Document:

$110,000,000

                                     SECOND
                      AMENDED AND RESTATED CREDIT AGREEMENT

                                      AMONG

                         HOMESTEAD VILLAGE INCORPORATED,

                            THE LENDERS NAMED HEREIN,

                                       AND

                        COMMERZBANK AG, NEW YORK BRANCH,
                     AS ADMINISTRATIVE AGENT FOR THE LENDERS

                          DATED AS OF FEBRUARY 29, 2000

<PAGE>

                  SECOND AMENDED AND RESTATED CREDIT AGREEMENT

         SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this Agreement ),  dated
as of February  29,  2000,  among  HOMESTEAD  VILLAGE  INCORPORATED,  a Maryland
corporation  (the  Borrower ),  COMMERZBANK AG, NEW YORK BRANCH,  and the other
lenders listed on Exhibit A annexed hereto, as amended from time to time (each a
Lender  and  collectively,  the Lenders ) and COMMERZBANK AG, NEW YORK BRANCH,
as contractual  representative for the Lenders on the terms provided herein (the
Administrative Agent ).

                              W I T N E S S E T H:

         WHEREAS,  the Administrative Agent arranged a revolving credit facility
in the  original  principal  amount of  $50,000,000  on  behalf of the  Borrower
pursuant  to a  Credit  Agreement  dated  as of  May  6,  1997  among  Borrower,
Administrative  Agent and certain  lenders  named therein  (said  Agreement,  as
amended to, but not including, this date, the Original Agreement );

         WHEREAS, the parties to the Original Agreement amended and restated the
Original  Agreement  in its  entirety  pursuant  to the terms of an Amended  and
Restated Credit Agreement dated as of March 18, 1999 (the First  Restatement );
and

         WHEREAS,  the parties to the First Restatement have agreed to amend and
restate the First Restatement in its entirety,  including the letters modifying,
amending or waiving the terms thereof.

         NOW,  THEREFORE,   in  consideration  of  the  fees,   representations,
warranties, covenants and agreements of the Borrower set forth herein and in the
Loan Documents, the parties hereto agree as follows:

                      ARTICLE I.. DEFINITIONS; CONSTRUCTION

          Section 1.1 Definitions As used herein, the following terms shall have
     the following meanings:

                  Accounting   Period  means  any  accounting   period  within
Borrower's  fiscal year,  provided that such fiscal year is in  accordance  with
GAAP and generally coincides with the calendar year.

                  Acquisition  Costs  means the actual  purchase  price paid by
Borrower or a Subsidiary of Borrower to acquire a Property.

<PAGE>

                                                        -2-

                  Adjusted EBITDA means,  with respect to any quarter,  EBITDA
for such  quarter,  plus  non-cash  charges,  minus a reserve  for  replacements
equivalent  to the  greater of (i) the average of actual,  historical  recurring
Property  capital  expenditures  incurred  during  the  four  calender  quarters
immediately  preceding the calender quarter in which the calculation is made and
(ii) four  percent  (4.0%) of the gross  revenues  derived  from the  Properties
during the  calendar  quarter  immediately  preceding  the  quarter in which the
calculation is made.

                  Adjusted  LIBOR Rate  means,  with  respect to each  Interest
Period,  the rate  obtained  by  dividing  (i) the LIBOR Rate for such  Interest
Period by (ii) a  percentage  equal to one minus the  actual  rate  (stated as a
decimal) of all reserves then actually  required to be maintained by each Lender
(provided  that  reasonable  evidence of the  imposition of such  requirement is
furnished  to  Borrower)  against  eurocurrency  liabilities   as  specified in
Regulation  D (or  against  any other  category  of  liabilities  that  includes
deposits by  reference  to which the interest  rate on  borrowings  hereunder is
determined or any category of extensions of credit or other assets that includes
loans by a non-United States office of the Administrative Agent to United States
residents)  or by any other  Requirement  of Law  relating to reserve or capital
adequacy requirements.

                  Adjusted  Maximum  Availability  Amount  means  the  Maximum
Availability  Amount,  except that, for periods  occurring  prior to the Closing
Date, the Adjusted Maximum Availability Amount  shall mean $170,000,000.

                  Adjusted Pool NOI means,  as of the last day of any calendar
quarter,  the NOI derived from the Mortgaged  Properties during such quarter and
the three  calendar  quarters  immediately  preceding  such  quarter  less (i) a
reserve for  replacements  equivalent to four percent  (4.0%) of gross  revenues
derived from such Mortgaged  Properties during such period and (ii) a management
fee equal to four percent (4.0%) of gross  revenues  derived from such Mortgaged
Properties during such period.

                  Administrative  Agent  means Commerzbank AG, New York Branch,
in its capacity as contractual representative for the Lenders hereunder, or such
successor  Administrative  Agent as may be appointed  pursuant to Section 7.9 of
this Agreement.

                  Affiliate  means,  with  respect  to any  Person,  any other
Person  directly  or  indirectly  controlling,  controlled  by, or under  common
control with such Person, whether through the ownership of voting securities, by
contract,  or otherwise.  A Person shall be deemed to control a  corporation  if
such  Person  possesses,  directly  or  indirectly,  the power to (i) vote fifty
percent (50%) or more of the  securities  having  ordinary  voting power for the
election of directors of such  corporation or (ii) direct or cause the direction
of the  management  and policies of such  corporation,  through the ownership of
voting securities, by contract or otherwise.

                  Agreement means this Agreement, as amended, supplemented, or
modified from time to time.

                  Alternate Rate means, as of any date of determination, a per
annum  rate  equal to the  greater  of (a) the Prime  Lending  Rate plus one and
one-half percent (1.5%) and (b) the Federal Funds Rate plus two percent (2%).

                  Applicable Margin  means two and one-half percent (2.5%).

<PAGE>

                                                       -15-

                  Appraised Value  shall have the following meanings:

               (i) At all times prior to May 1, 2001:

                    (x) With respect to each of the fifty-six (56) Mortgaged
Properties to which a value is ascribed on Schedule 1 annexed hereto, Appraised
Value  shall mean the value ascribed on Schedule 1 annexed hereto; and

                    (y) With  respect  to each of the  Mortgaged  Properties  to
which a value is not ascribed on Schedule 1 annexed hereto,  (x) until such time
as Borrower shall have delivered to  Administrative  Agent a FIRREA Appraisal of
such Mortgaged  Property in accordance  with the terms of Section 5.2(k) hereof,
Appraised Value shall mean undepreciated GAAP cost value and (y) upon delivery
of a FIRREA Appraisal as aforesaid,  Appraised  Value shall mean the value set
forth in the FIRREA Appraisal of the Mortgaged Property; and

               (ii)  During the period  commencing  May 1, 2001 and at all times
thereafter up to and including the Maturity Date, Appraised Value shall mean the
value ascribed to the Mortgaged  Properties in the Updated Appraisals  delivered
to Administrative Agent pursuant to the terms of Section 5.2(l) hereof.

                  Average  Undrawn  Balance   means the average daily amount of
the Revolving Portion of the Loan which remains undrawn upon by the Borrower for
the related period of determination  (on the basis of a year of 365/366 days for
the actual number of days which have elapsed during such period).

                  Bankruptcy Code  has the meaning provided in Section 6.1(g).

                  Borrower  has the  meaning  set  forth  in the  introductory
paragraph to this Agreement.

                  Borrower's Authorized  Representative means any duly elected
officer  designated  by the Borrower in a written  notice to the  Administrative
Agent, as such officer may be changed from time to time by written notice to the
Administrative Agent.

                  Business  Day means any day excluding  Saturday,  Sunday and
any other day on which  banks are  required or  authorized  to close in New York
City or on which  trading  is not  carried  on by and  between  banks in  Dollar
deposits in the applicable interbank Eurodollar market.

                  Capital   Stock   means  any  and  all  shares,   interests,
participation,  or other equivalents  (however designated) of capital stock of a
corporation,  any and all  equivalent  ownership  interests,  including  but not
limited to partnership  interests,  in a Person (other than a corporation),  and
any and all warrants or options to purchase any of the foregoing.

                  Closing Date means the date hereof.

<PAGE>

                    Code means the  Internal  Revenue  Code of 1986,  as amended
from time to time, or any successor  thereto.

                  Collateral means, collectively, the Mortgaged Properties and
all other property and interests in property now owned or hereafter acquired and
upon which a Lien has been or is  purported  or intended to have been granted in
favor  of  the   Administrative   Agent  or  its  predecessor   -in-interest  as
Administrative Agent, Wells Fargo Bank, National Association.

                  Construction Budget  means, with respect to any Project under
Development,  the total budgeted costs (including soft and hard costs), required
to cause  such  Project  under  Development  to  become  Construction  Complete,
including the acquisition cost of land.

                  Construction  Complete means,  with respect to any Mortgaged
Property,  that (a)  construction  of such  Mortgaged  Property is complete,  in
accordance with the Plans and  Specifications  of such Mortgaged  Property,  (b)
final,   permanent  and  unconditional   certificates  of  occupancy  permitting
occupancy  of all  portions  of such  Mortgaged  Property  as an  extended  stay
facility have been issued and are in full force and effect,  (c) all portions of
such Mortgaged  Property are, or may become at any time,  without the consent or
approval of any Person,  open for business to the general  public as an extended
stay  hotel,  and (d) the  Administrative  Agent  shall have  received  evidence
satisfactory  to it that the  conditions set forth in (a), (b) and (c) have been
satisfied.

                  Contractual  Obligation means as to any Person, any material
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.

                  Credit Exposure has the meaning provided in Section 7.17.

                  Debt  Service  means,  with respect to any period,  Interest
Expense for such period,  plus scheduled  amortization  of all  Indebtedness  of
Borrower or its Subsidiaries  (excluding  balloon payments and bullet maturities
on loans.)

                  Debt  Yield  shall  mean  the   quotient,   expressed  as  a
percentage,  obtained by dividing (x) the aggregate Net Operating Income derived
from the Mortgaged  Properties during the four calendar  quarters  preceding the
calendar quarter in which the calculation occurs by (y) the average  outstanding
principal balance of the Loan during the calendar quarter preceding the calendar
quarter in which the calculation occurs.

                  Decisions has the meaning set forth in Section 7.14.

                  Default  means any condition or event that,  with the giving
of notice or the lapse of time or both,  would  constitute an Event of Default
hereunder or under the Promissory Notes or the other Loan Documents.

                  Default  Rate has the  meaning  set forth in Section  2.3(b)
hereof.

<PAGE>

                  Direct  Costs  means  actual  costs paid by  Borrower or any
Subsidiary  of  Borrower  for  labor,  materials,   equipment,   contractor  and
subcontractor  fees and all  other  costs  (other  than  Acquisition  Costs  and
Indirect  Costs)  in  connection  with the  construction  of  improvements  on a
Property.

                  Dollar  and the sign $ each mean  lawful  currency  of the
United States of America.

                  EBITDA means, with respect to any period and any Person, the
net income of such Person,  plus, to the extent  included in the  calculation of
earnings,   interest  expense  (per  GAAP),   income  taxes,   depreciation  and
amortization   expense,   other  non-cash  losses  relating  to   restructuring,
downsizing  in  connection  with a corporate  personnel  restructuring  or other
unusual  events,   accounting   changes,   write-downs,   reclassifications   or
revaluations,  distributed  earnings of Unconsolidated  Affiliates and losses on
sales of property,  less, to the extent excluded in the calculation of earnings,
gains on sales of property.

                  Eligible  Assignee  means  a  Person  who,  at the  time  of
determination is (a) a Lender; (b) a commercial bank, trust company, savings and
loan association,  savings bank,  insurance company,  investment bank or pension
fund  organized  under the laws of the  United  States of  America  or any state
thereof,  and  having  total  assets  in  excess  of  $5,000,000,000;  or  (c) a
commercial  bank organized under the laws of any other country which is a member
of the  Organization  for Economic  Cooperation  and  Development or a political
subdivision  of  any  such  country,  and  having  total  assets  in  excess  of
$5,000,000,000,  provided such bank is acting through a branch or agency located
in the United  States of  America.  If such a Person is not  currently a Lender,
such  Person's  senior  unsecured  long term  indebtedness  must be rated BBB or
higher by Standard & Poor's, BA2 or higher by Moody's Investor's  Services,  or
the  equivalent  or higher of  either  such  rating  by  another  rating  agency
acceptable to the Administrative Agent.

                  Eligible  Costs  means,   with  respect  to  each  Mortgaged
Property, the Eligible Cost ascribed thereto in Schedule 2 annexed hereto.

                  Environment means soil, surface waters, groundwaters,  land,
stream, sediments, surface or subsurface strata and ambient air.

                  Environmental Discharge means any discharge of pollutants or
effluent into any aquifer or water source or system (whether naturally occurring
or man made), gaseous emissions (including,  without limitation, air emissions),
particulate  emissions  and noise  emissions,  in each case, in violation of any
Relevant Environmental Law.

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

                  ERISA Affiliate means each trade or business (whether or not
incorporated)  that  together  with the Borrower or a Subsidiary of the Borrower
would be deemed to be a single  employer  within the meaning of Section 4001 of
ERISA.

<PAGE>

                  Event of Default has the meaning provided in Article VI.

                  Exchange  Act  means the Securities and Exchange Act of 1934,
as amended.

                  Federal Funds Rate means, for any day of determination,  the
rate per annum (rounded  upwards,  if necessary,  to the nearest  1/100th of one
percent) equal to the weighted  average of the rates on overnight  Federal Funds
transacted  with members of the Federal Reserve System arranged by Federal Funds
brokers on such date,  as published  by the Federal  Reserve Bank of New York on
the Business Day next succeeding such day,  provided that (i) if such day is not
a Business  Day, the Federal  Funds Rate for such day shall be such rate on such
transactions  on the next  preceding  Business  Day as so  published on the next
succeeding  Business  Day, and (ii) if no such rate is so published on such next
succeeding  Business  Day,  the  Federal  Funds  Rate for such day  shall be the
average rate quoted to the Administrative Agent on such day on such transactions
as determined by the Administrative Agent.

                  Financing  Statements means UCC-1 Financing  Statements made
by  the  Borrower  or a  Subsidiary  Mortgagor,  as  debtor,  in  favor  of  the
Administrative  Agent,  as secured party,  covering all fixtures,  equipment and
personal property of the Borrower or such Subsidiary  Mortgagor at the Mortgaged
Properties.

                  FIRREA  Appraisal  means  an  appraisal  conforming  in  all
respects with the requirements of the Financial  Institutions  Reform,  Recovery
and  Enforcement  Act of 1989,  12 USC 1811,  as amended  and as the same may be
amended from time to time,  which  appraisal is  otherwise  satisfactory  to the
Administrative  Agent  and  is  prepared  by an  appraiser  satisfactory  to the
Administrative Agent at the sole cost and expense of Borrower.

                  Free Cash  Flow  means,  with  respect to any Person for any
period, such Person's EBITDA for such period, plus Net Cash Proceeds of sales of
assets,  less (i) interest expense paid or accrued (without  duplication),  (ii)
income  taxes paid or  accrued  (without  duplication),  (iii)  routine  capital
expenditures  on  operating  properties  and (iv) to the extent  excluded in the
calculation of earnings, payments made under the Sale-Leaseback Facility.

                  GAAP means generally  accepted  accounting  principles as in
effect at the time of  application  applied  on a  consistent  basis;  provided,
however,  if any change is adopted after the Closing Date in generally  accepted
accounting   principles  which  either  Borrower  or  the  Administrative  Agent
determines  to be adverse,  and if either such party  notifies the other of such
determination,  then both Borrower and the Administrative  Agent shall negotiate
in good faith the extent to which such change  shall be adopted  with respect to
the  matters  to which the  definition  of GAAP  is  applicable  under the Loan
Documents,  and the term GAAP  shall mean (i) in the event a written  agreement
with  respect to such change is executed  and  delivered  by both  Borrower  and
Required  Lenders  within  thirty (30) days  following  such  notice,  generally
accepted  accounting  principles  applied on a consistent basis giving effect to
such  agreement  or (ii)  in any  other  event,  generally  accepted  accounting
principles  as in effect at the time  immediately  prior to the adoption of such
change applied on a consistent basis.

<PAGE>

                  Governmental  Authority  means any  nation  and any state or
other  political  subdivision  thereof,  and any  entity  exercising  executive,
legislative,  judicial, regulatory, or administrative functions of or pertaining
to government,  including,  but not limited to, the Federal  Reserve Board,  any
Federal  Reserve Bank,  any other central  banking  authority,  or any agency or
subdivision thereof.

                  Gross  Asset Value Cost or GAV Cost  means the value of
all  cash,  cash  equivalents  and  Properties  owned  by the  Borrower  and its
Subsidiaries, valued at one hundred percent (100%) of cost.

                  Gross  Asset  Value Market (GAV Market)  means  Adjusted
EBITDA  capitalized at a rate per annum equal to 11%,  calculated with reference
to the four  calendar  quarters  preceding  the  calendar  quarter  in which the
calculation occurs.

                  Guarantee   Obligation   means,   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 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 (x) for the purchase
or payment of any such primary  obligation or (y) 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 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 Lenders in good
faith.

                  Hazardous Materials means any substance in quantities and/or
form:

                           (a)      the  presence  of which  requires  or  shall
hereafter require notification,  investigation or remediation under any Relevant
Environmental Law; or

<PAGE>

                        (b)  which is or becomes  defined as a hazardous  waste,
hazardous material or hazardous  substance or controlled  industrial waste
or Pollutant or Acontaminant   under any Relevant  Environmental  Law, including
without  limitation,  which contains  gasoline,  diesel fuel or other  petroleum
hydrocarbons or volatile organic  compounds,  or which contains  polychlorinated
biphenyls or asbestos or urea formaldehyde foam insulation, or which contains or
emits radioactive particles, waves or material, including radon gas; or

                        (c) which is  toxic,  explosive,  corrosive,  flammable,
infectious, radioactive,  carcinogenic,  mutagenic or otherwise hazardous and is
or becomes regulated under any Relevant Environmental Law or by any Governmental
Authority; or

                        (d)pursuant to applicable  Relevant  Environmental Laws,
the presence of which on the Mortgaged  Property  causes or threatens to cause a
nuisance  upon  the  Mortgaged  Property  or  adjacent  properties;  or poses or
threatens to pose a hazard to the Mortgaged  Property or to the health or safety
of persons or property on or about the Mortgaged Property.

                  HPT means HPT HSD  Properties  Trust,  the  purchaser-lessor
under the Sale- Leaseback Facility.

                  Implied Pool Debt Service  means,  as of the last day of any
calendar  quarter,  the debt service,  calculated on an annualized  basis,  of a
self-liquidating  loan with an original  principal  amount  equal to the average
daily  Adjusted  Maximum  Availability  Amount  during  such  calendar  quarter,
amortized over 300 months (25 years) at an interest rate per annum equivalent to
the  higher of (i) the  actual  interest  rate  under the Loan and (ii) the then
current 10-year Treasury Rate plus three percent (3.0%).

                  Indebtedness of any  Person  means,  as of the  date of any
determination thereof, without duplication:

                   (i) all  obligations  of such  Person  for  borrowed  money
and for the deferred  purchase  price of property or services,  and  obligations
evidenced by bonds, debentures, notes, or other similar instruments;

                   (ii) all  rental  or other  obligations  under  leases
required to be capitalized under
GAAP;

                   (iii) all  Guarantee Obligations  of  such  Person, including
obligations  of  Unconsolidated  Affiliates  guaranteed  by such  Person or with
respect to which such Person is otherwise obligated on a recourse basis;

                   (iv) such  Person's  Ownership Share  of all  obligations and
liabilities of its Unconsolidated Affiliates;

<PAGE>

                  (v) all  liabilities  in respect of currency or interest  rate
swap, cap or collar arrangements or any similar derivative instrument;  provided
that if such currency or interest rate swap, cap or collar  arrangements  or any
similar  derivative  instrument  has been  entered  into in  order to hedge  the
currency  or  interest  rate  exposure  of such  Person in respect of current or
contemplated  Indebtedness,  the  amount of any  liability  in  respect  of such
arrangement  or  instrument  shall  not  be  included  in the  determination  of
Indebtedness; and

                  (vi) Indebtedness  of others secured by any Lien upon property
owned by such Person, whether or not assumed by such Person.

                  Indirect  Costs means actual costs incurred by Borrower or a
Subsidiary of Borrower for title insurance, brokerage commissions, closing costs
and escrow fees, real estate taxes,  legal fees design and  architectural  fees,
permits and all other costs or fees  (other  than  Acquisition  Costs and Direct
Costs) incurred in connection with the development of a Property.

                  Intellectual  Property  has the meaning set forth in Section
4.12.

                  Interest  Expense means (without  redundancy) the sum of all
accrued,  paid or capitalized  interest  costs of Borrower and its  consolidated
Affiliates  (excluding  capitalized  interest funded from an interest  reserve),
including,  without limitation,  payments made under the Sale-Leaseback Facility
(to the extent deemed  interest costs under GAAP) plus (i) Borrower's  Ownership
Share of interest expense in its Unconsolidated  Affiliates and (ii) 100% of any
accrued,  paid, or capitalized  interest  incurred  (without  redundancy) on any
obligation  for which  Borrower is wholly or partially  liable under  repayment,
interest carry or performance guarantees, or other relevant liabilities,  minus,
to the extent included in the foregoing,  financing costs and fees paid prior to
the Closing Date which relate to (x) Indebtedness  which has been incurred prior
to the Closing Date, (y) the Sale-Leaseback Facility and (z) the Loan.

                  Interest Period has the meaning set forth in Section 2.4.

                  Leases  means all leases,  licenses  and other  arrangements
pursuant  to which  any  Person  has the  right or  option  to occupy or use any
portion of any  Mortgaged  Property,  and shall  include  all  right,  title and
interest to receive all rent and other revenue thereunder, and shall include all
guaranties of the obligations of all such Persons.

                  Lender  or  Lenders  has  the  meaning  set  forth  in the
introductory  paragraph of this Agreement,  and their  permitted  successors and
assigns.

                  Lending  Office  means,  with respect to any of the Lenders,
the branch or  branches  (or  affiliate  or  affiliates)  from which any of such
Lender's  loans are made or maintained and for the account of which all payments
of principal of, and interest on, such Lender's loans are made, as designated in
writing from time to time to the Administrative Agent and the Borrower.

<PAGE>

                  LIBO Rate means,  with respect to any Interest  Period,  the
sum of the  Applicable  Margin  plus the rate per annum  appearing  on Dow Jones
Markets (Telerate) Page 3750 (the Telerate Screen) at or about 11:00 a.m. (New
York time),  subject to corrections  (if any) made on the Telerate  Screen,  two
Business Days prior to the  commencement  of the Interest  Period for which such
LIBO Rate will apply (the Rate  Fixing  Day ) for the  offering  of deposits in
Dollars for a period  comparable to the Interest Period for which such LIBO Rate
will  apply;  provided,  however,  that if (x) no relevant  rate  appears on the
Telerate  Screen  for  the  purposes  of the  foregoing  calculation  or (y) the
Administrative Agent determines that no rate for a period of comparable duration
to that Interest  Period  appears on the Telerate  Screen at the relevant  time,
then LIBO  Rate shall mean the  Applicable  Margin  plus the  arithmetic  mean
(rounded upwards, if necessary,  to two decimal places) of the respective rates,
as supplied to the Administrative Agent at its request,  quoted by leading banks
to the Lenders in the London  Interbank  Market at or about 11:00 a.m. (New York
time) on the Rate  Fixing Day for the  offering  of  deposits  in Dollars  for a
period comparable to the Interest Period for which such LIBO Rate will apply. If
any of the  Lenders is unable or  otherwise  fails to supply an offered  rate by
11:30  a.m.  (New  York  time) on the Rate  Fixing  Day,  LIBO  Rate   shall be
determined on the basis of the quotations of the remaining Lenders so long as at
least two Lenders  supply an offered  rate. In the event there are less than two
Lenders  supplying  offered rates, then such offered rate shall be determined by
the Administrative  Agent from an alternate,  substantially  similar independent
source  available  to the  Administrative  Agent or shall be  calculated  by the
Administrative Agent by a substantially  similar methodology as that theretofore
used to  determine  such  offered  rate on the  Telerate  Screen  in the  London
Interbank  market for a term comparable to such Interest Period and in an amount
equal to or comparable  to the  principal  amount of the borrowing to which such
Interest  Period  relates.   Each   determination   of  the  LIBO  Rate  by  the
Administrative  Agent, in absence of demonstrable error, shall be conclusive and
binding.

                  Lien means with respect to any asset: any mortgage,  pledge,
security interest,  encumbrance,  lien, charge, or deposit  arrangement or other
arrangement  having the practical  effect of the foregoing and shall include the
interest of a vendor or lessor under any conditional sale agreement, capitalized
lease, or other title retention  agreement  relating to such asset or the filing
of any financing statement under the UCC or comparable law.

                  Loan has the meaning provided in Section 2.1 hereof.

                  Loan  Documents  means,  collectively,  this Agreement,  the
Promissory  Notes, all Mortgages,  all Financing  Statements,  the Environmental
Indemnity,  all Subsidiary  Mortgagor Guaranties (as that term is defined in the
First Restatement) and all other documents,  certificates,  affidavits and other
instruments  executed and delivered by the Borrower and its Affiliates  pursuant
thereto or in connection therewith, as each of the same may be amended, modified
or otherwise supplemented from time to time.

                  Loss has the meaning provided in Section 7.16(c).

                  Margin Stock has the meaning provided in Regulation U.

                  Material   Adverse   Change  means  any  change,   event  or
circumstance which has or is reasonably likely to have a material adverse effect
on (i) the  ability  of the  Borrower  and its  Subsidiaries  to  perform  their
respective  obligations under this Agreement or any of the other Loan Documents,
or (ii) the business, condition (financial or otherwise) or results of operation
of the Borrower and its Subsidiaries when taken as a whole.

                  Maturity Date means February 28, 2003.

<PAGE>

                  Maximum  Availability  Amount  means,  as  of  any  date  of
calculation,  the sum of (x)  the  Revolving  Portion  of the  Loan  and (y) the
outstanding principal balance of the Term Portion of the Loan.

                  Maximum   Dividend   Amount   means,   as  of  any  date  of
determination,  fifty percent (50%) of Free Cash Flow of Borrower derived during
the  period   commencing   September  30,  1999  and  ending  on  such  date  of
determination.

                  Mortgaged Properties means,  collectively,  each Property of
the Borrower or any Subsidiary  Mortgagor  which is (and for so long as same is)
mortgaged to the  Administrative  Agent pursuant to the terms hereof,  and shall
include all of the Property , as such term is defined in the Mortgages.

                  Mortgages  means  those  certain  deeds of  trust,  deeds to
secure debt,  mortgages  and security  agreements  with  assignments  of leases,
rents,  operating  agreements  and  management  agreements  and fixture  filings
delivered  by  the  Borrower  or  any  Subsidiary  Mortgagor  in  favor  of  the
Administrative Agent and covering the Mortgaged  Properties,  as the same may be
amended, modified, or otherwise supplemented from time to time.

                  Net Cash Proceeds  means with respect to any sale,  transfer
or other  disposition  by the Borrower or a Subsidiary  of any asset  (including
stock of a  Subsidiary),  the aggregate cash proceeds  (including  cash proceeds
received by way of deferred payment of principal pursuant to a note, installment
receivable,  reserve for adjustment or otherwise, but only as and when received)
received by the  Borrower  or a  Subsidiary  pursuant to such sale,  transfer or
other  disposition,  net  (subject to reserves  for normal  course  post-closing
adjustments and reserves for indemnification obligations in connection with such
asset sale) of (i) the direct  costs  relating  to such sale,  transfer or other
disposition  (including sales  commissions and legal and accounting  fees), (ii)
taxes  paid or  payable as a result  thereof  (after  taking  into  account  any
available tax credits or  deductions  and any tax sharing  arrangements),  (iii)
amounts required to be applied to the repayment of any Indebtedness secured by a
Lien on the asset  subject to such sale,  transfer or other  disposition  (other
than hereunder), and (iv) liabilities of the entity, or relating to the business
or assets sold,  transferred or otherwise  disposed of which are retained by the
Borrower or the applicable Subsidiary.

                 Net  Operating  Income or NOI  means,  with respect to any
appropriate  period and any Properties,  the gross revenues from such Properties
for  such  period  less  all  direct  operating  expenses  of  such  Properties,
including,  without  limitation,  expenses for the  following to the extent same
relate  to  such  Properties:  personnel,  landscaping,   contracts,  utilities,
housekeeping,  repairs  and  maintenance,   marketing,   administrative  duties,
insurance and real estate taxes for such period  (other than  interest  expense,
depreciation,  amortization  and  expenditures  capitalized  in accordance  with
GAAP).

                  Net  Worth  means the  tangible  net worth of the  Borrower,
calculated  on a GAAP basis,  plus  increases in  accumulated  depreciation  and
amortization that occur subsequent to Closing.

<PAGE>

                  Non-public  Information  means any information  delivered by
the Borrower to the Administrative  Agent or the Lenders (in their capacities as
such) pursuant to this Agreement  which is not publicly  disclosed or known,  or
which cannot be readily derived from information which is publicly  disclosed or
known.

                  Notice of Borrowing  means a notice in the form of Exhibit C
annexed  hereto  pursuant to which  Borrower may request a  disbursement  of the
Revolving Portion of the Loan.

                  Notice  of  Conversion   means,  with  respect  to  proposed
conversion of a Short-Notice  Borrowing in accordance  with the terms of Section
2.16 hereof, a notice substantially in the form of Exhibit D annexed hereto.

                  Notice  of  Additional  Interest  Period  Selection  means a
notice in the form of Exhibit E-1 annexed hereto  pursuant to which Borrower may
specify an additional Interest Period or Interest Periods applicable to portions
of the Loan.

                  Notice of Interest  Period  Selection  means a notice in the
form of Exhibit E annexed  hereto  pursuant to which  Borrower  shall specify an
Interest Period or Interest  Periods  applicable to the initial  disbursement of
the Loan.

                  Notifying Lender has the meaning provided in Section 2.10.

                  Ownership  Share means,  with respect to any Subsidiary of a
Person that is not a wholly owned Subsidiary and any Unconsolidated Affiliate of
a Person,  the greater of (i) such Person's relative nominal direct and indirect
ownership   interest   (expressed  as  a  percentage)  in  such   Subsidiary  or
Unconsolidated  Affiliate  and (ii) such Persons  relative  direct and indirect
economic   interest   (expressed  as  a  percentage)   in  such   Subsidiary  or
Unconsolidated   Affiliate,   determined  in  accordance   with  the  applicable
provisions of the declaration of trust, articles or certificate of organization,
articles of  organization,  partnership  agreement,  joint venture  agreement or
other applicable  organizational  document of such Subsidiary or  Unconsolidated
Affiliate.

                  Participant has the meaning provided in Section 7.17.

                  Payment Office means the office of the Administrative  Agent
located at Two World Financial Center, New York, New York 10281-1050.

                  Percentage  means each Lender's  percentage share of the Loan
as set forth on Exhibit A annexed hereto.

                  Period Fraction means, with respect to any period of time, a
fraction,  the  numerator of which is the actual  number of days in such period,
and the denominator of which is 360.

                  Permissible Assumed Indebtedness has the meaning provided in
Section 5.3(a)(iv).

<PAGE>

                  Permitted  Encumbrances  means,  with respect to each of the
Mortgaged  Properties,  (i) all exceptions to title insurance coverage set forth
in the title insurance  policies insuring the Mortgages  covering such Mortgaged
Properties, other than standard printed exceptions, as of the date such policies
are issued or updated by  endorsement,  (ii) all liens for real estate taxes and
assessments  provided  either  (x) that the  last  day by  which  such  taxes or
assessments may be paid without the imposition of any interest,  fine or penalty
has not occurred, or (y) the amount or validity of such taxes or assessments are
being contested in good faith by appropriate  proceedings  which have the effect
of staying  enforcement  or  execution  of such liens and with  respect to which
adequate  reserves in  conformity  with GAAP have been  provided on the books of
Borrower,  (iii) mechanics and  materialmen's  liens, the existence of which do
not  constitute  or  create  a  Material   Adverse  Change,   and  which  remain
unsatisfied,  unbonded or unstayed  for no more than thirty (30) days other than
those the  amount or  validity  of which are being  contested  in good  faith by
appropriate  proceedings  which  have  the  effect  of  staying  enforcement  or
execution  of such  liens  and  with  respect  to  which  adequate  reserves  in
conformity  with GAAP have been  provided on the books of Borrower,  (iv) Leases
which are  subordinate  to the lien of the  Mortgages and (v) such other matters
affecting title to the Mortgaged  Properties as the  Administrative  Agent shall
from time to time approve in writing.

                  Person means any individual, partnership, firm, corporation,
association,   joint  venture,  joint  stock  company,   trust,   unincorporated
organization or other entity,  or any  governmental or political  subdivision or
agency, department, or instrumentality thereof.

                  Plan means any  multiemployer  plan or single employer plan,
as  defined  in  Section  4001  and  subject  to  Title  IV of  ERISA,  which is
maintained,  or at any time during the five calendar years preceding the date of
this Agreement was maintained,  for employees of the Borrower or a Subsidiary of
the Borrower or an ERISA Affiliate.

                  Plans  and   Specifications   means  the  final   plans  and
specifications filed with the appropriate  Governmental Authorities with respect
to the construction of an extended stay hotel facility on a Mortgaged Property.

                  Presence  means,  when  used in  connection  with  Hazardous
Materials,  treatment, use, storage, handling, repair, encapsulation,  disposal,
transportation, spill, discharge and release.

                  Prime   Lending   Rate   means   the  rate  at   which   the
Administrative  Agent  announces in New York,  New York from time to time as its
prime lending rate, as in effect from time to time.  The Prime Lending Rate is a
reference  rate and does not  necessarily  represent  the  lowest  or best  rate
actually charged to any customer by the Administrative  Agent or any Lender. The
Administrative Agent and each Lender may make commercial loans or other loans at
rates of interest at, above or below the Prime Lending Rate.

                  Project  under  Development  means a  Property  (a) on which
construction  of an extended stay facility has commenced and (b) which lacks any
permit  or  certificate   required  for  the  lawful  occupancy  thereof  as  an
extended-stay facility.

<PAGE>

                  Promissory  Notes  means the  promissory  notes  made by the
Borrower to each Lender substantially in the form of Exhibit F annexed hereto.

                  Properties  means all land  owned or leased by the  Borrower
and/or  any  of  its  Subsidiaries,  all  buildings,  structures,  improvements,
fixtures and equipment,  and parking areas located thereon and therein,  and all
easements, rights, interests, privileges and other appurtenances thereto, of any
nature whatsoever. An individual Property  is a portion of land owned or leased
by the Borrower and/or its Subsidiaries which is bound by a perimeter containing
no land not owned or leased by Borrower and/or any of its Subsidiaries, together
with all  buildings,  structures,  improvements  and parking areas  fixtures and
equipment located thereon, and all easements, rights, interests,  privileges and
other appurtenances thereto, of any nature whatsoever.

                  Purchasing Lender has the meaning provided in Section 7.18.

                  Reaffirmation  of  Environmental  Indemnity means the Fourth
Reaffirmation of Environmental Indemnity to be executed by the Borrower in favor
of the  Administrative  Agent,  substantially  in the form of  Exhibit B annexed
hereto.

                  Reaffirmation of Subsidiary Guaranty means the Reaffirmation
of  Subsidiary  Guaranty  in  favor of the  Administrative  Agent in the form of
Exhibit H annexed hereto.

                  Realty means SC Realty Incorporated, a Nevada corporation.

                  Regulation  D and  Regulation  U mean  Regulation  D and
Regulation  U,  respectively,  of the Board of Governors of the Federal  Reserve
System as from time to time in effect and any successor thereto.

                  Release has the meaning provided in Section 8.11.

                  Release Parcel has the meaning provided in Section 8.11.

                  Release   Price  means,   with  respect  to  each  Mortgaged
Property, the release price allocated thereto on Schedule 2 annexed hereto.

                  Release Request has the meaning provided in Section 8.11.

<PAGE>

                  Relevant  Environmental  Laws means all  Requirements of Law
and all  other  applicable  Federal,  state and  local  environmental  statutes,
regulations,  rules, ordinances,  codes, licenses,  permits,  approvals,  plans,
authorizations,  guidelines, concessions,  franchises, orders and similar items,
and  rules  of  common  law  (whether  now  existing  or  hereafter  enacted  or
promulgated and whether now contemplated,  anticipated or foreseeable or not) of
all  courts  and  Governmental  Authorities,  and all  applicable  judicial  and
administrative and regulatory  decrees,  judgments and orders,  including common
law rulings and  determinations,  relating to injury to or the protection of the
Environment,  including,  without  limitation,  all  requirements  pertaining to
reporting,  licensing,  permitting,  investigation,  remediation  and removal of
emissions,  discharges,  releases or threatened  releases of Hazardous Materials
into the Environment, or relating to the manufacture,  processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials.

                  Required  Lenders  means the Lenders  holding at least sixty
six and two thirds percent (66 2/3%) of the Maximum Availability Amount.

                  Requirement of Law means, as to any Person,  the certificate
of  incorporation  and  by-laws,  certificate  of  partnership  and  partnership
agreement 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.

                  Revolving  Portion  of  the  Loan  shall  have  the  meaning
provided in Section 2.15.

                  Sale-Leaseback  Facility  means the lease dated  February 23,
1999 between HPT, as lessor, and HVI (2) Incorporated,  a Delaware  corporation,
as lessee.

                  Stockholders Equity means stockholders equity as reflected
on the balance sheet of the Borrower determined in accordance with GAAP.

                  Studies  means  environmental   studies  and  investigations
respecting (i) the condition and  circumstances  of the  Environment  on, under,
about or  affecting  any  Mortgaged  Property,  (ii)  any  actual  or  suspected
Environmental  Discharge or Presence of any Hazardous Materials on, under, about
or affecting any Mortgaged Property, and (iii) any actual or suspected violation
of any Relevant  Environmental Laws on, under, about or related to any Mortgaged
Property.

                  Subsidiary  of any Person means a corporation,  partnership,
limited liability,  trust or other entity of which a majority of the outstanding
shares of stock or  beneficial  interests of each class having  ordinary  voting
power is owned by such Person, by one or more Subsidiaries of such Person, or by
such Person and one or more of its Subsidiaries.

                  Subsidiary  Mortgagor means any  wholly-owned  Subsidiary of
Borrower or wholly-owned Subsidiary of a wholly-owned Subsidiary of Borrower.

                  Taxes has the meaning provided in Section 2.17.

                  Term  Portion  of the Loan  means  that  portion of the Loan
which is not the Revolving Portion of the Loan.

                  Total Costs means, with respect to any Property,  the sum of
(i) the Acquisition  Costs with respect to such Property,  (ii) the Direct Costs
with respect to such Property, and (iii) the Indirect Costs with respect to such
Property, all calculated on a cost to completion basis.

<PAGE>

                                      -19-

                  Total Liabilities  includes all GAAP liabilities and certain
non-GAAP (off balance sheet)  liabilities  with no redundancy.  Included are the
following:  non-recourse  mortgage  debt;  letters of credit;  binding  purchase
obligations;   repurchase  obligations;  forward  commitments;  unsecured  debt;
accounts payable;  accrued expenses,  capitalized lease obligations,  and to the
extent  required  under GAAP to be  reported  as a  liability,  any other  lease
obligations (including ground leases); guarantees of indebtedness;  subordinated
debt;  unfunded  obligations  of Borrower and its  Subsidiaries;  forward equity
commitments  (but  excluding  forward  equity  subscriptions  for which stock is
issued  within  thirty  (30) days of  receipt  of equity  proceeds);  Derivative
Exposure (as  hereinafter  defined);  and any other non-GAAP  liability that the
Security and Exchange  Commission  has  determined,  either  currently or in the
future,  should be treated as debt.  Total  Liabilities  will  include  (without
redundancy):  (a) one  hundred  percent  (100%)  of the  recourse  liability  of
Borrower and its Subsidiaries under (i) guarantees of indebtedness or (ii) loans
where  Borrower  or a  Subsidiary  of  Borrower  is liable for debt as a general
partner and (b) Borrower's and its Subsidiaries Ownership Share of non-recourse
debt in their Unconsolidated  Affiliates. As used herein,  Derivative Exposure
means the maximum liability  (including costs, fees and expenses),  based upon a
liquidation or termination as of the date of the applicable  covenant compliance
test, of any Person under any interest rate swap,  collar, cap or other interest
rate  protection   agreements,   treasury  locks,   foreign  currency   exchange
agreements,  commodity  purchase  or  option  agreements  or other  interest  or
exchange rate or commodity price hedging agreements.

                  For purposes of purchase obligations,  repurchase  obligations
and  forward  commitments,  the amount of Total  Liabilities  of a Person at any
given  time in  respect  of a  contract  to  purchase  real  property  shall  be
determined  as follows:  (x) if, at such time,  the seller of such real property
would be entitled to specific  enforcement of the contract  against such Person,
then the  amount of Total  Liabilities  shall  equal the  total  purchase  price
payable by such Person under the  contract,  otherwise,  (y) the amount of Total
Liabilities shall equal the aggregate amount of due diligence deposits,  earnest
money payments and other similar payments made by such Person under the contract
which,  at such time,  would be subject to forfeiture  upon  termination of such
contract.

                  For purposes of purchase obligations,  repurchase  obligations
and  forward  commitments,  the amount of Total  Liabilities  of a Person at any
given time in respect of a contract to purchase a property  being  renovated  or
developed by a third party shall equal the maximum amount  reasonably  estimated
to be payable under such contract during the remaining term of such contract.

                  Treasury  Rate means for any day the weekly average  auction
rate on United States  Treasury Bonds with a maturity of ten years, as published
in the Federal  Reserve  Bulletin  and made  available  each week by the Federal
Reserve Board in Statistical Release H.15(519) or any successor publication.

                  UCC means the Uniform  Commercial  Code as from time to time
in effect in the relevant jurisdiction.

                  Unconsolidated  Affiliate means, with respect to any Person,
an unconsolidated affiliate of such Person (determined in accordance with GAAP).

                  Updated  Appraisals  shall  have the  meaning  set  forth in
Section 5.2(l).

<PAGE>

                  Use  Requirements  means  any  and  all  building  codes  or
permits,  certificates  of  occupancy  or  compliance,  restrictions  of record,
easements,  reciprocal  easements  or  other  agreements,  subdivision,  zoning,
wetlands  protection,  or land use laws or ordinances and any and all applicable
rules or regulations  of any  Governmental  Authority  affecting any part of any
Mortgaged Property.

     Section 1.2 Accounting Terms and  Determinations.  Unless otherwise defined
or  specified  herein,  all  accounting  terms shall be  construed  herein,  all
accounting  determinations  hereunder  shall be made,  all financial  statements
required to be delivered hereunder shall be prepared,  and all financial records
shall be maintained in accordance with GAAP.

     Section 1.3 Other  Definitional  Terms.  The words  Ahereof,  Aherein,  and
Ahereunder and words of similar  import when used in this Agreement  shall refer
to  this  Agreement  as a  whole  and not to any  particular  provision  of this
Agreement, and Article, section,  schedule,  exhibit, and like references are to
this   Agreement   unless   otherwise   specified.   References  to  agreements,
instruments,  documents,  statutes,  and  regulations  include  all  amendments,
supplements, and modifications thereof as may be in effect from time to time.

                              ARTICLE II. THE LOAN

     Section 2.1 The Loan.  Subject to and upon the terms and conditions  herein
set forth,  each Lender,  severally  and not  jointly,  agrees to make a loan to
Borrower on the Closing  Date in the amount of  $110,000,000  (such loans of the
Lenders,  the ALoan ), pro rata in  accordance  with such  Lender's  Percentage.
Borrower hereby agrees to accept the Loan. Borrower may not reborrow any portion
of the Loan,  except as  provided  in  Section  2.15  hereof.  The Loan shall be
disbursed  to Borrower  upon the  satisfaction  of the  conditions  set forth in
Article III of this Agreement.

         Section 2.2      Promissory Notes; Collateral

                  (a) The  Borrower's  obligation  to pay the  principal of, and
interest on, the Loan shall be evidenced by one or more Promissory  Notes in the
face amount of each Lender's  Percentage  of the Loan,  with blanks as to payee,
date and principal  amount  appropriately  completed.  The  determination by the
Administrative Agent of the amount of principal  outstanding  hereunder or under
any Promissory  Note shall,  except for patent error,  be final,  conclusive and
binding upon the Borrower for all purposes.

                  (b)  Each  borrowing,   repayment  and  permitted  reborrowing
hereunder shall be recorded by the Administrative  Agent and the entries in such
records shall, except for patent error, be final,  conclusive and binding on the
Borrower;  provided,  however,  that no  failure  to make or error  in  making a
recordation  of a  borrowing  shall  in any way  limit,  affect  or  modify  the
obligation  of the  Borrower  to repay  any  obligations,  or the  rights of the
Administrative  Agent and the Lenders to any  amounts due under this  Agreement,
the Loan Documents and the Promissory Notes.

<PAGE>

                  (c) Except as otherwise set forth in the Loan Documents,  each
item of Collateral  shall secure the payment and performance of all indebtedness
and  obligations  of  the  Borrower  under  this  Agreement,  including  without
limitation,  any increased  cost under Section 2.11 hereof,  and each other Loan
Document.

         Section 2.3      Interest on the Loan.

                  (a) Subject to the  provisions  of Section  2.15  hereof,  the
unpaid  principal amount of the Loan shall bear interest at a rate per annum for
each Interest Period equal to the Adjusted LIBO Rate. Interest on the Loan shall
accrue from the date of any borrowing hereunder to but excluding the date of any
repayment  thereof  and shall be payable (i) in arrears on the first day of each
calendar  month,  (ii) at maturity  (whether by  acceleration  or otherwise) and
(iii) after maturity, on demand.  Notwithstanding the foregoing, should the Loan
bear  interest at the Alternate  Rate  pursuant to the terms of this  Agreement,
interest  shall be  payable  (i) in  arrears  on the first day of each  calendar
month,  (ii) at maturity  (whether by acceleration or otherwise) and (iii) after
maturity, on demand.

                  (b) Overdue  principal  and, to the extent  permitted  by law,
overdue  interest in respect of the Loan,  and all other  overdue  amounts owing
hereunder,  shall bear  interest for each day that such amounts are overdue at a
rate  (the  Default  Rate )  equal to three  percent  (3%) per  annum  plus the
interest rate otherwise  applicable  thereto from the first day such amounts are
overdue to but excluding the date such overdue amounts are paid.

                  (c) The  Administrative  Agent,  upon determining the Adjusted
LIBO Rate for any Interest Period, shall promptly notify by telephone (confirmed
in writing) or in writing the Borrower thereof. All such determinations shall be
binding on all parties, absent patent error.

<PAGE>

                  (d) It is expressly  stipulated and agreed to be the intent of
the  Lenders  and  Borrower  at all  times to  comply  with the  applicable  law
governing  the highest  lawful  interest  rate.  If the  applicable  law is ever
judicially interpreted so as to render usurious any amount called for under this
Agreement or under any of the other Loan Documents,  or contracted for, charged,
taken, reserved or received with respect to the Indebtedness  evidenced thereby,
or if  acceleration  of the  maturity of the  obligations,  or the rights of the
Administrative  Agent and the Lenders to any amounts due, under this  Agreement,
the Loan Documents and the Promissory Notes, any prepayment by Borrower,  or any
other  circumstance  whatsoever,  results in Borrower  having paid any interest,
penalty, fee or other amount in excess of that permitted by applicable law, then
it is the  express  intent of  Borrower  and  Lenders  that all  excess  amounts
theretofore  collected  by Lenders be credited on the  principal  balance of the
Loan (or, at Lenders option, paid over to Borrower), and the provisions of this
Agreement and the other Loan Documents  immediately  be deemed  reformed and the
amounts thereafter  collectible  hereunder and thereunder  reduced,  without the
necessity  of the  execution  of any new  document,  so as to  comply  with  the
applicable law, but so as to permit the recovery of the fullest amount otherwise
called for hereunder  and  thereunder.  The right to accelerate  maturity of the
obligations,  or the rights of the  Administrative  Agent and the Lenders to any
amounts due, under this Agreement,  the Loan Documents and the Promissory Notes,
does not include the right to  accelerate  any interest  which has not otherwise
accrued on the date of such  acceleration,  and Lenders do not intend to collect
any unearned  interest in the event of acceleration.  All sums paid or agreed to
be paid to Lenders for the use, forbearance or detention of the obligations,  or
the rights of the Administrative Agent and the Lenders to any amounts due, under
this Agreement, the Loan Documents and the Promissory Notes shall, to the extent
permitted  by  applicable  law, be  amortized,  prorated,  allocated  and spread
throughout the full term of such  obligations  and amounts until payment in full
so that the rate or amount of  interest on account of such  secured  obligations
does  not  exceed  the  maximum  rate or  amount  of  interest  permitted  under
applicable law.

     Section  2.4  Interest  Periods.  One or more  interest  periods  (each  an
AInterest Period ) shall be applicable with respect to the outstanding principal
amount of the Loan. Each Interest Period shall be a period of one, two, three or
six  months  as  specified  by  Borrower  in  accordance  with the terms of this
Agreement. Simultaneously with the execution and delivery hereof, Borrower shall
furnish  the  Administrative  Agent with a Notice of Interest  Period  Selection
specifying the initial  Interest  Period or Interest  Periods  applicable to the
Loan. Notwithstanding the foregoing:

                           (i)      the initial  Interest  Period for all or any
portion of the Loan shall commence on the date of the disbursement of the Loan;

                          (ii)  Provided  that no Event of  Default  shall  have
occurred and be continuing,  at the end of the initial  Interest Period and each
subsequent  Interest Period  applicable to any portion of the Loan, the Borrower
shall be permitted to select an additional  Interest  Period for the  applicable
portion  of the  Loan by  delivering  a Notice  of  Additional  Interest  Period
Selection to the Administrative  Agent at any time prior to 12:00 noon (New York
time) on the third  Business  Day prior to the  expiration  of the then  current
Interest  Period  applicable  to such portion of the Loan,  provided  that if no
Interest Period selection is delivered to the Administrative Agent by such time,
the Borrower  shall be deemed to have  selected an Interest  Period of one month
and such  Interest  Period  selected  or deemed to have been  selected  for such
portion of the Loan may not be changed without the consent of the Administrative
Agent;

                           (iii)      if any Interest Period would otherwise
expire on a day which is not a Business Day,  such Interest  Period shall expire
on the next  succeeding  Business Day,  provided that if any Interest  Period in
respect of a portion of the Loan (other than a borrowing  referred to in Section
2.10(b)(ii) or Section  2.11(b)(ii)) would otherwise expire on a day that is not
a Business  Day but is a day of the month  after which no further  Business  Day
occurs in such month,  such Interest  Period shall expire on the next  preceding
Business Day;

                           (iv)   any  Interest  Period in respect  of a portion
of the Loan which 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,  subject to clause (v) below, end on the
last Business Day of a calendar month;

                           (v)      no Interest Period shall extend beyond the
Maturity Date; and

                           (vi there shall be no more than six Interest  Periods
in effect at any time.

<PAGE>

                                      -31-

     Section  2.5  Repayment  of the  Loan.  The  Borrower  shall  repay  to the
Administrative  Agent,  for the  account of the  Lenders,  the unpaid  principal
amount of the Loan,  together with all accrued and unpaid  interest  thereon and
any other sums due and payable to the Lenders  hereunder or under the other Loan
Documents, on the Maturity Date.

     Section 2.6  Prepayments of the Loan. The Loan may be prepaid in full or in
part  without  penalty,  premium or  additional  charge,  except as set forth in
Section  2.13  hereof;  provided  such  prepayment  shall be at  least  equal to
$100,000 and provided further that in no event may any prepayment  (other than a
prepayment in full of the entire unpaid principal balance of the Loan) cause the
Maximum Availability Amount to be less than $50,000,000.  Any partial prepayment
of the Loan  shall be  applied  to the  Revolving  Portion  of the Loan,  unless
Borrower,  simultaneously  with the  making of such  prepayment,  instructs  the
Administrative  Agent  to  apply  the  same to the  Term  Portion  of the  Loan.
Notwithstanding  the  foregoing,  any  prepayment  made in  connection  with the
Release of a Mortgaged  Property  pursuant to Section 2.15 shall be applied only
to the Term Portion of the Loan. Borrower shall furnish the Administrative Agent
with not less than three (3) business  days notice of the  prepayment in full of
the Loan. At the time of any prepayment in full of the Loan,  Borrower shall pay
all  accrued  and  unpaid  interest  and all fees and other  amounts  due to the
Administrative  Agent and the Lenders  under this  Agreement  and the other Loan
Documents.

     Section 2.7 Fees.  The Borrower shall pay to the  Administrative  Agent for
the  account of the Lenders a  commitment  fee (the  ACommitment  Fee ) equal to
three eighths of one percent  (0.375%) per annum of the Average  Undrawn Balance
of the Revolving  Portion of the Loan. The amount of the Commitment Fee shall be
calculated  by the  Administrative  Agent and,  absent  patent  error,  shall be
binding  on all  parties.  The  Commitment  Fee  shall  be due and  payable  (i)
quarterly in arrears on the last day of each calendar  quarter,  and (ii) on the
Maturity Date or earlier termination of the Loan. Each payment on account of the
Commitment Fee for a period which is less than a full calendar  quarter shall be
prorated.  The Borrower agrees to pay to the Administrative  Agent such fees for
services rendered by the Administrative Agent as shall be separately agreed upon
in writing between the Borrower and the Administrative Agent.

        Section 2.8      Payments, Etc

                  (a) All payments under this Agreement  shall be pro rata among
the  Lenders  in  accordance  with  their  Percentages  and shall be made by the
Borrower, without defense, setoff, or counterclaim,  to the Administrative Agent
not later than 12:00 noon (New York time) on the date when due and shall be made
in Dollars in  immediately  available  funds at the Payment Office and any funds
received by the Administrative  Agent after such time shall, for all purposes of
this Agreement, be deemed to have been paid on the next succeeding Business Day.
The  Administrative  Agent  shall  thereafter  cause  to be  distributed  to the
Lenders,  on the  Business  Day when paid,  in like funds  their  Percentage  of
payments so received.  Notwithstanding  the foregoing,  any payments received by
the  Administrative  Agent after 12:00 noon (New York time) shall be distributed
to the Lenders on the following Business Day.

<PAGE>

                  (b)  Whenever  any payment to be made  hereunder  or under the
Promissory Notes shall be stated to be due on a day which is not a Business Day,
the due date  thereof  shall be extended  to the next  succeeding  Business  Day
(unless the relevant Interest Period expires on the next preceding  Business Day
pursuant  to  Section  2.4(iii),  in which  case the due date  shall be the next
preceding  Business Day) and,  with respect to payments of  principal,  interest
thereon shall be payable at the applicable rate during such extension.

                  (c) All  computations  of  interest  on the  unpaid  principal
amount  of the Loan  shall be made on the  basis of a year of (x) in the case of
interest  computed on the basis of the Adjusted LIBO Rate,  360 days, and (y) in
the case of interest computed on the basis of the Alternate Rate,  365/366 days,
in  either  case for the  actual  number  of days  (including  the first day but
excluding  the last day)  occurring  in the period for which  such  interest  is
payable.

     Section 2.9 Interest  Rate not  Ascertainable,  etc. If the  Administrative
Agent shall have determined (which determination shall be conclusive and binding
upon  the  Borrower)  that on any  date for  determining  the LIBO  Rate for any
Interest  Period,  by  reason  of  any  circumstances  affecting  the  interbank
Eurodollar  market  generally,   adequate  and  fair  means  do  not  exist  for
ascertaining  the  applicable  interest  rate on the basis  provided  for in the
definition  of  Adjusted  LIBO  Rate,   then,   and  in  any  such  event,   the
Administrative  Agent shall  forthwith  give notice (by  telephone  confirmed in
writing) to the Borrower of such determination.  Until the Administrative  Agent
notifies  the  Borrower  that the  circumstances  giving rise to the  suspension
described herein no longer exist:

                           (i)      each  borrowing of the  Revolving  Portion
of the Loan made pursuant to Section 2.15 hereof shall bear interest at the then
applicable Alternate Rate; and

                           (ii) the entire unpaid  principal  amount of the Loan
shall immediately convert into
a Loan bearing  interest at the then applicable  Alternate Rate with an Interest
Period  ending  on the date on  which  the  Interest  Period  applicable  to the
affected borrowing expires.

         Section 2.10     Illegality

                  (i) If any Lender (a ANotifying Lender ) shall have determined
at any time that the making or continuance of any portion of the Loan has become
unlawful  by  compliance  by such  Lender  in good  faith  with  any  applicable
Requirement of Law adopted or becoming effective after the date hereof, then, in
any such event,  the  Notifying  Lender shall give prompt  notice (by  telephone
confirmed  in  writing)  to the  Administrative  Agent and the  Borrower of such
determination.

                 (ii) Upon the giving of the notice to the Administrative  Agent
and the Borrower  referred to in subsection (a) above,  (i) the Borrower's right
to request  and the  Notifying  Lender's  obligation  to fund any portion of the
Revolving  Portion of the Loan shall be  suspended  and (ii) any  portion of the
Loan held by such Lender shall immediately  convert into a Loan bearing interest
at the then applicable Alternate Rate with an Interest Period ending on the date
on which the Interest Period applicable to the affected borrowing expires.

<PAGE>

         Section 2.11     Increased Costs

                  (a)  If,  by  reason  of  (x)  after  the  date  hereof,   the
implementation of or any change (including,  without  limitation,  any change by
way of imposition or increase of reserve or capital adequacy  requirements)  in,
or in the  interpretation by any Governmental  Authority or any other recognized
authority of, any law or regulation, or (y) the compliance with any guideline or
request   from  any   central   bank  or   other   Governmental   Authority   or
quasi-Governmental   Authority   exercising  control  over  banks  or  financial
institutions  generally  (whether  or not  having  the force of law)  adopted or
becoming effective after the date hereof:

                           (i)      any Lender (or its Lending  Office) shall be
subject  to any tax,  duty,  or other  charge  with  respect  to the Loan or its
obligation  to fund any portion of the  Revolving  Portion of the Loan, or shall
change the basis of taxation of  payments to any Lender of the  principal  of or
interest  on the Loan or its  obligation  to fund any  portion of the  Revolving
Portion of the Loan  (except  for  changes in the rate of tax on the overall net
income of such Lender or its Lending Office imposed by the jurisdiction in which
such Lender's principal executive office or Lending Office is located); or

                          (ii)      any  reserve,  special  deposit,  or similar
requirement  (including,  without limitation,  any reserve,  special deposit, or
similar  requirement  imposed by the Board of Governors  of the Federal  Reserve
System)  against  assets  of,  deposits  with or for the  account  of, or credit
extended  by,  any  Lender or its  Lending  Office  shall be  imposed  or deemed
applicable  or any  other  condition  affecting  borrowings  hereunder  shall be
imposed on such Lender or its Lending Office or the interbank Eurodollar market;

and as a result  thereof  there  shall be any cost to such Lender of agreeing to
make or maintain the Loan or to fund any portion of the Revolving Portion of the
Loan (excluding any cost reflected in the Adjusted LIBO Rate or in the Alternate
Rate),  or there shall be a reduction in the amount  received or  receivable  by
such Lender or its Lending  Office  (excluding  any  reduction  reflected in the
Adjusted LIBO Rate or in the Alternate Rate),  then the Borrower shall from time
to time,  upon written  notice and demand  (including  such Lender's  reasonable
details  with  respect  to  such   increased   cost)   promptly   given  by  the
Administrative  Agent, pay to the  Administrative  Agent for the account of such
Lender,  within five Business  Days after the date  specified in such notice and
demand,  additional  amounts  sufficient to indemnify  such Lender  against such
increased  cost. In the event that a Lender becomes aware of the imposition of a
cost to such Lender or a reduction in the amount to be received or receivable by
such Lender or its Lending  Office which is an additional  cost pursuant to this
Section 2.11, such Lender shall promptly notify the Administrative Agent and the
Borrower in writing of such imposition or reduction,  which notice shall include
such  Lender's  reasonable  details with respect to such  increased  cost.  With
respect to costs or  reductions  incurred by a Lender  pursuant to this  Section
2.11  relating  to  any  period  in  which  any  portion  of  the  Loan  remains
outstanding,  the provisions of this Section 2.11 shall survive the  termination
of this Agreement and the payment of the Promissory  Notes and all other amounts
payable hereunder.

<PAGE>

                  (b) If the  Required  Lenders  shall  notify the  Borrower  in
writing (with a copy to the  Administrative  Agent) that at any time, because of
the circumstances described in clause (x) or (y) in Section 2.11(a) or any other
circumstances arising after the Closing Date and relating to any period in which
any portion of the Loan remains outstanding  affecting the interbank  Eurodollar
market generally,  the then applicable  Adjusted LIBO Rate, as determined by the
Administrative  Agent,  will not  adequately  and fairly reflect the cost to the
Lenders of funding the borrowings, then, subject to Section 2.11(c), thereafter:

                           (i)      any borrowing of the  Revolving  Portion of
the Loan shall bear interest at the Alternate Rate; and

                           (ii)  any   affected   portion   of  the  Loan  shall
immediately  convert to a loan bearing  interest at the  Alternate  Rate with an
Interest  Period ending on the date on which the Interest  Period  applicable to
the affected portion expires.

                  (c) If the  Required  Lenders  shall  notify the  Borrower  in
writing (with a copy to the  Administrative  Agent) that at any time, because of
the circumstances described in clause (x) or (y) in Section 2.11(a) or any other
circumstances arising after the Closing Date and relating to any period in which
any portion of the Loan remains outstanding  affecting the interbank  Eurodollar
market generally,  then the Borrower shall be entitled to require each Lender to
which  such  circumstances  apply to assign its  Credit  Exposure  at par to any
Person  selected  by  Borrower  that  is  a  financial  institution   reasonably
acceptable  to the  Administrative  Agent,  which  assignment  shall be effected
pursuant to Section 7.18 hereof.

     Section 2.12 Change of Lending Office.  Each Lender agrees that it will use
reasonable  efforts to  designate an  alternate  Lending  Office with respect to
portions  of the Loan  affected  by the matters or  circumstances  described  in
Section 2.9,  2.10 or 2.11 to reduce the  liability of the Borrower or avoid the
results provided thereunder,  so long as such designation is not disadvantageous
to such Lender as determined by such Lender in its sole discretion.

     Section 2.13 Funding  Losses.  The Borrower shall  compensate  each Lender,
upon  such  Lender's  written  request  to  the  Administrative  Agent  and  the
Administrative Agent's delivery thereof to the Borrower (which request shall set
forth in  reasonable  detail the basis for  requesting  such  amounts),  for all
losses, expenses, and liabilities (including,  without limitation,  any interest
paid by such  Lender to  lenders  of funds  borrowed  by it to make or carry its
Percentage  of the Loan to the extent not recovered by such Lender in connection
with the re-employment of such funds but excluding loss of anticipated profits),
which such Lender may  sustain:  (i) if for any reason  (other than a default by
such Lender) a borrowing of the Revolving  Portion of the Loan does not occur on
the date specified therefor in a Notice of Borrowing (whether or not withdrawn);
(ii) if any repayment of a portion of the Loan occurs on a date which is not the
Maturity Date or the last day of an Interest  Period  applicable to such portion
(subject to Section 2.6(b));  (iii) if, for any reason, the Borrower defaults in
its  obligation  to repay any portion of the Loan when  required by the terms of
this Agreement; or (iv) the occurrence of any of the events described in Section
2.9,  2.10 or 2.11.  With respect to losses,  expenses and  liabilities  which a
Lender may sustain as described  in this Section 2.13  relating to any period in
which any portion of the Loan remains  unpaid,  the  provisions  of this Section
2.13 shall  survive the  termination  of this  Agreement  and the payment of the
Promissory Notes and all other amounts payable hereunder.

<PAGE>

         Section 2.14     Taxes

                  (a) All payments made by the Borrower under this Agreement and
the Promissory  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,   reserves  or
withholdings,  now or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Authority,  excluding in the case of each Lender, net income
taxes and franchise  taxes (imposed in lieu of net income taxes) imposed on such
Lender as a result of a present or former connection between the jurisdiction of
the government or taxing authority  imposing such tax and such Lender (excluding
a connection  arising  solely from such Lender having  executed,  delivered,  or
performed  its  obligations  or  received a payment  under,  or  enforced,  this
Agreement  or the  Promissory  Notes)  or any  political  subdivision  or taxing
authority  thereof or therein (all such  non-excluded  taxes,  levies,  imposts,
duties,  charges,  fees,  deductions and withholdings  being hereinafter  called
Taxes ).  If any Taxes are required to be withheld from any amounts  payable to
any Lender  hereunder or under the Promissory  Notes,  the amounts so payable to
such Lender shall be  increased to the extent  necessary to yield to such Lender
(after  payment  of all  Taxes)  interest  or any  such  other  amounts  payable
hereunder  at the rates or in the amounts  specified in this  Agreement  and the
appropriate  Promissory  Note.  Whenever  any Taxes are payable by the  Borrower
pursuant to  applicable  law, as promptly as possible  thereafter  the  Borrower
shall send to the Administrative  Agent a certified copy of an original official
receipt received by the Borrower showing payment thereof.  If the Borrower fails
to pay any Taxes when due to the appropriate  taxing authority or fails to remit
to the Administrative  Agent the required receipts or other required documentary
evidence  (other  than any such  failure due to failure of any Lender to furnish
the  documents  required  to be  furnished  by such  Lender  pursuant to Section
2.14(b)),   the  Borrower  shall   indemnify,   defend  and  hold  harmless  the
Administrative  Agent and each Lender 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.  With  respect to any  obligations  of the Borrower
pursuant to this Section 2.14 relating to any period in which any portion of the
Loan remains outstanding,  the agreements in this Section 2.14, as they apply to
any borrowing hereunder, shall survive the termination of this Agreement and the
payment of the Promissory Notes and all other amounts payable hereunder.

                  (b) The  Administrative  Agent and each Lender  shall  furnish
Borrower and the  Administrative  Agent,  at least thirty (30) days prior to the
date on which  the first  payment  to each  Lender  (including  each  Purchasing
Lender) is due, and annually thereafter during the term of the Loan, with United
States  Internal  Revenue  Service  Form  1001,  4224,  W-8 or W-9 (or any other
successor form) or any other document  evidencing  such Lender's  exemption from
withholding of Taxes from any amounts payable to such Lender  hereunder under as
of the Closing  Date.  If any Taxes are required to be withheld from any amounts
payable to any Lender hereunder or under the Promissory Notes, then the Borrower
shall be entitled to require such Lender to assign its Credit Exposure at par to
any  Person  selected  by  Borrower  that  is an  Eligible  Assignee  reasonably
acceptable  to the  Administrative  Agent,  which  assignment  shall be effected
pursuant to Section 7.18 hereof.

<PAGE>

         Section 2.15     Revolving Portion of the Loan

                  (1) Subject to the terms and conditions  hereof,  the Borrower
may  reborrow  portions of the Loan in an  aggregate  principal  amount of up to
$35,000,000  (the  ARevolving  Portion of the  Loan ).  Subject to the terms and
conditions of this  Agreement,  the Borrower may borrow,  repay and reborrow the
Revolving Portion of the Loan, provided that:

                           (i)    the  Administrative  Agent shall have received
a Notice of  Borrowing  either  (x) prior to 12:00  noon (New York  time) on the
third  Business  Day  prior  to the date of the  proposed  borrowing  (any  such
proposed borrowing,  a ALong-Notice  Borrowing ) or (y) prior to 11:30 A.M. (New
York time) on the date of the proposed borrowing (any such proposed borrowing, a
AShort-Notice  Borrowing ).  Each Notice of Borrowing  shall be irrevocable  and
shall advise the Administrative Agent as to whether it pertains to a Long-Notice
Borrowing or a  Short-Notice  Borrowing,  provided  that any Notice of Borrowing
which purports to pertain to a  Short-Notice  Borrowing but which is received by
the  Administrative  Agent after  11:30 A.M.  (New York time) on the date of the
proposed  borrowing  shall be deemed to constitute a request for a  Short-Notice
Borrowing on the next Business Day.

                           (ii) before  as well as after  giving  effect  to the
proposed borrowing, no Default or
Event of Default shall have occurred or be continuing;

                           (iii)     subject to the  provisions  of Section  5.5
hereof, all representations and warranties contained herein (including,  without
limitation,  those  incorporated  herein by reference,  but not including  those
expressly  provided  to be made only as of the  Closing  Date) shall be true and
correct in all material  respects  (before as well as after giving effect to the
proposed  borrowing)  with the same  effect as though such  representations  and
warranties  had been made on and as of the date of the  proposed  borrowing  and
Borrower  shall be in  compliance  in all material  respects  (before as well as
after giving effect to the proposed borrowing) with all covenants and agreements
contained in Article V hereof and elsewhere in this Agreement.

                          (iv) there shall have been no Material  Adverse Change
and no  Requirement  of Law or  Contractual  Obligation  of the  Borrower or any
Subsidiary  which could  reasonably be expected to result in a Material  Adverse
Change;

                           (v)    no  litigation,  investigation  or  proceeding
before or by any  arbitrator or  Governmental  Authority  shall be continuing or
threatened  against the Borrower or any  Subsidiary  thereof in connection  with
this  Agreement  and the other Loan  Documents  which could result in a Material
Adverse Change;

                          (vi)      the proposed  borrowing  shall not cause the
aggregate  outstanding  principal amount of the Loan to exceed the lowest of (i)
the Maximum  Availability  Amount,  (ii)  $110,000,000 and (iii) an amount which
would violate the provisions of Section 5.3(k) hereof.

                         (vii)      the proposed  borrowing  shall not cause the
aggregate  outstanding  principal amount of the Revolving Portion of the Loan to
exceed $35,000,000.

<PAGE>

                  (b) Each Long-Notice  Borrowing shall be in an amount equal to
$1,000,000 or a whole multiple of $100,000 in excess thereof.  Each Short-Notice
Borrowing  shall be in an amount  equal to  $2,000,000  or a whole  multiple  of
$100,000 in excess thereof.

                  (c)      There shall be no more than ten  borrowings of the
Revolving Portion of the Loan in any calendar month.

                  (d)  Interest on  Long-Notice  Borrowings  shall accrue at the
Adjusted  LIBO Rate,  subject to and in accordance  with the  provisions of this
Article 2. Each Notice of Borrowing  which  pertains to a Long-Notice  Borrowing
shall specify the Interest Period applicable  thereto.  Interest shall accrue on
Short-Notice Borrowings at the Alternate Rate.

                  (e) The proceeds of any borrowing of the Revolving  Portion of
the Loan shall be used solely to fund  ongoing  cash needs,  interest  payments,
dividend payments,  working capital requirements and reserve requirements of the
Borrower.

     Section 2.16 Conversion Option.  Provided that there is no Default or Event
of Default hereunder, the Borrower shall have the option to convert Short-Notice
Borrowings  to  borrowings  bearing  interest  at the  Adjusted  LIBO Rate.  Any
proposed conversion shall pertain to Short-Notice  Borrowings in an amount equal
to $2,000,000 or a whole  multiple of $100,000 in excess  thereof.  In the event
the Borrower shall elect to convert a Short-Notice  Borrowing as aforesaid,  the
Borrower  shall deliver a Notice of Conversion  to the  Administrative  Agent no
later than 11:30 A.M.  (New York time) at least three (3) Business Days prior to
the date of the proposed  conversion.  A Notice of Conversion  shall specify the
proposed  conversion  date,  the  amount  of the  Short-Notice  Borrowing  to be
converted and the Interest Rate  applicable  thereto.  If no Interest  Period is
specified  in a Notice  of  Conversion,  the  Borrower  shall be  deemed to have
selected  an Interest  Period of one month.  Any Notice of  Conversion  shall be
irrevocable  and the Borrower  shall be  obligated  to convert the  Short-Notice
Borrowing to which it relates in accordance therewith.

                      ARTICLE III. CONDITIONS TO BORROWINGS

         The  obligation  of the Lenders to disburse the Loan to Borrower on the
Closing Date is subject to the satisfaction of the following conditions:

     Section 3.1  Conditions  oPrecedent to Closing.  On or prior to the Closing
Date, all obligations of the Borrower hereunder to the Administrative  Agent and
the Lenders  incurred  prior to the Closing Date and any amounts  payable to the
Administrative  Agent or the Lenders on the Closing  Date (other than legal fees
payable  pursuant to the last paragraph of subsection  3.1(a)),  shall have been
paid in full. In addition, the following conditions shall be satisfied:

                  (1) Receipt of Documents.  The Administrative Agent shall have
received the  following,  each dated as of or prior to the Closing Date, in form
and substance satisfactory to the Administrative Agent:

<PAGE>

                  (i)  an officer's  certificate, dated the Closing Date, signed
by any Chairman, the President, any Senior Vice President, any Vice President or
the  Controller  of  the  Borrower,  and  attested  to by the  Secretary  or any
Assistant  Secretary of the  Borrower,  in the form of Exhibit G annexed  hereto
with   appropriate   insertions,   together  with  copies  of  the  Articles  of
Incorporation of the Borrower  certified,  as of a recent date, by the Secretary
of State  of the  State  of the  Borrower's  incorporation  and the  By-Laws  of
Borrower and the  resolutions of the Borrower  referred to in such  certificate;
and certified copies of all other documents, if any, evidencing corporate action
or governmental  authorization  or approval with respect to this Agreement,  the
Promissory Notes and the Loan Documents;

                  (ii)  duly  executed  and  completed   replacement  or
substitute Promissory Notes payable to the order of each Lender;

                  (iii)  a duly executed and delivered Reaffirmation of Environ-
mental Indemnity;

                  (iv) a duly executed and delivered Reaffirmation of Subsidiary
 Guaranty;

                  (v)  an opinion of counsel to the Borrower as to such matters
as the Administrative Agent shall require;

                 (vi)  preliminary  financial statements in the forms prescribed
by Sections  5.2(a) to (d) hereof for fiscal year 1999,  the  accounting  period
ending in December,  1999 and the most recent Accounting  Period, to be followed
on or before March 31, 2000 by final financial statements in the aforesaid forms
for the aforesaid  periods which disclose a financial  condition of the Borrower
and the  Mortgaged  Properties  which is no worse in all material  respects than
that disclosed by the preliminary financial statements;

                 (vii)  copies of all financial  statements,  reports, and proxy
statements  mailed to the  Borrower's  shareholders  within the last  year,  and
copies of all registration  statements,  periodic  reports,  and other documents
filed by the  Borrower  with the  Securities  and  Exchange  Commission  (or any
successor thereto) and any national securities exchange within the last year;

                (viii) such  consents or  acknowledgments, with  respect to such
of the transactions hereunder,  from such Persons as the Administrative Agent or
its counsel may reasonably determine to be necessary or appropriate;

                   (ix) (A) a good standing certificate from the State of
Maryland in respect of the Borrower as of a recent date;  and (B) a  certificate
of the  Secretary of State of each state in which the Borrower  owns a Mortgaged
Property or is required to qualify to do business, as to due qualification to do
business as a foreign  entity and good standing of Borrower as of a recent date;
and

                   (x) title policy  endorsements which have the effect
of redating  the title  policies  insuring  the Liens of the  Mortgages  with no
additional exceptions; and

<PAGE>

                   (xi) originals of an estoppel letter executed by HPT.

Execution and delivery of this Agreement by Borrower shall constitute Borrower's
agreement and covenant to pay to the Administrative  Agent, promptly upon demand
(together  with a  reasonably  detailed  invoice(s)  in  respect  thereof),  all
reasonable fees and disbursements of counsel to the Administrative Agent and the
Lenders incurred prior to or on the Closing Date.

     Section  3.2 Post  Closing  Covenant.  On or  before  March 10,  2000,  the
Borrower  shall  furnish the  Administrative  Agent with a  certificate  of good
standing  with  respect  to each of the  entities  listed on  Schedule 9 annexed
hereto  from  the  Secretary  of  State  of  its  state  of   incorporation   or
organization,  and, if such  entity  owns a Mortgaged  Property in a state other
than  its  state  of  incorporation  or  organization,  a  certificate  from the
applicable  Secretary  of State as to its  qualification  to do business in such
state.

                   ARTICLE IV. REPRESENTATIONS AND WARRANTIES

         Borrower  represents  and warrants the  following as of the date hereof
and,  except  with  respect  to the  representations  and  warranties  expressly
provided  herein as being made only as of the Closing Date,  further  represents
and warrants on the date of any borrowing of the Revolving Portion of the Loan.

     Section 4.1  Corporate  Existence.  Borrower is duly  organized and validly
existing under the laws of the jurisdiction of its  incorporation.  In addition,
Borrower  is in  good  standing  under  the  laws  of  the  jurisdiction  of its
incorporation,  is duly qualified to do business as a foreign corporation and is
in good  standing  in each  jurisdiction  where it owns  property  or where  the
conduct of its business or the  ownership of its property or assets  (including,
without  limitation,  the  Mortgaged  Properties)  requires  such  qualification
(unless the failure to be so qualified or in good standing  would not constitute
a Material  Adverse  Change),  and has all corporate powers and all governmental
licenses,  authorizations,  consents,  and  approvals  required  to carry on its
business as is now or is proposed  to be  conducted  (unless the failure to have
same would not constitute a Material Adverse Change).

         The  execution,  delivery,  and  performance  by  Borrower  of  this
Agreement and of the Loan  Documents (i) are within the Borrower's  powers,  and
(ii) have been duly authorized by all necessary action.

     Section 4.3 Governmental  Approvals.  No authorization or approval or other
action by, and no notice to or filing or  registration  with,  any  Governmental
Authority  is  required  in  connection  with  the  execution,   delivery,   and
performance by Borrower of this  Agreement or the other Loan  Documents  (unless
the  failure  to have  obtained  or made same  would not  constitute  a Material
Adverse Change).

<PAGE>

     Section 4.4 Binding  Effect.  This  Agreement and the other Loan  Documents
have each been duly executed by Borrower and each  constitutes  a legal,  valid,
and binding obligation of Borrower,  enforceable  against Borrower in accordance
with its terms,  except as enforcement  thereof may be subject to (i) the effect
of any applicable bankruptcy, insolvency, reorganization, moratorium, or similar
law affecting creditors, rights generally, and (ii) general principles of equity
(regardless  of whether such  enforcement is sought in a proceeding in equity or
at law).

         Section 4.5      Financial Information and No Material Adverse Change

                  (a) Each of the  financial  statements  delivered  pursuant to
Sections 3.1(a)(vi) were prepared in accordance with GAAP and fairly present the
financial  condition and results of operation of the Persons  and/or  properties
covered  thereby on the dates and for the  periods  covered  thereby,  except as
disclosed in the notes thereto and, with respect to normally  recurring year-end
adjustments.  As of  the  date  hereof  Borrower  does  not  have  any  material
liability,  absolute or contingent,  not reflected in such financial statements,
the notes thereto or Schedule 4 hereof.

                  (b)  Since  December  31,  1999,  there  has been no  Material
Adverse Change,  except as otherwise  disclosed in writing to the Administrative
Agent and in the  reports on Forms 10-Q and 8-K filed by the  Borrower  with the
Securities and Exchange Commission.

     Section 4.6  Litigation.  There is no action,  suit, or proceeding,  or any
governmental  investigation or any arbitration,  in each case pending or, to the
knowledge of the Borrower,  threatened against Borrower,  or any property of the
Borrower before any court or arbitrator or any  governmental  or  administrative
body, agency, or official (i) which challenges the validity of this Agreement or
any of the other  Loan  Documents  or (ii)  which,  as  reasonably  likely to be
determined,  and taking into account any insurance with respect  thereto,  would
constitute a Material Adverse Change.

     Section 4.7  Compliance  with Law. The Borrower is in  compliance  with all
Requirements of Law, the Borrower's Certificate of Incorporation and By-Laws and
all Contractual  Obligations binding on or affecting it or any of its properties
(other  than where the  failure  to so comply  would not  constitute  a Material
Adverse Change).  The execution and delivery by Borrower of this Agreement,  the
Promissory  Notes and the Loan Documents do not, and the performance by Borrower
of this Agreement, the Promissory Notes and each of the Loan Documents will not,
(a) violate any  Requirement  of Law, (b) violate or contravene any provision of
the  Borrower's  Certificate  of  Incorporation  and By-Laws,  or any law, rule,
regulation,  order, writ, judgment, decree, determination or award applicable to
the Borrower,  (c) violate,  contravene or result in a breach of or constitute a
default  under any  Contractual  Obligation,  or (d) result  in, or require  the
creation or imposition  of, any Lien upon or with respect to any of its property
or assets (including,  without limitation,  the Mortgaged Properties) other than
the Liens created by the Loan  Documents  (other than,  in any such case,  where
such violation, contravention, default or result would not constitute a Material
Adverse Change).

<PAGE>

         Section 4.8      Labor Matters

                  (a)  There  are  no  strikes,  work  stoppages,  slowdowns  or
lockouts pending, or reasonably likely to occur in the immediate future, against
or involving the Borrower or any of its Subsidiaries,  other than those which in
the aggregate would not constitute or result in a Material Adverse Change.

                  (b) There are no arbitrations or grievances pending against or
involving the Borrower or any of its Subsidiaries, nor, to the best knowledge of
Borrower,  are there any  arbitrations  or grievances  threatened  involving the
Borrower or any of its  Subsidiaries,  other than those  which in the  aggregate
would not constitute or result in a Material Adverse Change.

                  (c)  Neither  the  Borrower  nor any of its  Subsidiaries  are
parties to, or have any obligations under, any collective  bargaining agreement,
other than collective bargaining  agreement(s) copies of which (certified by the
Borrower  as being  true,  correct  and  complete)  have been  furnished  to the
Administrative Agent.

                  (d) There are no representation  proceedings  pending,  or, to
the best knowledge of the Borrower, threatened with the National Labor Relations
Board, and no labor organization or group of employees of the Borrower or any of
its Subsidiaries  have made a pending demand for  recognition,  other than those
which in the  aggregate  would not  constitute  or result in a Material  Adverse
Change.

                  (e) There are no unfair labor practice charges,  grievances or
complaints  pending  or in  process  or,  to the  best  knowledge  of  Borrower,
threatened by or on behalf of any employee or group of employees of the Borrower
or any of its  Subsidiaries  other than those which in the  aggregate  would not
constitute or result in a Material Adverse Change.

                  (f) There are no complaints or charges against the Borrower or
any of  its  Subsidiaries  pending  or,  to  the  best  knowledge  of  Borrower,
threatened to be filed with any  Governmental  Authority or arbitrator based on,
arising out of, in connection  with, or otherwise  relating to the employment by
the  Borrower or any of its  Subsidiaries  of any  individual,  other than those
which in the  aggregate  would not  constitute  or result in a Material  Adverse
Change.

                  (g) The Borrower and each of its Subsidiaries is in compliance
with all laws, and all orders of any court,  governmental  agency or arbitrator,
relating to the employment of labor,  including all such laws relating to wages,
hours, collective bargaining,  discrimination,  civil rights, and the payment of
withholding   and/or  social  security  and  similar  taxes,   other  than  such
non-compliances as in the aggregate would not constitute or result in a Material
Adverse Change.

<PAGE>

     Section 4.9 ERISA. As of the date of this Agreement and throughout the term
of this Agreement,  (i) the Borrower is not and will not be an Aemployee benefit
plan as defined in Section 3(3) of ERISA,  which is subject to Title I of ERISA,
(ii) the assets of the Borrower do not and will not  constitute  Aplan assets of
one or more such plans within the meaning of 29 C.F.R.  '  2510.3-101  and (iii)
the  Borrower  is not and will not be a  Agovernment  plan within the meaning of
Section 3(32) of ERISA.

     Section  4.10 No Default.  The  Borrower is not in default  under,  or with
respect  to, any of its  Contractual  Obligations  in any  respect  which  could
reasonably be expected to result in a Material  Adverse Change and no Default or
Event of Default has occurred and is continuing.

     Section 4.11 Improvements. Subject to the provisions of Section 5.5 hereof:

                  (a)  All  of  the   improvements   located  on  the  Mortgaged
Properties  and the use of such  improvements  are  covered  by  existing  valid
certificates  of occupancy and all other  certificates  and permits  required by
applicable laws,  rules,  regulations,  and ordinances or in connection with the
use, occupancy, and operation thereof.

                  (b) No material  portion of any of the  Mortgaged  Properties,
nor any improvements  located on such Mortgaged  Properties that are material to
the  operation,  use, or value  thereof,  have been  damaged in any respect as a
result of any fire, explosion, accident, flood, or other casualty, except to the
extent that the same have been or will with due diligence and in compliance with
this  Agreement  and all of the  other  Loan  Documents  be  restored  to  their
condition prior thereto.

                  (c) No written notices of violation of any federal,  state, or
local law or ordinance or order or  requirement  have been received with respect
to any Mortgaged Properties.

     Section 4.12 Intellectual  Property.  Borrower owns, or is licensed to use,
all trademarks,  trade names,  copyrights,  technology,  know-how, and processes
necessary  for  the  conduct  of  its  business  as  currently   conducted  (the
Intellectual  Property ) except for those the  failure to own or license  which
could not reasonably be expected to have a Material Adverse Change. 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  (other than claims  which would not  constitute  a Material  Adverse
Change). The use of such Intellectual Property by the Borrower 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
Change.

<PAGE>

     Section  4.13  Taxes.  Borrower  has  filed or  caused  to be filed all tax
returns  that,  to the  knowledge of Borrower,  are required to be filed and has
paid all taxes shown to be due and payable on such returns or on any assessments
made  against it or any of its  property  and all other  taxes,  fees,  or other
charges  now  due  and  payable  imposed  on it or any of  its  property  by any
Governmental  Authority  (other  than any the  amount or  validity  of which are
currently  being  contested in good faith by  appropriate  proceedings  and with
respect to which adequate reserves in conformity with GAAP have been provided on
the books of Borrower). No tax Lien has been filed which could constitute a Lien
senior in priority to the Lien of any of the  Mortgages or Financing  Statements
and which has not been (or will not be) removed or  discharged  of record within
ten (10) days after  Borrower's  notice of such Lien (or the taxes to which such
Lien relates are being contested in good faith by appropriate  proceedings which
have the  effect  of  staying  enforcement  or  execution  of such Lien and with
respect to which adequate reserves in conformity with GAAP have been provided on
the books of Borrower).

     Section 4.14 Investment Company Act; Other Regulations.  Borrower is not an
Ainvestment company, or a company Acontrolled by an Ainvestment company,  within
the meaning of the Investment  Company Act of 1940, as amended.  Borrower is not
subject to regulation  under any Federal or state  statute or  regulation  which
limits its ability to incur Indebtedness.

     Section 4.15 SEcurity Capital. Security Capital Group Incorporated directly
or, through a wholly-owned  Subsidiary,  indirectly  owns no less than (a) fifty
one percent  (51%) of the voting  stock in Borrower  before  dilution due to the
conversion  of the  mortgages in favor of Archstone  Communities  Trust shown on
Schedule 4 and (b) forty-six percent (46%) after such dilution.

     Section 4.16  Insurance.  Subject to the  provisions of Section 5.5 hereof,
the Borrower  keeps the  Mortgaged  Properties  insured in the manner and in the
amounts set forth in subsection 5.1(k) hereof.

     Section 4.17 Properties. Subject to the provisions of Section 5.5 hereof:

                  (a) Borrower and each  Subsidiary  Mortgagor,  as the case may
be, has good and marketable title to all of the Mortgaged Properties, subject to
no mortgage,  security  interest,  pledge,  lien,  charge,  encumbrance or title
retention or other security  agreement or arrangement of any nature  whatsoever,
except Permitted  Encumbrances.  Borrower shall, and shall cause each Subsidiary
Mortgagor to, forever warrant and defend the title of their respective Mortgaged
Properties  against  the lawful  claims and  demands of all  persons  whomsoever
subject to the Permitted Encumbrances.

                  (b)  There  are no  pending  or,  to  the  best  knowledge  of
Borrower,  threatened  proceedings  or actions to  revoke,  attack,  invalidate,
rescind,  or modify in any  material  respect  (i) the  zoning of any  Mortgaged
Property or any part thereof,  or (ii) any building or other permits  heretofore
issued with respect to any Mortgaged Property or any part thereof,  or asserting
that any such  zoning or permits do not permit the  operation  of any  Mortgaged
Property or any part thereof or that any improvements  located on such Mortgaged
Property  cannot  be  operated  in  accordance  with its  intended  use or is in
violation of applicable Use Requirements.

                  (c) The Mortgage covering each such Mortgaged Property creates
a valid and  enforceable  first Lien, on such  property  described  therein,  as
security  for  the  repayment  of the  Indebtedness  incurred  by  the  Borrower
hereunder  and under the other Loan  Documents,  subject  only to the  Permitted
Encumbrances applicable to such property.

<PAGE>

                  (d) The  Collateral  is now, and so long as any portion of the
Loan remains outstanding or any monetary obligation to the Administrative  Agent
or the  Lenders  hereunder  or under  the  Promissory  Notes or the  other  Loan
Documents  shall  remain  unpaid,  will be owned  solely  by the  Borrower  or a
Subsidiary  Mortgagor,  as the case may be, and said  Collateral,  including the
proceeds  resulting from the sale or other disposition  (other than as permitted
by  Section  5.3(k))  thereof,  is and will  remain  free and clear of any Liens
except the Liens granted  pursuant to the Loan  Documents to the  Administrative
Agent, which Liens shall, at all times, be first and prior on the Collateral and
all  proceeds  resulting  from  the sale or other  disposition  thereof,  and no
further action need be taken to perfect said Liens.

                  (e) Neither the existence of any improvements upon a Mortgaged
Property nor the intended use or condition of any Mortgaged Property violates in
any  material  respect  any Use  Requirements.  With  respect to each  Mortgaged
Property,  neither  the zoning  nor any other  right to carry on the use of such
Mortgaged Property as an extended stay facility,  including ancillary facilities
related  thereto,  is to any extent  dependent upon or related to any other real
estate.  Each  Mortgaged  Property may be operated as an extended  stay facility
with  ancillary  facilities  related  thereto and the  Borrower  has received no
written notices from any Governmental  Authorities alleging any violation by any
Mortgaged  Property  of any  Requirement  of Law,  including  but not limited to
applicable  Use  Requirements.  Each of the  Mortgaged  Properties  includes  an
extended-stay  hotel  facility  which  is  Construction  Complete  and  open for
business.

                  (f) Except as set forth in  Schedule 6 annexed  hereto,  there
are no pending or, to the  knowledge  of the  Borrower,  threatened  proceedings
relating  to any (i)  taking  by  eminent  domain or other  condemnation  of any
portion of any  Mortgaged  Property,  (ii)  condemnation  or  relocation  of any
roadways  abutting  any  Mortgaged  Property  and (iii)  denial of access to any
Mortgaged Property from any point of access to such Mortgaged  Property,  in any
such case not accounted for in the Plans and Specifications.

                  (g) Each Mortgaged  Property has adequate and permanent  legal
access to water,  gas, and  electrical  supply,  storm,  and  sanitary  sewerage
facilities,  other  required  public  utilities  (with  respect  to  each of the
aforementioned  items by means of either a direct  connection  to the  source of
such  utilities  or through  easements  or  connections  available  on  publicly
dedicated  roadways directly  abutting such Mortgaged  Property),  parking,  and
means of access  between  such  Mortgaged  Property  and  public  highways  over
recognized  curb cuts,  and all of the foregoing  comply with all applicable Use
Requirements.

                  (h) Each Mortgaged  Property  constitutes a legally subdivided
lot under all applicable Use Requirements (or, if not subdivided, no subdivision
or platting of such Mortgaged Property is required under applicable Requirements
of Law), and for all material purposes each Mortgaged Property may be mortgaged,
conveyed, and otherwise dealt with as an independent parcel.

     Section 4.18 Full and Accurate Disclosure.  No statement of fact made by or
on  behalf  of the  Borrower  in  this  Agreement  or in any of the  other  Loan
Documents  (other than any Loan  Documents to which neither the Borrower nor any
Affiliate is a party),  or any certificate or financial  statement  furnished by
the Borrower to the Administrative  Agent or any Lender when made or deemed made
or the date as of which such  certificate  or  statement  speaks or is deemed to
speak, as the case may be, contains any untrue  statement of a material fact or,
to the best of Borrower's knowledge,  omits to state any material fact necessary
to make statements contained herein or therein not misleading.

<PAGE>

     Section 4.19 Solvency.  Within the meaning of Section 548 of the Bankruptcy
Code, the Uniform Fraudulent Transfer Act and the Uniform Fraudulent  Conveyance
Act as in effect in any relevant jurisdiction, and any similar laws or statutes,
and  after  giving  effect to the  transactions  contemplated  hereby:  the fair
saleable value of the Borrower's assets exceeds and will,  immediately following
the disbursement of the Loan or of any borrowing of the Revolving Portion of the
Loan, exceed the Borrower's total  liabilities  including,  without  limitation,
subordinated,  unliquidated,  disputed,  and  contingent  liabilities;  the fair
saleable value of the Borrower's assets is and will,  immediately  following the
disbursement  of the Loan or of any  borrowing of the  Revolving  Portion of the
Loan, be greater than the Borrower's probable liabilities, including the maximum
amount of its contingent  liabilities on its debts as such debts become absolute
and  matured;  the  Borrower's  assets  do not and,  immediately  following  the
disbursement  of the Loan or of any  borrowing of the  Revolving  Portion of the
Loan,  constitute  unreasonably  small  capital  to carry  out its  business  as
conducted or as proposed to be  conducted;  and the Borrower does not intend to,
and does not  believe  that it will,  incur  debts  and  liabilities  (including
without  limitation  contingent  liabilities and other  commitments)  beyond its
ability to pay such debts as they  mature  (taking  into  account the timing and
amounts of cash to be received by the  Borrower and the amounts to be payable on
or in respect of obligations of the Borrower).

     Section  4.20 Not Foreign  Person.  The  Borrower is not a Aforeign  person
within the meaning of Section 1445(f)(3) of the Code.

     Section 4.21 Assessments.  Subject to the provisions of Section 5.5 hereof,
except as set forth in  budgets  submitted  to the  Administrative  Agent or its
predecessor-in-interest  under the Original  Agreement or the First Restatement,
there are no pending or, to the Borrower's knowledge,  proposed special or other
assessments  for  public  improvements  or  otherwise  affecting  any  Mortgaged
Property,  nor,  to  the  Borrower's  knowledge,   are  there  any  contemplated
improvements to any Mortgaged  Property that may result in such special or other
assessments.

     Section  4.22  Flood  Zone.  Except  as  disclosed  by a survey  heretofore
delivered to the  Administrative  Agent,  no Mortgaged  Property is located in a
flood hazard area as defined by the Federal Emergency Management Agency.

     Section 4.23 Physical  Condition.  Subject to the provisions of Section 5.5
hereof,  each Mortgaged Property is free of material  structural defects and all
building systems contained therein are in good working order subject to ordinary
wear and tear.

     Section 4.24  Operation of Premises.  Subject to the  provisions of Section
5.5  hereof,  each  Mortgaged  Property  is being  operated  and  maintained  in
accordance with the Borrower's usual and customary business practices.

<PAGE>

     Section  4.25  Margin  Regulations.  The  Borrower  is not  engaged  in the
business of  extending  credit for the  purpose of  purchasing  or carrying  any
margin stock or margin securities  (within the meaning of Regulations T, U and X
issued by the Board of Governors of the Federal Reserve System), and no proceeds
of any borrowing will be used, directly or indirectly,  to purchase or carry any
margin stock or margin  securities or to extend credit to others for the purpose
of  purchasing  or carrying any margin stock or margin  securities.  None of the
transactions  contemplated  by  this  Agreement  will  violate  or  result  in a
violation of Section 7 of the Securities Exchange Act of 1934, as amended.

     Section 4.26 Hazardous Materials.  Subject to the provisions of Section 5.5
hereof,  except  as  disclosed  in  the  Studies  heretofore  delivered  to  the
Administrative  Agent,  to the best of the  Borrower's  knowledge,  no Hazardous
Materials  are located on or about the Mortgaged  Properties,  and the Mortgaged
Properties do not contain any  underground  tanks for the storage or disposal of
Hazardous Materials.  Further,  subject to the provisions of Section 5.5 hereof,
except  as  disclosed  in the  Studies,  (i) the  Borrower  has not,  and to the
knowledge of the  Borrower no other party has,  (A) stored or treated  Hazardous
Materials on the Mortgaged  Properties,  (B) disposed of Hazardous  Materials or
incorporated Hazardous Materials on the Mortgaged Properties,  and (C) permitted
any  underground  storage  tanks to exist on the Mortgaged  Properties,  (ii) no
complaint,  order,  citation  or  notice  with  regard to air  emissions,  water
discharges,  noise  emissions,  or  Hazardous  Materials,  if any,  or any other
environmental,  health, or safety matters affecting the Mortgaged  Properties or
any portion thereof,  from any person,  government or entity, has been issued to
the Borrower  which has not been  remedied or cured,  and (iii) the Borrower has
complied with all Requirements of Law affecting the Mortgaged Properties.

     Section 4.27 Representations and Warranties in the Loan Documents.  Subject
to the provisions of Section 5.5 hereof, the  representations  and warranties in
each of the Loan  Documents  (except  with  respect to the  representations  and
warranties  expressly  provided as being made only as of the  Closing  Date) are
true,  complete and correct in all material  respects,  and the Borrower  hereby
confirms  each such  representation  and  warranty as being true,  complete  and
correct in all material  respects as of the relevant  dates with the same effect
as if set forth in its entirety herein.

     Section 4.28 Loan Documents.  The provisions of the Loan Documents are each
effective to create, in favor of the  Administrative  Agent, a legal,  valid and
enforceable  Lien on or  security  interest in all of the  collateral  described
therein,  and when the appropriate  recordings and filings have been effected in
the  appropriate  public  offices (or, in the case of collateral  represented by
certificates,  when such  certificates  have been pledged to and received by the
Administrative Agent), the Loan Documents will constitute a perfected first Lien
on and  security  interest  in all  right,  title,  estate and  interest  of the
Borrower  or a  Subsidiary  Mortgagor,  as the  case may be,  in the  collateral
described  therein,  prior and superior to all other Liens except for  Permitted
Encumbrances and as otherwise permitted under this Agreement.

     Section 4.29 Balloon Payments. Except as reflected on Schedule 4 hereof, as
of the Closing Date, there are no balloon payments, scheduled balloon amortizing
payments or  scheduled  amortizing  payments  required to be paid at any time in
respect of any Indebtedness (other than Permissible Assumed Indebtedness) of the
Borrower or its Subsidiaries.

         Section 4.30     Subsidiaries

                  (a)     Each Subsidiary Mortgagor is a Subsidiary of Borrower.

<PAGE>

                  (b)  Each   Subsidiary   of  Borrower   has   guaranteed   the
Indebtedness   hereunder  and   reaffirmed   such   guaranty   pursuant  to  the
Reaffirmation of Guaranty, other than (i) any Non-Guarantor Subsidiary which has
no  other  Indebtedness  other  than  non-recourse  debt to  third  parties  and
inter-company  Indebtedness  to the Borrower  which would be  accelerated by the
occurrence of a Default or Event of Default  hereunder  and (ii) the  bankruptcy
remote  Subsidiary  which was formed for the purpose of  entering  into the Sale
Leaseback  Facility.  A  Non-Guarantor  Subsidiary   shall mean a Subsidiary of
Borrower  that all of the  Lenders  agree (i) is  prohibited  from  providing  a
guaranty or (ii) would not be an appropriate  Person,  for reasons acceptable to
Lenders, to provide a guaranty of the Indebtedness hereunder.

     Section 4.31 Nature of Business. Neither the Borrower nor any Subsidiary of
Borrower  is engaged in any  business  other than the  ownership,  construction,
development,  operation and management of extended stay hotel facilities  (other
than businesses and  investments  incidental to the  development,  operation and
management of extended stay hotel facilities), the management for a fee of other
lodging facilities or the licensing of the operation of extended stay facilities
under the AHomestead name, which licensing business does not have start-up costs
in excess of one million dollars ($1,000,000).

     Section 4.32 Indebtedness. The Indebtedness set forth on Schedule 4 annexed
hereto  represents  the  only  outstanding  Indebtedness  of  Borrower  and  its
Subsidiaries on the Closing Date.

                              ARTICLE V. COVENANTS

     Section 5.1 Certain  Affirmative  Covenants.  So long as any portion of the
Loan remains  outstanding  or any amounts due to the Lenders  hereunder or under
the  Promissory  Notes or the other Loan  Documents  shall  remain  unpaid,  the
Borrower  will,  and, to the extent any of the following  relates to a Mortgaged
Property  any  portion  of or  interest  in which  is  owned  by any  Subsidiary
Mortgagor, the Borrower will cause each such Subsidiary Mortgagor,  with respect
to such Mortgaged  Property,  to (unless expressly waived by the  Administrative
Agent or the Lenders as provided herein):

                  (a) Payment. Duly and punctually pay or reimburse when due or,
if there is no specified due date, when demanded,  the principal and interest on
the  Promissory  Notes and all other  amounts due under this  Agreement  and the
other Loan Documents.

                  (b) Existence, Etc. (i) Preserve and maintain its existence in
Maryland, and (ii) preserve and maintain its rights and franchises in each state
in which there  exists a Mortgaged  Property  (unless the failure to so preserve
and maintain its rights and franchises  would not constitute a Material  Adverse
Change).

<PAGE>

                  (c) Compliance  With Laws,  Etc.  Subject to the provisions of
Section  5.5  hereof,  comply  with  all  applicable  Requirements  of Law,  Use
Requirements  and all  agreements  and  grants of  easements  or  rights-of-way,
permits, declarations of covenants, conditions and restrictions, disposition and
development  agreements,  planned unit  development  agreements,  management  or
parking  agreements,  party wall agreements or other  instruments  affecting the
Mortgaged Properties.

                  (d)  Payment  of Taxes and  Claims,  Etc.  Pay (i) all  taxes,
assessments and governmental charges imposed upon it or upon its property (other
than  the  Mortgaged  Properties),  unless  the  failure  to so  pay  would  not
constitute  or  result  in a  Material  Adverse  Change,  (ii)  subject  to  the
provisions of Section 5.5 hereof and subparagraph  (iii) of this Section 5.1(d),
all taxes,  assessments  and  governmental  charges  imposed upon the  Mortgaged
Properties,  and all claims (including,  without  limitation,  claims for labor,
materials, supplies, or services) which might, if unpaid, become a Lien upon the
Mortgaged Properties or any of them unless, in each case, the validity or amount
thereof is being  contested  in good faith by  appropriate  proceedings  and the
Borrower has maintained  adequate  reserves with respect thereto,  and (iii) all
taxes,   assessments  and  governmental   charges  imposed  upon  the  Mortgaged
Properties which would, if unpaid,  become a Lien senior in priority to the Lien
of any of the  Mortgages  within ten (10) days after  Borrower's  notice of such
Lien (unless the taxes,  assessments or governmental  charges to which such Lien
relates are being contested in good faith by appropriate  proceedings which have
the effect of staying  enforcement or execution of such Lien and with respect to
which adequate  reserves in conformity with GAAP have been provided on the books
of Borrower).

                  (e)  Keeping  of Books.  Keep  accurate  records  and books of
account  in  which  full,  accurate  and  correct  entries  shall be made of all
dealings or  transactions  in relation to its business and affairs in accordance
with GAAP.  Upon reasonable  prior notice and during normal business hours,  the
Borrower  shall  permit  representatives  of any Lender to visit its offices and
inspect,  examine and make abstracts  from any of its books and records,  and to
discuss the  business,  operations,  and  financial  and other  condition of the
Borrower with  officers and  employees of the Borrower and with its  independent
certified public accountants, if any, in the presence of a representative of the
Borrower.

                  (f) Visitation,  Inspection, Etc. Permit any representative of
the  Administrative  Agent  or the  Lenders  to  visit  and  inspect  any of the
Mortgaged  Properties,  to examine  its books and records and to make copies and
take extracts therefrom, and to discuss its affairs, finances, and accounts with
its  officers,  accountants,  and agents,  all upon  reasonable  notice from the
Administrative Agent during normal business hours.

                  (g) Maintenance of Property.  Keep all Mortgaged Properties in
good working order and condition  and operate  Mortgaged  Properties in a manner
consistent  with the operation  thereof as an extended stay facility,  including
ancillary  facilities  related  thereto,  and otherwise  consistent with prudent
business practices.

                  (h)0  Management of  Properties. Subject to the  provisions of
Section 5.5 hereof,  Borrower or a Subsidiary of Borrower shall directly operate
and manage the  business of the  Borrower at each of the  Mortgaged  Properties;
provided,  however,  that with the prior written  consent of all of the Lenders,
which consent shall not be unreasonably  withheld, the Borrower may hire another
Person to operate and manage any Mortgaged Property.

<PAGE>

                  (i)      Hazardous  Materials  Removal.  Subject to the
provisions of Section 5.5 hereof,  abate and/or  remove any Hazardous  Materials
present in, on or under any of the  Mortgaged  Properties  in  violation  of any
applicable Requirement of Law.

                  (j)  Covenants  in  the  Loan   Documents.   Subject  to  the
provisions  of Section  5.5  hereof,  perform  all  covenants  (affirmative  and
negative) contained in each of the Loan Documents with the same effect as if set
forth in their entirety herein.

                  (k)     Insurance.  Subject  to the  provisions  of  Section
5.5  hereof,  maintain  upon  or  in  connection  with  each  of  the  Mortgaged
Properties:

                           (i)      Property and  casualty  insurance  coverage
evidenced by original or certified  copies of insurance  policies or binders for
such insurance,  together with evidence that the premiums for such policies have
been paid current.  Such  insurance  policies shall insure each of the Mortgaged
Properties  for one  hundred  percent  (100%)  of their  full  replacement  cost
(exclusive of footings and  foundations)  in so-called  All risk  form and with
coverage for floods,  earthquakes  (except as provided in subsection (ii) below)
and such other hazards (including collapse  and explosion ) as the Lenders may
require  for  each  of the  Mortgaged  Properties  and as  are  consistent  with
reasonable and customary  requirements in the industry.  Such insurance policies
shall contain replacement cost and agreed amount endorsements (with no reduction
for depreciation),  an endorsement  providing Building Ordinance Coverage and an
endorsement covering the costs of demolition and increased costs of construction
due to the  enforcement  of building  codes or  ordinances.  To the extent there
exists a boiler on the  premises of any of the  Mortgaged  Properties,  Borrower
shall  also  furnish  insurance  providing  boiler and  machinery  comprehensive
coverage for all mechanical  and electrical  equipment at each of such Mortgaged
Properties  insuring  against  breakdown  or  explosion  of such  equipment on a
replacement cost value basis.  Borrower shall also furnish business interruption
or loss of rental  income  insurance in  connection  with all policies  covering
property and boiler and  machinery  insurance  for a period of not less than one
(1) year endorsed, other than with respect to boiler and machinery insurance, to
provide a 180 day extended  period of indemnity.  All insurance  required  under
this subsection  5.1(k) shall be with companies and in amounts and with coverage
and deductibles  satisfactory to the Lenders.  All insurance required under this
subsection  5.1(k)(i)  with respect to the  Mortgaged  Properties  shall include
endorsements  naming  the  Administrative  Agent as loss  payee,  and shall have
endorsed thereon the standard  mortgagee  clause in favor of the  Administrative
Agent.  All companies  issuing policies  required under subsection  5.1(k) shall
have a current Best  Insurance  Reports  rating no less favorable than A- , and
all such  companies  shall be licensed  to do  business in the states  where the
applicable Mortgaged Property is located. All policies required under subsection
5.1(k)  shall  provide that (A) the  insurance  evidenced  thereby  shall not be
canceled or modified without,  in the case of non-payment of premiums,  at least
ten  (10)  days  prior  written  notice  from  the  insurance  carrier  to  the
Administrative Agent, or, in any other circumstance,  at least thirty (30) days
prior written notice from the insurance carrier to the Administrative Agent; and
(B) no act or thing done by the  Borrower,  or any  Affiliate of any of Borrower
shall  invalidate the policy as against the Lenders.  The Borrower shall deliver
renewal  certificates  of all policies of insurance  required  under  subsection
5.1(k) and requested by the Administrative Agent, together with written evidence
that  the  premiums  are paid  current,  at least  ten  (10)  days  prior to the
expiration of the then current policy.

<PAGE>

                           (ii)      earthquake  insurance  provided  for  in
subsection  5.1(k)(i)  only for the Mortgaged  Properties and only to the extent
(A) any Mortgaged  Property is located in an earthquake  prone area and (B) such
insurance is available at commercially reasonable rates.

                           (iii)0      Liability  and  worker's  compensation
insurance  evidenced  by original or  certified  copies of  insurance  policies,
binders for such insurance policies, or certificates of insurance, together with
evidence  that the  premiums  for such  policies  have been paid  current.  Such
insurance  shall  provide  for  (A)  commercial  general  liability   (including
contractual  liability)  covering  each  of the  Mortgaged  Properties  and  the
Borrower's and its Subsidiaries  operations  thereon in an amount not less than
$1,000,000  per  occurrence  and not less than  $1,000,000 per occurrence in the
aggregate;  (B)  commercial  automobile  liability  with a limit  not less  than
$1,000,000  combined  single  limit and be  endorsed to cover  owned,  hired and
non-owned  automobiles;  and (C) worker's compensation insurance covering all of
the Borrower's and its Subsidiaries employees and contracted parties (including
their  employees)  situated at the Mortgaged  Properties in accordance  with the
statutory  requirements of the states where the applicable Mortgaged Property is
located and including an endorsement  for  employer's  liability  coverage.  The
Borrower  shall  also  furnish  umbrella  liability  coverage  in  excess of the
foregoing  liability  coverage  with a limit of not less  than  $9,000,000.  The
commercial  general  liability and  automobile  policies and umbrella  liability
policy shall name the Lenders as additional  insureds.  Such policies shall also
contain a so-called Aproducts-completed operations endorsement.

                           (iv)     Insurance insuring against loss or damage by
perils  customarily  included under  standard  Abuilder's  risk completed  value
non-reporting  form  and which include all  insurance  required to be carried by
Borrower, as Aowner,  under the provisions of all construction  contracts let by
Borrower;  provided that such insurance shall insure all  construction on all of
the Mortgaged Properties,  including, without limitation, the construction of an
extended  stay  facility  and  ancillary  facilities  related  thereto  on  each
Mortgaged  Property,  including  all  materials  in storage and while in transit
during construction.

                           (v)      flood  insurance  with respect to any
Mortgaged  Property which is at any time  identified by the Secretary of Housing
and Urban Development as having special flood hazards.

<PAGE>

                  (l) Further  Assurances.  The Borrower  agrees upon demand of
the Administrative  Agent (i) to do any act or execute any additional  documents
(including,  but not limited to, security  agreements on any personalty included
or to be  included  in the  Collateral)  as may be  reasonably  required  by the
Administrative Agent to confirm the Lien of the Loan Documents or to exercise or
enforce  its  rights  under this  Agreement,  the  Promissory  Notes or the Loan
Documents  and to  realize  thereon,  and (ii) to  execute  and  deliver  to the
Administrative Agent and/or the Lenders such additional documents and to provide
such additional  information as the Administrative  Agent and/or the Lenders may
reasonably  require to carry out or confirm the terms of this  Agreement  or the
other Loan  Documents.  This  covenant  shall  survive the  termination  of this
Agreement  until  payment  in full of all  amounts  due  hereunder  or under the
Promissory  Notes and the Loan  Documents,  provided that the covenant  shall be
reinstated if any payment of all amounts due  hereunder or under the  Promissory
Notes and the Loan  Documents  is  required  to be  returned to the payor or any
other party under any applicable bankruptcy law.

                  (m)     Year 2000 Compliance.

                           (i)      Borrower has reviewed its  business  and
operations  and has  developed  a plan (the Y2K  Plan ) to  address on a timely
basis  the  risk  that  computer  applications  used  by it in  performing  date
sensitive  functions  and  involving  dates  prior  to  December  31,  1999  and
thereafter  (such risk being  herein  referred  to as the AY2K  Problem )  would
reasonably be expected to have a Material Adverse Effect.

                           (ii)     Pursuant to the Y2K Plan, Borrower is taking
and will take reasonable efforts to address the Y2K Problem on an ongoing basis.

     Section 5.2 Reporting  Covenants.  So long as the Loan remains in effect or
any monetary  obligation to the Lenders  hereunder or under the Promissory Notes
or the other Loan Documents  shall remain  unpaid,  the Borrower will furnish to
the  Administrative  Agent  at the  Borrower's  sole  cost and  expense  (unless
expressly waived by the Administrative Agent or the Lenders as provided herein).

                  (a) Annual Financial  Statements With Respect to the Borrower.
As soon as available  and in any event within  ninety (90) days after the end of
each  fiscal  year  (unless the filing  requirements  have been  extended by the
Securities  and Exchange  Commission  (SEC ),  in which case the 90-day  period
shall be  extended  until the earlier of the date of filing with the SEC or such
extended date granted by the SEC), a consolidated  balance sheet of the Borrower
and its  Subsidiaries  as at the end of such year and the  related  consolidated
statements of income,  shareholders  equity,  and cash flow of the Borrower and
its Subsidiaries for such fiscal year, setting forth in each case in comparative
form the figures for the previous  fiscal  year,  all in  reasonable  detail and
accompanied by a report thereon of Arthur Andersen or other  independent  public
accountants  of  comparable  recognized  national  standing  acceptable  to  the
Administrative  Agent,  which such report  shall be  unqualified  as to scope of
audit and shall state that such consolidated financial statements present fairly
the consolidated  financial condition as at the end of such fiscal year, and the
consolidated  results of  operations  and  changes in cash flow for such  fiscal
year,  of the Borrower  and its  Subsidiaries  in  accordance  with GAAP,  and a
statement of sources and uses of funds in the form of Exhibit I,  indicating  to
Administrative Agent's satisfaction, that (A) the Borrower's sources and uses of
funds are in balance with  respect to  Borrower's  business in general,  (B) the
Borrower  has  adequate   sources  to  make  each  Project   under   Development
Construction  Complete and (C) the Borrower has adequate  sources to satisfy the
Borrower's cash requirements.

<PAGE>

                  (b)  Quarterly  Financial   Statements  With  Respect  to  the
Borrower. As soon as available and in any event within sixty (60) days after the
end of each fiscal  quarter other than the last fiscal  quarter of a fiscal year
(unless the filing  requirements have been extended by the SEC in which case the
60-day period shall be extended until the earlier of the date of filing with the
SEC or such extended date granted by the SEC), a  consolidated  balance sheet of
the Borrower and its  Subsidiaries as at the end of such quarter and the related
consolidated  statements  of  income  and  cash  flow  of the  Borrower  and its
Subsidiaries  for such fiscal  quarter  and/or for the portion of the Borrower's
fiscal  year  ended at the end of such  quarter,  setting  forth in each case in
comparative form the figures for the corresponding quarter and the corresponding
portion of the Borrower's  previous  fiscal year,  all in reasonable  detail and
certified by the Controller or chief financial officer of the Borrower that they
are complete and correct and that they fairly present the consolidated financial
condition  as at the end of such fiscal  quarter,  the  consolidated  results of
operations  and changes in cash flow for such fiscal quarter and/or such portion
of the  Borrower's  fiscal  year,  of  the  Borrower  and  its  Subsidiaries  in
accordance  with GAAP (subject to normal,  year-end  audit  adjustments),  and a
statement of sources and uses of funds in the form of Exhibit I,  indicating  to
Administrative  Agent's satisfaction that (A) the Borrower's sources and uses of
funds are in balance with  respect to  Borrower's  business in general,  (B) the
Borrower  has  adequate   sources  to  make  each  Project   under   Development
Construction  Complete and (C) the Borrower has adequate  sources to satisfy the
Borrower's cash requirements.

                  (c) Annual  Financial  Statements  With  Respect to  Mortgaged
Properties.  As soon as available  and in any event within 90 days after the end
of each fiscal year of the Borrower or at such time as the financial  statements
described in Section 5.2(a) above are furnished to the  Administrative  Agent, a
statement with respect to each of the Mortgaged Properties for such fiscal year,
each of which  statements  shall (i) be in the form of Exhibit J annexed hereto,
and contain in  comparative  form the  information  required  to  complete  such
Exhibit in the manner and detail  contemplated  by such Exhibit,  (ii) set forth
the Net Operating  Income of each such Mortgaged  Property in comparative  form,
and (iii) be  certified  by the  Controller  or chief  financial  officer of the
Borrower  that they are  complete  and correct and that they fairly  present the
information  required to complete  such Exhibit for each such property as at the
end of such  fiscal  year,  in  accordance  with GAAP and (iv)  state  that such
statement presents fairly the information  required to complete such Exhibit for
each such property as at the end of such fiscal year, in accordance with GAAP.

                  (d) Quarterly  Financial  Statements With Respect to Mortgaged
Properties.  As soon as available and in any event within thirty (30) days after
the end of each fiscal quarter of Borrower,  a statement with respect to each of
the  Mortgaged  Properties as at the end of such fiscal  quarter,  each of which
statements shall (i) be in the form of Exhibit J annexed hereto,  and contain in
comparative form the information required to complete such Exhibit in the manner
and detail contemplated by such Exhibit, (ii) set forth the Net Operating Income
of each such Mortgaged  Property in comparative  form, and (iii) be certified by
the Controller or chief financial officer of the Borrower that they are complete
and correct and that they fairly  present the  information  required to complete
such Exhibit for each such property as at the end of such Accounting  Period, in
accordance with GAAP (subject to normal, year-end audit adjustments).

<PAGE>

                  (e)  No  Default/Compliance  Certificate.  Together  with  the
financial  statements  required  pursuant to  subsections  (a), (b), (c) and (d)
above,  a certificate of the  President,  the Controller or the chief  financial
officer  of the  Borrower  to the  effect  that,  based  upon  a  review  of the
Borrower's  activities and such financial  statements  during the period covered
thereby,  there exists no Event of Default and no Default under this  Agreement,
or if there exists an Event of Default or a Default  hereunder,  specifying  the
nature  thereof  and the  Borrower's  actions  taken or  proposed to be taken in
response thereto.  The President,  the Chief Financial Officer or the Controller
of the Borrower shall  complete the form of certificate  annexed as Exhibit G to
this Agreement and shall certify thereon that the Borrower is in compliance with
all financial covenants under this Agreement.

                  (f)  Notice of Default or Events of  Default.  Promptly  after
acquiring  knowledge of the  occurrence  of a Default or an Event of Default (or
the  occurrence  of any event or  existence of any  condition  which but for the
application  of Section 5.5 would  constitute a Default or Event of Default),  a
certificate of the president or chief financial officer or the Controller of the
Borrower  specifying  the nature thereof and the  Borrower's  proposed  response
thereto.

                  (g) Litigation. Promptly after (i) the occurrence thereof, the
Borrower  shall deliver notice of the  institution of or any  development in any
action,   suit,  or  proceeding  or  any   governmental   investigation  or  any
arbitration,   before  any  court  or   arbitrator   or  any   governmental   or
administrative body, agency, or official,  against the Borrower or any Mortgaged
Property in writing,  (ii) the Borrower receives actual knowledge  thereof,  the
Borrower  shall  deliver  notice  of  the  threat  of  any  such  action,  suit,
proceeding,  investigation,  or  arbitration,  or  (iii)  receipt  thereof,  the
Borrower shall deliver notice of any claims  relating to the Lenders  interests
or any proposal by a Governmental Authority to acquire any part of the Mortgaged
Properties  (other than any such proceeding or development  which, as reasonably
likely to be determined,  would not  constitute or result in a Material  Adverse
Change).

                  (h) Adverse  Change.  Immediately  after the Borrower knows of
the occurrence of any Material Adverse Change, a certificate of any Co-Chairman,
the President,  any Senior Vice President,  any Vice President or the Controller
or chief financial officer of the Borrower specifying the nature of such change.

                  (i) Shareholder  Communications,  Filings,  Etc. Promptly upon
the  mailing  or  filing  thereof,  the  Borrower  shall  deliver  copies of all
financial  statements,  reports,  and proxy statements  mailed to the Borrower's
shareholders  generally,  and copies of all final  registration  statements  and
other final documents filed with the Securities and Exchange  Commission (or any
successor thereto) or any national securities exchange.

                  (j) Title Endorsements. On or before March 31, 2001 and on or
before each March 31  occurring  thereafter  during the term of the Loan,  title
policy  endorsements  which  have the  effect of  redating  the  title  policies
insuring the Liens of the Mortgages with no exceptions  other than the Permitted
Exceptions,  to be obtained at Borrower's  sole cost and expense and to be dated
as of a date no later  than the date  which is  thirty  (30)  days  prior to the
outside date for the delivery thereof.

                  (k) FIRREA  Appraisals.  On or before the date which is sixty
(60) days after the Closing Date,  FIRREA Appraisals with respect to each of the
eight  Mortgaged  Properties  to which an  appraised  value is not  ascribed  on
Schedule 1 annexed hereto.

                  (l)     Updated  Appraisals.  On or before  April 30,  2001,
FIRREA Appraisals with respect to each of the Mortgaged Properties,  dated as of
a date not more  than 60 days  prior to April  30,  2001.  Such  appraisals  are
referred to herein , collectively, as the AUpdated Appraisals.

<PAGE>

                  (M)    Other  Information.  With reasonable  promptness,  such
information  about the  Borrower,  Realty and the  Mortgaged  Properties  as the
Administrative Agent or the Lenders may reasonably request from time to time.

         Section 5.3  Certain Negative Covenants. Neither  Borrower nor, with
respect to  subsection  (a),  (m) to (t),  (v), (w) or (x),  any  Subsidiary  of
Borrower will:

                  (a)      Indebtedness. Create, incur, assume, or suffer to
exist, any Indebtedness other than:

                           (i)      the Indebtedness hereunder and under the
other Loan Documents; and

                           (ii)      Indebtedness  outstanding  on  the  date
hereof which is reflected in the Borrower's  financial statements referred to in
Section 4.5(a) and in Schedule 4 annexed hereto;

                           (iii)      unsecured  liabilities  (not the result of
borrowing)  incurred in the ordinary course of business for current purposes and
not represented by any note or other evidence of Indebtedness  and which are not
past due more than 90 days;

                           (iv)      non-recourse   Indebtedness   to   third
parties (Permissible Assumed Indebtedness);

                           (v) liability to a surety under  performance bonds or
similar instruments  incurred in connection with the Borrower's  construction of
extended stay facilities on the Borrower's property;

                           (vi)      Indebtedness  due and  payable  solely  to
a Subsidiary of Borrower or by a Subsidiary to Borrower; and

                           (vii)      The guaranty of lease obligations under
the Sale-Leaseback Facility;

                           (viii) subject to Lenders prior written consent,
which consent  shall not be  unreasonably  withheld,  and provided no Default or
Event of Default has occurred,  Indebtedness arising from the refinancing of the
Indebtedness referred to in Schedule 4 annexed hereto; provided:

                                    (a)     such refinanced Indebtedness is not
secured by any of the Collateral;

                                    (b)     then existing  non-recourse
Indebtedness is not exchanged for recourse (however limited) Indebtedness;

                                    (c)     Borrower,  prior to and following
the closing of such  refinancing,  is in compliance with the covenants set forth
in this Article V; and

<PAGE>

                                    (d)     such  refinanced   Indebtedness
does not make any change in, the condition or affairs of Borrower  which, in any
Lender's opinion, increases its credit risk.

                  (b)  Total   Liabilities.   (1)  Permit   there  to  be  Total
Liabilities of Borrower,  at any time, in excess of the amount equal  fifty-five
percent (55%) of Gross Asset Value C Cost.

                           (i)   Permit there to be Total  Liabilities  of
Borrower, at any time, in excess of the amount equal to:

                                    (a)     for the first  calendar  quarter of
2000, 65% of Gross Asset Value C Market;

                                    (b)     for the second  calendar  quarter of
2000, 60% of Gross Asset Value C Market;

                                    (c)     for the third  calendar  quarter of
2000, 57.5% of Gross Asset Value C Market; and

                                    (d)     for the fourth  calendar  quarter of
2000 and  thereafter at all times up to and including the Maturity  Date, 55% of
Gross Asset Value Market.

                  (c) Aggregate  Indebtedness.  (1) Permit there to be aggregate
Indebtedness  of the  Borrower,  at any time,  in excess of the amount  equal to
fifty percent (50%) Gross Asset Value Cost.

                           (i)      Permit there to be aggregate  Indebtedness
of the Borrower, at any time, in excess of the amount equal to:

                                    (a)     for the first  calendar  quarter of
2000, 60% of Gross Asset Value Market;

                                    (b)     for the second  calendar  quarter of
2000, 55% of Gross Asset Value Market;

                                    (c)     for the third  calendar  quarter of
2000, 52.5% of Gross Asset Value Market; and

                                    (d)     for the fourth  calendar  quarter of
2000 and at all times  thereafter up to and including the Maturity  Date, 50% of
Gross Asset Value Market.

                  (d)  Interest  Expense  Ratios.  Maintain a ratio of EBITDA to
Interest Expense less than:

                           (i) for the first calendar quarter of 2000, 1.75:1.0;

<PAGE>

                           (ii)      for the second calendar quarter of 2000,
1.90:1.0; and

                           (iii)      for the third  calendar  quarter of 2000
and at all times thereafter up to and including the Maturity Date, 2.00:1.0.

                  (e) Debt Service  Ratios.  Maintain a ratio of Adjusted EBITDA
to Debt Service less than:

                           (i)      for the first calendar quarter of 2000,
1.25:1.0; and

                           (ii)      for the second calendar  quarter of 2000
and at all times thereafter up to and including the Maturity Date, 1.5:1.0.

                  (f) Implied Debt Service Ratios.  Maintain a ratio of Adjusted
Pool NOI to Implied Pool Debt Service less than:

                           (i)      for the first calendar quarter of 2000,
2.00:1.0; and

                           (ii2)      for the second calendar  quarter of 2000
and at all times thereafter up to and including the Maturity Date, 2.25:1.0.

                  (g) Net Worth.  Maintain,  at any time,  a Net Worth less than
eighty five percent  (85%) of its Net Worth as of December  31,  1999,  adjusted
upwards  (but  not  downwards)  by  eighty  five  percent  (85%) of the net cash
proceeds  and  other  value  derived  form the  Borrower's  issuance  of  equity
securities after the Closing Date.

                  (h) Available Amount. Permit the aggregate principal amount of
the Loan at any time to exceed  $110,000,000,  or the aggregate principal amount
of all borrowings of the Revolving Portion of the Loan to exceed $35,000,000.

                  (i)  Dividends  and   Distributions.   Make  any  dividend  or
distribution  prior  to  March  31,  2000.  Thereafter,  make  any  dividend  or
distribution  which would cause the aggregate of all dividends or  distributions
made by the  Borrower  at any time  subsequent  to March 31,  2000 to exceed the
Maximum Dividend Amount,  as determined as of the date of the declaration of the
dividend or distribution,  provided,  however, that in no event may the Borrower
make a dividend or distribution  during the continuance of a Default or Event of
Default.

                  (j) Debt Yield.  Permit  there at any time to be a Debt Yield
with respect to the Mortgaged Properties of less than 20%.

                  (k)     Loan to Appraised Value and Loan to Eligible Costs.

                           (i)      At all times  during the period  commencing
on the  Closing  Date and  ending  on April 30,  2001,  permit  the  outstanding
principal  balance of the Loan to exceed an amount equal to 20% of the aggregate
Appraised Value of the Mortgaged Properties.

<PAGE>

                           (ii)      At all  times  during  the  period
commencing May 1, 2001 and ending on the Maturity Date,  permit the  outstanding
principal  balance of the Loan to exceed an amount equal to 30% of the aggregate
Appraised Value of the Mortgaged Properties.

                         (iii) At all times during the term of the Loan,  permit
the outstanding principal
amount of the Loan to exceed an amount equal to 25% of Eligible Costs applicable
to the Mortgaged Properties.

                  (l)  Security   Capital.   Permit   Security   Capital  Group
Incorporated to directly or, through a wholly-owned  subsidiary,  indirectly own
less than (a)  fifty-one  percent  (51%) of the voting stock in Borrower  before
dilution  due  to  the  conversion  of  the  mortgages  in  favor  of  Archstone
Communities  Trust shown on Schedule 4 or (b) forty-six percent (46%) after such
dilution.

                  (m)  Sales,  Transfers.  Sell,  transfer  or  enter  into any
agreement  for the sale or transfer of any of the  Mortgaged  Properties,  other
than a sale or transfer or an agreement  for the sale or transfer of a Mortgaged
Property with respect to which all  conditions and  requirements  to the Release
thereof  pursuant to Section 8.11 hereof are (as of the date of such  agreement)
capable of being, and upon such sale or transfer shall be, satisfied.

                  (n) Liens. Create, incur, assume, or suffer to exist any Lien
on any  Mortgaged  Property to secure any  Indebtedness  of the  Borrower or any
other Person, other than Permitted Encumbrances.

                  (o) Mergers,  Sales,  Etc. (i) Merge into or consolidate with
any other  Person;  (ii) sell,  assign,  lease,  transfer,  convey or  otherwise
dispose of (in one transaction or a series of transactions) all or substantially
all of the Borrower's or such  Subsidiary's  assets,  as the case may be, to any
Person or group (as such term is used in Section  13(d)(3) of the Exchange Act),
(iii) the liquidation or dissolution of the Borrower or such Subsidiary,  as the
case may be, or the  adoption of a plan by the  stockholders  of the Borrower or
such Subsidiary,  as the case may be, relating to the dissolution or liquidation
of the Borrower or such Subsidiary,  as the case may be, (iv) the acquisition by
any Person or group (as such term is used in Section  13(d)(3)  of the  Exchange
Act), except for Realty or Affiliates  thereof, of a direct or indirect majority
interest  (more  than  50%) of the  voting  power  of the  capital  stock of the
Borrower by way of purchase, merger or consolidation or otherwise; or (v) during
any period of two  consecutive  years,  individuals who at the beginning of such
period  constituted  the Board of Directors of the Borrower  (which includes any
new directors whose election by such Board of Directors or whose  nomination for
election by the  stockholders of the Borrower was approved by a vote of at least
two thirds (2/3) of the directors then still in office who were either directors
at the beginning of such period or whose election or nomination for election was
previously  so  approved)  cease for any reason to  constitute a majority of the
Board of Directors of the Borrower.

                  (p)  Changes in Property or  Business.  Except in  connection
with the  development  of an extended  stay  facility and  ancillary  facilities
related thereto or with the prior written consent of the Required Lenders:

<PAGE>

                           (a)       Make or allow any  material  change to be
made in the nature of the use of any  Mortgaged  Property,  or any part  thereof
from that in effect on the date hereof or the date acquired, as the case may be;
or

                           (b)       Initiate or acquiesce in any change in any
Use Requirements now or hereafter in effect and affecting any Mortgaged Property
or any part thereof.

                  (q) Transactions with Affiliates. Purchase, acquire, or lease
any  property  from,  or sell,  transfer,  or lease any  property to, or lend or
advance any money to, or borrow any money from, or guarantee any  obligation of,
or acquire any stock, obligations, or securities of, or enter into any merger or
consolidation  agreement,  or any  management  or similar  agreement  with,  any
Affiliate,  or enter  into any  other  transaction  or  arrangement  or make any
payments to (including,  without limitation,  on account of any management fees,
service fees, office charges, consulting fees, technical service charges, or tax
sharing  charges) or otherwise deal with, in the ordinary  course of business or
otherwise,   any  Affiliate  on  terms  other  than  arm's-length   commercially
reasonable terms (other than (i) any such  transactions in effect on the Closing
Date and described in Schedule 7 annexed hereto,  and (ii) any such transactions
between  the  Borrower  and any of its  wholly-owned  Subsidiaries  and  between
wholly-owned Subsidiaries of Borrower).

                  (r) Use of Proceeds. Use the proceeds of any borrowing of the
Revolving  Portion  of the Loan for any  purpose  other  than those set forth in
Section 2.15(e) hereof.

                  (s) Change of Business.  Make or allow any material change in
the nature or scope of the business of the Borrower or any Subsidiary, except as
permitted under Section 4.31.

                  (t)     Hazardous Materials. Subject to the provisions of
Section 5.5 hereof:

                           (i)      Use or permit or suffer use of any
Mortgaged  Property or any part thereof or any  interest  therein or conduct any
activity or operations thereon in any manner which:

                                    (a)     would  involve or result in the
occurrence or presence of or exposure to Hazardous  Materials  at, upon,  under,
across or within any Mortgaged  Property or any part thereof not in the ordinary
course of operation;

                                    (b)     would violate any Relevant
Environmental Laws; or

                                    (c)     would result in the occurrence of
any Environmental Discharge.

<PAGE>

                           (ii)      Install  or suffer  or  permit installation
or Presence  on, in or under any  Mortgaged  Property or any part thereof of any
underground or above-ground  containers for the storage of fuel oil, gasoline or
other petroleum products or by-products, except (i) such above-ground containers
that are required for the  operation of the  Mortgaged  Property and that are at
all  times in  compliance  with all  Relevant  Environmental  Laws and any other
applicable  Requirements  of Law and (ii) such  underground  containers that are
required  for the  operation of the  Mortgaged  Property and are at all times in
compliance  with  all  Relevant  Environmental  Laws  and any  other  applicable
Requirements of Law.

                  (u)     Projects under Development.

                           (i)      Permit there to be any Project under
Development other than those with respect to which Borrower shall have delivered
to Agent  evidence  reasonably  satisfactory  to Agent  demonstrating  that such
Projects under Development are capable of being made Construction Complete using
funds readily available to Borrower.

                           (ii)  Permit  the  Total  Costs  of   Projects  under
Development, at any time, to exceed
ten percent (10%) of the lesser of (i) GAV Cost and (ii) GAV Market.

                           (iii)      Permit the  aggregate  amount of
Construction  Budgets to exceed ten percent (10%) of the lesser of (i) GAV Cost
and (ii) GAVC Market.

                  (v) Guarantors. Except as provided in Section 4.30(b), permit
or  suffer  any  Subsidiary  of  Borrower  to  not  guarantee  the  Indebtedness
hereunder.

                  (w)     Investments.

                           (i)      Except  as  set  forth  in  Schedule  5
annexed hereto,  Borrower and its Subsidiaries  shall not own or hold any direct
or indirect  interest in any Capital  Stock,  other than (x) Capital  Stock in a
Subsidiary  of  Borrower  and (y)  Capital  Stock  which  does  not and will not
constitute plan assets , as defined in Section 4.9 hereof.

                           (ii)      Borrower and its Subsidiaries  will not in
the  aggregate  own or hold any  direct or  indirect  interest  with  respect to
unimproved  land in excess of (a) five  percent  (5%) of the lesser of (i) GAV
Cost and (ii) GAV Market.

                           (iii)      Borrower and its Subsidiaries  will not in
the  aggregate  own or hold any direct or indirect  interest in any  mortgage or
other debt or security  instrument  in excess of the lesser of ten percent (10%)
of the lesser of (i) GAV Cost and (ii) GAV Market.

                           (iv)      Borrower and its Subsidiaries  will not in
the aggregate own or hold any direct or indirect  interest,  whether economic or
nominal,  in any limited liability company,  joint venture or partnership (other
than a wholly owned Subsidiary) in excess of fifteen percent (15%) of the lesser
of (i) GAV Cost and (ii) GAV Market, provided that in no event shall Borrower
or its  Subsidiaries  hold an interest in any such entity unless Borrower or the
applicable Subsidiary owns not less than 25% of the beneficial interests in such
entity and has the sole power at all times to direct the  management and affairs
of such entity.

<PAGE>

                           (v)      Borrower  and its  Subsidiaries  will not,
in the  aggregate,  own or hold any direct or indirect  interest  in  unimproved
land,  joint  venture,  limited  liability  company  or  partnership  interests,
mortgages  or other debt or security  instruments  or any other  investments  in
excess of twenty-five percent (25%) of the lesser of (i) GAV Cost and (ii) GAV
Market.

                  (x) Preferred Stock Issuance. Permit there to be any issuance
of preferred stock in Borrower or any Subsidiary Mortgagor.

         Section 5.4  Material Casualties. The  Borrower  agrees that if at any
time prior to the repayment in full of the Loan (including,  but not limited to,
at any time,  prior to or after an Event of Default) any  Mortgaged  Property is
damaged by fire,  earthquake  or other  casualty  in such a manner or to such an
extent  so  that  it is  unlikely,  in  the  Administrative  Agent's  reasonable
judgment,  that such  Mortgaged  Property  will be  restored  on or prior to the
Maturity Date to the same physical,  leased and operating condition as it exists
prior to such  casualty,  the  Borrower  shall,  within  twenty (20) days of the
Administrative Agent's written request,  direct that the insurance proceeds from
the casualty be delivered over to the Administrative Agent, to be applied by the
Administrative  Agent to repayment of or the Borrower's  obligations  under this
Agreement and the other Loan Documents.

         Section 5.5  Effect of Certain Representations of Covenants Being
Inaccurate  or  Breached.  In the  event  that  any of the  representations  and
warranties contained in Sections 4.11, 4.13, 4.15, 4.16, 4.17, 4.21, 4.23, 4.24,
4.26,  4.27,  4.30,  4.31 and 4.32 of this Agreement (or any  representation  or
warranty contained in any other Loan Document which is substantially  similar to
any of the foregoing  representations and warranties) are not accurate when made
or deemed made, or in the event that any of the covenants  contained in Sections
5.1(c),  (d)(ii),  (h),  (i),  (j),  (k)  and (o) and  5.3(t)  (or any  covenant
contained in any other Loan Document  which is  substantially  similar to any of
the foregoing  covenants) are breached,  then,  notwithstanding  anything to the
contrary,  such breach or inaccuracy shall not constitute or be deemed a Default
or  Event  of  Default,  and  Borrower  shall  not be  deemed  to have  made any
misrepresentation,  or breached any  warranty or covenant  unless and until (but
shall, at Administrative Agent's option,  constitute and be deemed a Default and
Event  of   Default,   and   Borrower   shall  be   deemed  to  have  made  such
misrepresentation, or breached such warranty or covenant, if and when):

<PAGE>

                  (a) (1) Borrower is given notice by the  Administrative  Agent
of the  circumstances  which,  but for this Section 5.5, would  constitute  such
misrepresentation,  or breach of warranty or covenant and such circumstances are
not remediated  (i.e, the  circumstances  which would otherwise  constitute such
misrepresentation, or breach of warranty or covenant no longer exist) within (1)
in the case of circumstances  which can be remediated by the payment of a sum of
money only, 10 days after such notice is given, and (2) in the case of all other
circumstances,  thirty  (30)  days  after  such  notice is given  plus,  if such
circumstances cannot reasonably be remediated within thirty (30) days after such
notice is given and the  Borrower  has during such 30-day  period  commenced  to
remediate such  circumstances  and thereafter  diligently  pursues all necessary
efforts to effect such  remediation,  such  additional  period of time as may be
required  to effect such  remediation;  provided,  however,  that if at any time
during any cure  period  described  above  regarding  circumstances  the cost to
remediate  which are  quantifiable,  Borrower  shall not have provided  evidence
satisfactory to the  Administrative  Agent that the Borrower has available to it
sufficient  funds (other than from  borrowings  pursuant to this  Agreement)  to
promptly  effect any such  remediation,  then the cure period provided for above
regarding such circumstances shall immediately expire; and

                           (ii)      upon  the  expiration  of the  applicable
cure period described in Section 5.5(a)(i),  if such circumstances have not been
remediated, the aggregate principal amount of all outstanding borrowings at such
time exceeds the Eligible Maximum  Availability  Amount , as herein defined, at
such  time.  The term  Remediation  Amount  means  the  amount  which  Borrower
certifies to the Administrative Agent in writing (Borrower hereby agreeing to so
certify such amount promptly upon the  Administrative  Agent's request) as being
Borrower's  reasonable estimate (determined in a manner reasonably acceptable to
the Administrative  Agent, the basis for which  determination shall be set forth
in reasonable detail in such certification) of the aggregate cost of remediating
all  circumstances  which  would  constitute  a  misrepresentation  or breach of
warranty or  covenant of any of the  representations,  warranties  or  covenants
described  above in this Section 5.5. The term  Eligible  Maximum  Availability
Amount means, as of the date of expiration of such  applicable cure period,  the
maximum outstanding  principal balance permitted under Section 5.3(k) as of such
date  recomputed by subtracting  from the Eligible Costs and the Appraised Value
of the Mortgaged  Properties the amount by which the Remediation Amount exceeds,
if at  all,  the  lesser  of (x)  $3,000,000.00,  and  (y)  the  greater  of (A)
$300,000.00, and (B) three percent (3%) of the greater of (I) the Eligible Costs
of the  Mortgaged  Properties,  and (II) the  Appraised  Value of the  Mortgaged
Properties; or

                  (b)   all    circumstances    which   would    constitute    a
misrepresentation   or  breach  of   warranty   or   covenant   of  any  of  the
representations,  warranties or covenants  described  above in this Section 5.5,
when taken as a whole, constitute a Material Adverse Change.

In the event that any  misrepresentation  or breach of warranty or covenant with
respect  to one or more  Mortgaged  Properties  occurs  which,  pursuant  to the
provisions  of this Section 5.5,  constitutes  or will  constitute a Default and
Event of Default,  then,  subject to the terms hereof,  Borrower  shall have the
right to substitute  for such affected  Mortgaged  Properties  one or more other
properties  of the Borrower or its  Subsidiaries,  provided that (i) all of such
proposed substitute  properties are acceptable in all respects to the Lenders in
their sole, absolute and subjective discretion, (ii) all other conditions herein
to a property becoming a Mortgaged Property are satisfied and complied with, and
(iii) both before and after  giving  effect to such  proposed  substitution,  no
Default or Event of Default (other than as a result of such misrepresentation or
breach of warranty or covenant) shall exist.

         Section 5.6 New Subsidiaries. In the event any Person becomes a
Subsidiary   after  the  Closing  Date,   the  Borrower  shall  deliver  to  the
Administrative Agent within twenty (20) Business Days of such event, each of the
following items, in form and substance satisfactory to the Administrative Agent:

                  (a)      an  accession  agreement  in the form  annexed
hereto as Exhibit K executed by such Subsidiary;

<PAGE>

                  (b) the articles of  incorporation,  articles of organization,
certificate of limited partnership or other comparable organizational instrument
(if any) of such  Subsidiary  certified as of a recent date by the  Secretary of
State of the State of formation of such Subsidiary;

                  (c) a Certificate  of Good Standing or  certificate of similar
meaning  with  respect  to such  Subsidiary  issued  as of a recent  date by the
Secretary of State of the State of formation of such Subsidiary and certificates
of qualification to transact business or other comparable certificates issued by
each Secretary of State (and any state department of taxation, as applicable) of
each state in which such Subsidiary is required to be so qualified;

                  (d) a  certificate  of  incumbency  signed by the Secretary or
Assistant  Secretary (or other individual  performing similar functions) of such
Subsidiary with respect to each of the officers or other representatives of such
Subsidiary  authorized  to execute and deliver the Loan  Documents to which such
Subsidiary is a party;

                  (e) copies  certified by the Secretary or Assistant  Secretary
of such Subsidiary (or other individual performing similar functions) of (i) the
bylaws of such  Subsidiary,  if a  corporation,  the operating  agreement,  if a
limited liability company,  the partnership  agreement,  if a limited or general
partnership, or other comparable document in the case of any other form or legal
entity and (ii) all corporate, partnership, member or other similar action taken
by such  Subsidiary to authorize the execution,  delivery and performance of the
Loan Documents to which it is a party;

                  (f) an opinion of legal counsel to such Subsidiary,  regarding
the due  formation  and good  standing of such  Subsidiary,  the  authorization,
execution,  delivery and  enforceability  of the Loan Documents to which it is a
party, and such other matter as the Administrative Agent may reasonably request;
and

                  (g)      such  other  documents  and  instruments  as the
Administrative Agent may reasonably request.

                          ARTICLE VI. EVENTS OF DEFAULT

        Section 6.1  Events of Default. The occurrence and continuance of any of
the following specified events shall constitute an Event of Default :

                  (a) Payments. The Borrower shall fail to pay (i) any principal
of the Loan when due, or (ii) within three (3) days when due (including, without
limitation, by mandatory prepayment) (1) any interest on the Loan or any fees or
(2) any other amount payable hereunder or under the other Loan Documents.

                  (b)  Certain  Property   Representations  and  Covenants.  Any
misrepresentation  or breach of warranty or covenant  occurs which,  pursuant to
the  provisions  of  Section  5.5  hereof,  constitutes  a Default  and Event of
Default.

<PAGE>

                  (c)  Other  Covenants.  The  Borrower  or  any  Subsidiary  of
Borrower shall fail to observe or perform any covenant or agreement  (other than
those  referred to in Sections  6.1(a) and (b)) and such  failure  shall  remain
unremedied (i) in the case of any amounts  payable  hereunder or under the other
Loan Documents for three (3) Business Days after notice from the  Administrative
Agent, (ii) in the case of covenants or agreements  contained in Section 5.2(a),
(b), (c) and (d) of this  Agreement,  for fifteen (15)  Business  Days after the
occurrence  thereof;  or (ii) in all other cases, for thirty (30) days after the
occurrence thereof. In the event that a breach of a covenant described in clause
(ii) above cannot be cured within thirty (30) days after the occurrence  thereof
and the Borrower has during such 30-day period commenced to cure such breach and
thereafter  diligently  pursues all necessary efforts to effect a cure, an Event
of Default  shall be deemed only to have occurred if the breach either cannot be
remedied,  or  remains  unremedied,  for sixty  (60) days  after the  occurrence
thereof.

                  (d)   Representations.   Any  representation,   warranty,   or
statement  (other than those referred to in Section 6.1(b)) made or deemed to be
made by the Borrower or any other Person (other than the Administrative Agent or
any Lender) that is a party to any Loan Document under or in connection with any
Loan Document shall have been  incorrect in any material  respect as of the date
hereof, or as of the date deemed to have been made.

                  (e)  Non-Payments of Other  Indebtedness.  The Borrower or any
Subsidiary  of  Borrower  shall  fail to make any  payment  of  principal  of or
interest on any Indebtedness of the Borrower or any such Subsidiary  (other than
any Indebtedness under this Agreement or the other Loan Documents and other than
Permissible  Assumed  Indebtedness) in an aggregate principal amount of not less
than  $5,000,000.00  within the applicable cure period or any event specified in
any note,  agreement,  indenture or other document evidencing or relating to any
such  Indebtedness  shall  occur;  and the effect of such failure or event is to
accelerate,  or to permit the holder of such aggregate Indebtedness or any other
Person to accelerate,  the maturity of such  Indebtedness;  or such Indebtedness
shall be required to be prepaid  (other than by a regularly  scheduled  required
prepayment) in whole or in part prior to its stated maturity.

                  (f) Defaults Under Loan  Documents.  The Borrower or any other
Person  (other than the  Administrative  Agent or any Lender) that is a party to
any Loan  Document  shall fail to observe or perform any  covenant or  agreement
(other than those referred to in Sections 6.1(a) and (b)) contained in any other
Loan Document,  or any default shall occur under any other Loan Document  (other
than those  referred to in Sections  6.1(a) and (b)) and such failure or default
shall remain  unremedied (i) in the case of any amounts  payable under the other
Loan Documents, for three (3) days after notice from the Administrative Agent or
the Administrative Agent, (ii) in the case of covenants or agreements similar to
the covenants or  agreements  contained in Section  5.2(a),  (b), (c) and (d) of
this Agreement,  for fifteen (15) Business Days after the occurrence thereof; or
(iii) in all other cases,  thirty (30) days after the occurrence thereof. In the
event that a breach of a covenant described in clause (ii) above cannot be cured
within thirty (30) days after the occurrence thereof and the Borrower has during
such  30-day  period  commenced  to cure such breach and  thereafter  diligently
pursues all  necessary  efforts to effect a cure,  an Event of Default  shall be
deemed only to have occurred if the breach either cannot be remedied, or remains
unremedied, for sixty (60) days after the occurrence thereof.

<PAGE>

                  (g)  Bankruptcy.  The Borrower shall commence a voluntary case
concerning itself under Title 11 of the United States Code entitled ABankruptcy
as now or hereafter in effect, or any successor thereto (the ABankruptcy Code );
or an involuntary case is commenced against the Borrower and the petition is not
dismissed  within  ninety  (90)  days,  after  commencement  of the  case;  or a
custodian (as defined in the Bankruptcy  Code) is appointed for, or takes charge
of, all or any substantial part of the property of the Borrower; or the Borrower
commences any other proceeding under any reorganization, arrangement, adjustment
of debt, relief of debtors,  dissolution,  insolvency, or liquidation or similar
law of any  jurisdiction  whether  now or  hereafter  in effect  relating to the
Borrower or there is commenced  against the Borrower any such  proceeding  which
remains  undismissed  for a period of  ninety  (90)  days;  or the  Borrower  is
adjudicated  insolvent  or  bankrupt;  or any  order of  relief  or other  order
approving any such case or proceeding  is entered;  or the Borrower  suffers any
appointment of any custodian or the like for it or any  substantial  part of its
property to continue  undischarged or unstayed for a period of ninety (90) days;
or the Borrower makes a general assignment for the benefit of creditors;  or the
Borrower shall fail to pay, or shall state that it is unable to pay, or shall be
unable to pay, its debts  generally  as they become due; or the  Borrower  shall
call a meeting  of its  creditors  with a view to  arranging  a  composition  or
adjustment  of its  debts;  or the  Borrower  shall by any act or failure to act
indicate its consent to,  approval of, or  acquiescence in any of the foregoing;
or any action is taken by the Borrower  for the purpose of effecting  any of the
foregoing; or any of the foregoing shall occur with respect to any Subsidiary of
Borrower.

                  (h) Money  Judgment.  A judgment  or order for the  payment of
money in excess of  $5,000,000  shall be rendered  against  the  Borrower or any
Subsidiary of Borrower and such judgment or order shall continue unsatisfied (in
the case of a money  judgment)  and in effect  for a period of thirty  (30) days
during which execution shall not be effectively  stayed or deferred  (whether by
action of a court, by agreement,  or otherwise) (or, if such judgment is covered
by insurance, such longer period during which the Borrower or such Subsidiary is
appealing or otherwise contesting such judgment in good faith).

                  (i)  Cessation.  Borrower or, without the prior consent of all
Lenders,  which  consent may not be  unreasonably  withheld,  any  Subsidiary of
Borrower which is not an Urban Subsidiary (as hereinafter  defined)  ceases,  or
threatens to cease,  to carry on all or a substantial  part of its business.  As
used  herein,  an Urban  Subsidiary   is a  Subsidiary  of  Borrower  which has
mortgaged property to the Administrative Agent, as agent, pursuant to the credit
facility referred to in subsection (j) below.

                  (j)  Sale-Leaseback  Facility.  A default shall have occurred
under the Sale-Leaseback Facility and shall remain uncured beyond the expiration
of any applicable notice or grace period.

<PAGE>

         Section 6.2  Global Remedies. Upon the occurrence and  continuation of
an Event of Default,  and at any time thereafter,  if any Event of Default shall
then be continuing, the Required Lenders may, by written notice to the Borrower,
take any or all of the following actions, without prejudice to the rights of the
Lenders to  enforce  its claims  against  the  Borrower:  (i)  declare  the Loan
terminated,  whereupon the Loan shall terminate immediately; (ii) declare all or
any portion of the  principal  of and any  accrued  interest on the Loan and all
other  obligations  owing hereunder and under the other Loan  Documents,  to be,
whereupon the same shall become,  forthwith due and payable without presentment,
demand,  protest, or other notice of any kind, all of which are hereby waived by
the Borrower; (iii) foreclose on any Collateral concurrently or in such order as
the Administrative  Agent may from time to time see fit; or (iv) take any action
permitted  under any Loan  Document;  provided,  that,  if any Event of  Default
specified in Section  6.1(g) shall occur,  the actions  specified in clauses (i)
and (ii) above shall be deemed to have  immediately and  automatically  occurred
without the giving of any notice to the Borrower.

<PAGE>

         Section 6.3  Marshalling Waiver of Certain Rights; Recapture. Neither
the  Administrative  Agent  nor the  Lenders  shall be under any  obligation  to
marshall any assets in favor of the Borrower or any other party or against or in
payment  of any  or  all of the  obligations  of  such  parties.  To the  extent
permitted by law the Borrower waives and renounces the benefit of all valuation,
appraisement,  homestead,  exemption,  stay,  redemption,  and moratorium rights
under  or by  virtue  of the  constitution  and laws of the  state in which  the
Mortgaged Properties are located and of any other state or of the United States,
now existing or hereafter enacted. To the extent the Administrative Agent or any
Lender  receives any payment by or on behalf of the  Borrower,  which payment or
any part  thereof is  subsequently  invalidated,  declared to be  fraudulent  or
preferential,  set aside or required to be repaid to the Borrower or its estate,
trustee, receiver, custodian, or any other party under any bankruptcy law, state
or federal  law,  common law,  or  equitable  cause,  then to the extent of such
payment  or  repayment,  the  obligation  or part  thereof  which has been paid,
reduced,  or satisfied by the amount so repaid shall be reinstated by the amount
so repaid and shall be included  within the  liabilities of the Borrower to such
party as of the date such initial payment,  reduction, or satisfaction occurred,
together  with interest at the Default  Rate.  The Borrower  agrees that (i) the
Administrative Agent on behalf of the Lenders shall have the right to pursue all
of its rights and remedies in one proceeding, or separately and independently in
separate  proceedings  from time to time, as the  Administrative  Agent,  in its
reasonable  discretion,  shall  determine from time to time, (ii) the Collateral
may be sold at such  proceeding or  proceedings in one or more sales and in such
portions or combinations as the  Administrative  Agent, in its sole and absolute
discretion,  shall determine,  (iii) the  Administrative  Agent on behalf of the
Lenders shall not be required to marshall assets,  sell any of the Collateral in
any inverse order of  alienation,  or be subject to any Aone action or Aelection
of  remedies  law or rule,  (iv) the  exercise  by the  Lenders of any  remedies
against any one item of Collateral will not impede the Lenders from subsequently
or simultaneously exercising remedies against any other item of Collateral,  and
(v) all  Liens  and  other  rights,  remedies,  or  privileges  provided  to the
Administrative  Agent and the Lenders  under this  Agreement  and the other Loan
Documents shall remain in full force and effect until the  Administrative  Agent
and the Lenders have exhausted all of their remedies  against the Collateral and
all of the Collateral has been  foreclosed,  sold or otherwise  realized upon in
satisfaction of the Promissory  Notes and the other  obligations of the Borrower
to the  Administrative  Agent and the  Lenders.  Each  Lender and its  officers,
directors,  shareholders,  employees,  counsel  and  agents  shall not incur any
liability as a result of the sale of the  Collateral,  or any part  thereof,  in
accordance  with the provisions of this  Agreement or any Loan Document,  or for
the failure to sell or offer for sale the Collateral,  or any part thereof,  for
any reason  whatsoever.  The Borrower  waives any claims against each Lender and
its officers,  directors,  shareholders,  employees,  counsel and agents arising
with respect to the price at which the Collateral, or any part thereof, may have
been sold by reason  of the fact  that  such  price was less than the  aggregate
amount of the  indebtedness due under the Promissory  Notes,  this Agreement and
the other Loan Documents.

         Section 6.4      Application of Proceeds

                  (a) All proceeds received by the  Administrative  Agent or the
Lenders in respect of the  repayment of any sums due  hereunder or in connection
with a  foreclosure  sale of all or any  portion  of the  Collateral  after  the
occurrence  of an Event of  Default  shall be  applied,  first,  to the costs of
enforcement of the Lenders rights hereunder and under the other Loan Documents;
second, to pay any accrued and unpaid interest  (including all interest owing at
the Default Rate),  the principal amount of the Loan and any unpaid fees payable
under this  Agreement and the other Loan  Documents in such order of priority as
the  Administrative  Agent, in its sole and absolute  discretion shall determine
but  subject to the rights of the  Lenders;  and third,  if any excess  proceeds
exist, to the Borrower or any party entitled  thereto as a matter of law. If the
amount of all proceeds  received in liquidation of the Collateral which shall be
applied to payment of the  indebtedness  due in respect of this  Agreement,  the
Promissory  Notes and the Loan Documents  shall be  insufficient to pay all such
indebtedness  or obligations in full,  the Borrower  acknowledges  that it shall
remain liable for any  deficiency,  together with interest  thereon and costs of
collection thereof (including reasonable counsel fees and legal expenses).

                  (b) The Administrative Agent shall have the right, but not the
obligation,  to deposit any proceeds in its possession which are available under
clause third of Section 6.4(a) above into a court of competent  jurisdiction for
determination  by such court of the disposition of such excess proceeds and upon
such deposit,  the  Administrative  Agent shall have no further  liability  with
respect to such proceeds.  All costs and expenses of the Administrative Agent in
connection  with such action may be  deducted  or charged by the  Administrative
Agent  against such excess  proceeds and shall  otherwise be  reimbursed  by the
Borrower upon demand. The Administrative Agent shall have the right, but not the
obligation,  to  request  and  rely  on  the  instructions  of the  Borrower  in
connection with the disposition of any such excess proceeds and, upon compliance
with such  instructions,  shall have no further  liability  with respect to such
proceeds.

<PAGE>

         Section 6.5  Attorneys in Fact.  The   Borrower   hereby   makes,
constitutes and appoints the Administrative Agent, and its agents and designees,
the true and lawful  agents and  attorneys-in-fact  of the  Borrower,  with full
power of  substitution,  to take any or all of the following  actions during the
continuance of an Event of Default: (i) to receive, open and dispose of all mail
addressed to the Borrower relating to the Collateral,  (ii) to notify and direct
the United  States Post Office  authorities  by notice  given in the name of the
Borrower  and signed on its behalf,  to change the  address for  delivery of all
mail  addressed to the Borrower  relating to the  Collateral to an address to be
designated by the  Administrative  Agent, and to cause such mail to be delivered
to such designated address where the Administrative Agent may open all such mail
and remove therefrom any notes,  checks,  acceptances,  drafts,  money orders or
other instruments in payment of the Collateral in which the Administrative Agent
has a security interest hereunder and any documents relative thereto,  with full
power  to  endorse  the  name of the  Borrower  upon  any  such  notes,  checks,
acceptances,  drafts,  money orders or other form of payment or on Collateral or
security of any kind and to effect the deposit and collection  thereof,  and the
Administrative  Agent shall have the further right and power to endorse the name
of the Borrower on any  documents  otherwise  relating to such  Collateral,  and
(iii) to do any and all other things necessary or proper to carry out the intent
of this  Agreement  and to  perfect  and  protect  the liens  and  rights of the
Administrative   Agent  created  under  this   Agreement,   including,   without
limitation, to claim, bring suit, settle or adjust any insurance proceeds claims
relating to the Collateral. The Borrower agrees that neither the Lenders nor any
of  their  officers,  directors,   shareholders,   employees,  counsel,  agents,
designees  or  attorneys-in-fact  will be liable for any acts of  commission  or
omission, or for any error of judgment or mistake of fact or law, except for any
acts of gross negligence or willful misconduct. The powers granted hereunder are
coupled with an interest and shall be irrevocable during the term hereof.

               ARTICLE VII. AGENCY AND INTERCREDITOR RELATIONSHIPS

         Section 7.1  Appointment. Each Lender hereby  irrevocably  designates
and appoints  Commerzbank AG, New York Branch as the contractual  representative
of such  Lender  under  the Loan  Documents,  and each such  Lender  irrevocably
authorizes   Commerzbank   AG,  New  York  Branch  to  act  as  the  contractual
representative  for such  Lender,  to take such  action on its behalf  under the
provisions of this  Agreement and the 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 Loan Documents,  together with such other
powers as are reasonably  incidental thereto. The Administrative Agent shall not
have any duties or  responsibilities,  except those  expressly set forth in this
Agreement and the Loan Documents, or any fiduciary relationship with any Lender,
and no implied covenants,  functions,  responsibilities,  duties, obligations or
liabilities  on the part of the  Administrative  Agent shall be read into any of
the Loan  Documents or otherwise  exist against the  Administrative  Agent.  The
provisions of this Article VII are solely for the benefit of the  Administrative
Agent, the Administrative Agent and the Lenders, and the Borrower shall not have
any rights as a third party beneficiary or otherwise under any of the provisions
of this Article VII. In performing its respective functions and duties under the
Loan  Documents,  the  Administrative  Agent shall act solely as the contractual
representatives  of the Lenders  and do not assume nor shall the  Administrative
Agent be deemed to have  assumed  any  obligation  or  relationship  of trust or
agency with or for the Borrower or any of such party's respective successors and
assigns.

        Section 7.2  Delegation of Duties. The  Administrative  Agent may
execute any of their  duties under the Loan  Documents  by or through  agents or
attorneys-in-fact  and shall be entitled to advice of counsel  (including  their
internal  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.

<PAGE>

     Section 7.3 Exculpatory  Provisions.  The Administrative Agent shall not be
(a) liable for any  action  lawfully  taken or omitted to be taken by it, or any
Person  described in Section 7.2, under or in connection  with any Loan Document
(except  for  those  actions  arising  from  the  gross  negligence  or  willful
misconduct of the Administrative Agent), or (b) responsible in any manner to any
of the Lenders for (i) any recitals,  statements,  representations or warranties
made by the Borrower  contained in any Loan Document,  or by the Borrower in any
certificate, report, statement or other document referred to or provided for in,
or received  under or in  connection  with any Loan  Document or (ii) the value,
validity, effectiveness,  genuineness, enforceability or sufficiency of any Loan
Document or any such certificate,  report, statement or other document, or (iii)
any failure of the Borrower,  or any Lender to perform or observe its respective
obligations hereunder or thereunder. Except as expressly required to do so under
the Loan Documents,  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 any Loan  Document,  or to
inspect the  properties,  or the books or records of the Borrower.  This Section
7.3  is  intended  to  govern  solely  the  relationship  between  each  of  the
Administrative Agent, on the one hand, and the Lenders, on the other.

     Section 7.4 Reliance by the Administrative  Agent. The Administrative Agent
shall be entitled to rely,  and shall be fully  protected  in relying,  upon any
writing, resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram,  telecopy,  telex  or  teletype  message,  statement,  order  or other
document or conversation  (including by telephone)  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,  its  internal  counsel  and counsel to the  Borrower),  independent
accountants  and  other  experts  selected  by  the  Administrative  Agent.  The
Administrative Agent shall be fully justified in failing or refusing to take any
action  under any Loan  Document  unless it shall first  receive  such advice or
concurrence of the Lenders required pursuant to this Agreement 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.

         Section 7.5     Notices

                  (a) The  Administrative  Agent  shall  not be  deemed  to have
knowledge or notice of the  occurrence of any Default or Event of Default unless
(i) such party 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  or (ii) such party,  in its capacity as the
Administrative  Agent, has actual knowledge of such Default or Event of Default.
In the event that the  Administrative  Agent  receives  such a notice or obtains
such actual knowledge, it shall promptly 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 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 the  Administrative  Agent  shall  deem  advisable  and in the  best
interests of the  Lenders.  The  Administrative  Agent shall take no action with
respect  to  a  Default  or  Event  of  Default   except  as   directed  by  the
Administrative  Agent in writing and shall have no  liability to the Borrower or
its  Subsidiaries  or any  Lender  for  acting  on and  carrying  out  any  such
direction.

                  (b) Each  Lender  agrees  that it shall  promptly  notify  the
Administrative  Agent in writing  after it first has knowledge of any Default or
Event of Default  or of any matter  which in such  Lender's  judgment  adversely
affects  any  Lender's  respective  interests  in the Loan,  which  notice  will
describe  the Default or Event of Default or matter in  reasonable  detail.  The
Administrative  Agent  shall  give a copy of any  such  notice  received  by the
Administrative Agent to the other Lenders.

<PAGE>

                  (c) The Administrative Agent shall promptly give copies of the
financial  reports it receives pursuant to Sections 5.2(a) and (b) hereof to the
other  Lenders.  The  Administrative  Agent  shall  promptly  give copies of the
financial  reports it receives  pursuant to Sections 5.2(c) to (e) hereof to the
other Lenders.

        Section 7.6  Non-Reliance on the 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 either of
the Administrative  Agent hereafter taken,  including,  without limitation,  any
review  of the  affairs  of the  Borrower  shall be  deemed  to  constitute  any
representation or warranty by the  Administrative  Agent. Each Lender represents
and warrants 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,  (a)  made  its own
appraisal  of  and  investigation  into  the  business,  operations,   property,
prospects,  financial and other condition,  creditworthiness and solvency of the
Borrower,  (b) satisfied  itself as to the due  execution,  legality,  validity,
enforceability,  genuineness, sufficiency and value of all of the Loan Documents
and all other instruments and documents furnished pursuant to any Loan Document,
and (c) made its own decision as to its  Percentage of the Loan pursuant to 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  analyses,  appraisals and decisions in taking or not taking
action  under  this  Agreement,  and to  make  such  investigation  as it  deems
necessary to inform itself as to the business, operations,  property, prospects,
financial and other condition and  creditworthiness of the Borrower.  Except for
notices,  reports and other documents  expressly  required  pursuant to the Loan
Documents  to be  furnished  by the  Administrative  Agent to the  Lenders,  the
Administrative  Agent, as applicable,  shall not have any duty or responsibility
to  provide  any  Lender  with any credit or other  information  concerning  the
business,  operations,  property,  prospects,  financial and other  condition or
creditworthiness  of the  Borrower  which  may come into the  possession  of the
Administrative  Agent or any of their officers,  directors,  employees,  agents,
attorneys-in-fact or affiliates.

<PAGE>

     Section 7.7  Indemnification.  The Lenders  agree to indemnify  each of the
Administrative   Agent  (in  their  capacities  as  such)  and  their  officers,
directors,  employees,  representatives and agents (to the extent not reimbursed
by the Borrower and without limiting the obligation,  if any, of the Borrower to
do so), ratably in accordance with their  Percentages,  from and against any and
all liabilities,  obligations,  losses, damages, penalties,  actions, judgments,
suits,  costs,  expenses  or  disbursements  of any  kind or  nature  whatsoever
(including,  without  limitation,  the fees and disbursements of counsel for the
Administrative  Agent or such  Person  in  connection  with  any  investigative,
administrative or judicial  proceeding  commenced or threatened,  whether or not
the  Administrative  Agent or such Person shall be  designated a party  thereto)
that  may at any  time be  imposed  on,  incurred  by or  asserted  against  the
Administrative Agent or such Person as a result of, or arising out of, or in any
way related to or by reason of, any of the transactions contemplated by the Loan
Documents or the  execution,  delivery or  performance of any Loan Document (but
excluding  any  such  liabilities,   obligations,  losses,  damages,  penalties,
actions,  judgments,  suits, costs,  expenses or disbursements  resulting solely
from the gross negligence or willful misconduct of the  Administrative  Agent or
such Person as determined by a court of competent jurisdiction).  The agreements
in this  subsection  shall survive the payment of the  Promissory  Notes and all
other amounts payable hereunder.

     Section  7.8  Individual   Capacity.   The  Administrative  Agent  and  its
Affiliates may make loans to, accept  deposits from and generally  engage in any
kind of business  with the Borrower and any of its  Affiliates as though it were
not the  Administrative  Agent  hereunder.  With respect to portions of the Loan
made or renewed by it and any Promissory  Note issued to it, the  Administrative
Agent shall have the same rights and powers  under this  Agreement as any Lender
and may exercise the same as though they were not the Administrative Agent.

     Section 7.9 The administrative Agents Resignation. The Administrative Agent
may resign at any time by giving notice thereof to the Administrative Agent, the
other Lenders and the Borrower.  If the  Administrative  Agent's  resignation is
given in conjunction with an assignment of the  Administrative  Agent's interest
in the  Promissory  Note held by the  Administrative  Agent to another Person or
Persons,  the  Administrative  Agent,  with the consent of the Required Lenders,
shall have the right to name a successor  Administrative  Agent by giving notice
thereof  to the  Administrative  Agent,  the  Borrower  and the  other  Lenders.
Otherwise,  upon the  resignation  of the  Administrative  Agent,  the  Required
Lenders shall designate within forty-five (45) days in writing another Person as
the successor  Administrative  Agent. If such proposed successor  Administrative
Agent agrees in writing to act as the  Administrative  Agent in accordance  with
the terms hereof, such successor Administrative Agent shall thereupon succeed to
and  become  vested  with  all  the  rights,  powers,  privileges,   duties  and
obligations   of  the  resigning   Administrative   Agent,   and  the  resigning
Administrative  Agent shall be discharged from its duties and obligations as the
Administrative  Agent under this  Agreement.  After any retiring  Administrative
Agent's resignation hereunder, the provisions of this Article VII shall inure to
its  benefit as to any  actions  taken or omitted to be taken by it while it was
the Administrative Agent under this Agreement.

<PAGE>

     Section 7.10 Appointment of a Substitute  Administrative Agent. Commerzbank
AG,  New York  Branch  shall be the  initial  Administrative  Agent  under  this
Agreement and the Loan Documents  until the Loan Documents have been  terminated
and the  Lenders  have been paid in full.  In the event that the  Administrative
Agent determines that it is not in the best interest of the Administrative Agent
to continue to act as the Administrative  Agent, then the  Administrative  Agent
may,  at its  option  and upon  thirty  (30) days  prior  written  notice to the
Borrower and the Lenders, request a substitute  Administrative Agent be selected
in accordance with the terms of this Section to act as the Administrative  Agent
with respect to such  matters.  Within  fifteen (15) days after  receipt of such
notice, the Required Lenders shall select a proposed  substitute agent and shall
notify the  Borrower  of the  identity of such  proposed  substitute  agent.  In
addition,  the Required Lenders, on not less than thirty (30) days notice to the
Administrative Agent, may elect to appoint a substitute  Administrative Agent in
the  event  that the  Administrative  Agent  has acted  hereunder  with  willful
misconduct,  gross  negligence  or exhibited a continuing  pattern of negligence
with respect to its duties and obligations hereunder.  Provided that no Event of
Default shall have occurred and be continuing,  Borrower shall have the right to
approve  any  such  proposed   substitute   agent.  The  succeeding   substitute
Administrative  Agent  shall  have all the  rights,  powers  and  duties  of the
Administrative   Agent  and  the  term  Administrative  Agent  shall  mean  such
substitute  Administrative Agent,  effective upon its appointment.  In the event
that the  substitute  Administrative  Agent wishes to resign,  it may do so upon
thirty (30) days prior notice to the Borrower,  the Administrative Agent and the
Lenders,  and a new  substitute  Administrative  Agent  shall  be  appointed  in
accordance  with this  Section.  After any  retiring  substitute  Administrative
Agent's resignation hereunder as substitute Administrative Agent, the provisions
of this  Section  7.10 and Section 8.4 hereof shall inure to the benefit of such
retired substitute Administrative Agent as to any actions taken or omitted to be
taken by it while it was substitute Administrative Agent under this Agreement.

     Section 7.11 Loans.  Each Lender shall make  available to the Borrower such
Lender's portion of the Loan subject to and in accordance with the provisions of
the Loan  Documents.  The  Borrower  shall  look  solely to each  Lender for the
performance of such Lender's  obligations,  covenants and  agreements  under the
Loan  Documents  on the part of each Lender to be  performed  or  observed  with
respect to each such  portion of the Loan,  subject to and upon the  conditions,
limitations and  restrictions  set forth herein and in the other Loan Documents,
as evidenced by the signature of each such party hereto. In the event any Lender
has not made available its Percentage of any borrowing, the Administrative Agent
may  (but  shall  not  be  obligated   to),  and  each  Lender   authorizes  the
Administrative  Agent to,  advance for such  Lender's  account,  pursuant to the
terms  hereof,  the amount of the  borrowing  to be made by such Lender and each
Lender agrees to reimburse the  Administrative  Agent in  immediately  available
funds for any amount so advanced on its behalf. If any such reimbursement is not
made in immediately  available funds on the same day on which the Administrative
Agent shall have made such amount available on behalf of any Lender, such Lender
shall also pay interest thereon to the Administrative Agent at the Federal Funds
Rate.

     Section 7.12 Priority of Loans.  Each Lender's portion of the Loan shall be
of equal priority with each other  Lender's  portion of the Loan, and no portion
of the Loan shall have priority or preference over any other portion of the Loan
or the security therefor, except as provided in Sections 7.20 and 7.24 hereof.

     Section  7.13  Books  and  Records.  The  Administrative  Agent  will  keep
customary books and records relating to all borrowings hereunder, and such books
and records  shall be available  at the  Administrative  Agent's  office for the
Lenders reasonable inspection during the Administrative  Agent's normal business
hours.  The original Loan Documents  shall be kept at the New York office of the
Administrative  Agent or at such other office of the Administrative  Agent or at
such other place as may be  designated  from time to time by the  Administrative
Agent and shall be made  available to any Lender for  inspection  at such office
within a reasonable  period of time following such Lender's  written  request to
inspect same.

<PAGE>

     Section  7.14  Decisions  of  Lenders.  Except  as  expressly  set forth in
Sections 7.15 and 7.16 hereof, all decisions,  consents,  waivers, approvals and
other  actions  (collectively,  ADecisions ) authorized  to be taken under or in
connection  with this Agreement and the other Loan Documents by any Lender shall
be taken by the  Administrative  Agent in its discretion  reasonably  exercised,
subject to the provisions of Section 7.4 hereof. Except as expressly provided in
Sections  7.15 and 7.16  hereof,  the  Administrative  Agent (i) may  consent or
withhold  consent to any action by the  Borrower,  (ii) may  exercise or refrain
from exercising any power,  rights or remedies hereunder or under the other Loan
Documents or otherwise in respect of the borrowings made hereunder, and/or (iii)
may  waive  any  conditions  in any  Loan  Documents,  so long as such  consent,
exercise or waiver would not, in the Administrative  Agent's judgment reasonably
exercised,   represent  a  departure   from  the   standards   followed  by  the
Administrative  Agent in the  administration of loans held by the Administrative
Agent  entirely  for its own  account.  The  Administrative  Agent may request a
Decision  with respect to matters  described in Sections 7.15 and 7.16 hereof at
any time by making a request for such Decision in writing to all of the Lenders.
Any such  request  (x) shall  contain  an  adequate  description  together  with
relevant  background  information  of the Decision  being  requested,  (y) shall
specify  the  reasons  for such  request,  and (z) shall state the effect of not
responding to such notice as set forth in this Section. The Administrative Agent
will provide the Lenders  with such  additional  information  as the Lenders may
reasonably request to assist such Lenders in reaching a Decision,  to the extent
such  information  is in the  Administrative  Agent's  possession  or under  its
control.  The requested  Decision shall be deemed approved by the Lenders if and
when the  Administrative  Agent  receives  written  approval  from the  required
percentage of the Lenders as specified in Sections 7.15 and 7.16 hereof,  as the
case may be. If a Lender does not deliver to the Administrative  Agent a written
objection thereto within ten (10) Business Days after hand delivery,  mailing or
delivery  to an express  courier  service of the  request by the  Administrative
Agent,  the  Administrative  Agent  shall make a second  written  request  for a
Decision from that Lender. If the Lender does not deliver to the  Administrative
Agent a written  objection  within five (5) Business  Days after hand  delivery,
mailing or delivery to an express courier service of such a second request, such
Lender  shall  be  deemed  to  have  approved  the  requested  Decision.  If the
Administrative Agent is unable to contact the usual  representatives of a Lender
for any  reason,  the  Administrative  Agent  will make a good  faith  effort to
contact  other  representatives  of such Lender as necessary to reach a Decision
within the allotted time. To the extent that the Administrative Agent reasonably
deems necessary,  any such Decision may also be requested  telephonically by the
Administrative  Agent  from each  Lender  with  such  telephonic  request  to be
confirmed in writing by the  Administrative  Agent. Any Decision as to which the
Administrative  Agent has made telephonic  requests for approval shall be deemed
approved by the Lenders after the Administrative  Agent has received the written
approval of the required percentage of the Lenders as specified in Sections 7.15
and 7.16 hereof.  The Borrower  shall be promptly  notified of the Decision,  if
such Decision was made in response to a request by the Borrower.

<PAGE>

     Section  7.15   Approvals  by  the  Lenders.   No  amendment,   supplement,
modification or waiver shall be effective  unless consented to in writing by the
Required   Lenders;   provided,   however,   that  any  amendment,   supplement,
modification or waiver which adds, deletes,  changes or waives any provisions of
the Loan Documents the effect of which is to (i) extend either the Maturity Date
or any  installment or required  prepayment of any  borrowings;  (ii) reduce the
rate or extend the time of payment of interest on any  borrowings;  (iii) reduce
the principal amount of any borrowings;  (iv) reduce the fees payable under this
Agreement and the other Loan Documents,  or any other fee payable to the Lenders
or extend the due date of any such fee; (v) change any  Lender's  portion of the
Loan  or the  amount  of any  borrowing  of any  Lender  (except  to the  extent
permitted by Sections 7.18 and 7.19 hereof);  (vii) forgive any  Indebtedness of
Borrower or any Subsidiary of Borrower; (viii) change any allocation of payments
among the  Lenders,  (ix) change any  provision  of this Section 7.15 or Section
7.16 or the definition of Required Lenders;  (x) modify any financial  covenants
or waive any Default or Event of Default  (except as provided in Section  7.16),
(xi)  release  any  guaranty,  (xii)  waive  or  release  any lien on any of the
Mortgaged Properties (except as provided in Section 8.11) or (xiii) commence any
judicial or nonjudicial  foreclosure  proceeding  (except as provided in Section
7.16),  shall be ineffective in each case without the written consent of all the
Lenders.  Furthermore,  no amendment,  supplement,  modification  or waive shall
amend, modify or waive any provision of any Loan Document, if the effect thereof
is to affect  the  rights or duties of the  Administrative  Agent,  without  the
written consent of the  Administrative  Agent.  Any such amendment,  supplement,
modification  or waiver shall apply to each of the Lenders  equally and shall be
binding upon the Borrower, the Lenders, Administrative Agent, the Administrative
Agent and all future holders of the Promissory Notes. In the case of any waiver,
the Borrower,  the Lenders,  the Administrative Agent shall be restored to their
former position and rights hereunder and under the outstanding Promissory Notes,
and any Default or Event of Default  waived  shall be deemed to be cured and not
continuing,  but no such waiver shall extend to any  subsequent or other Default
or Event of Default, or impair any right consequent thereon.

         Section 7.16    Approvals by the Required Lenders

                  (a) Upon the  Administrative  Agent's  receipt  of a notice of
default  (as  defined  in Section  7.5(a)  hereof)  with  respect to an Event of
Default,  the Administrative  Agent shall consult with the Lenders in respect of
any such Event of Default to determine a course of action which is acceptable to
the Required Lenders.  Subject to Section 7.15 hereof, the Administrative  Agent
shall  pursue any such  course of action  approved  in  writing by the  Required
Lenders in respect of any such Event of Default, including,  without limitation,
acceleration  of the Loan. In the event that the Required  Lenders cannot decide
which remedies, if any, are to be pursued, the Administrative Agent may commence
proceedings  on behalf of the Lenders;  provided,  however,  that if at any time
thereafter  the Required  Lenders  shall  direct that a different or  additional
remedial  action shall be taken,  such different or additional  remedial  action
shall be taken in lieu of or in addition to such proceedings.

                  (b) The Borrower  hereby consents and agrees to the provisions
of Sections 7.14 through 7.16 and any modifications  thereof entered into by the
Administrative  Agent  and the  Lenders  of  such  provisions  and  specifically
acknowledges  and  agrees  that,  notwithstanding  any  provisions  in the  Loan
Documents  requiring action by the ALenders  or similar provisions in connection
with  the  declaration  of  an  Event  of  Default,   the  acceleration  of  the
indebtedness evidenced by the Loan Documents and/or the exercise of any remedies
under the Loan Documents, the Administrative Agent is hereby empowered to act on
behalf of the Lenders in accordance with the provisions hereof and the authority
of  the   Administrative   Agent  with  respect  to  any  action  taken  by  the
Administrative Agent pursuant to and in accordance with this Agreement shall not
be contested by the Borrower by reason of any different or conflicting provision
contained in any of the Loan Documents.

<PAGE>

     Section 7.17 Participation.  Any Lender may at any time after the execution
and delivery of this Agreement, sell to one or more Persons (each a AParticipant
) participating  interests in any borrowing owing to such Lender, any Promissory
Note held by such Lender and/or any other interest of such Lender  hereunder (in
respect of any such Lender,  its ACredit  Exposure ).  Notwithstanding  any such
sale by a Lender of  participating  interests to a  Participant,  such  Lender's
rights and  obligations  hereunder  shall  remain  unchanged,  such Lender shall
remain solely responsible for the performance thereof,  such Lender shall remain
the holder of any such  Promissory  Note for all purposes  hereunder  (except as
expressly provided below),  and the Administrative  Agent shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations  hereunder.  The Borrower also agrees that each Participant shall be
entitled to the benefits of Sections  2.11,  2.13 and 2.14  hereof.  Each Lender
agrees  that any  agreement  between  such  Lender and any such  Participant  in
respect of such participating interest shall not restrict such Lender's right to
agree to any amendment, supplement, waiver or modification to any Loan Document,
except  where the  result of any of the  foregoing  would be to extend the final
maturity of any  borrowing or any  regularly  scheduled  installment  thereof or
reduce the rate or extend the time of payment of interest  thereon or reduce the
principal amount thereof.

         Section 7.18    Assignments

                  (a) Any Lender may, in the ordinary course of its business and
in accordance  with applicable law, at any time after the execution and delivery
of this  Agreement  and from  time to time  assign  to any  Lender  or any other
Eligible  Assignee  (each a  APurchasing  Lender ) all or any part of its Credit
Exposure in amounts not less than $10,000,000.  The Borrower, the Administrative
Agent and the Lenders agree that to the extent of any assignment, the Purchasing
Lender  shall be  deemed to have the same  rights  and  benefits  under the Loan
Documents and the same obligation to share pursuant to Section 7.24 hereof as it
would  have had if it had been a Lender  which was one of the  original  parties
hereto.  The  consent of the  Administrative  Agent and,  provided no Default or
Event of Default  has  occurred,  the  Borrower  shall be  required  prior to an
assignment becoming effective, which consents will not be unreasonably withheld,
delayed or conditioned; provided that the Administrative Agent shall be entitled
to continue to deal solely and directly  with the assignor  Lender in connection
with the  interests so assigned to the  Purchasing  Lender unless and until such
Purchasing Lender executes a supplement to this Agreement,  substantially in the
form of Exhibit L hereto (a AForm of Assignment and Assumption Agreement ).

                  (b) Upon (i) execution of a Form of Assignment  and Assumption
Agreement,  (ii)  delivery  of an executed  copy  thereof to the  Borrower,  the
Administrative Agent, (iii) payment by such Purchasing Lender to such transferor
Lender of an amount equal to the purchase price agreed  between such  transferor
Lender and such Purchasing Lender, and (iv) payment to the Administrative  Agent
of an  assignment  fee of $2500 for each  assignment by any Lender of all or any
portion of its Credit  Exposure,  such transferor  Lender shall be released from
its  obligations  hereunder to the extent of such assignment and such Purchasing
Lender shall for all purposes be a Lender party to this Agreement and shall have
all the rights and  obligations  of a Lender  under this  Agreement  to the same
extent as if it were an original party hereto,  and no further consent or action
by the Borrower, the Lenders or the Administrative Agent shall be required. Such
Form of  Assignment  and  Assumption  Agreement  shall be deemed  to amend  this
Agreement  to the  extent,  and only to the  extent,  necessary  to reflect  the
addition of such Purchasing Lender as a Lender.  Promptly after the consummation
of any transfer to a Purchasing Lender pursuant hereto,  the transferor  Lender,
the Administrative Agent and the Borrower shall make appropriate arrangements so
that a replacement Promissory Note is issued to such transferor Lender and a new
Promissory Note is issued to such Purchasing  Lender,  in each case in principal
amounts  reflecting  such  transfer.  The  Purchasing  Lender  shall  furnish to
Borrower  and the  Administrative  Agent,  at least 10 days prior to the date on
which  the  first  payment  to such  Purchasing  Lender  is due,  the  documents
described in Section 2.17(b) hereof.

<PAGE>

                  (c) Commerzbank  AG, New York Branch,  agrees that it will not
assign to a Purchasing  Lender any part of its Credit Exposure such that,  after
giving effect to such assignment,  Commerzbank AG, New York Branch's  Percentage
shall be less than twenty five percent (25%),  unless its failure to do so shall
(or in  Commerzbank  AG, New York  Branch's  reasonable  judgment  is likely to)
constitute a violation of any Requirement of Law. Notwithstanding the foregoing,
nothing herein shall  restrict or limit  Commerzbank  AG, New York Branch,  from
selling a participating interest in any portion, or all, of its Credit Exposure.

     Section 7.19 Withholding.  Notwithstanding anything to the contrary herein,
no Participant  or other  assignee of all or any part of the Credit  Exposure of
any Lender (each, a ANon-Party Holder ), other than a Purchasing  Lender,  shall
be entitled to any of the benefits of Section 2.16 hereof.

     Section 7.20 Amounts Received by Lenders.  Each Lender agrees that it shall
act as a trustee  for the  benefit  of the other  Lenders  to the  extent of the
respective  interests of the other  Lenders in the Loan with respect to all sums
of any kind paid to or received by such Lender in payment of all or a portion of
the Loan by or on behalf of the Borrower.

     Section 7.21 No Joint Venture.  Neither the execution of this Agreement nor
the selling of an interest in the Loan nor any  agreement to share in profits or
losses as provided  herein is intended to be, nor shall it be  construed  to be,
the  formation  of a  partnership  or joint  venture  among the  parties to this
Agreement.

     Section  7.22  Acknowledgement  by Parties  Hereto.  The  agreement  to and
acceptance of this Agreement by the parties  hereto,  indicated by the execution
of this Agreement,  shall evidence (a) each party's  acceptance of all the terms
and  conditions  of this  Agreement  and the other Loan  Documents  and (b) each
party's  consent  to  the   Administrative   Agent  acting  as  the  contractual
representatives  on behalf of the  Lenders  with  regard to all  aspects  of the
administration,  enforcement  and  collection  of the  Loan  and to all  matters
pertaining to the Loan Documents as provided for herein.

     Section  7.23 Sharing of  Payments.  Each of the Lenders  agrees that if it
should  receive  any  amount  under  this  Agreement  or any of the  other  Loan
Documents  (whether by voluntary payment,  by realization upon security,  by the
exercise of the right of banker's lien, by counterclaim or cross action,  by the
enforcement  of any  right  under the Loan  Documents,  or  otherwise)  which is
applicable  to the payment of any  borrowing  of a sum which with respect to the
related  sum or sums  received by the other  Lenders is in a greater  proportion
than the total of such  borrowings then owed and due to such Lender bears to the
total of  borrowings  made  hereunder  then  owed and due to all of the  Lenders
immediately  prior to such  receipt,  then such  Lender  receiving  such  excess
payment  shall  purchase  for cash without  recourse or warranty  from the other
Lenders an interest in such  borrowings  owing to such Lenders in such amount as
shall  result in a  proportional  participation  by all of the  Lenders  in such
amount;  provided that if all or any portion of such excess amount is thereafter
recovered  from such Lender,  such purchase  shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest.

<PAGE>

     Section 7.24 Limitation of Liability.  No claim may be made by the Borrower
or any other  Person  against the  Administrative  Agent or any Lender or any of
their affiliates,  directors,  officers, employees, attorneys or agent of any of
such Persons for any special,  indirect or  consequential  damages in respect of
any claim for breach of contract or any other theory of liability arising out of
or under this Article VII; and the Borrower  hereby waives,  releases and agrees
not to sue upon any such claim for any such damages,  whether or not accrued and
whether or not known or suspected to exist in its favor.

                           ARTICLE VIII. MISCELLANEOUS

     Section 8.1 Notices. All notices, requests, and other communications to any
party hereunder shall be in writing (including bank wire,  telecopy,  or similar
teletransmission  or writing) and shall be given to such party at its address or
telecopy  number set forth on Schedule 8 annexed hereto or such other address or
telecopier  number  as  such  party  may  hereafter  specify  by  notice  to the
Administrative  Agent  and  the  Borrower.  No  notices,   requests,  and  other
communications   given  to  any  Person  other  than  the  Administrative  Agent
(including,  without limitation,  any Affiliate thereof) shall be deemed to have
been given to the  Administrative  Agent.  Each such notice,  request,  or other
communication shall be effective (i) when delivered personally, (ii) if given by
telecopier, when such telecopy is transmitted to the telecopier number specified
in this Section 8.1,  (iii) if given by certified  or  registered  mail,  return
receipt  requested,  72 hours after such communication is deposited in the mails
with first class postage  prepaid,  addressed as  aforesaid,  or (iv) by Federal
Express or other recognized overnight delivery service (provided that, in either
such  case,  such  delivery  is made with a request  for  receipt),  on the next
Business Day after such  communication is deposited with such delivery  service,
or (v) if given by any other means when  delivered  at the address  specified in
this Section 8.1.

     Section 8.2  Amendments,  Etc. No amendment  or waiver of any  provision of
this  Agreement  or the other Loan  Documents,  nor consent to any  departure by
either party therefrom, shall in any event be effective unless the same shall be
in writing  and signed by the party or its agent,  if  authorized  to act on its
behalf, against whom enforcement of such waiver or amendment is sought, and then
such waiver or consent shall be effective only in the specific  instance and for
the specified  purpose for which given.  None of the  foregoing  shall negate or
vitiate any of the provisions of Sections 7.14, 7.15 or 7.16.

<PAGE>

     Section 8.3 No Waiver Remedies Cumulative.  No failure or delay on the part
of the Lenders in  exercising  any right or remedy  hereunder or under any other
Loan   Document  and  no  course  of  dealing   between  the  Borrower  and  the
Administrative Agent or the Lenders shall operate as a waiver thereof, nor shall
any single or partial  exercise  of any right or remedy  hereunder  or under any
other  Loan  Document  preclude  any other or  further  exercise  thereof or the
exercise of any other right or remedy hereunder.  The rights and remedies herein
and in the other  Loan  Documents  expressly  provided  are  cumulative  and not
exclusive of any rights or remedies  that the Lenders would  otherwise  have. No
notice to or demand on the Borrower  not  required  hereunder or under the other
Loan  Documents  in any case shall  entitle the Borrower to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the
rights of the  Lenders  to any  other or  further  action  in any  circumstances
without notice or demand.

     Section 8.4 Payment of Expenses,  Etc. The Borrower shall:

                  (a) whether or not the  transactions  hereby  contemplated are
consummated,  pay  all  reasonable  out-of-pocket  costs  and  expenses  of  the
Administrative  Agent and the  Lenders in the  administration  (both  before and
after the execution  hereof and including advice of counsel as to the rights and
duties of the  Administrative  Agent or the Lenders) of, and in connection  with
the  preparation,  execution,  and delivery of,  preservation  of rights  under,
enforcement of, and, after an Event of Default, refinancing,  renegotiation,  or
restructuring  of, this Agreement and the other Loan Documents and the documents
and instruments referred to therein; any amendment,  waiver, or consent relating
thereto (including, without limitation, the reasonable fees and disbursements of
counsel for the Administrative Agent and the Lenders);

                  (b) to the extent  permitted by  applicable  law, pay and hold
the  Administrative  Agent and the Lenders harmless from and against any and all
present  and future  stamp,  recording,  and other  similar  taxes and fees with
respect to the foregoing  matters and save the Lenders harmless from and against
any and all liabilities  with respect to or resulting from any delay or omission
to pay such taxes and fees; and

                  (c)  indemnify  the  Administrative  Agent and the Lenders and
each of their officers, directors, employees, Affiliates,  representatives,  and
agents from, and hold each of them harmless against,  any and all costs, losses,
liabilities,  claims,  damages and expenses  incurred by any of them (whether or
not any of them is  designated a party  thereto)  arising out of or by reason of
any litigation, or other proceeding related to any actual or proposed use by the
Borrower  of the  proceeds  of  the  Loan  or the  Borrower  entering  into  and
performing of this  Agreement or the other Loan  Documents or resulting from the
ownership  of  any  Mortgaged  Property,   including,  without  limitation,  the
reasonable  fees and  disbursements  of counsel  incurred in connection with any
such investigation,  litigation, or other proceeding; provided that the Borrower
shall not be obligated to indemnify  any such Person to the extent of any costs,
losses, liabilities, claims, damages, or expenses caused by the gross negligence
or willful misconduct of such Person.

         If and to the extent that the  obligations  of the Borrower  under this
Section 8.4 are unenforceable for any reason, the Borrower hereby agrees to make
the maximum  contribution to the payment and  satisfaction  of such  obligations
which is permissible under applicable law. The Borrower's obligations under this
Section 8.4 shall survive any  termination  of this Agreement and the payment of
the sums due hereunder and under the other Loan Documents.

<PAGE>

     Section 8.5 Right of Setoff.  Subject to the Administrative Agent's written
consent,  in addition to and not in  limitation of all rights of offset that the
Lenders may have under  applicable  law, the Lenders shall,  upon the occurrence
and  during  the  continuance  of any Event of  Default  and  whether or not the
Lenders have made any demand or the Borrower's obligations are matured, have the
right to  appropriate  and apply to the  payment of the  Borrower's  obligations
hereunder and under the other Loan Documents,  all deposits (general or special,
time or demand,  provisional  or final) of the Borrower then or thereafter  held
by, and other indebtedness or property then or thereafter owing by, the Lenders.

     Section 8.6 Benefit of Agreement.  This Agreement shall be binding upon and
inure to the benefit of and be  enforceable  by the  respective  successors  and
assigns of the parties  hereto,  provided  that the  Borrower  may not assign or
transfer any of its interest  hereunder without the prior written consent of the
Lenders.

         Section 8.7    Governing Law; Submission to Jurisdiction

                  (a) This  Agreement  and the  rights  and  obligations  of the
parties  hereunder  shall be construed in accordance with and be governed by the
law (without  giving  effect to the conflict of law  principles  thereof) of the
State  of New  York  except  as  otherwise  specifically  provided  in the  Loan
Documents with respect to the perfection, priority and enforcement of liens upon
real property and fixtures not located in the State of New York.

                  (b) Any  legal  action  or  proceeding  with  respect  to this
Agreement or the other Loan  Documents or any  document  related  thereto may be
brought  in the  courts  of the  State of New York or of the  United  States  of
America for the Southern  District of New York, and by execution and delivery of
this  Agreement,  the Borrower  hereby  accepts for itself and in respect of its
property  generally  and  unconditionally,  the  jurisdiction  of the  aforesaid
courts. The Borrower hereby irrevocably waives any objection, including, without
limitation,  any  objection  to the  laying of venue or based on the  grounds of
forum non conveniens,  which it may now or hereafter have to the bringing of any
such action or proceeding in such respective jurisdictions.  The Borrower agrees
that any  process  in any  proceeding  in any such  court  may be  served on the
Borrower through the United States mails in accordance with Section 8.1.

                  (c)  WAIVER  OF  JURY  TRIAL.  TO  THE  EXTENT   PERMITTED  BY
APPLICABLE   LAW,   EACH  OF  THE  PARTIES   HERETO   HEREBY   IRREVOCABLY   AND
UNCONDITIONALLY  WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS  AGREEMENT OR THE  PROMISSORY  NOTE OR ANY OTHER LOAN DOCUMENTS AND FROM
ANY COUNTERCLAIM THEREIN.

                  (d) Nothing  herein  shall  affect the right of the Lenders to
serve  process  in any  other  manner  permitted  by law  or to  commence  legal
proceedings or otherwise proceed against the Borrower in any other jurisdiction.

     Section 8.8  Counterparts.  This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts,  each
of which when  executed and  delivered  shall be an  original,  but all of which
shall together constitute one and the same instrument.

     Section 8.9 Headings Descriptive . The headings contained in this Agreement
are for  convenience  only  and  shall  not in any way  affect  the  meaning  or
construction of any provision of this Agreement.

<PAGE>

     Section 8.10 Entire Agreement.  This Agreement and the other Loan Documents
constitute  the entire  agreement  of the  parties  with  respect to the subject
matter hereof and thereof, and all prior discussions, negotiations, term sheets,
commitment   letters,   waiver   letters,    agreements,    letter   agreements,
correspondence  and  document  drafts  with  respect to such  matters are merged
herein and therein. Neither the Lenders nor any employee of the Lenders has been
authorized to make any  representation  or agreement  upon which the Borrower or
its Affiliates may rely unless such matter is set forth in this Agreement or the
other Loan Documents.

     Section 8.11  Release of Mortgaged  Properties.  The  Administrative  Agent
agrees  that,  upon  the  Borrower's  request  (a  ARelease  Request  )  to  the
Administrative  Agent, the Administrative  Agent will deliver to Borrower a form
of  release,  duly  executed  and  acknowledged  by  the  Administrative  Agent,
releasing  from the lien of the  applicable  Mortgage  (a ARelease ) a Mortgaged
Property (a ARelease Parcel ) but only if and on the condition that:

                           (i)      each  Release  Request  shall be in writing,
shall contain all information  necessary for the Administrative Agent to cause a
Release in  recordable  form to be prepared and shall be given at least ten (10)
Business Days prior to the requested date of such Release;

                           (ii)      as of the date of such  Release  Request,
and as of the  Closing  Date of such  Release  (before  as well as after  giving
effect to such Release),  no Default or Event of Default shall have occurred and
be   continuing,   and  each  Release   Request  shall   constitute   Borrower's
representation and warranty that the foregoing is true, complete and accurate;

                           (iii)  before as well as after  giving effect to such
Release,  subject to the provisions of Section 5.5 hereof,  all  representations
and warranties contained herein (except representations and warranties expressly
provided  herein as being made only as of the  Closing  Date)  shall be true and
correct  in  all  material   respects  with  the  same  effect  as  though  such
representations  and  warranties  had  been  made on and as of the  date of such
Release;

                           (iv)      the Borrower executes,  acknowledges and
delivers  to the  Administrative  Agent,  at  Borrower's  expense,  any  and all
documents and instruments  reasonably  required by the  Administrative  Agent to
preserve and maintain the  Administrative  Agent's and Lenders rights,  upon and
following any such Release, under and with respect to the Loan Documents; and

                           (v)      the Borrower  pays to the  Administrative
Agent for the account of the Lenders and for  application to the Term Portion of
the Loan an amount equal to the Release Price for the Mortgaged  Property,  less
any previous  prepayment  of the Term Portion of the Loan not made in connection
with a Release or otherwise applied to a Release Price.

<PAGE>

In the  event  that all of the  foregoing  conditions  to a  Release  have  been
satisfied,  then, at Borrower's request,  the Administrative Agent shall furnish
such Release for execution by the  Administrative  Agent and for  recordation by
the title  company  which had insured  the  Lenders  interest in the  Mortgaged
Property subject to the Release or as otherwise designated by Borrower.  Receipt
of a Release Request for each Release shall constitute  Borrower's agreement and
covenant to pay to the Administrative Agent, promptly upon demand (together with
a reasonably detailed invoice(s) in respect thereof),  all reasonable legal fees
and expenses arising in connection with the preparation, execution, delivery and
review of each Release, the documents and instruments described in this Section,
and all other  documents  relating  to,  and  rendering  at the  request  of the
Administrative Agent all advice respecting, each Release.

     Section  8.12  Confidentiality.  The  Administrative  Agent  and the  other
Lenders  agree  that,  unless  otherwise  agreed to in writing by us,  except as
required  by law or  regulation  or by legal  process,  to keep  all  Non-public
Information delivered by the Borrower to the Administrative Agent or the Lenders
confidential  and not to disclose or reveal any  Non-public  Information  to any
person, other than those employed or retained by the Administrative Agent or the
Lenders  (including,   without  limitation,   employees,  counsel,  accountants,
engineers,  advisers, experts and consultants to the Administrative Agent or the
Lenders).  Except as provided  for in the next  sentence,  in the event that the
Administrative  Agent or any Lender is  requested  pursuant  to, or required by,
applicable  law or  regulation  or by legal  process to disclose any  Non-public
Information,  the  Administrative  Agent  or such  Lender  agrees  that it shall
provide the Borrower with prompt notice of such  request(s) and, unless required
by law or  regulation to disclose  sooner,  shall wait at least forty eight (48)
hours  before  disclosing  such  Non-public  information.   Notwithstanding  the
foregoing or anything else to the contrary herein  contained or contained in any
of the other Loan Documents, the provisions of this Section 8.12 shall not apply
to (a) the  disclosure  or  sharing  of any  Non-public  information  among  the
Administrative  Agent and the Lenders,  (b) the disclosure by the Administrative
Agent or any Lender of any Non-public  information  to federal,  state and local
bank  regulators  or other  governmental  agencies  to the  extent  required  or
requested  to do so (such  disclosure  shall not,  however,  in and of itself be
deemed to render such information  public),  and (c) the Administrative Agent or
any Lender may, in connection with any assignment or  participation  or proposed
assignment or participation, disclose to the assignee or participant or proposed
assignee or participant under a requirement of  confidentiality,  any Non-public
information  relating to the Borrower,  the Collateral,  the Borrower's  assets,
properties  or financial  condition or  information  otherwise  furnished to the
Administrative Agent or the Lenders by the Borrower.

     Section 8.13 No Discharge.  The  execution  and delivery of this  Agreement
shall  not  extinguish  the  indebtedness  or  the  obligations  secured  by the
Mortgages,  and no part thereof  shall be  discharged,  disturbed,  cancelled or
impaired by the execution and delivery of this Agreement.

<PAGE>

                       [Signatures Continued on Next Page]

         IN  WITNESS  WHEREOF,   the  parties  hereto  have  caused  their  duly
authorized  officers to execute and deliver this  Agreement as of the date first
written above.

                                                 HOMESTEAD VILLAGE INCORPORATED

                                                 By
                                                    Laura L. Hamilton
                                                    Senior Vice President

                                                COMMERZBANK AG, New York Branch,
                                                as Administrative Agent

                                                 By
                                                    Name:
                                     Title:

                                                 By
                                                    Name:
                                     Title:

                                                COMMERZBANK AG, New York Branch,
                                                as Lender

                                                 By
                                                    Name:
                                     Title:

                                                 By
                                                    Name:
                                     Title:

<PAGE>

                                       K-2

                                WELLS FARGO BANK

                                                 By
                                                    Name:
                                     Title:

                                BANKBOSTON, N.A.

                                                 By
                                                    Name:
                                     Title:

                                                 CHASE BANK OF TEXAS, N.A.

                                                 By
                                                    Name:
                                     Title:EXHIBIT 4.1

                            U.S. WIRELESS CORPORATION

                                       AND

                  ___________________________________, Trustee

                                    Indenture

                           Dated as of _______________

                             Senior Debt Securities

<PAGE>
                         Reconciliation and tie between

                         the Trust Indenture Act of 1939

                                 and Indenture,

                             dated as of __________*

<TABLE>
<CAPTION>
Trust Indenture

    Act Section                                                                           Indenture Section

Section 3.10(a)(1)  6.09
<S>          <C>                                                                                             <C>
          (a)(2)..............................................................................................6.09
          (a)(3)....................................................................................Not Applicable
          (a)(4)....................................................................................Not Applicable
          (a)(5)........................................................................................6.08, 6.10
          (b)...........................................................................................6.08, 6.10
          (c).......................................................................................Not Applicable
Section 3.11(a)...............................................................................................6.13
          (b).................................................................................................6.13
Section 3.12(a)......................................................................................7.01, 7.02(a)
          (b)..............................................................................................7.02(b)
          (c).................................................................................................7.03
Section 3.13(a)...............................................................................................7.03
          (b).................................................................................................7.03
          (c).................................................................................................7.03
          (d).................................................................................................7.03
Section 3.14(a)........................................................................................7.04, 10.05
          (b).......................................................................................Not Applicable
          (c)(1)..............................................................................................1.02
          (c)(2)..............................................................................................1.02
          (c)(3)....................................................................................Not Applicable
          (d).......................................................................................Not Applicable
          (e).................................................................................................1.02
          (f).......................................................................................Not Applicable
Section 3.15(a)...............................................................................................6.01
          (b).................................................................................................6.02
          (c).................................................................................................6.01
          (d).................................................................................................6.01
          (e).................................................................................................5.14
Section 3.16(a)...............................................................................................1.01
          (a)(1)(A)...........................................................................................5.12
          (a)(1)(B)...........................................................................................5.13
          (a)(2)....................................................................................Not Applicable
          (b).................................................................................................5.08
Section 3.17(a)(1)  5.03
          (a)(2)..............................................................................................5.04
          (b)................................................................................................10.03
Section 3.18(a)...............................................................................................1.07
          (c).................................................................................................1.07
</TABLE>

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

<PAGE>
                                Table of Contents
<TABLE>
<CAPTION>

                                                                                                            Page

                                   ARTICLE I.

                              DEFINITIONS AND OTHER

                        PROVISIONS OF GENERAL APPLICATION

<S>     <C>                                                                                                      <C>
Section 1.01      Definitions.....................................................................................1
Section 1.02      Compliance Certificates and Opinions............................................................8
Section 1.03      Form of Documents Delivered to Trustee..........................................................8
Section 1.04      Acts of Holders; Record Dates...................................................................9
Section 1.05      Notices, Etc., to Trustee and Company..........................................................10
Section 1.06      Notice to Holders; Waiver......................................................................11
Section 1.07      Conflict with Trust Indenture Act..............................................................11
Section 1.08      Effect of Headings and Table of Contents.......................................................11
Section 1.09      Successors and Assigns.........................................................................11
Section 1.10      Separability Clause............................................................................12
Section 1.11      Benefits of Indenture..........................................................................12
Section 1.12      Governing Law..................................................................................12
Section 1.13      Legal Holidays.................................................................................12

                                   ARTICLE II.

                                 SECURITY FORMS

Section 2.01      Forms of Securities............................................................................12
Section 2.02      Form of Trustee's Certificate of Authentication................................................13
Section 2.03      Securities in Global Form......................................................................13

                                  ARTICLE III.

                                 THE SECURITIES

Section 3.01      Amount Unlimited; Issuable in Series...........................................................14
Section 3.02      Denominations..................................................................................16
Section 3.03      Execution, Authentication, Delivery and Dating.................................................16
Section 3.04      Temporary Securities...........................................................................18
Section 3.05      Registration, Registration of Transfer and Exchange and Book-Entry Securities..................18
Section 3.06      Mutilated, Destroyed, Lost and Stolen Securities...............................................21
Section 3.07      Payment of Interest; Interest Rights Preserved.................................................21
Section 3.08      Persons Deemed Owners..........................................................................23
Section 3.09      Cancellation...................................................................................23
Section 3.10      Computation of Interest........................................................................23

<PAGE>
                                   ARTICLE IV.

                           SATISFACTION AND DISCHARGE

Section 4.01      Satisfaction and Discharge of Indenture........................................................23
Section 4.02      Application of Trust Money.....................................................................25

                                   ARTICLE V.

                                    REMEDIES

Section 5.01      Events of Default..............................................................................25
Section 5.02      Acceleration of Maturity; Rescission and Annulment.............................................28
Section 5.03      Collection of Indebtedness and Suits for Enforcement by Trustee................................29
Section 5.04      Trustee May File Proofs of Claim...............................................................30
Section 5.05      Trustee May Enforce Claims Without Possession of Securities....................................30
Section 5.06      Application of Money Collected.................................................................31
Section 5.07      Limitation on Suits............................................................................31
Section 5.08      Unconditional Right of Holders to Receive Principal, Premium and Interest......................32
Section 5.09      Restoration of Rights and Remedies.............................................................32
Section 5.10      Rights and Remedies Cumulative.................................................................32
Section 5.11      Delay or Omission Not Waiver...................................................................32
Section 5.12      Control by Holders.............................................................................33
Section 5.13      Waiver of Defaults.............................................................................33
Section 5.14      Undertaking for Costs..........................................................................34
Section 5.15      Waiver of Stay or Extension Laws...............................................................34

                                   ARTICLE VI.

                                   THE TRUSTEE

Section 6.01      Certain Duties and Responsibilities............................................................34
Section 6.02      Notice of Defaults.............................................................................36
Section 6.03      Certain Rights of Trustee......................................................................36
Section 6.04      Not Responsible for Recitals or Issuance of Securities.........................................37
Section 6.05      May Hold Securities............................................................................37
Section 6.06      Money Held in Trust............................................................................37
Section 6.07      Compensation and Reimbursement.................................................................38
Section 6.08      Disqualification; Conflicting Interests........................................................38
Section 6.09      Corporate Trustee Required; Eligibility........................................................38
Section 6.10      Resignation and Removal; Appointment of Successor..............................................39
Section 6.11      Acceptance of Appointment by Successor.........................................................40
Section 6.12      Merger, Conversion, Consolidation or Succession to Business....................................41
Section 6.13      Preferential Collection of Claims Against Company..............................................41
Section 6.14      Appointment of Authenticating Agent............................................................42

<PAGE>
                                  ARTICLE VII.

                           HOLDERS' LISTS AND REPORTS

                             BY TRUSTEE AND COMPANY

Section 7.01      Company to Furnish Trustee Names and Addresses of Holders......................................43
Section 7.02      Preservation of Information; Communications to Holders.........................................44
Section 7.03      Reports by Trustee.............................................................................44
Section 7.04      Reports by Company.............................................................................44
Section 7.05      Holders' Meetings..............................................................................45

                                  ARTICLE VIII.

                                              CONSOLIDATION, MERGER,
                          CONVEYANCE, TRANSFER OR LEASE

Section 8.01      Company May Consolidate, Etc., Only on Certain Terms...........................................47
Section 8.02      Successor Substituted..........................................................................48

                                   ARTICLE IX.

                             SUPPLEMENTAL INDENTURES

Section 9.01      Supplemental Indentures Without Consent of Holders.............................................48
Section 9.02      Supplemental Indentures With Consent of Holders................................................50
Section 9.03      Execution of Supplemental Indentures...........................................................51
Section 9.04      Effect of Supplemental Indentures..............................................................51
Section 9.05      Conformity with Trust Indenture Act............................................................51
Section 9.06      Reference in Securities to Supplemental Indentures.............................................51
Section 9.07      Notice of Supplemental Indenture...............................................................52

                                   ARTICLE X.

                                    COVENANTS

Section 10.01     Payment of Principal, Premium and Interest.....................................................52
Section 10.02     Maintenance of Office or Agency................................................................52
Section 10.03     Money for Securities Payments to Be Held in Trust..............................................53
Section 10.04     Corporate Existence............................................................................54
Section 10.05     Statement by Officers as to Default............................................................54
Section 10.06     Payment of Taxes...............................................................................54
Section 10.07     Calculation of Original Issue Discount.........................................................54
Section 10.08     Waiver of Certain Covenants....................................................................54

                                   ARTICLE XI.

                            REDEMPTION OF SECURITIES

Section 11.01     Applicability of Article.......................................................................55
Section 11.02     Election to Redeem; Notice to Trustee..........................................................55
Section 11.03     Selection by Trustee of Securities to Be Redeemed..............................................55
Section 11.04     Notice of Redemption...........................................................................56
Section 11.05     Deposit of Redemption Price....................................................................57
Section 11.06     Securities Payable on Redemption Date..........................................................57
Section 11.07     Securities Redeemed in Part....................................................................57

<PAGE>
                                  ARTICLE XII.

                                  SINKING FUNDS

Section 12.01     Applicability of Article.......................................................................57
Section 12.02     Satisfaction of Mandatory Sinking Fund Payments with Securities................................58
Section 12.03     Redemption of Securities for Mandatory Sinking Fund............................................58

                                  ARTICLE XIII.

                             REPAYMENT OF SECURITIES

                              AT OPTION OF HOLDERS

Section 13.01     Applicability of Article.......................................................................59
Section 13.02     Notice of Repayment Date.......................................................................59
Section 13.03     Deposit of Repayment Price.....................................................................59
Section 13.04     Securities Payable on Repayment Date...........................................................60
Section 13.05     Securities Repaid in Part......................................................................60

                                  ARTICLE XIV.

                            CONVERSION OF SECURITIES

Section 14.01     General........................................................................................60
Section 14.02     Right to Convert...............................................................................61
Section 14.03     Manner of Exercise of Conversion Privilege; Delivery of Common Stock; No Adjustment
                  for Interest or Dividends......................................................................61
Section 14.04     Cash Payments in Lieu of Fractional Shares.....................................................62
Section 14.05     Conversion Price Adjustments; Effect of Reclassification, Mergers, Consolidations and
                  Sales of Assets................................................................................62
Section 14.06     Taxes on Shares Issued.........................................................................66
Section 14.07     Shares to be Fully Paid; Compliance with Governmental Requirements; Listing of Common
                  Stock..........................................................................................67
Section 14.08     Responsibility of Trustee......................................................................67
Section 14.09     Covenant to Reserve Shares.....................................................................67
Section 14.10     Other Conversions..............................................................................68

                                   ARTICLE XV.

                       DEFEASANCE AND COVENANT DEFEASANCE

Section 15.01     Applicability of Article; Company's Option to Effect Defeasance or Covenant Defeasance.........68
Section 15.02     Defeasance and Discharge.......................................................................68
Section 15.03     Covenant Defeasance............................................................................69
Section 15.04     Conditions to Defeasance or Covenant Defeasance................................................69
Section 15.05     Deposited Money and U.S. Government Obligations to be Held in Trust; Other
                  Miscellaneous Provisions.......................................................................71
Section 15.06     Reinstatement..................................................................................71

                                  ARTICLE XVI.

                                            IMMUNITY OF INCORPORATORS,
                      STOCKHOLDERS, OFFICERS AND DIRECTORS

Section 16.01     Immunity of Incorporators, Stockholders, Officers and Directors................................72
</TABLE>
<PAGE>

         INDENTURE,  dated  as  of  __________,   2000,  between  U.S.  WIRELESS
CORPORATION,  a corporation  duly  organized and existing  under the laws of the
State of Delaware (herein called the "Company"),  having its principal office at
2303   Camino   Ramon,   Suite   200,   San   Ramon,   California   94583,   and
_____________________,   a  national  banking  association  duly  organized  and
existing  under the laws of the United  States,  as Trustee  (herein  called the
"Trustee").

                             RECITALS OF THE COMPANY

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

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

                   NOW, THEREFORE, THIS INDENTURE WITNESSETH:

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

                                   ARTICLE I.
                              DEFINITIONS AND OTHER
                       PROVISIONS OF GENERAL APPLICATION

Section 1.01      Definitions.
                  -----------

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

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

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

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

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

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

<PAGE>
         "Act," when used with respect to any Holder,  has the meaning specified
in Section 1.04.

         "Affiliate" of any specified  Person means any other Person directly or
indirectly  controlling  or  controlled  by or under  direct or indirect  common
control  with  such  specified  Person.  For the  purposes  of this  definition,
"control,"  when used with respect to any specified  Person,  means the power to
direct the  management  and  policies of such  Person,  directly or  indirectly,
whether  through the ownership of voting  securities,  by contract or otherwise;
and the terms  "controlling" and "controlled"  have meanings  correlative to the
foregoing.

         "Authenticating  Agent"  means any  Person  authorized  by the  Trustee
pursuant  to  Section  6.14 to act on  behalf  of the  Trustee  to  authenticate
Securities of one or more series.

         "Authorized  Newspaper" means a newspaper of general circulation in the
relevant area, printed in the English language and customarily published on each
Business Day therein.

         "Board of Directors" means either the board of directors of the Company
or any duly  authorized  committee  of that board or any  director or  directors
and/or officer or officers of the Company to whom that board or committee  shall
have duly delegated its authority.

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

         "Business  Day," when used with respect to any Place of Payment,  means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
or executive order to close.

         "Capital Stock," as applied to the stock of any corporation,  means the
capital stock of every class whether now or hereafter authorized,  regardless of
whether such capital  stock shall be limited to a fixed sum or  percentage  with
respect to the rights of the holders  thereof to participate in dividends and in
the  distribution  of assets  upon the  voluntary  or  involuntary  liquidation,
dissolution or winding up of such corporation.

         "Commission" means the Securities and Exchange Commission, as from time
to time  constituted,  created  under the  Securities  Exchange Act of 1934,  as
amended  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.

         "Common Stock" means any stock of any class of the Company which has no
preference  in respect of  dividends  or of amounts  payable in the event of any
voluntary or involuntary  liquidation,  dissolution or winding up of the Company
and which is not subject to redemption by the Company.

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

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

<PAGE>
         "Conversion Price" means with respect to any series of Securities which
are  convertible  into Common Stock or Preferred  Stock,  the price per share of
Common Stock or Preferred  Stock, as the case may be, at which the Securities of
such series are so convertible as set forth in the Board Resolution with respect
to such  series (or in any  supplemental  indenture  entered  into  pursuant  to
Section  9.01(9) with respect to such series),  as the same may be adjusted from
time to time in accordance  with Section 14.05 (or such  supplemental  indenture
pursuant to Section 14.01).

         "Corporate Trust Office" means the principal  corporate trust office of
the Trustee at which, at any particular time, its corporate trust business shall
be   administered,   which   office   at  the  date   hereof   is   located   at
__________________________.

         "Corporation"  includes  corporations,   associations,   companies  and
business trusts.

         "Debt" means (a) all indebtedness of the Company (including  Securities
issued  hereunder)  whether  heretofore  or hereafter  incurred (i) for borrowed
money or (ii) in connection  with the acquisition by the Company or a Subsidiary
of assets  other than in the  ordinary  course of  business,  for the payment of
which the  Company is liable  directly or  indirectly  by  guarantee,  letter of
credit,  obligation to purchase or acquire or otherwise, or the payment of which
is secured by a lien,  charge or encumbrance on assets  acquired by the Company,
(b) amendments,  modifications,  renewals,  extensions and deferrals of any such
indebtedness  and  (c)  any  indebtedness   issued  in  exchange  for  any  such
indebtedness.

         "Defaulted Interest" has the meaning specified in Section 3.07.

         "Depositary"  means,  with  respect  to the  Securities  of any  series
issuable  or  issued  in the  form  of a  Global  Security,  a  clearing  agency
registered  under  the  Securities  Exchange  Act of 1934,  as  amended,  or any
successor  thereto,  which  shall in either  case be  designated  by the Company
pursuant to Section 3.01 or 3.05 until a successor  Depositary shall have become
such pursuant to the  applicable  provisions of this  Indenture,  and thereafter
"Depositary"  shall  mean  or  include  each  Person  who is  then a  Depositary
hereunder,  and if at any time there is more than one such Person,  "Depositary"
as used  with  respect  to the  Securities  of any such  series  shall  mean the
Depositary with respect to the Securities of that series.

         "ERISA" means the Employee  Retirement  Income Security Act of 1974, as
amended, including the regulations and published interpretations thereunder.

         "Event of Default" has the meaning specified in Section 5.01.

         "generally accepted  accounting  principles" or "GAAP" means, as of any
date of  computation,  generally  accepted  accounting  principles in the United
States,   consistently  applied,  that  are  in  effect  on  the  date  of  such
computation.

<PAGE>
         "Global  Security  or  Securities"  means one or more fully  registered
Securities  in global form  evidencing  all or a part of a series of  Securities
issued to the  Depositary  for such series or its nominee or  registered  in the
name of the Depositary or its nominee.

         "Holder"  means a Person in whose name a Security is  registered in the
Security Register.

         "Indenture"  means this instrument as originally  executed or as it may
from  time  to  time  be  supplemented  or  amended  by one or  more  indentures
supplemental  hereto entered into pursuant to the applicable  provisions  hereof
and shall include the terms of particular  series of Securities  established  as
contemplated by Section 3.01.

         "Independent  Investment  Banker" means one of the  Reference  Treasury
Dealers appointed by the Trustee after consultation with the Company.

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

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

         "Lien"  means,  with respect to any  Property,  any Mortgage or deed of
trust,  pledge,  hypothecation,  security interest,  lien,  encumbrance or other
security arrangement of any kind or nature on or with respect to such Property.

         "Loan Document" has the meaning specified in Section 5.01(5).

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

         "NNM" has the meaning specified in Section 14.05(a)(v).

         "Notice of Default" has the meaning specified in Section 5.01(4).

         "Officers'  Certificate"  means a  certificate  signed  by at least two
officers of the Company,  one signature being that of the Chairman of the Board,
the Vice Chairman of the Board, the President,  an Executive Vice President or a
Senior Vice President,  and the other signature being that of the Treasurer,  an
Assistant Treasurer,  the Secretary or an Assistant  Secretary,  of the Company,
and delivered to the Trustee.

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

         "Original  Issue Discount  Security"  means any Security which provides
for an amount less than the principal  amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 5.02.

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

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

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

                  (iii) Securities which have been paid pursuant to Section 3.06
         or in  exchange  for or in lieu of which  other  Securities  have  been
         authenticated and delivered pursuant to this Indenture,  other than any
         such  Securities in respect of which there shall have been presented to
         the Trustee proof satisfactory to it that such Securities are held by a
         bona  fide   purchaser  in  whose  hands  such   Securities  are  valid
         obligations of the Company; and

                  (iv)     Securities  with  respect to which the Company has
         effected  defeasance  as provided in Article XV;

provided,  however,  that in  determining  whether the Holders of the  requisite
principal amount of the Outstanding  Securities have given any request,  demand,
authorization, direction, notice, consent or waiver hereunder, (a) the principal
amount  of an  Original  Issue  Discount  Security  that  shall be  deemed to be
Outstanding  shall be the amount of the principal  thereof that would be due and
payable as of the date of such  determination upon a declaration of acceleration
of the Maturity  thereof  pursuant to Section 5.02, and (b) Securities  owned by
the Company or any other  obligor upon the  Securities  or any  Affiliate of the
Company  or of such  other  obligor  shall be  disregarded  and deemed not to be
Outstanding,  except that, in determining whether the Trustee shall be protected
in relying upon any such  request,  demand,  authorization,  direction,  notice,
consent or waiver,  only Securities which the Trustee knows to be so owned shall
be so disregarded. Securities so owned which have been pledged in good faith may
be regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's  right so to act with respect to such  Securities and that
the pledgee is not the Company or any other  obligor upon the  Securities or any
Affiliate of the Company or of such other obligor.

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

         "Person" means any individual,  corporation, limited liability company,
partnership,   joint   venture,   association,   joint-stock   company,   trust,
unincorporated organization or government or any agency or political subdivision
thereof.

<PAGE>
         "Place of  Payment,"  when used with respect to the  Securities  of any
series,  means the place or places where the principal of (and premium,  if any)
and  interest  on the  Securities  of that series are  payable as  specified  as
contemplated by Section 3.01.

         "Predecessor  Security" of any particular Security means every previous
Security  evidencing all or a portion of the same debt as that evidenced by such
particular  Security;  and,  for the purposes of this  definition,  any Security
authenticated  and delivered  under Section 3.06 in exchange for or in lieu of a
mutilated,  destroyed,  lost or stolen  Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.

         "Preferred Stock" means any stock of any class of the Company which has
a preference  over Common Stock in respect of dividends or of amounts payable in
the event of any voluntary or involuntary liquidation, dissolution or winding up
of the  Company  and  that  is  not  mandatorily  redeemable  or  repayable,  or
redeemable or repayable at the option of the Holder, otherwise than in shares of
Common Stock or Preferred  Stock of another class or series or with the proceeds
of the sale of Common Stock or Preferred Stock.

         "Property"  means any building,  structure or other facility,  together
with the land upon which it is erected and fixtures  comprising a part  thereof,
used primarily for selling  automotive  parts and accessories or the warehousing
or  distributing  of such  products,  owned  or  leased  by the  Company  or any
Subsidiary of the Company.

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

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

         "Reference   Treasury   Dealer"   means  each  of   __________________,
____________________  and  ____________________ and their respective successors;
provided, however, that if any of the foregoing shall cease to be a primary U.S.
Government securities dealer in New York City (a "Primary Treasury Dealer"), the
Company shall substitute therefor another Primary Treasury Dealer.

         "Reference  Treasury  Dealer  Quotations"  means,  with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the  Trustee,  of the bid and asked  prices for the  Comparable  Treasury  Issue
(expressed  in each case as a  percentage  of its  principal  amount)  quoted in
writing to the  Trustee by such  Reference  Treasury  Dealer by 5:00 p.m. on the
third Business Day preceding such redemption date.

         "Regular Record Date" for the interest  payable on any Interest Payment
Date on the  Securities of any series means the date  specified for that purpose
as contemplated by Section 3.01.

         "Repayment  Date"  means,  when used with respect to any Security to be
repaid at the  option of the  Holder,  the date fixed for such  repayment  by or
pursuant to this Indenture.

         "Repayment  Price" means,  when used with respect to any Security to be
repaid at the option of the Holder,  the price at which it is to be repaid by or
pursuant to this Indenture.

<PAGE>
         "Responsible Officer," when used with respect to the Trustee, means any
officer of the Trustee customarily performing corporate trust functions.

         "Securities"  has the  meaning  stated  in the  first  recital  of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.

         "Security  Register"  and  "Security  Registrar"  have  the  respective
meanings specified in Section 3.05.

         "Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.07.

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

         "Subsidiary" means a corporation or a limited partnership more than 50%
of the  outstanding  voting stock or limited  partnership  interests of which is
owned,  directly  or  indirectly,  by  the  Company  or by  one  or  more  other
Subsidiaries,  or by the  Company  and one or more other  Subsidiaries.  For the
purposes of this  definition,  "voting  stock" means stock which  ordinarily has
voting power for the election of directors, whether at all times or only so long
as no senior class of stock has such voting power by reason of any contingency.

         "Time  of   Determination"   has  the  meaning   specified  in  Section
14.05(a)(v).

         "Trading Day" has the meaning specified in Section 14.05(a)(v).

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

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

         "United States" means the United States of America.

     "U.S. Government Obligations" has the meaning specified in Section 15.04.

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

<PAGE>
Section 1.02      Compliance Certificates and Opinions.
                  ------------------------------------

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

         Every  certificate  or  opinion  with  respect  to  compliance  with  a
condition or covenant provided for in this Indenture (other than the certificate
provided for in Section 10.05) 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 1.03      Form of Documents Delivered to Trustee.
                  --------------------------------------

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

         Any  certificate  or opinion of an officer of the Company may be based,
insofar as it relates to legal  matters,  upon a  certificate  or opinion of, or
representations  by,  counsel,  unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or  representations
with respect to the matters upon which his  certificate or opinion are based are
erroneous.  Any such certificate or Opinion of Counsel may be based,  insofar as
it  relates  to  factual   matters,   upon  a  certificate  or  opinion  of,  or
representations  by, an officer or  officers  of the  Company  stating  that the
information  with respect to such factual  matters is in the  possession  of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know,  that the certificate or opinion or  representations  with respect to such
matters are erroneous.
<PAGE>
         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 1.04      Acts of Holders; Record Dates.
                  -----------------------------

(a) Any request, demand,  authorization,  direction,  notice, consent, waiver or
other action  provided by this  Indenture to be given or taken by Holders may be
embodied in and evidenced by one or more  instruments of  substantially  similar
tenor signed by such Holders in person or by an agent duly appointed in writing;
and, except as herein  otherwise  expressly  provided,  such action shall become
effective when such  instrument or instruments are delivered to the Trustee and,
where it is hereby  expressly  required,  to the  Company.  Such  instrument  or
instruments (and the action embodied  therein and evidenced  thereby) are herein
sometimes  referred to as the "Act" of the Holders  signing such  instrument  or
instruments.  Proof  of  execution  of  any  such  instrument  or  of a  writing
appointing  any such agent shall be sufficient for any purpose of this Indenture
and  (subject  to  Section  6.01)  conclusive  in favor of the  Trustee  and the
Company, if made in the manner provided in this Section.

(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 which the Trustee deems sufficient.

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

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

(e) The Company may, in the circumstances  permitted by the Trust Indenture Act,
fix any day as the record  date for the  purpose of  determining  the Holders of
Securities  of any  series  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  of
Securities  of  such  series.  If not  set by the  Company  prior  to the  first
solicitation  of a Holder of  Securities  of such  series  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 7.01) prior to such first solicitation or vote, as the case may be. With
regard to any record  date for action to be taken by the  Holders of one or more
series of Securities, only the Holders of Securities of such series on such date
(or their duly  designated  proxies)  shall be entitled to give or take, or vote
on, the relevant action.

<PAGE>
(f) Without  limiting the  foregoing,  a Holder  entitled  hereunder to take any
action hereunder with regard to any particular Security may do so with regard to
all or any part of the principal  amount of such Security or by one or more duly
appointed  agents  each of which may do so  pursuant  to such  appointment  with
regard to all or any part of such principal  amount.  Any notice given or action
taken by a Holder or its agents with regard to different parts of such principal
amount  pursuant  to this  paragraph  shall have the same  effect as if given or
taken by separate Holders of each such different part.

(g) Without limiting the generality of the foregoing, unless otherwise specified
pursuant  to Section  3.01 or pursuant  to one or more  indentures  supplemental
hereto,  a  Holder,  including  a  Depositary  that is the  Holder  of a  Global
Security,  may make,  give or take,  by a proxy or  proxies  duly  appointed  in
writing, any request, demand, authorization,  direction, notice, consent, waiver
or  other  action  provided  in this  Indenture  to be  made,  given or taken by
Holders,  and a Depositary  that is the Holder of a Global  Security may provide
its proxy or proxies to the  beneficial  owners of  interests in any such Global
Security  through  such   Depositary's   standing   instructions  and  customary
practices.

(h) The  Trustee  shall fix a record  date for the  purpose of  determining  the
Persons who are beneficial  owners of interests in any Global Security held by a
Depositary  entitled  under the procedures of such  Depositary to make,  give or
take,  by a proxy or proxies  duly  appointed in writing,  any request,  demand,
authorization,  direction,  notice,  consent, waiver or other action provided in
this Indenture to be made,  given or taken by Holders.  If such a record date is
fixed, the Holders on such record date or their duly appointed proxy or proxies,
and only such  Persons,  shall be entitled to make,  give or take such  request,
demand,  authorization,  direction,  notice,  consent,  waiver or other  action,
whether or not such  Holders  remain  Holders  after such record  date.  No such
request,  demand,  authorization,  direction,  notice,  consent, waiver or other
action  shall be valid or  effective  if made,  given or taken more than 90 days
after such record date.

Section 1.05      Notices, Etc., to Trustee and Company.
                  -------------------------------------

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

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

<PAGE>
         Corporate Trust Administration, or

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

Section 1.06      Notice to Holders; Waiver.
                  -------------------------

         Where this Indenture  provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly  provided)
if in writing and mailed,  first-class  postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register,  not later
than the latest date, and not earlier than the earliest date, prescribed for the
giving of such  notice.  In any case  where  notice to Holders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed,
to any  particular  Holder  shall  affect the  sufficiency  of such  notice with
respect to other  Holders.  Any notice to a Holder which is mailed in the manner
herein provided shall be conclusively  presumed to have been duly given, whether
or not such Holder  receives  such  notice.  Where this  Indenture  provides for
notice  in any  manner,  such  notice  may be waived in  writing  by the  Person
entitled to receive  such  notice,  either  before or after the event,  and such
waiver  shall be the  equivalent  of such  notice.  Waivers of notice by Holders
shall be filed  with the  Trustee,  but such  filing  shall  not be a  condition
precedent to the validity of any action taken in reliance upon such waiver.

         In case, by reason of the  suspension of or  irregularities  in regular
mail service or by reason of any other cause, it shall be  impracticable to give
notice of any event to Holders by mail when such  notice is required to be given
pursuant to any provision of this Indenture,  then such notification as shall be
made with the approval of the Trustee shall constitute a sufficient notification
for every purpose hereunder.

Section 1.07      Conflict with Trust Indenture Act.
                  ---------------------------------

         If any provision hereof limits,  qualifies or conflicts with the duties
imposed by any of Sections 3.10 through 3.17, inclusive,  of the Trust Indenture
Act through the operation of Section 3.18(c) thereof,  such imposed duties 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 shall be
deemed to be so excluded, as the case may be.

Section 1.08      Effect of Headings and Table of Contents.
                  ----------------------------------------

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

Section 1.09      Successors and Assigns.
                  ----------------------

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

<PAGE>
Section 1.10      Separability Clause.
                  -------------------

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

Section 1.11      Benefits of Indenture.
                  ---------------------

         Nothing in this  Indenture  or in the  Securities,  express or implied,
shall give to any  Person,  other than the parties  hereto and their  successors
hereunder,  any  Paying  Agent  and the  Holders,  any  benefit  or any legal or
equitable  right,  remedy or claim  under  this  Indenture;  provided  that this
Section  1.11 shall not limit the rights of any Holder of a Global  Security  to
give any notice or take any action,  or appoint  any agents,  with regard to any
part or different parts of the principal amount of such Global Security pursuant
to Section 1.04.

Section 1.12      Governing Law.
                  -------------

         This Indenture and the Securities shall be governed by and construed in
accordance  with the laws of the State of New York and for all purposes shall be
governed by and  construed  in  accordance  with the laws of said state  without
regard to the conflicts of laws and rules of said state.

Section 1.13      Legal Holidays.
                  --------------

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

ARTICLE II.

                                 SECURITY FORMS

Section 2.01      Forms of Securities.
                  -------------------

         The Securities of each series shall be in such form or forms (including
global form) as shall be established by or pursuant to a Board  Resolution or in
one or more indentures  supplemental  hereto, in each case with such appropriate
insertions,  omissions,  substitutions  and other  variations as are required or
permitted by this Indenture,  and may have such letters,  numbers or other marks
of  identification  and such legends or  endorsements  placed  thereon as may be
required to comply with any law or with any rules made  pursuant  thereto or the
rules of any securities exchange or as may, consistently herewith, be determined
by the officers  executing such  Securities,  as evidenced by their execution of
such  Securities.  If the form of  Securities  of any series is  established  by
action taken pursuant to a Board Resolution,  a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of the
Company and  delivered to the Trustee at or prior to the delivery of the Company
Order  contemplated by Section 3.03 for the  authentication and delivery of such
Securities.

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

         The definitive Securities shall be printed, lithographed or engraved or
may be produced in any other  manner  permitted  by the rules of any  securities
exchange  upon which the  Securities  may be listed and (with  respect to Global
Securities of any Series) the rules of the Depositary,  all as determined by the
officers  executing  such  Securities,  as evidenced by their  execution of such
Securities.

Section 2.02      Form of Trustee's Certificate of Authentication.
                  -----------------------------------------------

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

                                   as Trustee

                                                     By

                                                          Authorized Officer

Section 2.03      Securities in Global Form.
                  -------------------------

         If any Security of a series is issuable in global form,  such  Security
may  provide  that it  shall  represent  the  aggregate  amount  of  Outstanding
Securities  from time to time  endorsed  thereon and also may  provide  that the
aggregate amount of Outstanding  Securities represented thereby may from time to
time be reduced to reflect  exchanges.  Any  endorsement of a Security in global
form to reflect the  amount,  or any  increase  or  decrease  in the amount,  of
Outstanding  Securities  represented thereby shall be made by the Trustee and in
such manner as shall be  specified in such  Security.  Any  instructions  by the
Company with respect to a Security in global form,  after its initial  issuance,
shall be in writing but need not comply with Section 1.02.

<PAGE>
                                  ARTICLE III.

                                 THE SECURITIES

Section 3.01      Amount Unlimited; Issuable in Series.
                  ------------------------------------

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

         The Securities  may be issued in one or more series.  All Securities of
each series  issued  under this  Indenture  shall in all respects be equally and
ratably  entitled to the  benefits  hereof with  respect to such series  without
preference,  priority  or  distinction  on  account  of the  actual  time of the
authentication and delivery or Maturity of the Securities of such series.  There
shall be  established in or pursuant to a Board  Resolution,  and, to the extent
not set forth therein, set forth in an Officers' Certificate,  or established in
one or more indentures  supplemental hereto, prior to the issuance of Securities
of any series:

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

(2)      the price or prices  (expressed as a percentage of the aggregate
         principal  amount  thereof) at which the Securities will be issued;

(3)      any limit upon the aggregate  principal amount of the Securities of the
         series which may be  authenticated  and delivered  under this Indenture
         (except for Securities authenticated and delivered upon registration of
         transfer  of, or in exchange  for, or in lieu of, other  Securities  of
         that series pursuant to Section 3.04, 3.05, 3.06, 9.06, 11.06, 13.05 or
         14.03);

(4)      the date or dates on which the principal and premium, if any, of the
         Securities of the series is payable;

(5)      the rate or rates  (which may be fixed or  variable),  or the method of
         determination thereof, at which the Securities of the series shall bear
         interest,  if any,  the date or dates from which  such  interest  shall
         accrue,  the Interest  Payment  Dates on which such  interest  shall be
         payable and the Regular  Record  Date for the  interest  payable on any
         Interest Payment Date or, if the principal amount payable at the Stated
         Maturity of any of the Securities  will not be  determinable  as of any
         one or more dates prior to the Stated  Maturity,  the amount which will
         be  deemed  to be such  principal  amount  as of any such  date for any
         purpose,  including the principal  amount thereof which will be due and
         payable upon any Maturity other than the Stated  Maturity or which will
         be deemed to be  Outstanding as of any such date (or, in any such case,
         the manner in which such deemed principal amount is to be determined);

(6)      if other than the Corporate Trust Office, the place or places where the
         principal of (and  premium,  if any) and interest on  Securities of the
         series shall be payable;

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

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

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

(10)     if  other  than  the  principal  amount  thereof,  the  portion  of the
         principal  amount of  Securities  of the series  which shall be payable
         upon  declaration of acceleration of the Maturity  thereof  pursuant to
         Section 5.02;

(11)     if the  Securities of the series shall be issued in whole or in part in
         the form of a Global  Security or Securities,  the terms and conditions
         upon which such Global  Security  may be  exchanged in whole or in part
         for other  individual  securities  and the  Depositary  for such Global
         Security or Securities;

(12)     any addition to or change in the Events of Default which applies to any
         Securities of the series;

(13)     any  addition to or change in the  covenants  set forth in Article X
         which  applies to  Securities  of the series;

(14)     if the  Securities of the series are  convertible  into Common Stock or
         Preferred Stock, the Conversion Price therefor, the period during which
         such  Securities are  convertible  and any terms and conditions for the
         conversion of such Securities which differ from Article XIV;

(15)     the nature and terms of the security for any secured Securities;

(16)     the form and terms of any guarantee of the Securities;

(17)     the  application,  if any, of Section 15.02 or 15.03 to the Securities
         of the series and any provisions in modification of, in addition to or
         in lieu of any of the provisions of Article XV;

(18)     the  listing  of the  Securities  on any  securities  exchange  or the
         inclusion  in any other  market or quotation or trading system;

(19)     any  other  terms of the  series  (which  terms  shall not be
         inconsistent  with the  provisions  of this Indenture);

<PAGE>
(20)     if the principal  amount payable at the stated  maturity of any of such
         Securities  will not be  determinable as of any one or more dates prior
         to the  stated  maturity,  the  amount  which will be deemed to be such
         principal  amount as of any such date for any  purpose,  including  the
         principal  amount  thereof  which  will be due  and  payable  upon  any
         maturity  other than the stated  maturity or which will be deemed to be
         outstanding  as of any such date (or,  in any such case,  the manner in
         which such deemed principal amount is so determined); and

(21)     any trustee or fiscal or  authenticating  or paying  agent,  issuing or
         paying agent, transfer agent or registrar or any other person or entity
         to act in  connection  with  such  Securities  for or on  behalf of the
         holders thereof or the Company or an affiliate.

         All  Securities  of any one  series  shall be  substantially  identical
except as to denomination and except as may otherwise be provided in or pursuant
to such Board  Resolution  and set forth in such Officers'  Certificate,  to the
extent applicable,  or in any such indenture supplemental hereto. All Securities
of any one  series  need not be issued at the same  time and,  unless  otherwise
provided,  a series may be  reopened,  without the consent of the  Holders,  for
issuance of additional Securities of such series.

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

Section 3.02      Denominations.
                  -------------

         The Securities of each series shall be issuable in registered form with
or without coupons in such  denominations  as shall be specified as contemplated
by Section  3.01.  In the  absence of any such  provisions  with  respect to the
Securities  of any series,  the  Securities  of such series shall be issuable in
denominations of $1,000 and any integral multiple thereof.

Section 3.03      Execution, Authentication, Delivery and Dating.
                  ----------------------------------------------

         The  Securities  shall be  executed  on  behalf of the  Company  by its
Chairman  of the Board,  its Vice  Chairman  of the  Board,  its  President,  an
Executive  Vice  President or one of its Senior Vice  Presidents and attested by
its Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities may be manual or facsimile.

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

         At any time and from time to time after the  execution  and delivery of
this Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for  authentication,  and the Trustee shall  authenticate
and deliver such Securities upon Company Order. If all the Securities of any one
series  are not to be  originally  issued at one time and if a Board  Resolution
relating to such  Securities  shall so permit,  such Company Order may set forth
procedures  (acceptable to the Trustee) for the issuance and  authentication  of
such Securities.

<PAGE>
         If the  form  or  terms  of the  Securities  of the  series  have  been
established  in or pursuant to one or more Board  Resolutions  as  permitted  by
Sections 2.01 and 3.01, in  authenticating  such  Securities,  and accepting the
additional responsibilities under this Indenture in relation to such Securities,
the Trustee shall be entitled to receive, and (subject to Section 6.01) shall be
fully protected in relying upon, an Opinion of Counsel stating:

(a)      if the form of such  Securities has been  established by or pursuant to
         Board  Resolution as permitted by Section 2.01, that such form has been
         established in conformity with the provisions of this Indenture;

(b)      if the terms of such Securities have been established by or pursuant to
         Board  Resolution  as permitted by Section  3.01,  that such terms have
         been  established in conformity  with the provisions of this Indenture;
         and

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

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

         Notwithstanding  the  provisions  of Section 3.01 and of the  preceding
paragraph,  if all Securities of a series are not to be originally issued at one
time,  it shall not be  necessary to deliver the Board  Resolution  or Officers'
Certificate otherwise required pursuant to Section 3.01 or the Company Order and
Opinion of Counsel otherwise  required pursuant to this Section 3.03 or prior to
the time of authentication of each Security of such series if such documents are
delivered at or prior to the authentication  upon original issuance of the first
Security of such series to be issued and such documents  reasonably  contemplate
the issuance of all Securities of such series.

         Unless otherwise provided in the form of Security for any series,  each
Security shall be dated the date of its authentication.

         No Security shall be entitled to any benefit under this Indenture or be
valid or  obligatory  for any purpose  unless there  appears on such  Security a
certificate  of  authentication  substantially  in the form  provided for herein
executed by the Trustee by manual signature of an authorized  officer,  and such
certificate  upon  any  Security  shall  be  conclusive  evidence,  and the only
evidence, that such Security has been duly authenticated and delivered hereunder
and is entitled to the benefits of this Indenture.

         If the  Company  shall  establish  pursuant  to  Section  3.01 that the
Securities  of a  series  are to be  issued  in the  form of one or more  Global
Securities,  then the Company shall execute and the Trustee shall, in accordance
with  this  Section  and  the  Company   Order  with  respect  to  such  series,
authenticate and deliver one or more Global  Securities that (i) shall represent
and shall be denominated in an amount equal to the aggregate principal amount of
all of the  Securities  of such series  having the same terms issued and not yet
canceled, (ii) shall be registered in the name of the Depositary for such Global
Security  or  Securities  or the  nominee  of such  Depositary,  (iii)  shall be
delivered  by the Trustee to such  Depositary  or pursuant to such  Depositary's
instructions and (iv) shall bear a legend substantially to the following effect:
"Unless  and  until  it is  exchanged  in whole  or in part  for  Securities  in
definitive  registered  form,  this Security may not be transferred  except as a
whole by the  Depositary to the nominee of the Depositary or by a nominee of the
Depositary  to the  Depositary  or another  nominee of the  Depositary or by the
Depositary  or any such nominee to a successor  Depositary  or a nominee of such
successor Depositary."

<PAGE>
Section 3.04      Temporary Securities.
                  --------------------

         Pending the  preparation  of definitive  Securities of any series,  the
Company may execute,  and upon Company Order the Trustee shall  authenticate and
deliver,  temporary  Securities  which are printed,  lithographed,  typewritten,
mimeographed   or   otherwise   produced,   in  any   authorized   denomination,
substantially  of the tenor of the  definitive  Securities in lieu of which they
are issued and with such appropriate  insertions,  omissions,  substitutions and
other  variations as the officers  executing such  Securities may determine,  as
evidenced by their execution of such Securities.  Every such temporary  Security
shall be executed by the Company and shall be authenticated and delivered by the
Trustee upon the same conditions and in substantially the same manner,  and with
the same effect, as the definitive Security in lieu of which it is issued.

         If  temporary  Securities  of any series are issued,  the Company  will
cause definitive  Securities of that series to be prepared without  unreasonable
delay.  After the  preparation  of  definitive  Securities  of such series,  the
temporary  Securities  of such  series  shall  be  exchangeable  for  definitive
Securities  of such series upon  surrender of the  temporary  Securities of such
series at the office or agency of the  Company  in a Place of  Payment  for that
series, without charge to the Holder. Upon surrender for cancellation of any one
or more  temporary  Securities  of any series the Company  shall execute and the
Trustee shall  authenticate  and deliver in exchange  therefor a like  principal
amount of definitive Securities of the same series of authorized  denominations.
Until so exchanged the temporary  Securities of any series shall in all respects
be entitled to the same benefits under this  Indenture as definitive  Securities
of such series.

Section 3.05      Registration, Registration of Transfer and Exchange and Book-
                  Entry Securities.

         The  Company  shall  cause to be kept at one of its offices or agencies
maintained pursuant to Section 10.02 a register (the register maintained in such
office being herein sometimes referred to as the "Security  Register") in which,
subject to such  reasonable  regulations as it may prescribe,  the Company shall
provide for the  registration  of exchanges  and  transfers of  Securities.  The
Person  responsible for the maintenance of the Security  Register is referred to
herein as the "Security  Registrar." The Trustee is hereby  initially  appointed
Security  Registrar for the purpose of  registering  Securities and transfers of
Securities  as herein  provided.  The exchange of and the transfer of Securities
also may be registered at the office of the Trustee.

         Upon  surrender  for  registration  of transfer of any  Security of any
series  at the  office  or agency in a Place of  Payment  for that  series,  the
Company shall execute,  and the Trustee shall  authenticate and deliver,  in the
name of the designated transferee or transferees,  one or more new Securities of
the  same  series,  of any  authorized  denominations  and  of a like  aggregate
principal amount.

<PAGE>
         At the option of the Holder,  Securities of any series  (except  Global
Securities)  may be exchanged for other  Securities  of the same series  (except
Global  Securities)  of any  authorized  denominations  and of a like  aggregate
principal  amount,  upon  surrender  of the  Securities  to be exchanged at such
office or agency.  Whenever any Securities are so surrendered for exchange,  the
Company shall  execute,  and the Trustee  shall  authenticate  and deliver,  the
Securities which the Holder making the exchange is entitled to receive.

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

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

         No service  charge  shall be made for any  registration  of transfer or
exchange of Securities,  but the Company may require payment of a sum sufficient
to cover any tax or other governmental  charge that may be imposed in connection
with any  registration  of  transfer  or  exchange  of  Securities,  other  than
exchanges  pursuant to Section 3.04, 9.06,  11.06,  13.05 or 14.03 not involving
any transfer.

         The Company  shall not be required (i) to issue,  register the transfer
of or exchange Securities of any series during a period beginning at the opening
of business 15 days before the day of the mailing of a notice of  redemption  of
Securities of that series selected for redemption under Section 11.02 and ending
at the close of business  on the day of such  mailing,  or (ii) to register  the
transfer of or exchange any Security so selected for  redemption  in whole or in
part, except the unredeemed portion of any Security being redeemed in part.

         Notwithstanding  any other  provision of this Section 3.05,  unless and
until  it is  exchanged  in  whole  or in  part  for  Securities  in  definitive
registered  form,  a  Global  Security  representing  all  or a  portion  of the
Securities  of a  series  may  not  be  transferred  except  as a  whole  by the
Depositary  for such series to a nominee of such  Depositary  or by a nominee of
such  Depositary to such  Depositary or another nominee of such Depositary or by
such Depositary or any such nominee to a successor Depositary for such series or
a nominee of such successor Depositary.

         If at any time the Depositary  for the Securities of a series  notifies
the Company  that it is unwilling  or unable to continue as  Depositary  for the
Securities of such series or if at any time the Depositary for the Securities of
a series shall no longer be registered or in good standing  under the Securities
Exchange Act of 1934, as amended, or other applicable statute or regulation, the
Company shall appoint a successor  Depositary  with respect to the Securities of
such series. If a successor  Depositary for the Securities of such series is not
appointed by the Company  within 90 days after the Company  receives such notice
or becomes aware of such condition,  the Company shall execute, and the Trustee,
upon  receipt  of a  Company  Order  for  the  authentication  and  delivery  of
definitive  Securities of such series, shall authenticate and deliver Securities
of such series in definitive form in an aggregate  principal amount equal to the
principal amount of the Global Security or Securities  representing  such series
in exchange for such Global Security or Securities.

         The Company may at any time and in its sole  discretion  determine that
the Securities of any series issued in the form of one or more Global Securities
shall no longer be represented by a Global Security or Securities. In such event
the Company shall execute, and the Trustee,  upon receipt of a Company Order for
the authentication and delivery of definitive  Securities of such series,  shall
authenticate  and deliver,  Securities of such series in  definitive  registered
form without coupons, in any authorized denominations, in an aggregate principal
amount  equal to the  principal  amount of the  Global  Security  or  Securities
representing such series, in exchange for such Global Security or Securities.

         If specified by the Company  pursuant to Section 3.01 with respect to a
series of Securities, the Depositary for such series of Securities may surrender
a Global  Security for such series of Securities in exchange in whole or in part
for Securities of such series in definitive registered form on such terms as are
acceptable  to the Company and such  Depositary.  Thereupon,  the Company  shall
execute, and the Trustee shall authenticate and deliver, without service charge,

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

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

<PAGE>
         Upon the exchange of a Global  Security for  Securities  in  definitive
registered  form, in authorized  denominations,  such Global  Security  shall be
canceled by the Trustee.  Securities  in  definitive  registered  form issued in
exchange for a Global Security pursuant to this Section 3.05 shall be registered
in such names and in such  authorized  denominations  as the Depositary for such
Global  Security,   pursuant  to  instructions   from  its  direct  or  indirect
participants or otherwise,  shall instruct the Trustee. The Trustee shall not be
liable for any delay in delivery of such  instructions and may conclusively rely
on, and shall be protected in relying on, such instructions.  The Trustee shall,
at Company expense,  deliver such Securities to or as directed by the Persons in
whose names such Securities are so registered.

Section 3.06      Mutilated, Destroyed, Lost and Stolen Securities.
                  ------------------------------------------------

         If any mutilated Security is surrendered to the Trustee,  together with
such other security or indemnity as may be reasonably required by the Trustee to
save it harmless,  the Company shall execute and the Trustee shall  authenticate
and deliver in exchange  therefor a new  Security of the same series and of like
tenor  and  principal   amount  and  bearing  a  number  not   contemporaneously
outstanding.

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

         In case any such  mutilated,  destroyed,  lost or stolen  Security  has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security, subject to satisfaction of
the  foregoing  conditions.  Upon the  issuance of any new  Security  under this
Section,  the Company may require the payment of a sum  sufficient  to cover any
tax or other governmental charge that may be imposed in relation thereto and any
other  expenses  (including  the fees and  expenses  of the  Trustee)  connected
therewith.

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

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

Section 3.07      Payment of Interest; Interest Rights Preserved.
                  ----------------------------------------------

         Except as  otherwise  provided  as  contemplated  by Section  3.01 with
respect to any series of Securities,  interest on any Security which is payable,
and is punctually paid or duly provided for, on any Interest  Payment Date shall
be paid to the Person in whose name that  Security  (or one or more  Predecessor
Securities)  is registered  at the close of business on the Regular  Record Date
for such interest.  The Company and the Trustee  understand that interest on any
Global  Security will be disbursed or credited by the  Depositary to the Persons
having ownership  thereof pursuant to a book entry or other system maintained by
the Depositary.

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

(1)      The Company may elect to make payment of any Defaulted  Interest to the
         Persons  in  whose  names  the  Securities  of such  series  (or  their
         respective  Predecessor  Securities)  are  registered  at the  close of
         business on a Special  Record  Date for the  payment of such  Defaulted
         Interest,  which shall be fixed in the  following  manner.  The Company
         shall notify the Trustee in writing of the amount of Defaulted Interest
         proposed to be paid on each Security of such series and the date of the
         proposed  payment,  and at the same time the Company shall deposit with
         the Trustee an amount of money equal to the aggregate  amount  proposed
         to be  paid in  respect  of  such  Defaulted  Interest  or  shall  make
         arrangements  satisfactory to the Trustee for such deposit prior to the
         date of the proposed  payment,  such money when deposited to be held in
         trust  for the  benefit  of the  Persons  entitled  to  such  Defaulted
         Interest as in this Clause provided.  Thereupon the Trustee shall fix a
         Special  Record Date for the payment of such  Defaulted  Interest which
         shall be not more than 15 days and not less  than 10 days  prior to the
         date of the  proposed  payment  and not  less  than 10 days  after  the
         receipt  by the  Trustee  of the notice of the  proposed  payment.  The
         Trustee shall  promptly  notify the Company of such Special Record Date
         and, in the name and at the expense of the Company,  shall cause notice
         of the  proposed  payment of such  Defaulted  Interest  and the Special
         Record Date therefor to be mailed, first-class postage prepaid, to each
         Holder of Securities of such series at his address as it appears in the
         Security  Register,  not less than 10 days prior to such Special Record
         Date. Notice of the proposed payment of such Defaulted Interest and the
         Special  Record Date  therefor  having been so mailed,  such  Defaulted
         Interest  shall be paid to the Persons in whose names the Securities of
         such series (or their respective Predecessor Securities) are registered
         at the  close of  business  on such  Special  Record  Date and shall no
         longer be payable pursuant to the following Clause (2).

<PAGE>
(2)      The  Company  may  make  payment  of  any  Defaulted  Interest  on  the
         Securities  of any series in any other lawful  manner not  inconsistent
         with  the  requirements  of  any  securities  exchange  on  which  such
         Securities  may be listed,  and upon such  notice as may be required by
         such exchange,  if, after notice given by the Company to the Trustee of
         the proposed  payment  pursuant to this Clause,  such manner of payment
         shall be deemed practicable by the Trustee.

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

Section 3.08      Persons Deemed Owners.
                  ---------------------

         The  Company,  the  Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such  Security is  registered as the owner of
such Security for the purpose of receiving payment of principal of (and premium,
if any) and  (subject to Section  3.07)  interest on such  Security  and for all
other purposes whatsoever,  whether or not such Security be overdue, and neither
the  Company,  the Trustee nor any agent of the Company or the Trustee  shall be
affected by notice to the contrary.

         None of the  Company,  the  Trustee,  any Paying  Agent or the Security
Registrar  will  have any  responsibility  or  liability  for any  aspect of the
records  relating  to or  payments  made  on  account  of  beneficial  ownership
interests of a Global Security or for maintaining,  supervising or reviewing any
records relating to such beneficial ownership interests.

Section 3.09      Cancellation.
                  ------------

         Unless otherwise  specified  pursuant to Section 3.01(7) for Securities
of any series all Securities surrendered for payment,  redemption,  registration
of transfer or exchange or for credit against any mandatory sinking fund payment
shall, if surrendered to any Person other than the Trustee,  be delivered to the
Trustee  and shall be  promptly  canceled  by it.  The  Company  may at any time
deliver to the Trustee for cancellation any Securities previously  authenticated
and  delivered  hereunder  which the  Company  may have  acquired  in any manner
whatsoever,  and all Securities so delivered  shall be promptly  canceled by the
Trustee,  except that if a Global Security is so surrendered,  the Company shall
execute and the Trustee shall  authenticate  and deliver to the  Depositary  for
such  Global  Security,  without  service  charge,  a  new  Global  Security  or
Securities  in a  denomination  equal to and in exchange  for the portion of the
Global  Security so surrendered not to be paid,  redeemed,  repaid or registered
for transfer or exchange or for credit.  No Securities shall be authenticated in
lieu of or in exchange for any Securities  canceled as provided in this Section,
except as expressly permitted by this Indenture. All canceled Securities held by
the Trustee shall be disposed of in accordance with its customary procedures and
a certificate of  disposition  shall be delivered to the Company,  unless,  by a
Company Order,  the Company shall direct the canceled  Securities be returned to
it.

Section 3.10      Computation of Interest.
                  -----------------------

         Except as  otherwise  specified  as  contemplated  by Section  3.01 for
Securities  of any series,  interest on the  Securities  of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.

ARTICLE IV.

                           SATISFACTION AND DISCHARGE

Section 4.01      Satisfaction and Discharge of Indenture.
                  ---------------------------------------

         Upon  Company  Request,  this  Indenture  shall  cease to be of further
effect with respect to the  Securities of a particular  series (except as to any
surviving  rights  to  convert  Securities  into  Common  Stock,  or  rights  of
registration  of transfer or exchange of Securities  herein  expressly  provided
for),  and the Trustee,  at the expense of the  Company,  shall  execute  proper
instruments  acknowledging  satisfaction  and discharge of this  Indenture as to
such Securities, when:

(1)      either:

(A)               all Securities of such series  theretofore  authenticated  and
                  delivered   (other  than  (i)   Securities   which  have  been
                  destroyed, lost or stolen and which have been replaced or paid
                  as  provided  in Section  3.06 and (ii)  Securities  for whose
                  payment  money  has  theretofore  been  deposited  in trust or
                  segregated  and held in trust by the  Company  and  thereafter
                  repaid  to the  Company  or  discharged  from such  trust,  as
                  provided in Section  10.03) have been delivered to the Trustee
                  for cancellation; or

<PAGE>
(B)      all Securities of such series not theretofore delivered to the Trustee
         for cancellation

(i)      have become due and payable, or

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

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

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

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

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

         Notwithstanding  the  satisfaction and discharge of this Indenture with
respect to the Securities of a particular series, the obligations of the Company
to the Trustee under Section 6.07,  the  obligations,  if any, of the Trustee to
any  Authenticating  Agent  under  Section  6.14 and,  if money  shall have been
deposited  with the  Trustee  pursuant  to  subclause  (B) of clause (1) of this
Section,  the  obligations  of the  Trustee  under  Section  4.02  and the  last
paragraph of Section 10.03, in each case with respect to such Securities,  shall
survive.

         Notwithstanding  the  cessation,   termination  and  discharge  of  all
obligations,  covenants and  agreements of the Company under this Indenture with
respect to any  series of  Securities,  the  obligations  of the  Company to the
Trustee under Section 6.07,  the  obligations  of the Trustee under Section 4.02
and the last  paragraph  of Section  10.03 shall  survive  with  respect to such
series of Securities.

Section 4.02      Application of Trust Money.
                  --------------------------

         Subject to the provisions of the last  paragraph of Section 10.03,  all
money deposited with the Trustee pursuant to Section 4.01 shall be held in trust
and applied by it, in accordance  with the provisions of the Securities and this
Indenture,  to  the  payment,  either  directly  or  through  any  Paying  Agent
(including  the  Company  acting as its own Paying  Agent),  as the  Trustee may
determine,  to the Persons entitled thereto,  of the principal (and premium,  if
any) and  interest  for whose  payment  such money has been  deposited  with the
Trustee. All money deposited with the Trustee pursuant to Section 4.01 (and held
by it or any Paying Agent) for the payment of Securities  subsequently converted
into Common Stock shall be returned to the Company upon Company Request.

<PAGE>
                                   ARTICLE V.

                                    REMEDIES

Section 5.01      Events of Default.
                  -----------------

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

(1)      failure to pay  principal of (or premium,  if any, on) any Security of
         that series at its  Maturity,  upon  redemption or otherwise; or

(2)      failure to pay any interest  upon any Security of that series when due,
         and the default  continues  for 30 days; or

(3)      default in the deposit of any mandatory sinking fund payment,  when and
         as due by the terms of the Securities of that series,  and  continuance
         of such default for a period of 30 days; or

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

(5)      a  default  under  any  bond,  debenture,  note or  other  evidence  of
         indebtedness  for money  borrowed by the Company  (including  a default
         with  respect to  Securities  of any series  other than that series) or
         under any mortgage,  indenture (including this Indenture) or instrument
         under  which  there may be issued or by which  there may be  secured or
         evidenced  any  indebtedness  for money  borrowed by the Company or any
         Subsidiary (each such bond, debenture,  note, evidence of indebtedness,
         mortgage,  indenture  or  instrument  being  referred  to  as  a  "Loan
         Document"),  whether such indebtedness now exists or shall hereafter be
         created,  which default shall constitute a failure to pay the principal
         of such  indebtedness  at final  maturity  after the  expiration of any
         applicable  grace period with respect thereto or shall have resulted in
         such  indebtedness  becoming or being declared due and payable prior to
         the date on  which it would  otherwise  have  become  due and  payable,
         without such  indebtedness  having been discharged or such acceleration
         having  been  rescinded  or  annulled  within a period of 15 days after
         there shall have been given,  by registered  or certified  mail, to the
         Company by the Trustee or to the Company and the Trustee by the Holders
         of at least 25% in principal  amount of the  Outstanding  Securities of
         that series a written notice  specifying such default and requiring the
         Company  to  cause  such   indebtedness   to  be   discharged  or  such
         acceleration  to be  rescinded or annulled and stating that such notice
         is a  "Notice  of  Default"  hereunder,  if the  aggregate  outstanding
         principal  amount of indebtedness  under the Loan Document with respect
         to which such default or acceleration has occurred exceeds $20 million;
         provided,  however, that if such default under such Loan Document shall
         be  cured  by  the  Company  or  be  waived  by  the  holders  of  such
         indebtedness or if such acceleration shall be rescinded or annulled, in
         each case as may be permitted by such Loan Document,  then the Event of
         Default hereunder by reason of such default shall be deemed likewise to
         have been  thereupon  cured or waived;  and  provided,  further,  that,
         subject to the  provisions  of Sections 6.01 and 602, the Trustee shall
         not be deemed to have knowledge of such default or acceleration  unless
         either (A) a  Responsible  Officer  of the  Trustee  shall have  actual
         knowledge of such default or acceleration or (B) the Trustee shall have
         received written notice thereof from the Company, from any Holder, from
         the holder of any such  indebtedness or from the trustee under any such
         mortgage, indenture or other instrument; or

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

(7)      the  commencement  by the Company or any Subsidiary of a voluntary case
         or  proceeding  under  any  applicable  Federal  or  State  bankruptcy,
         insolvency, reorganization or other similar law or of any other case or
         proceeding to be adjudicated a bankrupt or insolvent, or the consent by
         it to the  entry of a decree  or order for  relief  in  respect  of the
         Company or any  Subsidiary 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 law, or the consent by it to the filing
         of such  petition or to the  appointment  of or taking  possession by a
         custodian,  receiver,  liquidator,  assignee, trustee,  sequestrator or
         other  similar  official  of the  Company or any  Subsidiary  or of any
         substantial part of its property,  or the making by it of an assignment
         for the benefit of creditors,  or the admission by it in writing of its
         inability to pay its debts  generally as they become due, or the taking
         of corporate  action by the Company or any Subsidiary in furtherance of
         any such action.

         Upon receipt by the Trustee of any proposed  Notice of Default from any
Holder  with  respect  to  Securities  of a  series  all or  part  of  which  is
represented  by a Global  Security,  a record  date  shall  be  established  for
determining Holders of Outstanding Securities of such series entitled to join in
such  proposed  Notice of  Default,  which  record date shall be at the close of
business on the day the Trustee  receives such proposed  Notice of Default.  The
Holders on such record date,  or their duly  designated  proxies,  and only such
Persons,  shall be entitled to join in such proposed Notice of Default,  whether
or not such Holders remain Holders after such record date; provided, that unless
Holders of at least 25% in principal  amount of the  Outstanding  Securities  of
such series,  or their  proxies,  shall have joined in such  proposed  Notice of
Default prior to the day which is 90 days after such record date,  such proposed
Notice of Default shall  automatically  and without further action by any Holder
be canceled and of no further effect.  Nothing in this paragraph shall prevent a
Holder, or a proxy of a Holder,  from giving (i) after expiration of such 90-day
period,  a new  proposed  Notice of Default  identical  to a proposed  Notice of
Default  which  has been  canceled  pursuant  to the  proviso  to the  preceding
sentence,  or (ii) during any such 90-day period, an additional  proposed Notice
of Default with respect to any new or different fact or circumstance  permitting
the giving of a proposed  Notice of Default with respect to  Securities  of such
series,  in  either  of which  events a new  record  date  shall be  established
pursuant to the  provisions  of this Section 5.01.  Any such proposed  Notice of
Default shall be considered a Notice of Default  hereunder at such time, if any,
that Holders of at least 25% in principal  amount of the Outstanding  Securities
shall have joined in such proposed  Notice of Default by giving timely notice to
the Trustee hereunder.

Section 5.02      Acceleration of Maturity; Rescission and Annulment.
                  --------------------------------------------------

         If an Event of Default with respect to  Securities of any series (other
than an  Event of  Default  specified  in  Section  5.01(6)  or (7)) at the time
Outstanding  occurs and is  continuing,  then in every such case, the Trustee or
the  Holders  of not  less  than  25% in  principal  amount  of the  Outstanding
Securities  of that series may declare the  principal  amount (or, if any of the
Securities of that series are Original Issue Discount  Securities,  such portion
of the  principal  amount of such  Securities  as may be  specified in the terms
thereof)  of all  of the  Securities  of  that  series  to be  due  and  payable
immediately,  by a notice in writing to the Company (and to the Trustee if given
by Holders),  and upon any such  declaration such principal amount (or specified
amount) shall become immediately due and payable.  Upon payment of said amounts,
all  obligations  of the  Company in respect  of  payment  of  principal  of the
Securities of such series shall terminate.  Notwithstanding the foregoing, if an
Event of Default  specified in Section 5.01(6) or (7) hereof occurs with respect
to the Company,  all  Outstanding  Securities  shall become  immediately due and
payable without further action or notice.

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

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

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

(B)               the principal of (and premium,  if any, on) any  Securities of
                  that  series  which  have  become due  otherwise  than by such
                  declaration of  acceleration  and any interest  thereon at the
                  rate or rates prescribed therefor in such Securities,

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

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

(2)      all Events of Default with respect to Securities of that series,  other
         than the  non-payment  of the  principal of  Securities  of that series
         which have become due solely by such declaration of acceleration,  have
         been cured or waived as provided in Section 5.13.

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

         Upon  receipt  by the  Trustee  of  written  notice  declaring  such an
acceleration, or rescission and annulment thereof, with respect to Securities of
a series all or part of which is represented by a Global Security, a record date
shall be established for determining  Holders of Outstanding  Securities of such
series entitled to join in such notice,  which record date shall be at the close
of business on the day the Trustee  receives  such  notice.  The Holders on such
record date, or their duly designated proxies,  and only such Persons,  shall be
entitled to join in such  notice,  whether or not such  Holders  remain  Holders
after such record date; provided,  that unless such declaration of acceleration,
or rescission and annulment,  as the case may be, shall have become effective by
virtue of the requisite percentage having joined in such notice prior to the day
which  is 90 days  after  such  record  date,  such  notice  of  declaration  of
acceleration,   or  rescission  and  annulment,   as  the  case  may  be,  shall
automatically  and without  further  action by any Holder be canceled  and of no
further effect.  Nothing in this paragraph shall prevent a Holder, or a proxy of
a Holder, from giving, (i) after expiration of such 90-day period, a new written
notice of declaration of  acceleration or rescission and annulment  thereof,  as
the case may be, that is identical to a written  notice which has been  canceled
pursuant  to the  proviso to the  preceding  sentence,  or (ii)  during any such
90-day period, an additional  written notice of declaration of acceleration with
respect  to  Securities  of such  series,  or an  additional  written  notice of
rescission and annulment of any declaration of acceleration  with respect to any
other Event of Default with respect to Securities  of such series,  in either of
which events a new record date shall be  established  pursuant to the provisions
of this Section 5.02.

Section 5.03    Collection of Indebtedness and Suits for Enforcement by Trustee.
                ---------------------------------------------------------------

         The Company covenants that if:

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

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

(3)      default is made in the making or  satisfaction  of any mandatory
         sinking fund payment when it becomes due pursuant to the terms of the
         securities of any series,

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

         If the Company  fails to pay such amounts  forthwith  upon such demand,
the Trustee,  in its own name and as trustee of an express trust, may, but shall
not be obligated to,  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 enforce the same against the Company or any other  obligor upon
such  Securities and collect the moneys adjudged or decreed to be payable in the
manner  provided by law out of the property of the Company or any other  obligor
upon such Securities, wherever situated.

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

Section 5.04      Trustee May File Proofs of Claim.
                  --------------------------------

         In case of any  judicial  proceeding  relative  to the  Company (or any
other obligor upon the Securities),  its property or its creditors,  the Trustee
shall  be  entitled  and  empowered,  by  intervention  in  such  proceeding  or
otherwise,  to take any and all actions authorized under the Trust Indenture Act
in order to have  claims of the  Holders  and the  Trustee  allowed  in any such
proceeding.  In particular,  the Trustee shall be authorized to file and prove a
claim for the whole amount of principal,  premium and interest  owing and unpaid
in respect of the  Securities  and to file such other papers or documents as may
be necessary or advisable in order to have claims of the Trustee  (including any
claim for the reasonable compensation,  expenses, disbursements, and advances of
the Trustee, its agents and counsel) and of the Holders allowed in such judicial
proceeding,  and to collect and receive any moneys or other property  payable or
deliverable  on any such claims and to distribute  the same;  and any custodian,
receiver, assignee, trustee, liquidator,  sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee  shall consent to the
making of such  payments  directly  to the  Holders,  to pay to the  Trustee any
amount  due it for the  reasonable  compensation,  expenses,  disbursements  and
advances of the Trustee,  its agents and counsel,  and any other amounts due the
Trustee under Section 6.07.

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

Section 5.05      Trustee May Enforce Claims Without Possession of Securities.
                  -----------------------------------------------------------

         All rights of action and claims under this  Indenture or the Securities
may be prosecuted  and enforced by the Trustee  without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such  proceeding  instituted by the Trustee shall be brought in its own name
as trustee of an express  trust,  and any  recovery  of  judgment  shall,  after
provision   for  the   payment  of  the   reasonable   compensation,   expenses,
disbursements  and advances of the Trustee,  its agents and counsel,  be for the
ratable  benefit  of the  Holders  of the  Securities  in  respect of which such
judgment has been recovered.

Section 5.06      Application of Money Collected.
                  ------------------------------

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

                  FIRST: To the payment of all amounts due the Trustee under
         Section 6.07;

                  SECOND:  To the payment of the amounts then due and unpaid for
         principal of (and  premium,  if any) and interest on the  Securities of
         such  series in respect of which or for the benefit of which such money
         has been  collected,  ratably,  without  preference  or priority of any
         kind,  according to the amounts due and payable on such  Securities for
         principal (and premium, if any) and interest, respectively; and

                  THIRD: The balance,  if any, to the Company or to whomsoever
         may be lawfully  entitled to receive the same as a court of competent
         jurisdiction may direct.

Section 5.07      Limitation on Suits.
                  -------------------

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

<PAGE>
(1)      such Holder has  previously  given  written  notice to the Trustee of a
         continuing  Event of Default with respect to the Securities of that
         series;

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

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

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

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

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

Section 5.08 Unconditional Right of Holders to Receive Principal, Premium
             and Interest.

         Notwithstanding  any other provision in this  Indenture,  the Holder of
any  Security  shall have the right,  which is absolute  and  unconditional,  to
receive  payment of the  principal  of (and  premium,  if any) and  (subject  to
Section  3.07)  interest on such  Security on the Stated  Maturity or Maturities
expressed in such  Security  (or, in the case of  redemption or repayment at the
option of the Holder,  on the Redemption Date or the Repayment Date, as the case
may be) and (if the terms of such  Security so  provide)  to have such  Security
converted  into Common Stock  pursuant to Article XIV and to institute  suit for
the enforcement of any such payment or conversion,  and such rights shall not be
impaired without the consent of such Holder.

Section 5.09      Restoration of Rights and Remedies.
                  ----------------------------------

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

Section 5.10      Rights and Remedies Cumulative.
                  ------------------------------

         Except as otherwise provided with respect to the replacement or payment
of mutilated,  destroyed,  lost or stolen  Securities  in the last  paragraph of
Section  3.06,  no right or remedy  herein  conferred  upon or  reserved  to the
Trustee or to the  Holders is  intended  to be  exclusive  of any other right or
remedy,  and every right and remedy  shall,  to the extent  permitted by law, be
cumulative  and in addition to every other right and remedy  given  hereunder or
now or hereafter  existing at law or in equity or  otherwise.  The  assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.

<PAGE>
Section 5.11      Delay or Omission Not Waiver.
                  ----------------------------

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

Section 5.12      Control by Holders.
                  ------------------

         The  Holders  of at  least  a  majority  in  principal  amount  of  the
Outstanding  Securities  of any series  shall have the right to direct the time,
method and place of conducting any  proceeding  for any remedy  available to the
Trustee, or exercising any trust or power conferred on the Trustee, with respect
to the Securities of such series, provided that

(1)      such  direction  shall not be in conflict  with any rule of law or with
         this Indenture,  expose the Trustee to personal  liability or be unduly
         prejudicial to Holders not joining therein, and

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

         Upon  receipt by the  Trustee  of any such  direction  with  respect to
Securities of a series all or part of which is represented by a Global Security,
a record  date shall be  established  for  determining  Holders  of  Outstanding
Securities of such series entitled to join in such direction,  which record date
shall be  determined  in accordance  with Section  1.04(e).  The Holders on such
record date, or their duly designated proxies,  and only such Persons,  shall be
entitled to join in such  direction,  whether or not such Holders remain Holders
after such record date; provided,  that unless Holders of at least a majority in
principal amount of the outstanding Securities of such series, or their proxies,
shall have been joined in such direction prior to the day which is 90 days after
such record date, such direction shall  automatically and without further action
by any Holder be canceled and of no further  effect.  Nothing in this  paragraph
shall  prevent  a  Holder,  or a proxy  of a  Holder,  from  giving,  (i)  after
expiration of such 90-day period, a new direction identical to a direction which
has been canceled  pursuant to the provisions to the preceding  sentence or (ii)
during any such 90-day period a new direction contrary to or different from such
direction,  in either of which  events a new record  date  shall be  established
pursuant to the provisions of this Section 5.12.

Section 5.13      Waiver of Defaults.
                  ------------------

         By Act  delivered  to the Company and the  Trustee,  the Holders of not
less than a majority in principal  amount of the  Outstanding  Securities of any
affected  series  may on behalf of the  Holders  of all the  Securities  of such
series waive any existing Event of Default hereunder with respect to such series
and its consequences (including an acceleration and its consequences,  including
any related  payment  default that resulted from such  acceleration),  except an
Event of Default

(1)      in the payment of the principal of (or premium,  if any) or interest on
         any Security of such series or in the payment of any mandatory  sinking
         fund installment with respect to the Securities of such series, or

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

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

<PAGE>
         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.
                  ---------------------

         In any suit for the  enforcement  of any  right or  remedy  under  this
Indenture,  or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an  undertaking to pay the costs of such suit, and may assess costs against
any such party  litigant,  in the manner and to the extent provided in the Trust
Indenture  Act;  provided that neither this Section nor the Trust  Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment  in any suit  instituted  by the Trustee,  by any Holder,  or
group of Holders,  holding in the aggregate more than 10% in principal amount of
the Outstanding  Securities of any series,  or by any Holder for the enforcement
of the  payment of the  principal  of (or  premium,  if any) or  interest on any
Security on or after the Stated Maturity  expressed in such Security (or, in the
case of  redemption  or repayment  at the option of the Holder,  on or after the
Redemption Date or Repayment Date, as the case may be, and (if the terms of such
Security so provide) to have such Security  converted into Common Stock pursuant
to Article XIV). Section 5.15 Waiver of Stay or Extension Laws.

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

ARTICLE VI.

                                   THE TRUSTEE

Section 6.01      Certain Duties and Responsibilities.
                  -----------------------------------

(a)      Except during the continuance of an Event of Default:

(1)      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;
         and

(2)      in the absence of 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
         of this  Indenture  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  to the  requirements  of this
         Indenture.

<PAGE>
(b) In case an Event of Default  has  occurred  and is  continuing,  the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise,  as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.

(c) 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:

(1)      this Subsection shall not be construed to limit the effect of
         Subsection (a) of this Section;

(2)      the Trustee  shall not be liable 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;

(3)      the  Trustee  shall not be liable with  respect to any action  taken or
         omitted  to be  taken  by it in  good  faith  in  accordance  with  the
         direction  of the  Holders of a  majority  in  principal  amount of the
         Outstanding  Securities of any series 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; and

(4)      no provision of this  Indenture  shall require the Trustee to expend or
         risk its own funds or otherwise  incur any  financial  liability in the
         performance of any of its duties  hereunder,  or in the exercise of any
         of its  rights or  powers,  if it shall  have  reasonable  grounds  for
         believing  that repayment of such funds or adequate  indemnity  against
         such risk or liability is not reasonably assured to it.

(d)  Whether or not therein  expressly  so  provided,  every  provision  of this
Indenture  relating to the conduct or  affecting  the  liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.

Section 6.02      Notice of Defaults.
                  ------------------

         Within 90 days  after the  occurrence  of any  default  hereunder  with
respect to Securities of any series,  the Trustee shall  transmit by mail to all
Holders of Securities of such series, as their names and addresses appear in the
Security Register, notice of such default hereunder known to the Trustee, unless
such default shall have been cured or waived; provided, however, that, except in
the case of a default in the  payment of the  principal,  premium or interest on
any  Security  of such series or in the payment of any  mandatory  sinking  fund
installment with respect to the Securities of such series,  the Trustee shall be
protected in  withholding  such notice if and so long as the board of directors,
the executive committee of the board of directors and/or Responsible Officers of
the Trustee in good faith  determine  that the  withholding of such notice is in
the  interests of the Holders of the  Securities  of such series;  and provided,
further,  that in the case of any default of the character  specified in Section
5.01(4) with respect to the  Securities of such series no such notice to Holders
shall be given  until at least 60 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 6.03      Certain Rights of Trustee.
                  -------------------------

         Subject to the provisions of Section 6.01:

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

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

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

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

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

(g) the Trustee may execute any of the trusts or powers hereunder or perform any
duties  hereunder  either  directly or by or through agents or attorneys and the
Trustee shall not be responsible for any misconduct or negligence on the part of
any agent or attorney appointed with due care by it hereunder; and

(h) the Trustee shall not be required to take notice or be deemed to have notice
of any default  hereunder  (except failure by the Company to pay principal of or
interest  on any series of  Securities  so long as the Trustee is also acting as
Paying  Agent  for such  series  of  Securities)  unless  the  Trustee  shall be
specifically  notified in writing of such  default by the Company by the Holders
of at least a 10% in aggregate  principal amount of all Outstanding  Securities,
and all such  notices or other  instruments  required  by this  Indenture  to be
delivered to the Trustee  must,  in order to be  effective,  be delivered at the
principal  Corporate  Trust  Office of the  Trustee,  and in the absence of such
notice  the  Trustee  may  conclusively  assume  there is no  default  except as
aforesaid.

Section 6.04      Not Responsible for Recitals or Issuance of Securities.
                  ------------------------------------------------------

         The  recitals  contained  herein  and in  the  Securities,  except  the
Trustee's  certificates of  authentication,  shall be taken as the statements of
the  Company,   and  the  Trustee  or  any   Authenticating   Agent  assumes  no
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Securities.  The Trustee
or any Authenticating  Agent shall not be accountable for the use or application
by the Company of Securities or the proceeds  thereof.  The Trustee shall not be
deemed to have knowledge of the identity of any  Subsidiary  unless either (A) a
Responsible  Officer of the Trustee shall have actual  knowledge  thereof or (B)
the Trustee shall have received  written  notice thereof from the Company or any
Holder.

<PAGE>
Section 6.05      May Hold Securities.
                  -------------------

         The Trustee,  any Authenticating  Agent, any Paying Agent, any Security
Registrar  or any other agent of the  Company,  in its  individual  or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
6.08 and 6.13, may otherwise deal with the Company with the same rights it would
have if it were  not  Trustee,  Authenticating  Agent,  Paying  Agent,  Security
Registrar or such other agent.

Section 6.06      Money Held in Trust.
                  -------------------

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

Section 6.07      Compensation and Reimbursement.
                  ------------------------------

         The Company agrees:

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

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

(3)      to  indemnify  the Trustee for,  and to hold it harmless  against,  any
         loss,  liability or expense incurred without negligence or bad faith on
         the Trustee's part, arising out of or in connection with the acceptance
         or  administration  of the trust or  trusts  hereunder,  including  the
         Trustee's  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.

         As security for the performance of the obligations of the Company under
this  Section,  the Trustee shall have a lien prior to the  Securities  upon all
property and funds held or  collected by the Trustee as such,  except funds held
in trust for the benefit of the Holders of particular Securities.

Section 6.08      Disqualification; Conflicting Interests.
                  ---------------------------------------

         If the Trustee has or shall acquire a conflicting  interest  within the
meaning of Section 3.10 of the Trust  Indenture  Act,  the Trustee  shall either
eliminate such interest or resign,  to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Indenture. To
the extent permitted by the Trust Indenture Act, the Trustee shall not be deemed
to have a conflicting  interest with respect to the  Securities of any series by
virtue of being Trustee with respect to the Securities of any particular  series
of Securities except as may be otherwise provided by the terms of the Securities
of that series.

Section 6.09      Corporate Trustee Required; Eligibility.
                  ---------------------------------------

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

Section 6.10      Resignation and Removal; Appointment of Successor.
                  -------------------------------------------------

(a) No  resignation  or removal of the Trustee and no appointment of a successor
Trustee  pursuant to this Article shall become effective until the acceptance of
appointment  by  the  successor   Trustee  in  accordance  with  the  applicable
requirements of Section 6.11.

(b) The Trustee may resign at any time with respect to the  Securities of one or
more series by giving written  notice thereof to the Company.  If the instrument
of  acceptance  by a successor  Trustee  required by Section 6.11 shall not have
been  delivered to the Trustee within 30 days after the giving of such notice of
resignation,   the  resigning  Trustee  may  petition  any  court  of  competent
jurisdiction  for the  appointment  of a successor  Trustee  with respect to the
Securities of such series.

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

(d)      If at any time:

(1)      the  Trustee  shall fail to comply  with  Section  6.08  after  written
         request  therefor  by the  Company or by any Holder who has been a bona
         fide Holder of a Security for at least six months, or

(2)      the Trustee shall cease to be eligible  under Section 6.09 and shall
         fail to resign after written  request
         therefor by the Company or by any such Holder, or

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

then,  in any such case,  (i) the Company by a Board  Resolution  may remove the
Trustee with respect to any or all Securities,  or (ii) subject to Section 5.14,
any Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated,  petition any court
of competent  jurisdiction for the removal of the Trustee with respect to any or
all  Securities  and the  appointment  of a successor  Trustee or Trustees  with
respect to such series.

(e) If the Trustee shall resign, be removed or become incapable of acting, or if
a vacancy  shall occur in the office of Trustee for any cause,  with  respect to
the Securities of one or more series, the Company, by a Board Resolution,  shall
promptly appoint a successor  Trustee or Trustees with respect to the Securities
of that or those series (it being understood that any such successor Trustee may
be appointed with respect to the Securities of one or more or all of such series
and  that at any  time  there  shall be only one  Trustee  with  respect  to the
Securities  of any  particular  series)  and shall  comply  with the  applicable
requirements  of Section  6.11.  If,  within  one year  after such  resignation,
removal or incapability,  or the occurrence of such vacancy, a successor Trustee
with respect to the Securities of that or those series shall be appointed by Act
of the Holders of a majority in principal  amount of the Outstanding  Securities
of such series delivered to the Company and the retiring Trustee,  the successor
Trustee so appointed shall, forthwith upon its acceptance of such appointment in
accordance  with  the  applicable  requirements  of  Section  6.11,  become  the
successor  Trustee  with  respect to the  Securities  of such series and to that
extent supersede the successor Trustee appointed by the Company. If no successor
Trustee  with  respect  to the  Securities  of any  series  shall  have  been so
appointed by the Company or the Holders and accepted  appointment  in the manner
required  by  Section  6.11,  any  Holder  who has been a bona fide  Holder of a
Security  of such  series for at least six months  may, on behalf of himself and
all others similarly situated,  petition any court of competent jurisdiction for
the  appointment  of a successor  Trustee with respect to the Securities of such
series.

(f) The Company  shall give notice of each  resignation  and each removal of the
Trustee with respect to the  Securities of any series and each  appointment of a
successor Trustee with respect to the Securities of any series to all Holders of
Securities of such series in the manner provided in Section 1.06. Each notice of
appointment  shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.

Section 6.11      Acceptance of Appointment by Successor.
                  --------------------------------------

(a) In case of the appointment  hereunder of a successor Trustee with respect to
all  Securities,  every such  successor  Trustee  so  appointed  shall  execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting  such  appointment,  and thereupon the  resignation  or removal of the
retiring Trustee shall become effective and such successor Trustee,  without any
further  act,  deed or  conveyance,  shall  become  vested  with all the rights,
powers,  trusts and duties of the retiring  Trustee;  but, on the request of the
Company or the successor  Trustee,  such retiring Trustee shall, upon payment of
its charges,  execute and deliver an instrument  transferring  to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall duly
assign,  transfer and deliver to such  successor  Trustee all property and money
held by such retiring Trustee  hereunder,  subject  nevertheless to its lien, if
any, provided for in Section 6.07.

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

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

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

Section 6.12      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,
without the  execution  or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not  delivered,  by the Trustee  then in office,  any  successor  by merger,
conversion  or  consolidation  to such  authenticating  Trustee  may adopt  such
authentication  and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself  authenticated such Securities.  In case
any Securities shall not have been  authenticated  by such predecessor  Trustee,
any such successor Trustee may authenticate and deliver such Debt Securities, in
either its own name or that of its predecessor Trustee,  with the full force and
effect which this Indenture  provides for the certificate of  authentication  of
the Trustee.

Section 6.13      Preferential Collection of Claims Against Company.
                  -------------------------------------------------

         If and when the  Trustee  shall be or become a creditor  of the Company
(or any other obligor upon the Securities),  the Trustee shall be subject to the
provisions of Section 3.11 of the Trust  Indenture Act regarding the  collection
of such claims against the Company (or any such other  obligor).  A Trustee that
has  resigned or been  removed  shall be subject to and comply with said Section
3.11 to the extent required thereby.

Section 6.14      Appointment of Authenticating Agent.
                  -----------------------------------

         The Trustee may appoint an Authenticating  Agent or Agents with respect
to one or more series of  Securities  (which may be an Affiliate of the Company)
which  shall be  authorized  to act on behalf  of the  Trustee  to  authenticate
Securities  issued  upon  registration  of  transfer  or partial  redemption  or
repayment  thereof or pursuant to Section 3.06, and Securities so  authenticated
shall be  entitled  to the  benefits  of this  Indenture  and shall be valid and
obligatory  for all  purposes  as if  authenticated  by the  Trustee  hereunder.
Wherever  reference is made in this Indenture to the authentication and delivery
of  Securities by the Trustee or the Trustee's  certificate  of  authentication,
such reference shall be deemed to include  authentication and delivery on behalf
of the Trustee by an  Authenticating  Agent and a certificate of  authentication
executed  on  behalf  of  the   Trustee  by  an   Authenticating   Agent.   Each
Authenticating  Agent shall be  acceptable to the Company and shall at all times
be a  corporation  organized and doing  business and in good standing  under the
laws of the United  States of America,  any State or the  District of  Columbia,
authorized  under such laws to act as  Authenticating  Agent,  having a combined
capital and surplus of no less than  $50,000,000  and subject to  supervision or
examination  by  Federal  or  State  authority.  If  such  Authenticating  Agent
publishes  reports of  condition  at least  annually,  pursuant to law or to the
requirements of said supervising or examining  authority,  then for the purposes
of this Section,  the combined capital and surplus of such Authenticating  Agent
shall be deemed to be its combined  capital and surplus as set forth in its most
recent report of condition so published.  If at any time an Authenticating Agent
shall cease to be eligible in  accordance  with the  provisions of this Section,
such  Authenticating  Agent shall resign  immediately in the manner and with the
effect specified in this Section.

<PAGE>
         Any  corporation  into which an  Authenticating  Agent may be merged or
converted or with which it may be  consolidated,  or any  corporation  resulting
from any merger,  conversion or consolidation to which such Authenticating Agent
shall be a party,  or any  corporation  succeeding  to the  corporate  agency or
corporate  trust business of an  Authenticating  Agent,  shall continue to be an
Authenticating  Agent,  provided such  corporation  shall be otherwise  eligible
under this Section,  without the execution or filing of any paper or any further
act on the part of the Trustee or the  Authenticating  Agent. An  Authenticating
Agent for any  series of  Securities  may  resign at any time by giving  written
notice  thereof to the Trustee for such series and to the  Company.  The Trustee
for any  series  of  Securities  may at any  time  terminate  the  agency  of an
Authenticating  Agent for such series by giving  written  notice thereof to such
Authenticating  Agent  and to the  Company.  Upon  receiving  such a  notice  of
resignation  or  upon  such  a  termination,   or  in  case  at  any  time  such
Authenticating  Agent  shall  cease  to  be  eligible  in  accordance  with  the
provisions of this  Section,  the Trustee of such series may appoint a successor
Authenticating  Agent  which shall be  acceptable  to the Company and shall mail
written notice of such appointment by first-class mail, postage prepaid,  to all
Holders of  Securities  of the series with respect to which such  Authenticating
Agent will serve, as their names and addresses appear in the Security  Register.
Any successor Authenticating Agent upon acceptance of its appointment thereunder
shall become  vested with all the rights,  powers and duties of its  predecessor
hereunder,  with like effect as if originally named as an Authenticating  Agent.
No successor  Authenticating  Agent shall be appointed unless eligible under the
provisions of this Section.

         Except with respect to an Authenticating Agent appointed at the request
of the Company, the Trustee agrees to pay to each Authenticating Agent from time
to time  reasonable  compensation  for its services under this Section,  and the
Trustee shall be entitled to be reimbursed  for such  payments,  pursuant to the
provisions of Section 6.07.

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

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

-------------------------,
as Trustee

By:
As Authenticating Agent

By:
Authorized Officer

                                  ARTICLE VII.

                           HOLDERS' LISTS AND REPORTS

                             BY TRUSTEE AND COMPANY

Section 7.01      Company to Furnish Trustee Names and Addresses of Holders.
                  ---------------------------------------------------------

         With respect to each series of Securities,  the Company will furnish or
cause to be furnished to the Trustee for the Securities of such Series

(a) semiannually,  not more than 15 days after each Regular Record Date relating
to that series (or, if there is no Regular  Record Date relating to that series,
on June 30 and December 31), a list, in such form as such Trustee may reasonably
require,  of the names and  addresses  of the  Holders of that series as of such
date, and

(b) at such other times as the  Trustee  may request in writing,  within 30 days
after the receipt by the Company of any such request, a list of similar form and
content  as of a date not more  than 15 days  prior  to the  time  such  list is
furnished;  provided,  however,  that if and so long as the  Trustee is Security
Registrar  with respect to Securities of a particular  series no such list shall
be required with respect to the Securities of such series.

Section 7.02      Preservation of Information; Communications to Holders.
                  ------------------------------------------------------

(a)  The  Trustee  shall  preserve,  in as  current  a  form  as  is  reasonably
practicable,  the names and  addresses  of Holders  contained in the most recent
list  furnished  to the Trustee as  provided  in Section  7.01 and the names and
addresses  of Holders  received  by the  Trustee  in its  capacity  as  Security
Registrar.  The  Trustee may  destroy  any list  furnished  to it as provided in
Section 7.01 upon receipt of a new list so furnished.

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

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

Section 7.03      Reports by Trustee.
                  ------------------

(a) Within 60 days after May 15 of each year commencing with the year _____, 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 if and to the extent 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  upon  which any
Securities are listed,  with the  Commission  and with the Company.  The Company
will notify the Trustee when any Securities are listed on any stock exchange.

Section 7.04      Reports by Company.
                  ------------------

(a) The Company 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 Securities Exchange Act of 1934, as amended, shall be
filed with the Trustee  within 15 days after the same is so required to be filed
with  the   Commission.   Delivery  of  such  reports  to  the  Trustee  is  for
informational  purposes only and the Trustee's receipt of such reports shall not
constitute   constructive  notice  of  any  information   contained  therein  or
determinable  from  information  contained  therein,   including  the  Company's
compliance  with any of its  covenants  hereunder  (as to which the  Trustee  is
entitled to rely exclusively on Officers' Certificates).

(b) Commencing  one year from the date hereof,  the Company shall furnish to the
Trustee annually the notice required by Section 10.07 hereof (if required) and a
statement as to the performance by the Company of its obligations  hereunder and
as to any Event of Default.

Section 7.05      Holders' Meetings.
                  -----------------

(a) A meeting of Holders of any or all series may be called at any time and from
time to time  pursuant to the  provisions  of this  Section  7.05 for any of the
following purposes:

(1)      to give any notice to the Company or to the Trustee for such series, or
         to give any directions to the Trustee for such series, or to consent to
         the waiving of any default hereunder and its  consequences,  or to take
         any other action  authorized to be taken by Holders  pursuant to any of
         the provisions of Article V;

(2)      to remove the  Trustee  for such series and appoint a  successor
         Trustee  pursuant to the  provisions  of Article VI;

(3)      to consent to the execution of an indenture or supplemental  indentures
         hereto pursuant to the provisions of Section 9.02;

(4)      to take any other action  authorized to be taken by or on behalf of the
         Holders of any specified  aggregate principal amount of the Outstanding
         Securities of any one or more or all series,  as the case may be, under
         any other provision of this Indenture or under applicable law.

(b) The Trustee for any series may at any time call a meeting of Holders of such
series to take any action specified in paragraph (a) of this Section 7.05, to be
held at such time or times and at such place or places as the  Trustee  for such
series shall  determine.  Notice of every  meeting of the Holders of any series,
setting  forth the time and the place of such  meeting and in general  terms the
action  proposed to be taken at such meeting,  shall be given to Holders of such
series in the manner and to the extent  provided  in Section  1.05.  Such notice
shall be given  not less  than 20 days nor more  than 90 days  prior to the date
fixed for the meeting.

<PAGE>
(c) In case at any time the  company,  pursuant  to a Board  Resolution,  or the
Holders  of at  least  10% in  aggregate  principal  amount  of the  Outstanding
Securities  of a  series  or of all  series,  as the  case  may be,  shall  have
requested the Trustee for such series to call a meeting of Holders of any or all
such series by written  request  setting forth in  reasonable  detail the action
proposed to be taken at the  meeting,  and the Trustee  shall not have given the
notice of such meeting  within 20 days after the receipt of such  request,  then
the  Company or such  Holders may  determine  the time or times and the place or
places  for  such  meetings  and may  call  such  meetings  to take  any  action
authorized by giving notice thereof as provided in the preceding paragraph.

(d) to be  entitled  to vote at any  meeting of Holders a Person  shall be (a) a
Holder of a Security of the series with  respect to which such  meeting is being
held or (b) a Person  appointed by an instrument in writing as agent or proxy by
such Holder. 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 for the series with respect
to which such meeting is being held and its counsel and any  representatives  of
the Company and its counsel.

(e) Notwithstanding any other provisions of this Indenture,  the Trustee for any
series may make such  reasonable  regulations  as it may deem  advisable for any
meeting  of  Holders  of such  series,  in  regard  to proof of the  holding  of
Securities of such series and of the  appointment  of proxies,  and in regard to
the  appointment  and  duties  of  inspectors  of  votes,   the  submission  and
examination  of proxies,  certificates  and other evidence of the right to vote,
and such other  matters  concerning  the conduct of the meeting as it shall deem
appropriate.

         The Trustee  shall,  by an instrument  in writing,  appoint a temporary
chairman  of the  meeting,  unless the  meeting  shall  have been  called by the
Company  or by Holders  of such  series as  provided  in  paragraph  (c) of this
Section 7.05, in which case the Company or the Holders  calling the meeting,  as
the case may be, shall in like manner appoint a temporary chairman.  A permanent
chairman and a permanent secretary of the meeting shall be elected by a majority
vote of the meeting.

         Subject to the  provisos in the  definition  of  "Outstanding,"  at any
meeting each Holder of a Debt  Security of the series with respect to which such
meeting is being held or proxy  therefor  shall be entitled to one vote for each
$1,000  principal  amount  (or  such  other  amount  as shall  be  specified  as
contemplated  by Section 3.01) of Securities of such series held or  represented
by him; provided,  however, that no vote shall be cast or counted at any meeting
in  respect  of any  Security  challenged  as not  Outstanding  and ruled by the
chairman of the meeting to be not Outstanding. The chairman of the meeting shall
have no right to vote other  than by virtue of  Outstanding  Securities  of such
series held by him or instruments in writing duly  designating him as the person
to vote on behalf of Holders of Debt  Securities of such series.  Any meeting of
Holders  with  respect  to which a  meeting  was  duly  called  pursuant  to the
provisions  of paragraph  (b) or (c) of this Section 7.05 may be adjourned  from
time to time by a majority of such  Holders  present and the meeting may be held
as so adjourned without further notice.

(f) Voting.  The vote upon any  resolution  submitted  to any meeting of Holders
with respect to which such meeting is being held shall be by written  ballots on
which  shall  be  subscribed   the  signatures  of  such  Holders  or  of  their
representatives by proxy and the serial number or numbers of the Securities 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 in  duplicate  of the  proceedings  of each  meeting of Holders  shall be
prepared  by the  secretary  of the  meeting and there shall be attached to said
record the  original  reports of the  inspectors  of votes on any vote by ballot
taken  thereat and  affidavits  by one or more persons  having  knowledge of the
facts  setting  forth a copy of the notice of the meeting and showing  that said
notice was  transmitted  as provided in paragraph (b) of this Section 7.05.  The
record  shall show the serial  numbers of the  Securities  voting in favor of or
against  any  resolution.  The  record  shall  be  signed  and  verified  by the
affidavits of the permanent chairman and secretary of the meeting and one of the
duplicates  shall be delivered to the Company and the other to the Trustee to be
preserved by the Trustee.

         Any record so signed and verified  shall be conclusive  evidence of the
matters therein stated.

(g) Nothing  contained  in this  Section  7.05 shall be deemed or  construed  to
authorize or permit, by reason of any call of a meeting of Holders or any rights
expressly or impliedly  conferred  hereunder to make such call, any hindrance or
delay in the exercise of any right or rights  conferred  upon or reserved to the
Trustee or to any Holder under any of the provisions of this Indenture or of the
Securities of any series.

<PAGE>
                                 ARTICLE VIII.

                             CONSOLIDATION, MERGER,
                          CONVEYANCE, TRANSFER OR LEASE

Section 8.01      Company May Consolidate, Etc., Only on Certain Terms.
                  ----------------------------------------------------

         The Company shall not consolidate  with or merge with or into any other
Person or sell, assign,  transfer,  lease, convey or otherwise dispose of all or
substantially all of its property or assets to any Person unless:

(1)      in case the Company shall consolidate with or merge into another Person
         or sell, assign, transfer, lease, convey or otherwise dispose of all or
         substantially  all of its property or assets to any Person,  the Person
         formed by such consolidation or into which the Company is merged or the
         Person which acquires by conveyance or transfer,  or which leases,  the
         properties  and assets of the Company  shall be either the Company or a
         corporation,  shall be organized and validly existing under the laws of
         the United  States of  America,  any State  thereof or the  District of
         Columbia  and shall  expressly  assume,  by an  indenture  supplemental
         hereto   executed  and  delivered  to  the  Trustee,   all  obligations
         hereunder,  including the due and punctual  payment of the principal of
         and any premium and interest on all the Securities and the  performance
         or  observance of every  covenant of this  Indenture on the part of the
         Company to be performed or observed;

(2)      immediately prior to and after giving effect to such  transaction,  and
         treating any indebtedness which becomes an obligation of the Company or
         a Subsidiary as a result of such transaction as having been incurred by
         the  Company or such  Subsidiary  at the time of such  transaction,  no
         Event of Default,  and no event which, after notice or lapse of time or
         both,  would  become an Event of Default,  shall have  happened  and be
         continuing; and

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

         Notwithstanding  the  foregoing,  any  Subsidiary  of the  Company  may
consolidate  with,  merge into or  transfer  all or part of its  properties  and
assets to the Company.

Section 8.02      Successor Substituted.
                  ---------------------

         Upon any  consolidation  of the Company  with, or merger of the Company
into, any other Person or any sale, assignment,  transfer,  lease, conveyance or
other  disposition of all or substantially  all of the property or assets of the
Company in  accordance  with Section 8.01,  the successor  Person formed by such
consolidation  or into  which  the  Company  is merged  or to which  such  sale,
assignment,   transfer,  lease,  conveyance  or  other  disposition  of  all  or
substantially  all of its  property  or assets is made shall  succeed to, and be
substituted  for, and may exercise  every right and power of, the Company  under
this Indenture  with the same effect as if such successor  Person had been named
as the  Company  herein,  and  thereafter,  except  in the case of a lease,  the
predecessor Person shall be relieved of all obligations and covenants under this
Indenture and the Securities.  In the case of a lease,  the  predecessor  Person
shall not be released from its obligations to pay the principal of, premium,  if
any, and interest on the  Securities.  All  Securities  issued by the  successor
Person  shall in all  respects  have the same legal  priority as the  Securities
theretofore or thereafter authenticated, issued and delivered in accordance with
the terms of this Indenture.

                                  ARTICLE IX.

                             SUPPLEMENTAL INDENTURES

Section 9.01      Supplemental Indentures Without Consent of Holders.
                  --------------------------------------------------

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

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

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

(3)      to add any additional  Events of Default for the benefit of the Holders
         of all or any series of  Securities  (and if such Events of Default are
         to be for the  benefit of less than all series of  Securities,  stating
         that such Events of Default are expressly being included solely for the
         benefit of such series); or

(4)      to add to or change any of the  provisions  of this  Indenture  to such
         extent as shall be  necessary to permit or  facilitate  the issuance of
         Securities  in  bearer  form,  registrable  or  not  registrable  as to
         principal  and  with or  without  interest  coupons,  or to  permit  or
         facilitate the issuance of Securities in uncertificated form; or

(5)      to add to, change or eliminate any of the provisions of this Indenture,
         including,  without limitation, and notwithstanding any other clause in
         this Section 9.01,  Sections  1.01 and 5.01,  and Articles X and XV, in
         respect of one or more  series of  Securities,  provided  that any such
         addition,  change or  elimination  (i) shall  neither  (A) apply to any
         Security  of  any  series  created  prior  to  the  execution  of  such
         supplemental  indenture  and entitled to the benefit of such  provision
         nor (B)  modify  the  rights of the  Holder of any such  Security  with
         respect to such  provision  or (ii) shall  become  effective  only when
         there is no such Security Outstanding; or

(6)      to secure the Securities pursuant to Section 8.01 or otherwise; or

(7)      to establish the form or terms of Securities of any series as permitted
         by Sections 2.01 and 3.01; or

(8)      to evidence and provide for the acceptance of appointment  hereunder by
         a  successor  Trustee  with  respect to the  Securities  of one or more
         series and to add to or change any of the  provisions of this Indenture
         as shall be necessary to provide for or facilitate  the  administration
         of the  trusts  hereunder  by more than one  Trustee,  pursuant  to the
         requirements of Section 6.11(b); or

(9)      to add to or change any  provisions of this Indenture to such extent as
         shall be necessary to permit or  facilitate  the issuance of Securities
         convertible into other securities; or

(10)     to effectuate the provisions of Section 14.05(b); or

(11)     to supplement any of the provisions of this Indenture to such extent as
         shall be necessary to permit or facilitate the defeasance and discharge
         and  covenant  defeasance  with  respect  to any  series of  Securities
         pursuant to Sections 15.02 or 15.03;  provided,  however, that any such
         action  shall not  adversely  affect the  interests  of the  Holders of
         Securities  of such  series or any other  series of  Securities  in any
         material respect; or

(12)     to add or change or eliminate any provisions of this Indenture as shall
         be  necessary or desirable in  accordance  with any  amendments  to the
         Trust  Indenture  Act  or  to  comply  with  any  requirements  of  the
         Commission in connection with the qualification of this Indenture under
         the Trust Indenture Act; or

(13)     (A) to cure any  ambiguity,  to correct  or  supplement  any  provision
         herein which may be defective or inconsistent  with any other provision
         herein,  or (B) to make any other provisions with respect to matters or
         questions  arising  under this  Indenture,  provided  that such  action
         pursuant  to  this  Clause  (13)(B)  shall  not  adversely  affect  the
         interests  of the Holders of  Securities  of any series in any material
         respect;

(14)     to change any place or places  where (1) the  principal of and premium,
         if any, and interest,  if any, on all or any series of Securities shall
         be payable,  (2) all or any series of Securities may be surrendered for
         registration  or transfer,  (3) all or any series of Securities  may be
         surrendered  for  exchange,  and 4) notices  and demands to or upon the
         Company  in  respect  of all or  any  series  of  Securities  and  this
         Indenture may be served; or

(15)     to waive a default in the payment of the principal  of, or interest on,
         any Security,  except as otherwise provided herein.

<PAGE>
Section 9.02      Supplemental Indentures With Consent of Holders.
                  -----------------------------------------------

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

(1)      change the Stated  Maturity of the principal of, or any  installment of
         principal of, premium, if any, or interest on, any Security,  or reduce
         the  principal  amount  thereof or the rate of interest  thereon or any
         premium  payable  upon  the  redemption  thereof,  the  payment  of any
         mandatory  sinking fund or analogous  obligation,  change the method of
         determination  of  interest  thereon,  or  reduce  the  amount  of  the
         principal of an Original Issue Discount  Security that would be due and
         payable upon a  declaration  of  acceleration  of the Maturity  thereof
         pursuant to Section 5.02, or adversely affect any right of repayment at
         the  option of the  Holder  of any  Security,  or  change  any Place of
         Payment  where,  or the coin or currency in which,  any Security or any
         premium or the  interest  thereon is payable or impair the right of any
         Holders of Securities of a Series entitled to the conversion rights set
         forth in Article XIV to receive  securities  upon the  exercise of such
         conversion  rights,  or  impair  the  right to  institute  suit for the
         enforcement  of any  such  payment  or  delivery  of  Common  Stock  or
         Preferred Stock for Securities  converted pursuant to Article XIV on or
         after the Stated  Maturity  thereof (or, in the case of  redemption  or
         repayment at the option of the Holder,  on or after the Redemption Date
         or  Repayment  Date,  as the  case  may  be,  or in the  case  of  such
         conversion, on or after the date of conversion), or

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

(3)      make any  change  in the  provisions  concerning  waivers  of Events of
         Default by Holders  or the rights of Holders to recover  the  principal
         of, premium,  if any, or interest on, any Security or waive an Event of
         Default  in the  payment  of the  principal  of, or  interest  on,  any
         Security, except as otherwise provided for herein, or

(4)      modify any of the  provisions of this Section,  Section 5.13 or Section
         10.08,  except to  increase  any such  percentage  or to  provide  that
         certain other provisions of this Indenture cannot be modified or waived
         without the consent of the Holder of each Outstanding Security affected
         thereby;  provided,  however,  that this clause  shall not be deemed to
         require  the  consent  of any  Holder  with  respect  to changes in the
         references to "the Trustee" and concomitant changes in this Section and
         Section 10.08, or the deletion of this proviso,  in accordance with the
         requirements of Sections 6.11(b) and 9.01(8).

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

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

Section 9.03      Execution of Supplemental Indentures.
                  ------------------------------------

         In  executing,  or  accepting  the  additional  trusts  created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture,  the Trustee shall be entitled to receive,
and  (subject to Section  6.01) shall be fully  protected  in relying  upon,  an
Opinion of Counsel stating that the execution of such supplemental  indenture is
authorized  or  permitted by this  Indenture.  The Trustee may, but shall not be
obligated  to,  enter into any such  supplemental  indenture  which  affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.

Section 9.04      Effect of Supplemental Indentures.
                  ---------------------------------

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

<PAGE>
Section 9.05      Conformity with Trust Indenture Act.
                  -----------------------------------

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

Section 9.06      Reference in Securities to Supplemental Indentures.
                  --------------------------------------------------

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

Section 9.07      Notice of Supplemental Indenture.
                  --------------------------------

         Promptly after the execution by the Company and the appropriate Trustee
of any supplemental  indenture,  the Company shall transmit, as provided herein,
to all Holders of any series of the Debt Securities  affected thereby,  a notice
setting forth in general terms the substance of such supplemental indenture.

ARTICLE X.

                                    COVENANTS

Section 10.01     Payment of Principal, Premium and Interest.
                  ------------------------------------------

         The  Company  covenants  and agrees for the  benefit of each  series of
Securities  that it will duly and  punctually pay the principal of (and premium,
if any) and interest on the  Securities  of that series in  accordance  with the
terms of the Securities and this Indenture.

Section 10.02     Maintenance of Office or Agency.
                  -------------------------------

         The Company will  maintain in each Place of Payment an office or agency
where  Securities may be presented or surrendered for payment,  where Securities
may be  surrendered  for  registration  of transfer,  conversion or exchange and
where  notices and  demands to or upon the Company in respect of the  Securities
and this Indenture may be served. The Company will give prompt written notice to
the Trustee of the location,  and any change in the location,  of such office or
agency. If at any time the Company  terminates the appointment of a Paying Agent
or Security  Registrar or conversion  agent or otherwise  shall fail to maintain
any such required  office or agency,  the Company shall use its reasonable  best
efforts to appoint a successor Paying Agent or Security  Registrar or conversion
agent reasonably  acceptable to the Trustee.  If the Company fails to maintain a
Paying Agent or Security  Registrar or conversion agent, the Trustee will act as
such,  and the Company  hereby  appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.

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

Section 10.03     Money for Securities Payments to Be Held in Trust.
                  -------------------------------------------------

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

         Whenever  the  Company  shall  have one or more  Paying  Agents for any
series of Securities,  it will,  prior to each due date of the principal of (and
premium,  if any) or interest on any  Securities of that series,  deposit with a
Paying Agent a sum  sufficient  to pay the principal  (and  premium,  if any) or
interest  so becoming  due,  such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest, and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee in writing of
its action or failure so to act.

<PAGE>
         The Company will cause each Paying  Agent for any series of  Securities
other than the Trustee to execute and  deliver to the Trustee an  instrument  in
which such Paying Agent shall agree with the Trustee,  subject to the provisions
of this Section, that such Paying Agent will:

(1)      hold all  sums  held by it for the  payment  of the  principal  of (and
         premium,  if any) or interest on Securities of that series 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;

(2)      give the Trustee  written  notice of any default by the Company (or any
         other obligor upon the  Securities of that series) in the making of any
         payment  of  principal  (and  premium,  if  any)  or  interest  on  the
         Securities of that series; and

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

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

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

Section 10.04     Corporate Existence.
                  -------------------

         Subject to Article  VIII,  the Company  will do or cause to be done all
things  necessary  to preserve  and keep in full force and effect its  corporate
existence and that of each Subsidiary and the rights (charter and statutory) and
franchises  of the Company and its  Subsidiaries;  provided,  however,  that the
Company  shall not be required to preserve any such right or franchise if in the
judgment of the Company it shall be  necessary,  advisable or in the interest of
the Company to discontinue the same.

Section 10.05     Statement by Officers as to Default.
                  -----------------------------------

         Pursuant to Section  3.14(a) of the Trust  Indenture  Act,  the Company
will deliver to the Trustee, within 90 days after the end of each fiscal year of
the Company ending after the date hereof, a certificate  signed by the principal
executive,  financial or accounting  officer of the Company,  stating whether or
not to the best knowledge of the signer thereof the Company is in default in the
performance  and  observance  of any of the  terms,  provisions,  covenants  and
conditions  of  this  Indenture  (without  regard  to any  period  of  grace  or
requirement  of notice  provided,  hereunder)  and, if the  Company  shall be in
default, specifying all such defaults and the nature and status thereof of which
they may have knowledge.

Section 10.06     Payment of Taxes.
                  ----------------

         The Company 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 Company or any Subsidiary or upon the income,
profits or property of the Company or any Subsidiary.

Section 10.07     Calculation of Original Issue Discount.
                  --------------------------------------

         If any Original Issue Discount  Securities  are issued  hereunder,  the
Company shall file with the Trustee promptly  following the end of each calendar
year  a  written  notice  specifying  the  amount  of  original  issue  discount
(including   daily  rates  and  accrual  periods)  accrued  on  each  series  of
outstanding Original Issue Discount Securities as of the end of such year.

<PAGE>
Section 10.08     Waiver of Certain Covenants.
                  ---------------------------

         The  Company  may omit in any  particular  instance  to comply with any
term,  provision or condition set forth in Section  8.01(3) and in Section 10.04
and Sections 10.07 and 10.08,  inclusive,  with respect to the Securities of any
series  if,  before  the time for such  compliance,  the  Holders  of at least a
majority in principal amount of the Outstanding Securities of such series shall,
by Act of such  Holders,  either waive  compliance in such instance or generally
waive  compliance  with such term,  provision or  condition,  but no such waiver
shall extend to or affect such term, provision or condition except to the extent
so  expressly  waived,  and,  until such  waiver  shall  become  effective,  the
obligations  of the Company and the duties of the Trustee in respect of any such
term, provision or condition shall remain in full force and effect.

ARTICLE XI.

                            REDEMPTION OF SECURITIES

Section 11.01     Applicability of Article.
                  ------------------------

         Securities  of any series  which are  redeemable  before  their  Stated
Maturity  shall be  redeemable  in  accordance  with their  terms and (except as
otherwise  specified  as  contemplated  in Section  3.01 for  Securities  of any
series) in accordance with this Article.

Section 11.02     Election to Redeem; Notice to Trustee.
                  -------------------------------------

         The election of the Company to redeem any Securities shall be evidenced
by a Board Resolution.  In case of any redemption at the election of the Company
of less than all the Securities of any series,  the Company  shall,  at least 60
days prior to the Redemption  Date fixed by the Company (unless a shorter notice
shall be  satisfactory  to the Trustee),  notify the Trustee of such  Redemption
Date, of the  principal  amount of Securities of such series to be redeemed and,
if applicable, of the tenor of the Securities to be redeemed. In the case of any
redemption of Securities  prior to the  expiration  of any  restriction  on such
redemption  provided  in the  terms  of such  Securities  or  elsewhere  in this
Indenture,  the Company shall furnish the Trustee with an Officers'  Certificate
evidencing compliance with such restriction.

Section 11.03     Selection by Trustee of Securities to Be Redeemed.
                  -------------------------------------------------

         If less  than  all the  Securities  of any  series  are to be  redeemed
(unless all of the Securities of such series and of a specified  tenor are to be
redeemed),  the particular  Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption  Date by the Trustee,  from the Outstanding
Securities  of such series not  previously  called for  redemption,  in a manner
which  the  Trustee  deems  fair and  appropriate,  which  may  provide  for the
selection  for  redemption  of  portions   (equal  to  the  minimum   authorized
denomination for Securities of that series or any integral  multiple thereof) of
the principal amount of Securities of such series of a denomination  larger than
the minimum  authorized  denomination  for  Securities  of that  series.  If the
Company  shall so specify and identify the  appropriate  Securities,  Securities
owned of record and  beneficially by the Company or any Subsidiary  shall not be
included in the Securities selected for redemption.

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

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

Section 11.04     Notice of Redemption.
                  --------------------

         Notice of redemption shall,  unless otherwise specified by the terms of
the  Securities to be redeemed,  be given not less than 30 nor more than 60 days
prior to the  Redemption  Date, to each Holder of Securities to be redeemed,  in
accordance with Section 1.06.

         All notices of redemption shall state:

(1)      the Redemption Date,

(2)      the Redemption Price,

(3)      that Debt  Securities of such series are being  redeemed by the Company
         pursuant to provisions  contained in this Indenture or the terms of the
         Securities of such series or a supplemental indenture establishing such
         series,  if such be the case,  together with a brief statement of facts
         permitting such redemption,

<PAGE>
(4)      if less than all the  Outstanding  Securities  of any  series are to be
         redeemed (unless all the Securities of such series of a specified tenor
         are to be redeemed),  the  identification  (and, in the case of partial
         redemption of any Securities,  the principal amounts) of the particular
         Securities to be redeemed,

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

(6)      the place or places where such  Securities  are to be  surrendered  for
         payment of the Redemption Price, which shall be the office or agency of
         the Company in each Place of Payment, and

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

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

Section 11.05     Deposit of Redemption Price.
                  ---------------------------

         Prior to any  Redemption  Date,  the  Company  shall  deposit  with the
Trustee or with a Paying  Agent (or,  if the Company is acting as its own Paying
Agent,  segregate  and hold in trust as provided in Section  10.03) an amount of
money  sufficient to pay the Redemption  Price of, and (except if the Redemption
Date shall be an Interest  Payment Date) accrued interest on, all the Securities
which are to be redeemed on that date.

Section 11.06     Securities Payable on Redemption Date.
                  -------------------------------------

         Notice of redemption having been given as aforesaid,  the Securities so
to be redeemed  shall,  on the  Redemption  Date,  become due and payable at the
Redemption  Price  therein  specified,  and from and after such date (unless the
Company  shall  default  in the  payment  of the  Redemption  Price and  accrued
interest) such  Securities  shall cease to bear interest.  Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption  Price,  together with accrued interest
to the Redemption Date; provided,  however,  that, unless otherwise specified as
contemplated by Section 3.01,  installments of interest whose Stated Maturity is
on or prior to the  Redemption  Date  will be  payable  to the  Holders  of such
Securities,  or one or more  Predecessor  Securities,  registered as such at the
close of business on the relevant  Record Dates according to their terms and the
provisions of Section 3.07.

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

Section 11.07     Securities Redeemed in Part.
                  ---------------------------

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

ARTICLE XII.

                                  SINKING FUNDS

Section 12.01     Applicability of Article.
                  ------------------------

         The  provisions of this Article shall be applicable to any sinking fund
for the  retirement of  Securities of a series except as otherwise  specified as
contemplated by Section 3.01 for Securities of such series.

         The minimum  amount of any sinking  fund  payment  provided  for by the
terms of Securities of any series is herein referred to as a "mandatory  sinking
fund payment," and any payment in excess of such minimum amount  provided for by
the terms of  Securities  of any series is herein  referred  to as an  "optional
sinking fund payment." If provided for by the terms of Securities of any series,
the cash  amount of any sinking  fund  payment  may be subject to  reduction  as
provided in Section  12.02.  Each sinking  fund payment  shall be applied to the
redemption  of  Securities  of any  series  as  provided  for by  the  terms  of
Securities of such series.

<PAGE>
Section 12.02 Satisfaction of Mandatory Sinking Fund Payments with Securities.

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

Section 12.03     Redemption of Securities for Mandatory Sinking Fund.
                  ---------------------------------------------------

         Not less than 60 days prior to each mandatory sinking fund payment date
for any  series of  Securities,  the  Company  will  deliver  to the  Trustee an
Officers'  Certificate  specifying  the  amount  of the next  ensuing  mandatory
sinking fund payment for that series  pursuant to the terms of that series,  the
portion  thereof,  if any,  which is to be  satisfied by payment of cash and the
portion  thereof,  if any,  which is to be satisfied by delivering and crediting
Securities or applying previously  cancelled  Securities of that series pursuant
to  Section  12.02 and the basis for such  credit  and will also  deliver to the
Trustee  any  Securities  to be so  delivered  which have not  theretofore  been
delivered  to the  Trustee.  Not less than 30 days  before  each such  mandatory
sinking  fund  payment  date,  the Trustee  shall  select the  Securities  to be
redeemed upon such mandatory  sinking fund payment date in the manner  specified
in Section 11.02 and cause notice of the  redemption  thereof to be given in the
name of and at the  expense of the  Company in the  manner  provided  in Section
11.03.  Such notice having been duly given,  the  redemption of such  Securities
shall be made upon the terms and in the manner stated in Sections  11.04,  11.05
and 11.06.

ARTICLE XIII.

                             REPAYMENT OF SECURITIES

                              AT OPTION OF HOLDERS

Section 13.01     Applicability of Article.
                  ------------------------

         Securities  of any  series  that  are  repayable  before  their  Stated
Maturity at the option of the Holders shall be repaid in  accordance  with their
terms and (except as  otherwise  specified as  contemplated  by Section 3.01 for
Securities of any series) in accordance with this Article.

Section 13.02     Notice of Repayment Date.
                  ------------------------

         Notice of any  Repayment  Date with respect to Securities of any series
shall, unless otherwise specified by the terms of the Securities of such series,
be given by the  Company  not less than 45 nor more  than 60 days  prior to such
Repayment  Date,  to the Trustee and to each Holder of Securities of such series
in accordance with Sections 1.05 and 1.06, respectively.

         The notice as to Repayment Date shall state:

(1)      the Repayment Date;

(2)      the Repayment Price;

(3)      the place or places where such  Securities  are to be  surrendered  for
         payment of the Repayment Price,  which shall be the office or agency of
         the Company in each Place of Payment,  and the date by which Securities
         must be so surrendered in order to be repaid;

(4)      a description of the procedure which a Holder must follow to exercise a
         repayment right; and

(5)      that exercise of the option to elect repayment is irrevocable.

         No failure of the Company to give the foregoing  notice shall limit any
Holder's right to exercise a repayment right.

Section 13.03     Deposit of Repayment Price.
                  --------------------------

         On or prior to any Repayment  Date,  the Company shall deposit with the
Trustee or with a Paying  Agent (or,  if the Company is acting as its own Paying
Agent,  segregate  and hold in trust as provided in Section  10.03) an amount of
money sufficient to pay the Repayment Price of and (except if the Repayment Date
shall be an Interest  Payment Date) accrued  interest on, all the  Securities of
such series which are to be repaid on that date.

<PAGE>
Section 13.04     Securities Payable on Repayment Date.
                  ------------------------------------

         The  form of  option  to  elect  repayment  having  been  delivered  as
specified in the form of Security  for such series as provided in Section  2.01,
the  Securities so to be repaid shall,  on the  Repayment  Date,  become due and
payable at the Repayment Price applicable thereto,  and from and after such date
(unless the Company  shall  default in the  payment of the  Repayment  Price and
accrued  interest) such Securities shall cease to bear interest.  Upon surrender
of any such Security for repayment in accordance with said notice, such Security
shall be paid by the  Company at the  Repayment  Price,  together  with  accrued
interest to the  Repayment  Date;  provided,  however,  that,  unless  otherwise
specified as contemplated by Section 3.01, installments of interest whose Stated
Maturity is on or prior to such Repayment Date will be payable to the Holders of
such Securities,  or one or more Predecessor  Securities,  registered as such at
the close of business on the relevant  Record Date  according to their terms and
the provisions of Section 3.07.

         If any  Security  to be  repaid  shall  not be so paid  upon  surrender
thereof for repayment,  the principal shall,  until paid, bear interest from the
Repayment Date at the rate prescribed in the Security.

Section 13.05     Securities Repaid in Part.
                  -------------------------

         Any Security  which by its terms may be repaid in part at the option of
the Holder and which is to be repaid  only in part shall be  surrendered  at any
office or agency of the Company  designated for that purpose pursuant to Section
10.02 (with, if the Company or the Trustee so requires, due endorsement by, or a
written  instrument  of  transfer  in form  satisfactory  to the Company and the
Trustee duly executed by, the Holder thereof or his attorney duly  authorized in
writing),  and the Company shall execute, and the Trustee shall authenticate and
deliver to the Holder of such Security,  without service charge,  a new Security
or  Securities  of  the  same  series  and of  like  tenor,  of  any  authorized
denomination as requested by such Holder, in aggregate principal amount equal to
and in exchange  for the  unrepaid  portion of the  principal of the Security so
surrendered. If a Global Security is so surrendered, such new Security so issued
shall be a new Global Security.

ARTICLE XIV.

                            CONVERSION OF SECURITIES

Section 14.01     General.
                  -------

         If so provided in the terms of the Securities of any series established
in accordance with Section 3.01, the principal  amount of the Securities of such
series shall be convertible  into shares of Common Stock in accordance with this
Article XIV and the terms of such series of Securities if such terms differ from
this Article XIV; provided,  however, that if any of the terms by which any such
Security shall be convertible  into Common Stock are set forth in a supplemental
indenture  entered into with respect thereto pursuant to Section 9.01(9) hereof,
the terms of such supplemental indenture shall govern.

Section 14.02     Right to Convert.
                  ----------------

         Subject to and upon compliance with the provisions of this Article, the
Holder of any  Security  that is  convertible  into Common  Stock shall have the
right,  at such  Holder's  option,  at any time on or after the date of original
issue of such  Security or such other date  specified  in the  applicable  Board
Resolution delivered pursuant to Section 3.01 and prior to the close of business
on the date set forth in such Board  Resolution  (or if such  Security is called
for redemption,  then in respect of such Security to and including but not after
the close of business on the date of redemption unless the Company shall default
in the  payment due on such date) to convert  the  principal  amount of any such
Security of any authorized  denomination,  or, in the case of any Security to be
converted of a denomination greater than the minimum denomination for Securities
of the applicable  series,  any portion of such principal which is an authorized
denomination or an integral multiple thereof, into that number of fully paid and
nonassessable  shares of Common Stock obtained by dividing the principal  amount
of such Security or portion thereof surrendered for conversion by the Conversion
Price  therefor by  surrender  of the Security so to be converted in whole or in
part in the manner provided in Section 14.03.  Such conversion shall be effected
by the Company in accordance  with the  provisions of this Article and the terms
of the Securities, if such terms differ from this Article.

<PAGE>
Section 14.03 Manner of Exercise of Conversion Privilege; Delivery of
              Common Stock; No Adjustment for Interest or Dividends.

         In order to  effect a  conversion,  the  holder of any  Security  to be
converted,  in whole or in part,  shall surrender such Security at the office or
agency maintained by the Company for such purpose,  as provided in Section 10.02
and shall give  written  notice of  conversion  to the Company at such office or
agency that the Holder  elects to convert such  Security or the portion  thereof
specified  in said  notice.  The  notice  shall  state  the name or names  (with
address),  and  taxpayer  identification  number,  in which the  certificate  or
certificates  for shares of Common  Stock  which  shall be  deliverable  on such
conversion shall be registered,  and shall be accompanied by payments in respect
of  transfer  taxes,  if  required  pursuant  to Section  14.06.  Each  Security
surrendered for conversion shall,  unless the shares of Common Stock deliverable
on  conversion  are to be issued in the same  name as the  registration  of such
Security,  be duly endorsed by or be accompanied by instruments of transfer,  in
form  satisfactory to the Company,  duly executed by the Holder or such Holder's
duly authorized  attorney,  and by any payment required pursuant to this Section
14.03.  As promptly as  practicable  after the  surrender  of such  Security and
notice, as aforesaid, the Company shall deliver or cause to be delivered at such
office  or  agency  to  such  Holder,  or on  such  Holder's  written  order,  a
certificate  or  certificates  for the  number of full  shares  of Common  Stock
deliverable  upon  the  conversion  of  such  Security  or  portion  thereof  in
accordance with the provisions of this Article and a check or cash in respect of
any fractional  interest in respect of a share of Common Stock arising upon such
conversion as provided in Section 14.04.  In case any Security of a denomination
greater than the minimum  denomination  for Securities of the applicable  series
shall be  surrendered  for partial  conversion,  the Company  shall  execute and
register and the Trustee shall  authenticate  and deliver to or upon the written
order of the Company  and the Holder of the  Security  so  surrendered,  without
charge to such  Holder,  a new  Security  or  Securities  of the same  series in
authorized   denominations  in  an  aggregate  principal  amount  equal  to  the
unconverted portion of the surrendered Security. Each conversion shall be deemed
to have been  effected  as of the date on which  such  Security  shall have been
surrendered (accompanied by the funds, if any, required by the last paragraph of
this Section) and such notice  received by the Company,  as  aforesaid,  and the
person or persons in whose name or names any  certificate  or  certificates  for
shares of Common Stock shall be registrable upon such conversion shall become on
said date the  Holder of record of the  shares  represented  thereby,  provided,
however,  that any such  surrender on any date when the stock  transfer books of
the  Company  shall be closed  shall  constitute  the  person in whose  name the
certificates  are to be registered as the record holder thereof for all purposes
on the next succeeding day on which such stock transfer books are open, but such
conversion  shall be at the  Conversion  Price in effect on the date upon  which
such Security shall have been so surrendered.

         Any Security or portion thereof  surrendered for conversion  during the
period from the close of business  on the Regular  Record Date for any  Interest
Payment  Date to the  opening of business on such  Interest  Payment  Date shall
(unless such Security or portion  thereof being converted shall have been called
for  redemption  or  submitted  for  repayment  on a date during such period) be
accompanied  by  payment,  in legal  tender  or other  funds  acceptable  to the
Company,  of an amount equal to the interest  otherwise payable on such Interest
Payment Date on the principal amount being converted; provided, however, that no
such  payment  need be made if there  shall  exist at the time of  conversion  a
default in the payment of interest on the applicable  series of  Securities.  An
amount  equal to such  payment  shall be paid by the  Company  on such  Interest
Payment  Date to the  Holder  of such  Security  on such  Regular  Record  Date;
provided,  however, that if the Company shall default in the payment of interest
on such Interest  Payment Date, such amount shall be paid to the person who made
such required payment.  Except as provided above in this Section,  no adjustment
shall be made for interest accrued on any Security converted or for dividends on
any shares  issued  upon the  conversion  of such  Security  as provided in this
Article.

Section 14.04     Cash Payments in Lieu of Fractional Shares.
                  ------------------------------------------

         No fractional shares of Common Stock or scrip  representing  fractional
shares of Common Stock shall be delivered upon conversion of Securities. If more
than one Security  shall be  surrendered  for conversion at one time by the same
Holder,  the number of full shares of Common  Stock  which shall be  deliverable
upon conversion shall be computed on the basis of the aggregate principal amount
of the Securities (or specified portions thereof to the extent permitted hereby)
so  surrendered.  Instead of any fraction of a share of Common Stock which would
otherwise be deliverable upon the conversion of any Security,  the Company shall
pay to the Holder of such  Security an amount in cash  (computed  to the nearest
cent, with one-half cent being rounded upward) equal to the same fraction of the
closing price (determined in the manner provided in Section  14.05(a)(v)) of the
Common  Stock on the  Trading  Day (as  defined  in  Section  14.05(a)(v))  next
preceding the date of conversion.

<PAGE>
Section 14.05 Conversion Price Adjustments; Effect of Reclassification,
              Mergers, Consolidations and Sales of Assets.

(a)      The Conversion Price shall be adjusted from time to time as follows:

     (i) In case the Company shall (x) pay a dividend or make a distribution  on
the Common Stock in shares of Common Stock, (y) subdivide the outstanding Common
Stock into a greater  number of shares or (z)  combine  the  outstanding  Common
Stock into a smaller number of shares, the Conversion Price shall be adjusted so
that the Holder of any Security  thereafter  surrendered for conversion shall be
entitled  to receive the number of shares of Common  Stock of the Company  which
such  holder  would  have  owned or have  been  entitled  to  receive  after the
happening of any of the events  described above had such Security been converted
immediately  prior to the record date in the case of a dividend or the effective
date in the case of subdivision or  combination.  An adjustment made pursuant to
this  subparagraph (i) shall become effective  immediately after the record date
in the case of a dividend,  except as provided in subparagraph  (vii) below, and
shall become  effective  immediately  after the effective  date in the case of a
subdivision or combination.

     (ii) In case the Company  shall issue  rights or warrants to all holders of
shares of Common  Stock  entitling  them (for a period  expiring  within 45 days
after the record date  mentioned  below) to subscribe for or purchase  shares of
Common  Stock at a price per share less than the current  market price per share
of  Common  Stock  (as  defined  for  purposes  of  this  subparagraph  (ii)  in
subparagraph  (v) below),  the Conversion  Price in effect after the record date
for the  determination  of  stockholders  entitled  to  receive  such  rights or
warrants  shall be  determined by  multiplying  the  Conversion  Price in effect
immediately  prior to such  record date by a fraction,  the  numerator  of which
shall be the number of shares of Common  Stock  outstanding  on such record date
plus the number of shares of Common Stock which the aggregate  offering price of
the total  number of shares of Common  Stock so offered  would  purchase at such
current market price, and the denominator of which shall be the number of shares
of Common  Stock  outstanding  on the record date for issuance of such rights or
warrants plus the number of additional  shares of Common Stock  receivable  upon
exercise of such rights or warrants.  Such adjustment shall be made successively
whenever  any such rights or warrants  are issued,  and shall  become  effective
immediately,  except as provided in subparagraph  (vii) below, after such record
date.

     (iii) In case the Company  shall  distribute to all holders of Common Stock
any  shares  of  capital  stock of the  Company  (other  than  Common  Stock) or
evidences  of  its   indebtedness   or  assets   (excluding  cash  dividends  or
distributions paid from retained earnings of the Company or dividends payable in
Common  Stock) or rights or warrants  to  subscribe  for or purchase  any of its
securities  (excluding those rights or warrants referred to in subparagraph (ii)
above) (any of the foregoing being hereinafter in this subparagraph (iii) called
the "Assets"),  then, in each such case, the Conversion  Price shall be adjusted
so that the same shall equal the price  determined by multiplying the Conversion
Price in  effect  immediately  prior to the  record  date for  determination  of
stockholders  entitled to receive such  distribution by a fraction the numerator
of which shall be the current market price per share (as defined for purposes of
this  subparagraph  (iii) in subparagraph (v) below) of the Common Stock at such
record  date  for  determination  of  stockholders   entitled  to  receive  such
distribution  less the then fair  market  value (as  determined  by the Board of
Directors, whose determination shall be conclusive) of the portion of the Assets
so distributed  applicable to one share of Common Stock,  and the denominator of
which shall be the current  market  price per share (as defined in  subparagraph
(v) below) of the Common Stock at such record date. Such adjustment shall become
effective immediately, except as provided in subparagraph (vii) below, after the
record date for the  determination  of  stockholders  entitled  to receive  such
distribution.

<PAGE>
     (iv) If, pursuant to subparagraph (ii) or (iii) above, the number of shares
of Common Stock into which a Security is  convertible  shall have been  adjusted
because the Company has  declared a  dividend,  or made a  distribution,  on the
outstanding  shares  of  Common  Stock in the form of any  right or  warrant  to
purchase  securities of the Company, or the Company has issued any such right or
warrant,  then, upon the expiration of any such unexercised right or unexercised
warrant,  the  Conversion  Price  shall  forthwith  be  adjusted  to  equal  the
Conversion  Price that would have  applied had such right or warrant  never been
declared, distributed or issued.

     (v) For the purpose of any computation  under  subparagraphs  (ii) or (iii)
above,  the current  market price per share of Common Stock on any date shall be
deemed to be the average of the daily closing prices of the Common Stock for the
shorter of (i) 30  consecutive  Trading Days ending on the last full Trading Day
on the exchange or market  specified in the second  following  sentence prior to
the  Time of  Determination  or (ii) the  period  commencing  on the  date  next
succeeding  the first  public  announcement  of the  issuance  of such rights or
warrants or such  distribution  through  such last full Trading Day prior to the
Time of Determination.  The term "Time of Determination" as used herein shall be
the  time and  date of the  earlier  of (x) the  determination  of  stockholders
entitled  to  receive  such  rights,  warrants,  or  distributions  or  (y)  the
commencement  of  "ex-dividend"  trading in the Common  Stock on the exchange or
market specified in the following sentence. The closing price for each day shall
be the reported  last sales price,  regular way, or, in case no sale takes place
on such day, the average of the reported  closing bid and asked prices,  regular
way, in either case as reported on the New York Stock  Exchange  Composite  Tape
or, if the  Common  Stock is not listed or  admitted  to trading on the New York
Stock Exchange at such time, on the principal  national  securities  exchange on
which the Common  Stock is listed or  admitted  to trading  or, if not listed or
admitted to trading on any national securities exchange,  on the Nasdaq National
Market  ("NNM")  or, if the  Common  Stock is not  quoted on the  average of the
closing  bid and  asked  prices  on such day in the  over-the-counter  market as
reported  by NNM or, if bid and asked  prices for the Common  Stock on each such
day shall not have been  reported  through NNM, the average of the bid and asked
prices for such date as  furnished  by any New York Stock  Exchange  member firm
regularly  making a market in the Common Stock  selected for such purpose by the
Company or, if no such  quotations are  available,  the fair market value of the
Common Stock as determined by a New York Stock  Exchange  member firm  regularly
making a market in the Common Stock selected for such purpose by the Company. As
used herein,  the term  "Trading  Day" with respect to Common Stock means (x) if
the  Common  Stock is listed  or  admitted  for  trading  on the New York  Stock
Exchange or another national  securities  exchange,  a day on which the New York
Stock Exchange or such other national securities  exchange,  as the case may be,
is open for business or (y) if the Common Stock is quoted on NNM, a day on which
trades may be made on NNM or (z)  otherwise,  any day other  than a Saturday  or
Sunday  or a day on  which  banking  institutions  in the  State of New York are
authorized or obligated by law or executive order to close.

     (vi) No adjustment in the  Conversion  Price shall be required  unless such
adjustment  would  require an increase or decrease of at least 1% in such price;
provided,  however,  that any adjustments  which by reason of this  subparagraph
(vi) are not required to be made shall be carried forward and taken into account
in any subsequent adjustment. All calculations under this Section 14.05(a) shall
be made to the nearest  cent or to the  nearest .01 of a share,  as the case may
be, with one-half cent and .005 of a share, respectively,  being rounded upward.
Anything in this Section 14.05(a) to the contrary  notwithstanding,  the Company
shall be entitled to make such  reductions in the Conversion  Price, in addition
to those  required  by this  Section  14.05(a),  as it in its  discretion  shall
determine  to be  advisable  in order that any stock  dividend,  subdivision  of
shares,  distribution of rights or warrants to purchase stock or securities,  or
distribution of other assets (other than cash  dividends)  hereafter made by the
Company to its stockholders shall not be taxable.

     (vii)  In any  case  in  which  this  Section  14.05(a)  provides  that  an
adjustment shall become effective  immediately after a record date for an event,
the  Company  may defer  until the  occurrence  of such event (x) issuing to the
holder  of any  Security  converted  after  such  record  date  and  before  the
occurrence  of such event the  additional  shares of Common Stock  issuable upon
such  conversion  by reason of the  adjustment  required  by such event over and
above the Common Stock  issuable  upon such  conversion  before giving effect to
such  adjustment and (y) paying to such holder any amount of cash in lieu of any
fractional share of Common Stock pursuant to Section 14.04.

<PAGE>
     (viii) Whenever the Conversion  Price is adjusted as herein  provided,  the
Company shall file with the Trustee an Officers' Certificate,  setting forth the
Conversion  Price after such  adjustment and setting forth a brief  statement of
the facts  requiring  such  adjustment,  which  certificate  shall be conclusive
evidence of the  correctness of such  adjustment;  provided,  however,  that the
failure of the Company to file such Officers'  Certificate  shall not affect the
legality or validity of any corporate action by the Company.

     (ix) Whenever the Conversion Price for any series of Securities is adjusted
as provided in this Section  14.05(a),  the Company  shall cause to be mailed to
each  holder of  Securities  of such  series at its then  registered  address by
first-class mail, postage prepaid, a notice of such adjustment of the Conversion
Price  setting forth such adjusted  Conversion  Price and the effective  date of
such  adjusted  Conversion  Price;  provided,  however,  that the failure of the
Company to give such  notice  shall not affect the  legality  or validity of any
corporate action by the Company.

     (b) (i) (i) Notwithstanding any other provision herein to the contrary,  if
any of the following events occur, namely (x) any  reclassification or change of
outstanding  shares of Common Stock  (other than a change in par value,  or from
par value to no par value,  or from no par value to par value, or as a result of
a subdivision or combination of the Common Stock), (y) any consolidation, merger
or  combination  of the Company with or into another  corporation as a result of
which holders of Common Stock shall be entitled to receive stock,  securities or
other  property or assets  (including  cash) with  respect to or in exchange for
such Common Stock, or (z) any sale or conveyance of all or substantially  all of
the assets of the  Company to any other  entity as a result of which  holders of
Common Stock shall be entitled to receive stock, securities or other property or
assets  (including  cash) with respect to or in exchange for such Common  Stock,
then appropriate  provision shall be made by supplemental  indenture so that (A)
the holder of any  outstanding  Security that is  convertible  into Common Stock
shall have the right to convert  such  Security  into the kind and amount of the
shares of stock and securities or other property or assets (including cash) that
would have been receivable upon such  reclassification,  change,  consolidation,
merger, combination,  sale, or conveyance by a holder of the number of shares of
Common Stock issuable upon conversion of such Security immediately prior to such
reclassification, change, consolidation, merger, combination, sale or conveyance
and (B) the number of shares of any such other  stock or  securities  into which
such Security  shall  thereafter be  convertible  shall be subject to adjustment
from time to time in a manner and on terms as nearly  equivalent as  practicable
to the terms of  adjustment  provided for in this Section,  and Sections  14.02,
14.03,  14.04,  14.06,  14.07,  14.08 and 14.09 shall apply on like terms to any
such other stock or securities.

     (ii) In case of any  reclassification  or change of the Common Stock (other
than a subdivision or combination of its  outstanding  Common Stock, or a change
in par  value,  or from par value to no par  value,  or from no par value to par
value),  or of any  consolidation,  merger or combination of the Company with or
into another  corporation  or of the sale or conveyance of all or  substantially
all of the assets of the Company,  the Company  shall cause to be filed with the
Trustee and to be mailed to each holder of Securities that are convertible  into
shares of Common Stock at such holder's  registered  address,  the date on which
such  reclassification,  change,  consolidation,  merger,  combination,  sale or
conveyance  is  expected  to  become  effective,  and the date as of which it is
expected that holders of Common Stock shall be entitled to exchange their Common
Stock  for  stock,   securities  or  other   property   deliverable   upon  such
reclassification,   change,   consolidation,   merger,   combination,   sale  or
conveyance.

Section 14.06     Taxes on Shares Issued.
                  ----------------------

         The delivery of stock certificates upon conversions of Securities shall
be made  without  charge to the  holder  converting  a  Security  for any tax in
respect of the issue thereof. The Company shall not, however, be required to pay
any tax which may be payable in respect of any transfer involved in the delivery
of stock  registered  in any  name  other  than of the  holder  of any  Security
converted,  and the  Company  shall not be  required  to deliver  any such stock
certificate  unless  and until the  person or persons  requesting  the  delivery
thereof  shall  have paid to the  Company  the  amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid.

Section 14.07 Shares to be Fully Paid; Compliance with Governmental
              Requirements; Listing of Common Stock.

         The  Company  covenants  that all shares of Common  Stock  which may be
delivered upon conversion of Securities of any series which are convertible into
Common Stock will upon delivery be fully paid and  nonassessable  by the Company
and free from all taxes, liens and charges with respect to the issue thereof.

         The Company covenants that if any shares of Common Stock to be provided
for the purpose of conversion of Securities  hereunder require registration with
or approval of any governmental  authority under any Federal or state law before
such shares may be validly  delivered upon conversion,  the Company will in good
faith and as expeditiously as possible  endeavor to secure such  registration or
approval, as the case may be.

<PAGE>
         The Company  further  covenants that it will, if permitted by the rules
of the New York Stock  Exchange or such other  national  stock exchange on which
the Common  Stock is listed or admitted to trading or if  permitted by the rules
of NNM if the Common Stock is approved by it for listing or quotation,  list and
keep listed for so long as the Common Stock shall be so listed on such exchange,
upon official notice of issuance,  all Common Stock  deliverable upon conversion
of Securities of any series which are convertible into Common Stock.

Section 14.08     Responsibility of Trustee.
                  -------------------------

         Neither the Trustee nor any conversion agent shall at any time be under
any duty or  responsibility to any Holder of Securities to determine whether any
facts exist which may require any adjustment of the Conversion  Price applicable
to such  Securities,  or with  respect  to the  nature  or  extent  of any  such
adjustment  when made, or with respect to the method  employed,  or herein or in
any supplemental  indenture provided to be employed, in making the same. Neither
the Trustee nor any conversion  agent shall be  accountable  with respect to the
validity or value (or the kind or amount) of any shares of Common  Stock,  or of
any  securities  or  property,  which  may at any  time be  delivered  upon  the
conversion of any  Security;  and neither the Trustee nor any  conversion  agent
makes any  representation  with  respect  thereto.  Neither  the Trustee nor any
conversion  agent shall be responsible for any failure of the Company to deliver
any shares of Common Stock or stock certificates or other securities or property
or cash upon the  surrender of any Security for the purpose of conversion or for
any failure of the Company to comply  with any of the  covenants  of the Company
contained in this Article XIV.

Section 14.09     Covenant to Reserve Shares.
                  --------------------------

         The  Company  covenants  that it will at all  times  reserve  and  keep
available,  free from  pre-emptive  rights,  out of its  authorized but unissued
Common Stock, such number of shares of Common Stock as shall then be deliverable
upon the  conversion of all  Outstanding  Securities of any series of Securities
which are convertible into Common Stock.

Section 14.10     Other Conversions.
                  -----------------

         If so provided in a Board  Resolution with respect to the Securities of
a  series,  the  principal  amount of the  Securities  of such  series  shall be
convertible  into or exchangeable  for a principal amount of other securities of
the Company  (which  other  securities  may be issued  under this  Indenture  or
otherwise),  and the issuance of such  securities  upon any such  conversion  or
exchange shall be made in accordance with the terms of such Board Resolution.

                                  ARTICLE XV.

                       DEFEASANCE AND COVENANT DEFEASANCE

Section 15.01 Applicability of Article; Company's Option to Effect
              Defeasance or Covenant Defeasance.

         If pursuant to Section 3.01 provision is made for either or both of (a)
defeasance  of the  Securities  of a series under  Section 15.02 or (b) covenant
defeasance  of  the  Securities  of a  series  under  Section  15.03,  then  the
provisions  of such Section or Sections,  as the case may be,  together with the
other  provisions of this Article XV, shall be  applicable to the  Securities of
such series, and the Company may at its option by Board Resolution, at any time,
with  respect to the  Securities  of such series,  elect to have either  Section
15.02 (if  applicable)  or  Section  15.03 (if  applicable)  be  applied  to the
Outstanding  Securities of such series upon  compliance  with the conditions set
forth below in this Article XV.

Section 15.02     Defeasance and Discharge.
                  ------------------------

         Upon the  Company's  exercise of the above  option  applicable  to this
Section with respect to the Outstanding  Securities of a particular  series, the
Company  shall be deemed  to have  been  discharged  from its  obligations  with
respect  to the  Outstanding  Securities  of such  series  (except  for  certain
obligations  to register the transfer or exchange of  Securities of such series,
to replace stolen, lost or mutilated  Securities of such series, and to maintain
paying agencies) on and after the date the conditions  precedent set forth below
are satisfied  (hereinafter,  "defeasance").  For this purpose,  such defeasance
means that the Company  shall be deemed to have paid and  discharged  the entire
indebtedness  represented  by the  Outstanding  Securities of such series and to
have  satisfied  all its  other  obligations  under  such  Securities  and  this
Indenture  insofar as such  Securities  are concerned  (and the Trustee,  at the
expense  of  the  Company  and  upon  Company  Request,   shall  execute  proper
instruments  acknowledging  the same),  except  for the  following  which  shall
survive until otherwise  terminated or discharged  hereunder:  (A) the rights of
Holders of  Outstanding  Securities  of such series to receive,  solely from the
trust fund  described in Section  15.04 as more fully set forth in such Section,
payments of the  principal  of and any premium and  interest on such  Securities
when such payments are due, (B) the Company's  obligations  with respect to such
Securities  under  Section  3.04,  3.05,  3.06,  6.07,  10.02 and 10.03 and such
obligations  as shall be  ancillary  thereto,  (C) the rights,  powers,  trusts,
duties,  immunities and other provisions in respect of the Trustee hereunder and
(D) this Article XV. Subject to compliance with this Article XV, the Company may
exercise its option under this Section 15.02  notwithstanding the prior exercise
of its option under Section 15.03 with respect to the Securities of such series.

<PAGE>
Section 15.03     Covenant Defeasance.
                  -------------------

         Upon the  Company's  exercise of the above  option  applicable  to this
Section with respect to the Outstanding  Securities of a particular  series, the
Company shall be released from its  obligations  under Sections 8.01,  10.04 and
10.06 (and any other covenant  applicable to such  Securities that is determined
pursuant  to  Section  3.01 to be  subject  to  covenant  defeasance  under this
Section) and the occurrence of an event  specified in Clause (4) of Section 5.01
with  respect to any of  Sections  8.01,  10.04 or 10.06 (and any other Event of
Default  applicable to such  Securities  that is determined  pursuant to Section
3.01 to be subject to  covenant  defeasance  under  this  Section)  shall not be
deemed to be an Event of Default with respect to the  Outstanding  Securities of
such series on and after the date the  conditions  set forth below are satisfied
(hereinafter, "covenant defeasance"). For this purpose, such covenant defeasance
means that,  with respect to the  Outstanding  Securities  of such  series,  the
Company  may omit to comply with and shall have no  liability  in respect of any
term,  condition,  limitation  or  restrictive  covenant  set  forth in any such
Section or Clause  whether  directly or  indirectly  by reason of any  reference
elsewhere  herein to any such Section or Clause or by reason of any reference in
any such  Section  or  Clause  to any  other  provision  herein  or in any other
document,  including any supplement  hereto,  any Board  Resolution or Officers'
Certificate  delivered  hereto  but the  remainder  of this  Indenture  and such
Securities shall be unaffected thereby.

Section 15.04     Conditions to Defeasance or Covenant Defeasance.
                  -----------------------------------------------

         The  following  shall be the  conditions  precedent to  application  of
either  Section  15.02 or  Section  15.03  to the  Outstanding  Securities  of a
particular series:

(1)      The Company shall  irrevocably have deposited or caused to be deposited
         with the Trustee (or another  trustee  satisfying the  requirements  of
         Section  6.09 who shall  agree to comply  with the  provisions  of this
         Article XV applicable to it) as trust funds in trust for the purpose of
         making the following  payments,  specifically  pledged as security for,
         and dedicated solely to, the benefit of the Holders of such Securities,
         (A)  money in an  amount,  or (B)  U.S.  Government  Obligations  which
         through the  scheduled  payment of  principal  and  interest in respect
         thereof in accordance with their terms will provide, not later than one
         day before the due date of any  payment,  money in an amount,  or (C) a
         combination thereof, sufficient,  without reinvestment,  in the opinion
         of a  nationally  recognized  firm of  independent  public  accountants
         expressed in a written  certification thereto delivered to the Trustee,
         to pay and  discharge,  and which  shall be applied by the  Trustee (or
         other  qualifying  trustee) to pay and discharge,  (i) the principal of
         and any premium, if any, and interest on the Outstanding  Securities of
         such series on the maturity of such principal,  premium or interest and
         (ii)  any  mandatory  sinking  fund  payments  or  analogous   payments
         applicable to the  Outstanding  Securities of such series on the day on
         which  such  payments  are due in  accordance  with  the  terms of this
         Indenture and of such  Securities.  Before such a deposit,  the Company
         may make arrangements satisfactory to the Trustee for the redemption of
         Securities  at a future date or dates in  accordance  with  Article XI,
         which  shall  be given  effect  in  applying  the  foregoing.  For this
         purpose,  "U.S.  Government  Obligations" means securities that are (x)
         direct  obligations  of the United States of America for the payment of
         which its full  faith and credit is  pledged  or (y)  obligations  of a
         Person  controlled  or  supervised  by  and  acting  as  an  agency  or
         instrumentality  of the United States of America the timely  payment of
         which  is  unconditionally  guaranteed  as  a  full  faith  and  credit
         obligation by the United States of America,  which, in either case, are
         not callable or  redeemable  at the option of the issuer  thereof,  and
         shall also include a depositary receipt issued by a bank (as defined in
         Section 3(a)(2) of the Securities Act of 1933, as amended) as custodian
         with  respect  to any such U.S.  Government  Obligation  or a  specific
         payment  of  principal  of or  interest  on any  such  U.S.  Government
         Obligation held by such custodian for the account of the holder of such
         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 U.S. Government  Obligation
         or the  specific  payment  of  principal  of or  interest  on the  U.S.
         Government Obligation evidenced by such depositary receipt.

(2)      No Event of Default or event which with notice or lapse of time or both
         would become an Event of Default with respect to the Securities of such
         series shall have  occurred and be  continuing  (A) on the date of such
         deposit or (B) insofar as subsections 5.01(6) and (7) are concerned, at
         any time  during  the  period  ending on the 91st day after the date of
         such deposit or, if longer,  ending on the day following the expiration
         of the longest  preference  period applicable to the Company in respect
         of such  deposit  (it  being  understood  that  the  condition  in this
         condition  shall not be deemed  satisfied  until the expiration of such
         period). (3) Such defeasance or covenant defeasance shall not (A) cause
         the Trustee  for the  Securities  of such series to have a  conflicting
         interest  as  defined  in  Section  6.08 or for  purposes  of the Trust
         Indenture  Act with  respect to any  securities  of the  Company or (B)
         result in the trust arising from such deposit to constitute,  unless it
         is qualified as, a regulated  investment  company under the  Investment
         Company Act of 1940, as amended.

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

(4)      In the case of an election under Section 15.02,  the Company shall have
         delivered  to the  Trustee an Opinion of Counsel  stating  that (x) the
         Company has received from, or there has been published by, the Internal
         Revenue Service a ruling, or (y) since the date of this Indenture there
         has been a change in the  applicable  Federal income tax law, in either
         case to the effect that,  and based  thereon such opinion shall confirm
         that, the Holders of the Outstanding Securities of such series will not
         recognize  income,  gain or loss for United States  federal  income tax
         purposes as a result of such deposit, defeasance and discharge and will
         be subject to United States federal income tax on the same amounts,  in
         the same  manner  and at the same  times as would have been the case if
         such deposit, defeasance and discharge had not occurred.

(5)      In the case of an election under Section 15.03,  the Company shall have
         delivered  to the  Trustee an Opinion of Counsel to the effect that the
         Holders of the Outstanding Securities of such series will not recognize
         income, gain or loss for United States federal income tax purposes as a
         result of such covenant defeasance and will be subject to United States
         federal  income tax on the same amounts,  in the same manner and at the
         same times as would  have been the case if such  deposit  and  covenant
         defeasance had not occurred.

(6)      Such defeasance or covenant  defeasance shall be effected in compliance
         with any  additional  terms,  conditions  or  limitations  which may be
         imposed on the  Company in  connection  therewith  pursuant  to Section
         3.01.

(7)      The  Company   shall  have   delivered  to  the  Trustee  an  Officers'
         Certificate and an Opinion of Counsel, each stating that all conditions
         precedent  provided for relating to either the defeasance under Section
         15.02 or the covenant  defeasance  under Section 15.03 (as the case may
         be) have been complied with.

Section 15.05 Deposited Money and U.S. Government Obligations to be Held in
              Trust; Other Miscellaneous Provisions.

         Subject to the provisions of the last  paragraph of Section 10.03,  all
money and U.S. Government Obligations (including the proceeds thereof) deposited
with the Trustee (or other qualifying  trustee - collectively,  for purposes for
this Section 15.05,  the "Trustee")  pursuant to Section 15.04 in respect of the
Outstanding  Securities of such series shall be held in trust and applied by the
Trustee,  in  accordance  with  the  provisions  of  such  Securities  and  this
Indenture,  to the payment, either directly or through any Paying Agent (but not
including  the  Company  acting  as its own  Paying  Agent) as the  Trustee  may
determine, to the Holders of such Securities,  of all sums due and to become due
thereon in respect of principal,  premium and interest,  but such money need not
be segregated from other funds except to the extent required by law.

         The Company shall pay and indemnify the Trustee against any tax, fee or
other  charge  imposed  on or  assessed  against  the  money or U.S.  Government
Obligations  deposited  pursuant to Section  15.04 or the principal and interest
received in respect thereof.

         Anything  herein to the  contrary  notwithstanding,  the Trustee  shall
deliver or pay to the Company from time to time upon  Company  Request any money
or U.S. Government Obligations held by it as provided in Section 15.04 which, in
the opinion of a nationally  recognized firm of independent  public  accountants
expressed in a written  certification  thereof delivered to the Trustee,  are in
excess of the amount  thereof  which would then be required to be  deposited  to
effect an equivalent defeasance or covenant defeasance.

Section 15.06     Reinstatement.
                  -------------

         If the  Trustee  or the  Paying  Agent is  unable to apply any money in
accordance  with Section  15.02 or 15.03 with respect to the  Securities  of any
series by reason of any order or judgment of any court or governmental authority
enjoining,  restraining  or otherwise  prohibiting  such  application,  then the
Company's  obligations  under this  Indenture and the  Securities of such series
shall be revived and  reinstated  as though no deposit had occurred  pursuant to
this  Article XV until such time as the Trustee or Paying  Agent is permitted to
apply all such  money in  accordance  with  Section  15.02 or  10.53;  provided,
however,  that if the  Company  makes any  payment  of the  principal  of or any
premium or interest on any such  Security  following  the  reinstatement  of its
obligations,  the Company  shall be  subrogated  to the rights of the Holders of
such  Securities  to receive  such payment from the money held by the Trustee or
the Paying Agent.

<PAGE>
                                  ARTICLE XVI.

                           IMMUNITY OF INCORPORATORS,
                      STOCKHOLDERS, OFFICERS AND DIRECTORS

Section 16.01 Immunity of Incorporators, Stockholders, Officers and Directors.

         No recourse under or upon any obligation, covenant or agreement of this
Indenture,  or of any  Security,  or for any claim based thereon or otherwise in
respect thereof, shall be had against any incorporator,  stockholder, officer or
director,  as such, past,  present or future, of the Company or of any successor
corporation,  either  directly or through the Company,  whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise;  it being expressly understood that this Indenture and the
obligations  issued  hereunder  are solely  corporate  obligations,  and that no
personal  liability whatever shall attach to, or is or shall be incurred by, the
incorporators,  stockholders,  officers or directors, as such, of the Company or
any  successor  corporation,  or any of them,  because  of the  creation  of the
indebtedness  hereby authorized,  or under or by this Indenture or in any of the
Securities or implied therefrom; and that any and all such personal liability of
every name and nature,  either at common law or in equity or by  constitution or
statute,  of,  and any and all  such  rights  and  claims  against,  every  such
incorporator, stockholder, officer or director, as such, because of the creation
of the indebtedness hereby authorized, or under or by reason of the obligations,
covenants or agreements  contained in this Indenture or in any of the Securities
or implied therefrom are hereby expressly waived and released as a condition of,
and as a  consideration  for, the  execution of this  Indenture and the issue of
such Securities.

                                                       * * *

<PAGE>

         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.

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

                                                     U.S. WIRELESS CORPORATION

                                                     By:
                                                           Name:
                                                           Title:

Attest:  `
         Name:
         Title:

                                                    [TRUSTEE]

                                                     By:
                                                           Name:
                                                           Title:

Attest:
         Name:
         Title:

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