
                                 LEASE AGREEMENT

                            Dated as of June 2, 1999

                                     between

                   FIRST SECURITY BANK, NATIONAL ASSOCIATION,
                                not individually,
                         but solely as the Owner Trustee
                       under the DTSD Realty Trust 1999-1,
                                    as Lessor

                                       and

                         DOLLAR TREE DISTRIBUTION, INC.,
                                    as Lessee





This Lease  Agreement is subject to a security  interest in favor of First Union
National  Bank  ("Bank")  under a  Security  Agreement  dated as of June 2, 1999
between First Security Bank, National Association, not individually,  but solely
as the Owner  Trustee  under  the DTSD  Realty  Trust  1999-1  and the Bank,  as
amended, modified, extended, supplemented, restated and/or replaced from time to
time in accordance with the applicable  provisions thereof. This Lease Agreement
has been  executed in several  counterparts.  To the extent,  if any,  that this
Lease  Agreement  constitutes  chattel  paper  (as such term is  defined  in the
Uniform  Commercial  Code  as in  effect  in any  applicable  jurisdiction),  no
security interest in this Lease Agreement may be created through the transfer or
possession of any counterpart other than the original counterpart containing the
receipt therefor executed by the Bank on the signature page hereof.


<PAGE>


                                TABLE OF CONTENTS

ARTICLE I....................................................................  1
         1.1 Definitions.....................................................  1
         1.2 Interpretation..................................................  2
ARTICLE II...................................................................  2
         2.1 Property........................................................  2
         2.2 Lease Term......................................................  2
         2.3 Title...........................................................  2
         2.4 Lease Supplements...............................................  2
ARTICLE III..................................................................  3
         3.1 Rent............................................................  3
         3.2 Payment of Basic Rent...........................................  3
         3.3 Supplemental Rent...............................................  3
         3.4 Performance on a Non-Business Day...............................  4
         3.5 Rent Payment Provisions.........................................  4
ARTICLE IV...................................................................  4
         4.1 Taxes; Utility Charges..........................................  4
ARTICLE V....................................................................  5
         5.1 Quiet Enjoyment.................................................  5
ARTICLE VI...................................................................  5
         6.1 Net Lease.......................................................  5
         6.2 No Termination or Abatement.....................................  6
ARTICLE VII..................................................................  6
         7.1 Ownership of the Properties.....................................  6
ARTICLE VIII.................................................................  8
         8.1 Condition of the Properties.....................................  8
         8.2 Possession and Use of the Properties............................  8
         8.3 Integrated Properties...........................................  9
ARTICLE IX................................................................... 10
         9.1 Compliance With Legal Requirements, Insurance Requirements
             and Manufacturer's Specifications and Standards................. 10
ARTICLE X.................................................................... 10
         10.1 Maintenance and Repair; Return................................. 10
         10.2 Environmental Inspection....................................... 11
ARTICLE XI................................................................... 12
         11.1 Modifications.................................................. 12
ARTICLE XII.................................................................. 13
         12.1 Warranty of Title.............................................. 13
ARTICLE XIII................................................................. 14
         13.1 Permitted Contests Other Than in Respect of Indemnities........ 14
         13.2 Impositions, Utility Charges, Other Matters; Compliance
              with Legal Requirements........................................ 14
ARTICLE XIV.................................................................. 14
         14.1 Public Liability and Workers' Compensation Insurance........... 14
         14.2 Permanent Hazard and Other Insurance........................... 15

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<PAGE>


         14.3 Coverage....................................................... 16
ARTICLE XV................................................................... 17
         15.1 Casualty and Condemnation...................................... 17
         15.2 Environmental Matters.......................................... 19
         15.3 Notice of Environmental Matters................................ 20
ARTICLE XVI.................................................................. 20
         16.1 Termination Upon Certain Events................................ 20
         16.2 Procedures..................................................... 20
ARTICLE XVII................................................................. 21
         17.1 Lease Events of Default........................................ 21
         17.2 Surrender of Possession........................................ 23
         17.3 Reletting...................................................... 24
         17.4 Damages........................................................ 24
         17.5 Power of Sale.................................................. 25
         17.6 Final Liquidated Damages....................................... 25
         17.7 Environmental Costs............................................ 26
         17.8 Waiver of Certain Rights....................................... 26
         17.9 Assignment of Rights Under Contracts........................... 26
         17.10 Remedies Cumulative........................................... 26
ARTICLE XVIII................................................................ 26
         18.1 Lessor's Right to Cure Lessee's Lease Defaults................. 26
ARTICLE XIX.................................................................. 27
         19.1 Provisions Relating to lessee's Exercise of its Purchase
              Option......................................................... 27
         19.2 No Purchase or Termination With Respect to Less than All
              of a Property.................................................. 27
ARTICLE XX................................................................... 27
         20.1 Purchase Option or Sale Option-General Provisions.............. 27
         20.2 Lessee Purchase Option......................................... 28
         20.3 Third Party Sale Option........................................ 29
ARTICLE XXI.................................................................. 29
         21.1 [Intentionally Omitted]........................................ 29
ARTICLE XXII................................................................. 29
         22.1 Sale Procedure................................................. 29
         22.2 Application of Proceeds of Sale................................ 32
         22.3 Indemnity for Excessive Wear................................... 32
         22.4 Appraisal Procedure............................................ 33
         22.5 Certain Obligations Continue................................... 33
ARTICLE XXIII................................................................ 33
         23.1 Holding Over................................................... 33
ARTICLE XXIV................................................................. 34
         24.1 Risk of Loss................................................... 34
ARTICLE XXV.................................................................. 34
         25.1 Assignment..................................................... 34
         25.2 Subleases...................................................... 35
ARTICLE XXVI................................................................. 35
         26.1 No Waiver...................................................... 35

                                       ii

<PAGE>



ARTICLE XXVII................................................................ 26
         27.1 Acceptance of Surrender........................................ 26
         27.2 No Merger of Title............................................. 36
ARTICLE XXVIII............................................................... 36
         28.1 Incorporation of Covenants..................................... 36
ARTICLE XXIX................................................................. 37
         29.1 Notices........................................................ 37
ARTICLE XXX.................................................................. 37
         30.1 Miscellaneous.................................................. 37
         30.2 Amendments and Modifications................................... 37
         30.3 successors and Assigns......................................... 37
         30.4 Headings and Table of Contents................................. 38
         30.5 Counterparts................................................... 38
         30.6 GOVERNING LAW.................................................. 38
         30.7 Calculation of Rent............................................ 38
         30.8 Memoranda of Lease and Lease Supplements....................... 38
         30.9 [Intentionally Left Blank]..................................... 38
         30.10 Limitations on Recourse....................................... 38
         30.11 WAIVERS OF JURY TRIAL......................................... 39
         30.12 Exercise of Lessor Rights..................................... 39
         30.13 SUBMISSION TO JURISDICTION; VENUE; ARBITRATION................ 39
         30.14 USURY SAVINGS PROVISION....................................... 39



EXHIBITS

EXHIBIT A    -    Lease Supplement No. ____
EXHIBIT B    -    Memorandum of Lease and Lease Supplement No. ____



                                       iii


<PAGE>


                                 LEASE AGREEMENT


         THIS LEASE  AGREEMENT  dated as of June 2, 1999 (as amended,  modified,
extended,  supplemented,  restated  and/or  replaced  from  time to  time,  this
"Lease")  is between  FIRST  SECURITY  BANK,  NATIONAL  ASSOCIATION,  a national
banking  association,  having its principal office at 79 South Main Street, Salt
Lake City, Utah 84111, not  individually,  but solely as the Owner Trustee under
the DTSD  Realty  Trust  1999-1,  as lessor  (the  "Lessor"),  and  DOLLAR  TREE
DISTRIBUTION,  INC.,  a  Virginia  corporation,  having its  principal  place of
business  at 500 Volvo  Parkway,  Chesapeake,  Virginia  23320,  as lessee  (the
"Lessee").

                              W I T N E S S E T H:

         A. WHEREAS,  subject to the terms and  conditions of the  Participation
Agreement  and the Agency  Agreement,  Lessor will (i)  purchase or ground lease
various  parcels of real  property,  some of which  will (or may) have  existing
Improvements  thereon,  from one (1) or more third parties  designated by Lessee
and  (ii)  fund  the  acquisition,   installation,  testing,  use,  development,
construction,  operation,  maintenance, repair, refurbishment and restoration of
the Properties by the Construction Agent; and

         B. WHEREAS,  the Term shall commence with respect to each Property upon
the  Property  Closing  Date with  respect  thereto;  provided,  Basic Rent with
respect  thereto shall not be payable  until the  applicable  Rent  Commencement
Date; and

         C. WHEREAS,  Lessor  desires to lease to Lessee,  and Lessee desires to
lease from Lessor, each Property;

         NOW,  THEREFORE,  in consideration of the foregoing,  and of other good
and  valuable  consideration,  the receipt and  sufficiency  of which are hereby
acknowledged, the parties hereto agree as follows:


                                    ARTICLE I

         1.1      Definitions.

                  For  purposes  of this Lease,  capitalized  terms used in this
Lease and not otherwise  defined herein shall have the meanings assigned to them
in Appendix A to that certain  Participation  Agreement dated as of June 2, 1999
(as amended,  modified,  extended,  supplemented,  restated and/or replaced from
time  to  time  in  accordance  with  the  applicable  provisions  thereof,  the
"Participation  Agreement") among Lessee,  the various parties thereto from time
to time, as the Guarantors,  Lessor and First Union National Bank, as Lender and
Holder  ("Bank").  Unless  otherwise  indicated,  references  in this  Lease  to
articles, sections, paragraphs, clauses, appendices,  schedules and exhibits are
to the same contained in this Lease.

                                       1

<PAGE>


         1.2      Interpretation.

                 The rules of usage set forth in Appendix A to the Participation
Agreement shall apply to this Lease.


                                   ARTICLE II

         2.1      Property.

                  Subject to the terms and conditions  hereinafter set forth and
contained in the respective Lease Supplement  relating to each Property,  Lessor
hereby leases to Lessee and Lessee hereby leases from Lessor, each Property.

         2.2      Lease Term.

                  The term of this Lease  with  respect  to each  Property  (the
"Term")  shall  begin upon the earlier to occur of (a) the  Completion  Date for
such Property and (b) the date any Agency Agreement Event of Default shall occur
(in each  case the  "Commencement  Date")  and  shall  end on the  fifth  annual
anniversary of the Initial Closing Date, unless the Term is earlier  terminated;
provided,  this  Lease  shall be in full  force  and  effect  from and after the
Initial Closing Date,  notwithstanding that the Term for any particular Property
shall  not   commence   until   the   Commencement   Date  for  such   Property.
Notwithstanding  the foregoing,  Lessee shall not be obligated to pay Basic Rent
until the Rent Commencement Date with respect to such Property.

         2.3      Title.

                  Each Property is leased to Lessee  without any  representation
or warranty,  express or implied, by Lessor and subject to the rights of parties
in  possession  (if  any),  the  existing  state  of  title  (including  without
limitation the Permitted  Liens) and all applicable Legal  Requirements.  Lessee
shall in no event have any  recourse  against  Lessor for any defect in Lessor's
title to any  Property or any interest of Lessee  therein  other than for Lessor
Liens.

         2.4      Lease Supplements.

         On the Property Closing Date for each Property, Lessee and Lessor shall
each  execute  and  deliver a Lease  Supplement  for the  Property  to be leased
effective as of the  Commencement  Date for such Property in  substantially  the
form of Exhibit A hereto.

                                       2
<PAGE>


                                   ARTICLE III

         3.1      Rent.

                  (a) Lessee  shall pay Basic  Rent in  arrears on each  Payment
         Date, and on any date on which this Lease shall  terminate with respect
         to any or all  Properties  during  the Term;  provided,  however,  with
         respect to each individual  Property Lessee shall have no obligation to
         pay  Basic  Rent  with  respect  to  such   Property   until  the  Rent
         Commencement Date with respect to such Property  (notwithstanding  that
         Basic  Rent for such  Property  shall  accrue  from and  including  the
         Scheduled  Interest  Payment  Date  immediately   preceding  such  Rent
         Commencement Date).

                  (b) Basic Rent shall be due and payable in lawful money of the
         United  States  and  shall  be  paid by wire  transfer  of  immediately
         available  funds on the due date  therefor  (or within  the  applicable
         grace  period)  to such  account or  accounts  at such bank or banks as
         Lessor shall from time to time direct.

                  (c) Lessee's inability or failure to take possession of all or
         any portion of any Property  when  delivered by Lessor,  whether or not
         attributable to any act or omission of Lessor, the Construction  Agent,
         Lessee or any other  Person or for any other reason  whatsoever,  shall
         not delay or otherwise affect Lessee's  obligation to pay Rent for such
         Property in accordance with the terms of this Lease.

                  (d)  Lessee  shall  make all  payments  of Rent prior to 12:00
         Noon,  Charlotte,  North  Carolina  time,  on the  applicable  date for
         payment of such amount.

         3.2      Payment of Basic Rent.

                  Basic  Rent  shall be paid  absolutely  net to  Lessor  or its
designee,  so that this Lease  shall  yield to Lessor the full  amount  thereof,
without setoff, deduction or reduction.

         3.3      Supplemental Rent.

                  Lessee  shall pay to the Person  entitled  thereto any and all
Supplemental  Rent when and as the same  shall  become due and  payable,  and if
Lessee fails to pay any  Supplemental  Rent within three (3) days after the same
is due, Lessor shall have all rights, powers and remedies provided for herein or
by law or equity or otherwise in the case of nonpayment of Basic Rent.  All such
payments  of  Supplemental  Rent shall be in the full  amount  thereof,  without
setoff,  deduction or reduction.  Lessee shall pay to the appropriate Person, as
Supplemental  Rent due and owing to such Person,  among other things, on demand,
(a) any and all payment  obligations  (except for amounts payable as Basic Rent)
owing from time to time under the Operative Agreements by any Person to the Bank
or any  other  Person,  (b)  interest  at the  applicable  Overdue  Rate  on any
installment  of Basic Rent not paid when due  (subject to the  applicable  grace
period) for the period for which the same shall be overdue and on any payment of
Supplemental  Rent  not paid  when due or  demanded  by the  appropriate  Person
(subject to any

                                       3

<PAGE>


applicable  grace  period)  for the period  from the due date or the date of any
such  demand,  as the case may be,  until the same shall be paid and (c) amounts
referenced  as  Supplemental  Rent  obligations  pursuant  to Section 8.3 of the
Participation  Agreement. It shall be an additional Supplemental Rent obligation
of Lessee to pay to the appropriate  Person all rent and other amounts when such
become due and owing from time to time under each  Ground  Lease and without the
necessity of any notice from Lessor with regard thereto. The expiration or other
termination of Lessee's  obligations to pay Basic Rent hereunder shall not limit
or modify the  obligations of Lessee with respect to Supplemental  Rent.  Unless
expressly  provided  otherwise in this Lease, in the event of any failure on the
part of  Lessee  to pay and  discharge  any  Supplemental  Rent as and when due,
Lessee shall also promptly pay and discharge any fine, penalty, interest or cost
which  may be  assessed  or  added  for  nonpayment  or  late  payment  of  such
Supplemental Rent, all of which shall also constitute Supplemental Rent.

         3.4      Performance on a Non-Business Day.

                  If any Basic Rent is required hereunder on a day that is not a
Business Day, then such Basic Rent shall be due on the  corresponding  Scheduled
Interest Payment Date. If any Supplemental  Rent is required  hereunder on a day
that is not a Business Day, then such Supplemental Rent shall be due on the next
succeeding Business Day.

         3.5      Rent Payment Provisions.

                  Lessee shall make  payment of all Basic Rent and  Supplemental
Rent when due (subject to the applicable  grace  periods)  regardless of whether
any of the  Operative  Agreements  pursuant to which same is  calculated  and is
owing  shall have been  rejected,  avoided or  disavowed  in any  bankruptcy  or
insolvency  proceeding  involving  any of the  parties  to any of the  Operative
Agreements.  Such  provisions  of such  Operative  Agreements  and their related
definitions  are  incorporated   herein  by  reference  and  shall  survive  any
termination, amendment or rejection of any such Operative Agreements.


                                   ARTICLE IV

         4.1      Taxes; Utility Charges.

                  From and after the Commencement Date for any Property,  Lessee
shall pay or cause to be paid all  Impositions  with  respect  to such  Property
and/or the use, occupancy,  operation,  repair, access, maintenance or operation
thereof and all charges for  electricity,  power,  gas, oil,  water,  telephone,
sanitary sewer service and all other rents,  utilities and operating expenses of
any kind or type used in or on any Property and related real property during the
Term. Prior to the Commencement Date for any Property,  Lessor (at the direction
of the Bank) shall make the payments  referenced in the foregoing  sentence (but
only to the extent amounts are available  therefor with respect to the Available
Commitments  and the  Available  Holder  Commitments  or the Bank  increases the
amount of Available  Commitments and Available  Holder  Commitments to fund such
costs).  Upon  Lessor's  request,  Lessee shall provide from

                                       4

<PAGE>


time to time  Lessor  with  evidence  of all  such  payments  referenced  in the
foregoing  sentence.  Lessee  shall be  entitled to receive any credit or refund
with respect to any Imposition or utility charge paid by Lessee. Unless an Event
of Default  shall have occurred and be  continuing,  the amount of any credit or
refund received by Lessor on account of any Imposition or utility charge paid by
Lessee,  net of the costs and  expenses  incurred  by Lessor in  obtaining  such
credit or  refund,  shall be  promptly  paid over to  Lessee.  All  charges  for
Impositions  or  utilities  imposed  with  respect to any  Property for a period
during which this Lease expires or terminates  shall be adjusted and prorated on
a daily basis between  Lessor and Lessee,  and each party shall pay or reimburse
the other for such party's pro rata share thereof.


                                    ARTICLE V

         5.1      Quiet Enjoyment.

                  Subject to the rights of Lessor  contained  in Sections  17.2,
17.3  and  20.3  and the  other  terms of this  Lease  and the  other  Operative
Agreements  and so long as no  Event  of  Default  shall  have  occurred  and be
continuing,  Lessee  shall  peaceably  and  quietly  have,  hold and enjoy  each
Property for the applicable Term, free of any claim or other action by Lessor or
anyone rightfully  claiming by, through or under Lessor (other than Lessee) with
respect to any matters arising from and after the applicable Commencement Date.


                                   ARTICLE VI

         6.1      Net Lease.

                  This Lease shall  constitute a net lease,  and the obligations
of  Lessee  hereunder  are  absolute  and  unconditional.  Lessee  shall pay all
operating  expenses  arising out of the use,  operation and/or occupancy of each
Property. Any present or future law to the contrary notwithstanding,  this Lease
shall not terminate, nor shall Lessee be entitled to any abatement,  suspension,
deferment, reduction, setoff, counterclaim, or defense with respect to the Rent,
nor shall the obligations of Lessee  hereunder be affected  (except as expressly
herein permitted and by performance of the obligations in connection  therewith)
for any reason  whatsoever,  including without  limitation by reason of: (a) any
damage to or destruction of any Property or any part thereof;  (b) any taking of
any  Property  or any part  thereof  or  interest  therein  by  Condemnation  or
otherwise;  (c)  any  prohibition,  limitation,  restriction  or  prevention  of
Lessee's use, occupancy or enjoyment of any Property or any part thereof, or any
interference  with such use,  occupancy  or  enjoyment  by any Person or for any
other reason;  (d) any title defect,  Lien or any matter  affecting title to any
Property;  (e) any eviction by paramount title or otherwise;  (f) any default by
Lessor  hereunder;  (g) any action for bankruptcy,  insolvency,  reorganization,
liquidation,  dissolution or other proceeding relating to or affecting the Bank,
Lessor,  Lessee  or  any  Governmental  Authority;   (h)  the  impossibility  or
illegality  of  performance  by  Lessor,  Lessee or both;  (i) any action of any
Governmental  Authority  or  any  other  Person;  (j)  Lessee's  acquisition  of
ownership  of all or  part  of any  Property;  (k)  breach  of any  warranty  or
representation with

                                       5

<PAGE>


respect  to any  Property  or any  Operative  Agreement;  (l) any  defect in the
condition,  quality or fitness for use of any Property or any part  thereof;  or
(m) any  other  cause or  circumstance  whether  similar  or  dissimilar  to the
foregoing and whether or not Lessee shall have notice or knowledge of any of the
foregoing.  The parties intend that the obligations of Lessee hereunder shall be
covenants, agreements and obligations that are separate and independent from any
obligations  of Lessor  hereunder  and shall  continue  unaffected  unless  such
covenants,  agreements and obligations shall have been modified or terminated in
accordance  with  an  express  provision  of  this  Lease.   Lessor  and  Lessee
acknowledge  and  agree  that the  provisions  of this  Section  6.1  have  been
specifically reviewed and subject to negotiation.

         6.2      No Termination or Abatement.

                  Lessee shall remain  obligated  under this Lease in accordance
with its terms and shall not take any action to terminate, rescind or avoid this
Lease,  notwithstanding any action for bankruptcy,  insolvency,  reorganization,
liquidation,  dissolution,  or other  proceeding  affecting  any  Person  or any
Governmental  Authority,  or any  action  with  respect  to  this  Lease  or any
Operative Agreement which may be taken by any trustee, receiver or liquidator of
any Person or any  Governmental  Authority  or by any court with  respect to any
Person,  or any  Governmental  Authority.  Lessee hereby waives all right (a) to
terminate or surrender  this Lease  (except as permitted  under the terms of the
Operative  Agreements)  or (b) to avail  itself  of any  abatement,  suspension,
deferment,  reduction, setoff, counterclaim or defense with respect to any Rent.
Lessee shall remain  obligated under this Lease in accordance with its terms and
Lessee hereby waives any and all rights now or hereafter conferred by statute or
otherwise to modify or to avoid strict  compliance  with its  obligations  under
this Lease. Notwithstanding any such statute or otherwise, Lessee shall be bound
by all of the terms and conditions contained in this Lease.


                                   ARTICLE VII

         7.1      Ownership of the Properties.

                  (a) Lessor and Lessee intend that (i) for financial accounting
         purposes  with  respect  to Lessee (A) this Lease will be treated as an
         "operating  lease"  pursuant  to  Statement  of  Financial   Accounting
         Standards  No. 13, as amended,  (B) Lessor will be treated as the owner
         and  lessor of each  Property  and (C)  Lessee  will be  treated as the
         lessee of each  Property,  but (ii) for federal and all state and local
         income  tax  purposes,   bankruptcy   purposes,   regulatory  purposes,
         commercial law and real estate purposes and all other purposes (A) this
         Lease will be treated as a financing arrangement and (B) Lessee will be
         treated as the owner of the  Properties and will be entitled to all tax
         benefits  ordinarily  available  to owners of  property  similar to the
         Properties  for  such  tax  purposes.  Notwithstanding  the  foregoing,
         neither  party  hereto has made,  or shall be deemed to have made,  any
         representation  or  warranty  as to  the  availability  of  any  of the
         foregoing   treatments  under   applicable   accounting   rules,   tax,
         bankruptcy,  regulatory,  commercial  or real  estate  law or under any
         other set of rules.  Lessee  shall claim the cost  recovery  deductions
         associated with each Property,  and Lessor shall not, to the extent not

                                       6
<PAGE>


         prohibited by Law, take on its tax return a position  inconsistent with
         Lessee's claim of such deductions.

                  (b) For  all  purposes  other  than as set  forth  in  Section
         7.1(a)(i),  Lessor and Lessee intend this Lease to constitute a finance
         lease and not a true  lease.  In order to  secure  the  obligations  of
         Lessee now existing or hereafter  arising  under any and all  Operative
         Agreements,   Lessee  hereby  conveys,   grants,  assigns,   transfers,
         hypothecates, mortgages and sets over to Lessor, for the benefit of all
         Financing  Parties,  a first priority security interest (but subject to
         the security  interest in the assets  granted by Lessee in favor of the
         Bank in  accordance  with the  Security  Agreement)  in and lien on all
         right,  title and interest of Lessee (now owned or hereafter  acquired)
         in and to all Properties,  to the extent such is personal  property and
         irrevocably  grants and conveys a lien,  deed of trust and  mortgage on
         all  right,  title and  interest  of  Lessee  (now  owned or  hereafter
         acquired) in and to all Properties to the extent such is real property.
         Lessor and Lessee  further  intend and agree  that,  for the purpose of
         securing the  obligations of Lessee and/or the  Construction  Agent now
         existing or hereafter arising under the Operative Agreements,  (i) this
         Lease shall be a security agreement and financing  statement within the
         meaning of Article 9 of the Uniform  Commercial Code respecting each of
         the Properties and all proceeds (including without limitation insurance
         proceeds  thereof)  to the  extent  such is  personal  property  and an
         irrevocable  grant and conveyance of a lien, deed of trust and mortgage
         on  each  of  the  Properties  and  all  proceeds   (including  without
         limitation  insurance  proceeds  thereof)  to the  extent  such is real
         property;  (ii) the  acquisition  of title by Lessor  (or to the extent
         applicable,  a leasehold  interest  pursuant to a Ground Lease) in each
         Property  referenced  in  Article II  constitutes  a grant by Lessee to
         Lessor of a security interest,  lien, deed of trust and mortgage in all
         of Lessee's  right,  title and interest in and to each Property and all
         proceeds  (including without limitation  insurance proceeds thereof) of
         the conversion,  voluntary or involuntary,  of the foregoing into cash,
         investments, securities or other property, whether in the form of cash,
         investments,  securities  or other  property,  and an assignment of all
         rents,  profits  and  income  produced  by  each  Property;  and  (iii)
         notifications  to Persons holding such property,  and  acknowledgments,
         receipts or  confirmations  from financial  intermediaries,  bankers or
         agents (as applicable) of Lessee shall be deemed to have been given for
         the purpose of perfecting such lien,  security interest,  mortgage lien
         and deed of trust under applicable law. Lessee shall promptly take such
         actions as Lessor may reasonably  request (including without limitation
         the filing of Uniform  Commercial  Code Financing  Statements,  Uniform
         Commercial  Code Fixture Filings and memoranda (or short forms) of this
         Lease and the  various  Lease  Supplements)  to  ensure  that the lien,
         security interest, mortgage lien and deed of trust in each Property and
         the other items referenced above will be deemed to be a perfected lien,
         security  interest,  mortgage lien and deed of trust of first  priority
         under  applicable  law and will be maintained as such from the Property
         Closing Date for each such Property and thereafter throughout the Term.


                                  ARTICLE VIII

         8.1      Condition of the Properties.

                  LESSEE  ACKNOWLEDGES  AND  AGREES  THAT  IT  IS  LEASING  EACH
PROPERTY "AS-IS WHERE-IS" WITHOUT REPRESENTATION,  WARRANTY OR COVENANT (EXPRESS
OR IMPLIED) BY LESSOR  (EXCEPT  THAT LESSOR  SHALL KEEP EACH  PROPERTY  FREE AND
CLEAR OF LESSOR  LIENS) AND IN EACH CASE  SUBJECT TO (A) THE  EXISTING  STATE OF
TITLE,  (B) THE RIGHTS OF ANY PARTIES IN  POSSESSION  THEREOF (IF ANY),  (C) ANY
STATE OF FACTS  REGARDING  ITS PHYSICAL  CONDITION  OR WHICH AN ACCURATE  SURVEY
MIGHT SHOW, (D) ALL APPLICABLE  LEGAL  REQUIREMENTS  AND (E) VIOLATIONS OF LEGAL
REQUIREMENTS  WHICH  MAY  EXIST  ON THE  DATE  HEREOF  AND/OR  THE  DATE  OF THE
APPLICABLE  LEASE  SUPPLEMENT.  NEITHER LESSOR NOR THE BANK HAS MADE OR SHALL BE
DEEMED  TO HAVE  MADE ANY  REPRESENTATION,  WARRANTY  OR  COVENANT  (EXPRESS  OR
IMPLIED)  (EXCEPT THAT LESSOR SHALL KEEP EACH  PROPERTY FREE AND CLEAR OF LESSOR
LIENS) OR SHALL BE  DEEMED TO HAVE ANY  LIABILITY  WHATSOEVER  AS TO THE  TITLE,
VALUE,  HABITABILITY,  USE,  CONDITION,  DESIGN,  OPERATION,  MERCHANTABILITY OR
FITNESS  FOR  USE  OF  ANY  PROPERTY  (OR  ANY  PART  THEREOF),   OR  ANY  OTHER
REPRESENTATION,  WARRANTY  OR  COVENANT  WHATSOEVER,  EXPRESS OR  IMPLIED,  WITH
RESPECT TO ANY PROPERTY (OR ANY PART  THEREOF),  AND NEITHER LESSOR NOR THE BANK
SHALL BE LIABLE FOR ANY LATENT,  HIDDEN, OR PATENT DEFECT THEREON OR THE FAILURE
OF ANY  PROPERTY,  OR ANY PART  THEREOF,  TO COMPLY WITH ANY LEGAL  REQUIREMENT.
LESSEE HAS OR PRIOR TO THE BASIC TERM  COMMENCEMENT DATE WILL HAVE BEEN AFFORDED
FULL OPPORTUNITY TO INSPECT EACH PROPERTY AND THE IMPROVEMENTS THEREON (IF ANY),
IS OR WILL BE (INSOFAR AS LESSOR AND THE BANK ARE CONCERNED)  SATISFIED WITH THE
RESULTS OF ITS  INSPECTIONS  AND IS ENTERING INTO THIS LEASE SOLELY ON THE BASIS
OF THE  RESULTS OF ITS OWN  INSPECTIONS,  AND ALL RISKS  INCIDENT TO THE MATTERS
DESCRIBED IN THE PRECEDING SENTENCE,  AS BETWEEN LESSOR AND THE BANK, ON THE ONE
(1) HAND, AND LESSEE, ON THE OTHER HAND, ARE TO BE BORNE BY LESSEE.

         8.2      Possession and Use of the Properties.

                  (a)  At all  times  during  the  Term  with  respect  to  each
         Property, such Property shall be a Permitted Facility and shall be used
         by Lessee in the ordinary course of its business.  Lessee shall pay, or
         cause to be paid, all charges and costs required in connection with the
         use of the Properties as contemplated  by this Lease.  Lessee shall not
         commit or permit any waste of the Properties or any part thereof.

                  (b) The  address  stated in Section  29.1 of this Lease is the
         principal  place of business and chief  executive  office of Lessee (as
         such terms are used in Section 9-103(3) of the Uniform  Commercial Code
         of any  applicable  jurisdiction),  and Lessee will provide

                                       8

<PAGE>


         Lessor  with  prior written  notice of  any change of  location of  its
         principal  place  of business  or  chief  executive office. Regarding a
         particular Property,  each  Lease  Supplement  correctly identifies the
         initial location of the related Equipment (if any) and Improvements (if
         any) and contains an accurate legal  description for the related parcel
         of Land  or a  copy of  the Ground  Lease (if any).  The  Equipment and
         Improvements respecting each particular Property  will  be located only
         at  the  location identified in the applicable Lease Supplement.

                  (c)  Lessee  will  not  attach  or  incorporate  any  item  of
         Equipment to or in any other item of equipment or personal  property or
         to or in any real  property  in a manner  that  could  give rise to the
         assertion  of any Lien on such  item of  Equipment  by  reason  of such
         attachment  or the assertion of a claim that such item of Equipment has
         become a fixture  and is  subject  to a Lien in favor of a third  party
         that is prior to the Liens thereon created by the Operative Agreements.

                  (d) On the Property Closing Date for each Property, Lessor and
         Lessee  shall  execute a Lease  Supplement  in regard to such  Property
         which  shall   contain  an  Equipment   Schedule  that  has  a  general
         description  of the Equipment  which shall  comprise the  Property,  an
         Improvement Schedule that has a general description of the Improvements
         which shall  comprise the Property and a legal  description of the Land
         to be leased  hereunder  (or in the case of any  Property  subject to a
         Ground Lease to be subleased hereunder) as of the Commencement Date for
         such Property.  Each Property subject to a Ground Lease shall be deemed
         to be ground  subleased  from  Lessor to Lessee as of the  Commencement
         Date,  and such ground  sublease shall be in effect until this Lease is
         terminated or expires,  in each case in  accordance  with the terms and
         provisions  hereof.  Lessee shall  satisfy and perform all  obligations
         imposed on Lessor  under each  Ground  Lease.  Simultaneously  with the
         execution  and  delivery  of each  Lease  Supplement,  such  Equipment,
         Improvements,   Land,  ground  subleasehold  interest,  all  additional
         Equipment and all additional  Improvements which are financed under the
         Operative  Agreements after the Commencement  Date and the remainder of
         such  Property  shall be deemed to have been accepted by Lessee for all
         purposes of this Lease and to be subject to this Lease.

                  (e) At all  times  from  the  Property  Closing  Date for each
         Property and thereafter  during the Term with respect to such Property,
         Lessee  will comply  with all  obligations  under and (to the extent no
         Event of Default exists and provided that such exercise will not impair
         the value,  utility or remaining useful life of such Property) shall be
         permitted to exercise all rights and remedies under,  all operation and
         easement  agreements  and related or similar  agreements  applicable to
         such Property.

         8.3      Integrated Properties.

                  On the Rent Commencement Date for each Property, Lessee shall,
at its sole cost and expense,  cause such Property and the  applicable  property
subject to a Ground Lease to constitute  (and for the duration of the Term shall
continue to constitute) all of the equipment,

                                       9

<PAGE>


facilities, rights, other personal property and other real property necessary or
appropriate to operate,  utilize, maintain and control a Permitted Facility in a
commercially reasonable manner.


                                   ARTICLE IX

         9.1      Compliance With Legal Requirements, Insurance Requirements and
                  Manufacturers Specifications and Standards.

                  Subject to the terms of Article  XIII  relating  to  permitted
contests,  Lessee,  at its sole  cost and  expense,  shall (a)  comply  with all
applicable Legal  Requirements  (including  without limitation all Environmental
Laws) and all Insurance  Requirements  relating to the Properties,  (b) procure,
maintain and comply with all licenses, permits, orders, approvals,  consents and
other authorizations required for the acquisition,  installation,  testing, use,
development,  construction,  operation,  maintenance,  repair, refurbishment and
restoration  of  the  Properties,   and  (c)  comply  with  all   manufacturer's
specifications  and standards,  including  without  limitation the  acquisition,
installation, testing, use, development,  construction,  operation, maintenance,
repair,  refurbishment  and  restoration  of  the  Properties,  whether  or  not
compliance  therewith shall require  structural or extraordinary  changes in any
Property or interfere  with the use and  enjoyment  of any  Property  unless the
failure  to  procure,   maintain  and  comply  with  such  items  identified  in
subparagraphs (b) and (c), individually or in the aggregate, shall not and could
not reasonably be expected to have a Material  Adverse Effect.  Lessor agrees to
take such actions as may be reasonably  requested by Lessee in  connection  with
the compliance by Lessee of its obligations under this Section 9.1.


                                    ARTICLE X

         10.1     Maintenance and Repair; Return.

                  (a) Lessee, at its sole cost and expense,  shall maintain each
         Property in good condition, repair and working order (ordinary wear and
         tear  excepted)  and in the repair  and  condition  as when  originally
         delivered  to  Lessee  and  make  all  necessary  repairs  thereto  and
         replacements  thereof,  of every  kind and nature  whatsoever,  whether
         interior  or  exterior,   ordinary  or  extraordinary,   structural  or
         nonstructural  or foreseen or  unforeseen,  in each case as required by
         Section  9.1  and  on  a  basis   consistent  with  the  operation  and
         maintenance of properties or equipment  comparable in type and function
         to the applicable Property, such that such Property is capable of being
         immediately  utilized by a third party and in compliance  with standard
         industry  practice  subject,  however,  to the provisions of Article XV
         with respect to Casualty and Condemnation.

                  (b) Lessee  shall not move or relocate  any  component  of any
         Property  beyond the  boundaries of the Land  (comprising  part of such
         Property) described in the applicable Lease Supplement,  except for the
         temporary  removal of Equipment and other personal  property for repair
         or replacement.

                                       10
<PAGE>

                  (c) If any component of any Property  becomes worn out,  lost,
         destroyed,  damaged  beyond  repair or otherwise  permanently  rendered
         unfit for use,  Lessee,  at its own  expense,  will within a reasonable
         time replace such component with a replacement  component which is free
         and clear of all Liens (other than  Permitted  Liens and Lessor  Liens)
         and has a  value,  utility  and  useful  life  at  least  equal  to the
         component replaced (assuming the component replaced had been maintained
         and repaired in accordance with the  requirements  of this Lease).  All
         such  replacement  components  which  are added to any  Property  shall
         immediately  become the property of (and title  thereto  shall vest in)
         Lessor and shall be deemed incorporated in such Property and subject to
         the terms of this Lease as if originally leased hereunder.

                  (d) Upon  reasonable  advance  notice,  Lessor  and its agents
         shall  have the right to  inspect  each  Property  and all  maintenance
         records  with  respect  thereto at any  reasonable  time during  normal
         business  hours but shall not,  in the  absence of an Event of Default,
         materially disrupt the business of Lessee.

                  (e) Lessee  shall cause to be delivered to Lessor (at Lessee's
         sole  expense) one (1) or more  reappraisals  of Property as Lessor may
         request  if any one (1) of  Lessor,  the Trust  Company  or the Bank is
         required  pursuant to any applicable  Legal  Requirement to obtain such
         reappraisals.

                  (f) Lessor shall under no  circumstances  be required to build
         any  improvements  or install any equipment on any  Property,  make any
         repairs,  replacements,  alterations  or  renewals  of  any  nature  or
         description  to  any  Property,  make  any  expenditure  whatsoever  in
         connection  with this Lease or maintain any Property in any way. Lessor
         shall not be required to maintain, repair or rebuild all or any part of
         any  Property,  and Lessee  waives the right to (i)  require  Lessor to
         maintain,  repair, or rebuild all or any part of any Property,  or (ii)
         make   repairs  at  the  expense  of  Lessor   pursuant  to  any  Legal
         Requirement,  Insurance  Requirement,  contract,  agreement,  covenant,
         condition or restriction at any time in effect.

                  (g) Lessee shall,  upon the expiration or earlier  termination
         of this Lease  with  respect to a  Property,  if Lessee  shall not have
         exercised  its  Purchase  Option  with  respect  to such  Property  and
         purchased such Property, surrender such Property (i) to Lessor pursuant
         to the exercise of the  applicable  remedies  upon the  occurrence of a
         Lease  Event of Default or (ii)  pursuant  to the second  paragraph  of
         Section 22.1(a) hereof, to Lessor or the third party purchaser,  as the
         case  may  be,  subject  to  Lessee's   obligations  under  this  Lease
         (including  without limitation the obligations of Lessee at the time of
         such surrender  under Sections 9.1,  10.1(a)  through (f), 10.2,  11.1,
         12.1, 22.1 and 23.1).

         10.2     Environmental Inspection.

                  If Lessee has not given  notice of  exercise  of its  Purchase
Option on the  Expiration  Date pursuant to Section 20.1 or for whatever  reason
Lessee does not purchase a Property in

                                       11
<PAGE>


accordance  with the terms of this Lease,  then not more than one hundred twenty
(120) days nor less than sixty (60) days prior to the Expiration Date, Lessee at
its expense shall cause to be delivered to Lessor a Phase I  environmental  site
assessment recently prepared (no more than thirty (30) days prior to the date of
delivery) by an independent  recognized  professional  reasonably  acceptable to
Lessor, and in form, scope and content reasonably satisfactory to Lessor.


                                   ARTICLE XI

         11.1     Modifications.

                  (a) Lessee at its sole cost and expense,  at any time and from
         time to time  without  the  consent of Lessor  may make  modifications,
         alterations, renovations, improvements and additions to any Property or
         any  part  thereof  and   substitutions   and   replacements   therefor
         (collectively,  "Modifications"),  and  Lessee  shall  make any and all
         Modifications  required to be made pursuant to all Legal  Requirements,
         Insurance Requirements and manufacturer's specifications and standards;
         provided,  that: (i) no Modification shall materially impair the value,
         utility  or  useful  life  of any  Property  from  that  which  existed
         immediately prior to such Modification; (ii) each Modification shall be
         done  expeditiously  and in a good  and  workmanlike  manner;  (iii) no
         Modification  shall  adversely  affect the structural  integrity of any
         Property;  (iv) to the extent required by Section 14.2(a), Lessee shall
         maintain  builders' risk insurance at all times when a Modification  is
         in  progress;  (v)  subject to the terms of Article  XIII  relating  to
         permitted  contests,  Lessee  shall  pay all  costs  and  expenses  and
         discharge any Liens arising with respect to any Modification; (vi) each
         Modification   shall  comply  with  the   requirements  of  this  Lease
         (including  without  limitation  Sections  8.2 and 10.1);  and (vii) no
         Improvement  shall be  demolished or otherwise  rendered  unfit for use
         unless  Lessee  shall  finance the  proposed  replacement  Modification
         outside of this lease  facility;  provided,  further,  Lessee shall not
         make any Modification (unless required by any Legal Requirement) to the
         extent any such Modification,  individually or in the aggregate,  shall
         or could reasonably be expected to have a Material Adverse Effect.  All
         Modifications  shall  immediately and without further action upon their
         incorporation  into the  applicable  Property  (1) become  property  of
         Lessor,  (2) be  subject to this Lease and (3) be titled in the name of
         Lessor.  Lessee shall not remove or attempt to remove any  Modification
         from any  Property.  Each Ground Lease for a Property  shall  expressly
         provide for the provisions of the foregoing  sentence.  Lessee,  at its
         own cost and  expense,  will pay for the  repairs  of any damage to any
         Property   caused  by  the   removal  or   attempted   removal  of  any
         Modification.

                  (b)  The  construction  process  provided  for in  the  Agency
         Agreement  is  acknowledged  by  Lessor  to be  consistent  with and in
         compliance with the terms and provisions of this Article XI.

                                       12
<PAGE>


                                   ARTICLE XII

         12.1     Warranty of Title.

                  (a) Lessee hereby  acknowledges  and shall cause title in each
         Property (including without limitation all Equipment, all Improvements,
         all  replacement  components  to each  Property and all  Modifications)
         immediately  and  without  further  action  to vest in and  become  the
         property  of  Lessor  and to be  subject  to the  terms  of this  Lease
         (provided, respecting each Property subject to a Ground Lease, Lessor's
         interest therein is acknowledged to be a leasehold interest pursuant to
         such  Ground  Lease)  from and  after  the date  hereof or such date of
         incorporation  into any Property.  Lessee  agrees that,  subject to the
         terms of Article XIII relating to permitted contests,  Lessee shall not
         directly or indirectly  create or allow to remain,  and shall  promptly
         discharge at its sole cost and expense,  any Lien, defect,  attachment,
         levy,  title  retention  agreement  or  claim  upon any  Property,  any
         component thereof or any Modifications or any Lien, attachment, levy or
         claim with  respect to the Rent or with  respect to any amounts held by
         Lessor or the Bank  pursuant  to any  Operative  Agreement,  other than
         Permitted  Liens and Lessor Liens.  Lessee shall promptly notify Lessor
         in the event it  receives  actual  knowledge  that a Lien  other than a
         Permitted  Lien or Lessor Lien has occurred with respect to a Property,
         the Rent or any other such amounts,  and Lessee represents and warrants
         to, and covenants with, Lessor that the Liens in favor of Lessor and/or
         the  Bank  created  by the  Operative  Agreements  are (and  until  the
         Financing Parties under the Operative Agreements have been paid in full
         shall remain) first priority  perfected Liens subject only to Permitted
         Liens and Lessor Liens. At all times subsequent to the Property Closing
         Date respecting a Property,  Lessee shall (i) cause a valid, perfected,
         first priority Lien on each applicable Property to be in place in favor
         of the  Bank and  (ii)  file,  or  cause  to be  filed,  all  necessary
         documents  under the applicable  real property law and Article 9 of the
         Uniform Commercial Code to perfect such title and Liens.

                  (b)  Nothing  contained  in this Lease shall be  construed  as
         constituting the consent or request of Lessor, expressed or implied, to
         or  for  the   performance  by  any  contractor,   mechanic,   laborer,
         materialman,  supplier  or vendor of any labor or  services  or for the
         furnishing of any materials for any construction, alteration, addition,
         repair or demolition of or to any Property or any part thereof.  NOTICE
         IS HEREBY  GIVEN  THAT  LESSOR  IS NOT AND SHALL NOT BE LIABLE  FOR ANY
         LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO LESSEE, OR
         TO ANYONE  HOLDING A  PROPERTY  OR ANY PART  THEREOF  THROUGH  OR UNDER
         LESSEE,  AND THAT NO  MECHANIC'S  OR OTHER  LIENS  FOR ANY SUCH  LABOR,
         SERVICES OR MATERIALS  SHALL ATTACH TO OR AFFECT THE INTEREST OF LESSOR
         IN AND TO ANY PROPERTY.

                                       13
<PAGE>


                                  ARTICLE XIII

         13.1     Permitted Contests Other Than in Respect of Indemnities.

                  Except to the extent  otherwise  provided for in Section 11 of
the  Participation  Agreement,  Lessee,  on its own or on Lessor's behalf but at
Lessee's sole cost and expense,  may contest,  by appropriate  administrative or
judicial proceedings conducted in good faith and with due diligence, the amount,
validity  or  application,  in  whole  or in  part,  of any  Legal  Requirement,
Imposition  or utility  charge  payable  pursuant  to  Section  4.1 or any Lien,
attachment,  levy,  encumbrance or  encroachment,  and Lessor agrees not to pay,
settle  or  otherwise  compromise  any  such  item,   provided,   that  (a)  the
commencement and  continuation of such proceedings  shall suspend the collection
of any such contested amount from, and suspend the enforcement  thereof against,
the applicable Properties, Lessor and the Bank; (b) there shall not be imposed a
Lien (other than  Permitted  Liens and Lessor Liens) on any Property and no part
of any  Property  nor any Rent would be in any danger of being sold,  forfeited,
lost or deferred;  (c) at no time during the permitted  contest shall there be a
risk of the  imposition  of criminal  liability or material  civil  liability on
Lessor or the Bank for failure to comply  therewith;  and (d) in the event that,
at any time, there shall be a material risk of extending the application of such
item  beyond  the end of the  Term,  then  Lessee  shall  deliver  to  Lessor an
Officer's Certificate certifying as to the matters set forth in clauses (a), (b)
and (c) of this Section 13.1.  Lessor, at Lessee's sole cost and expense,  shall
execute and deliver to Lessee such  authorizations  and other  documents  as may
reasonably  be required in  connection  with any such contest and, if reasonably
requested  by Lessee,  shall join as a party  therein at Lessee's  sole cost and
expense.

         13.2     Impositions, Utility  Charges, Other Matters;  Compliance with
                  Legal Requirements.

                  Except  with  respect  to  Impositions,   Legal  Requirements,
utility charges and such other matters  referenced in Section 13.1 which are the
subject of ongoing  proceedings  contesting the same in a manner consistent with
the  requirements  of Section  13.1,  Lessee  shall  cause (a) all  Impositions,
utility  charges  and  such  other  matters  to  be  timely  paid,   settled  or
compromised, as appropriate, with respect to each Property and (b) each Property
to comply with all applicable Legal Requirements.


                                   ARTICLE XIV

         14.1     Public Liability and Workers Compensation Insurance.

                  During the Term for each  Property,  Lessee shall  procure and
carry,  at Lessee's  sole cost and expense,  commercial  general  liability  and
umbrella  liability  insurance  for claims for  injuries or death  sustained  by
persons or damage to property while on such Property or respecting the Equipment
and such other public  liability  coverages as are then  customarily  carried by
similarly  situated companies  conducting  business similar to that conducted by
Lessee.  Prior to the Commencement  Date for any Property,  Lessee shall procure
and carry all such

                                       14

<PAGE>


insurance referenced in the immediately  preceding sentence,  but Lessor (at the
direction of the Bank) shall pay the costs and expenses incurred  respecting the
insurance  referenced in the foregoing  sentence (but only to the extent amounts
are  available  therefor  with  respect  to the  Available  Commitments  and the
Available  Holder  Commitments  or the Bank  increases  the amount of  Available
Commitments and Available  Holder  Commitments to fund such costs and expenses).
Such insurance  shall be on terms and in amounts that are no less favorable than
insurance  maintained by Lessee with respect to similar properties and equipment
that it owns and are then carried by  similarly  situated  companies  conducting
business  similar  to that  conducted  by Lessee,  and in no event  shall have a
minimum combined single limit per occurrence coverage (i) for commercial general
liability of less than  $1,000,000 and (ii) for umbrella  liability of less than
$2,000,000.  The policies shall name Lessee as the insured and shall be endorsed
to name Lessor and the Bank as  additional  insureds.  The  policies  shall also
specifically  provide that such policies shall be considered  primary  insurance
which shall apply to any loss or claim before any  contribution by any insurance
which Lessor or the Bank may have in force.  In the operation of the Properties,
Lessee  shall  comply with  applicable  workers'  compensation  laws and protect
Lessor and the Bank against any liability under such laws.

         14.2     Permanent Hazard and Other Insurance.

                  (a) During the Term for each Property,  Lessee shall keep such
         Property  insured  against all risk of physical  loss or damage by fire
         and other risks and shall  maintain  builders'  risk  insurance  during
         construction  of any  Improvements  or  Modifications  in each  case in
         amounts  no less  than  the  then  current  replacement  value  of such
         Property  (assuming that such Property was in the condition required by
         the terms of this  Lease  immediately  prior to such loss) and on terms
         that (i) are no less favorable  than  insurance  covering other similar
         properties  owned by  Lessee  and (ii) are then  carried  by  similarly
         situated  companies  conducting  business  similar to that conducted by
         Lessee.  The  policies  shall name  Lessee as the  insured and shall be
         endorsed to name each of Lessor and the Bank as an  additional  insured
         and as a loss  payee,  to the  extent  of their  respective  interests;
         provided, so long as no Event of Default exists, any loss payable under
         the  insurance  policies  required  by this  Section  for  losses up to
         $1,000,000 will be paid to Lessee.  Prior to the Commencement  Date for
         any  Property,  Lessee  shall  procure  and  carry  all such  insurance
         referenced in this Section 14.2(a), but Lessor (at the direction of the
         Bank)  shall  pay  the  costs  and  expenses  incurred  respecting  the
         insurance  referenced  in this Section  14.2(a) (but only to the extent
         amounts  are   available   therefor   with  respect  to  the  Available
         Commitments and the Available Holder  Commitments or the Bank increases
         the amount of Available Commitments and Available Holder Commitments to
         fund such costs and expenses).

                  (b) If, during the Term with respect to a Property the area in
         which such  Property  is located is  designated  a  "flood-prone"  area
         pursuant  to  the  Flood  Disaster  Protection  Act  of  1973,  or  any
         amendments or  supplements  thereto or is in a zone  designated A or V,
         then Lessee shall comply with the National Flood  Insurance  Program as
         set forth in the Flood  Disaster  Protection  Act of 1973. In addition,
         Lessee will fully comply with the  requirements  of the National  Flood
         Insurance Act of 1968 and the Flood

                                       15

<PAGE>


         Disaster Protection Act of 1973, as each may be  amended  from  time to
         time, and with any other Legal Requirement, concerning  flood insurance
         to the extent that it applies  to any such  Property.  During the Term,
         Lessee shall, in the  operation  and  use of  each  Property,  maintain
         workers'  compensation  insurance  consistent  with  that  carried   by
         similarly  situated  companies  conducting  business  similar  to  that
         conducted by Lessee and containing minimum liability  limits of no less
         than  $100,000. In the operation of each Property, Lessee shall  comply
         with  workers' compensation   laws applicable  to Lessee,  and  protect
         Lessor and the Bank against any liability under such laws. Prior to the
         Commencement Date for any Property,  Lessee shall procure and carry all
         such insurance referenced in this  Section 14.2(b),  but Lessor (at the
         direction  of  the  Bank) shall pay  the  costs and  expenses  incurred
         respecting the insurance referenced  in this  Section 14.2(b) (but only
         to  the  extent  amounts  are  available  therefor  with respect to the
         Available Commitments and the Available Holder Commitments  or the Bank
         increases  the  amount  of Available  Commitments and Available  Holder
         Commitments to fund such costs and expenses).

         14.3     Coverage.

                  (a) As of the  date  of this  Lease  and  annually  thereafter
         during the Term,  Lessee  shall  furnish the Bank (on behalf of Lessor)
         with  certificates  prepared  by the  insurers or  insurance  broker of
         Lessee  showing the insurance  required under Sections 14.1 and 14.2 to
         be in  effect,  naming (to the  extent of their  respective  interests)
         Lessor  and  the  Bank as  additional  insureds  and  loss  payees  and
         evidencing  the  other  requirements  of this  Article  XIV.  All  such
         insurance  shall be at the cost and  expense of Lessee and  provided by
         nationally recognized,  financially sound insurance companies having an
         A or better rating by A.M. Best's Key Rating Guide.  Lessee shall cause
         such  certificates to include a provision for thirty (30) days' advance
         written  notice by the insurer to the Bank (on behalf of Lessor) in the
         event of cancellation or material  alteration of such insurance.  If an
         Event of Default has occurred and is continuing and the Bank (on behalf
         of Lessor) so requests,  Lessee shall deliver to the Bank (on behalf of
         Lessor) copies of all insurance  policies required by Sections 14.1 and
         14.2.

                  (b)  Lessee  agrees  that the  insurance  policy  or  policies
         required  by  Sections  14.1,  14.2(a)  and  14.2(b)  shall  include an
         appropriate clause pursuant to which any such policy shall provide that
         it will not be invalidated should Lessee or any Contractor, as the case
         may be, waive,  at any time, any or all rights of recovery  against any
         party  for  losses  covered  by such  policy  or due to any  breach  of
         warranty, fraud, action, inaction or misrepresentation by Lessee or any
         Person  acting on behalf of Lessee.  Lessee  hereby  waives any and all
         such rights  against Lessor and the Bank to the extent of payments made
         to any such Person under any such policy.

                  (c) Neither Lessor nor Lessee shall carry  separate  insurance
         concurrent  in kind or form or  contributing  in the event of loss with
         any insurance  required under this Article XIV,  except that Lessor may
         carry separate liability insurance at Lessor's sole cost so long as (i)
         Lessee's  insurance is  designated as primary and in no event excess or

                                       16

<PAGE>

         contributory  to any  insurance  Lessor may have in force  which  would
         apply to a loss  covered  under  Lessee's  policy  and (ii)  each  such
         insurance policy will not cause Lessee's  insurance required under this
         Article XIV to be subject to a coinsurance exception of any kind.

                  (d) Lessee  shall pay as they become due all  premiums for the
         insurance  required by Section  14.1 and Section  14.2,  shall renew or
         replace each policy prior to the  expiration  date thereof or otherwise
         maintain the coverage  required by such  Sections  without any lapse in
         coverage.


                                   ARTICLE XV

         15.1     Casualty and Condemnation.

                  (a) Subject to the provisions of the Agency Agreement and this
         Article  XV and  Article  XVI  (in the  event  Lessee  delivers,  or is
         obligated  to deliver  or is deemed to have  delivered,  a  Termination
         Notice),  and prior to the occurrence and  continuation of a Default or
         an Event of Default,  Lessee  shall be entitled to receive  (and Lessor
         hereby  irrevocably  assigns to Lessee all of Lessor's right, title and
         interest  in)  any  condemnation  proceeds,   award,   compensation  or
         insurance  proceeds under  Sections  14.2(a) or 14.2(b) hereof to which
         Lessee or Lessor  may  become  entitled  by reason of their  respective
         interests  in a Property  (i) if all or a portion of such  Property  is
         damaged or  destroyed  in whole or in part by a Casualty or (ii) if the
         use,  access,  occupancy,  easement rights or title to such Property or
         any part thereof is the subject of a Condemnation;  provided,  however,
         if a  Default  or an  Event  of  Default  shall  have  occurred  and be
         continuing or if such award,  compensation or insurance  proceeds shall
         exceed $1,000,000,  then such award, compensation or insurance proceeds
         shall be paid  directly to Lessor or, if  received by Lessee,  shall be
         held in trust  for  Lessor,  and shall be paid over by Lessee to Lessor
         and held in  accordance  with  the  terms of this  paragraph  (a).  All
         amounts held by Lessor hereunder on account of any award,  compensation
         or insurance  proceeds either paid directly to Lessor or turned over to
         Lessor shall be deposited in an  interest-bearing  account and shall be
         held as security for the performance of Lessee's obligations  hereunder
         and under the other Operative  Agreements and when all such obligations
         of Lessee with respect to such matters  (and all other  obligations  of
         Lessee  which  should have been  satisfied  pursuant  to the  Operative
         Agreements as of such date) have been satisfied, all amounts so held by
         Lessor  (including  interest earned on such amounts) shall be paid over
         to Lessee.

                  (b)  Lessee  may  appear  in  any   proceeding  or  action  to
         negotiate,  prosecute,  adjust  or  appeal  any  claim  for any  award,
         compensation  or insurance  payment on account of any such  Casualty or
         Condemnation and shall pay all expenses thereof. At Lessee's reasonable
         request,  and at Lessee's  sole cost and  expense,  Lessor and the Bank
         shall  participate  in  any  such  proceeding,   action,   negotiation,
         prosecution  or  adjustment.  Lessor

                                       17

<PAGE>


         and Lessee agree that this Lease shall control the rights of Lessor and
         Lessee in and to any such award, compensation or insurance payment.

                  (c)  If  Lessee  shall  receive  notice  of  a  Casualty  or a
         Condemnation of a Property or any interest  therein where damage to the
         affected  Property is estimated to equal or exceed fifty  percent (50%)
         of the Property Cost of such Property, Lessee shall give notice thereof
         to Lessor promptly after Lessee's receipt of such notice.  In the event
         such a Casualty or  Condemnation  occurs  (regardless of whether Lessee
         gives notice thereof),  then Lessee shall be deemed to have delivered a
         Termination  Notice to Lessor and the  provisions  of Sections 16.1 and
         16.2 shall apply.

                  (d) In the event of a Casualty or a  Condemnation  (regardless
         of whether  notice  thereof must be given  pursuant to paragraph  (c)),
         this Lease shall  terminate with respect to the applicable  Property in
         accordance  with Section 16.1 if Lessee,  within thirty (30) days after
         such occurrence, delivers to Lessor a notice to such effect.

                  (e) If pursuant to this Section 15.1 this Lease shall continue
         in full force and effect  following  a Casualty  or  Condemnation  with
         respect to the affected  Property,  Lessee shall,  at its sole cost and
         expense  (subject to  reimbursement in accordance with Section 15.1(a))
         promptly and diligently  repair any damage to the  applicable  Property
         caused  by  such  Casualty  or  Condemnation  in  conformity  with  the
         requirements  of Sections 10.1 and 11.1,  using the as-built  Plans and
         Specifications  or  manufacturer's  specifications  for the  applicable
         Improvements,  Equipment or other components of the applicable Property
         (as  modified  to give  effect  to any  subsequent  Modifications,  any
         Condemnation affecting the applicable Property and all applicable Legal
         Requirements),  so as to restore the applicable Property to the same or
         a greater remaining economic value,  useful life,  utility,  condition,
         operation and function as existed immediately prior to such Casualty or
         Condemnation  (assuming all maintenance and repair  standards have been
         satisfied).  In such  event,  title to the  applicable  Property  shall
         remain with Lessor.

                  (f) In no  event  shall  a  Casualty  or  Condemnation  affect
         Lessee's obligations to pay Rent pursuant to Article III.

                  (g)  Notwithstanding  anything  to the  contrary  set forth in
         Section 15.1(a) or Section 15.1(e),  if during the Term with respect to
         a Property a Casualty  occurs with  respect to such  Property or Lessee
         receives  notice of a Condemnation  with respect to such Property,  and
         following such Casualty or Condemnation, the applicable Property cannot
         reasonably be restored,  repaired or replaced on or before the date six
         (6)  months  prior to the  Expiration  Date or the date nine (9) months
         after the occurrence of such Casualty or Condemnation (if such Casualty
         or  Condemnation  occurs  during  the  Term) to the  same or a  greater
         remaining economic value,  useful life, utility,  condition,  operation
         and  function  as  existed   immediately  prior  to  such  Casualty  or
         Condemnation  (assuming all maintenance and repair  standards have been
         satisfied)  or on or before  such day such  Property  is not in fact so
         restored,  repaired  or  replaced,  then  Lessee  shall be  required to
         exercise its Purchase Option for such Property on the next Payment Date

                                       18
<PAGE>


         (notwithstanding the limits on such exercise contained in Section 20.2)
         and pay Lessor the Termination  Value for such Property;  provided,  if
         any Default or Event of Default has occurred and is continuing,  Lessee
         shall also promptly  (and in any event within three (3) Business  Days)
         pay Lessor any award,  compensation or insurance  proceeds  received on
         account of any Casualty or  Condemnation  with respect to any Property;
         provided,  further, that if no Default or Event of Default has occurred
         and is continuing,  any Excess  Proceeds shall be paid to Lessee.  If a
         Default or an Event of Default has occurred and is  continuing  and any
         Loans, Holder Advances or other amounts are owing with respect thereto,
         then any  Excess  Proceeds  (to the  extent of any such  Loans,  Holder
         Advances or other amounts owing with respect  thereto) shall be paid to
         Lessor,  held as security for the  performance of Lessee's  obligations
         hereunder and under the other Operative  Agreements and applied to such
         obligations  upon the  exercise  of  remedies  in  connection  with the
         occurrence  of an Event of Default,  with the  remainder of such Excess
         Proceeds in excess of such Loans,  Holder  Advances  and other  amounts
         owing with respect thereto being distributed to the Lessee.

         15.2     Environmental Matters.

                  Promptly  upon  Lessee's  actual  knowledge of the presence of
Hazardous   Substances   in  any  portion  of  any  Property  or  Properties  in
concentrations  and conditions  that constitute an  Environmental  Violation and
which,  in the reasonable  opinion of Lessee,  the cost to undertake any legally
required response,  clean up, remedial or other action will or might result in a
cost to Lessee of more than  $50,000.  Lessee shall notify  Lessor in writing of
such  condition.  In the event of any  Environmental  Violation  (regardless  of
whether notice thereof must be given),  Lessee shall, not later than thirty (30)
days after Lessee has actual knowledge of such Environmental  Violation,  either
deliver to Lessor a Termination  Notice with respect to the applicable  Property
or Properties pursuant to Section 16.1, if applicable, or, at Lessee's sole cost
and expense,  promptly and  diligently  undertake  and  diligently  complete any
response,  clean up, remedial or other action (including  without limitation the
pursuit by Lessee of  appropriate  action  against  any  off-site or third party
source  for  contamination)  necessary  to  remove,  cleanup  or  remediate  the
Environmental  Violation in accordance  with all  Environmental  Laws.  Any such
undertaking  shall be timely  completed  in  accordance  with  prudent  industry
standards.  If Lessee does not deliver a Termination Notice with respect to such
Property  pursuant to Section 16.1,  Lessee shall,  upon  completion of remedial
action by Lessee, cause to be prepared by a reputable  environmental  consultant
acceptable to Lessor a report  describing  the  Environmental  Violation and the
actions  taken by Lessee  (or its  agents)  in  response  to such  Environmental
Violation,  and a statement by the consultant that the  Environmental  Violation
has been remedied in full compliance with applicable Environmental Law. Not less
than sixty (60) days prior to any time that  Lessee  elects to cease  operations
with respect to any  Property or to remarket  any  Property  pursuant to Section
20.1 hereof or any other  provision of any  Operative  Agreement,  Lessee at its
expense  shall  cause to be  delivered  to Lessor a Phase I  environmental  site
assessment  respecting such Property recently prepared (no more than thirty (30)
days prior to the date of delivery) by an  independent  recognized  professional
acceptable to Lessor in its reasonable discretion and in form, scope and content
satisfactory to Lessor in its reasonable  discretion.  Notwithstanding any other
provision  of any  Operative  Agreement,  if  Lessee  fails to  comply  with the
foregoing

                                       19
<PAGE>


obligation regarding the Phase I environmental site assessment,  Lessee shall be
obligated to purchase such Property for its  Termination  Value and shall not be
permitted  to exercise  (and Lessor shall have no  obligation  to honor any such
exercise)  any rights  under any  Operative  Agreement  regarding a sale of such
Property to a Person other than Lessee or any Affiliate of Lessee.

         15.3     Notice of Environmental Matters.

                  Promptly,  but in any event within five (5) Business Days from
the date Lessee has actual  knowledge  thereof,  Lessee shall  provide to Lessor
written  notice  of any  pending  or  threatened  claim,  action  or  proceeding
involving  any  Environmental  Law or any Release on or in  connection  with any
Property or Properties. All such notices shall describe in reasonable detail the
nature of the  claim,  action  or  proceeding  and  Lessee's  proposed  response
thereto. In addition,  Lessee shall provide to Lessor,  within five (5) Business
Days  of  receipt,  copies  of all  material  written  communications  with  any
Governmental  Authority relating to any Environmental Law in connection with any
Property.  Lessee shall also promptly  provide such detailed reports of any such
material  environmental claims as may reasonably be requested by Lessor.  Actual
knowledge of Lessee shall be deemed actual  knowledge of an officer at the level
of Vice President or above.


                                   ARTICLE XVI

         16.1     Termination Upon Certain Events.

                  If Lessee  has  delivered,  or is  deemed  to have  delivered,
written  notice of a  termination  of this Lease with respect to the  applicable
Property  to Lessor in the form  described  in Section  16.2(a) (a  "Termination
Notice") pursuant to the provisions of this Lease, then following the applicable
Casualty,  Condemnation or Environmental  Violation,  this Lease shall terminate
with respect to the affected Property on the applicable Termination Date.

         16.2     Procedures.

                  (a)  A  Termination  Notice  shall  contain:   (i)  notice  of
         termination  of this Lease with respect to the  affected  Property on a
         Payment  Date not more than sixty (60) days after  Lessor's  receipt of
         such Termination  Notice (the "Termination  Date");  and (ii) a binding
         and irrevocable  agreement of Lessee to pay the  Termination  Value for
         the applicable  Property and purchase such Property on such Termination
         Date.

                  (b) On each Termination  Date,  Lessee shall pay to Lessor the
         Termination Value for the applicable Property,  and Lessor shall convey
         such Property or the remaining  portion thereof,  if any, to Lessee (or
         Lessee's designee), all in accordance with Section 20.2.

                                       20

<PAGE>


                                  ARTICLE XVII

         17.1     Lease Events of Default.

                  If any one (1) or more of the following  events (each a "Lease
Event of Default") shall occur:

                  (a) Lessee  shall  fail to make  payment of (i) any Basic Rent
         (except as set forth in clause (ii)) within fifteen (15) days after the
         same has become due and payable or (ii) any  Termination  Value, on the
         date any such payment is due and payable,  or any payment of Basic Rent
         or  Supplemental  Rent  due on the due  date  of any  such  payment  of
         Termination Value, or any amount due on the Expiration Date;

                  (b) Lessee shall fail to make payment of any Supplemental Rent
         (other than  Supplemental  Rent referred to in Section  17.1(a)(ii)) or
         any other  Credit  Party  shall fail to make any  payment of any amount
         under any Operative  Agreement  which has become due and payable within
         fifteen (15) days after receipt of notice that such payment is due;

                  (c)      [Reserved];

                  (d) (i) Lessee  shall  fail to  observe  or perform  any term,
         covenant, obligation or condition of Lessee under this Lease (including
         without  limitation the Incorporated  Covenants) or any other Operative
         Agreement  to which  Lessee is a party  other  than  those set forth in
         Sections  17.1(a),  (b) or (c) hereof or any other  Credit  Party shall
         fail to observe or perform any term, covenant,  obligation or condition
         of such Credit Party under any Operative Agreement other than those set
         forth in Section  17.1(b)  hereof and such failure  shall  continue for
         thirty (30) days (or with respect to the  Incorporated  Covenants,  the
         grace period, if any,  applicable  thereto) after notice thereof to the
         Lessee or such Credit  Party,  or (ii) any  representation  or warranty
         made by  Lessee  or any other  Credit  Party  set  forth in this  Lease
         (including  without  limitation  the  Incorporated  Representation  and
         Warranties)  or in any other  Operative  Agreement  or in any  document
         entered into in  connection  herewith or therewith or in any  document,
         certificate  or financial or other  statement  delivered in  connection
         herewith or therewith  shall be false or inaccurate in any material way
         when made;

                  (e) An Agency  Agreement  Event of Default shall have occurred
and be continuing;

                  (f) Any Credit  Party or any  Subsidiary  of any Credit  Party
         shall  default  (beyond  applicable  periods of grace and/or notice and
         cure) in the payment  when due of any  principal  of or interest on any
         Indebtedness  having  an  outstanding  principal  amount  of  at  least
         $500,000;  or any other event or condition shall occur which results in
         a default of any such  Indebtedness  or enables  the holder of any such
         Indebtedness or any Person acting on such holder's behalf to accelerate
         the maturity thereof;

                                       21

<PAGE>


                  (g) Any Credit Party (other than Dollar Tree Management, Inc.)
         shall cease to be solvent,  or shall make an assignment for the benefit
         of  creditors,  or admit in writing its  inability  to pay or generally
         fail to pay its debts as they mature or become  due, or shall  petition
         or  apply  for  the  appointment  of  a  trustee  or  other  custodian,
         liquidator or receiver of any Credit Party or of any  substantial  part
         of the assets of any Credit  Party or shall  commence any case or other
         proceeding   relating  to  any  Credit  Party  under  any   bankruptcy,
         reorganization,   arrangement,   insolvency,   readjustment   or  debt,
         dissolution or liquidation or similar law of any  jurisdiction,  now or
         hereafter  in  effect,  or shall  take any  action to  authorize  or in
         furtherance of any of the foregoing, or if such petition or application
         shall be filed or any such case or other  proceeding shall be commenced
         against any Credit  Party and such  Credit  Party  shall  indicate  its
         approval thereof, consent thereto or acquiescence therein;

                  (h) The  filing of any case or other  proceeding  against  any
         Credit  Party  under  any  bankruptcy,   reorganization,   arrangement,
         insolvency, readjustment of debt, dissolution or liquidation or similar
         law of any  jurisdiction,  now or  hereafter in effect and such case or
         proceeding is not discharged or dismissed within sixty (60) days of its
         commencement; a decree or order is entered appointing any such trustee,
         custodian,  liquidator  or receiver or  adjudicating  any Credit  Party
         bankrupt  or  insolvent,  or  approving  a petition in any such case or
         other proceeding, or a decree or order for relief is entered in respect
         of any Credit Party, an involuntary case under federal  bankruptcy laws
         as now or hereafter constituted;

                  (i)      [Reserved]

                  (j) The entering of any order in any  proceedings  against any
         Credit  Party or any  Subsidiary  of any  Credit  Party  decreeing  the
         dissolution,  divestiture  or  split-up  of  any  Credit  Party  or any
         Subsidiary  of any Credit  Party,  and such order remains in effect for
         more than sixty (60) days;

                  (k) Any  report,  certificate,  financial  statement  or other
         instrument  delivered  to Lessor by or on  behalf of any  Credit  Party
         pursuant to the terms of this Lease or any other Operative Agreement is
         false or misleading in any material respect when made or delivered;

                  (l) Any Lessee  Credit  Agreement  Event of Default shall have
         occurred and be continuing and shall not have been waived;

                  (m) There shall remain in force, undischarged, unsatisfied and
         unstayed,  for more than thirty (30) days,  whether or not consecutive,
         any uninsured final judgment  against any Credit Party that, with other
         outstanding uninsured final judgments, undischarged, against the Credit
         Parties exceeds $2,000,000 in the aggregate;

                  (n) Any  Credit  Party or any member of the  Controlled  Group
         shall fail to pay when due an amount or amounts  aggregating  in excess
         of $500,000  which it shall have

                                       22

<PAGE>


         become liable to pay to the PBGC or to a Pension Plan under Title IV of
         ERISA;  or  notice  of  intent to  terminate a Pension  Plan or Pension
         Plans having aggregate Unfunded Liabilities in excess of $500,000 shall
         be filed  under  Title IV of ERISA by any Credit Party or any member of
         the Controlled Group, any plan administrator or any  combination of the
         foregoing;  or the PBGC shall institute  proceedings  under Title IV of
         ERISA to terminate or to  cause a trustee to be appointed to administer
         any  such  Pension  Plan  o  Pension  Plans  or  a  proceeding shall be
         instituted by a fiduciary of any  such  Pension  Plan or Pension  Plans
         against any Credit  Party or any  member  of  the  Controlled  Group to
         enforce Section 515 or 4219(c)(5) of ERISA;  or a condition shall exist
         by  reason  of  which  the  PBGC  would  be entitled to obtain a decree
         adjudicating  that  any  such  Pension  Plan  or  Pension Plans must be
         terminated;

                  (o)      [Reserved];

                  (p)      Any  Operative  Agreement  shall  cease to be in full
         force and effect; or

                  (q)  Except  as to any  Credit  Party  which  is  released  in
connection  with the Operative  Agreements,  the guaranty given by any Guarantor
under the Participation  Agreement or any material provision thereof shall cease
to be in full force and effect,  or any  Guarantor or any Person acting by or on
behalf of such Guarantor  shall deny or disaffirm such  Guarantor's  obligations
under such guaranty,  or any Guarantor  shall default in the due  performance or
observance  of any term,  covenant or  agreement  on its part to be performed or
observed pursuant to any guaranty;

then,  in any such  event,  Lessor  may,  in  addition  to the other  rights and
remedies  provided for in this Article XVII and in Section 18.1,  terminate this
Lease by  giving  Lessee  five (5) days  notice of such  termination  (provided,
notwithstanding  the foregoing,  this Lease shall be deemed to be  automatically
terminated  without the giving of notice upon the occurrence of a Lease Event of
Default under Sections 17.1(g) or (h)), and this Lease shall terminate,  and all
rights of Lessee  under this Lease shall  cease.  Lessee  shall,  to the fullest
extent  permitted  by law,  pay as  Supplemental  Rent all  costs  and  expenses
incurred  by or on behalf of Lessor  or any  other  Financing  Party,  including
without limitation  reasonable fees and expenses of counsel,  as a result of any
Lease Event of Default hereunder.

         A POWER OF SALE HAS BEEN  GRANTED  IN THIS  LEASE.  A POWER OF SALE MAY
ALLOW LESSOR TO TAKE THE  PROPERTIES  AND SELL THE  PROPERTIES  WITHOUT GOING TO
COURT IN A FORECLOSURE ACTION UPON THE OCCURRENCE OF A LEASE EVENT OF DEFAULT.

         17.2     Surrender of Possession.

                  If a  Lease  Event  of  Default  shall  have  occurred  and be
continuing, and whether or not this Lease shall have been terminated pursuant to
Section 17.1, Lessee shall, upon thirty (30) days' written notice,  surrender to
Lessor  possession  of the  Properties.  Lessor may enter upon and repossess the
Properties  by such means as are  available at law or in equity,  and may remove

                                       23
<PAGE>


Lessee and all other  Persons and any and all  personal  property  and  Lessee's
equipment and personalty and severable Modifications from the Properties. Lessor
shall have no  liability  by reason of any such entry,  repossession  or removal
performed in accordance  with applicable law. Upon the written demand of Lessor,
Lessee  shall  return  the  Properties  promptly  to  Lessor,  in the manner and
condition  required by, and  otherwise in  accordance  with the  provisions  of,
Section 22.1(c) hereof.

         17.3     Reletting.

                  If a  Lease  Event  of  Default  shall  have  occurred  and be
continuing, and whether or not this Lease shall have been terminated pursuant to
Section 17.1,  Lessor may, but shall be under no obligation to, relet any or all
of the  Properties,  for the  account of Lessee or  otherwise,  for such term or
terms (which may be greater or less than the period which would  otherwise  have
constituted the balance of the Term) and on such  conditions  (which may include
concessions  or free rent) and for such  purposes as Lessor may  determine,  and
Lessor may collect,  receive and retain the rents resulting from such reletting.
Lessor  shall not be liable to Lessee for any  failure to relet any  Property or
for any failure to collect any rent due upon such reletting.

         17.4     Damages.

                  Neither (a) the  termination of this Lease as to all or any of
the Properties  pursuant to Section 17.1; (b) the  repossession of all or any of
the  Properties;  nor (c) the  failure  of  Lessor  to  relet  all or any of the
Properties,  the  reletting  of all or any portion  thereof,  nor the failure of
Lessor to collect or receive  any  rentals  due upon any such  reletting,  shall
relieve Lessee of its liabilities and obligations hereunder,  all of which shall
survive any such termination,  repossession or reletting.  If any Lease Event of
Default  shall  have  occurred  and  be  continuing  and   notwithstanding   any
termination of this Lease pursuant to Section 17.1,  Lessee shall  forthwith pay
to Lessor all Rent and other sums due and  payable  hereunder  to and  including
without  limitation  the date of such  termination.  Thereafter,  on the days on
which the Basic Rent or Supplemental Rent, as applicable, are payable under this
Lease or would  have  been  payable  under  this  Lease if the same had not been
terminated pursuant to Section 17.1 and until the end of the Term hereof or what
would have been the Term in the absence of such  termination,  Lessee  shall pay
Lessor,  as  current  liquidated  damages  (it  being  agreed  that it  would be
impossible  accurately to determine actual damages) an amount equal to the Basic
Rent and Supplemental  Rent that are payable under this Lease or would have been
payable by Lessee  hereunder if this Lease had not been  terminated  pursuant to
Section 17.1,  less the net  proceeds,  if any,  which are actually  received by
Lessor with  respect to the period in question of any  reletting of any Property
or any portion thereof;  provided,  that Lessee's obligation to make payments of
Basic Rent and Supplemental  Rent under this Section 17.4 shall continue only so
long as Lessor shall not have received the amounts specified in Section 17.6. In
calculating  the amount of such net  proceeds  from  reletting,  there  shall be
deducted  all of  Lessor's  and the Bank's  reasonable  expenses  in  connection
therewith,  including without limitation  repossession costs, brokerage or sales
commissions,  fees  and  expenses  for  counsel  and  any  necessary  repair  or
alteration costs and expenses incurred in preparation for such reletting. To the
extent Lessor  receives any damages  pursuant to this Section 17.4, such amounts
shall be  regarded  as  amounts  paid on account  of

                                       24
<PAGE>


Rent.  Lessee  specifically  acknowledges and agrees that its obligations  under
this  Section  17.4  shall  be  absolute  and  unconditional  under  any and all
circumstances  and shall be paid and/or  performed,  as the case may be, without
notice or demand and  without  any  abatement,  reduction,  diminution,  setoff,
defense, counterclaim or recoupment whatsoever.

         17.5     Power of Sale.

                  Without  limiting any other  remedies set forth in this Lease,
Lessor and Lessee  agree that Lessee has  granted,  pursuant  to Section  7.1(b)
hereof and each Lease  Supplement,  a Lien against the Properties  WITH POWER OF
SALE,  and that,  upon the  occurrence  and during the  continuance of any Lease
Event of  Default,  Lessor  shall  have the power and  authority,  to the extent
provided by law, after prior notice and lapse of such time as may be required by
law, to foreclose its interest (or cause such interest to be  foreclosed) in all
or any part of the Properties.

         17.6     Final Liquidated Damages.

                  If a  Lease  Event  of  Default  shall  have  occurred  and be
continuing,  whether or not this Lease  shall have been  terminated  pursuant to
Section  17.1 and  whether  or not  Lessor  shall  have  collected  any  current
liquidated  damages  pursuant to Section  17.4,  Lessor  shall have the right to
recover,  by demand to Lessee and at Lessor's election,  and Lessee shall pay to
Lessor,  as and for final liquidated  damages,  but exclusive of the indemnities
payable under Section 11 of the  Participation  Agreement  (which, if requested,
shall  be paid  concurrently),  and in lieu of all  current  liquidated  damages
beyond the date of such  demand  (it being  agreed  that it would be  impossible
accurately to determine actual damages) the Termination  Value.  Upon payment of
the amount specified pursuant to the first sentence of this Section 17.6, Lessee
shall be entitled to receive  from  Lessor,  either at Lessee's  request or upon
Lessor's  election,  in either case at Lessee's  cost, an assignment of Lessor's
entire  right,  title  and  interest  in and to  the  Properties,  Improvements,
Fixtures,  Modifications,  Equipment and all components thereof, in each case in
recordable form and otherwise in conformity with local custom and free and clear
of the Lien of this  Lease  (including  without  limitation  the  release of any
memoranda of Lease and/or the Lease Supplement recorded in connection therewith)
and any  Lessor  Liens.  The  Properties  shall be  conveyed  to Lessee  "AS-IS,
WHERE-IS" and in their then present physical  condition.  If any statute or rule
of law shall limit the amount of such final liquidated  damages to less than the
amount  agreed upon,  Lessor shall be entitled to the maximum  amount  allowable
under  such  statute  or rule of law;  provided,  however,  Lessee  shall not be
entitled to receive an assignment of Lessor's  interest in the  Properties,  the
Improvements,  Fixtures,  Modifications,  Equipment  or the  components  thereof
unless Lessee shall have paid in full the Termination Value. Lessee specifically
acknowledges  and agrees that its  obligations  under this Section 17.6 shall be
absolute and  unconditional  under any and all  circumstances  and shall be paid
and/or  performed,  as the case may be, without notice or demand and without any
abatement,  reduction,  diminution,  setoff, defense, counterclaim or recoupment
whatsoever.

                                       25

<PAGE>


         17.7     Environmental Costs.

                  If a  Lease  Event  of  Default  shall  have  occurred  and be
continuing, and whether or not this Lease shall have been terminated pursuant to
Section  17.1,  Lessee  shall pay  directly  to any third  party (or at Lessor's
election,  reimburse  Lessor) for the cost of any  environmental  testing and/or
remediation work undertaken  respecting any Property, as such testing or work is
deemed  appropriate in the reasonable  judgment of Lessor.  Lessee shall pay all
amounts referenced in the immediately preceding sentence within ten (10) days of
any request by Lessor for such  payment.  The  provisions  of this  Section 17.7
shall  not limit  the  obligations  of  Lessee  under  any  Operative  Agreement
regarding indemnification obligations, environmental testing, remediation and/or
work.

         17.8     Waiver of Certain Rights.

                  If this Lease shall be  terminated  pursuant to Section  17.1,
Lessee  waives,  to the  fullest  extent  permitted  by Law,  (a) any  right  of
redemption, re-entry or possession; (b) the benefit of any laws now or hereafter
in force  exempting  property from  liability for rent or for debt;  and (c) any
other rights  which might  otherwise  limit or modify any of Lessor's  rights or
remedies under this Article XVII.

         17.9     Assignment of Rights Under Contracts.

                  If a  Lease  Event  of  Default  shall  have  occurred  and be
continuing, and whether or not this Lease shall have been terminated pursuant to
Section 17.1, Lessee shall upon Lessor's demand immediately assign, transfer and
set over to Lessor all of  Lessee's  right,  title and  interest  in and to each
agreement  executed by Lessee in connection with the acquisition,  installation,
testing,  use,  development,   construction,   operation,  maintenance,  repair,
refurbishment and restoration of the Properties  (including  without  limitation
all  right,  title  and  interest  of  Lessee  with  respect  to  all  warranty,
performance,  service and indemnity  provisions),  as and to the extent that the
same  relate  to  the  acquisition,  installation,  testing,  use,  development,
construction,  operation,  maintenance, repair, refurbishment and restoration of
the Properties or any of them.

         17.10    Remedies Cumulative.

                  The  remedies  herein  provided  shall  be  cumulative  and in
addition to (and not in  limitation  of) any other  remedies  available  at law,
equity or  otherwise,  including  without  limitation  any mortgage  foreclosure
remedies.


                                  ARTICLE XVIII

         18.1     Lessors Right to Cure Lessees Lease Defaults.

                  Lessor,  without  waiving or releasing any obligation or Lease
Event of  Default,  may (but shall be under no  obligation  to) remedy any Lease
Event of Default  for the  account  and

                                       26
<PAGE>


at the sole cost and expense of Lessee, including without limitation the failure
by Lessee to maintain  the  insurance  required by Article  XIV, and may, to the
fullest  extent  permitted  by law,  and  notwithstanding  any  right  of  quiet
enjoyment in favor of Lessee, enter upon any Property,  and take all such action
thereon as may be  necessary  or  appropriate  therefor.  No such entry shall be
deemed an  eviction  of any  lessee.  All  out-of-pocket  costs and  expenses so
incurred  (including without limitation fees and expenses of counsel),  together
with  interest  thereon at the Overdue  Rate from the date on which such sums or
expenses are paid by Lessor, shall be paid by Lessee to Lessor on demand.


                                   ARTICLE XIX

         19.1    Provisions Relating to Lessees Exercise of its Purchase Option.

                  Subject to Section 19.2, in connection with any termination of
this Lease with respect to any Property  pursuant to the terms of Section  16.2,
or in connection with Lessee's exercise of its Purchase Option, upon the date on
which this Lease is to terminate  with respect to any Property,  and upon tender
by Lessee of the amounts set forth in Sections  16.2(b) or 20.2, as  applicable,
Lessor shall execute and deliver to Lessee (or to Lessee's designee) at Lessee's
cost and expense an  assignment  (by deed or other  appropriate  instrument)  of
Lessor's entire  interest in such Property,  in each case in recordable form and
otherwise in conformity with local custom and free and clear of any Lessor Liens
attributable to Lessor but without any other  warranties (of title or otherwise)
from Lessor. Such Property shall be conveyed to Lessee "AS-IS, "WHERE-IS" and in
then present physical condition.

         19.2     No Purchase or Termination With Respect to  Less than All of a
                  Property.

         Lessee  shall not be entitled to exercise  its  Purchase  Option or the
Sale Option  separately with respect to a portion of any Property  consisting of
Land, Equipment, Improvements and/or any interest pursuant to a Ground Lease but
shall be  required  to  exercise  its  Purchase  Option or the Sale  Option with
respect to an entire Property.


                                   ARTICLE XX

         20.1     Purchase Option or Sale OptionGeneral Provisions.

                  Not less than one hundred eighty (180) days (or respecting the
Purchase  Option  only,  not less  than  sixty  (60)  days) and no more than two
hundred  forty (240) days prior to the third annual  anniversary  of the date of
this Lease,  the Expiration  Date or,  respecting the Purchase  Option only, any
Payment Date (such third  annual  anniversary  date,  such  Expiration  Date or,
respecting  the Purchase  Option only,  any such Payment Date being  hereinafter
referred to as the "Election Date"),  Lessee may give Lessor irrevocable written
notice (the  "Election  Notice") that Lessee is electing to exercise  either (a)
the  option  to  purchase  all,  but not less than all,  the  Properties  on the
applicable  Election  Date (the  "Purchase  Option")  or (b) with  respect to an

                                       27
<PAGE>


Election  Notice given in connection  with the third annual  anniversary  of the
date of this Lease or the Expiration  Date only, the option to remarket all, but
not less than all, the Properties to a Person other than Lessee or any Affiliate
of  Lessee  and  cause a sale of such  Properties  to  occur  on the  applicable
Election  Date  pursuant to the terms of Section  22.1 (the "Sale  Option").  If
Lessee does not give an Election  Notice  indicating the Purchase  Option or the
Sale Option at least one hundred eighty (180) days and not more than two hundred
forty (240) days prior to the  Expiration  Date,  then Lessee shall be deemed to
have elected for the Purchase Option to apply on the Expiration  Date. If Lessee
shall  either (i) elect (or be deemed to have  elected) to exercise the Purchase
Option or (ii) elect the Sale  Option  and fail to cause all,  but not less than
all, the  Properties to be sold in accordance  with the terms of Section 22.1 on
the applicable  Election Date, then in either case Lessee shall pay to Lessor on
the date on which such purchase or sale is scheduled to occur an amount equal to
the Termination  Value for all, but not less than all, the Properties (which the
parties do not intend to be a "bargain"  purchase  price) and,  upon  receipt of
such amounts and  satisfaction  of such  obligations,  Lessor shall  transfer to
Lessee all of Lessor's  right,  title and  interest in and to all,  but not less
than all, the Properties in accordance with Section 20.2.

         20.2     Lessee Purchase Option.

                  Provided,  no Default or Event of Default  shall have occurred
and be  continuing  (other  than those that will be cured by the  payment of the
Termination Value for all the Properties) and provided, that the Election Notice
has been  appropriately  given  specifying  the  Purchase  Option,  Lessee shall
purchase all the Properties on the applicable  Election Date at a price equal to
the Termination Value for such Properties (which the parties do not intend to be
a "bargain" purchase price).

                  Subject to Section 19.2, in connection with any termination of
this Lease with respect to any Property  pursuant to the terms of Section  16.2,
or in connection with Lessee's exercise of its Purchase Option, upon the date on
which  this Lease is to  terminate  with  respect  to a  Property  or all of the
Properties,  and upon  tender  by  Lessee of the  amounts  set forth in  Section
16.2(b) or this Section 20.2, as applicable,  Lessor shall execute,  acknowledge
(where  required) and deliver to Lessee,  at Lessee's cost and expense,  each of
the  following:  (a) a termination or assignment (as requested by the Lessee) of
each  applicable  Ground Lease and special or limited  warranty Deeds  conveying
each  Property (to the extent it is real property not subject to a Ground Lease)
to  Lessee  free and  clear of the Lien of this  Lease,  the Lien of the  Credit
Documents and any Lessor Liens;  (b) a Bill of Sale  conveying each Property (to
the extent it is personal property) to Lessee free and clear of the Lien of this
Lease,  the Lien of the  Credit  Documents  and any Lessor  Liens;  (c) any real
estate tax affidavit or other document  required by law to be executed and filed
in order to record the  applicable  Deed  and/or  the  applicable  Ground  Lease
termination;  and (d) FIRPTA affidavits. All of the foregoing documentation must
be in form and  substance  reasonably  satisfactory  to Lessor.  The  applicable
Property  shall be  conveyed to Lessee  "AS-IS,  WHERE-IS"  and in then  present
physical condition.

                  If  any  Property  is  the  subject  of  remediation   efforts
respecting  Hazardous  Substances  at the  applicable  Election Date which could
materially  and  adversely  impact the Fair

                                       28

<PAGE>


Market Sales Value of such  Property  (with  materiality  determined in Lessor's
discretion),  then Lessee  shall be  obligated  to purchase  each such  Property
pursuant to Section 20.2.

                  On the applicable Election Date on which Lessee has elected to
exercise its Purchase Option,  Lessee shall pay (or cause to be paid) to Lessor,
the Bank  and all  other  parties,  as  appropriate,  the sum of all  costs  and
expenses incurred by any such party in connection with the election by Lessee to
exercise  its  Purchase  Option and all Rent and all other  amounts then due and
payable or accrued under this Lease and/or any other Operative Agreement.

         20.3     Third Party Sale Option.

                  (a)  Provided,  that (i) no Default or Event of Default  shall
         have occurred and be continuing  and (ii) the Election  Notice has been
         appropriately given specifying the Sale Option,  Lessee shall undertake
         to cause a sale of the Properties on the applicable  Election Date (all
         as specified in the Election Notice), in accordance with the provisions
         of Section 22.1 hereof.  Such Election Date on which a sale is required
         may be hereafter referred to as the "Sale Date".

                  (b) In the event Lessee  exercises  the Sale Option  then,  as
         soon as  practicable  and in all  events  not less than sixty (60) days
         prior  to the  Sale  Date,  Lessee  at its  expense  shall  cause to be
         delivered to Lessor a Phase I environmental site assessment for each of
         the  Properties  recently  prepared  (no more than thirty (30) days old
         prior  to the  Sale  Date) by an  independent  recognized  professional
         reasonably  acceptable  to  Lessor  and  in  form,  scope  and  content
         reasonably  satisfactory to Lessor.  In the event that Lessor shall not
         have received such environmental site assessment by the date sixty (60)
         days  prior to the Sale  Date or in the event  that such  environmental
         assessment  shall reveal the  existence  of any  material  violation of
         Environmental Laws, other material Environmental Violation or potential
         material  Environmental  Violation (with materiality determined in each
         case by Lessor in its reasonable  discretion),  then Lessee on the Sale
         Date shall pay to Lessor an amount equal to the  Termination  Value for
         all  the  Properties  and  any  and all  other  amounts  due and  owing
         hereunder. Upon receipt of such payment and all other amounts due under
         the  Operative  Agreements,  Lessor  shall  transfer  to Lessee  all of
         Lessor's  right,  title and  interest in and to all the  Properties  in
         accordance with Section 19.1.


                                   ARTICLE XXI

         20.1     [Intentionally Omitted].

                                       29
<PAGE>


                                  ARTICLE XXII

         22.1     Sale Procedure.

                  (a) During the Marketing Period,  Lessee, on behalf of Lessor,
         shall  obtain  bids  for the cash  purchase  of all the  Properties  in
         connection with a sale to one (1) or more third party  purchasers to be
         consummated  on the Sale Date for the highest  price  available,  shall
         notify  Lessor  promptly  of the name and  address of each  prospective
         purchaser  and the cash price which each  prospective  purchaser  shall
         have  offered to pay for each such  Property and shall  provide  Lessor
         with  such   additional   information   about  the  bids  and  the  bid
         solicitation  procedure as Lessor may  reasonably  request from time to
         time. All such prospective purchasers must be Persons other than Lessee
         or any  Affiliate  of Lessee.  On the Sale Date,  Lessee  shall pay (or
         cause to be paid) to Lessor and all other parties, as appropriate,  the
         sum of all costs and  expenses  incurred by Lessor  and/or the Bank (as
         the  case  may  be) in  connection  with  such  sale  of  one  or  more
         Properties,  all Rent and all other  amounts  then due and  payable  or
         accrued under this Lease and/or any other Operative Agreement.

                  Lessor may reject any and all bids and may  solicit and obtain
         bids by giving Lessee written notice to that effect; provided, however,
         that  notwithstanding  the  foregoing,  Lessor  may not reject the bids
         submitted by Lessee if such bids, in the aggregate, are greater than or
         equal to the sum of the Limited Recourse Amount for all the Properties,
         and  represent  bona  fide  offers  from  one (1) or more  third  party
         purchasers.  If the highest price which a prospective  purchaser or the
         prospective purchasers shall have offered to pay for all the Properties
         on the Sale Date is less than the sum of the  Limited  Recourse  Amount
         for all the  Properties  or if such  bids do not  represent  bona  fide
         offers  from one (1) or more  third  parties  or if there  are no bids,
         Lessor  may elect to  retain  one or more of the  Properties  by giving
         Lessee prior  written  notice of Lessor's  election to retain the same,
         and promptly upon receipt of such notice,  Lessee shall  surrender,  or
         cause  to be  surrendered,  each of the  Properties  specified  in such
         notice in  accordance  with the terms and  conditions  of Section 10.1.
         Upon  acceptance of any bid,  Lessor  agrees,  at Lessee's  request and
         expense,  to execute a contract of sale with  respect to such sale,  so
         long as the same is  consistent  with the terms of this  Article 22 and
         provides by its terms that it is nonrecourse to Lessor.

                  Unless  Lessor shall have elected to retain one or more of the
         Properties  pursuant  to the  provisions  of the  preceding  paragraph,
         Lessee  shall  arrange for Lessor to sell all the  Properties  free and
         clear of the Lien of this Lease and any Lessor  Liens  attributable  to
         Lessor, without recourse or warranty (of title or otherwise),  for cash
         on the Sale Date to the  purchaser or  purchasers  offering the highest
         cash sales price,  as identified  by Lessee or Lessor,  as the case may
         be; provided, however, solely as to Lessor or the Trust Company, in its
         individual capacity, any Lessor Lien shall not constitute a Lessor Lien
         so long as Lessor or the Trust Company, in its individual capacity,  is
         diligently  and in good faith  contesting,  at the cost and  expense of
         Lessor or the Trust Company,  in its individual  capacity,  such Lessor
         Lien by  appropriate  proceedings  in which event the  applicable  Sale

                                       30
<PAGE>


         Date, all without  penalty or cost to Lessee,  shall be delayed for the
         period of such contest. To effect such transfer and assignment,  Lessor
         shall  execute,   acknowledge  (where  required)  and  deliver  to  the
         appropriate  purchaser  each of the  following:  (a) special or limited
         warranty  Deeds  conveying each such Property (to the extent it is real
         property  titled to  Lessor)  and an  assignment  of the  Ground  Lease
         conveying  the  leasehold  interest of Lessor in each such Property (to
         the extent it is real  property  and subject to a Ground  Lease) to the
         appropriate  purchaser  free and clear of the Lien of this  Lease,  the
         Lien of the Credit  Documents and any Lessor Liens;  (b) a Bill of Sale
         conveying  each such  Property (to the extent it is personal  property)
         titled  to Lessor to the  appropriate  purchaser  free and clear of the
         Lien of this  Lease,  the Lien of the Credit  Documents  and any Lessor
         Liens; (c) any real estate tax affidavit or other document  required by
         law to be  executed  and filed in order to record each Deed and/or each
         Ground Lease assignment; and (d) FIRPTA affidavits, as appropriate. All
         of the foregoing documentation must be in form and substance reasonably
         satisfactory  to Lessor.  Lessee shall surrender the Properties so sold
         or  subject  to such  documents  to  each  purchaser  in the  condition
         specified in Section 10.1, or in such other  condition as may be agreed
         between  Lessee and such  purchaser.  Lessee  shall not take or fail to
         take  any  action   which   would  have  the  effect  of   unreasonably
         discouraging  bona fide third party bids for any  Property.  If each of
         the  Properties  is not either (i) sold on the Sale Date in  accordance
         with  the  terms of this  Section  22.1,  or (ii)  retained  by  Lessor
         pursuant  to an  affirmative  election  made by Lessor  pursuant to the
         second sentence of the second paragraph of this Section  22.1(a),  then
         (x) Lessee  shall be obligated to pay Lessor on the Sale Date an amount
         equal to the aggregate  Termination  Value for all the Properties  less
         any  sales  proceeds  received,  and (y)  Lessor  shall  transfer  each
         applicable Property to Lessee in accordance with Section 20.2.

                  (b) If the  Properties  are sold on a Sale  Date to one (1) or
         more third party  purchasers  in  accordance  with the terms of Section
         22.1(a) and the aggregate purchase price paid for all the Properties is
         less than the sum of the aggregate Property Cost for all the Properties
         (hereinafter  such  difference  shall be referred to as the "Deficiency
         Balance"), then Lessee hereby unconditionally promises to pay to Lessor
         on the Sale Date the lesser of (i) the Deficiency  Balance, or (ii) the
         Maximum  Residual  Guarantee  Amount for all the Properties.  On a Sale
         Date if (x) Lessor receives the aggregate Termination Value for all the
         Properties from one (1) or more third party purchasers,  (y) Lessor and
         such other  parties  receive all other  amounts  specified  in the last
         sentence  of the  first  paragraph  of  Section  22.1(a)  and  (z)  the
         aggregate  purchase  price  paid for all the  Properties  on such  date
         exceeds the sum of the aggregate  Property Cost for all the Properties,
         then Lessee may retain such  excess.  If one or more of the  Properties
         are  retained by Lessor  pursuant to an  affirmative  election  made by
         Lessor  pursuant  to the  provisions  of Section  22.1(a),  then Lessee
         hereby  unconditionally  promises  to pay to Lessor on the Sale Date an
         amount  equal  to  the  Maximum  Residual   Guarantee  Amount  for  the
         Properties so retained.  Any payment of the foregoing amounts described
         in this Section  22.1(b)  shall be made  together with a payment of all
         other amounts referenced in the last sentence of the first paragraph of
         Section 22.1(a).

                                       31

<PAGE>


                  (c) In the event that all the  Properties  are either  sold to
         one (1) or more third party  purchasers on the Sale Date or retained by
         Lessor  in  connection  with an  affirmative  election  made by  Lessor
         pursuant to the provisions of Section  22.1(a),  then in either case on
         the  applicable  Sale Date Lessee  shall  provide  Lessor or such third
         party purchaser (unless otherwise agreed by such third party purchaser)
         with (i) all permits, certificates of occupancy,  governmental licenses
         and  authorizations  necessary  to use,  operate,  repair,  access  and
         maintain each such Property for the purpose it is being used by Lessee,
         and (ii)  such  manuals,  permits,  easements,  licenses,  intellectual
         property,  know-how,  rights-of-way  and other rights and privileges in
         the nature of an easement as are  reasonably  necessary or desirable in
         connection with the use, operation, repair, access to or maintenance of
         each such  Property for its intended  purpose or otherwise as Lessor or
         such  third  party   purchaser(s)   shall  reasonably  request  (and  a
         royalty-free  license or similar  agreement to effectuate the foregoing
         on  terms   reasonably   agreeable   to  Lessor  or  such  third  party
         purchaser(s),  as applicable).  All assignments,  licenses,  easements,
         agreements  and other  deliveries  required  by clauses (i) and (ii) of
         this paragraph (c) shall be in form  reasonably  satisfactory to Lessor
         or such third party  purchaser(s),  as  applicable,  and shall be fully
         assignable  (including without limitation both primary  assignments and
         assignments  given in the nature of  security)  without  payment of any
         fee, cost or other charge.  Lessee shall also execute any documentation
         requested by Lessor or such third party  purchaser(s),  as  applicable,
         evidencing the continuation or assignment of each Ground Lease.

         22.2     Application of Proceeds of Sale.

                  Lessor shall apply the proceeds of sale of any Property in the
following order of priority:

                  (a) FIRST, to pay or to reimburse  Lessor (and/or the Bank, as
         the case may be) for the payment of all  reasonable  costs and expenses
         incurred by Lessor  (and/or the Bank, as the case may be) in connection
         with the sale (to the extent Lessee has not satisfied its obligation to
         pay such costs and expenses);

                  (b) SECOND,  so long as the Credit  Agreement is in effect and
         any Loans or Holder  Advances  or any amount is owing to the  Financing
         Parties under any Operative  Agreement,  to the Bank to be allocated in
         accordance with Section 8.7 of the Participation Agreement; and

                  (c)      THIRD, to Lessee.

         22.3     Indemnity for Excessive Wear.

                  If the  proceeds of the sale  described  in Section  22.1 with
respect to the Properties  shall be less than the Limited  Recourse  Amount with
respect  to the  Properties,  and at the time of such  sale it shall  have  been
reasonably determined (pursuant to the Appraisal Procedure) that the Fair Market
Sales Value of the Properties  shall have been impaired by greater than expected
wear

                                       32

<PAGE>


and tear  during the term of the Lease,  Lessee  shall pay to Lessor  within ten
(10) days after  receipt of Lessor's  written  statement  (i) the amount of such
excess wear and tear determined by the Appraisal Procedure or (ii) the amount of
the Sale Proceeds Shortfall, whichever amount is less.

         22.4     Appraisal Procedure.

                  For  determining the Fair Market Sales Value of the Properties
or any other  amount  which may,  pursuant  to any  provision  of any  Operative
Agreement, be determined by an appraisal procedure,  Lessor and Lessee shall use
the following  procedure (the  "Appraisal  Procedure").  Lessor and Lessee shall
endeavor to reach a mutual  agreement as to such amount for a period of ten (10)
days from commencement of the Appraisal  Procedure under the applicable  section
of the Lease,  and if they  cannot  agree  within  ten (10)  days,  then two (2)
qualified  appraisers,  one (1)  chosen by Lessee  and one (1) chosen by Lessor,
shall  mutually  agree  thereupon,  but if either  party shall fail to choose an
appraiser  within  twenty  (20) days after  notice  from the other  party of the
selection of its appraiser, then the appraisal by such appointed appraiser shall
be binding on Lessee and Lessor.  If the two (2) appraisers  cannot agree within
twenty (20) days after both shall have been  appointed,  then a third  appraiser
shall be selected by the two (2)  appraisers  or,  failing  agreement as to such
third appraiser within thirty (30) days after both shall have been appointed, by
the American Arbitration Association.  The decisions of the three (3) appraisers
shall be given within twenty (20) days of the appointment of the third appraiser
and the decision of the appraiser  most  different from the average of the other
two (2) shall be  discarded  and such  average  shall be  binding  on Lessor and
Lessee;  provided,  that if the highest  appraisal and the lowest  appraisal are
equidistant  from the third  appraisal,  the third appraisal shall be binding on
Lessor and Lessee.  The fees and expenses of the  appraiser  appointed by Lessee
shall be paid by Lessee;  the fees and  expenses of the  appraiser  appointed by
Lessor shall be paid by Lessor  (such fees and  expenses  not being  indemnified
pursuant  to  Section  11 of the  Participation  Agreement);  and the  fees  and
expenses of the third  appraiser  shall be divided  equally  between  Lessee and
Lessor (such fees and expenses not being  indemnified  pursuant to Section 11 of
the Participation Agreement).

         22.5      Certain Obligations Continue.

                  During the Marketing  Period,  the obligation of Lessee to pay
Rent  with  respect  to  the  Properties   (including   without  limitation  the
installment  of Basic Rent due on the Sale  Date)  shall  continue  undiminished
until  payment  in full to  Lessor of the sale  proceeds,  if any,  the  Maximum
Residual  Guarantee  Amount,  the amount due under Section 22.3, if any, and all
other  amounts due to Lessor or any other Person with respect to all  Properties
or any Operative  Agreement.  Lessor shall have the right, but shall be under no
duty,  to solicit  bids, to inquire into the efforts of Lessee to obtain bids or
otherwise  to take  action  in  connection  with any such  sale,  other  than as
expressly provided in this Article XXII.

                                       33

<PAGE>

                                  ARTICLE XXIII

         23.1     Holding Over.

                  If Lessee  shall for any  reason  remain  in  possession  of a
Property  after the  expiration or earlier  termination of this Lease as to such
Property (unless such Property is conveyed to Lessee),  such possession shall be
as a tenancy at  sufferance  during  which time  Lessee  shall  continue  to pay
Supplemental  Rent that would be payable by Lessee hereunder were the Lease then
in full force and effect with respect to such Property and Lessee shall continue
to pay Basic Rent at the lesser of the  highest  lawful rate and one hundred ten
percent  (110%)  of the last  payment  of Basic  Rent due with  respect  to such
Property prior to such  expiration or earlier  termination  of this Lease.  Such
Basic  Rent shall be  payable  from time to time upon  demand by Lessor and such
additional  amount of Basic  Rent  shall be  applied  by Lessor  ratably  to the
Lenders and the Holders based on their relative  amounts of the then outstanding
aggregate  Property  Cost for all  Properties.  During  any period of tenancy at
sufferance, Lessee shall, subject to the second preceding sentence, be obligated
to perform and observe all of the terms, covenants and conditions of this Lease,
but shall have no rights  hereunder other than the right, to the extent given by
law to  tenants at  sufferance,  to  continue  their  occupancy  and use of such
Property.  Nothing contained in this Article XXIII shall constitute the consent,
express or implied, of Lessor to the holding over of Lessee after the expiration
or earlier termination of this Lease as to any Property (unless such Property is
conveyed to Lessee) and nothing  contained  herein shall be read or construed as
preventing  Lessor from  maintaining  a suit for  possession of such Property or
exercising any other remedy available to Lessor at law or in equity.


                                  ARTICLE XXIV

         24.1     Risk of Loss.

                  During  the  Term,  unless  Lessee  shall  not  be  in  actual
possession of any Property in question solely by reason of Lessor's  exercise of
its remedies of  dispossession  under Article XVII, the risk of loss or decrease
in the enjoyment and  beneficial  use of such Property as a result of the damage
or destruction thereof by fire, the elements, casualties, thefts, riots, wars or
otherwise is assumed by Lessee,  and Lessor shall in no event be  answerable  or
accountable therefor.


                                   ARTICLE XXV

         25.1     Assignment.

                  (a) Lessee  may not assign  this Lease or any of its rights or
         obligations  hereunder  or with  respect to any Property in whole or in
         part to any Person  without the prior  written  consent of the Bank and
         Lessor  (except for any  assignment  arising by

                                       34

<PAGE>


         operation  of law as a  result  of a merger  of  the  Lessee  permitted
         without  consent  under Section 8.4 of the Lessee Credit Agreement).

                  (b) No assignment by Lessee  (referenced  in this Section 25.1
         or  otherwise)  or other  relinquishment  of possession to any Property
         shall in any way discharge or diminish any of the obligations of Lessee
         to Lessor  hereunder  and Lessee  shall remain  directly and  primarily
         liable under the Operative  Agreements as to any rights or  obligations
         assigned  by  Lessee  or  regarding  any  Property  in which  rights or
         obligations have been assigned or otherwise transferred.

         25.2     Subleases.

                  (a) Promptly,  but in any event within five (5) Business Days,
         following the execution and delivery of any sublease  permitted by this
         Article  XXV,  Lessee  shall  notify  Lessor of the  execution  of such
         sublease.  As of the date of each Lease Supplement,  Lessee shall lease
         the  respective  Properties  described  in such Lease  Supplement  from
         Lessor,   and  any  existing  tenant  respecting  such  Property  shall
         automatically be deemed to be a subtenant of Lessee and not a tenant of
         Lessor.

                  (b) So long as no Lease Event of Default  shall have  occurred
         and be  continuing,  without the prior  written  consent of the Bank or
         Lessor and subject to the other provisions of this Section 25.2, Lessee
         may  sublet  any  Property  or  portion  thereof  to  any  wholly-owned
         Subsidiary of Lessee or DTS.  Except as  referenced in the  immediately
         preceding  sentence,  no  other  subleases  shall be  permitted  unless
         consented  to in  writing by Lessor.  All  subleasing  shall be done on
         market  terms and shall in no way  diminish  the fair  market  value or
         useful life of any applicable Property.

                  (c) No sublease (referenced in this Section 25.2 or otherwise)
         or other  relinquishment of possession to any Property shall in any way
         discharge or diminish any of Lessee's  obligations to Lessor  hereunder
         and Lessee shall remain directly and primarily  liable under this Lease
         as to such Property,  or portion  thereof,  so sublet.  The term of any
         such sublease shall not extend beyond the Term.  Each sublease shall be
         expressly subject and subordinate to this Lease.


                                  ARTICLE XXVI

         26.1     No Waiver.

                  No  failure  by Lessor or  Lessee  to insist  upon the  strict
performance of any term hereof or to exercise any right,  power or remedy upon a
default  hereunder,  and no acceptance of full or partial payment of Rent during
the  continuance  of any such  default,  shall  constitute  a waiver of any such
default or of any such term. To the fullest  extent  permitted by law, no waiver
of any default shall affect or alter this Lease,  and this Lease shall  continue
in full force and effect with respect to any other then  existing or  subsequent
default.

                                       35

<PAGE>


                                  ARTICLE XXVII

         27.1     Acceptance of Surrender.

                  No  surrender to Lessor of this Lease or of all or any portion
of any Property or of any part of any thereof or of any interest  therein  shall
be valid or effective  unless agreed to and accepted in writing by Lessor and no
act by Lessor or the Bank or any  representative or agent of Lessor or the Bank,
other than a written  acceptance,  shall  constitute  an  acceptance of any such
surrender.

         27.2     No Merger of Title.

                  There  shall be no  merger of this  Lease or of the  leasehold
estate  created  hereby by reason of the fact that the same Person may  acquire,
own or hold, directly or indirectly,  in whole or in part, (a) this Lease or the
leasehold  estate created hereby or any interest in this Lease or such leasehold
estate, (b) any right, title or interest in any Property,  (c) any Notes, or (d)
a beneficial interest in Lessor.


                                 ARTICLE XXVIII

         28.1     Incorporation of Covenants.

                  Reference  is  made to the  Lessee  Credit  Agreement  and the
representations  and  warranties of Lessee  contained in Section 6 of the Lessee
Credit Agreement  (hereinafter referred to as the "Incorporated  Representations
and  Warranties")  and the  covenants  contained  in  Sections 7, 8 and 9 of the
Lessee  Credit  Agreement   (hereinafter   referred  to  as  the   "Incorporated
Covenants"). Lessee agrees with Lessor that the Incorporated Representations and
Warranties and the Incorporated  Covenants (and all other relevant provisions of
the Lessee Credit Agreement related thereto,  including  without  limitation the
defined terms contained in Section I thereof which are used in the  Incorporated
Representations  and  Warranties  and the  Incorporated  Covenants,  hereinafter
referred to as the "Additional  Incorporated  Terms") are hereby incorporated by
reference  into this Lease to the same extent and with the same effect as if set
forth  fully  herein and shall inure to the  benefit of Lessor,  without  giving
effect to any  waiver,  amendment,  modification  or  replacement  of the Lessee
Credit  Agreement or any term or provision of the  Incorporated  Representations
and Warranties or the Incorporated Covenants occurring subsequent to the date of
this  Lease,  except  to  the  extent  otherwise  specifically  provided  in the
following  provisions of this paragraph.  In the event a waiver is granted under
the Lessee  Credit  Agreement or an amendment or  modification  is executed with
respect  to the Lessee  Credit  Agreement,  and such  waiver,  amendment  and/or
modification  affects  the  Incorporated  Representations  and  Warranties,  the
Incorporated  Covenants or the Additional  Incorporated Terms, then such waiver,
amendment or  modification  shall be effective with respect to the  Incorporated
Representations  and Warranties,  the Incorporated  Covenants and the

                                       36
<PAGE>


Additional  Incorporated  Terms as incorporated by reference into this Lease. In
the event of any  replacement  of the  Lessee  Credit  Agreement  with a similar
credit  facility  (the  "New  Facility")  the  representations  and  warranties,
covenants and additional terms contained in the New Facility which correspond to
the  representations  and  warranties,  covenants  contained  in  Section  6 and
Sections  7,8 and 9,  respectively,  and  such  additional  terms  (each  of the
foregoing   contained  in  the  Lessee  Credit   Agreement)   shall  become  the
Incorporated  Representations and Warranties, the Incorporated Covenants and the
Additional  Incorporated Terms and, if the Lessee Credit Agreement is terminated
and  not  replaced,  then  the  representations  and  warranties  and  covenants
contained  in  Section  6 and  Sections  7,  8 and  9,  respectively,  and  such
additional terms (each of the foregoing contained in the Lessee Credit Agreement
(together with any modifications or amendments  approved in accordance with this
paragraph))   shall  continue  to  be  the  Incorporated   Representations   and
Warranties,  the Incorporated  Covenants and the Additional  Incorporated  Terms
hereunder.


                                  ARTICLE XXIX

         29.1     Notices.

                  All notices required or permitted to be given under this Lease
shall be in writing and delivered as provided in the Participation Agreement.


                                   ARTICLE XXX

         30.1     Miscellaneous.

                  Anything   contained   in   this   Lease   to   the   contrary
notwithstanding,  all claims against and liabilities of Lessee or Lessor arising
from events  commencing  prior to the expiration or earlier  termination of this
Lease shall survive such expiration or earlier termination.  If any provision of
this  Lease  shall  be  held  to be  unenforceable  in  any  jurisdiction,  such
unenforceability  shall not affect the  enforceability of any other provision of
this Lease and such  jurisdiction or of such provision or of any other provision
hereof in any other jurisdiction.

         30.2     Amendments and Modifications.

                  Neither  this Lease nor any Lease  Supplement  may be amended,
waived,  discharged or terminated  except in accordance  with the  provisions of
Section 12.4 of the Participation Agreement.

         30.3     Successors and Assigns.

                  All the terms and  provisions of this Lease shall inure to the
benefit of the parties  hereto and their  respective  successors  and  permitted
assigns.

                                       37

<PAGE>


         30.4     Headings and Table of Contents.

                  The  headings  and  table of  contents  in this  Lease are for
convenience  of  reference  only and  shall not limit or  otherwise  affect  the
meaning hereof.

         30.5     Counterparts.

                  This Lease may be executed in any number of counterparts, each
of which shall be an original,  but all of which shall  together  constitute one
(1) and the same instrument.

         30.6     GOVERNING LAW.

                  THIS LEASE SHALL BE GOVERNED BY AND CONSTRUED, INTERPRETED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH  CAROLINA,  EXCEPT TO
THE EXTENT THE LAWS OF THE STATE  WHERE A  PARTICULAR  PROPERTY  IS LOCATED  ARE
REQUIRED TO APPLY.

         30.7     Calculation of Rent.

                  All  calculation of Rent payable  hereunder  shall be computed
based on the actual  number of days elapsed over a year of three  hundred  sixty
(360) days or, to the extent such Rent is based on the Prime Lending Rate, three
hundred sixty-five (365) (or three hundred sixty-six (366), as applicable) days.

         30.8     Memoranda of Lease and Lease Supplements.

                  This Lease shall not be recorded;  provided, Lessor and Lessee
shall promptly  record (a) a memorandum of this Lease and the  applicable  Lease
Supplement (in  substantially  the form of Exhibit B attached hereto) or a short
form lease (in form and substance  reasonably  satisfactory to Lessor) regarding
each Property promptly after the acquisition  thereof in the local filing office
with respect thereto, in all cases at Lessee's cost and expense, and as required
under  applicable  law to  sufficiently  evidence  this Lease and any such Lease
Supplement in the applicable real estate filing records.

         30.9     [Intentionally Left Blank].

         30.10    Limitations on Recourse.

                  Notwithstanding  anything  contained  in  this  Lease  to  the
contrary,  Lessee  agrees to look solely to Lessor's  estate and interest in the
Properties  (and in no  circumstance to the Bank or otherwise to Lessor) for the
collection of any judgment requiring the payment of money by Lessor in the event
of  liability  by  Lessor,  and no other  property  or  assets  of Lessor or any
shareholder,  owner or partner  (direct  or  indirect)  in or of Lessor,  or any
director,  officer,  employee,  beneficiary,  Affiliate of any of the  foregoing
shall be subject  to levy,  execution  or other  enforcement  procedure  for the
satisfaction of the remedies of Lessee under or with respect

                                       38

<PAGE>


to this Lease,  the  relationship of Lessor and Lessee hereunder or Lessee's use
of the  Properties or any other  liability of Lessor to Lessee.  Nothing in this
Section shall be  interpreted so as to limit the terms of Sections 6.1 or 6.2 or
the provisions of Section 12.9 of the Participation Agreement.

         30.11    WAIVERS OF JURY TRIAL.

                  EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY, TO
         THE FULLEST  EXTENT  ALLOWED BY APPLICABLE  LAW, WAIVE TRIAL BY JURY IN
         ANY  LEGAL  ACTION OR  PROCEEDING  RELATING  TO THIS  LEASE AND FOR ANY
         COUNTERCLAIM THEREIN.

         30.12    Exercise of Lessor Rights.

                  Lessee  hereby  acknowledges  and  agrees  that the rights and
powers of Lessor under this Lease have been assigned to the Bank pursuant to the
terms of the Security Agreement and the other Operative  Agreements.  Lessor and
Lessee hereby  acknowledge and agree that (a) the Bank shall, in its discretion,
direct  and/or act on behalf of Lessor  pursuant to the  provisions  of Sections
8.2(h) and 8.6 of the  Participation  Agreement,  (b) all notices to be given to
Lessor  shall be given to the Bank and (c) all notices to be given by Lessor may
be given by the Bank, at its election.


         30.13    SUBMISSION TO JURISDICTION; VENUE; ARBITRATION.

                  THE  PROVISIONS  OF THE  PARTICIPATION  AGREEMENT  RELATING TO
SUBMISSION TO  JURISDICTION,  VENUE AND ARBITRATION  ARE HEREBY  INCORPORATED BY
REFERENCE HEREIN, MUTATIS MUTANDIS.


         30.14    USURY SAVINGS PROVISION.

                  IT IS THE  INTENT  OF THE  PARTIES  HERETO TO  CONFORM  TO AND
CONTRACT IN STRICT  COMPLIANCE  WITH  APPLICABLE  USURY LAW FROM TIME TO TIME IN
EFFECT.   TO  THE  EXTENT  ANY  RENT  OR  PAYMENTS   HEREUNDER  ARE  HEREINAFTER
CHARACTERIZED  BY ANY  COURT  OF  COMPETENT  JURISDICTION  AS THE  REPAYMENT  OF
PRINCIPAL AND INTEREST THEREON, THIS SECTION 30.14 SHALL APPLY. ANY SUCH RENT OR
PAYMENTS SO  CHARACTERIZED  AS INTEREST MAY BE REFERRED TO HEREIN AS "INTEREST."
ALL AGREEMENTS  AMONG THE PARTIES HERETO ARE HEREBY LIMITED BY THE PROVISIONS OF
THIS PARAGRAPH WHICH SHALL OVERRIDE AND CONTROL ALL SUCH AGREEMENTS, WHETHER NOW
EXISTING OR HEREAFTER ARISING AND WHETHER WRITTEN OR ORAL. IN NO WAY, NOR IN ANY
EVENT OR CONTINGENCY (INCLUDING WITHOUT LIMITATION PREPAYMENT OR ACCELERATION OF
THE MATURITY OF ANY OBLIGATION),  SHALL ANY INTEREST TAKEN, RESERVED, CONTRACTED
FOR,  CHARGED,  OR RECEIVED  UNDER THIS

                                       39

<PAGE>


LEASE OR OTHERWISE,  EXCEED THE MAXIMUM  NONUSURIOUS  AMOUNT  PERMISSIBLE  UNDER
APPLICABLE  LAW.  IF, FROM ANY  POSSIBLE  CONSTRUCTION  OF ANY OF THE  OPERATIVE
AGREEMENTS  OR ANY OTHER  DOCUMENT OR  AGREEMENT,  INTEREST  WOULD  OTHERWISE BE
PAYABLE IN EXCESS OF THE MAXIMUM NONUSURIOUS AMOUNT, ANY SUCH CONSTRUCTION SHALL
BE SUBJECT TO THE  PROVISIONS  OF THIS  PARAGRAPH  AND SUCH  AMOUNTS  UNDER SUCH
DOCUMENTS  OR  AGREEMENTS  SHALL  BE   AUTOMATICALLY   REDUCED  TO  THE  MAXIMUM
NONUSURIOUS  AMOUNT  PERMITTED UNDER  APPLICABLE  LAW,  WITHOUT THE NECESSITY OF
EXECUTION OF ANY  AMENDMENT OR NEW DOCUMENT OR  AGREEMENT.  IF LESSOR SHALL EVER
RECEIVE ANYTHING OF VALUE WHICH IS CHARACTERIZED AS INTEREST WITH RESPECT TO THE
OBLIGATIONS OWED HEREUNDER OR UNDER  APPLICABLE LAW AND WHICH WOULD,  APART FROM
THIS  PROVISION,  BE IN EXCESS OF THE MAXIMUM LAWFUL AMOUNT,  AN AMOUNT EQUAL TO
THE AMOUNT WHICH WOULD HAVE BEEN EXCESSIVE INTEREST SHALL,  WITHOUT PENALTY,  BE
APPLIED TO THE REDUCTION OF THE COMPONENT OF PAYMENTS DEEMED TO BE PRINCIPAL AND
NOT TO THE  PAYMENT  OF  INTEREST,  OR  REFUNDED  TO LESSEE  OR ANY OTHER  PAYOR
THEREOF,  IF AND TO THE EXTENT  SUCH  AMOUNT  WHICH  WOULD  HAVE BEEN  EXCESSIVE
EXCEEDS THE COMPONENT OF PAYMENTS  DEEMED TO BE  PRINCIPAL.  THE RIGHT TO DEMAND
PAYMENT OF ANY AMOUNTS  EVIDENCED BY ANY OF THE  OPERATIVE  AGREEMENTS  DOES NOT
INCLUDE THE RIGHT TO RECEIVE ANY INTEREST WHICH HAS NOT OTHERWISE ACCRUED ON THE
DATE OF SUCH  DEMAND,  AND  LESSOR  DOES NOT  INTEND TO CHARGE  OR  RECEIVE  ANY
UNEARNED INTEREST IN THE EVENT OF SUCH DEMAND. ALL INTEREST PAID OR AGREED TO BE
PAID TO LESSOR SHALL,  TO THE EXTENT  PERMITTED BY APPLICABLE LAW, BE AMORTIZED,
PRORATED,  ALLOCATED,  AND SPREAD  THROUGHOUT  THE FULL STATED  TERM  (INCLUDING
WITHOUT LIMITATION ANY RENEWAL OR EXTENSION) OF THIS LEASE SO THAT THE AMOUNT OF
INTEREST ON ACCOUNT OF SUCH  PAYMENTS  DOES NOT EXCEED THE  MAXIMUM  NONUSURIOUS
AMOUNT PERMITTED BY APPLICABLE LAW.


                            [signature pages follow]

                                       40
<PAGE>


         IN WITNESS  WHEREOF,  the  parties  have  caused  this Lease to be duly
executed and delivered as of the date first above written.


                                       FIRST     SECURITY    BANK,
                                       NATIONAL  ASSOCIATION,  not
                                       individually, but solely as
                                       the Owner Trustee under the
                                       DTSD Realty  Trust  1999-1,
                                       as Lessor


                                       By:/s/ Val T. Orton
                                       Name: Val T. Orton
                                       Title: Vice President



                                       DOLLAR TREE DISTRIBUTION, INC., as Lessee


                                       By: /s/ Frederick C. Coble
                                       Name: Frederick C. Coble
                                       Title: Sr. V.P.



Receipt of this original
counterpart of the foregoing
Lease is hereby acknowledged
as the date hereof


FIRST UNION NATIONAL BANK,
as Lender and Holder


By:
Name:
Title:




<PAGE>


                             EXHIBIT A TO THE LEASE


                            LEASE SUPPLEMENT NO. ___

         THIS LEASE  SUPPLEMENT  NO. ___ (this "Lease  Supplement")  dated as of
___________,  199___  between  FIRST  SECURITY  BANK,  NATIONAL  ASSOCIATION,  a
national banking association, not individually,  but solely as the Owner Trustee
under the DTSD Realty Trust 1999-1,  as lessor (the  "Lessor"),  and DOLLAR TREE
DISTRIBUTION, INC., a Virginia corporation, as lessee (the "Lessee").

         WHEREAS,  Lessor  is the  owner or will be the  owner  of the  Property
described on Schedule 1 hereto (the "Leased  Property")  and wishes to lease the
same to Lessee;

         NOW,  THEREFORE,  in  consideration  of the  premises  and  the  mutual
agreements  herein  contained  and other good and  valuable  consideration,  the
receipt and  sufficiency  of which are hereby  acknowledged,  the parties hereto
agree as follows:

         SECTION 1.  Definitions;  Rules of Usage.  For  purposes  of this Lease
Supplement, capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to them in Appendix A to the Participation Agreement,
dated as of June 2, 1999, among Lessee, the various parties thereto from time to
time, as the Guarantors,  Lessor,  not individually,  except as expressly stated
therein, but solely as the Owner Trustee under the DTSD Realty Trust 1999-1, and
First  Union  National  Bank,  as Lender  and  Holder,  as such may be  amended,
modified, extended, supplemented, restated and/or replaced from time to time.

         SECTION  2.  The  Properties.  Attached  hereto  as  Schedule  1 is the
description of the Leased Property,  with an Equipment  Schedule attached hereto
as Schedule 1 A, an Improvement  Schedule attached hereto as Schedule 1 B and [a
legal  description of the Land / a copy of the Ground Lease]  attached hereto as
Schedule 1 C. Effective upon the Commencement Date, the Leased Property shall be
subject to the terms and provisions of the Lease. Without further action, on the
Commencement  Date, any and all additional  Equipment funded under the Operative
Agreements  and any and all  additional  Improvements  made to the Land shall be
deemed to be titled to the Lessor and subject to the terms and conditions of the
Lease and this Lease Supplement.

         This Lease  Supplement  shall  constitute  a  mortgage,  deed of trust,
security agreement and financing  statement under the laws of the state in which
the Leased Property is situated.  The maturity date of the  obligations  secured
hereby shall be [___________] unless extended to not later than [___________].

         For  purposes  of  provisions  of the Lease and this  Lease  Supplement
related to the creation and  enforcement of the Lease and this Lease  Supplement
as a security agreement and a fixture filing, Lessee is the debtor and Lessor is
the secured party.  The mailing  addresses of the debtor (Lessee  herein) and of
the secured party (Lessor  herein) from which  information  concerning

                                      A-1

<PAGE>


security  interests  hereunder  may be obtained  are set forth on the  signature
pages hereto. A carbon, photographic or other reproduction of the Lease and this
Lease  Supplement  or of any financing  statement  related to the Lease and this
Lease  Supplement  shall be sufficient  as a financing  statement for any of the
purposes referenced herein.

         SECTION 3. Use of  Property.  At all times during the Term with respect
to each  Property,  Lessee will comply  with all  obligations  under and (to the
extent no Event of Default  exists and  provided,  that such  exercise  will not
impair the value of such Property) shall be permitted to exercise all rights and
remedies  under,  all operation and easement  agreements  and related or similar
agreements applicable to such Property.

         SECTION  4.  Ratification;   Incorporation  by  Reference.   Except  as
specifically  modified  hereby,  the terms and  provisions  of the Lease and the
Operative  Agreements are hereby ratified and confirmed and remain in full force
and  effect.  The Lease is hereby  incorporated  herein by  reference  as though
restated herein in its entirety.

         SECTION 5. Original Lease  Supplement.  The single executed original of
this  Lease  Supplement  marked  "THIS  COUNTERPART  IS  THE  ORIGINAL  EXECUTED
COUNTERPART"  on the signature  page thereof and  containing  the receipt of the
Agent  therefor on or following the signature page thereof shall be the original
executed   counterpart  of  this  Lease   Supplement  (the  "Original   Executed
Counterpart").  To the extent  that this Lease  Supplement  constitutes  chattel
paper,  as such term is defined in the Uniform  Commercial  Code as in effect in
any applicable  jurisdiction,  no security interest in this Lease Supplement may
be created through the transfer or possession of any counterpart  other than the
Original Executed Counterpart.

         SECTION 6.  GOVERNING LAW. THIS LEASE  SUPPLEMENT  SHALL BE GOVERNED BY
AND  CONSTRUED,  INTERPRETED  TO AND ENFORCED IN ACCORDANCE  WITH THE LAW OF THE
STATE OF NORTH  CAROLINA,  EXCEPT TO THE  EXTENT  THE LAWS OF THE STATE  WHERE A
PARTICULAR PROPERTY IS LOCATED ARE REQUIRED TO APPLY.

         SECTION 7. Mortgage; Power of Sale. Without limiting any other remedies
set forth in the  Lease,  in the event  that a court of  competent  jurisdiction
rules that the Lease  constitutes  a  mortgage,  deed of trust or other  secured
financing  as is the intent of the  parties,  then Lessor and Lessee  agree that
Lessee hereby grants a Lien against the Leased  Property WITH POWER OF SALE, and
that,  upon the occurrence of any Lease Event of Default,  Lessor shall have the
power and authority, to the extent provided by law, after prior notice and lapse
of such time as may be required by law, to foreclose its interest (or cause such
interest to be foreclosed) in all or any part of the Leased Property.

         SECTION 8. Counterpart Execution. This Lease Supplement may be executed
in any number of  counterparts  and by each of the  parties  hereto in  separate
counterparts,  all such counterparts  together  constituting but one (1) and the
same instrument.

                                      A-2

<PAGE>


         For purposes of the provisions of this Lease Supplement concerning this
Lease  Supplement  constituting  a security  agreement and fixture  filing,  the
addresses of the debtor (Lessee  herein) and the secured party (Lessor  herein),
from whom  information may be obtained about this Lease  Supplement,  are as set
forth on the signature pages hereto.


         [The remainder of this page has been intentionally left blank.]

                                      A-3


<PAGE>


         IN WITNESS  WHEREOF,  each of the parties  hereto has caused this Lease
Supplement to be duly executed by an officer thereunto duly authorized as of the
date and year first above written.
                                       FIRST SECURITY BANK, NATIONAL
                                       ASSOCIATION, not individually, but solely
                                       as the Owner Trustee under the DTSD
                                       Realty Trust 1999-1, as Lessor

                                       By:
                                       Name:
                                       Title:

                                       First Security Bank, National Association
                                       79 South Main Street
                                       Salt Lake City, Utah 84111
                                       Attn:    Val T. Orton
                                                Vice President

                                       DOLLAR TREE DISTRIBUTION, INC.,
                                       as Lessee

                                       By:
                                       Name:
                                       Title:




                                       Attn:


Receipt of this original counterpart of the foregoing Lease Supplement is hereby
acknowledged as the date hereof.

                                       FIRST UNION NATIONAL BANK, as
                                       Lender and Holder

                                       By:
                                       Name:
                                       Title:

                                       First Union National Bank
                                       c/o First Union Capital Markets Group
                                       301 South College Street, DC 6
                                       Charlotte, North Carolina 28288-0166

                                      A-4

<PAGE>

                       [CONFORM TO STATE LAW REQUIREMENTS]

STATE OF _______________ )
                         )        ss:
COUNTY OF ______________ )

         The  foregoing  Lease  Supplement  was  acknowledged   before  me,  the
undersigned Notary Public, in the County of _________________  this _____ day of
______________,  by ________________,  as  __________________  of FIRST SECURITY
BANK, NATIONAL  ASSOCIATION,  a national banking association,  not individually,
but solely as the Owner Trustee under the DTSD Realty Trust 1999-1, on behalf of
the Owner Trustee.

[Notarial Seal]
                                                    Notary Public
My commission expires: ____________


STATE OF _______________ )
                         )        ss:
COUNTY OF ______________ )

         The  foregoing  Lease  Supplement  was  acknowledged   before  me,  the
undersigned Notary Public, in the County of _________________  this _____ day of
______________,  by  ________________,  as  __________________  of  DOLLAR  TREE
DISTRIBUTION, INC., a Virginia corporation, on behalf of the corporation.

[Notarial Seal]
                                                    Notary Public
My commission expires: ____________


STATE OF _______________ )
                         )        ss:
COUNTY OF ______________ )

         The  foregoing  Lease  Supplement  was  acknowledged   before  me,  the
undersigned  Notary Public, in the County of  ________________  this ____ day of
___________,  by _____________,  as  __________________  of FIRST UNION NATIONAL
BANK, a national banking association.

[Notarial Seal]
                                                    Notary Public
My commission expires: ____________

                                      A-5


<PAGE>


                                   SCHEDULE 1
                          TO LEASE SUPPLEMENT NO. ____

                      (Description of the Leased Property)

                                      A-6
<PAGE>


                                                          EXHIBIT B TO THE LEASE

                    [MODIFY OR SUBSTITUTE SHORT FORM LEASE AS
                      NECESSARY FOR LOCAL LAW REQUIREMENTS]

Recordation requested by:

Moore & Van Allen, PLLC




After recordation return to:

Moore & Van Allen, PLLC (LSJ)
100 North Tryon Street, Floor 47
Charlotte, NC  28202-4003
                                                           Space above this line
                                                           for Recorder's use


                          MEMORANDUM OF LEASE AGREEMENT
                                       AND
                            LEASE SUPPLEMENT NO. ____

         THIS  MEMORANDUM  OF LEASE  AGREEMENT  AND LEASE  SUPPLEMENT  NO.  ____
("Memorandum"),  dated  as of  _____________,  199__,  is by and  between  FIRST
SECURITY  BANK,  NATIONAL  ASSOCIATION,  a  national  banking  association,  not
individually,  but  solely as the Owner  Trustee  under  the DTSD  Realty  Trust
1999-1,  with an office at 79 South  Main  Street,  Salt Lake  City,  Utah 84111
(hereinafter  referred to as  "Lessor")  and DOLLAR TREE  DISTRIBUTION,  INC., a
Virginia corporation with an office at 500 Volvo Parkway,  Chesapeake,  Virginia
23320 (hereinafter referred to as "Lessee").

                                   WITNESSETH:

         That for value received, Lessor and Lessee do hereby covenant,  promise
and agree as follows:

         1. Demised Premises and Date of Lease. Lessor has leased to Lessee, and
Lessee has leased from Lessor,  for the Term (as hereinafter  defined),  certain
real property and other property located in ________________, which is described
in the attached  Schedule 1 (the  "Property"),  pursuant to the terms of a Lease
Agreement  between  Lessor and  Lessee  dated as of June 2, 1999 (as such may be
amended, modified, extended, supplemented, restated and/or replaced from time to
time,  "Lease") and a Lease Supplement No. _____ between Lessor and Lessee dated
as of ______________ (the "Lease Supplement").

                                      B-1

<PAGE>


         The Lease and the Lease Supplement shall constitute a mortgage, deed of
trust and security agreement and financing statement under the laws of the state
in which the Property is situated.  The maturity date of the obligations secured
thereby shall be ___________, unless extended to not later than ___________.

         For  purposes  of  provisions  of the Lease  and the  Lease  Supplement
related to the creation and enforcement of the Lease and the Lease Supplement as
a security  agreement and a fixture  filing,  Lessee is the debtor and Lessor is
the secured party.  The mailing  addresses of the debtor (Lessee  herein) and of
the secured party (Lessor  herein) from which  information  concerning  security
interests  hereunder  may be obtained  are as set forth on the  signature  pages
hereof.  A carbon,  photographic or other  reproduction of this Memorandum or of
any financing  statement  related to the Lease and the Lease Supplement shall be
sufficient as a financing statement for any of the purposes referenced herein.

         2. Term,  Renewal, Extension and Purchase Option. The term of the Lease
for the Property ("Term")  commenced as of __________,  19__ and shall end as of
_________, 19__, unless the Term is extended or earlier terminated in accordance
with the provisions of the Lease. The Lease contains  provisions for renewal and
extension. The tenant has a purchase option under the Lease.

         3.       Tax Payer Numbers.

                  Lessor's tax payer number:     87-6243032

                  Lessee's tax payer number:     54-1737649

         4. Mortgage; Power of Sale.  Without  limiting  any other  remedies set
forth in the Lease,  in the event that a court of competent  jurisdiction  rules
that the Lease constitutes a mortgage,  deed of trust or other secured financing
as is the intent of the  parties,  then Lessor and Lessee  agree that Lessee has
granted,  pursuant  to the terms of the Lease and the Lease  Supplement,  a Lien
against the  Property  WITH POWER OF SALE,  and that,  upon the  occurrence  and
during the  continuance  of any Lease  Event of Default,  Lessor  shall have the
power and authority, to the extent provided by law, after prior notice and lapse
of such time as may be required by law, to foreclose its interest (or cause such
interest to be foreclosed) in all or any part of the Property.

         5. Effect of  Memorandum. The  purpose  of this  instrument  is to give
notice  of the  Lease  and the Lease  Supplement  and  their  respective  terms,
covenants  and  conditions  to the same  extent  as if the  Lease  and the Lease
Supplement were fully set forth herein.  This Memorandum shall not modify in any
manner the terms,  conditions or intent of the Lease or the Lease Supplement and
the parties  agree that this  Memorandum is not intended nor shall it be used to
interpret  the Lease or the Lease  Supplement  or  determine  the  intent of the
parties under the Lease or the Lease Supplement.

                                      B-2

<PAGE>



         [The remainder of this page has been intentionally left blank.]

                                      B-3

<PAGE>


       IN WITNESS WHEREOF, the parties hereto have duly executed this instrument
as of the day and year first written.


                                     LESSOR:

                                     FIRST     SECURITY    BANK, NATIONAL
                                     ASSOCIATION,  not  individually, but solely
                                     as the Owner Trustee under the  DTSD Realty
                                     Trust  1999-1, as Lessor

                                     By:
                                     Name:
                                     Title:


                                     First Security Bank, National Association
                                     79 South Main Street
                                     Salt Lake City, Utah 84111
                                     Attn:    Val T. Orton
                                              Vice President

                                     LESSEE:

                                     DOLLAR TREE DISTRIBUTION, INC.,
                                     as Lessee

                                     By:
                                     Name:
                                     Title:




                                      Attn:


                                      B-4

<PAGE>


                                   SCHEDULE 1

                            (Description of Property)




                                      B-5
<PAGE>


                       [CONFORM TO STATE LAW REQUIREMENTS]

STATE OF _______________            )
                                    )        ss:
COUNTY OF ______________            )

         The foregoing  Memorandum of Lease  Agreement and Lease  Supplement No.
_____ was acknowledged  before me, the undersigned  Notary Public, in the County
of _________________ this _____ day of ______________,  by ________________,  as
__________________  of FIRST SECURITY  BANK,  NATIONAL  ASSOCIATION,  a national
banking association, not individually, but solely as the Owner Trustee under the
DTSD Realty Trust 1999-1, on behalf of the Owner Trustee.

[Notarial Seal]
                                  Notary Public

My commission expires: ____________



STATE OF _______________            )
                                    )        ss:
COUNTY OF ______________            )

         The foregoing  Memorandum of Lease  Agreement and Lease  Supplement No.
_____ was acknowledged  before me, the undersigned  Notary Public, in the County
of _________________ this _____ day of ______________,  by ________________,  as
___________________  of DOLLAR TREE DISTRIBUTION,  INC., a Virginia corporation,
on behalf of the corporation.

[Notarial Seal]
                                  Notary Public

My commission expires: ____________



                                      B-6

