the Obligations to an
amount in excess of that permitted to be charged by applicable law then in
effect, then all sums determined to constitute interest in excess of such legal
limit shall, without penalty, be promptly applied to reduce the then outstanding
principal of the related Obligations or, at such Lender's or holder's option,
promptly returned to Borrower or the other payor thereof upon such
determination. In determining whether or not the interest paid or payable, under
any specific circumstance, exceeds the maximum amount permitted under

                                       79
<PAGE>
applicable law, Lenders, the Administrative Agent and the Loan Parties (and any
other payers thereof) shall to the greatest extent permitted under applicable
law, (i) characterize any non-principal payment as an expense, fee or premium
rather than as interest, (ii) exclude voluntary prepayments and the effects
thereof, and (iii) amortize, prorate, allocate, and spread the total amount of
interest throughout the entire contemplated term of the instruments evidencing
the Obligations in accordance with the amounts outstanding from time to time
thereunder and the maximum legal rate of interest from time to time in effect
under applicable law in order to lawfully charge the maximum amount of interest
permitted under applicable law.

         11.18 Existing Indebtedness. The Borrower, the Administrative Agent and
the Lenders have agreed that this Agreement is an amendment and restatement of
the Existing Credit Facility, not a new or substitute credit agreement or
novation of the Existing Credit Facility, and each reference to an "Extension of
Credit" shall include each Extension of Credit made or issued heretofore under
the Existing Credit Facility as well as each Extension of Credit made or issued
hereafter under this Agreement.

                  [Remainder of Page Intentionally Left Blank]

                                       80
<PAGE>

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

                                    THE MERIDIAN RESOURCE CORPORATION

                                    By:    /s/ JOSEPH A. REEVES, JR.
                                           -------------------------------------
                                    Title: CEO
                                           -------------------------------------

<PAGE>

                                    SOCIETE GENERALE, as Administrative Agent,
                                    Lead Arranger, Bookrunner, Issuing Lender
                                    and as a Lender

                                    By:    /s/ CARY HUGHES
                                           -------------------------------------
                                    Title: Director
                                           -------------------------------------

<PAGE>

                                    FORTIS CAPITAL CORP., as Co-Lead Arranger,
                                    Documentation Agent and as a Lender

                                    By:    /s/ DARRELL W. HOLLEY
                                           -------------------------------------
                                    Title: Managing Director
                                           -------------------------------------

                                    By:    /s/ MICHIEL DEHAAN
                                           -------------------------------------
                                    Title: Assistant Vice President
                                           -------------------------------------<PAGE>

                                                                    EXHIBIT 4.1

                  SOUTHWEST SHOPPING CENTERS CO. II, L.L.C.,
                                                       as Issuer,

                             THE BANK OF NEW YORK,
                                                       as Trustee,

                              ARCHON GROUP, L.P.,
                                                       as Servicer,

                                      and

                              ARCHON GROUP, L.P.,
                                                       as Special Servicer

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

                       INDENTURE AND SERVICING AGREEMENT

                 Dated and Effective as of [          ], 2002

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

               Secured Notes, Series 2002-SSCC, due May 31, 2010

<PAGE>

                CERTAIN SECTIONS OF THIS INDENTURE RELATING TO
                        SECTIONS 310 THROUGH 318 OF THE
                         TRUST INDENTURE ACT OF 1939:

<TABLE>
<CAPTION>
                         TRUST INDENTURE                           INDENTURE
                           ACT SECTION                              SECTION
                         ---------------                         --------------
 <C>     <S>                                                     <C>
 (S) 310 (a) (1)................................................ 6.7
         (a) (2)................................................ 6.7
         (a) (3)................................................ 6.19(b)
         (a) (4)................................................ Not Applicable
         (b).................................................... 6.12, 6.10
 (S) 311 (a).................................................... 6.21
         (b).................................................... 6.21
 (S) 312 (a).................................................... 3.7(a)
         (b).................................................... 3.7(b)
         (c).................................................... 3.7(c)
 (S) 313 (a).................................................... 6.18(a)
         (b).................................................... 6.18(a)
         (c).................................................... 6.18(a)
         (d).................................................... 6.18(b)
 (S) 314 (a).................................................... 8.1(b)
         (b).................................................... 8.1(c)
         (c) (1)................................................ 1.15
         (c) (2)................................................ 1.15
         (c) (3)................................................ Not Applicable
         (d).................................................... 4.6
         (e).................................................... 1.15
 (S) 315 (a).................................................... 6.1(b), 6.1(c)
         (b).................................................... 6.3
         (c).................................................... 6.1(d)
         (d).................................................... 6.1
         (e).................................................... 5.14
 (S) 316 (a).................................................... 5.12, 5.13
         (a) (2)................................................ Not Applicable
         (b).................................................... 5.8
         (c).................................................... 1.3(c)
 (S) 317 (a) (1)................................................ 5.3
         (a) (2)................................................ 5.4
         (b).................................................... 10.3
 (S) 318 ....................................................... 1.16
</TABLE>

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

<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                       PAGE
                                                                                       ----
<C>          <S>                                                                       <C>
ARTICLE I    DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION..................   1
SECTION 1.1    Definitions............................................................   1
SECTION 1.2    Form of Documents Delivered to Trustee.................................  15
SECTION 1.3    Acts of Holders........................................................  16
SECTION 1.4    Computation of Principal Amount........................................  17
SECTION 1.5    Notices................................................................  17
SECTION 1.6    Notice to Holders of Notes.............................................  18
SECTION 1.7    Successors and Assigns.................................................  18
SECTION 1.8    Separability Clause....................................................  18
SECTION 1.9    Benefits of Indenture..................................................  18
SECTION 1.10   Governing Law..........................................................  19
SECTION 1.11   Execution in Counterparts..............................................  19
SECTION 1.12   Security Agreement.....................................................  19
SECTION 1.13   Third-Party Beneficiary................................................  19
SECTION 1.14   No Liability of Exculpated Persons.....................................  19
SECTION 1.15   Compliance Certificates and Opinions...................................  21
SECTION 1.16   Conflict with Trust Indenture Act......................................  21

ARTICLE II   FORMS OF THE NOTES.......................................................  21
SECTION 2.1    Forms Generally........................................................  21
SECTION 2.2    Form of Trustee's Certificate of Authentication........................  22
SECTION 2.3    Form of the Notes......................................................  22
SECTION 2.4    Legend.................................................................  22
SECTION 2.5    Global Notes...........................................................  23

ARTICLE III  THE NOTES................................................................  24
SECTION 3.1    Equal and Ratable Notes; Amount; Authorization.........................  24
SECTION 3.2    Denominations..........................................................  24
SECTION 3.3    Conditions Precedent to Issuance of Notes..............................  25
SECTION 3.4    Execution, Authentication and Delivery of the Notes....................  26
SECTION 3.5    Deposit Account, Collection Account, Payment Account, Holdover Account,
                 Redemption Account...................................................  26
SECTION 3.6    Registration; Fiscal Agent.............................................  29
SECTION 3.7    Holder Lists...........................................................  30
SECTION 3.8    Transfer and Exchange..................................................  30
SECTION 3.9    Mutilated, Destroyed, Lost and Stolen Notes............................  31
SECTION 3.10   Interest...............................................................  32
SECTION 3.11   Payment of Principal and Interest......................................  32
SECTION 3.12   Interest on New Notes..................................................  33
SECTION 3.13   Cancellation...........................................................  34
SECTION 3.14   Fiscal Agent to Hold Money in Trust....................................  34

ARTICLE IV   RELEASE OF COLLATERAL; SATISFACTION AND DISCHARGE OF INDENTURE...........  34
SECTION 4.1    Release................................................................  34
SECTION 4.2    Satisfaction and Discharge of Indenture................................  35
SECTION 4.3    Application of Trust Money.............................................  36
SECTION 4.4    Repayment to Issuer....................................................  36
SECTION 4.5    Reinstatement..........................................................  36
SECTION 4.6    Trust Indenture Act....................................................  36
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                                                                        PAGE
                                                                                        ----
<C>          <S>                                                                        <C>
ARTICLE V    REMEDIES..................................................................  36
SECTION 5.1    Events of Default.......................................................  36
SECTION 5.2    Acceleration of Maturity; Rescission and Annulment......................  37
SECTION 5.3    Collection of Indebtedness and Suits for Enforcement by Servicer........  38
SECTION 5.4    Special Servicer May File Proofs of Claim...............................  39
SECTION 5.5    Servicer May Enforce Claims Without Possession of Notes.................  39
SECTION 5.6    Application of Money Collected..........................................  40
SECTION 5.7    Limitation on Suits.....................................................  40
SECTION 5.8    Unconditional Right of Holders to Receive Principal and Interest........  41
SECTION 5.9    Restoration of Rights and Remedies......................................  41
SECTION 5.10   Rights and Remedies Cumulative..........................................  41
SECTION 5.11   Delay or Omission Not Waiver............................................  42
SECTION 5.12   Control by Holders......................................................  42
SECTION 5.13   Waiver of Past Defaults.................................................  43
SECTION 5.14   Undertaking for Costs...................................................  43

ARTICLE VI   THE TRUSTEE...............................................................  43
SECTION 6.1    Certain Duties and Responsibilities.....................................  43
SECTION 6.2    Money Held in Trust.....................................................  47
SECTION 6.3    Notice of Defaults......................................................  47
SECTION 6.4    Certain Rights of Trustee...............................................  48
SECTION 6.5    Compensation and Reimbursement..........................................  48
SECTION 6.6    Confidentiality.........................................................  49
SECTION 6.7    Corporate Trustee Required; Eligibility.................................  49
SECTION 6.8    Representations and Warranties of the Trustee...........................  50
SECTION 6.9    Merger, Conversion, Consolidation or Succession to Business.............  51
SECTION 6.10   Resignation and Removal; Appointment of Successor.......................  51
SECTION 6.11   Acceptance of Appointment by Successor..................................  52
SECTION 6.12   Conflicting Interests...................................................  53
SECTION 6.13   Self Dealing............................................................  53
SECTION 6.14   Investments.............................................................  53
SECTION 6.15   Unclaimed Funds.........................................................  53
SECTION 6.16   Illegal Acts............................................................  54
SECTION 6.17   Communications to be Sent to the Issuer.................................  54
SECTION 6.18   Reports by Trustee......................................................  54
SECTION 6.19   Separate Trustees and Co-trustees.......................................  55
SECTION 6.20   Withholding and Information Reporting...................................  56
SECTION 6.21   Preferential Collection of Claims Against Company.......................  56

ARTICLE VII  THE SERVICER AND SPECIAL SERVICER.........................................  56
SECTION 7.1    Servicer to Act as Servicer; Special Servicer to Act as Special Servicer  56
SECTION 7.2    Sub-Servicing Agreements................................................  57
SECTION 7.3    Certain Duties and Responsibilities.....................................  58
SECTION 7.4    Payment of Taxes and Other Charges, Etc.................................  59
SECTION 7.5    Maintenance of Insurance and Errors and Omissions and Fidelity Coverage.  60
SECTION 7.6    Application of Funds in Event of Default................................  60
SECTION 7.7    Realization upon the Underlying Collateral..............................  61
SECTION 7.8    Trustee to Cooperate: Release of Original Security Documents............  63
SECTION 7.9    Title and Management of Foreclosed Collateral...........................  63
SECTION 7.10   Sale of Foreclosed Collateral...........................................  64
SECTION 7.11   Servicing Compensation..................................................  65
</TABLE>

                                      ii

<PAGE>

<TABLE>
<CAPTION>
                                                                                               PAGE
                                                                                               ----
<C>          <S>                                                                               <C>
SECTION 7.12   Reports to the Trustee.........................................................  66
SECTION 7.13   Annual Statement as to Compliance..............................................  66
SECTION 7.14   Access to Certain Documentation Regarding the Note Indebtedness................  66
SECTION 7.15   Inspections....................................................................  67
SECTION 7.16   Advances.......................................................................  67
SECTION 7.17   Appointment of Special Servicer................................................  68
SECTION 7.18   Transfer of Servicing Between Servicer and Special Servicer; Record Keeping....  68
SECTION 7.19   Rights of the Issuer with Respect to the Servicer..............................  69
SECTION 7.20   Limitation on the Liability of the Servicer and Others.........................  69
SECTION 7.21   Servicer and Special Servicer Not to Resign; Termination of Servicer by Holders  71
SECTION 7.22   Merger or Consolidation of the Servicer........................................  72
SECTION 7.23   Servicer Default...............................................................  72
SECTION 7.24   Remedies of Trustee............................................................  74
SECTION 7.25   Directions by Holders and Duties of Trustee During Servicer Default............  74
SECTION 7.26   Trustee to Act; Appointment of Successor.......................................  75
SECTION 7.27   Notification to Holders........................................................  76
SECTION 7.28   Waiver of Past Events of Default...............................................  76
SECTION 7.29   Representations and Warranties.................................................  76

ARTICLE VIII THE ISSUER.......................................................................  77
SECTION 8.1    Reports by the Issuer..........................................................  77
SECTION 8.2    Representations, Warranties and Covenants of the Issuer........................  78

ARTICLE IX   SUPPLEMENTAL INDENTURES; AMENDMENTS..............................................  79
SECTION 9.1    Supplemental Indentures or Amendments Without Consent of Holders...............  79
SECTION 9.2    Supplemental Indentures or Amendments With Consent of Holders..................  80
SECTION 9.3    Delivery of Supplements........................................................  81
SECTION 9.4    Opinion of Counsel.............................................................  81

ARTICLE X    COVENANTS; WARRANTIES............................................................  81
SECTION 10.1   Payment of Principal and Interest..............................................  81
SECTION 10.2   Maintenance of Office or Agency................................................  81
SECTION 10.3   Fiscal Agent; Money for Note Payments to be Held in Trust......................  82
SECTION 10.4   Entity Existence...............................................................  82
SECTION 10.5   Payment of Taxes and Other Claims..............................................  82
SECTION 10.6   Maintenance of Lien and Recording..............................................  82
SECTION 10.7   Performance and Enforcement....................................................  83
SECTION 10.8   Negative Covenants.............................................................  83
SECTION 10.9   Statement as to Compliance.....................................................  84

ARTICLE XI   REDEMPTION OF NOTES..............................................................  84
SECTION 11.1   Applicability of Article.......................................................  84
SECTION 11.2   Selection by Trustee of Notes to be Redeemed...................................  85
SECTION 11.3   Notice of Redemption...........................................................  85
SECTION 11.4   Deposit of Redemption Price....................................................  85
SECTION 11.5   Notes Payable on Redemption Date...............................................  85
SECTION 11.6   Notes Redeemed in Part.........................................................  86
SECTION 11.7   Holders' Redemption Right......................................................  86

ARTICLE XII  MEETINGS OF HOLDERS OF NOTES.....................................................  88
SECTION 12.1   Purposes for Which Meetings May Be Called......................................  88
SECTION 12.2   Call, Notice and Place of Meetings.............................................  88
</TABLE>

                                      iii

<PAGE>

<TABLE>
<CAPTION>
                                                                                         PAGE
                                                                                         ----
<C>          <S>                                                                         <C>
SECTION 12.3   Persons Entitled to Vote at Meetings.....................................  88
SECTION 12.4   Quorum; Action...........................................................  88
SECTION 12.5   Determination of Voting Rights; Conduct and Adjournment of Meetings......  89
SECTION 12.6   Counting Votes and Recording Action of Meetings..........................  89
</TABLE>

EXHIBITS
    A  Form of Note
    B  Assignment
    C  List of Authorized Persons
    D  Request for Release of Documents

                                      iv

<PAGE>

   INDENTURE AND SERVICING AGREEMENT, dated and effective as of [          ],
2002 (this "Indenture"), among SOUTHWEST SHOPPING CENTERS CO. II, L.L.C., as
issuer (defined herein as the "Issuer"), having an address at c/o First Union
Real Estate Equity and Mortgage Investments, 125 Park Avenue, 14th Floor, New
York, New York 10017; THE BANK OF NEW YORK, as trustee (defined herein,
together with its successors and any separate or co-trustee, as the "Trustee"),
having an address at 2 North LaSalle Street, Suite 1020, Chicago, IL 60602;
ARCHON GROUP, L.P., as servicer (defined herein together with its successors,
the "Servicer"), having an address at 600 E. Las Colinas Blvd., Suite 400,
Irving, Texas 75039; and ARCHON GROUP, L.P. as special servicer (defined herein
together with its successors, the "Special Servicer") having an address at 600
E. Las Colinas Blvd., Suite 400 Irving, Texas 75039.

                            RECITALS OF THE ISSUER

   The Issuer has duly authorized the execution and delivery of this Indenture
to provide for the issuance of its notes or other evidences of indebtedness
(herein individually called a "Note" and collectively called the "Notes") to be
issued as provided in this Indenture in the form of Secured Notes, Series
2002-SSCC, due May 31, 2010, in an aggregate principal amount equal to
$20,000,000.

   All things necessary to make the Notes, when executed by the Issuer and
authenticated and delivered by the Trustee hereunder and duly issued by the
Issuer, the valid and legally binding obligations of the Issuer enforceable in
accordance with their terms, and to make this Indenture a valid and legally
binding agreement of the Issuer, the Servicer, the Special Servicer and the
Trustee enforceable in accordance with its terms, except in each case as such
enforcement may be limited by bankruptcy, fraudulent conveyance or transfer,
insolvency, reorganization, receivership, moratorium or other similar laws
relating to or affecting the rights of creditors generally, and by general
principles of equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law), have been done.

                               GENERAL COVENANT

   IT IS HEREBY COVENANTED AND DECLARED that the Notes are to be authenticated
and delivered by the Trustee (or any Authenticating Agent), and the Collateral
is to be held and applied by the Trustee, subject to the further covenants,
conditions and trusts hereinafter set forth, and the Issuer does hereby
represent and warrant, and covenant and agree, to and with the Trustee, the
Special Servicer, and the Servicer, for the equal and proportionate benefit and
security of the Trustee for the benefit of the Holders of Notes as follows:

                                   ARTICLE I

                             DEFINITIONS AND OTHER
                       PROVISIONS OF GENERAL APPLICATION

   SECTION 1.1  DEFINITIONS.

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

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

      (b) all accounting terms not otherwise defined herein have the meanings
   assigned to them in accordance with generally accepted accounting principles
   in the United States;

      (c) the word "including" shall be construed to be followed by the words
   "without limitation";

      (d) section headings are for the convenience of the reader and shall not
   be considered in interpreting this Indenture or the intent of the parties
   hereto;

<PAGE>

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

      (f) the words "immediately available funds" shall have the same meaning
   as "same day funds" when used herein; and

   ACT has the meaning stated in Section 1.3.

   ADVANCE has the meaning stated in Section 7.16(a).

   ADVANCE INTEREST RATE has the meaning stated in Section 7.16(b).

   AFFILIATE of any Person means (i) any other Person which, directly or
indirectly, is in Control of, is controlled by or is under common control with,
such Person; (ii) any other Person who is a director or officer of (x) such
Person, (y) any subsidiary of such Person, or (z) any Person described in
clause (i) above, or (iii) any corporation, limited liability company or
partnership which has a director any Person described in clause (ii) above. For
purposes of this definition, one entity (the "controlled entity") is controlled
by another (the "controlling entity") if the controlling entity has the power,
directly or indirectly, to direct or cause the direction of the management and
policies of the controlled entity, whether through the ownership of voting
securities, by contract, or otherwise. A controlling entity shall be deemed to
have control of a controlled entity in the following circumstances: (i) if the
controlled entity is a corporation, the controlling entity owns more than
fifty-one percent (51%) of the shares of the controlled entity's capital stock
that have voting power to elect directors, including shares that have voting
power by reason of the occurrence of one or more conditions or contingencies;
(ii) if the controlled entity is a limited partnership, the controlling entity
both owns more than fifty-one percent (51%) of the equity interests in the
partnership and controls (in accordance with the balance of this definition)
the general partner of the partnership; (iii) if the controlling entity is a
limited liability company, the controlling entity either owns more than
fifty-one percent (51%) of the equity interests in the limited liability
company or controls (in accordance with the balance of this definition) a
majority of the managers or members of the limited liability company; or (iv)
if the controlling entity is a business trust, the controlling entity either
owns more than fifty-one percent (51%) of the equity interests in the business
trust or controls (in accordance with the balance of this definition) a
majority of the trustees of the business trust.

   AGENT MEMBERS has the meaning stated in Section 2.5(e).

   APPRAISAL means an appraisal of the Underlying Collateral prepared by an
independent appraiser, selected by the Servicer or Special Servicer, as
applicable, that is a MAI, and that, if the state in which the portion of the
property being appraised certifies or licenses appraisers, is certified or
licensed in such state, and who has a minimum of five years' experience in the
appraisal of properties comparable to the property being appraised.

   ASSIGNMENT OF CONTRACTS means the Assignment of Leases, Permits, and
Contracts entered into as of the date hereof between Issuer and FUR, as the
same may be amended or supplemented from time to time.

   ASSIGNMENT OF LEASES means the Assignment of Licenses and Rents entered into
as of the date hereof between Issuer and FUR, as the same may be amended or
supplemented from time to time.

   ASSIGNMENT OF MANAGEMENT AGREEMENT means the Assignment of Management
Agreement and Subordination of Management Fees entered into as of the date
hereof between Issuer and FUR, as the same may be amended or supplemented from
time to time.

   AUTHENTICATING AGENT means the Trustee and/or any Person authorized by the
Trustee to act on behalf of the Trustee to authenticate and deliver the Notes.
Written notice of such authorization shall be transmitted to the Issuer by the
Trustee in a timely manner.

                                      2

<PAGE>

   AUTHORIZED NEWSPAPER means, so long as the Notes are listed on a securities
exchange or an over-the-counter market and the rules of such exchange or market
so require, a newspaper published in the city in which such securities exchange
or market is located. If, because of temporary or permanent suspension of
publication or general circulation of any newspaper or for any other reason, it
is impossible or, in the opinion of the Trustee, impracticable to make
reasonable publication of any notice required herein in a newspaper published
in the city in which the securities exchange or market is located, "AUTHORIZED
NEWSPAPER" shall mean any publication in a newspaper of general circulation in
the United States.

   AUTHORIZED PERSON, when used with respect to the Issuer, has the meaning
stated in Section 3.4 and, when used with respect to the Servicer or Special
Servicer, means a Servicing Officer.

   BASE INTEREST RATE for the Notes has the meaning stated in Section 3.10(b).

   BUSINESS DAY means any day other than a Saturday or a Sunday or a legal
holiday on which national banks in the State of New York or Illinois are closed.

   CAPITAL EXPENDITURES means the amount expended for items capitalized under
GAAP, including expenditures for building improvements or major repairs,
leasing commissions and tenant improvements.

   CASH means coin or currency of the United States or immediately available
federal funds, including such funds delivered by wire transfer.

   CASH MANAGEMENT AGREEMENT means the cash management agreement dated as of
[          ], 2002 between FUR, The Bank of New York, and Issuer, as the same
may be amended or supplemented from time to time.

   CASUALTY ACCOUNT has the meaning stated in Section 10.7(b).

   CERCLA means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended.

   CLOSING DATE means [          ], 2002.

   CODE means the United States Internal Revenue Code of 1986, as amended, and
applicable Treasury Department regulations thereunder.

   COLLATERAL means the Indenture Collateral and the Underlying Collateral or
both, as appropriate in the context in which such term is used in this
Indenture.

   COLLATERAL ASSIGNMENT OF MORTGAGE means, that certain Collateral Assignment
of Leasehold Mortgage dated as of the date hereof, made by the Issuer in favor
of the Trustee, as the same may be amended or supplemented from time to time.

   COLLATERAL ASSIGNMENT OF UNDERLYING NOTES AND SECURITY DOCUMENTS means that
certain Collateral Assignment of Underlying Notes and Security Documents dated
as of the date hereof made by the Issuer in favor of the Trustee.

   COLLATERAL VALUE means as of any date with respect to U.S. Government
Securities theretofore delivered to the Trustee, the aggregate amount of
payments of principal of U.S. Government Securities and the predetermined and
certain income therefrom that will be paid or payable to the Servicer on behalf
of the Trustee on or before the second Business Day prior to each day on which
payments are due on the obligations in respect of which such U.S. Government
Securities were delivered, without consideration of any reinvestment of such
income, PLUS the face amount of any Cash, all as certified in writing to the
Trustee and Servicer (which certificate may be

                                      3

<PAGE>

conclusively relied upon by the Trustee and the Servicer absent manifest error)
by a recognized and reputable independent certified public accounting firm or
investment banking firm selected by the Issuer (unless reasonably disapproved
by the Trustee).

   COLLECTION ACCOUNT has the meaning stated in Section 3.5(a).

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

   CONFIDENTIAL INFORMATION has the meaning stated in Section 6.6.

   CORPORATE TRUST OFFICE means the principal office of the Trustee at which at
any particular time its corporate trust business shall be administered, which
as of the Closing Date is 2 North LaSalle Street, Suite 1020, Chicago, IL 60602.

   CUSTODIAN means The Bank of New York, and any successor custodian, as
custodian of the Global Notes for DTC under custody agreements, or any similar
successor agreement or agreements.

   DEBT SERVICE means for any period, all payments of interest, if any, payable
by the Underlying Borrowers under the terms of the Underlying Loans during such
period, excluding balloon payments of principal or accrued interest, if any,
due at maturity.

   DEBT SERVICE COVERAGE RATIO means the ratio obtained by dividing Net
Operating Income for the most recently completed Interest Period by Debt
Service for such Interest Period.

   DEBT SERVICE COVERAGE RATIO CALCULATION DATE means the date on which the
Issuer and/or the Underlying Borrowers deliver or are required to deliver
financial statements pursuant to the Mortgage and the Mezzanine Loan Agreement.

   DEFAULT RATE has the meaning stated in Section 3.11(d).

   DEPOSIT ACCOUNT BANK means The Bank of New York.

   DEPOSITARY means, with respect to the Global Notes, DTC or such other Person
as shall be designated as Depositary by the Issuer pursuant to Section 2.5(a)
of this Indenture.

   DILLARD'S EVENT means the commencement of construction of a mall in the
Little Rock metropolitan area with Dillard's Department Store as an anchor,
unless Dillard's, Inc. first renews its operating agreement with Park Plaza
Mall so that the operating agreement remains in effect through the maturity
date of the Mezzanine Loan.

   DOLLARS, U.S.$ and $ mean such coin or currency of the United States as, at
the time, shall be legal tender for the payment of public or private debts.

   DTC means The Depository Trust Company, a New York corporation.

   ELECTION FORM means a form sent to each common shareholder of First Union
pursuant to the Merger Agreement and on which such holder, if it elects to
receive Notes in the merger, may elect to exercise its Redemption Right with
respect to such Notes in accordance with Section 11.7 hereof and on which the
beneficial owner of such Notes shall make the certifications described in
Section 11.7(b) hereof.

                                      4

<PAGE>

   ELIGIBLE ACCOUNT means an identifiable account separate from all other funds
held by the holding institution that is either (i) an account or accounts
maintained with a federal or state-chartered depository institution or trust
company or (ii) a segregated trust account or accounts maintained with a
federal or state-chartered depository institution or trust company acting in
its fiduciary capacity, which may be the Trustee, and which, in the case of a
state-chartered depository institution or trust company is subject to
regulations substantially similar to 12 C.F.R. 9.10(b), and has a combined
capital and surplus of at least $500,000,000 and is subject to supervision or
examination by federal or state authority. An Eligible Account will not be
evidenced by a certificate of deposit, passbook or other instrument.

   ELIGIBLE INVESTMENTS has the meaning stated in Section 6.14.

   ENVIRONMENTAL INDEMNITY means the environmental indemnity provisions set
forth in the Underlying Loan Documentation.

   ENVIRONMENTAL LAWS means any present and future federal, state and local
laws, statutes, ordinances, rules, regulations, standards, policies and other
government directives or requirements, as well as common law, including but not
limited to CERCLA and the Resource Conservation and Recovery Act, that apply to
Underlying Borrowers and relate to Hazardous Materials or protection of human
health or the environment.

   EVENT has the meaning stated in Section 6.1(a)(viii).

   EVENT OF DEFAULT has the meaning stated in Section 5.1.

   EXCHANGE ACT means the Securities Exchange Act of 1934, as amended from time
to time, any successor statute thereto, and the rules and regulations of the
Commission promulgated thereunder from time to time.

   EXIT FEE means any Exit Fee, as defined in the Mezzanine Note, received by
the Issuer in connection with a repayment of the Mezzanine Note.

   EXCULPATED PERSONS has the meaning stated in Section 1.14(a).

   FHLMC means Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of
the Emergency Home Finance Act of 1970, as amended, or any successor thereto.

   FISCAL AGENT has the meaning stated in Section 3.6(b).

   FNMA means the Federal National Mortgage Association, a federally chartered
and privately owned corporation organized and existing under the Federal
National Mortgage Association Charter Act or any successor thereto.

   FORECLOSED COLLATERAL means any Collateral the ownership of which is
acquired by the Special Servicer in the name of the Trustee or its nominee for
the benefit of the Holders by foreclosure or acceptance of a deed in lieu of
foreclosure or otherwise.

   FORECLOSURE PROCEEDS means proceeds, net of any related expenses of the
Servicer, the Special Servicer, or the Trustee, received in respect of any
Foreclosed Collateral prior to the final liquidation of the Foreclosed
Collateral.

   FUR means First Union Real Estate Equity and Mortgage Investments, Inc., an
Ohio business trust.

   GGC means Gotham Golf Corp., a Delaware corporation and wholly owned
subsidiary of GGP.

                                      5

<PAGE>

   GGP means Gotham Partners, L.P., a Delaware limited partnership.

   GOVERNMENTAL AUTHORITY means any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.

   GLOBAL NOTE has the meaning set forth in Section 2.3.

   GROSS REVENUE means, for any period and all or any portion of the
Collateral, revenue derived from the ownership and operation of such Collateral
from whatever source, including but not limited to, rents (without giving
effect to straight-lining of rents), but excluding sales, use and occupancy or
other taxes on receipts required to be accounted for by the Underlying
Borrowers or Issuer to any governmental authority, non-recurring revenues,
refunds and uncollectible accounts, proceeds of casualty insurance and any
other insurance or similar awards (other than business interruption or other
loss of income insurance), and any disbursements to the Underlying Borrowers or
Issuer of any escrow funds established by the Mortgage Security Documents.

   HAZARDOUS MATERIALS means petroleum and petroleum products and compounds
containing them, including gasoline, diesel fuel and oil; explosives; flammable
materials; radioactive materials; polychlorinated biphenyls ("PCBs") and
compounds containing them; lead and lead-based paint; asbestos or
asbestos-containing materials in any form that is or could become friable;
underground or above-ground storage tanks, whether empty or containing any
substance; any substance the presence of which on an Underlying Property is
prohibited by any federal, state or local authority; any substance that
requires special handling; and any other material or substance now or in the
future defined as a "hazardous substance", "hazardous material", "hazardous
waste", "toxic substance", "toxic pollutant", "contaminant", or "pollutant"
within the meaning of any Environmental Law.

   HOLDER means, with respect to any Note, the Person in whose name such Note
is registered in the Register.

   HOLDOVER ACCOUNT has the meaning stated in Section 3.5(g).

   INDENTURE has the meaning stated in the introductory paragraph hereto.

   INDENTURE COLLATERAL means, collectively, the Underlying Loans and all
monies, accounts, instruments, or other property constituting a part of the
security for the Holders of Notes for the performance by the Issuer of its
obligations hereunder and conveyed to the Trustee in trust for the benefit of
the Holders of Notes, the proceeds of the foregoing, and all amounts in the
Payment Account, Collection Account, Mortgage Deposit Account, Mezzanine
Deposit Account, the Redemption Account, the REO Property Account, or any other
account established hereunder or under the Cash Management Agreement or the
Mezzanine Cash Management Agreement.

   INDENTURE SECURITY DOCUMENTS means the Collateral Assignment of Mortgage,
the Collateral Assignment of Underlying Notes and Security Documents, the
Notes, the Indenture, the financing statements now or hereafter executed in
connection herewith and any and all other agreements, certificates (including,
without limitation, Officer's Certificates), instruments or documents executed
by the Issuer evidencing or securing the Notes.

   INDEPENDENT when used with respect to any specified Person means such a
Person who (i) does not have any direct financial interest or material indirect
financial interest in the Issuer, any Underlying Borrower, the Trustee, the
Fiscal Agent, the Special Servicer or the Servicer or any Holder of a Note or
in any of their respective Affiliates and (ii) is not an officer, employee,
promoter, underwriter, trustee, partner, director or Person performing similar
functions of or for the Issuer, the Trustee, the Fiscal Agent, the Special
Servicer or the Servicer or any Holder of a Note or any of their respective
Affiliates.

                                      6

<PAGE>

   INSURANCE PROCEEDS means amounts, awards or payments payable to the Issuer
or Underlying Borrowers in respect of all or any part of the Collateral on the
Underlying Properties in connection with the damage or destruction thereof
(after the deduction therefrom and payment to the Issuer or Underlying
Borrowers, respectively, of any and all reasonable expenses incurred by the
Issuer or Underlying Borrowers in the recovery thereof, including all
attorneys' fees and expenses, the fees of insurance experts and adjusters and
the costs incurred in any litigation or arbitration with respect to such damage
or destruction).

   INTEREST PERIOD means each period that runs, with respect to any Payment
Date in July, from and including the first day in the immediately preceding
January or, with respect to any Payment Date in January, from and including the
first day in the immediately preceding July, in either case to and excluding
the first day of the calendar month containing such Payment Date; PROVIDED that
the first Interest Period shall commence on the Closing Date and end on (but
exclude) the first day of January, 2003 and the final Interest Period shall end
on (but exclude) the Maturity Date or the Redemption Date (other than in
connection with a Redemption with respect to which the Issuer has made a
designation pursuant to Section 11.7(d)), as applicable.

   INTERESTED PERSON means, as of any date of determination, the Issuer, any
Underlying Borrower, the Servicer, the Special Servicer, the Manager, the
Trustee, the Fiscal Agent (if any), any Holder or, in each such case, any of
its Affiliates.

   ISSUER has the meaning stated in the introductory paragraph hereto.

   ISSUER REQUEST or ISSUER ORDER means a written request or order signed in
the name of the Issuer by any Authorized Person.

   LEASE shall mean any lease, sublease, further sublease, license, occupancy
agreement or other agreement existing on the date hereof or hereafter entered
into by an owner of an Underlying Property permitting the use or enjoyment of
any part of the Underlying Property by another Person, and every modification,
amendment, or extension relating thereto.

   LIEN means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or otherwise), preference, priority
or other security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement, the filing of any financing statement under the Uniform
Commercial Code or comparable law of any jurisdiction in respect of any of the
foregoing and a mechanics' or materialmens' lien).

   LIQUIDATED COLLATERAL means Collateral that has been liquidated and, with
respect to which, the Special Servicer has determined that all amounts which it
expects to recover from or on account of such Collateral have been recovered.

   LIQUIDATION EXPENSEs means reasonable and customary expenses (other than
expenses actually covered by insurance and reimbursed by the insurer to the
Servicer, the Special Servicer or the Trustee) incurred by the Servicer, the
Special Servicer or the Trustee in connection with the liquidation of the
Collateral, such expenses including, without limitation, legal fees and
expenses, appraisal fees, the costs of any environmental reports, receivership
fees, brokerage fees, trustee and co-trustee fees, if any. Liquidation Expenses
shall not include any expenses actually incurred by the Trustee, the Special
Servicer or the Servicer that were subsequently reimbursed to the Servicer, the
Special Servicer or the Trustee or that were netted against income from the
Foreclosed Collateral and were considered in the calculation of the amount of
Foreclosure Proceeds pursuant to the definition thereof.

   LIQUIDATION FEE means a fee payable to the Special Servicer equal to 1% of
the Net Liquidation Proceeds relating to each Liquidated Collateral, provided
that the aggregate of all Liquidation Fees paid hereunder shall not exceed
$100,000.

                                      7

<PAGE>

   LIQUIDATION PROCEEDS means amounts received by the Servicer or the Special
Servicer in connection with the liquidation of the Collateral, whether through
judicial foreclosure, sale or otherwise, other than amounts required to be paid
to the Issuer or an Underlying Borrower pursuant to law or the terms of this
Indenture, the Mortgage, the Mezzanine Loan Agreement, or the other Security
Documents.

   LOAN EVENT means (i) the Issuer has not made one semi-annual payment of
interest on the Notes; (ii) the Issuer has defaulted in its obligation to make
the payment of principal due on the Maturity Date or to pay the Redemption
Price on a Redemption Date; (iii) the Servicer has received notice that the
Issuer or any Underlying Borrower has become the subject of any bankruptcy,
insolvency or similar proceeding, admitted in writing its inability to pay its
debts as they come due or made an assignment for the benefit of creditors; (iv)
the Servicer has received notice of a foreclosure or threatened foreclosure of
any lien on all or any portion of the Collateral; (v) the Issuer has expressed
to the Servicer that the Issuer is unable to pay the Notes in a timely manner,
or in the judgment of the Servicer (consistent with the Servicing Standards),
an Event of Default (other than as set forth in the foregoing clauses) is
imminent and, in either such case, the Special Servicer will be required to
engage in modification negotiations or other typical special servicing
activities in connection therewith; or (vi) an Event of Default of which the
Servicer has notice; PROVIDED that a Loan Event will cease (a) with respect to
the circumstances described in clause (i) above, when the Issuer has brought
the Notes current and thereafter made the next semi-annual payment in full when
due, including pursuant to a workout of the Mortgage Loan, the Mezzanine Loan
and the terms of the Notes, (b) with respect to the circumstances described in
clauses (iii), (iv) and (v) above, when such circumstances cease to exist in
the good faith judgment of the Servicer, or (c) with respect to the
circumstances described in clause (vi) above, when such Event of Default is
cured; as long as, in the case of each of clauses (a), (b) and (c) of this
proviso, at that time no other circumstance exists that would constitute a Loan
Event.

   MAI means a Member of the Appraisal Institute.

   MAJORITY HOLDERS, with respect to any vote, request, authorization,
direction, consent or similar Act, means the Holders of more than 50% in
aggregate principal amount of the Outstanding Notes, PROVIDED that if (i) the
Holders of not less than 66 2/3% in aggregate principal amount of the
Outstanding Notes (regarding as not being Outstanding, for the purposes of this
clause (i) only, any Notes known to a Responsible Officer of the Trustee to be
owned by GGP, GGC, Gotham Partners, L.P., or any other Affiliate of the Issuer,
with the exception of any such Notes that are pledged in good faith to a Person
that is not the Issuer or an Affiliate of the Issuer) shall make or provide a
contrary vote, request, authorization, direction, consent or similar Act, and
(ii) the Holders described in clause (i) above hold not less than 25% in
aggregate principal amount of the Outstanding Notes, then such contrary Act
shall be treated as the Act of the Majority Holders.

   MANAGEMENT FEE means, as to any Underlying Property acquired by the Special
Servicer by foreclosure, a fee payable out of the Collateral to the Manager for
managing such property while it is owned by or on behalf of the Trustee, which
shall be reasonable and customary in the market in which such property is
located.

   MANAGER has the meaning stated in Section 7.9(a).

   MATURITY DATE means, with respect to any Notes, the date on which the
principal of such Notes shall become due and payable as herein provided,
whether at the Scheduled Maturity Date, by acceleration or otherwise, but not
including redemption.

   MERGER AGREEMENT means the Agreement and Plan of Merger and Contribution
dated February 13, 2002, by and among FUR, First Union Management, Inc., a
Delaware corporation, GGP, Gotham Golf Partners, L.P., a Delaware limited
partnership, GGC, GGC sub Inc., a Delaware corporation and a wholly owned
subsidiary of GGC, Florida Golf Properties, Inc., a Florida corporation and the
sole general partner of GGP, and Florida Golf Associates, L.P., a Virginia
limited partnership.

                                      8

<PAGE>

   MEZZANINE CASH MANAGEMENT AGREEMENT means the mezzanine cash management
agreement dated as of [          ], 2002 between Park Plaza 1, The Bank of New
York and Issuer, as the same may be amended or supplemented from time to time.

   MEZZANINE DEBT SERVICE SUB ACCOUNT has the meaning given to the term "Debt
Service Sub Account" in the Mezzanine Cash Management Agreement.

   MEZZANINE DEPOSIT ACCOUNT has the meaning given to the term "Deposit
Account" in the Mezzanine Cash Management Agreement.

   MEZZANINE EVENT OF DEFAULT has the meaning given to the term "Event of
Default" in the Mezzanine Loan Agreement.

   MEZZANINE EXPENSES SUB ACCOUNT has the meaning given to the term "Expenses
Sub Account" in the Mezzanine Cash Management Agreement.

   MEZZANINE LOAN means the indebtedness advanced to Park Plaza 1 by Issuer
pursuant to the Mezzanine Loan Agreement secured by the Mezzanine Pledge
Agreement and the other Mezzanine Security Documents and evidenced by the
Mezzanine Promissory Note dated as of [          ], 2002 made by Park Plaza 1
to the Issuer.

   MEZZANINE LOAN AGREEMENT means the Mezzanine Loan Agreement dated as of
[          ], 2002, by and between Park Plaza 1 and Issuer, as the same may be
amended or supplemented from time to time.

   MEZZANINE NOTE means the Mezzanine Promissory Note dated as of [          ],
2002 made by Park Plaza 1 to the Issuer evidencing the Mezzanine Loan and
secured by the Mezzanine Pledge Agreement.

   MEZZANINE PLEDGE AGREEMENT means the Pledge and Security Agreement dated as
of [          ], 2002 by and between Park Plaza 1 and Issuer, as the same may
be amended or supplemented from time to time.

   MEZZANINE RESIDUAL SUB ACCOUNT has the meaning given to the term "Residual
Sub Account" in the Mezzanine Cash Management Agreement.

   MEZZANINE SECURITY DOCUMENTS means collectively, the Mezzanine Loan
Agreement, the Mezzanine Note, the Mezzanine Subordination of Management
Agreement, the Mezzanine Cash Management Agreement, the Mezzanine Pledge
Agreement and any and all other documents and agreements executed in connection
with the Mezzanine Loan, all as the same may be modified, supplemented,
consolidated, extended and reinstated from time to time.

   MEZZANINE SUBORDINATION OF MANAGEMENT AGREEMENT means the Subordination of
Management Agreement and of Management Fees entered into of even date herewith
by and between Issuer and Park Plaza 1 and acknowledged by the Property
Manager, as the same may be amended or supplemented from time to time.

   MORTGAGE means the Leasehold Mortgage, Security Agreement and Fixture Filing
dated as of [          ], 2002, granting the Issuer a first priority mortgage
lien on the FUR's interest in the Property (as defined therein), as the same
may be amended or supplemented from time to time.

   MORTGAGE DEBT SERVICE SUB ACCOUNT has the meaning given to the term "Debt
Service Sub Account" in the Cash Management Account.

   MORTGAGE DEPOSIT ACCOUNT has the meaning given to the term "Deposit Account"
in the Cash Management Account.

                                      9

<PAGE>

   MORTGAGE LOAN means the indebtedness evidenced by the Mortgage Promissory
Note dated as of [          ], 2002 made by FUR to Issuer and secured by the
Mortgage and the other Mortgage Security Documents.

   MORTGAGE NOTE means the Mortgage Promissory Note dated as of [          ],
2002 made by FUR to Issuer evidencing the Mortgage Loan and secured by the
Mortgage.

   MORTGAGE RESIDUAL SUB ACCOUNT has the meaning given to the term "Residual
Sub Account" in the Cash Management Agreement.

   MORTGAGE SECURITY DOCUMENTS means the Mortgage, the Mortgage Note, the
Assignment of Leases, the Assignment of Licenses, the Subordination of
Management Agreement, the Cash Management Agreement, the financing statements
now or hereafter executed in connection therewith and any and all other
agreements, certificates (including, without limitation, Officer's
Certificates), instruments or documents executed by the Underlying Borrowers
evidencing or securing the Mortgage Loan.

   MORTGAGE SUBORDINATION OF MANAGEMENT AGREEMENT means the Assignment of
Management Agreement and Subordination of Management Fees entered into of even
date herewith by and between Issuer, FUR and Property Manager, as the same may
be amended or supplemented from time to time.

   MORTGAGE TAXES AND INSURANCE SUB ACCOUNT has the meaning given to the term
"Taxes and Insurance Sub Account" in the Cash Management Account.

   NET CASH FLOW, with respect to a specified period and with respect to all or
a portion of the Collateral, means, for any period, the excess, if any, of
Gross Revenue for the Collateral (or relevant portion thereof) determined for
such period over Operating Expenses for the Collateral (or relevant portion
thereof) determined for such period.

   NET OPERATING INCOME means Gross Revenue minus Operating Expenses.

   NET LIQUIDATION PROCEEDS means the Liquidation Proceeds received with
respect to the Collateral net of Liquidation Expenses incurred with respect
thereto.

   NEW NOTE has the meaning stated in Section 3.9.

   NONRECOVERABLE ADVANCE means any portion of an Advance proposed to be made
or previously made which has not been previously reimbursed to the Servicer or
the Special Servicer, as applicable, and which, in the good faith business
judgment of the Servicer or the Special Servicer, as applicable, will not or,
in the case of a proposed Advance, would not be ultimately recoverable from
late payments, Insurance Proceeds, Net Liquidation Proceeds and other
collections on or in respect of the Issuer's or Underlying Borrowers'
obligations under the Security Documents. The judgment or determination by the
Servicer or the Special Servicer, as applicable, that it has made a
Nonrecoverable Advance or that any proposed Advance, if made, would constitute
a Nonrecoverable Advance shall be evidenced, in the case of the Servicer, by a
certificate of a Servicing Officer of the Servicer delivered to the Trustee and
the Issuer, and in the case of the Special Servicer, by a certificate of a
Servicing Officer of the Special Servicer delivered to the Servicer, the
Trustee and the Issuer, which in each case sets forth such judgment or
determination and the procedures and considerations of the Servicer or the
Special Servicer, as applicable, forming the basis of such determination
(including, but not limited to information selected by the Person making such
judgment or determination in its good faith discretion, such as related income
and expense statements, rent rolls, occupancy status, property inspection
reports, the written responses to any Servicer or Special Servicer inquiries
and third party engineering reports, environmental surveys or other third-party
reports). Notwithstanding the above, the Servicer shall be entitled to rely
upon any determination by the Special Servicer that any Advance previously made
is a Nonrecoverable Advance or that any proposed Advance would, if made,
constitute a Nonrecoverable Advance; notwithstanding the above, the Special
Servicer shall be entitled

                                      10

<PAGE>

to rely upon any determination by the Servicer that any Advance previously made
is a Nonrecoverable Advance or that any proposed Advance would, if made,
constitute a Nonrecoverable Advance.

   NOTE means any physical note issued hereunder, including, without
limitation, any Global Notes; PROVIDED, HOWEVER, that with respect to any
Global Note, the term "NOTE" also includes, when appropriate in context, any
interest in any Global Note in the authorized denomination as provided herein
of any Person as shown on the records of the Depositary.

   NOTE INDEBTEDNESS means the indebtedness created pursuant to this Indenture,
evidenced by the Notes and secured by the Indenture Collateral.

   NOTICE OF DEFAULT has the meaning stated in Section 5.1.

   NRSRO means a nationally recognized statistical rating organization.

   OFFICER'S CERTIFICATE means a certificate signed on behalf of the Issuer by
an Authorized Person.

   OPERATING EXPENSES means, for any period and all or any portion of the
Collateral, all operating expenses (but not Capital Expenditures) actually
incurred by or charged by or to the Issuer or Underlying Borrowers
(appropriately prorated for any expenses that, although actually incurred in a
particular period, also relate to other periods) with respect to the ownership,
operation, leasing and management of such Collateral or the related Underlying
Properties in the ordinary course of business, determined in accordance with
GAAP, including any of the following, to the extent applicable: (1) personal
property taxes and real estate taxes; (2) sales taxes or any tax on rents; (3)
wages, salaries, payroll taxes and employee benefits; (4) costs of utility
services; (5) maintenance, repair and custodial costs; (6) premiums payable for
insurance carried on or with respect to such Underlying Properties; (7) office
supplies, other administrative expenses and professional fees; (8) costs of
advertising and marketing for such Underlying Properties; (9) costs of
telephone service; (10) costs of garbage removal; and (11) any compensation,
fees or reimbursements paid to a property manager.

   OPINION OF COUNSEL means, when required to be delivered by the Issuer, a
written opinion of counsel selected by the Issuer, which shall be delivered at
the expense of the Issuer, and when required to be delivered by any other
Person, a written opinion of counsel who may be regular counsel to such Person,
reasonably acceptable to the Trustee and to any other party hereto to whom such
opinion is to be delivered pursuant to the terms of this Indenture.

   OUTSTANDING, when used with respect to the Notes, means, as of the date of
determination, any Note theretofore authenticated and delivered under this
Indenture (including, as of such date, all Notes represented by Global Notes
authenticated and delivered under this Indenture), except the reduced portion
or portions of any Global Note, as such reduction or reductions shall have been
endorsed on such Global Note by the Trustee as provided herein and EXCEPT:

      (i) Notes theretofore canceled by the Trustee or delivered to the Trustee
   for cancellation (other than any Note as to which any amount that has become
   due and payable in respect thereof has not been paid in full);

      (ii) Notes for the payment or redemption or repurchase of which Cash
   and/or Eligible Investments in the necessary amount have been deposited with
   the Trustee in trust for the Holders of such Notes in accordance with this
   Indenture (other than any such Notes that are the subject of a Redemption
   with respect to which the Issuer has made a designation pursuant to Section
   11.7(d)); PROVIDED that if such Notes are to be redeemed or repurchased,
   notice of such redemption or repurchase has been duly given pursuant to this
   Indenture or provision therefor satisfactory to the Trustee and the Servicer
   has been made; and

      (iii) Notes in exchange for or in lieu of which other Notes have been
   authenticated and delivered pursuant to this Indenture, other than any such
   Notes in respect of which there shall have been presented to

                                      11

<PAGE>

   the Trustee proof satisfactory to it that such Notes are held by a bona fide
   purchaser in whose hands such Notes are valid obligations of the Issuer;

PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
principal amount of the Outstanding Notes are present at a meeting of Holders
for quorum purposes or have given any request, demand, authorization, vote,
direction, notice, consent or waiver hereunder, any Notes owned by the Issuer
shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, vote, direction, notice, consent or waiver or
upon any such determination as to the presence of a quorum, only Notes which a
Responsible Officer of the Trustee knows to be so owned shall be so
disregarded. Notes so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the sole satisfaction of
the Trustee the pledgee's right to act with respect to such Notes and that the
pledgee is not the Issuer.

   PARK PLAZA 1 means Park Plaza 1, L.L.C., a Delaware limited liability
company.

   PARK PLAZA 2 means Park Plaza 2, L.L.C., a Delaware limited liability
company.

   PARK PLAZA MALL means Park Plaza Mall, L.L.C., a Delaware limited liability
company.

   PAYMENT ACCOUNT means the segregated trust account or accounts established
by the Trustee pursuant to Section 3.5(a)(ii).

   PAYMENT DATE means the third Business Day of each July and January.

   PAYMENT DATE STATEMENT means a statement prepared by the Servicer in respect
of the payments that shall be made on the next Payment Date setting forth:

      (a) the amount of any Advances made by the Servicer or the Special
   Servicer during the related Interest Period;

      (b) the aggregate amount of prepayments of principal on the Underlying
   Loans, if any, made during the related Interest Period;

      (c) any amounts received by the Issuer during the related Interest Period
   on account of any Exit Fee or late charges under the Mortgage Security
   Documents and Mezzanine Security Documents, as described in Section 3.10(c).

      (d) to the best of the Servicer's knowledge, whether any Loan Event or
   Event of Default has occurred during the related Interest Period;

      (e) any portion of the Collateral upon which the Special Servicer has
   foreclosed;

      (f) whether the Issuer, FUR, or Park Plaza 1 has declared bankruptcy, to
   the extent known to the Servicer;

      (g) the amount of proceeds from any liquidation or other disposition of
   Foreclosed Collateral, if any, received by the Special Servicer during the
   related Interest Period;

      (h) the aggregate amount of the Servicing Fee, Special Servicing Fee,
   Liquidation Fee, Work-out Fee and any other compensation paid or payable to
   the Servicer or Special Servicer during the related Interest Period; and

      (i) the balance in the Collection Account.

   PERMITTED EXCEPTIONS means any liens on the Underlying Collateral the
existence of which is permitted by the terms of the Underlying Loan
Documentation.

                                      12

<PAGE>

   PERSON means an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.

   PREDECESSOR NOTE of any particular Note means every previous Note evidencing
all or a portion of the same indebtedness as that evidenced by such particular
Note.

   PRIME RATE means the prime rate as published in the Wall Street Journal. If
the Wall Street Journal has temporarily or permanently ceased publication, the
Prime Rate will be the prime rate as published in an Authorized Newspaper
selected by the Trustee.

   PROCEEDS shall mean Insurance Proceeds and/or Taking Proceeds, as applicable.

   PROPERTY MANAGER means each of Landau & Heyman of Arkansas, Inc., an
Arkansas corporation, and Cornerstone Properties, Inc., an Indiana corporation,
and their permitted successors and assigns.

   REDEMPTION ACCOUNT has the meaning stated in Section 3.5(h).

   REDEMPTION AGENT means a Person designated by the Issuer for the purpose of
receiving Election Forms, making payments to the Holders pursuant to Section
11.7, and carrying out such further duties in relation to the Holders'
Redemption Right as are specified in Section 11.7 or shall be agreed between it
and the Issuer. The name and address of the Redemption Agent shall be printed
on the Election Form.

   REDEMPTION DATE means the date fixed for such redemption by or pursuant to
this Indenture in accordance with Article XI.

   REDEMPTION PRICE means the price at which such Note is to be redeemed
calculated pursuant to Article XI.

   REDEMPTION RIGHT has the meaning stated in Section 11.7(a).

   REGISTER has the meaning stated in Section 3.6(a).

   REGISTRAR has the meaning stated in Section 3.6(a).

   REGISTRATION STATEMENT means any registration statement on Form S-4 filed
with the Commission by the Issuer in respect of the Notes, including any
exhibits thereto, any information incorporated by reference therein, and any
amendments thereto.

   REGULAR RECORD DATE for a Payment Date means the day which is five (5)
Business Days immediately preceding such Payment Date.

   RELEASE PROPERTY has the meaning stated in Section 4.1.

   REO PROPERTY ACCOUNT means an account held in trust of the Special Servicer,
on behalf of the Trustee, for the benefit of the Holders for the deposit
therein of all funds collected and received from any Foreclosed Collateral.

   RESPONSIBLE OFFICER means any officer of the Trustee or the Fiscal Agent, as
the case may be, in the Corporate Trust Office and also means, with respect to
a particular corporate trust matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.

                                      13

<PAGE>

   SCHEDULED MATURITY DATE means May 31, 2010. If the Scheduled Maturity Date
shall occur on a date that is not a Business Day, the applicable Scheduled
Maturity Date shall be the next succeeding Business Day and no further interest
or other payment shall be due any Holder as a result of such adjustment.

   SECURITIES ACT means the Securities Act of 1933, as amended from time to
time, any successor statute thereto, and the rules and regulations of the
Commission promulgated thereunder from time to time.

   SECURITY DOCUMENTS means the Indenture Security Documents, the Mortgage
Security Documents and the Mezzanine Security Documents.

   SERVICER has the meaning stated in the introductory paragraph hereto.

   SERVICER DEFAULT has the meaning stated in Section 7.23.

   SERVICING FEE means an amount equal to $1,000 payable to the Servicer from
the Collection Account on the first Business Day of each month.

   SERVICING OFFICER means any officer or employee of the Servicer or the
Special Servicer, as applicable, involved in, or responsible for, the
administration and servicing of the Note Indebtedness and the Underlying Loans
and whose name and specimen signature appear on a written list of servicing
officers furnished to the Trustee on the Closing Date by the Servicer or the
Special Servicer, as applicable, as such list may from time to time be amended
by the Servicer or the Special Servicer, as applicable.

   SERVICING STANDARDS has the meaning stated in Section 7.1.

   SPECIAL SERVICER has the meaning stated in the introductory paragraph hereto.

   SPECIAL SERVICING FEE means an amount payable to the Special Servicer from
the Collection Account on the first Business Day of each month after the
occurrence of a Loan Event and while such Loan Event is continuing, equal to
$4,167.

   SHAREHOLDER NOTE PURCHASE RIGHT has the meaning set forth in the Merger
Agreement.

   TAKING shall mean a temporary or permanent taking by a government or
political subdivision thereof or by a governmental agency, as the result or in
lieu or in anticipation of the exercise of the right of condemnation or eminent
domain, of all or any part of any Underlying Property, or any interest therein
or right accruing thereto, including any right of access thereto or any change
of grade affecting any Underlying Property or part thereof.

   TAKING PROCEEDS shall mean amounts, awards or payments payable to the
Underlying Borrowers or the Issuer in respect of all or any part of the
Underlying Properties in connection with the Taking thereof (after the
deduction therefrom and payment to the Underlying Borrowers or the Issuer,
respectively, of any and all reasonable expenses incurred by the Underlying
Borrowers or the Issuer in the recovery thereof, including all attorneys' fees
and expenses and the costs incurred in any litigation or arbitration with
respect to such Taking).

   TAXES AND OTHER CHARGES means, collectively, Taxes and Other Charges (as
each term is defined in the Mortgage).

   TERMINATION FEE means an amount payable to the Servicer prior to any
discharge of this Indenture pursuant to Section 4.2 that occurs prior to the
first anniversary of the Closing Date, equal to $10,000 less five-sixths of the
aggregate of all Servicing Fees paid to it hereunder on or prior to such date.

                                      14

<PAGE>

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

   TRUSTEE means The Bank of New York, until a successor Person or successor
Persons shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter "TRUSTEE" shall mean or include each Person who is
then a Trustee hereunder.

   TRUSTEE FEE means an amount payable on each Payment Date from the Payment
Account equal to $4,000.

   UNDERLYING BORROWER means each of FUR and Park Plaza 1; and UNDERLYING
BORROWERS means FUR and Park Plaza 1, collectively.

   UNDERLYING COLLATERAL means (i) the Mortgage Security Documents and all
monies, accounts, instruments and other property pledged to the Issuer or in
which a lien or security interest has been granted to the Issuer as security
for the Mortgage Loan pursuant to any of the Mortgage Security Documents and
(ii) the Mezzanine Security Documents and all monies, accounts, instruments and
other property pledged to the Issuer or in which a lien or security interest
has been granted to the Issuer as security for the Mezzanine Loan pursuant to
any of the Mezzanine Security Documents and all proceeds of the foregoing.

   UNDERLYING LOAN means each of the Mortgage Loan and the Mezzanine Loan.

   UNDERLYING LOAN DOCUMENTATION means, collectively, the Mortgage and the
Mezzanine Loan Agreement.

   UNDERLYING PROPERTIES means, collectively, the Premises (as defined in the
Mezzanine Loan Agreement) and the Property (as defined in the Mortgage).

   U.S. GOVERNMENT SECURITIES means securities evidencing an obligation to pay
principal and interest in a full and timely manner that are (y) direct
obligations of the United States for the payment of which its full faith and
credit is pledged, or (z) obligations of a Person controlled or supervised by
and acting as an agency or instrumentality of and guaranteed as a full faith
and credit obligation by the United States, which in either case are not
callable or redeemable at the option of the issuer thereof (including a
depositary receipt issued by a bank (as defined in Section 3(a)(2) of the
Securities Act) as custodian with respect to any such securities or a specific
payment of principal of or interest on any such securities held by such
custodian for the account of the holder of such depositary receipt; PROVIDED
that (except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depositary receipt from
any amount received by the custodian in respect of the securities or the
specific payment of principal of or interest on the securities evidenced by
such depository receipt).

   WORK-OUT FEE means, with respect to any Loan Event that is terminated
following resolution of such Loan Event by a written agreement negotiated by
the Special Servicer, a fee equal to 1% of any amounts paid to or for the
benefit of the Holders pursuant to such agreement if and until another Loan
Event occurs, provided that the aggregate of all Work-Out Fees paid hereunder
shall not exceed $100,000 for each Loan Event that is terminated pursuant to a
written agreement negotiated by the Special Servicer.

   SECTION 1.2  FORM OF DOCUMENTS DELIVERED TO TRUSTEE.

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

                                      15

<PAGE>

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

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

   SECTION 1.3  ACTS OF HOLDERS.

   (a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by the Holders
(i) may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent
duly appointed in writing or (ii) may be embodied in and evidenced by the
record of Holders voting in favor thereof in person at any meeting of Holders
duly called and held in accordance with the provisions of Article XIII. Except
as herein otherwise expressly provided, such action will become effective when
such instrument or instruments of record are delivered to the Trustee, and,
where it is expressly required by this Indenture, to the Issuer. Such
instrument or instruments and any such record (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "ACT" of the
Holders signing such instrument or instruments and so voting at any such
meeting. Proof of execution of any such instrument or of a writing appointing
any such agency or proxy, or of the holding by any Person of a Note, shall be
sufficient for any purpose of this Indenture or any other Security Document and
(subject to Section 6.1) conclusive in favor of the Servicer, Trustee and the
Issuer if made in the manner provided in this Section 1.3. The record of any
meeting of the Holders of Notes shall be proved in the manner provided in this
Section 1.3. With respect to authorization to be given or taken by the Holders
of Notes, the Trustee shall be authorized to follow the written directions or
the vote of the Majority Holders unless any greater or lower percentage is
required or permitted by the terms hereof.

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

   (c) The Issuer may, in the circumstances permitted by the Trust Indenture
Act, fix any day as the record date for the purpose of determining the Holders
entitled to give or take any request, demand, authorization, direction, notice,
consent, waiver or other action, or to vote on any action, authorized or
permitted to be given or taken by Holders. If not set by the Issuer prior to
the first solicitation of a Holder made by any Person in respect of any such
action, or, in the case of any such vote, prior to such vote, the record date
for any such action or vote shall be the 30th day (or, if later, the date of
the most recent list of Holders required to be provided pursuant to Section
3.7(a)) prior to such first solicitation or vote, as the case may be. With
regard to any record date, only the Holders on such date (or their duly
designated proxies) shall be entitled to give or take, or vote on, the relevant
action.

   (d) The principal amount and identification numbers of Notes held by any
Person, and the date of holding the same, shall be proved by the Register for
the Notes.

                                      16

<PAGE>

   (e) Any request, demand, authorization, direction, notice, consent,
election, declaration, waiver or other act of the Holder of any Note shall bind
every future Holder of the same Note and the Holder of every Note issued upon
the transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Servicer, Special
Servicer, Trustee or Issuer in reliance thereon, whether or not notation of
such action is made upon such Note.

   SECTION 1.4  COMPUTATION OF PRINCIPAL AMOUNT.

   Whenever this Indenture states that any action may be taken by a specified
percentage of Holders, such statement shall, unless otherwise specified, mean
that such action may be taken by the Holders of such specified percentage of
the aggregate principal amount of the Outstanding Notes to which such vote
relates.

   SECTION 1.5  NOTICES.

   Any notice, direction, request, consent, election, waiver or demand which by
any provision of this Indenture is required or permitted to be given may be
served by national overnight courier service or may be given or served by
facsimile only during business hours (as determined at the place of delivery)
(9 a.m.-5 p.m.) of the addressee on a Business Day (with a confirmation copy
sent by certified or registered mail, return receipt requested, or by national
overnight courier) or by certified or registered mail, in each case return
receipt requested, postage prepaid, to the address or addresses set forth below
or such other address or addresses in the continental United States as such
Person may designate in accordance with the provisions hereof.

   If to the Issuer, addressed to it at:

      Southwest Shopping Centers Co. II, L.L.C.
      c/o First Union Real Estate Equity and Mortgage Investments
      125 Park Avenue, 14th Floor
      New York, New York 10017
      Attention:
      Telephone:
      Facsimile:

   if to the Servicer, addressed to it at:

      Archon Group, L.P.
      600 E. Las Colinas Blvd., Suite 400
      Irving, Texas 75039
      Attention: Michael Forbes
      Telephone: (972) 368-2350
      Facsimile: (972) 368-3499

   if to the Special Servicer, addressed to it at:

      Archon Group, L.P.
      600 E. Las Colinas Blvd., Suite 400
      Irving, Texas 75039
      Attention: Michael Forbes
      Telephone: (972) 368-2350
      Facsimile: (972) 368-3499

   with a copy to the Trustee and the Servicer; and

                                      17

<PAGE>

   if to the Trustee, addressed to it at:

      The Bank of New York
      c/o The Bank of New York
      2 North LaSalle Street, Suite 1020
      Chicago, IL 60602
      Attention: Structured Finance Group
      Telephone: (312) 827-8500
      Facsimile: (312) 827-8562

   with a copy to the Servicer;

   SECTION 1.6  NOTICE TO HOLDERS OF NOTES.

   Where this Indenture provides for notice to the Holders of Notes from the
Trustee, the Trustee, subject to reimbursement by the Issuer, shall (i) in the
case of a Global Note, mail such notice by overnight mail to the Depositary and
(ii) in the case of Notes other than the Global Notes, mail such notice by
first class mail, postage prepaid (except with respect to any redemption
notice, which shall be sent by overnight mail) to the Holders thereof at the
addresses appearing on the Register, with a copy of all such notices delivered
(by mail or otherwise) to the Issuer. Any such notice so sent shall be
conclusively presumed to have been received by such Holders.

   In case by reason of the suspension of regular mail service or overnight
mail service, as the case may be, or by reason of any other cause it shall be
impracticable to give any notice in the manner required above, then any other
method of notification found satisfactory in the reasonable judgment of the
Trustee shall constitute a sufficient notification for every purpose hereunder.
In any case where notice to the Holders of Notes is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders of Notes.

   Where this Indenture provides for notice in any manner, such notice may be
waived in writing by any Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders of Notes shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken
in reliance upon such waiver.

   All requests, demands, authorizations, directions, notices, consents,
waivers and other communications required or permitted under this Indenture
shall be in writing in the English language. Notice to any Holder will be
deemed to have been given on the date of such publication or mailing.

   SECTION 1.7  SUCCESSORS AND ASSIGNS.

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

   SECTION 1.8  SEPARABILITY CLAUSE.

   In case any provision of this Indenture or of the Notes shall be invalid,
illegal or unenforceable, then, to the extent permitted by law, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.

   SECTION 1.9  BENEFITS OF INDENTURE.

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

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<PAGE>

   SECTION 1.10  GOVERNING LAW.

   (a) THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

   (b) Any action or proceeding against any of the parties hereto relating in
any way to this Indenture or any Note or the Collateral may be brought and
enforced in any state or federal court located in the Borough of Manhattan, The
City of New York, and the Issuer irrevocably submits to the jurisdiction of
each such court in respect of any such action or proceeding. The Issuer hereby
waives any right to remove any such action or proceeding by reason of improper
venue. As long as any of the Notes remain Outstanding, the Issuer will at all
times have an authorized agent in New York City upon whom process may be served
in any legal action or proceeding relating in any way to this Indenture or any
Note. Service of process upon such agent and written notice of such notice
mailed or delivered to the Issuer at its address set forth in Section 1.5
shall, to the fullest extent permitted by law, be deemed in every respect
effective service upon the Issuer in any such legal action or proceeding. The
Issuer's authorized agent for service of process shall be The Corporation Trust
Company, 111 Eighth Avenue, New York, NY 10011, or such other Person as the
Issuer shall identify in a notice to the Trustee and the Servicer in accordance
with Section 1.5.

   SECTION 1.11  EXECUTION IN COUNTERPARTS.

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

   SECTION 1.12  SECURITY AGREEMENT.

   This Indenture shall constitute a security agreement under the Uniform
Commercial Code as in effect in the states where the Payment Account, the
Collection Account, the Holdover Account and any other similar account
established by the Trustee, or the Servicer or the Special Servicer in
furtherance of such entity's responsibilities under this Indenture or any other
Security Document are located (with respect to the liens and security interests
granted in Section 3.1(c)). Upon the occurrence of any Event of Default, and in
addition to any other rights available under this Indenture, the Security
Documents or any other instruments included in the Indenture Collateral or the
Underlying Collateral or otherwise available at law or in equity, the Trustee
shall have all rights and remedies of a secured party under the Uniform
Commercial Code to enforce the assignments and security interests contained
herein and, in addition, shall have the right, subject to compliance with any
mandatory requirements of applicable law, to sell at public or private sale or
apply, as appropriate, all monies or other property then on deposit in the
Payment Account, the Collection Account, the Holdover Account, the Redemption
Account, the REO Property Account and any other similar account established by
the Trustee, the Servicer or the Special Servicer in furtherance of its rights
or responsibilities under this Indenture or any other Security Document and any
other rights and other interests assigned or pledged hereby in accordance with
the terms of this Indenture. All amounts received hereunder and under the other
Security Documents and any other instruments included in the Indenture
Collateral or the Underlying Collateral shall be applied in accordance with the
priorities established in Section 5.6.

   SECTION 1.13  THIRD-PARTY BENEFICIARY.

   This Indenture shall inure to the benefit of and be binding upon each of the
parties hereto and its successors. Except as otherwise provided in this Article
I, no other Person shall have any right or obligation hereunder.

   SECTION 1.14  NO LIABILITY OF EXCULPATED PERSONS.

   (a) Anything contained in this Indenture or the other Security Documents to
the contrary notwithstanding, the recourse for the satisfaction of the
indebtedness due under the Notes and for the payment and performance of all of
the obligations and liabilities of the Issuer under the Indenture or the other
Security Documents shall be

                                      19

<PAGE>

limited solely to the Issuer's property and assets, including its interest in
the Collateral, the Payment Account, the Holdover Account, the Collection
Account, the Redemption Account, the REO Property Account, the Mortgage Deposit
Account, and the Mezzanine Deposit Account and none of GGP, GGC, or any of
their successors or assigns, any partner (general or limited, or a subpartner
at any level), member, tenant in common, officer, director, trustee,
beneficiary, shareholder, controlling Person, employee, agent, contractholder
or policyholder of or with GGP, GGC, or the Issuer, or any Affiliate of any of
the foregoing (collectively, "Exculpated Persons"), shall be liable in any
respect for (i) the payment of the principal of or interest on the Notes, (ii)
the payment of any other amount due under the Notes, this Indenture or the
other Indenture Security Documents, or (iii) damages for the breach of, or any
costs or expenses associated with the performance of or failure to perform, any
of the covenants, obligations, representations, warranties or indemnifications
contained herein or in the Notes or the other Indenture Security Documents. The
Holders, by their acceptance of the Notes, and the Trustee shall agree that, in
the event the Trustee pursues any remedies available to it hereunder or under
the Notes or the other Security Documents, the Trustee, the Servicer, the
Special Servicer and the Holders shall not have recourse to the Exculpated
Persons for any deficiency, loss or claim for damages resulting therefrom, and
none of the property or assets of any of the Exculpated Persons shall be
subject to levy, execution, garnishment, attachment, foreclosure or other
enforcement procedure for the satisfaction of the remedies of the Trustee, the
Servicer and the Special Servicer and the Holders hereunder. Nothing contained
herein shall (i) constitute a waiver of any indebtedness evidenced by the Notes
or secured by the Mortgage, the Mezzanine Pledge Agreement or the other
Security Documents, or (ii) be taken to prevent recourse to or the enforcement
of remedies against any of the Collateral, in respect of any and all
liabilities, obligations and undertakings contained in the Security Documents.

   Each document that is executed by any Exculpated Persons pursuant to or in
connection with this Indenture and/or any other Security Documents shall either
expressly incorporate, or shall be deemed to incorporate, the provisions
contained in this Section 1.14.

   (b) In furtherance of the foregoing, it is expressly understood and agreed
that nothing herein nor any act of the Issuer nor any document or instrument
executed by the Issuer in connection herewith shall create or impose on any
Exculpated Persons any personal liability, other than to the extent expressly
provided with respect to the Underlying Borrowers in the Environmental
Indemnity, and this Indenture is executed by the Issuer with the express
understanding and agreement that nothing contained herein, in the Notes or
under any of the other Indenture Security Documents (including the Notes) shall
be construed as creating any liability on the part of any Exculpated Persons
personally, other than to the extent expressly provided with respect to the
Underlying Borrowers in the Environmental Indemnity, to pay the principal
obligation or any interest that may accrue thereon or any indebtedness that may
accrue hereunder or under any of the other Indenture Security Documents or to
perform any covenant, either express or implied, herein contained, and that
every Person now or hereafter claiming any right or security hereunder shall
look solely to the Collateral, the Payment Account, the Holdover Account, the
Collection Account, the Redemption Account, the REO Property Account, the
Mortgage Deposit Account and the Mezzanine Deposit Account, for the payment
thereof and the enforcement of any lien hereby created or the enforcement of
any covenant, condition or agreement contained herein or under any of the other
Indenture Security Documents.

   (c) The provisions of Section 1.14(a) and (b) hereof shall not (i)
constitute a waiver, release or impairment of any obligation of the Issuer
(without recourse to its partners, members or other equity investors) evidenced
or secured by the Notes, this Indenture or any other Indenture Security
Document to the extent that it would impair the Trustee's (or the Servicer's or
Special Servicer's on the Trustee's behalf) right or ability to declare an
Event of Default or accelerate the maturity of the Notes, (ii) constitute a
waiver of the Trustee's right under Section 1111(b) of the United States
Bankruptcy Code to claim against the Issuer (without recourse to its partners,
members or other equity investors, other than to the extent expressly provided
with respect to the Underlying Borrowers in the Environmental Indemnity) the
full amount of the indebtedness evidenced by the Notes or incurred pursuant to
any of the other Indenture Security Documents or (iii) impair the right of the
Trustee to obtain a deficiency judgment (without recourse to any partner,
member or other equity investor in the Issuer, other than to the extent
expressly provided with respect to the Underlying Borrowers in the Environmental

                                      20

<PAGE>

Indemnity) in any action or proceeding in order to preserve its rights and
remedies against Collateral as to which a lien is granted hereunder, including,
without limitation, foreclosure, nonjudicial foreclosure or the exercise of a
power of sale, under the Collateral.

   SECTION 1.15  COMPLIANCE CERTIFICATES AND OPINIONS.

   Upon any application or request by the Issuer to the Trustee to take any
action under any provision of this Indenture, the Issuer shall furnish to the
Trustee such certificates and opinions as may be required under the Trust
Indenture Act or this Indenture. Each such certificate or opinion shall be
given in the form of an Officers' Certificate, if to be given by an officer of
the Issuer, or an Opinion of Counsel, if to be given by counsel, and shall
comply with the requirements of the Trust Indenture Act and any other
requirement set forth in this Indenture.

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

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

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

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

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

   SECTION 1.16  CONFLICT WITH TRUST INDENTURE ACT.

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

                                  ARTICLE II

                              FORMS OF THE NOTES

   SECTION 2.1  FORMS GENERALLY.

   (a) The Notes and the Trustee's certificate of authentication shall be in
substantially the form set forth in this Article, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification or designation and such legends or endorsements placed
thereon as may be required to comply with any applicable law or with any
applicable rules made pursuant thereto or with the applicable rules of any
securities exchange on which any of the Notes may be listed or any depositary
or any governmental agency, to conform with market practice or as may,
consistent herewith, be determined by the officers executing any Notes, as
evidenced by their execution of such Notes.

   (b) The definitive Notes shall be printed, lithographed or engraved on steel
engraved borders or may be produced in any other manner, all as determined by
the officers executing such Notes, as evidenced by their execution of such
Notes.

                                      21

<PAGE>

   SECTION 2.2  FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.

   The Trustee's certificates of authentication for the Notes shall be in
substantially the following form:

   This Note is one of the Notes referred to in the above-mentioned Indenture.

   THE BANK OF NEW YORK
   as Trustee

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

   or

   THE BANK OF NEW YORK
   as Trustee

   By:
      -------------------------
      as Authenticating Agent

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

   SECTION 2.3  FORM OF THE NOTES.

   The Notes are issuable initially in the form of a single Global Note in
definitive, fully registered form without coupons (a "GLOBAL NOTE") in
substantially the form of Exhibit A hereto, with the legend provided for in
Section 2.4. The Notes are not issuable in bearer form.

   SECTION 2.4  LEGEND.

   So long as DTC is acting as Depositary, Global Notes shall bear a legend
substantially in the following form:

      UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
   DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR
   ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE
   ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
   REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
   CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
   REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
   OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
   OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

      THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE REFERRED
   TO HEREIN. THIS GLOBAL NOTE MAY NOT BE EXCHANGED, IN WHOLE OR IN PART, FOR A
   NOTE REGISTERED IN THE NAME OF ANY PERSON OTHER THAN DTC OR A NOMINEE
   THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES SET FORTH IN THE INDENTURE.
   BENEFICIAL INTERESTS IN THIS GLOBAL NOTE MAY NOT BE TRANSFERRED EXCEPT IN
   ACCORDANCE WITH THE INDENTURE.

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<PAGE>

      THIS NOTE WILL NOT BE ACCEPTED IN EXCHANGE FOR A BENEFICIAL INTEREST IN A
   GLOBAL NOTE UNLESS THE HOLDER OF THIS NOTE, SUBSEQUENT TO SUCH EXCHANGE,
   WILL HOLD A MINIMUM AGGREGATE BENEFICIAL INTEREST IN SUCH GLOBAL NOTE OF AT
   LEAST ONE HUNDRED DOLLARS ($100).

   SECTION 2.5  GLOBAL NOTES.

   (a) (i) Any Note issued in exchange for a Global Note or any portion thereof
shall be a Global Note, PROVIDED, HOWEVER, that any such Note so issued that is
registered in the name of a Person other than the Depositary or a nominee
thereof shall not be a Global Note. Notwithstanding any other provision of this
Indenture, a Global Note shall not be exchanged in whole or in part for a Note
registered in the name of any Person other than the Depositary or one or more
nominees thereof, unless (1) the Depositary (A) notifies the Issuer that it is
unwilling or unable to continue as Depositary for such Global Note or (B)
ceases to be a clearing agency registered under the Exchange Act, and in either
case the Issuer fails to appoint a successor depositary (as described below) or
(2) there shall have occurred and be continuing an Event of Default with
respect to the Notes. Any Global Note exchanged pursuant to clause (1) above
shall be so exchanged from time to time in whole and not in part and any Global
Note exchanged pursuant to clause (2) above may be exchanged from time to time
in whole or in part as directed by the Depositary.

   (ii) The Issuer hereby designates DTC as the Depositary with respect to the
Global Notes. If at any time DTC notifies the Issuer that it is unwilling or
unable to continue as Depositary for the Global Notes or if at any time DTC has
ceased to be a clearing agency registered under the Exchange Act if so required
by applicable law or regulation, the Issuer shall be entitled to appoint a
successor depositary with respect to each Global Note and provide notice to the
Trustee of such appointment. If (x) a successor depositary for such Global Note
is not appointed by the Issuer within 90 days after the Issuer receives such
notice or becomes aware of such unwillingness, inability or ineligibility, (y)
an Event of Default has occurred and is continuing and the beneficial owners
representing a majority in principal amount of the Notes represented by such
Global Note advise DTC, with a copy to the Trustee and the Issuer, to cease
acting as depositary for such Global Note or (z) the Issuer, in its sole
discretion, determines at any time that all (but not less than all) Outstanding
Notes issued or issuable in the form of a Global Note shall no longer be
represented by such Global Note and advises the Trustee and DTC of such
determination, then the Issuer shall execute, and the Trustee shall
authenticate and deliver, definitive Notes of like class, rank, tenor and terms
in definitive form in an aggregate principal amount equal to the principal
amount of such Global Notes. On or after the earliest date on which such
interests may be so exchanged as described above, each Global Note shall be
surrendered for exchange by DTC to the Trustee; PROVIDED, HOWEVER, that such
exchange is subject to the terms of Section 3.8 herein.

   (b) Notes issued in exchange for a Global Note or any portion thereof shall
be issued in definitive, fully registered form, shall have an aggregate
principal amount equal to that of such Global Note or portion thereof to be so
exchanged, shall be registered in such names and be in such authorized
denominations as the Depositary shall designate and shall bear the applicable
legends provided for herein. Any Global Note to be exchanged in whole shall be
surrendered by the Depositary to the Trustee located at the Corporate Trust
Office to be so exchanged. With regard to any Global Note to be exchanged in
part, either such Global Note shall be so surrendered or exchanged or, if the
Trustee is acting as custodian for the Depositary or its nominee with respect
to such Global Note, the principal amount thereof shall be reduced, by an
amount equal to the portion thereof to be so exchanged, by means of an
appropriate adjustment made on the records of the Trustee. Upon any such
surrender or adjustment, the Trustee shall authenticate and deliver the Note
issuable on such exchange to or upon the order of the Depositary or an
authorized representative thereof.

   (c) Subject to the provisions in the legend required by Section 2.4 above, a
registered Holder may grant proxies and otherwise authorize any Person,
including any Agent Member and any Person who may hold an interest in an Agent
Member, to take any action that such Holder is entitled to take under this
Indenture.

                                      23

<PAGE>

   (d) In the event of the occurrence of any of the events specified in
paragraph (a) of this Section 2.5, the Issuer will promptly make available to
the Trustee a reasonable supply of certificated Notes in definitive, fully
registered form.

   (e) Neither members of, or participants in, the Depositary ("AGENT MEMBERS"
and each an "AGENT MEMBER") nor any other Person on whose behalf Agent Members
may act shall have any rights under this Indenture with respect to any Global
Note held on its or their behalf by the Depositary or under any such Global
Note, and the Depositary may be treated by the Issuer, the Trustee and any
agent of the Issuer or the Trustee (including, without limitation, the
Servicer) as the absolute owner of such Global Note for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Issuer, the Trustee or any agent of the Issuer or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or impair, as between the Depositary and its Agent Members, the
operation of customary practices governing the exercise of the rights of a
Holder of any Note.

                                  ARTICLE III

                                   THE NOTES

   SECTION 3.1  EQUAL AND RATABLE NOTES; AMOUNT; AUTHORIZATION.

   (a) Each Note shall rank PARI PASSU with each other Note. The Notes shall be
equally and ratably secured by the Indenture Collateral, PROVIDED that payment
of principal and interest on the Notes shall be subject to the priorities of
distributions set forth in Section 3.5(f) and Section 5.6, as applicable. The
aggregate principal amount of the Notes that may be authenticated, delivered
and Outstanding under this Indenture and which may be Outstanding at any time
is limited to $20,000,000 (except for Notes authenticated and delivered upon
registration of, transfer of, or in exchange for, or in lieu of, other Notes
pursuant to the provisions of this Indenture or the Notes). All Notes shall be
substantially identical except as to denominations and tenor and except as
expressly permitted in this Indenture.

   (b) The Notes shall be known and designated as the "Secured Notes, Series
2002-SSCC due May 31, 2010." The Scheduled Maturity Date for the Notes shall be
May 31, 2010.

   (c) The Issuer hereby grants, and this Indenture shall evidence, a
continuing lien and security interest in the Indenture Collateral, including
the Payment Account, the Collection Account, the Holdover Account, the
Redemption Account, the REO Property Account, and any other similar account
established by the Trustee, the Servicer or the Special Servicer in furtherance
of its rights or responsibilities under this Indenture or any other Security
Document to secure the full payment of the principal of and interest, and all
other amounts payable, on all the Notes, which shall in all respects be equally
and ratably secured hereby without preference, priority or distinction on
account of the actual time or times of the authentication and delivery of the
Notes provided that payment of principal and interest on the Notes shall be
subject to the priorities of distributions set forth in Section 3.5 and Section
5.6, as applicable. The foregoing grant shall not be in derogation or
limitation of any lien or security interest granted under any Security Document
to the Trustee to secure amounts payable on the Notes.

   (d) Notes may be transferred at the option of the Holder thereof to the
Depositary for credit to the account of any Agent Member in accordance with
this Indenture. Thereafter, the Depositary or its nominee shall be the Holder
of the portion of the Global Note evidencing any Notes so transferred and the
beneficial ownership thereof.

   SECTION 3.2  DENOMINATIONS.

   The Notes shall be issuable in fully registered form, without coupons, in
denominations of $100 and integral multiples of $100.

                                      24

<PAGE>

   SECTION 3.3  CONDITIONS PRECEDENT TO ISSUANCE OF NOTES.

   On the date hereof, Notes may be executed by the Issuer and authenticated
and delivered by the Trustee to the specified parties upon the Issuer Request
(directing the Trustee to authenticate the Notes and designating to whom the
Trustee shall deliver the authenticated Notes) only if the Issuer shall have
delivered the following to the Trustee (as evidenced by the Officer's
Certificate referred to in (d) below and provided that the Trustee shall have
no obligation to review the following and shall make no representation as to
their sufficiency or effectiveness):

      (a) A copy of the certificate of formation of each of the Issuer and each
   Underlying Borrower, and any amendments thereto, certified, as applicable,
   by the appropriate government official of its jurisdiction of incorporation
   or organization;

      (b) A certificate of the Secretary or Assistant Secretary of the Issuer,
   stating that:

          (i) the copy of the applicable charter or organizational document of
       each of the Issuer and each Underlying Borrower provided under clause
       (a) above is true and complete;

          (ii) the attached copy of the resolutions of the governing body of
       FUR (A) authorizing the issuance of the Mortgage Note and the execution
       and delivery of the Mortgage and the other Mortgage Security Documents
       and (B) authorizing the officers (or classes of officers) identified
       therein to execute documents on such Underlying Borrower's behalf is
       true and complete and that such resolutions remain in full force and
       effect and have not been modified or amended;

          (iii) the attached copy of the resolutions of the governing body of
       Park Plaza 1 (A) authorizing the issuance of the Mezzanine Note and the
       execution and delivery of the Mezzanine Loan Agreement and the other
       Mezzanine Security Documents and (B) authorizing the officers (or
       classes of officers) identified therein to execute documents on such
       Underlying Borrower's behalf is true and complete and that such
       resolutions remain in full force and effect and have not been modified
       or amended; and

          (iv) the Persons who, as officers of the Issuer or any Underlying
       Borrower, executed this Indenture, the Notes, the Mortgage Note, the
       Mezzanine Note, the Mortgage, the Mezzanine Loan Agreement and each
       other Security Document to which the Issuer or such Underlying Borrower
       is a party, and any certificates or other papers delivered to the
       Trustee in connection with the execution and delivery of this Indenture
       and each other Security Document and the issuance of the Notes, the
       Mortgage Note and the Mezzanine Note, were validly elected to, and the
       incumbents of, the offices they purported to hold at the time of such
       execution, delivery and issuance, and that their signatures set forth on
       such certificate are genuine;

      (c) Executed counterparts of this Indenture, the agreement between the
   Trustee and the Fiscal Agent (if any) referred to in the second to last
   paragraph of Section 3.6(b), the Notes, the Mortgage Security Documents, the
   Mezzanine Security Documents and each of the other Security Documents;

      (d) An Officer's Certificate from the Issuer, dated as of the Closing
   Date, stating that, to the best knowledge of the signer(s) thereof, all of
   the conditions to the closing of the merger under the Merger Agreement have
   been satisfied;

      (e) Executed UCC-l financing statements with respect to the Indenture
   Collateral naming the Issuer as debtor and the Trustee as secured party
   thereunder (to be filed by or on behalf of the Issuer in the appropriate
   filing offices in the State of Delaware); and

      (f) Executed UCC-1 financing statements naming the Underlying Borrowers
   as debtor, the Issuer as secured party thereunder and the Trustee as
   assignee (to be filed by or on behalf of the Underlying Borrowers in the
   appropriate filing offices in the States of Ohio, Delaware and Indiana);

   Copies of the documents described above shall also be delivered to the
Servicer.

                                      25

<PAGE>

   SECTION 3.4  EXECUTION, AUTHENTICATION AND DELIVERY OF THE NOTES.

   Each Note shall be executed manually or in facsimile on behalf of the Issuer
by any Person so authorized and listed on Exhibit C hereto to sign documents on
behalf of the Issuer in connection with the performance of the Issuer's
obligations under this Indenture and the other Security Documents (each, an
"AUTHORIZED PERSON"), notwithstanding that such Persons, or any of them, shall
have ceased, for any reason, to be so authorized prior to the authentication
and delivery of such Note or was not so authorized at the date of any such
Note. The Issuer shall have the right to add to or delete from the names listed
on Exhibit C upon written notice to the Trustee and the Servicer signed by an
Authorized Person and, in the case of additions to the list of Authorized
Persons, accompanied by a specimen signature of each newly designated
Authorized Person. The Notes may also have such additional provisions,
omissions, variations or substitutions as are not inconsistent with the
provisions of this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with any applicable law or with any applicable rules made
pursuant thereto or with the applicable rules of any securities exchange or
governmental agency or as may, consistently herewith, be determined by an
Authorized Person executing such Notes, as conclusively evidenced by their
execution of such Notes. All Notes shall be otherwise substantially identical
except as to denomination and as provided herein.

   The Trustee is hereby authorized, upon receipt of Notes duly executed on
behalf of the Issuer for the purposes of the original issuance of such Notes
and receipt of the other documents set forth in Section 3.3, to authenticate
such Notes in an aggregate principal amount not in excess of $20,000,000 and to
deliver such Notes to the Issuer or any other Person designated by the Issuer
and, thereafter, to authenticate and deliver Notes in accordance with the
provisions hereinafter set forth.

   The Trustee may, with the consent of the Issuer, appoint by an instrument or
instruments in writing one or more Authenticating Agents (which may include the
Trustee itself) for the authentication of Notes and, with such consent, vary or
terminate any such appointment upon written notice and approve any change in
the office through which any Authenticating Agent acts. The Issuer (by written
notice to the Trustee and the Authenticating Agent whose appointment is to be
terminated) may also terminate any such appointment at any time; PROVIDED,
HOWEVER, that if the Trustee is acting as the Authenticating Agent, it may be
terminated as Authenticating Agent only if it is also being terminated as
Trustee. The Trustee hereby agrees to solicit written acceptances from the
entities concerned (in form and substance satisfactory to the Issuer) of such
appointments; PROVIDED, HOWEVER, that the Trustee shall not be required to
solicit such written acceptances from any of its Affiliates who acts in the
capacity of Fiscal Agent. In its acceptance of such appointment, an
Authenticating Agent shall agree to act as an authenticating agent pursuant to
the terms and conditions of this Indenture. The Fiscal Agent shall also be an
Authenticating Agent.

   No Note shall be entitled to any benefit under this Indenture or be valid or
obligatory for any purpose unless there appears on such Note a certificate of
authentication substantially in the form provided for in Section 2.2, executed
by the Trustee or an Authenticating Agent by manual signature, and such
certificate of authentication upon any Note shall be conclusive evidence, and
the only evidence, that such Note has been duly authenticated and delivered
hereunder and is entitled to the benefits of this Indenture.

   SECTION 3.5  DEPOSIT ACCOUNT, COLLECTION ACCOUNT, PAYMENT ACCOUNT, HOLDOVER
ACCOUNT, REDEMPTION ACCOUNT.

   (a) On or prior to the date hereof,

      (i) the Servicer shall establish and maintain a single, segregated
   account (the "COLLECTION ACCOUNT"), which is required to be an Eligible
   Account, with a federally or state-chartered depository institution or trust
   company in the name of the Servicer, as Servicer for the Trustee. The
   Collection Account will be under the sole dominion and control of the
   Servicer, as Servicer for the Trustee, and neither the Issuer nor any

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   Underlying Borrower will have the right to withdraw funds from the
   Collection Account. The Servicer shall give notice to the Trustee and the
   Issuer of any change in the location of the Collection Account; and

      (ii) the Trustee shall establish a segregated trust account (the "PAYMENT
   ACCOUNT"), in the Trustee's name, which shall be an Eligible Account,
   bearing a designation clearly indicating that such account and all funds
   deposited therein (including all investments of such deposited funds and all
   income or other gain from such investments) are held for the exclusive
   benefit of the Holders. The Trustee shall have exclusive control and sole
   right of withdrawal with respect to the Payment Account for the purpose of
   making withdrawals from the Payment Account in accordance with this
   Indenture. Funds in the Payment Account shall not be commingled with any
   other monies. Subject to the interests of the Trustee pursuant to this
   Section 3.5, all monies deposited from time to time in the Payment Account
   and all investments made with such monies, including all income or other
   gains from such investments, shall be held by the Trustee in the Payment
   Account for the benefit of the Holders as provided herein and, to the extent
   specified in Section 3.5(d) and Section 6.15, the Issuer.

   (b) The Issuer shall, at or before 11:00 a.m. (New York time) on the second
Business Day before each Payment Date or Maturity Date, transfer the balance of
funds in the Mortgage Debt Service Sub Account and the Mezzanine Debt Service
Sub Account to the Servicer for credit to the Collection Account. The Issuer
shall also remit, at or before 11:00 a.m. (New York time) on the second
Business Day before such Payment Date or Maturity Date such additional funds as
are required to ensure that the balance in the Collection Account is sufficient
to pay the amount of any interest and principal due in respect of the Notes,
together with all other amounts due in respect of such date pursuant to this
Indenture, including Trustee Fees, Servicing Fees, Special Servicing Fees,
Work-out Fees and Liquidation Fees. The Issuer shall also transfer from the
Mortgage Debt Service Sub Account or the Mezzanine Debt Service Sub Account, or
both, or otherwise remit to the Servicer or Special Servicer, as applicable, at
or before 11:00 a.m. (New York time) on the first Business Day of each calendar
month (other than a month containing a Payment Date or Maturity Date such
additional amounts as are required to pay any Servicing Fee or Special
Servicing Fee due on such date.

   (c) The Servicer shall remit to the Trustee for deposit in the Payment
Account all funds then available in the Collection Account at or before 3:00
p.m. (New York time) on the Business Day immediately preceding each Payment
Date or Maturity Date.

   (d) All interest earned on funds on deposit in the Mortgage Deposit Account
or the Mezzanine Deposit Account, or any other account or sub-account required
to be maintained under this Indenture, the Mortgage, the Mezzanine Loan
Agreement, the Mezzanine Cash Management Agreement or the Cash Management
Agreement, other than the Collection Account, the Payment Account, the
Redemption Account, and the REO Property Account, shall accrue for the benefit
of the Issuer. Interest on funds on deposit in the Collection Account, the
Payment Account and the Redemption Account shall be paid as follows: (i) to the
Servicer, one calendar day's interest on all funds deposited in the Collection
Account, to the extent such interest is actually earned; (ii) to the Trustee,
one Business Day's interest on all funds deposited in the Payment Account and
the Redemption Account, to the extent such interest is actually earned; and
(iii) all other interest earned on funds on deposit in the Collection Account
and the Payment Account shall accrue for the benefit of the Issuer. Any
interest earned on funds on deposit in the REO Property Account shall accrue
for the benefit of the Special Servicer.

   (e) So long as no Event of Default shall have occurred and be continuing,
all of the funds on deposit in the Payment Account may be invested and
reinvested by the Trustee in one or more Eligible Investments only in the event
such funds are reasonably expected by the Trustee to be on deposit for a period
in excess of the period from and including the Business Day prior to the
Payment Date or Maturity Date, as applicable, to but excluding the related
Payment Date or Maturity Date, as applicable, subject to the following
requirements; PROVIDED, HOWEVER,

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that in no event shall amounts in the Payment Account be invested on the
Business Day preceding any Payment Date or Maturity Date:

      (i) such Eligible Investments shall not mature later than the Business
   Day prior to the date such amounts are required to be applied under this
   Indenture;

      (ii) securities purchased with the monies in the Payment Account shall be
   deemed a part of the Payment Account;

      (iii) each such Eligible Investment shall be made in the name of the
   Trustee (in its capacity as such) or in the name of a nominee of the Trustee
   under its complete and exclusive dominion and control (or, if applicable law
   provides for perfection of pledges of an instrument not evidenced by a
   certificate or other instrument through registration of such pledge on books
   maintained by or on behalf of the issuer of such investment, such pledge may
   be so registered);

      (iv) the Trustee shall have the sole control over such investment, the
   income thereon and the proceeds thereof;

      (v) other than the investments described in clause (iii) above, any
   certificate or other instrument evidencing such investment, if any, shall be
   delivered directly to the Trustee or its agent; and

      (vi) the proceeds of each investment (which shall be made as provided in
   Section 6.14) shall be remitted by the purchaser thereof (if not the
   Trustee) directly to the Trustee.

   All net income or other gain from investments of monies deposited in the
Payment Account shall be credited to the Payment Account and any net loss
resulting from such investments shall be charged to the Payment Account. The
Trustee shall not be liable to the Holder of any Note, the Issuer or any other
Person for any loss resulting from any such investment or sale in accordance
with this Indenture, whether by depreciation in value or otherwise, unless such
loss results from the Trustee's negligence or willful misconduct.

   (f) Except as otherwise provided in Section 5.6 hereof, on each Payment Date
or Maturity Date, the Trustee shall apply all amounts on deposit in the Payment
Account to pay, pursuant to Section 3.11, the following amounts in the
following order of priority:

      (i) first, any Trustee Fee and, to the extent not already paid from the
   Collection Account, any Servicing Fees and Special Servicing Fees, shall be
   paid, as well as any other amounts due and payable to the Trustee pursuant
   to Section 6.5, the Fiscal Agent (if any), the Servicer or the Special
   Servicer; and, second, any unreimbursed Advance that has been determined to
   be a Nonrecoverable Advance made by the Servicer or the Special Servicer
   (and interest thereon at the Advance Interest Rate) shall be repaid;

      (ii) any additional interest payable on the Notes on account of a late
   payment charge on an Underlying Loan or any Exit Fee paid on the Mezzanine
   Loan shall be paid to the Holders pro rata until paid in full;

      (iii) any interest then due and payable on the Notes, including any
   interest at the Default Rate, but excluding any amounts included within
   clause (ii) above, shall be paid to the Holders pro rata until paid in full;

      (iv) any principal then due and payable on the Notes shall be paid to the
   Holders pro rata until paid in full; and

      (v) any Advances that were not repaid pursuant to clause (i) above, and
   any accrued but unpaid interest thereon at the Advance Interest Rate, shall
   be repaid, first to the Servicer, and second to the Special Servicer.

   (g) Funds in the Payment Account for payments of amounts due and payable and
not claimed in accordance with this Indenture on any Outstanding Note shall be
deposited by the Trustee in a segregated trust account (the

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<PAGE>

"HOLDOVER ACCOUNT") in the Trustee's name with the Trustee and shall be held
for the account of the Holder or Holders of such Notes pursuant to Section
6.15. Upon the written request of the Issuer, the Trustee shall invest such
funds pursuant to Section 6.14, but the Trustee shall not otherwise be under
any obligation to do so. Any investment income earned on amounts held in the
Holdover Account shall be credited to the Holdover Account and applied pursuant
to Section 6.15. The Trustee shall not be responsible for any net loss that
results from such investments.

   (h) Any funds remaining in the Payment Account after all amounts described
in Section 3.5(f) have been paid in full shall be deposited by the Trustee in a
segregated account (the "REDEMPTION ACCOUNT") in the Trustee's name with the
Trustee. The Issuer shall transfer to the Redemption Account at or before 11:00
a.m. (New York time) on the second Business Day before each Payment Date the
balance of funds in (x) the Mortgage Residual Sub Account and (y) if a
Dillard's Event or a Mezzanine Event of Default occurred during the related
Interest Period and is continuing on the second Business Day before such
Payment Date, the Mezzanine Residual Sub Account. In addition, in the event
that the Issuer receives a repayment of principal on the Underlying Loans prior
to the second Business Day before the Scheduled Maturity Date, the Issuer shall
remit the amount of such repayment to the Redemption Account no later than the
next Business Day following the receipt thereof. The Trustee shall invest funds
in the Redemption Account pursuant to Section 6.14 and any investment income
earned on such amounts shall be credited to the Redemption Account. The Trustee
shall not be responsible for any net loss that results from such investments.

   SECTION 3.6  REGISTRATION; FISCAL AGENT.

   (a) GENERAL.  The Issuer shall cause to be kept at the Corporate Trust
Office a register (the "REGISTER"), within the meaning of Section 163(f) of the
Code and any regulations thereunder, for the registration of transfer of the
Notes. The Register shall be maintained by the Trustee, which is hereby
appointed as the "REGISTRAR" for the purpose of registering Notes and transfers
of Notes as provided herein. The name and address of the Holder of each Note,
records of any transfers of the Notes and the name and address of any
transferee of a Note shall be entered in the Register under such reasonable
regulations as the Trustee may prescribe. There shall be no more than one
Holder for each Note, including all beneficial interests therein. The Registrar
shall (i) at all reasonable times during office hours make the Register
available to the Issuer or any Person authorized by the Issuer in writing for
inspection and the making of copies thereof or extracts therefrom and (ii) mail
a copy of the Register to the Issuer or any other such Person promptly after
request therefor from the Issuer.

   Upon surrender for registration of transfer of any Note at the Corporate
Trust Office, accompanied by a written instrument of transfer in the form
approved by the Issuer and the Trustee (it being understood that, until notice
to the contrary is given to Holders, the Issuer and the Trustee shall each be
deemed to have approved the form of instrument of transfer, if any, printed on
the Notes), executed by the registered owner, in Person or by such Holder's
attorney thereunto duly authorized in writing, such Note shall be transferred
upon the Register, and the Issuer shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more newly registered Notes of any authorized denominations
and of a like aggregate principal amount. Transfers and exchanges of Notes
shall be subject to the restrictions set forth in this Section 3.6 and Section
3.8 and in the text of the Notes and such reasonable regulations as may be
prescribed by the Issuer or Registrar. Successive registrations of transfers as
aforesaid may be made from time to time as desired, and each such registration
shall be noted on the Register.

   Any Note may be exchanged for two or more Notes of any authorized
denominations and of a like aggregate principal amount in accordance with the
provisions of Section 3.2 hereof if the Note to be so exchanged is surrendered
for cancellation at the Corporate Trust Office accompanied by the written
request of the Holder thereof specifying the denominations of the new Notes to
be issued in exchange therefore. New Notes, executed by the Issuer and payable
to such Holder in the denominations so requested (but in denominations not less
than the principal amount of $100 and in integral multiples thereof), and in an
aggregate principal amount equal to the principal amount of the surrendered
Notes, shall be authenticated and delivered by the Trustee to such Holder in
exchange for the surrendered Note.

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<PAGE>

   (b) The Trustee may, at its discretion, appoint a Fiscal Agent (a "FISCAL
AGENT") and the Trustee, Fiscal Agent, Registrar and Authenticating Agent may
be the same Person. The Trustee shall promptly notify the Issuer of the name
and address of any Fiscal Agent appointed by it, and will notify the Issuer of
the resignation or termination of any Fiscal Agent. Subject to the provisions
of this Section 3.6 and the third paragraph of Section 3.4, the Issuer may vary
or terminate the appointment of any Fiscal Agent at any time and from time to
time upon giving notice to such Fiscal Agent and to the Trustee. Any Fiscal
Agent appointed hereunder shall be entitled to the same protections and
exculpations as are available to the Trustee under Article VI hereof.

   In respect of the Notes, the Trustee (on behalf of the Issuer) shall cause
notice of any resignation, termination or appointment of any Fiscal Agent or of
the Trustee to be given to the Holders as provided in Section 1.6 hereof.

   The Trustee shall enter into an appropriate agency agreement with any Fiscal
Agent not a party to this Indenture and shall provide a copy of any such
agreement to the Issuer. The agreement shall implement the provisions of this
Indenture that relate to such Fiscal Agent.

   The Issuer initially appoints the Trustee as Registrar, Fiscal Agent and
Authenticating Agent. If the Trustee resigns or is removed as Trustee,
hereunder, it shall resign from each of the foregoing capacities. No such
resignation or removal shall preclude the Issuer from reappointing the retiring
Trustee to any such capacity.

   SECTION 3.7  HOLDER LISTS.

   (a) The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders. If the Trustee is not the Registrar, the Issuer or any other obligor
upon the Notes shall furnish to the Trustee in writing at least four Business
Days before each Payment Date and at such other times as the Trustee may
request in writing a list in such form and as of such date as the Trustee may
reasonably request of the names and addresses of the Holders.

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

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

   SECTION 3.8  TRANSFER AND EXCHANGE.

   (a) GENERAL.  At the option of each Holder but subject to the provisions of
this Section 3.8, Notes may be exchanged for other Notes of any authorized
denomination or denominations and of the same aggregate principal amount, upon
surrender of the Notes to be exchanged at any office or agency of the Trustee
appointed in or pursuant to Section 3.6 for such purpose. Subject to the terms
of this Section 3.8, upon surrender for registration of transfer of any Note at
any such office or agency of the Trustee, the Issuer shall prepare and the
Issuer shall execute, and the Trustee or an Authenticating Agent shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Notes of any authorized denomination or
denominations and of the same aggregate principal amount. The Trustee will,
throughout the term of this Indenture, retain in its permanent records executed
originals of all retired Notes delivered to it in connection with any exchanges
or replacements hereunder.

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

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<PAGE>

   Every Note presented or surrendered for registration of transfer or for
exchange shall (if so required by the Issuer or the Registrar) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Issuer and the Registrar (it being understood that, until
notice to the contrary is given to Holders of Notes, the Issuer and the
Registrar shall each be deemed to have approved the form of instrument of
transfer, if any, printed on any definitive Note), duly executed by the Holder
or such Holder's attorney duly authorized in writing.

   No service charge shall be made for any registration, registration of
transfer or exchange of Notes, but the Issuer and the Trustee shall have the
right to require payment from the Holder requesting any such registration of
transfer or exchange of an amount in United States Dollars sufficient to pay or
discharge any stamp duty, tax or other governmental charge or insurance charge
that may be imposed in connection with such registration of transfer or
exchange.

   Subject to Section 11.7(d), neither the Issuer nor the Trustee shall be
required to register the transfer of, or exchange, any Note called for
redemption in whole or in part, except the unredeemed portion of any Note being
redeemed in part.

   (b) REDEMPTION PERIOD.  Neither the Issuer nor the Trustee shall issue
Notes, register the transfer of Notes or exchange Notes during a period
beginning at the opening of business fifteen (15) days before any selection of
Notes to be redeemed and ending on the relevant Redemption Date if the Global
Note for which exchange is requested may be among those selected for redemption.

   (c) TRANSFER OF GLOBAL NOTES.  Notwithstanding any other provision of this
Indenture or the Notes, a Global Note may not be transferred, in whole or in
part, to any Person other than the Depositary or a nominee thereof, and no such
transfer to any such other Person may be registered; PROVIDED, HOWEVER, that
this clause (c) shall not prohibit any transfer of a Note that is issued in
exchange for a Global Note but is not itself a Global Note. No transfer of a
Note to any Person shall be effective under this Indenture or the Notes unless
and until such Note has been registered in the name of such Person.

   (d) Successive registrations and registrations of transfers and exchanges as
aforesaid may be made from time to time as desired, and each such registration
shall be noted on the Register. No service charge shall be made for any
registration of transfer or exchange of the Notes, but the Trustee may require
payment by the applicable Holder of a sum sufficient to cover any stamp duty,
tax or other governmental charge or insurance charge payable in connection
therewith and any other amounts required to be paid by the provisions of the
Notes.

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

   SECTION 3.9  MUTILATED, DESTROYED, LOST AND STOLEN NOTES.

   If any mutilated Note is surrendered to the Trustee, the Issuer shall
execute, and the Trustee shall authenticate and deliver in exchange therefor, a
new Note (a "NEW NOTE") of like tenor and principal amount and bearing a number
not contemporaneously outstanding. Each New Note issued pursuant to this
Section in exchange for, in substitution for, or in lieu of a Predecessor Note
shall be dated the date of, and be in the form of, such Predecessor Note.

   If there shall be delivered to the Issuer and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Note and (ii) such
security or indemnity as may be required by each of them to save each of them
and any agent of either of them harmless, then, in the absence of notice to the
Issuer or the Trustee that such Note has been acquired by a bona fide
purchaser, the Issuer shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen Note, a
New Note of like tenor and principal

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<PAGE>

amount and bearing a number not contemporaneously outstanding. In every case of
mutilation or defacement, the applicant shall surrender to the Trustee the Note
so mutilated or defaced. Upon the issuance of any substitute Note, the Issuer
may require the payment by the applicant of a sum sufficient to cover any stamp
duty, tax or other governmental charge or insurance charge that may be imposed
or incurred in relation thereto and any other expenses connected therewith.

   Every New Note issued pursuant to this Section in lieu of any destroyed,
lost or stolen Note shall constitute an original additional contractual
obligation of the Issuer evidencing the same debt as the Predecessor Note,
whether or not the destroyed, lost or stolen Note shall be at any time
enforceable by anyone having rights in such New Note thereunder and hereunder,
and any such New Note shall be entitled to all the benefits of this Indenture
and of the other Security Documents to the same extent as such Predecessor Note.

   All Notes shall be held and owned upon the express condition that, to the
extent permitted by law, the foregoing provisions are exclusive with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Notes and
shall preclude (to the extent lawful) all other rights and remedies with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Notes or negotiable instruments without their surrender.

   SECTION 3.10  INTEREST.

   (a) Each Note shall bear interest from and including the Closing Date to but
excluding the date on which the principal balance of such Note is repaid in
full. Such interest shall accrue during each Interest Period and be payable by
the Issuer in arrears for such Interest Period on the related Payment Date and
upon the redemption (other than a Redemption pursuant to Section 11.7) or
maturity thereof or, during the continuance of an Event of Default, at the time
provided in Section 5.6. Interest on each Note shall cease to accrue from the
Maturity Date, except to the extent that funds are not available in the Payment
Account to repay such Note in full (taking into account the priority of
application of funds provided herein) on the Maturity Date.

   (b) Subject to Section 3.11(d), the interest rate on the Notes shall be 11%
per annum (the "BASE INTEREST RATE"). Interest on the Notes shall be computed
based on the actual number of days elapsed during the relevant Interest Period
and a 360-day year.

   (c) On each Payment Date, the Holders shall also be entitled to receive, as
additional interest, any amounts received by the Issuer during the immediately
preceding Interest Period on account of exit fees or late payment charges under
the Mortgage Security Documents and Mezzanine Security Documents. On the
Maturity Date not falling on a Payment Date, the Holders shall be entitled to
receive, as additional interest, any amounts received by the Issuer since the
end of the most recently completed Interest Period on account of exit fees or
late payment charges under the Mortgage Security Documents and Mezzanine
Security Documents.

   SECTION 3.11  PAYMENT OF PRINCIPAL AND INTEREST.

   (a) The Issuer hereby authorizes and directs the Trustee to make or cause to
be made payment, from funds available in the Payment Account and any other
funds made available to the Trustee for such purpose, of the principal of and
any interest on the Notes as set forth in this Indenture.

   (b) Any interest payable on a Payment Date shall be paid to the Person who
was the Holder thereof at the close of business on the Regular Record Date for
such Payment Date; PROVIDED, HOWEVER, that interest payable on the Maturity
Date of the Notes shall be payable to the Person to whom principal shall be
payable. Payments of principal of the Notes shall be payable on the Maturity
Date against surrender thereof at the Corporate Trust Office, at such other
office as the Issuer may have designated for this purpose pursuant to Section
10.2, or at the offices of the Fiscal Agent, if any.

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   (c) So long as the Notes are held through the Depositary's book-entry
system, payments of interest and principal on the Notes will be made, subject
to applicable laws and regulations, by wire transfer from the Trustee to the
Depositary and will be forwarded to beneficial owners in accordance with the
payment procedures of the Depositary and the Agent Members thereof. If any Note
is not held through the Depositary, payments of principal with respect to the
Notes shall be made on the Maturity Date upon surrender of such Notes and
payments of any interest on such Notes shall be made on the applicable Payment
Date, in accordance with the foregoing and subject to applicable laws and
regulations, by check mailed on or before the due date for such payment to the
Person entitled thereto at such Person's address appearing on the Register, or,
in the case of payments of principal on the Maturity Date, to such other
address as the Holder shall provide in writing at the time of such surrender
(or, in the case of a Holder that provides the Trustee with wire instructions
and complies with any other reasonable requirements of the Trustee or Fiscal
Agent, if any, by wire transfer to such account as such Holder shall designate
by written instruction received by the Trustee or Fiscal Agent not less than
five (5) Business Days prior to the Regular Record Date).

   (d) If any Note is not paid in full on or before the Maturity Date, the
unpaid principal and accrued interest and other amounts then due shall bear
interest at a rate per annum ("DEFAULT RATE") equal to the lesser of (i) four
percent (4.0%) in excess of the Base Interest Rate, or (ii) the maximum rate of
interest, if any, which may be charged or collected from Issuer under
applicable law.

   In the event that any payment due on a Payment Date has not been provided
for in full (including by deposit in the Collection Account) by the Issuer on
or before the second Business Day prior to the date that such payment is due
(as such due date may be extended by the applicable grace period, if any),
interest at the Default Rate shall accrue on the unpaid amount and on the
principal balance of the Outstanding Notes until the earlier of the Maturity
Date and the date when full payment is received.

   (e) At the Maturity Date of the Notes, the Trustee shall pay the principal
amount of each Note, and any unpaid interest thereon in immediately available
funds from funds in the Payment Account as promptly as possible after
presentation to the Trustee of such Note but shall initiate such payment no
later than 3:00 p.m. (New York time) on the day of such presentation, PROVIDED
that such presentation has been made no later than 11:00 a.m. (New York time).
If presentation is made after 11:00 a.m. (New York time) on any day, such
presentation shall be deemed to have been made not later than 11:00 a.m. (New
York time) on the immediately succeeding Business Day.

   (f) In the event that a Note is not presented for payment by 11:00 a.m. (New
York time) on the Maturity Date, the Trustee shall transfer any principal
thereof and interest thereon to the Holdover Account. If the Holder of such
Note shall present such Note to the Trustee within two (2) years after the
Maturity Date, the Trustee shall pay such Note from funds in the Holdover
Account. In no event (other than following a default by the Issuer) shall such
Note earn interest after the Maturity Date. If such Note is not presented for
payment within two (2) years after the Maturity Date, the Trustee shall not
honor a demand for payment of such Note and the Trustee shall act in accordance
with Section 6.15 in respect of the unclaimed funds in the Holdover Account in
respect of such Note.

   (g) If at 4:00 p.m. (New York time) of any day beginning on the Maturity
Date, any funds remaining in the Payment Account after (i) the payment of each
Note which is presented by 11:00 a.m. (New York time) for payment on such date
and (ii) the transfer of funds to the Holdover Account pursuant to Section
3.11(f) for each Note which is not presented for payment on such date (or is
presented after 11:00 a.m. (New York time) on such date), then such remaining
funds shall be transferred by the Trustee to the Issuer in accordance with
written wire transfer instructions given by the Issuer to the Trustee.

   SECTION 3.12  INTEREST ON NEW NOTES.

   Interest shall be deemed to have been paid on each New Note issued pursuant
to Section 3.9 hereof in exchange for, in substitution for, or in lieu of a
Predecessor Note to the date to which interest was paid on such Predecessor
Note.

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   SECTION 3.13  CANCELLATION.

   (a) All Notes surrendered for redemption (other than a Redemption with
respect to which the Issuer has made a designation pursuant to Section
11.7(d)), payment, registration of transfer or exchange shall, if surrendered
to any Person other than the Trustee, be delivered to the Trustee and shall be
promptly canceled by it. The Issuer may at any time deliver to the Trustee for
cancellation any Notes previously authenticated and delivered hereunder which
the Issuer may have acquired in any manner whatsoever, and all Notes so
delivered shall be promptly canceled by the Trustee.

   (b) No Notes shall be authenticated in lieu of or in exchange for any Notes
canceled as provided in this Section 3.13, except as expressly permitted by
this Indenture. All canceled Notes held by the Trustee shall be retained by the
Trustee in accordance with Section 3.8(a).

   SECTION 3.14  FISCAL AGENT TO HOLD MONEY IN TRUST.

   The Trustee shall require the Fiscal Agent, if any, to agree in writing that
the Fiscal Agent will hold in trust for the benefit of Holders and the Trustee
all money held by the Fiscal Agent for the payment of principal of or interest
on the Notes, and will notify the Trustee of any Event of Default by the Issuer
or any other obligor upon the Notes in making any such payment or in depositing
the funds to make such payment with the Fiscal Agent. While any such Event of
Default continues, the Trustee may require a Fiscal Agent to pay all money and
other property, if any, held by it to the Trustee.

                                  ARTICLE IV

                      RELEASE OF COLLATERAL; SATISFACTION
                          AND DISCHARGE OF INDENTURE

   SECTION 4.1  RELEASE.

   Upon the release of any portion of the Underlying Collateral from the lien
of the Mortgage Security Documents or the Mezzanine Security Documents or of
any portion of the Indenture Collateral from the lien and security interest of
this Indenture or any other Security Document in accordance with the relevant
provisions hereof and thereof, the Trustee and the Servicer (if applicable)
shall execute such instruments as may be reasonably requested and presented by
the Issuer to effect and/or acknowledge such release which shall be at the
expense of the Issuer. The above-referenced instruments may include, at the
Issuer's election, (i) one or more amendments and/or restatements of the
Mortgage, Mezzanine Loan Agreement, the Assignment of Leases and/or any other
Security Document (in each case, without any representation or warranty by or
recourse to the Trustee or the Servicer) as may be appropriate to separate the
liens created thereby against the portion of the Underlying Collateral or the
Indenture Collateral to be released (as used herein, the "RELEASE PROPERTY")
from the liens encumbering the remaining portion of such collateral and,
thereafter, one or more assignments of the resulting Security Documents
relating to the Release Property to any designee or nominee of the Issuer and
the Underlying Borrowers and (ii) such uniform commercial code financing
statements, each in customary form and as may be mutually agreed upon by the
Issuer and the Trustee; PROVIDED, HOWEVER, that neither the Trustee nor the
Servicer shall be required to take any action or execute any instruments
pursuant to the foregoing unless such entity is satisfied, in its reasonable
judgment, that such action or instrument will not compromise in any way the
validity or enforceability of the lien of any Security Document with respect to
the remaining portion of the Collateral that is not Release Property. The
Trustee shall be entitled to receive and rely on an Opinion of Counsel to such
effect. Concurrently with any release transaction contemplated hereby or by the
Mortgage or Mezzanine Loan Agreement, the Trustee and Servicer shall return to
the Issuer the duplicate originals of any amendment or restatement of any
collateral agreement to which it is a party which relates solely to the Release
Property and in which the Trustee or Servicer, as applicable, will no longer
have any interest after such release.

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   SECTION 4.2  SATISFACTION AND DISCHARGE OF INDENTURE.

   This Indenture shall cease to be of further effect (except as to any
surviving rights of transfer or exchange of Notes herein expressly provided for
and except in the case of clause (a)(ii) below, for the rights of the Holders
of Notes hereunder to receive payment of the principal of and interest on the
Notes, and any other rights of the Holders of Notes hereunder with respect to
amounts deposited with the Trustee), and the Trustee, at the expense of the
Issuer, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture and release of the Collateral to the Issuer, when

      (a) either

          (i) all Notes theretofore authenticated and delivered (other than (x)
       Notes that have been destroyed, lost or stolen and that have been
       replaced or paid as provided in Section 3.9 and (y) Notes for which
       payment money has theretofore been deposited in trust or segregated and
       held in trust by the Trustee and thereafter repaid to the Issuer or
       discharged from such trust, as provided in Section 6.15) have been
       delivered to the Trustee for cancellation; or

          (ii) all such Notes not theretofore delivered to the Trustee for
       cancellation

             (1) have become due and payable, or

             (2) will become due and payable at their Maturity Date within one
          (1) year, or

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

       and, in the case of (1), (2) or (3) above, the Issuer has deposited or
       caused to be deposited with or delivered to the Trustee as trust funds
       in trust for these purposes Cash and Eligible Investments with
       Collateral Value sufficient, without consideration of any reinvestment
       of interest therefrom, to pay and discharge the entire indebtedness on
       such Notes not theretofore delivered to the Trustee for cancellation,
       for principal and any interest to the date of such deposit (in the case
       of Notes that have become due and payable) or to the Maturity Date or
       Redemption Date, as the case may be; PROVIDED, HOWEVER, that, in the
       case of (2) or (3) above with respect to Notes that are not yet due and
       payable, the Issuer shall direct by Issuer Order how any Cash received
       pursuant to this Section 4.2 will be invested and no satisfaction and
       discharge will be permitted unless the Issuer delivers to the Trustee an
       Opinion of Counsel addressed to the Issuer and the Trustee from counsel
       experienced in federal income tax matters to the effect that, based on
       such stipulations of the Issuer, any action taken pursuant to this
       Section 4.2 will not be treated as an exchange pursuant to Section 1001
       of the Code; PROVIDED, FURTHER, HOWEVER, that such Opinion of Counsel
       shall not be required if both the satisfaction and discharge of this
       Indenture, on the one hand, and the Maturity Date or Redemption Date of
       the Notes, on the other hand, will occur in the same calendar year;

      (b) the Issuer has paid or caused to be paid all other sums payable
   hereunder and under the other Security Documents by the Issuer to the
   Trustee, the Servicer (including any Termination Fee), the Special Servicer,
   and each of the Holders; and

      (c) the Issuer has delivered to the Trustee an Officer's Certificate
   stating that all conditions precedent herein provided for relating to the
   satisfaction and discharge of this Indenture have been complied with.

   Notwithstanding the foregoing, but subject to the provisions of Section 1.12
and Section 1.14 hereof, the Issuer's obligations under this Indenture and in
respect of the Notes shall survive the discharge of this Indenture if and to
the extent that any payment of any amount paid by the Issuer to the Trustee or
any Holder is avoided as a preferential transfer or otherwise rescinded or
required to be restored under applicable law. Notwithstanding the satisfaction
and discharge of this Indenture, the obligations of the Issuer, the Servicer,
the Special Servicer or the Holders, as applicable, to satisfy indemnification
obligations under any provision of this Indenture, and the obligation of the
Trustee to the Holders of Notes under Section 6.15 hereof shall survive.

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<PAGE>

   SECTION 4.3  APPLICATION OF TRUST MONEY.

   Subject to Section 4.5, the Trustee shall hold in trust Cash or Eligible
Investments deposited with it pursuant to Section 4.2 of this Indenture, as the
case may be, and shall apply the deposited Cash and the money from Eligible
Investments in accordance with this Indenture to the payment to Persons
entitled thereto, of principal of and interest on the Notes.

   SECTION 4.4  REPAYMENT TO ISSUER.

   Subject to the other provisions of this Indenture and any other applicable
Security Documents, the Trustee shall promptly pay to the Issuer upon written
request any excess money held by it in the Payment Account or any other account
established by the Trustee in furtherance of its rights or obligations under
this Indenture of any other Security Document (exclusive of money to be held by
the Trustee pursuant to Section 6.15) at any time and thereupon shall be
relieved from all liability with respect to such money.

   SECTION 4.5  REINSTATEMENT.

   If the Trustee is unable to apply any Cash or Eligible Investments in
accordance with Section 4.2 by reason of any legal proceeding or by reason of
any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the Issuer's obligations
under this Indenture and the Notes shall be revived and reinstated as though no
deposit had occurred pursuant to Section 4.2 until such time as the Trustee has
received the final order or decree of such court or governmental authority
permitting it to apply all such Cash or Eligible Investments in accordance with
Section 4.2, as applicable; PROVIDED that, if the Issuer has made any payment
of principal of or interest on any Notes because of the reinstatement of its
obligations, the Issuer shall be subrogated to the rights of the Holders of
Notes to receive such payment from the Cash or Eligible Investment held by the
Trustee.

   SECTION 4.6  TRUST INDENTURE ACT.

   To the extent applicable, the Issuer shall comply with Trust Indenture Act
Section 314(d) relating to the release of property from the lien of this
Indenture.

                                   ARTICLE V

                                   REMEDIES

   SECTION 5.1  EVENTS OF DEFAULT.

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

      (a) a default in the regularly scheduled payment of interest required to
   be paid to the Trustee (or the Servicer on behalf of the Trustee) for the
   benefit of the Holders by the Issuer on the second Business Day immediately
   preceding any Payment Date prior to the Maturity Date; or

      (b) a default in the payment of the principal of or interest on any Note
   at the Maturity Date or in the payment of the Redemption Price at a
   Redemption Date; or

      (c) a default in the performance of any material covenant, or breach of
   any material representation or warranty, of the Issuer in this Indenture or
   in any certificate delivered pursuant to this Indenture (other than any
   default in the payment of interest or other amounts due to the Servicer or
   the Trustee for the benefit of

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<PAGE>

   the Holders, or in the performance of any other material covenant,
   representation or warranty a default in whose performance or whose breach is
   elsewhere in this Section 5.1 specifically dealt with), and continuance of
   such default or breach for a period of thirty (30) days after there has been
   given, by registered or certified mail, to the Issuer by the Trustee (or the
   Servicer on the Trustee's behalf) a written notice specifying such default
   or breach and requiring it to be remedied and stating that such notice is a
   "NOTICE OF DEFAULT" under this Indenture; provided that in the case of any
   such failure that is susceptible of cure but that cannot with diligence be
   cured within such thirty (30) day period, if the Issuer shall have promptly
   commenced to cure the same within such thirty (30) day period (as shall be
   evidenced by an Officer's Certificate of the Issuer delivered to the Trustee
   and the Servicer) and shall thereafter prosecute the curing thereof with
   diligence, the period within which such failure may be cured shall be
   extended for such further period as shall be reasonably necessary for the
   curing thereof, although such extended period shall not exceed 180 days; or

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

      (e) the commencement by the Issuer of a voluntary case or proceeding
   under any applicable federal or state bankruptcy, insolvency, reorganization
   or other similar law or of any other case or proceeding to be adjudicated a
   bankrupt or insolvent, or the consent by the Issuer to the entry of a decree
   or order for relief in an involuntary case or proceeding under any
   applicable federal or state bankruptcy, insolvency, reorganization or other
   similar law or to the commencement of any bankruptcy or insolvency case or
   proceeding against it, or the filing by it of a petition or answer or
   consent seeking reorganization or relief under any applicable federal or
   state bankruptcy or similar law, or the consent by it to the filing of such
   petition or to the appointment of or taking possession by a custodian,
   receiver, liquidator, assignee, trustee, sequestrator or similar official of
   the Issuer or of any substantial part of its property, or the making by it
   of an assignment for the benefit of creditors, or the admission by it in
   writing of its inability to pay its debts generally as they become due, or
   the taking of action by the Issuer in furtherance of any such action; or

      (f) the occurrence and continuance, beyond any applicable grace period,
   of an "Event of Default" under the Mortgage, the Mezzanine Loan Agreement or
   any other Security Document.

   SECTION 5.2  ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.

   If an Event of Default occurs and is continuing, then in every such case the
Special Servicer may, to the extent consistent with the Servicing Standards
and, at the direction of the Majority Holders, shall, by a notice in writing to
the Issuer and the Trustee, declare the sum of (i) the principal amount of all
Outstanding Notes and, to the extent permitted under the Underlying Loan
Documentation, the Underlying Loans and (ii) any other amounts, including but
not limited to, accrued interest payable to the Holders under the Notes, to the
extent such amounts are permitted by law to be paid, to be due and payable
immediately, and upon any such declaration such amounts shall become
immediately due and payable.

   At any time after such declaration of acceleration of the Notes or the
Underlying Loans has been made and before a judgment or decree for payment of
the money due has been obtained by the Trustee or the Servicer as hereinafter
provided in this Article, and subject to the Servicer's and Special Servicer's
obligation to act in

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<PAGE>

accordance with the Servicing Standards, the Majority Holders by written notice
to the Issuer, the Trustee, the Servicer and the Special Servicer, may rescind
and annul such declaration and its consequences if:

   (a) the Issuer has paid or caused to be deposited with the Trustee (or the
Servicer or Special Servicer on the Trustee's behalf) a sum sufficient to pay:

          (i) all interest due and payable on all Outstanding Notes,

          (ii) all other amounts due thereon at the rate or rates or in the
       amount prescribed therefor in such Notes,

          (iii) all sums Advanced (with interest thereon at the Advance
       Interest Rate) or paid by the Trustee, the Fiscal Agent (if any), the
       Special Servicer or the Servicer hereunder and the reasonable
       compensation, expenses and disbursements of the Trustee, the Fiscal
       Agent, Special Servicer and the Servicer and its agents and counsel, and

          (iv) any other amounts then due and payable under the Indenture or
       any Indenture Security Document (other than principal that became due
       solely as a consequence of such acceleration); and

   (b) all Events of Default, other than the non-payment of the principal of
the Outstanding Notes which has become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 5.13 and all
"Events of Default" under the Mortgage and the Mezzanine Loan Agreement, other
than the non-payment of the principal of the Mortgage Loan or Mezzanine Loan,
as applicable, which has become due solely by a declaration of acceleration,
have been cured or waived as provided in Section 5.13. No such rescission shall
affect any subsequent default or impair any right consequent thereon.

   If the Issuer fails to make a payment when due, and then delivers to the
Trustee funds sufficient to make all payments current, absent acceleration, and
the Servicer or the Special Servicer on behalf of the Holders agrees in writing
to accept such payment and to rescind the declaration of an Event of Default or
acceleration, or the Majority Holders, prior to an acceleration, agree to
rescind the declaration of an Event of Default, in either case, the Holders
shall also be deemed to waive the right to claim that the failure to make the
payment when due was an Event of Default and is continuing.

   SECTION 5.3  COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
SERVICER.

   If the Issuer fails to pay all amounts due upon an acceleration under
Section 5.2 forthwith upon demand, the Special Servicer (on behalf of the
Trustee) may (subject to the rights of the Majority Holders set forth in
Section 5.12(a) and in accordance with the Servicing Standards) institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may take any action
or remedy available under the Uniform Commercial Code and, subject to the
provisions of this Agreement, may enforce the same against the Issuer and
collect the monies adjudged or decreed to be payable in the manner provided by
law out of the Collateral and pursuant to the Security Documents, wherever
situated, or may institute such non-judicial proceedings in lieu of judicial
proceedings as are then permitted by applicable law, and may take such actions
through a mortgage trustee if necessary or advisable under applicable law.

   If an Event of Default with respect to the Notes occurs and is continuing,
subject to the provisions of this Agreement, the Special Servicer (subject to
the rights of the Majority Holders set forth in Section 5.12(a)) may in its
discretion (or, if any outstanding Advance is a Nonrecoverable Advance, shall)
proceed to protect and enforce its rights, the rights of the Trustee and the
rights of the Holders of Notes by such appropriate judicial proceedings as the
Special Servicer shall deem most effectual to protect and enforce any such
rights, whether for the specific enforcement of any covenant or agreement in
this Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy.

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<PAGE>

   SECTION 5.4  SPECIAL SERVICER MAY FILE PROOFS OF CLAIM.

   In the case of pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, rehabilitation, arrangement, adjustment,
composition or other judicial proceeding relative to the Issuer, or the
property of the Issuer or its creditors, the Special Servicer or the Trustee
(irrespective of whether the principal of the Notes shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Special Servicer shall have made any demand on the Issuer for the
payment of overdue principal or interest) shall be entitled and empowered, to
the extent not prohibited by applicable law, by intervention in such proceeding
or otherwise to,

      (i) file and prove a claim for the whole amount of the principal of and
   any interest on the Notes owing and unpaid and all other sums owing and
   unpaid under the Notes, the Mortgage, the Mezzanine Loan Agreement, this
   Indenture, or any other Security Document, if any, and to file such other
   papers or documents as may be necessary or advisable in order to have the
   claims of the Special Servicer, the Servicer and the Trustee (including any
   claim for the reasonable compensation, expenses, disbursements and advances
   of the Special Servicer, Servicer or the Trustee and their respective agents
   and counsel), except as a result of its or their negligence or bad faith,
   and of the Holders allowed in such judicial proceeding, and

      (ii) collect and receive any monies, notes or other property payable or
   deliverable on any such claims and to distribute the same in accordance with
   this Indenture;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Special Servicer or the Trustee and,
in the event that the Special Servicer, or the Trustee, as applicable, shall
consent to the making of such payments directly to the Holders, to pay to the
Special Servicer, on behalf of the Trustee, any amount due it or the Trustee
for the reasonable compensation, expenses, Advances (with interest thereon at
the Advance Interest Rate) and disbursements of the Servicer, the Special
Servicer or the Trustee, their respective agents and counsel, and any other
amounts due the Trustee hereunder.

   Nothing contained in this Article V shall be interpreted as limiting the
right or responsibility of the Servicer and Special Servicer to take any
actions on behalf of the Trustee in furtherance or fulfillment of the
Servicer's or Special Servicer's responsibility to service the Note
Indebtedness and the Underlying Loans as set out in Article VII. In addition,
nothing herein contained shall be deemed to limit each Holder's right to file
and prove its claim with respect to Notes held by it and to collect and receive
any award in any such proceeding, or to authorize the Servicer and Special
Servicer to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, rehabilitation, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Servicer and Special Servicer to vote in respect of the claim of
any Holder in any such proceeding.

   SECTION 5.5  SERVICER MAY ENFORCE CLAIMS WITHOUT POSSESSION OF NOTES.

   All rights of action and claims under this Indenture or the Notes may be
prosecuted and enforced by the Servicer or Special Servicer on behalf of the
Trustee (or the Trustee at the direction of the Servicer or Special Servicer if
the nature of such action so requires), without the possession of any of the
Notes or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Servicer or Special Servicer on behalf of the
Trustee (or the Trustee at the direction of the Servicer or Special Servicer if
the nature of such action so requires) shall be brought in the Trustee's name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Servicer or Special Servicer (and the
Trustee, if applicable), its agents and counsel, be for the ratable benefit of
the Holders of Notes, if any, in respect of which such judgment has been
recovered.

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<PAGE>

   SECTION 5.6  APPLICATION OF MONEY COLLECTED.

   Upon the occurrence and during the continuance of an Event of Default, money
collected by the Servicer, the Special Servicer or the Trustee hereunder
(including, without limitation, all money remitted by the Servicer or the
Special Servicer to the Trustee for deposit into the Payment Account pursuant
to Section 7.6 hereof) shall be applied in the following order, at the date or
dates fixed by the Trustee (it being the intent that payments of accrued
interest, if funds are available therefor, shall occur not later than each
Payment Date) and, in case of the distribution of such money on account of the
principal of or interest on, the Notes, upon presentation of the Notes (to the
extent not held in global form), and the notation thereon of the payment if
only partially paid and upon surrender thereof:

      (i) first, to the payment of any Trustee Fee, Servicing Fees, Special
   Servicing Fees, as well as any other amounts due and payable to the Trustee,
   the Servicer or the Special Servicer and, second, to the repayment of any
   unreimbursed Advance that has been determined to be a Nonrecoverable Advance
   made by the Servicer or the Special Servicer (and interest thereon at the
   Advance Interest Rate);

      (ii) to the payment to the Holders, pro rata until paid in full, of any
   additional interest accrued to the Holders and then due and payable on the
   Notes on account of a late payment charge on an Underlying Loan or any Exit
   Fee;

      (iii) to the payment to the Holders, pro rata until paid in full, any
   interest then due and payable on the Notes, including any interest at the
   Default Rate but excluding any amounts included within clause (ii) above;

      (iv) to the payment to the Holders, pro rata until paid in full, any
   principal then due and payable on the Notes;

      (v) to the repayment, first to the Servicer, and second to the Special
   Servicer, of any Advances that were not repaid pursuant to clause (i) above,
   and any accrued but unpaid interest thereon at the Advance Interest Rate; and

      (vi) to the payment of the remainder, if any, to the Trustee for deposit
   in the Redemption Account.

   For purposes of Section 10.5 and clauses (iii) through (vi) of this Section
5.6, amounts withheld on account of taxes from money collected by the Trustee,
the Servicer or the Special Servicer as a result of the identity, the
jurisdiction of organization, residence or citizenship or any other
characteristic of a Holder or beneficial owner of any Note shall be treated as
having been distributed by the Trustee to such Holder or to the Holder through
which such beneficial owner holds such Note, or to any successor to any such
Holder.

   Payment on the Outstanding Notes shall be on a pro rata basis and shall be
based, with respect to interest, on the relative proportions of the accrued
interest on any Note to the aggregate amount of accrued interest on all
Outstanding Notes and, with respect to principal, on the relative proportions
of the unpaid principal amount of any Outstanding Notes to the aggregate unpaid
principal amount of all Outstanding Notes and, with respect to any other
amounts, on the relative proportions of such amounts due and payable on any
Note to the aggregate amount of such amounts due and payable on all Outstanding
Notes.

   SECTION 5.7  LIMITATION ON SUITS.

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

      (a) such Holder has previously given written notice to the Trustee, the
   Servicer or Special Servicer of a continuing Event of Default;

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<PAGE>

      (b) the Majority Holders have made written request to the Special
   Servicer to institute proceedings in respect of such Event of Default in the
   name of the Trustee as Trustee; PROVIDED, HOWEVER, that the Special Servicer
   shall not be required to institute such proceedings at the direction of such
   Holders that would cause it to violate the Servicing Standards;

      (c) such Holder or Holders have offered to the Servicer and Special
   Servicer reasonable indemnity or security against any potential losses,
   expenses and liabilities to be incurred in connection with such request;

      (d) the Special Servicer for sixty (60) days after its receipt of such
   notice, request and offer of indemnity or security has failed to institute
   any such proceeding;

      (e) no direction inconsistent with such written request has been given to
   the Special Servicer during such sixty (60) day period by the Majority
   Holders; and

      (f) an Event of Default shall have occurred and be continuing;

it being understood and intended that, except to the extent provided in Section
5.12(a), no one or more of such Holders shall have any right in any manner
whatever by virtue of, or by availing of, any provision of this Indenture to
affect, disturb or prejudice the rights of any other of such Holders, or to
obtain or to seek to obtain priority or preference over any other of such
Holders or to enforce any right under this Indenture, except in the manner
herein provided and for the equal and ratable benefit of all of such Holders.
The Holders may exercise their rights under this Section 5.7 independently
without being subject to Section 1.3.

   SECTION 5.8  UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL AND
INTEREST.

   Notwithstanding any other provision in this Indenture, the Holder of any
Note shall have the right, which is absolute and unconditional, to receive
payment of the principal of and interest on such Note at the Scheduled Maturity
Date expressed in such Note (or in the case of a redemption, to receive payment
of the Redemption Price for such Note, on the Redemption Date) and such rights
shall not be impaired without the consent of such Holder.

   SECTION 5.9  RESTORATION OF RIGHTS AND REMEDIES.

   If the Special Servicer, the Servicer (or the Trustee at the request of the
Special Servicer) or, subject to Section 5.7, any Holder has instituted any
proceeding to enforce any right or remedy under this Indenture or under any
other Security Document and such proceeding has been discontinued, waived,
rescinded, or abandoned for any reason, or has been determined adversely to the
Trustee, the Special Servicer, the Servicer or to such Holder, then and in
every such case, subject to any determination in such proceeding, the Issuer,
the Trustee, the Special Servicer, the Servicer and the Holders shall be
restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee, the Holders, the Special
Servicer, the Servicer and the Issuer shall continue as though no such
proceeding had been instituted.

   SECTION 5.10  RIGHTS AND REMEDIES CUMULATIVE.

   Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Notes in Section 3.10, no right or remedy
herein conferred upon or reserved to the Trustee, the Servicer, the Special
Servicer or to the Holders of Notes is intended to be exclusive of any other
right or remedy, and every right and remedy shall, to the extent permitted by
law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.

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   SECTION 5.11  DELAY OR OMISSION NOT WAIVER.

   No delay or omission of the Trustee, the Servicer, the Special Servicer or
any Holder of any Note to exercise any right or remedy accruing upon any Event
of Default shall impair any such right or remedy or constitute a waiver of any
such Event of Default or an acquiescence therein. Every right and remedy given
by this Indenture or by any of the Security Documents or by law to the Trustee,
the Servicer, the Special Servicer or to the Holders may be exercised from time
to time, and as often as may be deemed expedient, to the extent permitted by
applicable law, by the Trustee, the Servicer, the Special Servicer or by the
Holders entitled to exercise such remedies, as the case may be.

   SECTION 5.12  CONTROL BY HOLDERS.

   (a) Subject to matters described herein which require the consent of 100% of
the Holders of Notes, prior to the Scheduled Maturity Date, during the
continuance of an Event of Default, the Majority Holders will have the right to
direct the time, place and method of conducting any proceeding for any remedy
available to the Special Servicer; PROVIDED, HOWEVER, that any such direction
shall not conflict with applicable law or the Security Documents or cause the
Special Servicer to violate the Servicing Standards. Following an Event of
Default which has occurred and is continuing prior to the Maturity Date, the
Special Servicer shall prepare a plan of action with respect to such Event of
Default and shall give notice thereof to the Trustee, which will forward copies
of such plan and of any material change therein (other than a material change
at the written direction of the Majority Holders as contemplated below) through
to each Holder of Notes. Unless within 10 days after such notice is given the
Majority Holders have objected thereto in writing, the Special Servicer shall
follow its original or modified, as the case may be, planned course of action.
If the Majority Holders have objected in writing within such 10-day period,
such Holders shall have an additional 10 days to provide the Special Servicer
with an alternative plan of action. In the event that within such second 10-day
period the Majority Holders have provided the Special Servicer with such
alternative plan of action, the Special Servicer shall follow such alternative
plan of action, unless the Special Servicer has determined that such
alternative plan of action conflicts with applicable law or the Security
Documents or is contrary to the Servicing Standards, in which case the Special
Servicer will follow its original planned course of action. If no such
alternative plan is provided in such second 10-day period, the Special Servicer
shall proceed with its original plan of action. In addition, notwithstanding
the foregoing, the Special Servicer may take action prior to the lapse of
either such 10-day period if it determines, in accordance with the Servicing
Standards, that such action is required by the Servicing Standards in order to
avoid a material adverse effect on the Holders or is in the nature of an
emergency, and shall have no liability to the Issuer, any Underlying Borrower,
any party or any Holder for taking any such action that meets the foregoing
standards. In addition, the Special Servicer will have no liability and shall
be held harmless by the Holders for any action taken pursuant to a planned
course of action directed by the Majority Holders which is in contradiction to
the Special Servicer's original plan of action, provided such action is in
accordance with the Servicing Standards. Notwithstanding any other provision of
this Indenture to the contrary, any rights of less than 100% of the Holders
hereunder to consent to or direct any action or inaction shall be subject to
the rights of the Majority Holders and the Special Servicer pursuant to this
Section 5.12(a).

   (b) Notwithstanding anything herein to the contrary, if in connection with
any Event of Default the Special Servicer has recommended the commencement of
foreclosure or any proceedings or actions which relate to the realization
against any Collateral, or the Special Servicer has recommended the sale or
liquidation of any Foreclosed Collateral, and, in either case, the requisite
Holders have disapproved or have not approved such action pursuant to this
Indenture, the Special Servicer shall nevertheless be required to commence such
foreclosure proceedings or actions and sell or liquidate such property, as the
case may be, in accordance with the Servicing Standards, upon but only upon a
determination by the Servicer, the Special Servicer or the Trustee that any
previously made and unreimbursed Advances with interest thereon constitute
Nonrecoverable Advances.

   (c) The Majority Holders will have the right to terminate and replace the
Special Servicer.

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   SECTION 5.13  WAIVER OF PAST DEFAULTS.

   Subject to the Servicer's and Special Servicer's obligation to act in
accordance with the Servicing Standards and subject to Section 5.12(b), the
Majority Holders may on behalf of the Holders of all the Notes waive any past
Event of Default hereunder and its consequences, except:

      (a) an Event of Default Pursuant to Section 5.1(a), (b) or (f) hereof, or
   Section 4.1 of the Mortgage Note or, then a waiver will require the consent
   of 100% of the Holders in aggregate principal amount of the Outstanding
   Notes directly affected;

      (b) an Event of Default in respect of a covenant or provision hereof or
   under the Mortgage or Mezzanine Loan Agreement that under Article IX cannot
   be modified or amended without the consent of the Holder of each Outstanding
   Note affected thereby;

      (c) a default depriving the Trustee of a lien on any part of the
   Collateral;

      (d) a default depriving the Trustee, the Fiscal Agent (if any), the
   Servicer or the Special Servicer of any fees, reimbursement or
   indemnification to which it is entitled, for which a waiver will require the
   consent of the Trustee, the Fiscal Agent (if any), the Servicer or the
   Special Servicer, as applicable, which consent may be withheld in the sole
   discretion of the Trustee, the Fiscal Agent (if any), the Servicer or the
   Special Servicer, as applicable; or

      (e) an Event of Default that is an Event of Default occurring on the
   Scheduled Maturity Date.

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

   SECTION 5.14  UNDERTAKING FOR COSTS.

   All parties to this Indenture agree, and each Holder of any Note by its
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy
under this Indenture or any other Security Document, or in any suit against the
Trustee or the Servicer or Special Servicer for any action taken, suffered or
omitted by the Trustee or the Servicer or Special Servicer, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit,
and that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees and expenses, against any party litigant in such
suit, having due regard to the merits and good faith of the claims or defenses
made by such party litigant; but the provisions of this Section shall not apply
to any suit instituted by the Issuer, or to any suit instituted by the Trustee,
or to any suit instituted by the Servicer or Special Servicer, or to any suit
instituted by any Holder, or group of Holders, holding in the aggregate at
least 25% in aggregate principal amount of Outstanding Notes, or to any suit
instituted by any Holder of any Note for the enforcement of the payment of the
principal of or interest on any Note on or after the Maturity Date (or, in the
case of redemption, on or after the Redemption Date).

                                  ARTICLE VI

                                  THE TRUSTEE

   SECTION 6.1  CERTAIN DUTIES AND RESPONSIBILITIES.

   (a) The duties, responsibilities and liabilities of the Trustee in respect
of the Security Documents and the other duties and liabilities of the Trustee
under this Indenture shall be as follows:

      (i) The Trustee (and the Servicer or Special Servicer on its behalf)
   shall have the full power and authority to do all things not inconsistent
   with the provisions of this Indenture or any other Security

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   Document that it may deem advisable in order to enforce the provisions
   hereof or thereof or to take any action with respect to a default or an
   Event of Default hereunder or thereunder, of which a Responsible Officer
   shall have actual knowledge or with respect to which notice was given to the
   Trustee in accordance with this Indenture, or to institute, appear in or
   defend any suit or other proceeding with respect hereto or thereto, or to
   protect the interests of the Holders of Notes; PROVIDED, HOWEVER, that
   notwithstanding the foregoing or any other provisions of this Indenture to
   the contrary, the Note Indebtedness and the Underlying Loans shall be
   serviced by the Servicer or the Special Servicer and the powers vested in
   the Servicer and Special Servicer hereunder shall not be exercised by the
   Trustee except as expressly set forth herein. Neither the Trustee nor any of
   its directors, officers, shareholders, agents or employees (each, a "TRUSTEE
   INDEMNIFIED PARTY" and, collectively, the "TRUSTEE INDEMNIFIED PARTIES")
   shall be answerable to or accountable for, except for its or their own bad
   faith, willful misconduct or negligence, and the Issuer agrees to indemnify
   and save harmless the Trustee Indemnified Parties from, any costs, expenses,
   liabilities and damages that any of them may incur or sustain, in good faith
   and without willful misconduct or negligence, in the exercise and
   performance of the Trustee's powers and duties hereunder, including the cost
   and expense of defending themselves against any claim or liability in
   connection with the exercise or performance thereof; PROVIDED, HOWEVER, that
   if it is found that any such claim or liability has resulted from the bad
   faith, willful misconduct or negligence of any Trustee Indemnified Party in
   the performance of its duties hereunder, such Trustee Indemnified Party
   shall repay such portion of the reimbursed amounts that is attributable to
   expenses incurred in relation to that portion of its acts or omissions that
   is the subject of such finding. If any Trustee Indemnified Party is entitled
   to receive indemnification hereunder with respect to any such action or
   proceeding brought by a third party, the Issuer shall be entitled to assume
   the defense of any such action or proceeding with counsel reasonably
   satisfactory to such Trustee Indemnified Party who shall not, except with
   the consent of such Trustee Indemnified Party, be counsel to the Issuer or
   any Affiliate thereof. Upon assumption by the Issuer of the defense of any
   such action or proceeding, such Trustee Indemnified Party shall have the
   right to participate in such action or proceeding and to retain its own
   separate counsel, but the Issuer shall not be liable for any legal fees or
   expenses of such a separate counsel subsequently incurred by such Trustee
   Indemnified Party in connection with the defense thereof unless (i) the
   Issuer has agreed to pay such fees and expenses or (ii) counsel provided by
   the Issuer pursuant to the foregoing is counsel to the Issuer and such
   Trustee Indemnified Party shall have been advised by such counsel that
   representation of such Trustee Indemnified Party by such counsel provided by
   the Issuer pursuant to the foregoing would be inappropriate due to actual or
   potential conflicting interests between the Issuer and such Trustee
   Indemnified Party, including situations in which there are one or more legal
   defenses available to such Trustee Indemnified Party that are different from
   or additional to those available to the Issuer; PROVIDED, HOWEVER, that the
   Issuer shall not, in connection with any such action or proceeding, or
   separate but substantially similar action or proceeding arising out of the
   same general allegations, be liable for the fees and expenses of more than
   one separate firm of attorneys at any time, in addition to any local
   counsel, for any such Trustee Indemnified Party. The Issuer shall not
   consent to the terms of any compromise or settlement of any action defended
   by the Issuer in accordance with the foregoing without the prior consent of
   the Trustee Indemnified Party. The Issuer shall not be required to indemnify
   any Trustee Indemnified Party for any amount paid or payable by such Trustee
   Indemnified Party in settlement of any action, proceeding or investigation
   without the prior written consent of the Issuer, which consent shall not be
   unreasonably withheld. Promptly after receipt by any Trustee Indemnified
   Party of notice of its involvement (or the involvement of any of its
   affiliates or such affiliate's directors, officers, shareholders, agents or
   employees) in any action, proceeding or investigation, such Trustee
   Indemnified Party shall, if a claim for indemnification in respect thereof
   is to be made against the Issuer hereunder, notify the Issuer in writing of
   such involvement, but the failure of such Trustee Indemnified Party to
   provide such notice shall neither cause the forfeiture of the right to
   receive indemnity hereunder nor limit such right, except to the extent, if
   any, that the Issuer is prejudiced by the failure of the Trustee Indemnified
   Party to promptly give such notice. The Issuer's indemnification obligations
   under this Section 6.1(a)(i) shall survive payment of the Notes and any
   resignation, removal or replacement of the Trustee. The indemnification
   provided herein is limited in each case to actual damages and does not
   extend to consequential damages.

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      The Trustee shall have no obligation to take any action to protect,
   preserve or enforce any rights or interests in the Security Documents or
   towards the execution or enforcement of the trusts hereby or thereby created
   which, in its opinion, shall be likely to involve expense or liability to
   the Trustee, unless the Trustee shall have received an agreement
   satisfactory to the Trustee in its sole discretion to indemnify it against
   such liability and expense. The Trustee shall not be required to ascertain
   or inquire as to the performance or observance of any of the covenants or
   agreements contained herein, or in any other Security Document or in any
   other instruments to be performed or observed by the Issuer or any other
   party to any Security Document (including, without limitation, the necessity
   or desirability under any applicable state law to re-record, re-register or
   re-file any Security Document). In accepting the trusts hereunder and under
   the Security Documents, the Trustee is acting solely as Trustee hereunder
   and not in its individual capacity and all Persons, other than the Issuer
   and the Holders, having any claim against the Trustee arising by reason
   hereof shall look only to the Collateral for payment or satisfaction thereof
   except as provided herein.

      (ii) The Trustee shall incur no liability in acting upon any signature,
   notice, request, consent, certificate, opinion, or other instrument
   reasonably believed by it to be genuine. In administering the trusts, the
   Trustee may exercise any of the powers hereof directly or through its agents
   or attorneys and may, at the expense of the Issuer, consult with counsel,
   accountants and other skilled Persons to be selected and employed by it, and
   the reasonable expenses thereof shall be paid by the Issuer, and the Trustee
   shall not be liable for anything done, suffered or omitted in good faith by
   it in accordance with the advice of any such Person nor for any error of
   judgment made in good faith by a Responsible Officer, unless it shall be
   proved that the Trustee was negligent in ascertaining the pertinent facts.

      (iii) The Trustee shall have no duty to make, arrange or ensure the
   completion of any recording, filing or registration of this Indenture, any
   Security Document, any instrument of further assurance, any instrument
   constituting part of the Underlying Collateral, or any amendments or
   supplements to any of said instruments and the Trustee shall have no duty to
   make, arrange or ensure the completion of the payment of any fees, charges
   or taxes in connection therewith (and the Trustee may act with respect to
   the Security Documents and pay out deposited monies without regard thereto),
   or to give any notice thereof, or to make, arrange or ensure the completion
   of the payment of or be under any duty in respect of any tax, assessment or
   other governmental charge that may be levied or assessed on the Underlying
   Collateral, the Underlying Properties or any part thereof or against the
   Issuer. Notwithstanding the foregoing, the Trustee agrees that it will
   notify the Issuer in writing of any filings, fees, taxes or other payments
   required in connection with the satisfaction of the Issuer's obligations
   hereunder and under the other Security Documents known to any Responsible
   Officer of the Trustee assigned to its Corporate Trust Office and actively
   involved in the administration of this Indenture.

      (iv) Whenever, in administering the trust, the Trustee shall deem it
   necessary or desirable that a matter be proved or established prior to
   taking, suffering or omitting any action hereunder, the Trustee may, in the
   absence of bad faith on the part of the Trustee, request and rely upon
   (unless other evidence in respect thereof be specifically prescribed herein
   or in any Security Document) an Officer's Certificate of the Issuer, and
   such Officer's Certificate shall be full warrant to the Trustee for any
   action taken, suffered or omitted by it on the faith thereof, but in its
   discretion the Trustee may in lieu thereof accept other evidence of such
   fact or matter or may require such further or additional evidence as it may
   deem reasonable.

      (v) Whenever, in administering the trust, the Trustee shall be permitted
   whether pursuant to the terms of this Indenture or any other Security
   Document, to determine to grant or withhold its consent to or waiver or
   approval of any matter described herein or therein or to take or omit to
   take any action or course of conduct permitted or required hereunder or
   thereunder, the Trustee shall be fully protected in making such
   determination based solely upon the written direction of the Servicer,
   Special Servicer or, absent such direction, (a) on the basis of the related
   submission required by this Indenture or by such other Security Document, as
   the case may be, or (b) if a standard for such determination is specified
   herein or therein, on the basis of its determination in good faith as to
   whether or not such standard has been satisfied, or (c) if no such standard
   is specified, on the basis of its determination in good faith as to (x) with
   respect to any act, omission or course of conduct, whether such act,
   omission or course of conduct is reasonable (which

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   determination may be made solely on the basis of advice from professionals
   selected by the Trustee with reasonable care) and (y) with respect to the
   selection of any professional, whether the party proposing the engagement of
   such professional is motivated primarily by interests contrary to those of
   the Holders in making such proposal, PROVIDED, in each case, that the
   Trustee grants or withholds its consent or approval or takes any other
   action on a timely basis. The Trustee shall not be required to seek the
   individual consents or approvals of the Holders with respect to any such
   consent or approval unless the same shall be explicitly required by the
   terms of this Indenture or such other Security Document, as the case may be.
   Without limiting the generality of the foregoing, in the event the approval
   of the Trustee is requested by the Servicer or Special Servicer with respect
   to a settlement of an insurance claim pursuant to the Mortgage or the
   Mezzanine Loan Agreement, the Trustee shall be fully protected in granting
   such approval based on directions from the Servicer or Special Servicer and
   the Servicer or Special Servicer shall be protected in providing such
   direction if the Servicer or Special Servicer has selected and retained, in
   accordance with the Servicing Standards, a qualified independent insurance
   adjuster who has advised the Servicer or Special Servicer that the proposed
   settlement is reasonable, and the Trustee determines in good faith, solely
   on the basis of such advice, that such settlement is reasonable.
   Notwithstanding anything to the contrary herein or in any of the other
   Security Documents, neither the Trustee (at the request of the Servicer or
   Special Servicer) nor the Servicer or Special Servicer on its behalf shall
   consent to the transfer of the Underlying Collateral or any beneficial
   interest therein, any modification or waiver of the other Security Documents
   or the terms of this Indenture (other than modifications or waivers that may
   be made unilaterally (within the meaning of Prop. Treas. Reg. (S) 1.1001-3,
   or any successor provision) as provided herein or in the other Security
   Documents), any release of any property pledged pursuant to this Indenture
   or the other Security Documents, or any release of the Issuer from its
   obligations hereunder or under the other Security Documents (other than any
   actions expressly contemplated by this Indenture or the other Security
   Documents in connection with payments on the Notes (including any
   redemptions) or otherwise), unless the Issuer has obtained and delivered to
   the Trustee, the Servicer and the Special Servicer an Opinion of Counsel
   from counsel experienced in federal income tax matters that such consent or
   modification, or waiver, as the case may be, will not be treated as an
   exchange of any Note for a newly issued obligation pursuant to Section 1001
   of the Code.

      (vi) The Trustee shall have no obligation to see to the payment or
   discharge of any liens (other than the liens of the Security Documents, and
   then only to the extent therein provided), or to see to the application of
   any payment of the principal of or interest on the Notes or the Underlying
   Loans secured by any such lien or to the delivery or transfer to any Person
   of any property released from any such lien, or to give notice to or make
   demand upon any borrower, lender, trustor, beneficiary or other Person for
   the delivery or transfer of any such property.

      (vii) The Trustee shall not be concerned with or accountable to any
   Person for the use or application of any deposited monies that shall be
   released or withdrawn in accordance with the provisions hereof or of any
   other Security Document or of any property or securities or the proceeds
   thereof that shall be released from the lien hereof or thereof in accordance
   with the provisions hereof or thereof and the Trustee shall have no
   liability for the acts of other parties hereto that are not in accordance
   with the provisions hereof.

      (viii) The Trustee shall not be charged with knowledge of any Event of
   Default hereunder or under any other Security Document (except default in
   the payment of monies to the Trustee that the Issuer is required to pay or
   cause to be paid to the Trustee on or before a specified date and except
   default in the delivery of any certificate, opinion or other document
   expressly required to be delivered to the Trustee by any provision hereof or
   any Security Document) or any condition which after notice and/or the
   passage of time would constitute an Event of Default or any other fact,
   circumstance or event the occurrence of which would require the Trustee to
   give any notice or otherwise take any action (any such Event of Default,
   condition, circumstance or other event, an "EVENT"), unless either (i) a
   Responsible Officer of the Trustee assigned to its Corporate Trust Office
   shall have actual knowledge of such Event or (ii) written notice in the
   manner provided in this Indenture of such Event shall have been given to and
   received by the Trustee, by the Issuer, the Servicer, the Special Servicer
   or any Holder or Holders of at least 25% in aggregate principal amount of
   the Notes then Outstanding.

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<PAGE>

      (ix) The Trustee shall not be responsible for any act or omission of the
   Servicer or Special Servicer.

   (b) Except during the continuance of an Event of Default of which a
Responsible Officer of the Trustee shall have actual knowledge (or with respect
to which notice was given to the Trustee in accordance with this Indenture)
with respect to the Notes, the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into this Indenture against the
Trustee.

   (c) In the absence of actual knowledge of a Responsible Officer to the
contrary or bad faith on its part, the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed therein,
upon certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but in the case of any such certificates or
opinions which by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine the same
to determine whether or not they conform on their face to the requirements of
this Indenture.

   (d) In case an Event of Default known to a Responsible Officer of the
Trustee (or with respect to which notice was given to the Trustee in accordance
with this Indenture) with respect to the Notes has occurred and is continuing,
the Trustee shall exercise (subject, in all cases, to the rights and powers
vested in the Servicer and Special Servicer pursuant to this Indenture), with
respect to the Notes, such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent Person would exercise or use under the circumstances in the conduct of
his own affairs.

   (e) No provision of this Indenture shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act,
or its own willful misconduct, EXCEPT that

      (i) this Subsection (e) shall not be construed to limit the effect of
   Subsection (a) or (b) of this Section;

      (ii) the Trustee shall not be liable for any error of judgment made in
   good faith by a Responsible Officer, unless it is proved by a court of
   competent jurisdiction that the Trustee was negligent in ascertaining the
   pertinent facts; and

      (iii) the Trustee shall not be liable with respect to any action taken or
   omitted to be taken by it in good faith and without negligence in accordance
   with the terms of this Indenture and the direction of the Majority Holders,
   relating to the time, method and place of conducting any proceeding for any
   remedy available to the Trustee, or exercising any trust or power conferred
   upon the Trustee, under this Indenture with respect to the Notes or the
   Security Documents.

   SECTION 6.2  MONEY HELD IN TRUST.

   Accounts established by the Trustee hereunder shall be subject to
regulations regarding fiduciary funds on deposit substantially similar to those
described in 12 C.F.R. (S) 9.10(b). Money held by the Trustee hereunder shall
be held in trust for the purposes for which it was paid, and shall be
segregated from any other monies held by the Trustee, and may be deposited by
the Trustee, under such general conditions as may be prescribed by law, in the
trust department of the Trustee. All such moneys shall be held in Eligible
Accounts. The Trustee shall be under no liability for interest on any money
received by it hereunder except as provided in this Indenture, the Cash
Management Agreement, the Mezzanine Cash Management Agreement or as otherwise
agreed with the Issuer. Within a reasonable time after the end of each calendar
year or portion thereof during the term of the Notes, the Trustee shall cause
the depository for any accounts referred to in this Article to deliver to the
Issuer, the Servicer and the Trustee and, upon request, to the Holder of any
Note a statement of any amounts received or disbursed by the Trustee in respect
of the Collateral during such calendar year or portion thereof.

   SECTION 6.3  NOTICE OF DEFAULTS.

   The Trustee shall give the Holders, the Servicer, the Special Servicer and
the Issuer notice of any default hereunder as and to the extent provided by the
Trust Indenture Act; PROVIDED, HOWEVER, that in the case of any

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<PAGE>

default of the character specified in Section 5.1(c), no such notice to Holders
shall be given until at least 30 days after the occurrence thereof. For the
purpose of this Section, the term "default" means any event which is, or after
notice or lapse of time or both would become, an Event of Default.

   SECTION 6.4  CERTAIN RIGHTS OF TRUSTEE.

   Subject to the provisions of Section 6.1:

      (a) the Trustee may rely and shall be protected in acting or refraining
   from acting upon any resolution, certificate, statement, instrument,
   opinion, report, notice, request, direction, consent, order, bond,
   debenture, note, other evidence of indebtedness or other paper or document
   believed by it to be genuine and to have been signed or presented by the
   proper party or parties;

      (b) any request or direction of the Issuer referred to herein shall be
   sufficiently evidenced by the Issuer Request or the Issuer Order;

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

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

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

      (f) the Trustee shall not be bound to make any investigation into the
   facts or matters stated in any resolution, certificate, statement,
   instrument, opinion, report, notice, request, direction, consent, order,
   bond, debenture, note, other evidence of indebtedness or other paper or
   document, but the Trustee, in its discretion, may make such further inquiry
   or investigation into such facts or matters as it may see fit, and, if the
   Trustee shall determine to make such further inquiry or investigation, it
   shall be entitled to examine the books, records and premises of the Issuer
   personally or by agent or attorney (any such examination to be made upon
   reasonable advance notice and at reasonable times, except that if an Event
   of Default has occurred and is continuing such examination shall be
   permitted at such times, with or without notice, as the Trustee may select
   in its sole discretion);

      (g) the Trustee may execute any of the trusts or powers hereunder or
   perform any duties hereunder either directly or by or through agents or
   attorneys;

      (h) the Trustee shall not be personally liable for any action taken,
   suffered or omitted by it in good faith and believed by it to be authorized
   or within the discretion or rights or powers conferred upon it by this
   Indenture; and

      (i) all rights and protections afforded to the Trustee in accordance with
   this Indenture shall apply to the Trustee when it is acting as the Fiscal
   Agent, the Registrar or in any other capacity in accordance with this
   Indenture.

   SECTION 6.5  COMPENSATION AND REIMBURSEMENT.

   The Issuer agrees:

      (a) to pay to the Trustee the Trustee Fee and such other amounts due from
   time to time pursuant to this Indenture;

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      (b) except as otherwise expressly provided herein, to reimburse the
   Trustee upon its request for all reasonable expenses, disbursements and
   advances incurred or made by the Trustee in carrying out its duties and
   responsibilities under this Indenture or under the other Security Documents,
   including, without limitation, the reasonable compensation, expenses and
   disbursements of its agents and counsel, any amounts required to be expended
   by the Trustee in compliance with Article XII hereof, and any expenses
   incurred in connection with the transfer or reassignment by the Trustee to a
   successor trustee of any Security Document pursuant to Section 6.11, except
   any such expense, disbursement or advance as may be attributable to the
   Trustee's negligence, willful misconduct or bad faith;

      (c) that the Trustee Indemnified Parties shall not be answerable to or
   accountable for, except in the case of their own bad faith, willful
   misconduct or negligence, and, the Issuer agrees to indemnify, consistent
   with the provisions set forth in Section 6.1(a)(i) hereof, each of the
   Trustee Indemnified Parties for, and to hold them harmless against, any
   loss, liability, damage or expense that it may incur or sustain without
   negligence, willful misconduct, or bad faith on its part, arising out of or
   in connection with the exercise and performance of the Trustee's powers and
   duties hereunder and the acceptance or administration of the trust or trusts
   hereunder, under the Mortgage, Mezzanine Loan Agreement or under any other
   instrument included in the Collateral, including the costs and expenses of
   defending itself against any claim or liability in connection with the
   exercise or performance of any of the Trustee's powers or duties hereunder.
   The indemnification obligation of the Issuer under this Section 6.5(c) shall
   survive payment of the Notes and any resignation, removal or replacement of
   the Trustee; and

      (d) the expenses and the compensation for the services rendered by the
   Trustee or the Servicer after an Event of Default as specified in Section
   5.1(d) or Section 5.1(e) hereof in connection herewith are intended to
   constitute expenses of administration under any bankruptcy proceeding.

   SECTION 6.6  CONFIDENTIALITY.

   Unless an Event of Default has occurred and is continuing, the Holders of
Notes (each in their individual capacities only) shall not have any right to
obtain any information relating to the Underlying Collateral or the Underlying
Properties, including information regarding lease rents, any rent rolls or
copies of any leases, except as expressly provided for herein. Each of the
Trustee, the Special Servicer, and the Servicer agree to keep confidential, and
to cause their respective directors, officers, employees, agents, attorneys,
accountants, financial advisors and other representatives to keep confidential,
all leases, lease abstracts, rent rolls, financial statements, appraisals and
other financial information, including information relating to lease terms and
identities of tenants, furnished to, or obtained by, the Trustee, the Special
Servicer or the Servicer hereunder (the "CONFIDENTIAL INFORMATION") and to use
reasonable efforts, if such material is not marked "Proprietary" or
"Confidential", and to use special efforts, if such material is so marked, to
not, without the prior written consent of the Issuer, disclose such
Confidential Information in whole or in part in any manner whatsoever;
PROVIDED, HOWEVER, that the Trustee shall be permitted to fulfill its
responsibilities under Section 6.17 hereof and the Trustee, the Special
Servicer, the Servicer, and their representatives shall be permitted to
disclose Confidential Information if (i) required by law (or regulations
thereunder) or (ii) such disclosure is necessary for either the Trustee, the
Special Servicer or the Servicer to perform its duties hereunder or (iii) an
Event of Default shall have occurred and be continuing and such disclosure is
made in connection with the enforcement of the provisions of the Notes, this
Indenture or any other Security Document or (iv) such disclosure is appropriate
in working with its regulators (or those of its corporate parent), to such
regulators. This Section shall not apply to any provisions of the Confidential
Information that are or become generally available to the public or to
information in or incorporated by reference in any Registration Statement.

   SECTION 6.7  CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.

   There shall at all times be a Trustee hereunder which shall be a trust
company, a national banking association or a banking corporation, in each case
organized and doing business under the laws of the United States, any state
thereof or the District of Columbia, authorized under such laws to exercise
corporate trust

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powers (i) having a long-term unsecured debt rating not less than AA (or its
equivalent) (without regard to any '+' or '-' or numerical designation) by at
least one NRSRO (unless a Fiscal Agent has been appointed hereunder which has
such rating) and (ii) a combined capital and surplus of at least $50,000,000,
and subject to supervision or examination by federal or state authority. If
such corporation or national banking association publishes reports of condition
at least annually, pursuant to law or to the requirements of said supervising
or examining authority, then for the purposes of this Section, the combined
capital and surplus of such corporation or national banking association shall
be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time the Trustee shall cease
to be eligible in accordance with the provisions of this Section, it shall
resign immediately in the manner and with the effect hereinafter specified in
this Article and in the last paragraph of Section 3.6.

   SECTION 6.8  REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE.

   The Trustee hereby represents and warrants to the other parties hereto that,
as of the Closing Date:

      (a) the Trustee has been duly organized and is validly existing under the
   laws of the State of New York and is qualified under the laws of the
   jurisdictions in which the Collateral and the Underlying Properties are
   located to the extent necessary to perform its obligations in accordance
   with the terms of this Indenture except to the extent that the laws of any
   state in which the Indenture Collateral is located may require the
   appointment of a co-trustee for the enforcement of its rights with respect
   to the Indenture Collateral;

      (b) the execution and delivery of this Indenture and the other Security
   Documents to which it is a party by the Trustee have been duly authorized by
   all necessary corporate action on the part of the Trustee; the Trustee is
   duly authorized under applicable law, its articles of incorporation and its
   by-laws to authenticate the Notes, to accept the delivery of the Collateral
   and to perform its obligations under this Indenture andeach of the other
   Security Documents to which it is a party, and all corporate action
   necessary or required therefor has been duly and effectively taken or
   obtained; none of the execution, delivery and performance of this Indenture,
   or the consummation of the transactions herein contemplated, nor the
   compliance with the provisions hereof, will conflict with or result in a
   breach of, or constitute a default under (i) the terms of any agreement or
   instrument to which the Trustee is a party or by which it is bound; (ii) the
   certificate of incorporation or by-laws of the Trustee; or (iii) to the
   Trustee's knowledge, the provisions of any law, governmental rule,
   regulation, judgment, decree or order binding on the Trustee or its
   properties; neither the Trustee nor any of its Affiliates is a party to,
   bound by, or in breach of or in violation of any material indenture or other
   agreement or instrument, or subject to or in violation of any statute, order
   or regulation of any court, regulatory body, administrative agency or
   governmental body having jurisdiction over it, which materially and
   adversely affects or to the knowledge of the Trustee may in the future
   materially and adversely affect (x) the ability of the Trustee to perform
   its obligations under this Indenture or (y) the business, operations,
   financial condition, properties or assets of the Trustee;

      (c) the execution and delivery by the Trustee of this Indenture and the
   consummation of the transactions contemplated hereby (with the benefit of
   the provisions hereof) do not require any consent, approval, authorization,
   order, registration or qualification of or with any court or any regulatory
   authority or other governmental agency or body, except such as has been
   obtained and is in full force and effect;

      (d) this Indenture has been duly executed and delivered by the Trustee
   and, assuming due authorization, execution and delivery by the other parties
   hereto, constitutes a valid and legally binding obligation of the Trustee
   enforceable against it in accordance with its terms, subject to (i)
   applicable bankruptcy, fraudulent conveyance or transfer, insolvency,
   reorganization, moratorium or similar laws of general applicability relating
   to or affecting the rights and remedies of creditors generally and (ii) the
   application of principles of equity (regardless of whether considered and
   applied in a proceeding in equity or at law);

      (e) there are no actions, suits or proceedings pending or, to the
   Trustee's knowledge, threatened against the Trustee, before or by any court,
   administrative agency, arbitrator or governmental body (i) with

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   respect to any of the transactions contemplated by this Indenture or (ii)
   with respect to any other matter which could, if determined adversely to the
   Trustee, materially and adversely affect it or its business, assets,
   operations or condition, financial or otherwise, or adversely affect its
   ability to perform its obligations under this Indenture; and

      (f) the Trustee is not in default with respect to any order or decree of
   any court or any order, regulation or demand of any federal, state,
   municipal or governmental agency, which default might have consequences that
   would materially and adversely affect the condition (financial or otherwise)
   or operations of the Trustee or its properties or might have consequences
   that would materially and adversely affect its performance hereunder.

   Within thirty (30) days of the earlier of discovery by the Trustee or
receipt of notice by the Trustee of the breach of any representation or
warranty of the Trustee set forth in this Section 6.8, the Trustee shall cure
such breach in all material respects.

   SECTION 6.9  MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.

   Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, PROVIDED such
corporation shall be otherwise qualified and eligible under this Article, and
shall be deemed to have assumed all of the liabilities and obligations of the
Trustee hereunder without the execution or filing of any paper or any further
act on the part of any of the parties hereto (other than such Person). In case
any Notes shall have been authenticated, but not delivered, by the Trustee then
in office, any successor by merger, conversion, consolidation or succession to
such authenticating Trustee may adopt such authentication and deliver the Notes
so authenticated with the same effect as if such successor Trustee had itself
authenticated such Notes.

   SECTION 6.10  RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.

   (a) The Trustee may resign at any time by giving written notice thereof to
the Servicer, the Special Servicer and the Issuer. No resignation or removal of
the Trustee and no appointment of a successor Trustee pursuant to this Article
shall become effective until the acceptance of appointment by the successor
Trustee in accordance with the applicable requirements of Section 6.11.

   (b) If the instrument of acceptance by a successor Trustee required by
Section 6.11 shall not have been delivered to the Trustee within thirty (30)
days after the giving of a notice of resignation as contemplated in clause (a)
above, the resigning Trustee may petition any court of competent jurisdiction
for the appointment of a successor Trustee.

   (c) The Trustee may be removed at any time with respect to the Notes by the
Majority Holders and notice of such action by such Holders shall be delivered
to the Trustee, the Issuer, the Servicer and the Special Servicer.

   (d) If at any time:

      (i) the Trustee shall fail to comply with Section 6.6 or shall fail to
   comply with Section 6.12 after written request for compliance by the Issuer
   or any Holder who has been a bona fide Holder for at least six (6) months, or

      (ii) the Trustee shall cease to be eligible under Section 6.7, or the
   representations in Section 6.8 shall prove to be untrue, and the Trustee
   shall fail to resign after written request therefor by the Issuer or any
   such Holder referred to in clause (i) above, or

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

then, in any such case, (i) the Issuer, the Servicer or Majority Holders may
remove the Trustee with respect to the Notes, or (ii) subject to Section 5.14,
any Holder of a Note may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of the
Trustee with respect to the Notes and the appointment of a successor Trustee or
Trustees.

   (e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Notes, the Issuer shall promptly appoint a successor Trustee or
Trustees satisfying the requirements of Section 6.7 with respect to the Notes
and shall comply with the applicable requirements of Section 6.11. If, within
fifteen (15) days after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall not have been appointed
by the Issuer or, if appointed, shall not have accepted such appointment in
accordance with the applicable requirements of Section 6.11, then a successor
Trustee shall be appointed by the Servicer or the Act of the Majority Holders
delivered to the Issuer and the retiring Trustee, and the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment in
accordance with the applicable requirements of Section 6.11, become the
successor Trustee with respect to the Notes. Upon such resignation, removal,
incapacity or other vacancy, the Trustee shall forward all documents relating
to the Notes to the successor Trustee at the address provided by the Issuer.

   If, within sixty (60) days after such resignation, removal or incapability,
or the occurrence of such vacancy, no successor Trustee shall have been so
appointed and accepted appointment in the manner required by Section 6.11, any
bona fide Holder may, on behalf of such Holder and all others similarly
situated, petition any court of competent jurisdiction for the appointment of a
successor Trustee.

   (f) The Issuer or the Servicer, as applicable, shall give notice of each
resignation and each removal of the Trustee and each appointment of a successor
Trustee by giving notice of such event to each of the Holders, the Servicer and
the Special Servicer in accordance with Sections 1.5 and 1.6. Each notice shall
include the name of the successor Trustee and the address of its Corporate
Trust Office.

   (g) The resignation or removal of the Trustee shall automatically result in
the removal of the Fiscal Agent from its obligations hereunder as of such date
of registration or removal.

   SECTION 6.11  ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.

   In case of the appointment hereunder of a successor Trustee, the successor
Trustee so appointed shall execute, acknowledge and deliver to the Issuer, the
Servicer, the Special Servicer and the retiring Trustee an instrument accepting
such appointment and assuming the responsibilities of the Trustee hereunder,
and thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee; but, on the request of the Issuer or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee, shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder, shall take such action as may be necessary to provide for
the appropriate interest in the Collateral to be vested in such successor
Trustee, and shall execute and deliver any amendments to the Security Documents
necessary in connection therewith, but shall not be responsible for the
recording of such documents and instruments as may be necessary to give effect
to the foregoing (which responsibility shall be borne by the successor
Trustee). In the event that the retiring Trustee is removed without cause, any
costs of transfer shall be paid by the party removing the retiring Trustee. The
retiring Trustee shall pay any costs of transfer to a successor Trustee in the
event the retiring Trustee is removed for cause.

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   Upon request of any such successor Trustee, the Issuer shall execute any and
all instruments for more fully and certainly vesting in and confirming to such
successor Trustee all such rights, powers and trusts referred to in this
Section.

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

   SECTION 6.12  CONFLICTING INTERESTS.

   If the Trustee has or shall acquire any conflicting interest (as defined in
Section 310 of the Trust Indenture Act), such Trustee shall, within ninety (90)
days after ascertaining that it has such conflicting interest and if the
default (as defined in Section 310 of such statute) has not been cured or duly
waived or otherwise eliminated before the end of such ninety-day period, either
eliminate such conflicting interest or resign, such resignation to become
effective upon the appointment of a successor Trustee and such successor's
acceptance of such appointment, and the Issuer shall take prompt steps to have
a successor appointed in the manner provided in Section 6.10 hereof.

   SECTION 6.13  SELF DEALING.

   The Trustee may purchase Eligible Investments through the Trustee, in its
individual capacity, and through its Affiliates, and such Persons may retain
any charges or commissions customarily imposed for such purchases.

   SECTION 6.14  INVESTMENTS.

   The Trustee shall invest any amounts held in the Payment Account (to the
extent required pursuant to Section 3.5) and any other account maintained by
the Trustee pursuant to this Indenture, pending their application to the
purposes herein provided, in one or more of the following investments (the
"ELIGIBLE INVESTMENTS"):

      (i) obligations of the U.S. Treasury (all direct or fully guaranteed
   obligations), PROVIDED, HOWEVER, that (A) the investments described in this
   clause must have a predetermined fixed dollar of principal due at maturity
   that cannot vary or change, (B) if such investments have a variable rate of
   interest, such interest rate must be tied to a single interest rate index
   plus a fixed spread (if any) and must move proportionately with that index,
   and (C) such investments must not be subject to liquidation prior to their
   maturity; and

      (ii) units of taxable money market funds which invest solely in
   obligations described in clause (i) above;

PROVIDED, HOWEVER, that (1) no obligation or security shall be a Permitted
Investment if (A) such obligation or security evidences a right to receive only
interest payments or (B) the right to receive principal and interest payments
on such obligation or security is derived from an underlying investment that
provides a yield to maturity in excess of 120% of the yield to maturity at par
of such underlying investment, and (2) no investment described herein may be
purchased at a price greater than par if such investment may be prepaid or
called at a price less than its purchase price prior to maturity.

   SECTION 6.15  UNCLAIMED FUNDS.

   At the expiration of two (2) years following the Maturity Date of the Notes
issued hereunder, any monies deposited in the Holdover Account for such Notes
then remaining on deposit and unclaimed by the lawful owner thereof shall be
paid to the Issuer (or in accordance with any written directions previously
given to the Trustee by the Issuer) and the Person entitled to receive such
monies thereafter shall look only to the Issuer for payment thereof as an
unsecured general creditor (without regard to any limitation on recourse
contained herein or in the Notes or any other Security Document), and all
liability of the Trustee with respect to such trust money shall

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thereupon cease; PROVIDED that the Trustee, before being required to make any
such repayment, may, at the expense of the Issuer, cause to be published at
least once but not more than three times in any Authorized Newspaper (if the
Notes were, as of the Trustee's receipt of such payment, listed on a securities
exchange or an over-the-counter market) and in a newspaper in the English
language customarily published on each Business Day and of general circulation,
in New York, New York, a notice to the effect that said monies remain unclaimed
and have not been applied for the purpose for which they were deposited, and
that after a date specified therein, which shall be not less than thirty (30)
days after the date of first publication of said notice, any unclaimed balance
of said monies then remaining in the hands of the Trustee will be paid to the
Issuer upon its written directions. Any successor to the Issuer through merger,
consolidation or otherwise or any recipient of substantially all the assets of
the Issuer in a liquidation of the Issuer shall remain liable for the amount of
any unclaimed balance paid to the Issuer pursuant to this paragraph.

   SECTION 6.16  ILLEGAL ACTS.

   No provision of this Indenture or any amendment or supplement hereto shall
be deemed to impose any duty or obligation on the Trustee to do any act in the
performance of its duties hereunder or to exercise any right, power, duty or
obligation conferred or imposed on it, which under any present or future law
shall be unlawful, or which shall be beyond the corporate powers, authorization
or qualification of the Trustee.

   SECTION 6.17  COMMUNICATIONS TO BE SENT TO THE ISSUER.

   The Trustee shall:

      (a) send to the Issuer, within five (5) days after the date on which any
   installment of interest or principal on the Notes becomes due and payable
   hereunder and is not paid, a written demand for payment thereof;

      (b) send to the Issuer, within five (5) days after any amount other than
   principal or interest becomes due and payable hereunder as notified by the
   Servicer or Special Servicer and is not paid, a written demand for payment
   of such amount;

      (c) send to the Issuer, within five (5) Business Days after a Responsible
   Officer of the Trustee acquires actual knowledge that any mechanic's or
   other lien (other than Permitted Exceptions) shall have been filed against
   the (Underlying Collateral, the Underlying Properties) or any part thereof,
   a written demand that the Issuer cause the Underlying Borrowers to bond or
   otherwise satisfy such lien unless the Servicer shall have already delivered
   such notice and demand to the Issuer; and

      (d) send to the Issuer, within seven (7) Business Days after a
   Responsible Officer of the Trustee acquires actual knowledge of (A) any
   failure of the Issuer or an Underlying Borrower to perform or comply with
   any of the terms of this Indenture, the Mortgage, the Mezzanine Loan
   Agreement, or any other Security Document, or (B) any breach, in any
   material respect, of a representation or warranty made by the Issuer or an
   Underlying Borrower in this Indenture, the Mezzanine Loan Agreement or the
   Mortgage, respectively, written notice of such default, failure or breach
   and demand for cure in accordance with the Indenture.

   SECTION 6.18  REPORTS BY TRUSTEE.

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

   (b) A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange or over-the-counter
market upon which the Securities are listed, with the Commission and with the
Issuer. The Issuer will notify the Trustee when the Notes are listed on any
stock exchange or over-the-counter market.

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   SECTION 6.19  SEPARATE TRUSTEES AND CO-TRUSTEES.

   (a) If at any time the Trustee reasonably shall deem it necessary for the
purpose of meeting any legal requirements applicable to it in the performance
of its duties hereunder (including any legal requirements of any jurisdiction
in which any of the Collateral is located), the Trustee shall have the power
to, and shall, execute and deliver any and all instruments necessary to appoint
one or more Persons to act as separate trustees or co-trustees hereunder,
jointly with the Trustee, of any of the Collateral, to the extent applicable,
subject to this Indenture, and any such Persons shall be such separate trustee
or co-trustee, with such powers and duties consistent with this Indenture and
the other Security Documents as shall be specified in the instrument appointing
such Person but without thereby releasing the Trustee from any of its duties
hereunder. If the Trustee shall request the Issuer so to do, the Issuer shall
join with the Trustee in the execution of such instrument, but the Trustee
shall have the power to make such appointment without making such request and
without obtaining the Issuer's execution of such instrument. All fees and
expenses of any separate trustee or co-trustee shall be paid by the Issuer.

   (b) Every separate trustee and co-trustee shall, to the extent not
prohibited by law, be subject to the following terms and conditions:

      (i) the rights, powers, duties and obligations conferred or imposed upon
   such separate or co-trustee shall be conferred or imposed upon and exercised
   or performed by the Trustee and such separate or co-trustee jointly, as
   shall be provided in the appointing instrument, except to the extent that
   under any law of any jurisdiction in which any particular act is to be
   performed any nonresident trustee shall be incompetent or unqualified to
   perform such act, in which event such rights, powers, duties and obligations
   shall be exercised and performed by such separate trustee or co-trustee;
   PROVIDED, HOWEVER, that in the event of a conflict between the instructions
   or directions of the Trustee and any separate or co-trustee, the directions
   of the Trustee shall govern;

      (ii) all powers, duties, obligations and rights conferred upon the
   Trustee, in respect of the custody of all cash and other securities to be
   deposited with or otherwise held by the Trustee hereunder shall be exercised
   solely by the Trustee;

      (iii) the Trustee may at any time by written instrument accept the
   resignation of or remove any such separate trustee or co-trustee, and, upon
   the request of the Trustee, the Issuer shall join with the Trustee in the
   execution, delivery and performance of all instruments and agreements
   necessary or proper to make effective such resignation or removal, but the
   Trustee shall have the power to accept such resignation or to make such
   removal without making such request. A successor to a separate trustee or
   co-trustee so resigning or removed may be appointed in the manner otherwise
   provided herein; and

      (iv) the co-trustee shall resign immediately upon the resignation or
   removal of the Trustee and the acceptance of appointment of a successor
   Trustee hereunder.

   (c) Such separate trustee or co-trustee, upon acceptance of such trust,
shall be vested with the estates or property specified in such instrument,
jointly with the Trustee and the Trustee shall take such action as may be
necessary to provide for the appropriate interest in the Collateral to be
vested in such separate trustee or co-trustee, the execution and delivery of
any amendments to the Security Documents necessary in connection therewith, and
the recording of such documents and instruments as may be necessary to give
effect to the foregoing. Any separate trustee or co-trustee may, at any time,
by written instrument constitute the Trustee, his agent or attorney-in-fact
with full power and authority, to the extent permitted by law, to do all acts
and things and exercise all discretion authorized or permitted by him, for and
on behalf of him and in his name. If any separate trustee or co-trustee shall
be dissolved, become incapable of acting, resign, be removed or die, all the
estates, property, rights, powers, trusts, duties and obligations of said
separate trustee or co-trustee, so far as permitted by law, shall vest in and
be exercised by the Trustee, without the appointment of a successor to said
separate trustee or co-trustee, until the appointment of a successor to said
separate trustee or co-trustee is necessary as provided in this Indenture. The
appointment of a co-trustee shall in no way release the Trustee from any of its
duties or responsibilities hereunder.

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   (d) Any notice, request or other writing, by or on behalf of any Holder,
delivered to the Trustee shall be deemed to have been delivered to all separate
trustees and co-trustees.

   SECTION 6.20  WITHHOLDING AND INFORMATION REPORTING.

   The Trustee agrees with the Issuer that the Trustee will comply with all
applicable United States federal income tax withholding and any IRS Form 1099
interest reporting requirement.

   SECTION 6.21  PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.

   If and when the Trustee shall be or become a creditor of the Issuer, the
Trustee shall be subject to the provisions of the Trust Indenture Act regarding
the collection of claims against the Issuer.

                                  ARTICLE VII

                       THE SERVICER AND SPECIAL SERVICER

   SECTION 7.1  SERVICER TO ACT AS SERVICER; SPECIAL SERVICER TO ACT AS SPECIAL
SERVICER.

   Each of the Servicer and the Special Servicer, is an independent contract
servicer and shall service and administer the Note Indebtedness and the
Underlying Loans solely on behalf of, and in the best interests of (as
determined by the Servicer or Special Servicer in its reasonable judgment) and
for the benefit of the Holders in accordance with applicable law the terms of
this Indenture and the other Security Documents and the following Standards
(the "SERVICING STANDARDS"):

      (i) (A) in the same manner in which and with the same care, skill,
   prudence and diligence with which the Servicer or Special Servicer services
   and administers similar mortgage and mezzanine loans for other third-party
   portfolios, giving due consideration to customary and usual standards of
   practice of prudent institutional commercial mortgage and mezzanine lenders
   servicing their own mortgage and mezzanine loans and to the maximization of
   the net present value of the Note Indebtedness and the Underlying Loans or
   (B) with the care, skill, prudence and diligence the Servicer or Special
   Servicer uses for mortgage and mezzanine loans which it owns and which are
   substantially the same as the Note Indebtedness and the Underlying Loans,
   giving due consideration to the maximization of the net present value of the
   Note Indebtedness and the Underlying Loans, whichever of the standards in
   this clause (i) is higher;

      (ii) with a view to the timely collection of all scheduled payments of
   principal of and interest on the Note Indebtedness and the Underlying Loans
   or, if an Event of Default shall occur and be continuing and if, in the good
   faith and reasonable judgment of the Servicer or Special Servicer, no
   satisfactory arrangements can be made for the collection of the delinquent
   payments, the maximization of the recovery on the Note Indebtedness and the
   Underlying Loans to the Holders on a net present value basis; and

      (iii) without regard to (A) any relationship that the Servicer or Special
   Servicer or any affiliate thereof may have with the Issuer or any Affiliate
   thereof; (B) the ownership of any Note by the Servicer or Special Servicer
   or their affiliates; (C) the right of the Servicer or Special Servicer to
   receive reimbursement of costs, or the sufficiency of any compensation
   payable to it under the Indenture or with respect to any particular
   transaction; or (D) the Servicer's or Special Servicer's ownership,
   servicing or management for others of any other mortgage and mezzanine loans
   or mortgaged property.

   Subject to the above-described Servicing Standards and the terms of this
Indenture and of the other Security Documents, the Servicer and Special
Servicer shall have full power and authority to do or cause to be done any and
all things in connection with such servicing and administration which it may
deem necessary or desirable. The Servicer and Special Servicer shall service
and administer the Note Indebtedness and the Underlying Loans in accordance
with applicable state and federal law. At the written request of the Servicer
or Special Servicer,

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accompanied by the form of powers or other documents being requested and a
certificate that such power of attorney or document is necessary or appropriate
to enable the Servicer or Special Servicer to carry out its servicing and
administrative duties hereunder, the Trustee shall furnish to the Servicer or
Special Servicer, as applicable, any powers of attorney and other documents and
the Trustee shall not be held responsible for any acts by the Servicer or
Special Servicer in its uses of any such powers of attorney or other documents.
Notwithstanding anything contained herein to the contrary, neither the
Servicer, the Special Servicer nor the Issuer shall, without the Trustee's
written consent, (i) initiate any action, suit or proceeding solely under the
Trustee's name without indicating Servicer's or Special Servicer's, as
applicable, representative capacity or (ii) take any action with the intent to
cause, and which actually does cause, the Trustee to be registered to do
business in any state. Where the terms of the Mortgage, the Mezzanine Loan
Agreement or any other Security Document provide that the consent or approval
of the Issuer is required, then (unless otherwise provided therein) such
consent or approval shall be granted or withheld by the Servicer or Special
Servicer, as applicable on behalf of the Issuer in accordance with the
Servicing Standards.

   SECTION 7.2  SUB-SERVICING AGREEMENTS.

   Each of the Servicer or Special Servicer, at its own expense without a right
of reimbursement from the Issuer under this Indenture, may enter into
sub-servicing agreements with sub-servicers for the servicing and
administration of the Note Indebtedness and the Underlying Loans, PROVIDED that,

      (i) the Issuer shall have consented in writing to the appointment of such
   sub-servicer (which consent shall not be unreasonably withheld), unless (x)
   such sub-servicer is a wholly owned subsidiary of the Servicer or Special
   Servicer, as applicable, or (y) the Servicer or Special Servicer, as
   applicable, has determined, in good faith, that the appointment of such
   sub-servicer is necessary for the purpose of meeting any legal requirements
   applicable to it in the performance of its duties hereunder (including any
   legal requirements of any jurisdiction in which any of the Collateral is
   located),

      (ii) any such sub-servicing agreement (x) will be upon such terms and
   conditions as are not inconsistent with this Indenture and as the Servicer
   or Special Servicer, as applicable and the sub-servicer have agreed, and (y)
   shall provide that in the event the Servicer or Special Servicer, as
   applicable, has been removed as the Servicer or Special Servicer, as
   applicable hereunder, the Trustee or any successor Servicer or Special
   Servicer, as applicable, appointed pursuant hereto shall have the right to
   terminate such sub-servicing agreement without cost or penalty on not more
   than five days' written notice to the sub-servicer, and

      (iii) no sub-servicer retained by the Servicer or Special Servicer shall
   grant any modification, waiver, or amendment to the Security Documents
   without the written approval of the Servicer or Special Servicer, as
   applicable.

   References in this Indenture to actions taken or to be taken, and
limitations on actions permitted to be taken, by the Servicer or Special
Servicer in servicing the Note Indebtedness and the Underlying Loan
Documentation include actions taken or to be taken by a sub-servicer on behalf
of the Servicer or Special Servicer, as applicable. Each sub-servicer shall be

      (A) authorized to transact business in the applicable state(s), if, and
   to the extent, required by applicable law to enable the sub-servicer to
   perform its obligations hereunder and under the applicable sub-servicing
   agreement, and

      (B) qualified to service mortgage and mezzanine loans comparable to the
   Note Indebtedness and the Underlying Loans.

   For purposes of this Indenture, the Servicer or Special Servicer shall be
deemed to have received any amount when the sub-servicer receives such amount
and actions taken by the sub-servicer shall be deemed to be actions of the
Servicer or Special Servicer, as applicable. The Servicer or Special Servicer,
as applicable, shall

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notify the Trustee and the Issuer in writing promptly upon the appointment of
any sub-servicer and promptly furnish the Trustee and the Issuer with a copy of
the sub-servicing agreement. Each of the Servicer and the Special Servicer is
permitted to utilize agents and attorneys as is consistent with the Servicing
Standards in performing certain of its obligations under this Indenture and the
other Security Documents, each of which will be an expense reimbursable
pursuant to Section 7.11(a). Obligations of the Servicer or Special Servicer
which are an expense of the Issuer pursuant to the preceding sentence include,
but are not limited to, enforcement of the Mortgage and the Mezzanine Loan
Agreement and administration of releases, assumptions, modifications,
substitutions, bankruptcy claims and similar matters.

   Notwithstanding any sub-servicing agreement the use of other agents and
attorneys, any of the provisions of this Indenture relating to agreements or
arrangements between the Servicer or Special Servicer, as applicable and a
sub-servicer or reference to actions taken through a sub-servicer other agents
or attorneys or otherwise, the Servicer or Special Servicer, as applicable
shall remain obligated and liable to the Trustee and the Holders for the
servicing and administering of the Note Indebtedness and the Underlying Loans
in accordance with the provisions of Section 7.1 without diminution of such
obligation or liability by virtue of such sub-servicing agreement or
arrangements or by virtue of indemnification from a sub-servicer and to the
same extent and under the same terms and conditions as if the Servicer or
Special Servicer alone were servicing and administering the Note Indebtedness
and the Underlying Loans.

   SECTION 7.3  CERTAIN DUTIES AND RESPONSIBILITIES.

   (a) Until the principal and interest on each Note is paid in full, the
Servicer (the Special Servicer during the occurrence and continuance of a Loan
Event) shall proceed diligently to collect all payments called for under the
terms and provisions of the Security Documents and this Indenture, and in doing
so the Servicer (the Special Servicer during the occurrence and continuance of
a Loan Event) shall follow such collection procedures as are in accordance with
the Servicing Standards. The foregoing responsibilities shall include, without
limitation, making, at the expense of the Issuer, timely filings of any Uniform
Commercial Code continuation statements and any refilings of any Security
Document as necessary to preserve the liens created thereby to the extent not
so done by the Issuer or the Underlying Borrowers as provided herein or in the
other Security Documents. The Servicer and Special Servicer each agree that it
will notify the Issuer and the Trustee (with a copy to the Servicer in the case
of the Special Servicer) in writing of any filings, fees, taxes or other
similar payments required in connection with the satisfaction of the
obligations of the Issuer or the Underlying Borrowers under this Indenture and
the other Security Documents known to any officer or employee of the Servicer
or Special Servicer actively involved in the administration of the Note
Indebtedness or the Underlying Loans.

   (b) The Servicer (the Special Servicer during the occurrence and continuance
of a Loan Event) shall also give such directions, make such determinations and
take such other actions pursuant to the Mezzanine Cash Management Agreement and
the Cash Management Agreement as the assignee of the Mezzanine Lender or
Mortgage Lender, as applicable, thereunder, as are in the best interests of (as
determined by the Servicer or Special Servicer in its reasonable judgment) the
Holders and in accordance with the Servicing Standards.

   (c) Upon an acceleration of the Notes pursuant to Section 5.2, subject to
the rights of the Majority Holders, set forth in Section 5.12(a), and subject
to Section 7.7 hereof, the Special Servicer may, unless the Event of Default
preceding such acceleration is an Event of Default occurring on the Maturity
Date, in which case the Special Servicer shall, initiate foreclosure
proceedings with respect to the Indenture Collateral and immediately thereafter
with respect to the Underlying Collateral; PROVIDED, HOWEVER, that the Special
Servicer will not convert ownership of any of the Underlying Collateral to the
Trustee or its nominee on behalf of the Holders unless and until the Special
Servicer has complied with the terms of this Indenture.

   (d) Subject to the rights of the Majority Holders, described in Section
5.12(a), if prior to the Maturity Date an Event of Default has occurred and is
continuing or an Event of Default is reasonably foreseeable and the Special
Servicer determines in accordance with the Servicing Standards that a
modification, waiver or

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amendment of the terms of any Security Document either (i) is reasonably likely
to produce a greater recovery on a present value basis than liquidation of
Indenture Collateral and the Underlying Collateral or (ii) would not reasonably
be likely to adversely affect the timely receipt of payments under the Security
Documents, then the Special Servicer may, but is not required to, agree to a
modification, waiver, or amendment of any of the terms of the Security
Documents; PROVIDED, HOWEVER, notwithstanding the foregoing, that (1) the
action cannot reasonably be expected to result in an increase in the ratio of
(A) the then-outstanding aggregate principal balance of the Notes DIVIDED BY
(B) the most recent appraised value of the Underlying Collateral (net of any
prior liens); (2) the action cannot reasonably be expected to result in a
decrease in the Debt Service Coverage Ratio for the Underlying Collateral; (3)
the action complies with all applicable legal requirements, including without
limitation, all zoning, environmental and building laws, ordinances, and
regulations and any condition, easement, right-of-way, covenant or restriction
of record applicable to the Underlying Properties; (4) to the extent any
additional criteria are specified in the Security Documents for consent to a
specific action, such criteria have been satisfied in all material respects;
(5) the consent to such action is otherwise consistent with the Servicing
Standards; and (6) such action does not impair the rights or increase the
obligations of the Trustee, the Servicer or the Special Servicer; PROVIDED that
any such modification will be made in compliance with the terms of this
Indenture and any other applicable Security Document.

   (e) Subject to the rights of the Majority Holders, described in Section
5.12(a) and subject to the terms of this Indenture, the Servicer (the Special
Servicer during a Loan Event) may enter into or grant the following
modifications, waivers or amendments of any Security Document without the
consent of any Holder of the Notes: (i) waivers of minor covenant defaults
(other than financial covenants), including late financial statements; (ii)
grants of easements that do not materially adversely affect the use, operation
or value of the Underlying Properties or the obligation of the Issuer or the
Underlying Borrowers to pay the Notes and the Underlying Loans, respectively;
and (iii) any other modifications, waivers or amendments which the Servicer
(the Special Servicer during a Loan Event) determines, in accordance with the
Servicing Standards, are of a routine nature and which are made in accordance
with the Servicing Standards; PROVIDED that the Servicer (the Special Servicer
during a Loan Event) has determined that (x) any such modification, waiver or
amendment described in this sentence would not in any way affect a payment term
of any Note or the Underlying Loans, and (y) agreeing to such modification,
waiver or amendment would be consistent with the Servicing Standards.

   SECTION 7.4  PAYMENT OF TAXES AND OTHER CHARGES, ETC.

   The Servicer shall maintain accurate records (i) with respect to the status
of Taxes and Other Charges required to be paid under the Mortgage and (ii) with
respect to the status of insurance premiums payable in respect of any of the
insurance policies required to be maintained by each of the Underlying
Borrowers under the Mortgage and the Mezzanine Loan Agreement. Except to the
extent the same are paid directly by the Servicer from sums on deposit in the
Mortgage Taxes and Insurance Sub Account pursuant to the Cash Management
Agreement, and the Mezzanine Expenses Sub Account pursuant to the Mezzanine
Cash Management Agreement, the Issuer shall supply to the Servicer evidence of
the payment of such amounts at least ten (10) Business Days prior to the
applicable penalty or termination dates. To the extent the Servicer has
obtained notice of any such Taxes and Other Charges that have not been paid by
the borrower under the Mortgage on or before the related penalty date and such
borrower is not contesting such items in accordance with the terms of the
Mortgage, the Servicer shall obtain all bills for the payment of such items and
shall instruct such borrower in writing to effect payment thereof prior to the
applicable penalty or termination date, PROVIDED that failure of the Servicer
to provide such instruction shall in no way limit the obligation of the
borrower under the Mortgage to timely pay such Taxes and Other Charges. To the
extent that the Servicer has obtained notice of any insurance premiums that are
required to be paid an have not been paid on or before the related termination
date, the Servicer shall obtain all bills for the payment of such premiums and
shall instruct the applicable Underlying Borrower in writing to effect payment
thereof (or to cause such payment to be effected) prior to the applicable
termination date, PROVIDED that failure of the Servicer to provide such
instruction shall in no way limit the obligation of the applicable Underlying
Borrower to timely pay such premiums.

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   SECTION 7.5  MAINTENANCE OF INSURANCE AND ERRORS AND OMISSIONS AND FIDELITY
COVERAGE.

   (a) The Servicer shall, in accordance with the Servicing Standards, use its
best efforts to cause the Underlying Borrowers to maintain for the Underlying
Properties all insurance required by the terms of the Mortgage and the
Mezzanine Loan Agreement in the amounts, with the terms and provisions, and
from the insurers set forth therein. In carrying out the foregoing, the
Servicer shall monitor the Underlying Borrowers' compliance with the Mortgage
and the Mezzanine Loan Agreement, as applicable, and shall advise the
Underlying Borrowers and the Issuer of any instance where the Servicer believes
that the Underlying Borrowers are no longer in compliance with such insurance
requirements. The Special Servicer shall also cause to be maintained on the
Underlying Properties (after foreclosure on the Underlying Collateral) all such
insurance, to the extent the same is then available at commercially reasonable
rates and maintaining such insurance would be in the interest of the Holders in
accordance with the Servicing Standards. The cost of any such insurance with
respect to an Underlying Property will be payable out of amounts on deposit in
the REO Property Account. Pursuant to Section 7.6, any amounts collected by the
Servicer or Special Servicer under any such policies (other than amounts to be
applied to the restoration or repair of the Underlying Properties or property
so acquired or amounts released to the applicable Underlying Borrower in
accordance with the terms of the Mortgage, the Mezzanine Loan Agreement, the
Cash Management Agreement, the Mezzanine Cash Management Agreement, or the
Servicing Standards) shall be deposited in accordance with the Cash Management
Agreement or the Mezzanine Cash Management Agreement, as applicable. Any costs
(including third party costs as described in Section 7.2) incurred by the
Servicer or Special Servicer pursuant to this Section shall be reimbursable to
the Servicer or Special Servicer pursuant to Section 7.6.

   (b) The Servicer and Special Servicer shall obtain and maintain at its own
expense, and keep in full force and effect throughout the term of this
Indenture, a blanket fidelity bond and an errors and omissions insurance
policy, with the Trustee named as certificateholder or loss payee, as
applicable, from a provider that is rated at least Aa2 or an equivalent rating
by at least one NRSRO and covering the Servicer's and Special Servicer's
officers and employees in connection with its activities under this Indenture.
The amount of coverage shall be such as is commercially reasonable given the
Servicer's and Special Servicer's role hereunder and at least equal to the
coverage that is required by applicable governmental authorities having
regulatory power over the Servicer and Special Servicer. If no such coverage
amounts are imposed by such regulatory authorities, the amount of coverage
shall be at least equal to the coverage that would be required by FNMA or FHLMC
with respect to the Servicer or Special Servicer if the Servicer or Special
Servicer were servicing and administering the Note Indebtedness and the
Underlying Loans for FNMA or FHLMC. In the event that any such bond or policy
ceases to be in effect, the Servicer or Special Servicer shall obtain a
comparable replacement bond or policy. Coverage of the Servicer or Special
Servicer under a policy or bond obtained by an Affiliate of the Servicer or
Special Servicer and providing the coverage and continuing for the term
required by this Section 7.5 shall satisfy the requirements of this Section 7.5.

   No provision of this Section 7.5 requiring such fidelity bond and errors and
omissions insurance shall diminish or relieve the Servicer or Special Servicer
from its duties and obligations as set forth in this Indenture. Promptly
following the Closing Date, the Servicer or Special Servicer shall deliver or
cause to be delivered to the Trustee a certificate of insurance from the
surety, insurer or insurance broker. The Servicer shall promptly provide notice
to the Trustee of any cancellation, termination, expiration, reduction in
amount of, or material change (other than an increase) in, coverage under any
such fidelity bond or policy of errors and omissions insurance.

   (c) Any right of the Issuer to approve or withhold approval of adjustments
or settlements of claims under insurance policies described in the first
sentence of Section 7.5(a) shall be exercised by the Servicer.

   SECTION 7.6  APPLICATION OF FUNDS IN EVENT OF DEFAULT.

   (a) Upon the occurrence and continuation of an Event of Default, the Special
Servicer shall deposit, or cause to be deposited, in the applicable REO
Property Account within one (1) Business Day after receipt all

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revenues received from any Foreclosed Collateral and all other amounts received
by the Special Servicer or Servicer with respect to the Security Documents and
the Underlying Collateral. All funds in the REO Property Account, in excess of
the amount that, in the reasonable judgment of the Special Servicer, will be
required to defray costs relating to the Foreclosed Collateral which this
Indenture contemplates are payable from the REO Property Account, shall be
remitted to the Collection Account at or before 3:00 p.m. (New York time) two
Business Days prior to each Payment Date.

   (b) Money held by the Servicer hereunder shall be held in trust for the
purposes for which it was paid, and shall be segregated from any other monies
held by the Servicer, and may be deposited by the Servicer or Special Servicer
under such general conditions as may be prescribed by law.

   (c) Payments made with funds obtained by the Special Servicer by liquidating
any part of the Collateral shall not constitute a cure of a failure by the
Issuer to make a payment for purposes of Section 5.1 hereof unless the Event of
Default relating thereto is waived in accordance with Section 5.13.

   SECTION 7.7  REALIZATION UPON THE UNDERLYING COLLATERAL.

   (a) Upon the occurrence and during the continuance of an Event of Default
and acceleration of the maturity of the Notes pursuant to Section 5.2, and
subject to Sections 7.7(b) through (e), the Special Servicer may or if the
Issuer fails to pay the principal of and interest on any Notes on the Maturity
Date, the Special Servicer shall (i) exercise the remedies available under
Article V hereof, and under the Security Documents, including foreclosing on
all or some of the Collateral, to the extent determined appropriate by the
Special Servicer in accordance with the Servicing Standards and (ii) the
Special Servicer shall deliver such notices as may be required by any Leases to
the parties entitled thereto. Except in the case of rescission of acceleration
in accordance with Article V, to the extent the Special Servicer has determined
to foreclose all or some of the Collateral the Special Servicer shall liquidate
such Collateral and transfer the payments to the REO Property Account. In
addition, upon the occurrence and during the continuance of an Event of
Default, or an event which with the giving of notice or the passage of time
would become an Event of Default, the Special Servicer may obtain advice from
Persons with expertise in the field of distressed real estate, bankruptcy or
other relevant fields the cost of which shall be reimbursed from the REO
Property and until reimbursed shall constitute an Advance. Notwithstanding the
foregoing, the Special Servicer shall promptly commence foreclosure following
the Maturity Date unless prior to that time the term of the Note Indebtedness
has been extended with approval of the requisite Holders as described in
Section 7.3. Within sixty (60) days after the occurrence and during the
continuance of an Event of Default and acceleration of the Notes, the Special
Servicer shall prepare, or cause to be prepared, a liquidation plan for the
Collateral and shall deliver a copy of such plan to the Trustee for
distribution to each Holder. Nothing in such plan shall conflict with or alter
in any way any of the obligations of the parties to this Indenture. Such
liquidation plan shall be deemed approved by the Holders unless, within sixty
(60) days after its delivery, the Majority Holders object by writings filed
with the Trustee to such liquidation plan. If the Majority Holders (but not the
holders of 100% in aggregate principal amount of the Notes then Outstanding)
have objected in writing within such 60-day period, subject to Section 7.7(c),
the Special Servicer may take action pursuant to such liquidation plan if it
has determined such action to be consistent with the Servicing Standards. If
Holders of 100% in aggregate principal amount of the Notes then Outstanding
have objected in writing within such 60-day period, the Special Servicer shall
not take action in accordance with such liquidation plan subject, however, to
its right to propose a new liquidation plan to Holders for approval in
accordance with the foregoing procedure. In connection with such foreclosure or
other conversion, the Special Servicer shall follow such practices and
procedures as it shall deem necessary or advisable and as shall be consistent
with the Servicing Standards. At the time the Special Servicer on behalf of the
Trustee for the benefit of the Holders takes possession of part or all of the
Underlying Collateral by foreclosure or otherwise, the Special Servicer may,
but shall have no obligation whatsoever to, pay the cost of any capital
improvements to the Underlying Properties, as applicable, if the Special
Servicer determines that such expenditures are advisable to protect or, enhance
the value of the Underlying Properties and are in the best interests of the
Holders, and any such payment by the Special Servicer shall constitute an
Advance hereunder.

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   (b) Notwithstanding Sections 5.12(a) and 7.7(a), the Special Servicer may,
if it believes it to be in the best economic interest of the Holders of Notes,
and shall, if in its reasonable judgment the amount it estimates would be
realized as Net Liquidation Proceeds, assuming a liquidation of the Collateral
at a price based on the most recent Appraisal of the Underlying Properties, are
less than the present value, applying a discount rate equal to the Base
Interest Rate, of the expected Net Cash Flow from the Collateral through the
remaining term of the Notes, forebear from foreclosing on the Collateral and,
instead, collect all sums available under the terms of the Cash Management
Agreement and the Mezzanine Cash Management Agreement to be applied in
accordance with the terms of such agreements and this Indenture. Any
determination to forebear pursuant to this Section 7.7(b) shall be reevaluated
every twelve (12) months based on a new determination by the Special Servicer
of the estimated Net Liquidation Proceeds and the expected Net Cash Flow from
the Collateral. If a forebearance has been in effect for more than twenty-four
(24) consecutive months, the Majority Holders may direct the Special Servicer
to terminate such forebearance and to initiate foreclosure proceedings with
respect to the Collateral.

   (c) Notwithstanding Section 7.7(a), the Special Servicer shall not, on
behalf of the Trustee, obtain title to part or all of the Underlying Collateral
as a result or in lieu of foreclosure or otherwise, and shall not otherwise
acquire possession of, or take other action with respect to any of the
Underlying Collateral, if as a result of any such action, the Special Servicer
or the Trustee would be considered to hold title to, be a
"mortgagee-in-possession" of, or be an "owner" or "operator" of any of the
Underlying Properties within the meaning of CERCLA or any applicable comparable
federal, state or local law, or a "discharger" or "responsible party"
thereunder unless the Special Servicer has also previously determined, based on
an environmental report prepared at the direction of the Special Servicer by a
Person having the qualifications set forth in Section 7.7(d) (a copy of which
report shall have been delivered to the Trustee), that the relevant Underlying
Property does not contain any condition identified in Section 501.04 (or any
successor provision) of Part II of the Fannie Mae Multifamily Guide, or that,
if any such condition exists, taking such actions as are necessary to bring the
relevant Underlying Property into compliance with applicable Environmental
Laws, or taking such actions as are necessary to contain, clean-up, remove or
remediate Hazardous Materials affecting the relevant Underlying Property is
reasonably likely to produce a greater recovery on a present value basis than
not taking such actions.

   Subject to the rights of the Majority Holders pursuant to Section 5.12(a),
if the Special Servicer has so determined based on satisfaction of the criteria
in this Section 7.7(c) that it would be in the best economic interest of the
Holders to take any such actions and foreclose or otherwise acquire possession
of any of the Underlying Collateral, and is otherwise consistent with the
Servicing Standards, the Special Servicer shall notify the Trustee in writing
setting forth in reasonable detail the reasons for its determination, and the
Trustee, in turn, shall send a copy of the related environmental report and
notification to the Holders notifying them of their right to object to such
proposed action. Such proposed action shall be taken unless the Trustee (i)
shall have received and delivered to the Special Servicer, within thirty (30)
days after such notification from the Special Servicer, written instructions
from the Majority Holders directing it not to take such action; PROVIDED,
HOWEVER, that the Special Servicer shall not be required to take any action or
refrain from taking any action that would cause it to violate the Servicing
Standards; or (ii) has given the Special Servicer similar written instructions
based upon the Trustee's reasonable opinion that there would be a likelihood of
the Trustee's individual liability resulting from such action against which it
would not be indemnified hereunder.

   (d) Any environmental report contemplated by Section 7.7(c) shall be
prepared by any Independent Person who regularly conducts environmental site
assessments for purchasers of comparable properties, as determined by the
Special Servicer in a manner consistent with the Servicing Standards. The cost
of preparation of any environmental site assessment shall be reimbursed from
the REO Property Account and until reimbursed shall constitute an Advance.

   (e) If the Special Servicer determines, pursuant to Section 7.7(c), that
taking such actions as are necessary to bring any of the Underlying Properties
into compliance with applicable Environmental Laws, or taking such actions with
respect to the containment, clean-up, removal or remediation of Hazardous
Substances affecting any of the Underlying Properties is not reasonably likely
to produce a greater recovery on a present value basis than

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not taking such actions, the Special Servicer shall notify the Trustee in
writing setting forth in reasonable detail the reasons for its determination
and any action which it determines to take, and the Trustee, in turn, shall
send a copy of such notification to the Holders notifying them of their right
to give contrary direction. The Special Servicer shall take such alternative
action as it deems to be in the best economic interests of the Holders,
consistent with the Servicing Standards including, without limitation,
releasing the lien of the Mortgage Security Documents or the Mezzanine Security
Documents with respect to the relevant Underlying Collateral unless the Trustee
has received and delivered to the Special Servicer within thirty (30) days
after such notification from the Special Servicer, contrary directions from the
Majority Holders; PROVIDED, HOWEVER, that the Special Servicer shall not be
required to take any action or refrain from taking any action that would cause
it to violate the Servicing Standards unless so directed by Holders of not less
than 100% in aggregate principal amount of Outstanding Notes. Neither the
Trustee nor the Special Servicer shall be obligated to take any action, or
refrain from taking any action at the direction of Holders pursuant to this
Section 7.7(e) unless the Holders offer to the Trustee or the Special Servicer,
as the case may be, security or indemnification satisfactory to the Trustee or
the Special Servicer against the costs, expenses and liabilities that may be
incurred with respect to such actions or inaction.

   SECTION 7.8  TRUSTEE TO COOPERATE; RELEASE OF ORIGINAL SECURITY DOCUMENTS.

   From time to time and as appropriate for the servicing or foreclosure of the
Note Indebtedness, the Underlying Loans, and the Collateral, the Trustee shall,
upon written request of the Servicer or Special Servicer and delivery to the
Trustee of a trust receipt in the form of Exhibit D hereto, release or cause to
be released originals of any Security Documents being held by it to the
Servicer or Special Servicer and shall execute such documents furnished to it
as shall, according to an Officer's Certificate of the Servicer, be necessary
to the prosecution of any such proceedings. The Servicer or Special Servicer
shall promptly return such items to the Trustee (or the Custodian) when the
need therefor by the Servicer or Special Servicer no longer exists.

   SECTION 7.9  TITLE AND MANAGEMENT OF FORECLOSED COLLATERAL.

   (a) In the event that title to any of the Underlying Collateral is acquired
by the Special Servicer for the benefit of the Holders in foreclosure or by
deed-in-lieu of foreclosure or otherwise, the deed, certificate of sale,
assignment or other instrument of conveyance shall be taken in the name of the
Trustee, or its nominee, on behalf of the Holders or as otherwise contemplated
pursuant to Section 6.19. To the extent that it determines a sale of any such
Foreclosed Collateral to be in the best economic interest of the Holders, the
Special Servicer, on behalf of the Holders, shall sell such Foreclosed
Collateral as expeditiously as possible in accordance with the provisions of
Section 7.10. Subject to Section 7.9(d), the Special Servicer shall retain the
entity or entities that were acting as the Property Manager with respect to the
related Underlying Property immediately prior to the Event of Default, or such
other property managers as the Special Servicer shall deem appropriate (the
"MANAGER"), to provide property management services at the relevant property.
In connection with such management, the property manager selected by the
Special Servicer shall be entitled to the related Management Fees from the
Collateral, and such fees shall be payable in accordance with Section 7.9.

   (b) The Special Servicer and the Manager shall segregate and hold all funds
collected and received in connection with the operation of any Foreclosed
Collateral separate and apart from their own funds and general assets and shall
deposit all such funds collected and received in connection with the operation
of any such property in the REO Property Account.

   (c) The Special Servicer shall have full power and authority, subject only
to the specific requirements and prohibitions of this Indenture and Servicing
Standards, to do any and all things in connection with any of the Foreclosed
Collateral for the benefit of the Holders on such terms and for such period as
the Special Servicer deems to be in the best interests of the Holders and as
consistent with the Servicing Standards. In connection therewith, the Special
Servicer shall require the Manager to deposit or cause to be deposited within
one (1) Business Day after receipt in the REO Property Account all revenues
received with respect to all Foreclosed

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Collateral. To the extent such funds are available therefor, the Special
Servicer shall withdraw from the REO Property Account funds necessary for the
proper operation, management and maintenance of the relevant Underlying
Properties, including, but not limited to:

      (i) all insurance premiums due and payable in respect of such property;

      (ii) all taxes or other charges in respect of such property that could
   result or have resulted in the imposition of a lien thereon;

      (iii) all amounts that are due and payable under any Leases or operating
   agreements affecting such property; and

      (iv) all costs and expenses necessary to preserve such property
   including, but not limited to payment of Management Fees to the related
   Manager.

   (d) In the event that any Underlying Collateral becomes Foreclosed
Collateral, the Special Servicer, in the name of the Trustee on behalf of the
Holders, shall contract with any Manager for the operation and management of
the relevant Underlying Properties, PROVIDED that no such contract shall impose
individual liability on the Trustee, the Special Servicer or the Holders; and
PROVIDED, FURTHER, that:

      (i) the terms and conditions of any such contract shall not be
   inconsistent herewith (including those set forth in the definition of
   Management Fee);

      (ii) any such contract shall require, or shall be administered to
   require, that the Manager (A) pay from revenues of any such Underlying
   Properties all costs and expenses incurred in connection with the operation
   and management of such property, and (B) remit all related revenues, net of
   such costs and expenses, to the Special Servicer for deposit to the REO
   Property Account as soon as practicable but in no event later than the
   Business Day immediately following receipt; and

      (iii) none of the provisions of this Section 7.9 relating to any such
   contract or to actions taken by any such Manager shall be deemed to relieve
   the Special Servicer of any of its duties and obligations to the Trustee on
   behalf of the Holders with respect to the asset management of such property.

   (e) The Special Servicer in the name of the Trustee on behalf of the Holders
shall be entitled to enter into any agreement with any Manager related to its
duties and obligations hereunder for indemnification of the Special Servicer by
such Manager, and nothing in this Indenture shall be deemed to limit or modify
such indemnification. The Special Servicer agrees to monitor the performance of
the Manager and to enforce the obligations of the Manager on behalf of the
Trustee in accordance with the Servicing Standards. Expenses incurred by the
Special Servicer in connection herewith shall be reimbursed from the REO
Account and, until reimbursed, shall constitute Advances. The Special Servicer
shall not serve as Manager, but shall be obligated with respect to any
management contract with the Manager to monitor and act to ensure the Manager's
compliance with its obligations thereunder to the same extent as if the Special
Servicer alone were performing all duties and obligations in connection with
the operation and management of the relevant Underlying Properties.

   SECTION 7.10  SALE OF FORECLOSED COLLATERAL.

   (a) Promptly after the acquisition of a Foreclosed Collateral by the Special
Servicer in the name of and on behalf of the Trustee, the Special Servicer
shall on behalf of the Trustee obtain a full narrative Appraisal of the related
Underlying Properties (unless there exists and is available to the Special
Servicer a full narrative Appraisal of the relevant properties performed within
the last twelve (12) months and the Special Servicer is not aware of any
circumstance that would materially and adversely affect the value of such
properties as set forth in such appraisal), the cost of which shall be
reimbursed from the REO Property Account and until reimbursed shall constitute
an Advance in order to determine the fair market value of such properties and
shall provide copies of such appraisal to the Trustee and the Issuer. The
Special Servicer may offer to sell to any Person all or part of the Foreclosed
Collateral, if and when the Special Servicer determines, consistent with the
Servicing Standards, that

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such a sale would be in the best economic interests of the Holders. The Special
Servicer shall give the Trustee not less than five (5) days' prior written
notice of its intention to sell any Foreclosed Collateral and shall accept the
highest cash offer received from any Person (which Person shall certify in its
offer as to whether it is an Interested Person) for the Foreclosed Collateral
that is not less than the fair market value of the Foreclosed Collateral based
on the most recent full narrative Appraisal of the related Underlying
Properties. In the absence of any such offer, the Special Servicer shall offer
the Foreclosed Collateral for sale to any Person other than an Interested
Person, in a commercially reasonable manner for a period of not less than
thirty (30) days nor more than such period as shall be determined by the
Special Servicer in accordance with the Servicing Standards, and shall accept
the highest cash offer received therefor in excess of the highest cash offer
previously submitted. If no such offer is received, any Interested Person may
submit an offer for no less than the fair market value of the Foreclosed
Collateral based on the most recent full narrative Appraisal of the related
Underlying Properties and the Special Servicer shall accept the highest
outstanding cash offer, regardless of from whom received and regardless of its
amount. No Interested Person shall be obligated to submit an offer to purchase
any Foreclosed Collateral, and notwithstanding anything to the contrary herein,
neither the Trustee in its individual capacity nor any of its Affiliates may
offer to purchase or purchase any Foreclosed Collateral.

   (b) Subject to the provisions of Section 7.9, the Special Servicer shall act
on behalf of the Trustee for the benefit of the Holders in negotiating and
taking any other action necessary or appropriate in connection with the sale of
the Foreclosed Properties, including the collection of all amounts payable in
connection therewith. Any sale of a Foreclosed Collateral shall be without
warranty by, or recourse to, the Trustee, the Issuer, the Servicer, the Special
Servicer, the Holders or any other Person (except for such warranties of title
and condition as may be customary under the circumstances of any such sale)
and, if consummated in accordance with the provisions of this Section 7.10,
neither the Trustee, the Issuer, the Servicer nor the Special Servicer shall
have any liability to any Holder with respect to the purchase price thereof
accepted by the Special Servicer or the Trustee.

   (c) The proceeds of any sale effected pursuant to Section 7.10(a), after
deduction of the expenses incurred in connection therewith, shall be deposited
in the REO Property Account in accordance with Section 7.6.

   (d) Notwithstanding anything to the contrary in this Section 7.10, the
Special Servicer shall not accept an offer for or conclude a sale of any
Foreclosed Collateral if it determines, in accordance with the Servicing
Standards, that such offer or sale is not in the best economic interest of the
Holders.

   SECTION 7.11  SERVICING COMPENSATION.

   (a) The Servicer shall be entitled to receive as servicing compensation its
Servicing Fee, and after the occurrence of a Loan Event and while such Loan
Event is continuing, the Special Servicer shall be entitled to receive as
servicing compensation its Special Servicing Fee. In addition, each of the
Servicer and Special Servicer shall be entitled to reimbursement for all other
costs or expenses incurred directly by it in the performance of its duties
hereunder other than: (i) fees and expenses of any sub-servicer unless such
expenses, if incurred by the Servicer or Special Servicer, would be
reimbursable to the Servicer or Special Servicer; (ii) the cost of any fidelity
bond or errors and omissions policy required by Section 7.5(b); (iii) overhead
expenses of the Servicer and Special Servicer including but not limited to
those which may properly be allocable under the Servicer's or Special
Servicer's accounting system or otherwise to the Servicer's or Special
Servicer's activities under this Indenture or the income derived by it
hereunder including the costs to Servicer or Special Servicer associated with
employees of the Servicer or Special Servicer performing services in connection
with the obligations of the Servicer or Special Servicer hereunder; and (iv)
costs and expenses arising from the negligence or willful misconduct of the
Servicer or Special Servicer. If a Loan Event ceases following resolution of
such Loan Event by a written agreement negotiated by the Special Servicer, the
Special Servicer shall be entitled to a Work-Out Fee, PROVIDED, HOWEVER, that
the Work-Out Fees payable to the Special Servicer under this Indenture shall
not exceed $100,000 for each Loan Event that is terminated pursuant to a
written agreement negotiated by the Special Servicer; PROVIDED, FURTHER, that
in the event of a Loan Event pursuant to clause (i) or (ii) of the definition
of Loan Event that the Special Servicer has resolved by a written agreement
negotiated by it and that it

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would have earned a Work-Out Fee but solely for the passage of time after such
written agreement had been entered into and is then terminated pursuant to the
terms of this Indenture prior to the cessation of such Loan Event, whether or
not for cause, such terminated Special Servicer shall be entitled to receive
such Work-Out Fee after its termination and the successor Special Servicer
shall have no rights with respect to such Work-Out Fee. In addition, the
Special Servicer shall be entitled to receive a Liquidation Fee with respect to
the Liquidated Collateral as to which the Special Servicer receives Net
Liquidation Proceeds; provided that the aggregate amount of all Liquidation
Fees payable hereunder shall not exceed $100,000. The Liquidation Fee will be
payable from the related Net Liquidation Proceeds.

   (b) No transfer, sale, pledge or other disposition of the Servicer's or
Special Servicer's right to receive all or any portion of the fees payable to
the Servicer or Special Servicer hereunder shall be made, and any such
attempted transfer, sale, pledge or other disposition shall be void, unless
such transfer is made to a successor servicer in connection with the assumption
by such successor servicer of the duties hereunder pursuant to Section 7.22 or
7.27(a) and all (and not a portion) such fees are transferred to such successor
servicer from and after the date of transfer (subject to Section 7.11(a)).

   (c) In connection with any discharge of this Indenture pursuant to Section
4.2 prior to the first anniversary of the Closing Date, the Servicer shall be
entitled to receive from the Issuer prior to such discharge a Termination Fee.

   SECTION 7.12  REPORTS TO THE TRUSTEE.

   The Servicer or the Special Servicer, as applicable, shall furnish the
Trustee with a Payment Date Statement at or before 3:00 p.m. (New York time) on
the third Business Day immediately preceding any Payment Date.

   After an Event of Default, the Servicer and Special Servicer shall (i)
furnish to the Trustee or its designee the originals of all agreements entered
into by the Servicer or Special Servicer, as applicable in the name of the
Trustee pursuant to this Indenture, (ii) advise the Trustee in writing of any
event or circumstance materially affecting the Collateral or the interests of
the Holders therein coming to the attention of any Servicing Officer of the
Servicer or Special Servicer in connection or as a result of the fulfillment by
the Servicer or Special Servicer, as applicable of its obligations under this
Indenture, and (iii) furnish, and cause any Manager to furnish, to the Trustee
or its designee such other reports with respect to the Underlying Properties,
their condition, tenants, and the income resulting therefrom as the Trustee or
its designee may reasonably request in writing.

   SECTION 7.13  ANNUAL STATEMENT AS TO COMPLIANCE.

   Each of the Servicer and the Special Servicer shall deliver to the Trustee
and the Issuer on April 30 of each year (or if such day is not a Business Day,
on the next succeeding Business Day), beginning April 30, 2003, an officer's
certificate stating as to each signor thereof, (a) that a review of the
activities of the Servicer or Special Servicer, as applicable during the
preceding calendar year (or since the Closing Date in the case of the first
such officer's certificate) and of performance under this Indenture has been
made under such officer's supervision and (b) that to the best of such
officer's knowledge, based on such review, the Servicer or Special Servicer, as
applicable, has fulfilled all of its obligations under this Indenture in all
material respects throughout such period, or if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof.

   SECTION 7.14  ACCESS TO CERTAIN DOCUMENTATION REGARDING THE NOTE
INDEBTEDNESS.

   Upon reasonable advance notice, the Servicer or Special Servicer, as
applicable shall provide the Trustee with reasonable access during its normal
business hours at its offices to any information in its possession relating to
its servicing of the Note Indebtedness or the Underlying Loans.

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   SECTION 7.15  INSPECTIONS.

   The Servicer (or after the occurrence and during the continuance of a Loan
Event or with respect to any of the Collateral becoming Foreclosed Collateral,
the Special Servicer) shall, at its expense, inspect or cause to be inspected
the relevant Underlying Properties at least once each calendar year and furnish
to the Trustee upon its request a written report in electronic or hard copy
format of the results of any inspection required hereunder. If the Issuer fails
to pay any sums due under any Note on or before its due date and such failure
is not remedied within five days, or if an inspection is otherwise warranted in
accordance with the Servicing Standards, the Servicer or Special Servicer, as
applicable shall inspect the relevant Underlying Properties (or such of them as
the Servicer or Special Servicer, as applicable deems appropriate) within 30
days of the relevant event (or as soon thereafter as is practicable). The cost
of inspecting the Underlying Properties more than once per year shall be paid
by the Issuer upon written request by the Servicer or Special Servicer, as
applicable, therefor explaining in reasonable detail the basis for such costs.
If an Event of Default shall have occurred and be continuing, the costs of
inspecting the Underlying Properties more than once per year shall be
reimbursed from the REO Property Account and until reimbursed shall constitute
an Advance.

   SECTION 7.16  ADVANCES.

   (a) In any circumstance in which the Issuer has the right under the Mortgage
or the Mezzanine Loan Agreement to make an advance to or for the benefit of an
Underlying Borrower (including for the payment of real estate taxes or
insurance premiums with respect to an Underlying Property), each of the
Servicer or Special Servicer may, at its sole discretion, make an advance (an
"ADVANCE") to the Issuer, and the Issuer shall apply any such Advance to the
making of an advance in the same amount to or for the benefit of the relevant
Underlying Borrower under the Mortgage or the Mezzanine Loan Agreement, as
applicable. The term "Advance" shall also include other amounts advanced to the
Issuer hereunder and designated herein as Advances, it being understood that,
notwithstanding anything to the contrary herein, neither the Servicer nor the
Special Servicer shall have any obligation to make any Advance or to make any
disbursement that would constitute an Advance.

   (b) Interest on each Advance will compound annually and accrue for each day
that such Advance is outstanding at a rate of interest equal to the greater of
the Base Interest Rate and the Prime Rate (such greater rate, the "ADVANCE
INTEREST RATE") as most recently available for such day on the basis of a year
of 360 days and the actual number of days elapsed during the period such
Advance is outstanding. The Servicer or the Special Servicer will be entitled
to recover interest payable on Advances as set forth in Section 5.6, to the
extent not otherwise recovered or reimbursed pursuant to the Cash Management
Agreement or the Mezzanine Cash Management Agreement.

   (c) The determination by the Servicer or the Special Servicer that it has
made a Nonrecoverable Advance or that any proposed Advance, if made, would
constitute a Nonrecoverable Advance, shall be evidenced by a certificate of a
Servicing Officer, delivered on or before the fifth Business Day after
determination that an Advance would be a Nonrecoverable Advance, to the
Servicer, Trustee and Issuer (in the case of the Special Servicer) or Trustee
and the Issuer (in the case of the Servicer), and detailing the reasons for
such determination, which in each case shall be accompanied by copies of any
engineers' reports, environmental surveys, other third party reports or other
information relevant thereto that were used by the Servicer or Special Servicer
to support its determination that the Advance is non-recoverable. The costs of
any such reports, surveys or other information used by the Servicer or Special
Servicer in making the determination that an Advance is or would be a
Nonrecoverable Advance shall be an expense of the Holders or shall constitute
an Advance if paid by the Servicer or Special Servicer.

   (d) All Advances shall be repaid in the order in which originally advanced,
and Advances owed to any prior Servicer or Special Servicer shall be repaid in
full, with interest, prior to the repayment of Advances made by the successor
Servicer or Special Servicer.

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   SECTION 7.17  APPOINTMENT OF SPECIAL SERVICER.

   (a) Archon Group, L.P. is hereby appointed as the initial Special Servicer
to service the Note Indebtedness and the Underlying Loans after the occurrence
and during the continuance of a Loan Event.

   (b) Neither the Servicer nor the Trustee shall be liable for any actions or
any inaction of the Special Servicer. Any termination fee payable to a
terminated Special Servicer by the Majority Holders (and it is acknowledged
that there is no such fee payable in the event of a termination of Archon
Group, L.P. as Special Servicer or in the event of a termination for breach of
this Agreement) shall be paid by the Holders so terminating the Special
Servicer.

   (c) No termination of the Special Servicer and appointment of a successor
special servicer shall be effective until the successor special servicer has
assumed all of its responsibilities, duties and liabilities hereunder pursuant
to a writing satisfactory to the Trustee. Any successor special servicer shall
make the representations and warranties provided for in Section 7.29 MUTATIS
MUTANDIS.

   SECTION 7.18  TRANSFER OF SERVICING BETWEEN SERVICER AND SPECIAL SERVICER;
RECORD KEEPING.

   (a) Upon the occurrence of a Loan Event, the Servicer shall promptly give
notice thereof to the Special Servicer and the Trustee and shall use its
reasonable best efforts to provide the Special Servicer with all information,
documents (but excluding the original documents constituting the Security
Documents) and records (including records stored electronically on computer
tapes, magnetic discs and the like) relating to the Note Indebtedness and the
Underlying Loans either in the Servicer's or any of its directors', officers',
employees', affiliates' or agents' possession or control or otherwise available
to the Servicer without undue burden or expense, and reasonably requested by
the Special Servicer to enable it to assume its duties hereunder with respect
thereto without acting through a sub-servicer. The Servicer shall use its
reasonable best efforts to comply with the preceding sentence within five
Business Days of the date of the occurrence of a Loan Event and in any event
shall continue to act as Servicer and administrator of the Note Indebtedness
and the Underlying Loans until the Special Servicer has commenced the servicing
of the Note Indebtedness and the Underlying Loans, which shall occur upon the
receipt by the Special Servicer of the information, documents and records
referred to in the preceding sentence. After the occurrence of a Loan Event,
the Servicer shall instruct the Underlying Borrowers to continue to remit all
payments in respect of the Underlying Loans to the Servicer. The Servicer or
Special Servicer, as applicable, may agree that, notwithstanding the preceding
sentence, after the occurrence of a Loan Event, the Servicer shall instruct the
Underlying Borrowers to remit all payments in respect of the Underlying Loans
to the Special Servicer, PROVIDED that the payee in respect of such payments
shall remain the Servicer. The Special Servicer shall remit to the Servicer any
such payments received by it pursuant to the preceding sentence within one
Business Day of receipt. The Servicer shall forward any notices it would
otherwise send to the Underlying Borrowers or the Issuer to the Special
Servicer who shall send such notices to the Underlying Borrowers or the Issuer.

   Upon determining that a Loan Event is no longer continuing, the Special
Servicer shall immediately give notice thereof to the Servicer and the Trustee,
and upon giving such notice, the Special Servicer's obligation to service the
Note Indebtedness and the Underlying Loans shall terminate and the obligations
of the Servicer to service and administer the Note Indebtedness and the
Underlying Loans shall resume. In addition, if the Underlying Borrowers have
been instructed, pursuant to the last sentence of the preceding paragraph, to
make payments to the Special Servicer, upon such determination, the Special
Servicer shall instruct the Underlying Borrowers to remit all payments in
respect of such directly to the Servicer.

   (b) The Special Servicer shall provide to the Trustee originals of documents
(to the extent such documents are in the possession of the Special Servicer)
and copies of any additional documents related to the Note Indebtedness or the
Underlying Loans information, including correspondence with the Issuer and the
Underlying Borrowers, and the Special Servicer shall promptly provide copies of
all of the foregoing to the Servicer as well as copies of any analysis or
internal review prepared by or for the benefit of the Special Servicer.

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   (c) After the occurrence and during the continuance of a Loan Event, and not
later than 11:00 a.m. New York time on the Business Day preceding each date on
which the Servicer is required to furnish a report under Section 7.12 to the
Trustee, the Special Servicer shall deliver to the Servicer, with a copy to the
Trustee, a written statement describing, (i) the amount of all payments on
account of interest received on the Note Indebtedness and the Underlying Loans,
the amount of all payments on account of principal, on the Note Indebtedness
and the Underlying Loans, the amount of Insurance Proceeds and Net Liquidation
Proceeds received with respect to the Note Indebtedness and the Underlying
Loans and (ii) such additional information relating to the Note Indebtedness
and the Underlying Loans as the Servicer or Trustee reasonably requests to
enable it to perform its duties under this Indenture including but not limited
to files and reports in formats approved by the Commercial Mortgage Securities
Association or any successor organization which are customarily delivered by
special servicers in commercial mortgage-backed securitization transactions.

   (d) Notwithstanding the provisions of the preceding subsection (c), the
Servicer shall maintain ongoing payment records with respect to the Note
Indebtedness and the Underlying Loans and shall provide the Special Servicer
with any information reasonably required by a the Special Servicer to perform
its duties under this Indenture. The Special Servicer shall provide the
Servicer with any information reasonably required by the Servicer to perform
its duties under this Indenture.

   (e) The Servicer shall maintain all records with respect to the Note
Indebtedness and the Underlying Loans if the Underlying Loans or the Note
Indebtedness is defeased and/or prepaid.

   SECTION 7.19  RIGHTS OF THE ISSUER WITH RESPECT TO THE SERVICER.

   The Servicer and Special Servicer shall afford the Issuer, upon reasonable
notice, during normal business hours access to all records regarding payments
made with respect to the Note Indebtedness and the Notes, including those in
electronic form, maintained by the Servicer or Special Servicer as required
hereunder and access to Servicing Officers of the Servicer or Special Servicer
responsible for such records. Upon request, the Servicer or Special Servicer
shall furnish the Issuer with the most recent publicly available financial
statements of Servicer (or its corporate parent) or Special Servicer (or its
corporate parent). The Issuer shall not have any responsibility or liability
for any action or failure to act by the Servicer or Special Servicer and is not
obligated to supervise the performance of the Servicer or Special Servicer
under this Indenture or otherwise.

   SECTION 7.20  LIMITATION ON THE LIABILITY OF THE SERVICER AND OTHERS.

   (a) None of the Servicer, the Special Servicer, nor any of their respective
directors, officers, employees, Affiliates or agents shall be under any
liability to the Trustee or the Holders for any action taken or for refraining
from the taking of any action in good faith pursuant to this Indenture, or for
errors in judgment; PROVIDED, HOWEVER, that this provision shall not protect
the Servicer, the Special Servicer or any such other Person against any breach
of warranties or representations made herein by the Servicer or Special
Servicer, as applicable, or any liability which would otherwise be imposed by
reason of willful misconduct, bad faith or negligence in the performance of the
Servicer's or Special Servicer's, as applicable duties or by reason of
negligent disregard of the Servicer's or Special Servicer's, as applicable,
obligations and duties hereunder. The Servicer, the Special Servicer and any of
their respective directors, officers, employees, Affiliates or agents may rely
in good faith on any document of any kind PRIMA FACIE properly executed and
submitted by any Person respecting any matters arising hereunder. The Servicer,
the Special Servicer, and any of their respective directors, officers,
employees or agents (each, a "SERVICER INDEMNIFIED PARTY" and, collectively,
the "SERVICER INDEMNIFIED PARTIES") shall be indemnified by the Issuer and held
harmless against any loss, liability, claim, demand or expense relating to this
Indenture, the Note Indebtedness, the Underlying Loans, the Collateral, or the
Security Documents, other than any loss, liability or expense incurred by
reason of willful misconduct, bad faith or negligence in the performance by the
Servicer or Special Servicer, as applicable, of its duties hereunder or by
reason of negligent disregard of the Servicer or Special Servicer, as
applicable, of its obligations and duties hereunder; PROVIDED, HOWEVER, that if
it is found that any such claim or liability has resulted from the bad faith,
willful misconduct or negligence of the

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Servicer or Special Servicer, as applicable, in the performance by the Servicer
or Special Servicer, as applicable, of its duties hereunder, such Servicer
Indemnified Party shall repay such portion of the reimbursed amounts that is
attributable to expenses incurred in relation to its act or omission which is
the subject of such finding. If any Servicer Indemnified Party is entitled to
receive indemnification hereunder with respect to any such action or proceeding
brought by a third party, the Issuer shall be entitled to assume the defense of
any such action or proceeding with counsel reasonably satisfactory to such
Servicer Indemnified Party who shall not, except with the consent of such
Servicer Indemnified Party, be counsel to the Issuer. Upon assumption by the
Issuer of the defense of any such action or proceeding, such Servicer
Indemnified Party shall have the right to participate in such action or
proceeding and to retain its own counsel, but the Issuer shall not be liable
for any legal fees or expenses subsequently incurred by such Servicer
Indemnified Party in connection with the defense thereof unless (i) the Issuer
has agreed to pay such fees and expenses or (ii) counsel provided by the Issuer
pursuant to the foregoing is counsel to the Issuer and such Servicer
Indemnified Party shall have been advised by such counsel that representation
of such Servicer Indemnified Party by such counsel provided by the Issuer
pursuant to the foregoing would be inappropriate due to actual or potential
conflicting interests between the Issuer and such Servicer Indemnified Party,
including situations in which there are one or more legal defenses available to
such Servicer Indemnified Party that are different from or additional to those
available to the Issuer; PROVIDED, HOWEVER, that the Issuer shall not, in
connection with any such action or proceeding, or separate but substantially
similar actions or proceedings arising out of the same general allegations, be
liable for the fees and expenses of more than one separate firm of attorneys at
any time, in addition to any local counsel, for all such Servicer Indemnified
Parties. The Issuer shall not consent to the terms of any compromise or
settlement of any action defended by the Issuer in accordance with the
foregoing without the prior consent of the Servicer Indemnified Party. The
Issuer shall not be required to indemnify any Servicer Indemnified Party for
any amount paid or payable by such Servicer Indemnified Party in settlement of
any action, proceeding or investigation without the prior written consent of
the Issuer, which consent shall not be unreasonably withheld. Promptly after
receipt by any Servicer Indemnified Party of notice of its involvement (or the
involvement of any of its affiliates or such affiliate's directors, officers,
shareholders, agents or employees) in any action, proceeding or investigation,
such Servicer Indemnified Party shall, if a claim for indemnification in
respect thereof is to be made against the Issuer hereunder, notify the Issuer
in writing of such involvement, but the failure of such Servicer Indemnified
Party to provide such notice shall neither cause the forfeiture of the right to
receive indemnity hereunder nor limit such right, except to the extent, if any,
that the Issuer is prejudiced by the failure of the Servicer Indemnified Party
to promptly give such notice. This indemnity shall survive termination or
resignation of the Servicer or Special Servicer or termination of the Indenture.

   Neither the Servicer nor the Special Servicer shall be under any obligation
to appear in, prosecute or defend any legal action which is not incidental to
its duties under this Indenture or which in the Servicer's or Special
Servicer's opinion may involve it in any expense or liability; PROVIDED,
HOWEVER, that, subject to the rights of the Majority Holders set forth in
Section 5.12(a), the Servicer or Special Servicer may, in its discretion,
undertake any such action which it may deem necessary or desirable in respect
of this Indenture and the rights and duties of the parties hereto and the
interests of the Holders hereunder. In such event, the legal expenses and costs
of such action and any liability resulting therefrom shall be expenses, costs
and liabilities of the Issuer payable from the Collateral. The indemnification
provided herein is limited in each case to actual damages and does not extend
to consequential damages.

   (b) Each of the Servicer and the Special Servicer agrees, with respect to
its actions and omissions and those of its agents (but, not with respect to the
actions or omissions of any other Person), to indemnify the Trustee and the
Holders and hold them harmless against any and all claims, losses, penalties,
fines, forfeitures, reasonable legal fees and related costs, judgments, and any
other costs, liabilities, fees and expenses (including reasonable attorneys'
fees) that the Trustee and/or the Holders may sustain in connection with this
Indenture related to the willful misconduct, bad faith and/or negligence by the
Servicer or Special Servicer, in the performance of duties by the Servicer or
Special Servicer hereunder or by reason of negligent disregard of obligations
and duties by the Servicer or Special Servicer, as the case may be, except that
neither the Servicer nor the Special Servicer shall be liable for losses (i)
that arise from events occurring or conditions existing prior to the date of
this Indenture;

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(ii) which were known to the Trustee but not disclosed to the Servicer or
Special Servicer and as to which an employee or agent of the Servicer or
Special Servicer performing the duties of the Servicer or Special Servicer
hereunder did not otherwise have knowledge, unless such failure to have such
knowledge resulted from such Person's negligence, bad faith or misconduct;
(iii) which are caused by Servicer's or Special Servicer's inability to perform
because of the unavailability of funds in the Mortgage Deposit Account, the
Mezzanine Deposit Account, or the Collection Account; or (iv) which are caused
by any action or inaction taken by the Servicer or Special Servicer in
accordance with the express recommendation or at the direction of Trustee or
due to the negligence, bad faith or misconduct of the Trustee; PROVIDED, that
such indemnity is limited to actual damages and shall not cover consequential
damages. The Trustee shall immediately notify the Servicer or Special Servicer,
as applicable, if a claim is made with respect to this Indenture or the Note
Indebtedness entitling the Trustee or the Holders to indemnification hereunder,
whereupon the Servicer or Special Servicer, as applicable, shall assume the
defense of any such claim (with counsel reasonably satisfactory to the Trustee)
and pay all expenses in connection therewith, including counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against it or them in respect of such claim. Any failure to so notify the
Servicer or Special Servicer shall not affect any rights the Trustee or the
Holders may have to indemnification under this Indenture or otherwise except to
the extent the Servicer or Special Servicer is prejudiced by such failure. Such
indemnity obligation shall survive the termination of the Trustee and the
Servicer or Special Servicer hereunder and the termination of this Indenture.
Neither the Servicer nor the Special Servicer shall be required to indemnify
the Trustee and the Holders for any amount paid or payable by either of them in
settlement of any action, proceeding or investigation without the prior written
consent of the Servicer or Special Servicer, as applicable, which consent shall
not be unreasonably withheld.

   SECTION 7.21  SERVICER AND SPECIAL SERVICER NOT TO RESIGN; TERMINATION OF
SERVICER BY HOLDERS.

   (a) Subject to the provisions of Section 7.22, neither the Servicer nor the
Special Servicer shall resign from any of its obligations and duties hereby
imposed on it, except that it may resign from all of its obligations and duties
hereunder (a) upon determination that its duties are no longer permissible
under applicable law or are in material conflict with applicable law, or (b)
upon thirty (30) days' notice to the Trustee provided that, in either case, a
successor servicer meeting the qualifications described in this Section 7.21(a)
and Section 7.26 is appointed. Any determination permitting the resignation of
the Servicer or Special Servicer upon a determination that its duties hereunder
are no longer permissible under applicable law or are in material conflict with
applicable law must be evidenced by an Opinion of Counsel to such effect
obtained by the Servicer or Special Servicer (at the Servicer's or Special
Servicer's expense) and delivered to the Trustee and the Issuer. No resignation
by the Servicer or Special Servicer under this Indenture shall become effective
until the Trustee, in accordance with Section 7.26 hereof, or a successor
Servicer or Special Servicer shall have assumed all of the Servicer's or
Special Servicer's responsibilities and obligations. Any such successor
Servicer or Special Servicer shall satisfy the requirements set forth in the
fourth sentence of Section 7.26(a) (other than clause (iii) of such section).
The Servicer or Special Servicer may assign its rights and delegate its duties
hereunder to a directly or indirectly wholly owned subsidiary of the Servicer
or Special Servicer PROVIDED such assignment is consented to in writing by the
Trustee (which consent shall not be unreasonably withheld).

   (b) Upon the occurrence and continuance of a Servicer Default, the Trustee
may, and on the written request of the Holders of Notes evidencing, in the
aggregate, no less than 25% of the aggregate principal amount of the
Outstanding Notes, shall, terminate the Servicer or Special Servicer, as
applicable, under this Indenture and replace the Servicer or Special Servicer,
as applicable, with a successor servicer having the qualifications set forth in
Section 7.26; PROVIDED, HOWEVER, that such replacement shall not terminate any
rights (including rights to any amounts owed to the Servicer or Special
Servicer under this Indenture or any other Security Documents) and obligations
accrued prior to such replacement. In connection with any termination and
replacement of the Servicer or Special Servicer, the Trustee shall make such
arrangements for the compensation of the successor servicer or successor
special servicer as it shall deem reasonable and, if such compensation is in
excess of the compensation being paid the Servicer or Special Servicer
hereunder, such compensation shall be approved by the Majority Holders and, if
no Event of Default has occurred and is continuing, the Issuer; PROVIDED that
if the

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Holders select a successor Servicer or successor Special Servicer the Holders
will also be responsible for negotiating the compensation to be paid to such
successor Servicer or successor Special Servicer in accordance with the
foregoing.

   SECTION 7.22  MERGER OR CONSOLIDATION OF THE SERVICER.

   The Servicer and the Special Servicer shall each keep in full effect its
existence and rights as a corporation or other entity, as the case may be,
under the laws of the jurisdiction of its organization, and shall obtain and
preserve its qualification to do business as a foreign corporation in each
jurisdiction in which such qualification is or shall be necessary and shall be
in compliance with the laws of the State of New York and each such other State
to the extent necessary to perform its duties under this Indenture.

   Any Person into which the Servicer or Special Servicer may be merged or
consolidated, or any Person resulting from any merger or consolidation to which
the Servicer or Special Servicer shall be a party, or any Person succeeding to
substantially all business of the Servicer or Special Servicer (which may be
limited to the commercial mortgage servicing business of the Servicer or
Special Servicer), shall be a permitted successor of the Servicer or Special
Servicer, as the case may be, hereunder and shall be deemed to have assumed all
of the liabilities and obligations of the Servicer or Special Servicer, as
applicable, hereunder without the execution or filing of any paper or any
further act on the part of any of the parties hereto (other than such Person),
anything herein to the contrary notwithstanding; so long as the successor or
surviving Person to the Servicer or Special Servicer shall agree in writing to
service the Note Indebtedness and the Underlying Loan Documentation in
accordance with this Indenture.

   SECTION 7.23  SERVICER DEFAULT.

   "SERVICER DEFAULT," wherever used herein, means any one of the following
events (whatever the reason for such Servicer Default and whether it is
voluntary or involuntary or effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):

      (i) any failure by the Servicer or Special Servicer to remit to the
   Trustee or to any other Person or entity to which it is payable any payment
   required to be so made or remitted by it under the terms of this Indenture
   or any other Security Document which, with respect to remittances to the
   Trustee or to the Payment Account, are not cured by 11:00 a.m. on the
   related Payment Date, Redemption Date or Maturity Date, as applicable,
   PROVIDED, HOWEVER, that in the event the Servicer or Special Servicer fails
   to make any such remittance required to be made by the Servicer or the
   Special Servicer to the Payment Account on the Business Day immediately
   preceding the Payment Date or, as applicable, on the Business Day
   immediately preceding the Redemption Date or Maturity Date, the Servicer or
   the Special Servicer shall pay to the Trustee for the account of the Trustee
   interest on any amount not timely remitted at the Prime Rate from and
   including the first Business Day prior to the Payment Date or Maturity Date,
   as applicable, to but not including the date such remittance is actually
   made; or

      (ii) any failure by the Servicer or Special Servicer to observe or
   perform in any material respect any other of the Servicer's or Special
   Servicer's covenants or agreements contained in this Indenture, which
   failure shall continue unremedied for a period of thirty (30) days after the
   date on which written notice of such failure shall have been given to the
   Servicer or Special Servicer by the Trustee; PROVIDED that in the case of
   any such failure that is susceptible to cure, but that cannot with diligence
   be cured within such 30-day period, if the Servicer or Special Servicer will
   have promptly commended to cure the same within such 30-day period and
   thereafter (as evidenced by a certificate of a Servicing Officer),
   prosecutes the curing thereof with diligence, the period within which such
   failure may be cured will be extended for such further period as will be
   reasonably necessary for the curing thereof, such period not to exceed an
   additional 30 days; or

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      (iii) a representation or warranty of the Servicer or Special Servicer
   set forth in this Indenture shall prove to be incorrect as of the time made
   in any respect that materially and adversely affects the interests of the
   Holders, and the circumstances or condition in respect of which such
   representation or warranty was incorrect shall not have been eliminated or
   cured within thirty (30) days after the date on which written notice thereof
   shall have been given to the Servicer or Special Servicer by the Trustee;
   PROVIDED that in the case of any such failure that is susceptible to cure,
   but that cannot with diligence be cured within such 30-day period, if the
   Servicer or Special Servicer will have promptly commenced to cure the same
   within such 30-day period (as evidenced by a certificate of a Servicing
   Officer) and thereafter prosecutes the curing thereof with diligence, the
   period within which such failure may be cured will be extended for such
   further period as will be reasonably necessary for the curing thereof, such
   period not to exceed an additional 30 days; or

      (iv) the entry of a decree or order of a court or agency or supervisory
   authority having jurisdiction in the premises for the appointment of a
   conservator, receiver or liquidator in any insolvency, readjustment of debt,
   marshaling of assets and liabilities or similar proceedings against the
   Servicer or Special Servicer, or for the winding-up or liquidation of the
   Servicer's or Special Servicer's affairs, and such decree or order remains
   unstayed and in effect for a period of sixty (60) days; or

      (v) the consent by the Servicer or Special Servicer to the appointment of
   a conservator or receiver or liquidator or liquidating committee in any
   insolvency, readjustment of debt, marshaling of assets and liabilities,
   voluntary liquidation or similar proceedings of or relating to the Servicer
   or Special Servicer or of or relating to all or substantially all of its
   property.

   Subject to Section 7.21(b), if (A) a Servicer Default due to any action or
inaction of the Servicer or Special Servicer shall occur, (B) any of the
representations or warranties of Servicer or Special Servicer are breached in
any material respect and, as a result thereof, a Servicer Default occurs, or
(C) the Servicer or Special Servicer fails to carry out any other of its
obligations under this Indenture or any other Security Document and, as a
result thereof, a Servicer Default occurs, then, and in each and every such
case, so long as such Servicer Default shall not have been remedied, the
Trustee may terminate all of the rights and obligations of the Servicer or
Special Servicer, as applicable hereunder other than rights (including rights
to any amounts owed to it under this Indenture or any other Security Documents)
and obligations accrued prior to such termination by notice in writing to the
Servicer or Special Servicer.

   If a Responsible Officer of the Trustee shall obtain knowledge of any
Servicer Default hereunder, the Trustee shall immediately notify the Servicer
or Special Servicer, as applicable, of the occurrence of such Servicer Default.
Upon the occurrence and continuation of any Servicer Default hereunder known to
a Responsible Officer of the Trustee, the Trustee shall give the Issuer written
notice of the occurrence thereof. Within ten (10) days after a Responsible
Officer of the Trustee obtains actual knowledge of the occurrence of any
Servicer Default, the Trustee shall transmit by mail to all Holders notice of
such Servicer Default, unless such Servicer Default shall have been cured or
waived.

   On or after the receipt by the Servicer or Special Servicer, as applicable,
of written notice of termination, all authority, power and obligations of the
Servicer or Special Servicer, as applicable, under this Indenture (other than
its capacity, if any, as a Holder) shall pass to and be vested in the Trustee
in its capacity as successor Servicer or Special Servicer, as applicable,
hereunder pursuant to and under this Section. The Servicer and Special Servicer
agree to provide to the Trustee promptly (and in any event no later than five
Business Days subsequent to such notice) all documents and records, including
those in electronic form, requested by it to enable it to assume the Servicer's
or Special Servicer's, as applicable, obligations hereunder, and to cooperate
with the Trustee in effecting the termination of the Servicer's or Special
Servicer's, as applicable, responsibilities and rights hereunder, including,
without limitation, the transfer within one Business Day to the Trustee or its
duly appointed agent or any successor appointed by it for administration by it
of all cash and other securities then held in the Mortgage Deposit Account, the
Mezzanine Deposit Account, the Collection Account, or any of the

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sub-accounts maintained pursuant to the Cash Management Agreement or the
Mezzanine Cash Management Agreement and any other cash received by the Servicer
or Special Servicer under the Underlying Loan Documentation or the Security
Documents and which shall at the time have been or should have been credited by
the Servicer or Special Servicer to the Payment Account or thereafter received
with respect to the Underlying Loan Documentation (PROVIDED, HOWEVER, that
notwithstanding anything to the contrary in this Section, the Servicer and
Special Servicer shall continue to be entitled to receive all amounts accrued
or owing to it under this Indenture and the other Security Documents on or
prior to the date of such termination, whether in respect of Advances or
otherwise in accordance with the terms hereof). All reasonable costs and
expenses (including attorneys' fees) incurred by the Trustee, the Issuer or the
Holders in connection with the appointment of a successor Servicer or Special
Servicer, including, but not limited to, transferring originals of the Security
Documents to the successor Servicer or Special Servicer and, if applicable,
amending this Indenture to reflect such succession as Servicer or Special
Servicer pursuant to this Section shall be paid by the predecessor Servicer or
Special Servicer upon presentation of reasonable documentation of such costs
and expenses to the Trustee; PROVIDED, HOWEVER, that all such costs and
expenses shall be paid pro rata by the Majority Holders in the event that the
Special Servicer is terminated pursuant to Section 5.12(c) and no Servicer
Event of Default has occurred or is continuing. If not paid by the predecessor
Servicer or Special Servicer within sixty (60) days after the request therefor,
such costs and expenses shall be advanced by the Issuer, who shall then be
entitled to reimbursement therefor from the predecessor Servicer, predecessor
Special Servicer or Majority Holders as applicable.

   SECTION 7.24  REMEDIES OF TRUSTEE.

   During the continuance of any Servicer Default and so long as such Servicer
Default shall not have been remedied, the Trustee, in addition to the rights
specified in Section 7.21 and/or 7.23 and elsewhere in this Indenture, shall
have the right, in its own name as trustee of an express trust, to take all
actions now or hereafter existing at law, in equity or by statute to enforce
its rights and remedies and to protect the interests, and enforce the rights
and remedies, of the Holders (including the institution and prosecution of all
judicial, administrative and other proceedings and the filing of proofs of
claim, debt and other papers in connection therewith). Except as otherwise
expressly provided in this Indenture, no remedy provided for by this Indenture
shall be exclusive of any other remedy, and each and every remedy shall be
cumulative and in addition to any other remedy and no delay or omission to
exercise any right or remedy shall impair any such right or remedy or shall be
deemed to be a waiver of any Servicer Default.

   SECTION 7.25  DIRECTIONS BY HOLDERS AND DUTIES OF TRUSTEE DURING SERVICER
DEFAULT.

   During the continuance of any Servicer Default, the Majority Holders may
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon the
Trustee under this Indenture; PROVIDED, HOWEVER, that the Trustee shall be
under no obligation to pursue any such remedy, or to exercise any of the trusts
or powers vested in it by this Indenture (including, without limitation, (i)
the conducting or defending of any administrative action or litigation
hereunder or in relation hereto, and (ii) the terminating of the Servicer or
Special Servicer or any successor Servicer or Special Servicer from its rights
and duties as Servicer or Special Servicer hereunder) at the request, order or
direction of any of the Holders, unless such Holders shall have offered the
Trustee security or indemnification satisfactory to the Trustee against the
costs, expenses and liabilities which may be incurred therein or thereby and,
PROVIDED, FURTHER, that the Trustee shall have the right to decline to follow
any such direction if the Trustee determines that the action or proceeding so
directed may not lawfully be taken (such determination to be evidenced by an
Opinion of Counsel obtained by the Trustee and delivered to the Holders of
Notes making such direction, with a copy to the Servicer or Special Servicer
and the Issuer; the cost of such Opinion of Counsel to be payable by the Issuer
in accordance with Section 6.5), if the Trustee in good faith determines that
the action or proceeding so directed would involve it in personal liability or
be unjustly prejudicial to the non-assenting Holders or if the Trustee
determines that the action or proceeding is not consistent with the Servicing
Standards.

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   SECTION 7.26  TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.

   (a) On and after the time the Servicer or Special Servicer receives a notice
of termination pursuant to Section 5.12(d) or Section 7.23 or the Trustee
receives the resignation of the Servicer or Special Servicer in accordance with
Section 7.21(a) (unless a successor is appointed pursuant to Section 7.21), the
Trustee shall be the successor in all respects to the Servicer or Special
Servicer, as the case may be, in its capacity as Servicer or Special Servicer,
as the case may be, under this Indenture and the transactions set forth or
provided for herein and shall have all the rights and powers and be subject to
all the responsibilities, duties and liabilities relating thereto placed on the
Servicer or Special Servicer, as the case may be, accruing after such
termination; and PROVIDED, that any failure to perform such duties or
responsibilities caused by the Servicer's or Special Servicer's, as the case
may be, failure to comply with Section 7.21 shall not be considered a default
by the Trustee hereunder. In its capacity as such successor, the Trustee shall
have the same limitation of liability herein granted to the Servicer or Special
Servicer, as the case may be. As compensation therefor, the Trustee shall be
entitled to such compensation as the Servicer or Special Servicer, as the case
may be, would have been entitled to hereunder if no such notice of termination
or resignation had been given (other than amounts due under this Indenture or
the other Security Documents prior to the date of such termination), including,
without limitation, the fees payable hereunder. Notwithstanding anything
contained herein, the Trustee may, if it shall be unwilling to so act, or
shall, if it is unable to so act, appoint any established financial institution
or mortgage servicing institution which has a net worth of not less than
$15,000,000 and if no declaration of acceleration of the Notes has occurred,
has been consented to in writing by the Issuer, such consent not to be
unreasonably withheld (as such consent right to terminate after the expiration
of 30 days after request therefore from the Trustee), as the successor to the
Servicer or Special Servicer, as the case may be, hereunder in the assumption
of all or any part of the responsibilities, duties or liabilities of the
Servicer or Special Servicer, as the case may be, hereunder; PROVIDED, HOWEVER,
that until such appointment and assumption, the Trustee will continue to
perform the servicing obligations pursuant to this Indenture to the extent set
forth above. In connection with any such appointment and assumption, the
Trustee may make such arrangements for the compensation of such successor as it
and such successor shall agree; PROVIDED, HOWEVER, that no such compensation
shall be in excess of that permitted the Servicer or Special Servicer, as the
case may be, hereunder unless approved by the Issuer and the Majority Holders.
In the event that no successor Servicer or Special Servicer has been appointed
as provided above, the Trustee shall solicit, by public announcement, bids from
commercial finance institutions, banks and mortgage servicing institutions
meeting the qualifications set forth above. Within sixty (60) days after any
such public announcement, the Trustee shall negotiate and effect the sale,
transfer and assignment of the servicing rights and responsibilities hereunder
to the qualified party submitting the highest satisfactory bid. The Trustee
shall deduct all costs and expenses of any public announcement and of any sale,
transfer and assignment of the servicing rights and responsibilities hereunder
from any sum received by the Trustee from the successor to the Servicer or
Special Servicer in respect of such sale, transfer and assignment. After such
deductions, the remainder of such sum shall be paid by the Trustee to the
Servicer or Special Servicer, as the case may be, at the time of such sale,
transfer and assignment to the Servicer's or Special Servicer's, as the case
may be, successor, net of any amounts due from the Servicer or Special
Servicer, as the case may be, hereunder, which shall be deposited in the
Payment Account. If no successor servicer or special servicer shall have been
so appointed and have accepted appointment within sixty (60) days after the
Trustee receives the resignation of the Servicer or Special Servicer in
accordance with Section 7.21, the Trustee may petition any court of competent
jurisdiction for the appointment of a successor servicer or special servicer in
accordance with the procedures and terms set forth above. The Trustee, the
Issuer, the Servicer, the Special Servicer and such successor shall take such
action, consistent with this Indenture, as shall be necessary to effectuate any
such succession. Neither the Trustee nor any successor Servicer or Special
Servicer shall be deemed to be in default of any of its obligations under this
Section if and to the extent that such default arises from failure of the
Servicer or Special Servicer to timely provide all applicable books, records
and other documents necessary to effectuate the sale, transfer or assignment of
servicing rights to the Trustee or a successor Servicer or Special Servicer in
accordance with this Section.

   (b) Any successor, including the Trustee, to the Servicer or Special
Servicer hereunder shall during the term of its service as servicer maintain in
force (i) a policy or policies of insurance covering errors and omissions in

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the performance of its obligations as mortgage servicer hereunder, and (ii) a
fidelity bond in respect of its officers, employees and agents to the same
extent that the Servicer or Special Servicer is required pursuant to Section
7.5(b).

   SECTION 7.27  NOTIFICATION TO HOLDERS.

   (a) Upon any termination of the Servicer or Special Servicer or appointment
of a successor to the Servicer or Special Servicer, in each case as provided
herein, the Trustee shall as soon as practicable give written notice thereof to
the Issuer and to each of the Holders at its addresses appearing in the
Register.

   (b) Any notification to Holders required pursuant to Section 7.23 or Section
7.21 shall advise the Holders of their rights hereunder.

   SECTION 7.28  WAIVER OF PAST EVENTS OF DEFAULT.

   Either the Trustee or the Majority Holders may, on behalf of all Holders of
Notes, waive any Servicer Default hereunder and its consequences; PROVIDED,
that in the absence of written instructions from all Holders the Trustee shall
not waive any Servicer Default (i) consisting of the failure to remit or
deposit any interest on the Notes as required by it hereunder or (ii) in
respect of a covenant or provision hereunder that under Article IX hereof
cannot be modified or amended without the consent of each Holder. Upon any such
waiver of a past default, such default shall cease to exist, and any Servicer
Default arising therefrom shall be deemed to have been remedied for every
purpose of this Indenture. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.

   SECTION 7.29  REPRESENTATIONS AND WARRANTIES.

   Each of the Servicer and the Special Servicer hereby represents and warrants
to the other parties hereto that as of the Closing Date:

      (i) it has been duly organized and is validly existing under the laws of
   the State of Delaware and is in compliance with and in good standing as a
   corporation under the laws of each State in which the Underlying Collateral
   or the Underlying Properties are located to the extent necessary to perform
   its obligations in accordance with the terms of this Indenture, except where
   the failure to so qualify or comply would not materially adversely affect
   the ability of the Servicer or Special Servicer, as applicable, to perform
   its obligations hereunder in accordance with the terms of this Indenture;

      (ii) the execution and delivery of this Indenture by it have been duly
   authorized by all necessary action on the part of the Servicer or Special
   Servicer, as the case may be; it is duly authorized under applicable law and
   its organizational documents to perform its obligations under this Indenture
   and all action necessary or required therefor has been duly and effectively
   taken or obtained; none of the execution, delivery or performance of this
   Indenture, or the consummation of the transactions herein contemplated, or
   the compliance with the provisions hereof, in each case by the Servicer or
   Special Servicer, as the case may be, will conflict with or result in a
   breach of or constitute a default under (A) the terms of any material
   agreement or instrument to which it is a party or by which it is bound; (B)
   the organizational documents of the Servicer or Special Servicer, as the
   case may be; or (C) to its knowledge, the provisions of any law,
   governmental rule, regulation, judgment, decree or order binding on the
   Servicer or Special Servicer or its properties, as the case may be, which
   conflict, breach or default in the case of clause (A) or clause (C)
   materially and adversely affects (X) the ability of the Servicer or Special
   Servicer, as the case may be, to perform its obligations under this
   Indenture or (Y) the operations or financial condition of the Servicer or
   Special Servicer, as the case may be;

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      (iii) no consent, approval, authorization or order of, or registration or
   qualification with any court or any regulatory authority or other
   governmental agency or body is required for the execution, delivery and
   performance by Servicer or Special Servicer of this Indenture, except such
   as has been obtained prior to the Closing Date and is in full force and
   effect;

      (iv) this Indenture has been duly executed and delivered by it and,
   assuming due authorization, execution and delivery by the other parties
   hereto, constitutes a valid, legal and binding obligation of the Servicer or
   Special Servicer, as the case may be, enforceable against it in accordance
   with its terms, except as such enforcement may be limited by applicable
   bankruptcy, fraudulent conveyance or transfer, insolvency, reorganization,
   moratorium or other laws of general applicability relating to or affecting
   the rights and remedies of creditors generally or by general principles of
   equity (regardless of whether such enforceability is considered and applied
   in a proceeding in equity or at law);

      (v) there are no actions, suits or proceedings pending or, to its
   knowledge, threatened against it, before or by any court, administrative
   agency, arbitrator or governmental body (A) with respect to any of the
   transactions contemplated by this Indenture or (B) with respect to any other
   matter which, either in any one instance or in the aggregate, would result
   in any material adverse change in the business, operations or financial
   condition of it or would materially impair its ability to perform its
   obligations under this Indenture;

      (vi) it is not in default with respect to any order or decree of any
   court or any order, regulation or demand of any federal, state, municipal or
   governmental agency, which default could reasonably have consequences that
   would materially and adversely affect its business, operations or financial
   condition or could reasonably have consequences that would materially and
   adversely affect its ability to perform its obligations hereunder; and

      (vii) it has obtained as of the Closing Date the insurance required to be
   maintained by it pursuant to Section 7.5(b).

                                 ARTICLE VIII

                                  THE ISSUER

   SECTION 8.1  REPORTS BY THE ISSUER.

   (a) The Issuer shall, at its own expense, promptly deliver to the Trustee,
with copies to the Servicer and Special Servicer, copies of all reports and
statements to be prepared hereunder and under the Mortgage and the Mezzanine
Loan Agreement.

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

   (c) The Issuer shall furnish the Trustee:

      (i) within 90 days after the execution and delivery of this Indenture, an
   Opinion of Counsel either stating that in the opinion of such counsel this
   Indenture and all other necessary statements and documents have been
   properly recorded and filed and all fees paid thereon so as to make
   effective and fully perfected the lien intended to be created hereby and
   reciting the details of such action, or stating that in the opinion of such
   counsel no such action is necessary to make such lien effective; such
   Opinion of Counsel may contain appropriate assumptions, exceptions,
   qualifications and limitations; and

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      (ii) at least annually after the execution and delivery of this
   Indenture, an Opinion of Counsel either stating that in the opinion of such
   counsel such action has been taken with respect to the recording, filing,
   re-recording and refilling of this Indenture, any indentures supplemental
   hereto and any other requisite documents and with respect to the execution
   and filing of any financing statements and continuation statements as is
   necessary to maintain the lien of this Indenture and reciting the details of
   such action, or stating that in the opinion of such counsel no such action
   is necessary to maintain such lien; such Opinion of Counsel may contain
   appropriate assumptions, exceptions, qualifications and limitations.

   SECTION 8.2  REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE ISSUER.

   (a) The Issuer hereby represents and warrants to the other parties hereto
that as of the Closing Date:

      (i) the Issuer is a limited liability company duly formed, validly
   existing and in good standing under the laws of Delaware, with full limited
   liability company power and authority to own the Indenture Collateral, to
   carry on its business relating to the Indenture Collateral as presently
   conducted and to enter into and perform its obligations under the Notes,
   this Indenture and the other Security Documents to which it is a party;

      (ii) the execution and delivery of the Notes, this Indenture and the
   other Security Documents to which it is a party by the Issuer have been duly
   authorized by all necessary limited liability company action on the part of
   the Issuer; neither the execution, delivery and performance of the Notes,
   this Indenture and the other Security Documents to which it is a party, nor
   the consummation of the transactions herein or therein contemplated, nor the
   compliance with the provisions hereof or thereof by the Issuer, will
   conflict with or result in a breach of, or constitute a default under (A)
   the terms of any material agreement or instrument to which the Issuer is a
   party or by which it is bound; (B) the limited liability company agreement
   of the Issuer; or (C) to the knowledge of the Issuer, the provisions of any
   law, governmental rule, regulation, judgment, decree or order binding on the
   Issuer; none of the Issuer or any of its Affiliates is a party to, bound by,
   or in breach of or in violation of any indenture or other agreement or
   instrument, or subject to or in violation of any statute, order or
   regulation of any court, regulatory body, administrative agency or
   governmental body having jurisdiction over it, which, in any such case,
   would reasonably be expected to have a material adverse effect on the
   Issuer's ability to perform its obligations under this Indenture or the
   other Security Documents to which it is a party;

      (iii) to the Issuer's knowledge, no consent, approval, authorization,
   order, registration or qualification of or with any court or any regulatory
   authority or other governmental agency or body required for the execution,
   delivery and performance by the Issuer of its obligations under the Notes,
   this Indenture or the other Security Documents, except such as has been
   obtained and is in full force and effect;

      (iv) each of the Notes, this Indenture and each of the other Security
   Documents have been duly executed and delivered by the Issuer and, assuming
   due authorization, execution and delivery by the other parties hereto or
   thereto, as applicable, constitutes a valid and legally binding obligation
   of the Issuer enforceable against it in accordance with its terms, except as
   such enforcement may be limited by bankruptcy, fraudulent conveyance or
   transfer, insolvency, reorganization, receivership, moratorium or other
   similar laws relating to or affecting the rights of creditors generally, and
   by general equity principles (regardless of whether such enforcement is
   considered in a proceeding in equity or at law);

      (v) there are no actions, suits or proceedings pending or, to the
   knowledge of the Issuer, threatened against the Issuer, before or by any
   court or other governmental body (A) with respect to any of the transactions
   contemplated by this Indenture or any other Security Document or (B) with
   respect to any other matter which could, if determined adversely to the
   Issuer, materially and adversely affect its ability to perform its
   obligations under the Notes, this Indenture and the other Security Documents
   to which it is a party; and

      (vi) the Issuer, on the date hereof and prior to the assignment of the
   Underlying Loans to the Trustee, is the sole owner and holder of the
   Underlying Loans and has all right, title and interest in and to the

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   Underlying Collateral as mortgagee or pledgee, as applicable, in each case
   free and clear of any liens, pledges, charges, participation interests and
   security interests of any nature, other than the security interest granted
   to the Trustee in connection with the Notes.

   (b) Commencing upon the earlier of discovery by the Issuer or receipt of
notice by the Issuer of a breach of any representation or warranty set forth in
this Section 8.2, the Issuer shall diligently cure such breach in all material
respects.

                                  ARTICLE IX

                      SUPPLEMENTAL INDENTURES; AMENDMENTS

   SECTION 9.1  SUPPLEMENTAL INDENTURES OR AMENDMENTS WITHOUT CONSENT OF
HOLDERS.

   Without the consent of any Holders, the Issuer, when authorized by its
members, the Servicer, the Special Servicer (it being understood that the
Servicer's and Special Servicer's signature shall not be required for any such
supplement or amendment unless the supplement or amendment restricts, changes
or impairs the rights of the Servicer or Special Servicer hereunder or under
any of the Security Documents or adds to or changes the liability or
obligations of the Servicer or Special Servicer hereunder or under any of the
Security Documents in any respect) and the Trustee, at any time and from time
to time, may enter into one or more indentures supplemental hereto, or one or
more amendments hereto or to the Notes, and the Issuer and the relevant
Underlying Borrower may enter into any amendments to the Mortgage Security
Documents or the Mezzanine Security Documents, and the Issuer and the Trustee
may enter into any amendments to the other Indenture Security Documents in form
satisfactory to the Trustee and the Servicer and Special Servicer (it being
understood that the Servicer's and Special Servicer's consent or signature
shall not be required for any such supplement or amendment unless the
supplement or amendment restricts, changes or impairs the rights of the
Servicer or Special Servicer hereunder under any of the Security Documents or
adds to or changes the liability or obligations of the Servicer or Special
Servicer hereunder or under any of the Security Documents in any respect), for
any of the following purposes:

      (i) to add to the covenants of the Issuer for the benefit of the Holders
   of Notes or to surrender any right or power herein conferred upon the
   Issuer; or

      (ii) to add to the covenants of the Underlying Borrowers under any
   Mezzanine Security Document or any Mortgage Security Document for the
   benefit of the Holders of Notes or to surrender any right or power conferred
   upon the Underlying Borrowers under those aforementioned agreements; or

      (iii) to add any additional Events of Default or Servicer Defaults
   hereunder; or

      (iv) to add any additional "Events of Default" to any Mezzanine Security
   Document or any Mortgage Security Document; or

      (v) to evidence and provide for the acceptance of appointment hereunder
   by a successor Trustee or successor Servicer or Special Servicer; or

      (vi) to correct any typographical error, to cure any ambiguity, or to
   cure, correct or supplement any defective or inconsistent provision herein,
   in the Notes, or in any Security Document, or to conform any such provision
   to the description thereof in the Registration Statement PROVIDED such
   action shall not adversely affect the interests of the Holders of Notes; or

      (vii) to convey, transfer, assign, mortgage or pledge any property to the
   Issuer in the case of an amendment to a Mortgage Security Document or a
   Mezzanine Security Document, or the Trustee in the case of an amendment to
   the Indenture, the Notes or another Indenture Security Document, in either
   case so long as the interests of the Holders of Notes would not be adversely
   affected; or

      (viii) to correct any manifestly incorrect description, or amplify the
   description, of any property subject to the lien of this Indenture or the
   other Security Documents; or

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      (ix) to make a required or conforming change to any Mezzanine Security
   Document or any Mortgage Security Document in connection with any amendment
   or supplement to this Indenture permitted hereunder; or

      (x) to modify any Security Document as required or made necessary by any
   change in applicable law, so long as the interests of the Holders of Notes
   would not be adversely affected.

   SECTION 9.2  SUPPLEMENTAL INDENTURES OR AMENDMENTS WITH CONSENT OF HOLDERS.

   With the consent of the Majority Holders, the Issuer, the Servicer, the
Special Servicer (it being understood that the Servicer's and Special
Servicer's signature shall not be required for any such supplement or amendment
unless the supplement or amendment restricts, changes or impairs the rights of
the Servicer or Special Servicer hereunder or under any of the Security
Documents or adds to or changes the liability or obligations of the Servicer or
Special Servicer hereunder or under any of the Security Documents in any
respect) and the Trustee may enter into an indenture or indentures supplemental
hereto or one or more amendments hereto for the purpose of adding to any
provisions of or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders of Notes
under this Indenture and the Issuer and the Trustee may enter into any
amendments to the other Security Documents; PROVIDED, HOWEVER, that no such
supplemental indenture or amendment shall, without the consent of the Holder of
each Outstanding Note adversely affected thereby,

      (i) change the Maturity Date of, the principal of, or the due date or
   amount of any interest on, any Note, or reduce the principal amount thereof
   or the rate of interest thereon or change the coin or currency in which any
   Note or interest thereon is payable, or impair the right to institute suit
   for the enforcement of any such payment on or after the Maturity Date
   thereof (or, in the case of redemption, on or after the Redemption Date), or

      (ii) reduce the percentage in principal amount of the Outstanding Notes,
   the consent of whose Holders is required for any supplemental indenture, or
   the consent of whose Holders is required for any waiver of compliance with
   certain provisions of this Indenture or for any other reason under this
   Indenture or reduce the requirements of Section 12.4 for quorum or voting, or

      (iii) change any obligation of the Issuer to maintain an office or agency
   in the places and for the purposes specified in Section 10.2, or

      (iv) modify any of the provisions of this Section 9.2 or Section 5.13,
   except to increase any such percentage or to provide that certain other
   provisions of this Indenture cannot be modified or waived without the
   consent of the Holder of each Outstanding Note affected thereby, or

      (v) except as otherwise expressly provided in this Indenture or in the
   other Security Documents, deprive any Holder of the benefit of a first
   priority security interest in the Indenture Collateral, or

      (vi) modify the provisions of this Indenture relating to payments on the
   Notes, or

      (vii) release from the lien of the Indenture all or any part of the
   Indenture Collateral except as described in this Indenture or the other
   Security Documents, or

      (viii) modify the Servicing Standards, or

      (ix) authorize the Trustee to agree to delay the timing of, or reduce the
   payments to be made on, the Notes except as described herein.

   In connection with the execution of any such supplemental indenture or
amendment, the Issuer shall obtain and deliver to the Trustee an Opinion of
Counsel from counsel experienced in federal income tax matters that the
execution of such supplemental indenture will not result in the Notes being
treated as having been exchanged for new notes pursuant to Section 1001 of the
Code, PROVIDED that no such Opinion of Counsel shall be required if such
Opinion of Counsel cannot be obtained and that fact is disclosed to the Holder
of each Outstanding Note

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whose consent is required hereunder. It shall not be necessary for the consent
of the Holders under this Section to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such consent
shall approve the substance thereof. No such supplement or amendment of this
Indenture or the Notes shall be permitted to the extent that such amendment
would cause an outstanding Advance to be a Nonrecoverable Advance.

   SECTION 9.3  DELIVERY OF SUPPLEMENTS.

   Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to the provisions of Section 9.1 or Section
9.2, the Issuer shall mail, first class postage prepaid, a notice to each
Holder at the address for such Holder set forth in the Register setting forth
in general terms the substance of such supplemental indenture or amendment. Any
failure of the Issuer to mail such a notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such supplemental
indenture.

   SECTION 9.4  OPINION OF COUNSEL.

   If the Trustee determines in the exercise of its good faith judgment that it
has doubt as to whether a proposed amendment or supplement to this Indenture is
permitted under the terms of Section 9.1 or 9.2 above, the Trustee may require,
as a condition to its executing any such amendment or supplement, that the
Issuer deliver, at no expense to the Trustee, an Opinion of Counsel confirming
that the amendment or supplement in question is permitted under the relevant
Section of this Article IX, it being understood that the Trustee does not have
any affirmative obligation to request such an opinion.

                                   ARTICLE X

                             COVENANTS; WARRANTIES

   SECTION 10.1  PAYMENT OF PRINCIPAL AND INTEREST.

   The Issuer covenants and agrees for the benefit of the Holders of Notes that
it will duly and punctually pay the principal of, and interest on, the Notes
and any fees due and payable in accordance with the terms of the Notes and this
Indenture.

   SECTION 10.2  MAINTENANCE OF OFFICE OR AGENCY.

   The Issuer will maintain or cause to be maintained an office or agency in
the continental United States where notices and demands to or upon the Issuer
in respect of the Notes and this Indenture may be served. The Issuer will give
prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Issuer shall fail to
maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such notices and demands may be made or
served at the Corporate Trust Office of the Trustee, and the Issuer hereby
appoints the Trustee as its agent to receive such respective notices and
demands.

   The Issuer may also from time to time designate one or more other offices or
agencies outside the United States where the Notes may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; PROVIDED, HOWEVER, that no such designation or rescission shall
in any manner relieve the Issuer of its obligation to maintain an office or
agency in accordance with the requirements set forth in the preceding
paragraph. The Issuer will give prompt written notice to the Trustee and prompt
notice to the Holders, in accordance with the provisions of Section 1.6, of any
such designation or rescission and of any change in the location of such office
or agency.

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   SECTION 10.3  FISCAL AGENT; MONEY FOR NOTE PAYMENTS TO BE HELD IN TRUST.

   The Trustee hereby appoints (on behalf of the Issuer) itself, at its
Corporate Trust Office, as Fiscal Agent in connection with the Notes. The
foregoing appointment may be rescinded at any time by the Trustee giving notice
thereof to the Issuer. All payments made by the Trustee in its capacity as
Fiscal Agent, will be made by wire transfer to such account as a Holder shall
designate by written instructions to be received by the Trustee no less than
five (5) Business Days prior to the applicable Regular Record Date.

   The Trustee will cause any Fiscal Agent other than the Trustee, appointed
pursuant to Section 3.6, to execute and deliver to the Trustee an instrument in
which such Fiscal Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Fiscal Agent will:

      (i) hold all sums held by it for the payment of the principal of and
   interest on the Notes in trust for the benefit of the Persons entitled
   thereto until such sums shall be paid to such Persons or otherwise disposed
   of as herein provided;

      (ii) give the Trustee notice of the occurrence and continuance of any
   Event of Default by the Issuer (or any other obligor upon the Notes) in the
   making of any payment of principal of or interest on the Notes; and

      (iii) at any time during the continuance of any such Event of Default,
   upon the written request of the Trustee, forthwith pay to the Trustee all
   sums so held in trust by such Fiscal Agent.

   SECTION 10.4  ENTITY EXISTENCE.

   The Issuer represents and agrees that it will do or cause to be done all
things necessary and within its control to preserve and keep in full force and
effect the existence, rights (contractual and statutory) and franchises of the
Issuer. The Issuer represents that neither it nor the Underlying Borrowers or
the owners of the Underlying Properties are in default in the payment of any
taxes levied or assessed against any of the Underlying Collateral or Underlying
Properties under any applicable statute, rule, order or regulation of any
governmental authority, under the Notes, this Indenture or any of the other
Security Documents to which the Issuer is a party or under any other agreement
to which the Issuer is a party or by which the Issuer or the Underlying
Collateral is bound.

   SECTION 10.5  PAYMENT OF TAXES AND OTHER CLAIMS.

   The Issuer agrees, in its independent capacity, that it will pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, all taxes, assessments and governmental charges levied or imposed
upon the Underlying Properties or upon the income or profits of the Issuer or
the Underlying Borrowers derived from the Underlying Properties as shown to be
due on the tax returns filed by the Issuer or the Underlying Borrowers and all
lawful claims for labor, materials and supplies which, if unpaid, might by law
become a lien upon the Underlying Properties, except any such taxes,
assessments, governmental charges or claims which the Issuer or the Underlying
Borrowers are in good faith contesting in appropriate proceedings in accordance
with the Mortgage and the Mezzanine Loan Agreement.

   SECTION 10.6  MAINTENANCE OF LIEN AND RECORDING.

   (a) The Issuer will maintain and preserve the security interest created by
this Indenture (in Section 3.1(c)) and each other Security Document to which it
is a party (except in connection with a release thereof permitted hereby or
thereby) so long as any Note is Outstanding.

   (b) The Issuer will, forthwith after the execution and delivery of this
Indenture and thereafter from time to time, cause the Mortgage, the Mezzanine
Pledge Agreement and any continuation statement or, upon the reasonable request
of the Trustee or the Servicer, any additional financing statement or similar
instrument relating to the Security Documents or to any property intended to be
subject to the lien thereof to be filed,

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registered and recorded in such manner and in such places as may be required by
law in order to publish notice of and fully to protect and perfect the validity
thereof or the lien thereof purported to be created upon the property subject
thereto and the Issuer will take such actions with respect to the interest and
rights of the Trustee in the Collateral as are necessary or reasonably
requested by the Trustee or the Servicer to preserve the interest and rights of
the Trustee therein. The Issuer will pay or cause to be paid all document,
recording, stamp and similar taxes and fees incident to such filing,
registration and recording, and all expenses incident to the preparation,
execution and acknowledgment of the Security Documents and of any instrument of
further assurance, and all taxes (except income taxes and franchise taxes of
parties other than the Issuer), duties and charges arising out of or incurred
in connection with the execution and delivery of such instruments; PROVIDED,
HOWEVER, that the Issuer shall not be required to pay or discharge or cause to
be paid or discharged any lien or encumbrance affecting the Collateral to the
extent such lien or encumbrance is being contested in good faith by appropriate
proceedings in accordance with and as permitted by the provisions of the
Security Documents. The Issuer will at all times or will cause the Underlying
Borrowers to preserve, warrant and defend the Trustee's title and right in and
to the property included in the Collateral against the claims of all Persons
claiming by or through the Issuer or any Underlying Borrower, subject to the
Permitted Exceptions.

   SECTION 10.7  PERFORMANCE AND ENFORCEMENT.

   (a) The Issuer will faithfully observe and perform, or cause to be observed
and performed, all its covenants, agreements, conditions and requirements
contained in the Security Documents in accordance with the terms thereof and
will maintain the validity and effectiveness of such instruments and the pledge
thereof to the Trustee. The Issuer will not take any action, nor permit any
action to be taken, that will release any party to such instruments from any of
its obligations or liabilities thereunder, or will result in the termination,
modification or amendment, or will impair the validity, of any such
instruments, except as expressly provided for herein and therein. The Issuer
will give the Trustee and the Servicer written notice of any default by any
party to any of such instruments promptly after it becomes known to the Issuer.

   (b) Subject to the provisions of the Leases, the Mortgage and the Mezzanine
Loan Agreement in the event of a casualty or condemnation resulting in the
payment of any Proceeds, the Servicer shall hold such Proceeds as part of the
Collateral in an Eligible Account (the "CASUALTY ACCOUNT"), in the name of the
Servicer as agent for the Trustee and shall disburse or apply such Proceeds in
accordance with the provisions of the Mortgage and the Mezzanine Loan Agreement.

   SECTION 10.8  NEGATIVE COVENANTS.

   The Issuer agrees that:

      (a) it shall not incur, create, assume or permit the existence of any
   debt (including guaranteeing any obligation) other than (i) the Notes and
   other debt expressly permitted by the other provisions of this Indenture and
   the other Security Documents; (ii) the Underlying Loans; and (iii) customary
   unsecured trade payables incurred in the ordinary course of business
   relating to the ownership of Park Plaza 2 or the Underlying Properties,
   PROVIDED, in the case of this clause (iii), that the same (A) do not exceed,
   in the aggregate, at any time a maximum amount of $100,000; and (B) are paid
   within sixty (60) days of the date incurred. The Issuer shall not permit the
   Underlying Borrowers to incur, create, assume or permit the existence of any
   debt (including guaranteeing any obligations), other than debt permitted
   under the terms of the Underlying Loans;

      (b) it shall, and will cause the Underlying Borrowers and Park Plaza 2
   not to pledge or to incur, create, assume or permit the existence of any
   Lien upon the Collateral, the Underlying Properties or any of their
   respective other property, assets or revenues, whether now owned or
   hereafter acquired, except the security interest in the Indenture Collateral
   granted to the Trustee in connection with the Notes, the security interest
   in the Underlying Collateral granted to the Issuer in connection with the
   Underlying Loans, and the Permitted Exceptions;

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      (c) it shall not engage in any business unrelated to (i) the ownership of
   the direct and/or indirect interests in the Underlying Borrowers, (ii)
   making the Mortgage Loan and the Mezzanine Loan, (iii) issuing the Notes,
   and (iv) otherwise dealing with the Underlying Borrowers, the wholly owned
   subsidiaries of the Underlying Borrowers, the Mortgage Loan, the Mezzanine
   Loan and the Notes;

      (d) it shall not own any assets other than assets relating to the
   Underlying Loans (including, without limitation, any proceeds therefrom and
   any funds in the Mortgage Deposit Account and the Mezzanine Deposit Account)
   and its interest in Park Plaza 1;

      (e) it shall not, except as required by law (i) (and then only in a
   manner that does not violate the requirements of any of the Security
   Documents and the Indenture) engage in, seek or consent to any dissolution,
   winding up, liquidation, consolidation, merger, asset sale, transfer of all
   or any portion of its assets, or amend its organizational or governing
   documents in any manner adverse to the Issuer's ability to satisfy the
   requirements of Sections 10.8(a) through (d) hereof, or (ii) (and then only
   in a manner that does not violate the requirements of any of the Security
   Documents and the Indenture) cause or permit Park Plaza 1 to engage in, seek
   or consent to any dissolution, winding up, liquidation, consolidation,
   merger, asset sale, transfer of all or any portion of its assets, or amend
   its applicable organizational documents in a manner adverse to Park Plaza
   1's ability to satisfy any requirement of the Mezzanine Loan Agreement that
   Park Plaza 1 be a single-purpose entity;

      (f) it shall separately identify and segregate its funds and assets from
   those of any other entity and shall not commingle its funds or assets with
   those of any other person or entity; and

      (g) it shall not consent to any amendment to the Mezzanine Security
   Documents or the Mortgage Security Documents other than an amendment in
   accordance with Article IX.

   SECTION 10.9  STATEMENT AS TO COMPLIANCE.

   The Issuer will deliver to the Servicer and the Trustee, within one hundred
and twenty (120) days after the end of each fiscal year, an Officer's
Certificate, stating that in the course of the performance by the signer of
such Officer's Certificate of his or her present duties as an officer or
authorized signatory of the Issuer such signer would normally obtain knowledge
or have made due inquiry as to the existence of any condition or event which
constitutes an Event of Default or would constitute an Event of Default after
notice or lapse of time or both and that to the best of the signer's knowledge,
based on such review, (a) the Issuer has fulfilled all its obligations under
this Indenture in all material respects throughout such year, or, if there has
been a default in the fulfillment of any such obligation in any material
respect, specifying each such default known to such signer and the nature and
status thereof, and (b) no event has occurred and is continuing which is, or
after notice or lapse of time or both would become, an Event of Default, or, if
such an event has occurred and is continuing, specifying each such event known
to such signer and the nature and status thereof.

                                  ARTICLE XI

                              REDEMPTION OF NOTES

   SECTION 11.1  APPLICABILITY OF ARTICLE.

   (a) The Notes shall be subject to redemption on any Payment Date or any
other date fixed for redemption in accordance with this Article XI, in whole or
in part, as provided in Section 11.1(b) or 11.7 below; PROVIDED, that in each
such case no Notes may be redeemed hereunder unless and until all other amounts
then due and payable to the Trustee, the Servicer and Special Servicer under
this Indenture have been paid in full.

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   (b) If during any 30 consecutive days the Redemption Account shall have a
balance in excess of $10,000, the Issuer shall redeem an equivalent principal
amount of Notes at a Redemption Price equal to 100% of their principal amount,
together with interest and all other amounts owing on the principal amount of
the Notes so redeemed accrued to the date of redemption, on the first Payment
Date on which the Issuer is able to do so after the Trustee has complied with
the notice provisions of this Article XI.

   SECTION 11.2  SELECTION BY TRUSTEE OF NOTES TO BE REDEEMED.

   In the case of any redemption pursuant to Section 11.1(b):

      (a) if less than all of the Notes are to be redeemed, the particular
   Notes to be redeemed shall be selected not more than twenty (20) days prior
   to the Redemption Date by the Trustee from the Outstanding Notes not
   previously called for redemption, pursuant to a random selection procedure
   which may provide for the selection for redemption of portions (equal to
   $100 and integral multiples in excess thereof) of a Note. The Trustee shall
   promptly notify the Issuer in writing of the Notes selected for redemption
   and, in the case of any Notes selected for partial redemption, the principal
   amount thereof to be redeemed; and

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

   SECTION 11.3  NOTICE OF REDEMPTION.

   Notice of a redemption pursuant to Section 11.1(b) shall be given by the
Trustee in the manner provided in Section 1.6 to the Holders of Notes to be
redeemed, not later than fifteen (15) days prior to the Redemption Date.

   All such notices of redemption shall state:

      (a) the Redemption Date (which date may either be a Payment Date or such
   other Business Day provided that if the Redemption Date is to occur on a
   date other than a Payment Date, the Redemption Price shall include interest
   on the Notes to be redeemed through but excluding the next succeeding
   Payment Date),

      (b) if less than all the Outstanding Notes are to be redeemed, which
   Notes are to be redeemed and the aggregate principal amount of the Notes to
   be redeemed,

      (c) the Redemption Price,

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

      (e) with respect to Notes other than those in global form, the place or
   places where such Notes maturing after the Redemption Date are to be
   surrendered for payment of the Redemption Price.

   SECTION 11.4  DEPOSIT OF REDEMPTION PRICE.

   In the case of any redemption pursuant to Section 11.1(b), the Trustee shall
transfer to the Payment Account at or before 3:00 p.m. on the Redemption Date
an amount of Cash from the Redemption Account sufficient to pay the Redemption
Price of the Notes to be redeemed.

   SECTION 11.5  NOTES PAYABLE ON REDEMPTION DATE.

   If notice of a redemption pursuant to Section 11.1(b) shall have been given
as aforesaid, the Notes subject to redemption shall, on the Redemption Date,
become due and payable at the Redemption Price therein specified, and from and
after such date (unless the Issuer shall default in the payment of the
Redemption Price) such Notes

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shall cease to bear interest. Upon surrender of any such Note for redemption in
accordance with said notice, such Note shall be paid by the Issuer at the
Redemption Price; PROVIDED, HOWEVER, that principal and interest on the Notes
which have a Maturity Date on or prior to the Redemption Date shall be payable
to the Holders of such Notes, or one or more Predecessor Notes, as of the close
of business on the relevant Record Dates according to their terms and the
provisions of this Indenture.

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

   SECTION 11.6  NOTES REDEEMED IN PART.

   Any Note which is to be redeemed only in part shall be surrendered at the
Corporate Trust Office or such other office designated by the Trustee (with, if
the Issuer or the Trustee so requires, due endorsement by, or written
instrument of transfer in form satisfactory to the Issuer or the Trustee, as
applicable, duly executed by, the Holder thereof or an attorney for the Holder
duly authorized in writing), and the Issuer shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Note without service
charge, a new Note or Notes, of any authorized denomination as requested by
such Holder, in an aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Notes so surrendered.

   In the event of a redemption of the Notes in part, the Issuer shall not be
required (i) to register the transfer of or to exchange any Note during a
period beginning at the opening of business fifteen (15) days before, and
continuing until, the date notice is given identifying the Notes to be
redeemed, or (ii) to register the transfer or exchange of any Note, or portion
thereof, called for redemption, or (iii) to exchange any Note called for
redemption, except for a Note of like aggregate principal amount which is
simultaneously surrendered for redemption.

   SECTION 11.7  HOLDERS' REDEMPTION RIGHT.

   (a) Each Holder of Notes shall have the right (the "REDEMPTION RIGHT") to
require the Issuer to redeem such Holder's Notes on the 90th day after the
Closing Date at a Redemption Price equal to 60.91% of the principal amount
thereof, without interest, provided that the Redemption Right shall not apply
to any Note to the extent that (i) it was issued pursuant to a Shareholder Note
Purchase Right; (ii) it is not held on the Redemption Date by the Holder to
which it was originally issued; or (iii) the Holder thereof shall not have
certified to the Redemption Agent in the manner set forth in Section 11.7(b)
the matters described therein. Notwithstanding the foregoing, at the Issuer's
option, the Issuer may designate another Person or Persons pursuant to Section
11.7(d) to fulfill its redemption obligation by the designee's payment of the
required funds in exchange for the Notes to be redeemed pursuant to the
Redemption Right.

   (b) In order for a Note to be redeemed pursuant to the Redemption Right on
the Redemption Date, the Redemption Agent must have received a duly completed
Election Form before 5:00 p.m. on the 80th day after the Closing Date, at the
address specified thereon, on which the Holder (or the DTC participant through
which the Notes are held, if the Notes are in the form of a Global Note) has
elected to exercise the Redemption Right in respect of such Note on behalf of
its beneficial owner and such beneficial owner has certified that:

      (i) no beneficial interest in the Note has been transferred, either
   directly or indirectly, after the Closing Date;

      (ii) the Note was not issued pursuant to a Shareholder Note Purchase
   Right; and

      (iii) with respect to each owner of a beneficial interest in such Note,
   the Redemption Right has been exercised for all Notes or beneficial
   interests in Notes owned by such owner eligible for redemption pursuant to
   the Redemption Right.

                                      86

<PAGE>

Any such Election Form received by the Redemption Agent shall be irrevocable.
All questions as to the validity, eligibility (including time of receipt) and
acceptance of the Notes for payment shall be determined by the Redemption
Agent, whose determination shall be final and binding.

   (c) The Issuer shall deposit (or shall cause any other Person or Persons
designated pursuant to Section 11.7(d) to deposit), on or before 11:00 a.m. on
the date that is two Business Days prior to the Redemption Date, an amount with
the Redemption Agent sufficient to make payment of the Redemption Price to
Holders of all the Notes with respect to which the Redemption Right was
exercised. Upon surrender of any such Notes for repurchase in accordance with
the procedures printed on the Election Form, the Redemption Agent shall make
payment of the Redemption Price in respect of such Notes on the Redemption
Date, to the account or accounts designated by such Holders.

   (d) At its option, the Issuer may designate, by written notice to the
Redemption Agent prior to the Redemption Date, one or more other Persons, which
may include one or more affiliates of the Issuer, to fulfill its redemption
obligation by the designee's payment of the required funds in exchange for the
Notes to be redeemed pursuant to the Redemption Right. If the Issuer designates
GGC or an affiliate of GGC pursuant to the preceding sentence, then GGC or its
affiliate may in turn designate, by written notice to the Issuer and the
Redemption Agent prior to the Redemption Date, one or more Persons to fulfill
such redemption obligation. The Registrar shall register the transfer of any
Notes that are redeemed pursuant to this Section 11.7(d) by a Person other than
the Issuer. For the avoidance of doubt, the interest accrued prior to the
Redemption Date on such redeemed Notes shall be for the benefit of the Holder
or Holders of such Notes on the Regular Record Date for the next Payment Date.

   (e) Any Note which is to be redeemed pursuant to this Section 11.7 shall be
surrendered at an office designated by the Redemption Agent (with, if the
Issuer or the Redemption Agent so requires, due endorsement by, or written
instrument of transfer in form satisfactory to the Issuer or the Redemption
Agent, as applicable, duly executed by, the Holder thereof or an attorney for
the Holder duly authorized in writing). If the Redemption Agent determines that
such Note has been validly submitted for redemption in accordance with this
Section 11.7, it shall deliver such Note to the Trustee together with a
statement specifying the amount of any unredeemed portion of such Note and any
portion of the principal of such Note which is being acquired by a person
designated pursuant to Section 11.7(d). If on the Redemption Date the Notes are
in the form of a single Global Note, the Issuer shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Note without service
charge, a new Note or Notes, of any authorized denomination as requested by
such Holder, in an aggregate principal amount equal to the sum of and in
exchange for any unredeemed portion of the principal of the Notes so
surrendered and any portion of the principal of the Notes surrendered to the
Redemption Agent and accepted for redemption pursuant to Section 11.7(b) the
beneficial ownership of which is being acquired by a person designated pursuant
to Section 11.7(d). If on the Redemption Date the Notes are no longer in the
form of a single Global Note, the Issuer shall execute and the Trustee shall
authenticate and deliver to the Holder of any Note delivered to the Trustee
pursuant to this Section 11.7(e), without service charge, a new Note or Notes,
of any authorized denomination as requested by such Holder, in an aggregate
principal amount equal to and in exchange for any unredeemed portion of the
principal of the Notes so surrendered, and shall deliver to the Person or
Persons designated pursuant to Section 11.7(d) a New Note or Notes of any
authorized denomination requested by such Person or Persons, in an aggregate
principal amount equal to the principal amount of redeemed Notes acquired by
such Person or Persons.

   (f) In the event that any Person designated pursuant to Section 11.7(d)
shall fail to make the payment described in Section 11.7(c), the Issuer shall
make the required payment to the Redemption Agent in accordance with Section
11.7(c) and shall redeem the related Notes on the Redemption Date as if such
Person had not been designated.

                                      87

<PAGE>

                                  ARTICLE XII

                         MEETINGS OF HOLDERS OF NOTES

   SECTION 12.1  PURPOSES FOR WHICH MEETINGS MAY BE CALLED.

   A meeting of Holders of Notes may be called at any time and from time to
time pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made, given or taken by Holders of Notes as required by
Section 1.3.

   SECTION 12.2  CALL, NOTICE AND PLACE OF MEETINGS.

   (a) The Trustee may at any time call a meeting of Holders of Notes for any
purpose specified in Section 12.1, to be held at such time and at such place in
the Borough of Manhattan, The City of New York, as the Trustee shall determine.
Notice of every meeting of Holders of Notes, setting forth the time and place
of such meeting and in general terms the action proposed to be taken at such
meeting, shall be given by the Trustee to each Holder of Notes and the Issuer,
in the manner provided in Sections 1.5 and 1.6, not less than 10 nor more than
180 days prior to the date fixed for the meeting.

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

   SECTION 12.3  PERSONS ENTITLED TO VOTE AT MEETINGS.

   To be entitled to vote at any meeting of Holders a Person shall (a) be a
Holder of one or more Notes or (b) be a Person appointed by an instrument in
writing as proxy by a Holder of one or more Notes. The only Persons who shall
be entitled to be present or to speak at any meeting of Holders shall be the
Persons entitled to vote at such meeting and their counsel and any
representatives of the Trustee and its counsel and any representatives of the
Issuer and its legal and financial advisers. Notwithstanding the foregoing, the
Issuer is not entitled to vote any Notes of which it may be the Holder.

   SECTION 12.4  QUORUM; ACTION.

   The Persons entitled to vote a majority in principal amount of the
Outstanding Notes shall constitute a quorum for a meeting of Holders of Notes.
In the absence of a quorum within 60 minutes of the time appointed for any such
meeting, the meeting shall, if convened at the request of Holders of Notes, be
dissolved. In any other case the meeting may be adjourned for a period of not
less than ten (10) days as determined by the chairman of the meeting prior to
the adjournment of such meeting. In the absence of a quorum at any such
adjourned meeting, such adjourned meeting may be further adjourned for a period
of not less than ten (10) days as determined by the chairman of the meeting
prior to the adjournment of such adjourned meeting. Notice of the reconvening
of any adjourned meeting shall be given as provided in Section 12.2, except
that such notice need be given only once not less than five (5) days prior to
the date on which the meeting is scheduled to be reconvened. Notice of the
reconvening of an adjourned meeting shall state expressly the percentage, as
provided above, of the principal amount of the Outstanding Notes that shall
constitute a quorum.

   Except as limited by the proviso to the first paragraph of Section 9.2, any
resolution presented to a meeting or adjourned meeting duly reconvened at which
a quorum is present as aforesaid may be adopted by the

                                      88

<PAGE>

affirmative vote of the Majority Holders PROVIDED that, except as limited by
the proviso to the first paragraph of Section 9.2, any resolution with respect
to any request, demand, authorization, direction, notice, consent, waiver or
other action that this Indenture expressly provides may be made, given or taken
by the Holders of a specified percentage, which is less than a majority, in
principal amount of the Outstanding Notes may be adopted at a meeting or an
adjourned meeting duly reconvened and at which a quorum is present as aforesaid
by the affirmative vote of the Holders of such specified percentage in
principal amount of the Outstanding Notes.

   Any resolution passed or decision taken at any meeting of Holders of Notes
duly held in accordance with this Section shall be binding on all the Holders
of such Notes, whether or not present or represented at the meeting.

   Notwithstanding any provision of this Indenture or any other Security
Document to the contrary, Servicer shall not be required to take any action or
refrain from taking any action hereunder or thereunder at the direction of the
Holders that would cause it to violate the Servicing Standards.

   SECTION 12.5  DETERMINATION OF VOTING RIGHTS; CONDUCT AND ADJOURNMENT OF
MEETINGS.

   (a) Notwithstanding any other provisions of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any meeting of
Holders of Notes in regard to proof of the holding of Notes and of the
appointment of proxies and in regard to the appointment and duties of
inspectors of votes, the submission and examination of proxies, certificates
and other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall deem appropriate. Such regulations may
provide that written instruments appointing proxies, regular on their face, may
be presumed valid and genuine without the proof specified in Section 1.3 or
other proof.

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

   (c) At any meeting each Holder of a Note or proxy shall be entitled to one
vote for each $100 principal amount of the Outstanding Notes held or
represented by such Holder; PROVIDED, HOWEVER, that no vote shall be cast or
counted at any meeting in respect of any Note challenged as not Outstanding and
ruled by the chairman of the meeting to be not Outstanding. The chairman of the
meeting shall have no right to vote, except as a Holder of a Note or of a proxy.

   (d) Any meeting of Holders of Notes duly called pursuant to Section 12.2 at
which a quorum is present may be adjourned from time to time by Persons
entitled to vote a majority in principal amount of the Outstanding Notes
represented at the meeting; and the meeting may be held as so adjourned without
further notice.

   SECTION 12.6  COUNTING VOTES AND RECORDING ACTION OF MEETINGS.

   The vote upon any resolution submitted to any meeting of Holders of Notes
shall be by written ballots on which shall be subscribed the signatures of the
Holders of Notes or their representatives by proxy and the principal amounts
and serial numbers of the Outstanding Notes held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record, at least in
duplicate, of the proceedings of each meeting of Holders of Notes shall be
prepared by the secretary of the meeting and there shall be attached to said
record the original reports of the inspectors of votes on any vote by ballot
taken thereat and affidavits by one or more

                                      89

<PAGE>

Persons having knowledge of the facts setting forth a copy of the notice of the
meeting and showing that said notice was given as provided in Section 12.2 and,
if applicable, Section 12.4. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Issuer, and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.

   IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly
executed, all as of the day and year first above written.

                                              SOUTHWEST SHOPPING CENTERS CO.
                                              II, L.L.C.,
                                              a Delaware limited liability
                                              company

                                              By: -----------------------------
                                                  Name:
                                                  Title: Authorized Signatory

                                              THE BANK OF NEW YORK,
                                              as Trustee

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

                                              ARCHON GROUP, L.P.,
                                              as Servicer

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

                                              ARCHON GROUP, L.P.,
                                              as Special Servicer

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

                                      90

<PAGE>

                                                                      EXHIBIT A

                                [FORM OF NOTE]

   THIS NOTE REPRESENTS AN OBLIGATION OF THE ISSUER SECURED BY THE COLLATERAL
(AS DEFINED IN THE INDENTURE (AS DEFINED HEREIN)) AND THE HOLDER HEREOF SHALL
HAVE NO RECOURSE AGAINST ANY PERSON OTHER THAN THE ISSUER. THIS NOTE DOES NOT
REPRESENT AN OBLIGATION OF OR INTEREST IN THE TRUSTEE, THE SERVICER, THE
SPECIAL SERVICER OR ANY OF THEIR RESPECTIVE AFFILIATES. THE NOTES ARE NOT
INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY OR BY THE
ISSUER, THE TRUSTEE, THE SERVICER, THE SPECIAL SERVICER OR ANY OF THEIR
RESPECTIVE AFFILIATES.

   UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR
TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.

   THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE REFERRED TO
HEREIN. THIS GLOBAL NOTE MAY NOT BE EXCHANGED, IN WHOLE OR IN PART, FOR A NOTE
REGISTERED IN THE NAME OF ANY PERSON OTHER THAN DTC OR A NOMINEE THEREOF,
EXCEPT IN THE LIMITED CIRCUMSTANCES SET FORTH IN THE INDENTURE. BENEFICIAL
INTERESTS IN THIS GLOBAL NOTE MAY NOT BE TRANSFERRED EXCEPT IN ACCORDANCE WITH
THE INDENTURE./1/

   THIS NOTE WILL NOT BE ACCEPTED IN EXCHANGE FOR A BENEFICIAL INTEREST IN A
GLOBAL NOTE UNLESS THE HOLDER OF THIS NOTE, SUBSEQUENT TO SUCH EXCHANGE, WILL
HOLD A MINIMUM AGGREGATE BENEFICIAL INTEREST IN SUCH GLOBAL NOTE OF AT LEAST
ONE HUNDRED DOLLARS ($100).

                                      A-1

<PAGE>

                   SOUTHWEST SHOPPING CENTERS CO. II, L.L.C.
                       SECURED NOTES, SERIES 2002-SSCC,
                               DUE MAY 30, 2010

<TABLE>
<S>                                                <C>
Base Interest Rate: 11%                            No.:

First Payment Date: January 6, 2003                Scheduled Maturity Date: May 31, 2010

Original principal balance of all Notes:           Initial principal balance of this Note: $20,000,000

CUSIP: 84522VAA2                                   ISIN: US84522VAA26

Common Code:
</TABLE>

   Southwest Shopping Centers Co. II., L.L.C. (herein called the "Issuer"), for
value received, hereby promises to pay in lawful currency of the United States
to Cede & Co., or registered assigns, the principal sum of Twenty Million
Dollars (U.S.$20,000,000) as provided in the Indenture, and to pay interest
thereon in arrears on a semi-annual basis two business days after the first
business day of January and July, respectively, commencing January 6, 2003
(each a "Payment Date"), from the date hereof until the Maturity Date. The
interest payable on this Note for the period from the date of issuance to, but
not including, the Maturity Date shall be the Base Interest Rate (as defined in
the Indenture) for the Notes.

   The interest so payable, and punctually paid or duly provided for, on any
Payment Date will, as provided in the Indenture, be paid to the Person in whose
name this Note (or one or more Predecessor Notes) is registered at the close of
business on the Regular Record Date for such Payment Date, which shall be the
Business Day immediately prior to the related Payment Date. Interest shall be
calculated on the basis of a 360-day year and the actual number of days elapsed
during each Interest Period (as defined in the Indenture). On the Maturity
Date, the Issuer shall pay in full all of the remaining obligations of the
Issuer under this Note, the Indenture and the other Security Documents to which
the Issuer is a party.

   If, (i) any Note is not paid in full on or before the Maturity Date, (ii)
any payment due on a Payment Date has not been provided for in full (including
by deposit in the Collection Account) by the Issuer or before the second
Business Day prior to the date that such payment is due (as such due date may
be extended by the applicable grace period, if any) or (iii) the Redemption
Price in respect of all Notes to be redeemed pursuant to a redemption is not
paid in full on or before a Redemption Date, the Issuer will be required to pay
interest at the Default Rate as set forth in Section 3.11(d) of the Indenture.

   The Holders shall also be entitled to receive as additional interest on each
Payment Date any amounts received by the Issuer by way of Exit Fee or late
payment charges under the Mortgage Security Documents or the Mezzanine Security
Documents, as defined in the Indenture, during the immediately preceding
Interest Period.

   At the Maturity Date, the Trustee shall pay the principal amount of the
Note, and any unpaid interest thereon in immediately available funds from funds
in the Payment Account as promptly as possible after presentation to the
Trustee of such Note but shall initiate such payment no later than 3:00 p.m.
(New York time) on the day of such presentation, PROVIDED that such
presentation has been made no later than 11:00 a.m. (New York time). If
presentation is made after 11:00 a.m. (New York time) on any day, such
presentation shall be deemed to have been made not later than 11:00 a.m. (New
York time) on the immediately succeeding Business Day.

   If an Event of Default occurs and is continuing, then in every such case the
Special Servicer may to the extent consistent with the Servicing Standards
(subject to the rights of the Majority Holders set forth in Section 5.12(a) of
the Indenture) and at the direction of the Majority Holders shall, by a notice
in writing to the Issuer and the Trustee, declare the sum of (i) the principal
amount of all Outstanding Notes and (ii) any other amounts, including but not
limited to, accrued interest payable to the Holders under the Notes, to the
extent such amounts are permitted by law to be paid, to be due and payable
immediately, and upon any such declaration such amounts shall become
immediately due and payable.

                                      A-2

<PAGE>

   This Note is one of a duly authorized issue of securities of the Issuer
(herein called the "Notes") designated as specified in the title hereof, issued
and to be issued in accordance with the Indenture and Servicing Agreement,
dated as of [         ], 2002 (herein called the "Indenture"), among the
Issuer, The Bank of New York, as Trustee (herein called the "Trustee", which
term includes any successors and any separate or co-trustee under the
Indenture), Archon Group, L.P., as Special Servicer and Archon Group, L.P., as
Servicer, copies of which Indenture are on file and available for inspection at
the corporate trust office of the Trustee at 2 North LaSalle Street, Suite
1020, Chicago, IL 60602. Reference is hereby made to the Indenture and all
indentures supplemental thereto for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Issuer, the
Trustee, the Special Servicer, the Servicer and the Holders of Notes. All
capitalized terms used but not defined herein shall have the meanings specified
in the Indenture.

   The Holder of this Note may receive distributions only in the manner and
subject to the priorities as provided in the Indenture.

   The Holder of this Note shall have the right (the "Redemption Right") to
require the Issuer to redeem this Note on the 90th day after the Closing Date
at a price of 60.91% of the principal amount hereof, without interest, PROVIDED
that the Redemption Right shall not apply to this Note to the extent that (i)
it was issued pursuant to a Shareholder Note Purchase Right; (ii) it is not
held on the Redemption Date by the Holder to which it was originally issued; or
(iii) the Holder thereof shall not have certified to the Redemption Agent in
the manner set forth in Section 11.7(b) of the Indenture the matters described
therein relating to the beneficial ownership of such Note. For the avoidance of
doubt, if the Redemption Right is exercised with respect to this Note and it is
repurchased by a designee of the Issuer, the interest accrued to the Redemption
Date on this Note will be for the benefit of the Holder or Holders of this Note
on the Regular Record Date for the subsequent Payment Date. The Issuer may
designate another Person or Persons to fulfill its redemption obligation with
respect to any Note to be redeemed pursuant to a Redemption Right, by the
designee's payment of the required funds in exchange for such Note. The
Indenture sets forth the conditions for and manner of exercise of the
Redemption Right.

   The Notes shall also be subject to redemption as set forth in writing to the
Trustee on any Payment Date or any other date fixed for redemption in
accordance with Article XI of the Indenture, in whole or in part, as provided
in Section 11.1(b) of the Indenture. However, no Notes may be redeemed unless
and until all other amounts then due and payable to the Trustee, the Special
Servicer and the Servicer under the Indenture and the other Security Documents
have been paid in full.

   Notice of a redemption of any Notes pursuant to Section 11.1(b) will be
given no later than fifteen (15) days prior to the proposed redemption date for
such Notes. Such notice shall specify, among other things, the redemption date,
the redemption price and (if less than all Notes are to be redeemed) the
principal amount of the Notes to be redeemed.

   In the event that this Note is redeemed in part only, a New Note for the
unredeemed portion hereof shall be issued in the name of the Holder hereof upon
the cancellation hereof.

   As more fully described in the Indenture, this Note is secured by the
Indenture Collateral. The Indenture constitutes a security agreement under the
Uniform Commercial Code as in effect in the states where the Payment Account,
the Collection Account, the Holdover Account and any other similar account
established by the Trustee or the Servicer in furtherance of its rights or
responsibilities under the Indenture or any other Security Document are located
(with respect to the liens and security interests granted in Section 3.1(c) of
the Indenture). Upon the occurrence of any Event of Default, and in addition to
any other rights available under the Indenture, the Security Documents or any
other instruments included in the Collateral or otherwise available at law or
in equity, the Trustee shall have all rights and remedies of a secured party
under the Uniform Commercial Code to enforce the assignments and security
interests contained in the Indenture and, in addition, shall have the right,
subject to compliance with any mandatory requirements of applicable law, to
sell at public or private sale or apply, as appropriate, all monies or other
property then on deposit in the Payment Account, the Collection

                                      A-3

<PAGE>

Account, the Holdover Account and any other similar account established by the
Trustee or the Servicer in furtherance of its rights or responsibilities under
the Indenture or any other Security Document and any other rights and other
interests assigned or pledged hereby in accordance with the terms of the
Indenture.

   The Indenture permits, with certain exceptions as therein provided, the
amendment thereof or the modification of the rights and obligations of the
Issuer and the rights of the Holders of Notes under the Indenture at any time
by the Issuer, the Special Servicer, the Servicer and the Trustee with the
consent of Majority Holders. The Indenture also contains provisions permitting
the Holders of specified percentages in aggregate principal amount of the Notes
at the time Outstanding, on behalf of the Holders of all the Notes, to waive
compliance by the Issuer with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consents or
waiver by the Holder of this Note shall be conclusive and binding upon such
Holder and upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Note.

   As provided in the Indenture and subject to the limitations therein set
forth, the transfer of this Note is registrable in the Register, upon surrender
of this Note for registration of transfer at the Corporate Trust Office, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Issuer and the Registrar duly executed by, the Holder
hereof or his or her attorney duly authorized in writing, and thereupon one or
more New Notes, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.

   Prior to due presentation of this Note for registration of transfer, the
Issuer, the Servicer, the Trustee and any agent of the Issuer, the Servicer or
the Trustee may treat the Person in whose name this Note is registered as the
owner hereof, for all purposes, whether or not this Note be overdue, and none
of the Issuer, the Servicer, the Trustee or any such agent shall be affected by
notice to the contrary.

   The agreements contained herein shall remain in full force and effect
notwithstanding any changes in the members or other equity owners of, or the
officers and directors relating to, the Issuer, and the term "Issuer" as used
herein, shall include any alternate or successor Person.

   The Issuer and all others who may become liable for the payment of all or
any part of the amounts due under this Note do hereby severally waive
presentment and demand for payment, notice of dishonor, protest, notice of
protest and non-payment and all other notices of any kind, except those
expressly required under the Indenture and the other Security Documents. No
notice to or demand on the Issuer or any other Person shall be deemed to be a
waiver of the obligation of the Issuer or the Servicer to take further action
without notice or demand as permitted in this Note, the Indenture and the other
Security Documents.

   It is not intended that, and none of the terms and conditions of the
Indenture or the other Security Documents shall ever be construed to create a
contract whereby, the Issuer or any guarantor, endorser or other party now or
hereafter becoming liable for payment of this Note shall be required to pay
interest on this Note at a rate in excess of the maximum interest that may be
lawfully charged under applicable law.

   The representations, undertakings, covenants and agreements of the Issuer
contained in the Indenture are those of the Issuer only and not of the Trustee,
the Special Servicer or the Servicer and neither the Trustee, the Special
Servicer nor the Servicer will have any liability with respect thereto.

   As provided in Section 1.14 of the Indenture, this Note is an obligation of
the Issuer secured only by the Collateral and the holder hereof shall no
recourse against any person other than the Issuer. The provisions of Section
1.14 of the Indenture are hereby incorporated by reference, as if set forth in
full herein.

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

                                      A-4

<PAGE>

                THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
              ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

           [The remainder of this page was intentionally left blank]

                                      A-5

<PAGE>

   IN WITNESS WHEREOF, the undersigned have caused this instrument to be duly
executed.

Dated: _________________________________________________________ , ____

                                              SOUTHWEST SHOPPING CENTERS CO.
                                              II, L.L.C., a Delaware limited
                                              liability company

                                              By: -----------------------------
                                                  Name:
                                                  Title: Authorized Signatory

                    TRUSTEE CERTIFICATE OF AUTHENTIFICATION

   This Note is one of the Notes referred to in the above-mentioned Indenture.

                                              THE BANK OF NEW YORK, as Trustee

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

                                      A-6

<PAGE>

                      REPAYMENT OF PRINCIPAL, IF ANY, AND
                         TRANSFERS AFFECTING THE NOTE
          (Initial Principal Balance on ________  __, ____: $______)

<TABLE>
<S>                        <C>                        <C>                        <C>
 AMOUNT OF REPAYMENT OR
   TRANSFER TO OR FROM       DATE OF REPAYMENT OR      BALANCE AFTER REPAYMENT
      ANOTHER NOTE                 TRANSFER                  OR TRANSFER         NOTATION MADE BY:
--------------------------------------------------------------------------------------------------
</TABLE>

                     (Add Additional Sheets As Necessary)

                                      A-7

<PAGE>

                                                                      EXHIBIT B

                                  ASSIGNMENT

   FOR VALUE RECEIVED, the undersigned ("Assignor(s)") hereby sell(s),
assign(s) and transfer(s) unto

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

--------------------------------------------------------------------------------
(please print or typewrite name(s) and address(es), including postal zip
code(s) of assignee(s)) ("Assignee(s)") the entire principal amount represented
by the within Note and hereby authorizes the registration of transfer of such
interest to Assignee(s) on the Register for the Notes.

   I (we) further direct the Registrar to issue a new Note of the entire
principal amount represented by the within Note to the above-named Assignee(s)
and to deliver such Note to the following address:

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

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

Date:
                                    ------------------------------
                                    Signature by or on behalf of
                                    Assignor(s)

                                    ------------------------------
                                    Taxpayer Identification Number

                                      B-1

<PAGE>

                                                                      EXHIBIT C

                          LIST OF AUTHORIZED PERSONS

Name: Mark Goldberg
Title: Manager

                                      C-1

<PAGE>

                                                                      EXHIBIT D

                       REQUEST FOR RELEASE OF DOCUMENTS

   The undersigned [Servicer] [Special Servicer] hereby acknowledges that it
has received on behalf of [    ], as Trustee for the Holders of Notes issued
pursuant to that certain Indenture and Servicing Agreement, dated as of
[     ], 2002 (the "INDENTURE"), among Southwest Shopping Centers Co. II.,
L.L.C, as Issuer, The Bank of New York, as Trustee, Archon Group, L.P., as
Special Servicer and Archon Group, L.P., as Servicer, the documents referred to
below (the "DOCUMENTS"). All capitalized terms not otherwise defined in this
Request for Release of Documents shall have the meanings given them in the
Indenture.

   [Identify documents]

   The undersigned [Servicer] [Special Servicer] hereby acknowledges and agrees
as follows:

      (1) The [Servicer] [Special Servicer] will hold and retain possession of
   the Documents in trust for the benefit of the Trustee, solely for the
   purposes provided in the Indenture.

      (2) The [Servicer] [Special Servicer] will not cause or permit the
   Documents to become subject to, or encumbered by, any claims, liens,
   security interests, charges, writs of attachment or other impositions, nor
   shall the Servicer assert or seek to assert any claims or rights of set-off
   to or against the Documents or any proceeds thereof.

      (3) The [Servicer] [Special Servicer] shall return the Documents to the
   Custodian when the need therefor no longer exists, unless the Note
   Indebtedness has been liquidated and the proceeds thereof have been remitted
   to the Collection Account as expressly provided in the Indenture.

      (4) The Documents and any proceeds thereof, including any proceeds of
   proceeds, coming into the possession or control of the Servicer at all times
   shall be earmarked for the account of the Trustee and the [Servicer]
   [Special Servicer] shall keep the Documents and any proceeds separate and
   distinct from all other property in the [Servicer's] [Special Servicer's]
   possession.

                                                  ____________________________ ,
                                                  as [Servicer] Special Servicer

                                                  By: __________________________
                                                      Name:
                                                      Title:

Dated: ______________________________ , 20__

                                      D-1

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