Sample Business Contracts


Facility Letter - Merrill Lynch International Bank Ltd. and Tel-Save Holdings Inc.

Loan Forms


February 26, 1997

Joseph A. Schenk
Chief Financial Officer
Tel-Save Holdings, Inc.
6805 Route 202
New Hope, PA 18938

                                 FACILITY LETTER

Dear Mr. Schenk:

Pursuant to the terms of this letter (the  "Letter") set out below,  we, Merrill
Lynch International Bank Limited, (the "Bank") are prepared to make available to
you Tel-Save  Holdings,  Inc. (the "Client") the facility  described  below (the
"Facility"). The Facility will be subject to the terms and conditions set out in
the attached Terms Sheet.  By execution of the Letter,  the Client  acknowledges
receipt of the Terms  Sheet and  agrees to be bound by the terms and  conditions
herein and therein as they may be amended  from time to time by the Bank.  Terms
defined in the Terms Sheet have the same meaning in the Letter.

The proposed Facility comprises as:

a.   credit  facility  to be drawn by  Advances,  which  shall  normally be in a
     minimum amount of Five Hundred Thousand U.S. Dollars ($500,000.00),  all in
     an  aggregate  amount not  exceeding  One Hundred and Twenty  Million  U.S.
     Dollars (USD $120,000,000).

With respect to the Facility,  "Maturity Date" means March 1, 2002 (although the
Maturity  Date may at the Bank's  discretion be extended by notice from the Bank
for one or more successive periods) and "Spread" means:

0.625%  per  annum for all  outstanding  Advances.  Client  shall pay 0. 125% of
Spread on monthly basis  (calculated to be 0.0104%) at inception of each Advance
and  monthly  thereafter  on  the  total  outstanding  balance  on  the  monthly
anniversary  of the  initial  Advance.  This  0.0104%  charge  shall be added to
outstanding loan balance on the date this charge is effected.

Where  interest is  calculated  by reference to LIBOR,  the Spread on an Advance
will be  determined  at the  start of each of its  Interest  Periods,  and where
interest is

<PAGE>

calculated by reference to Base Rate, the Spread will be determined  monthly or,
in each case, at such other intervals as the Bank may determine.

The Bank operates a Client  Complaints  Procedure.  If for any reason you should
have cause for  concern  or  complaint  you should  contact  the  Manager,  IPBG
Operations.

The offer of the Facility in the Letter will not be  effective  unless and until
the  Facility  is  approved  by the  Bank,  and the  Agreement  will not  become
effective until the Letter is signed by all parties.

Please confirm your agreement to the above and your acceptance of the provisions
of the Letter and the Terms  Sheet by  completing,  signing  and  returning  the
enclosed copy of the Letter.

Yours faithfully,
For and on behalf of Merrill Lynch International Bank Limited

_____________________________________________________________

We hereby accept the Facility on the terms and conditions detailed in the Letter
and in the Terms Sheet attached thereto.

We have read those terms and  conditions and in particular  acknowledge  that by
Clause 12 of the Terms  Sheet we will be  granting  security  over our assets in
favor of the Bank and other  members of the  Merrill  Lynch  Group and  granting
other rights to them.

Pursuant to Clause 30 of the Terms Sheet our address for notices is:

Client:
Joseph A. Schenk
Tel-Save Holdings, Inc.
Chief Financial Officer
6805 Route 202


/s/ Joseph A. Schenk                             3/11/97
--------------------                             -------
Joseph Schenk, CFO                               Dated

Telephone No.:  (215) 862-1805
                --------------

<PAGE>

I, the undersigned,  hereby certify that, at a meeting of the Board of Directors
of Tel-Save  Holdings,  Inc. (the "Client") whose  registered  office is at 6805
Route 202,  New Hope,  PA 18938 duly  convened  and held on the 11 day of March,
1997,  at which a duly  constituted  quorum of Directors  was present and voting
throughout,  resolutions  were duly passed and entered in the Minute Book of the
Client  and have not been  modified  or  amended  and are now in full  force and
effect.


IT WAS RESOLVED:

1.   That  entering into a facility  (the  "Facility")  offered by Merrill Lynch
     International  Bank Limited (the  "Bank") in  accordance  with the Facility
     Letter (the "Letter") and the attached Terms Sheet (which  together form an
     agreement  between the Client,  the  Indemnifier (if any) named therein and
     the Bank),  under which the Bank is prepared to consider  making  available
     Advances  and/or  issuing  Letters of Credit and certain  foreign  exchange
     facilities, is within the Client's purposes,  authorities and powers and is
     in  the  best  interests  of and to the  advantage  of the  Client,  and be
     approved,  and that Joseph A. Schenk,  Kevin Kelly,  Daniel  Borislow  (the
     "Authorized  Signatory"),  who (if  more  than one  Person)  may act in all
     respects  and  for  all  purposes   singly  without  any   co-signature  or
     countersigning, be Authorized to sign the Letter on behalf of the Client.

2.   That the placing of funds and/or securities on deposit,  and the opening of
     an account or  accounts  with the Bank in one or more  currencies,  for the
     purposes  of  the  Facility,  and in  particular  for  collateralizing  the
     Facility,  be approved and that the Authorized Signatory be Authorized from
     time to time to deposit such funds and/or  securities  with the Bank and to
     execute and/or deliver on behalf of the Client as its deed or otherwise any
     documentation  (including,   without  limitation,  any  power  of  attorney
     authorising  any member of the Merrill Lynch Group (as defined in the Terms
     Sheet  attached  to  the  Letter)  to  open  and  operate  any  account  or
     sub-account  in the name of the Client or otherwise)  requested by the Bank
     with  respect  thereto  or (as the case may be) any such  documentation  be
     executed  and/or  delivered  on  behalf  of the  Client  as its deed by the
     affixing  of the seal of the  Client  together  with the  signature

<PAGE>

     of any Director and  countersignature of a second Director or the Secretary
     or by the signatures of two Directors or a Director and the Secretary.

3.   That the Authorized Signatory be Authorized:

     A.   to request from time to time the making of an Advance,  the issue of a
          Letter of Credit or the  execution of a foreign  exchange  transaction
          pursuant to the Facility; and

     B.   to  give  instructions  (whether  in  writing,  orally,  by  telex  or
          otherwise)  to the Bank and/or to take such other  action on behalf of
          the Client as such  Signatory  may think fit in  connection,  with the
          Facility,  including the ability to increase or decrease the amount of
          the  Facility  and  agree  any  other  amendment  to the  terms of the
          Facility, all without additional specific approval by the Board,

and to  execute  and/or  deliver  on  behalf  of the  Client  any  documentation
requested  by the Bank with respect  thereto and that all such actions  shall be
binding on, and shall be approved and ratified by, the Client.

4.   That the  Client or any  Authorized  Signatory  may from time to time issue
     instructions,  notices,  demands or requests,  either orally or in writing,
     via any officer or employee of a member of the  Merrill  Lynch  Group,  and
     such  instructions,  notices,  demands or requests,  when delivered to such
     person in the name of and on behalf of the Client,  shall be deemed to have
     been made by the Client direct to the Bank,  and the Bank shall be entitled
     to rely on and shall not be liable for any action  taken,  or omitted to be
     taken,  in good faith pursuant to such  instructions,  notices,  demands or
     requests so deemed given by the Client or on any  communication or document
     believed by it to be genuine.

<PAGE>

This statement is furnished to assist you in understanding some of the potential
risks  which may arise  through  the use of our  lending  and  foreign  exchange
facilities.  You should also ensure that you are aware of the potential taxation
consequences  of using these  facilities  and if you are in any doubt,  seek the
advice of a professional advisor.

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

Leverage            Borrowing  for   investment   purposes  is  referred  to  as
                    leveraging.  In  order  for  a  leveraging  strategy  to  be
                    profitable,  the return on the  investment  must  exceed the
                    cost of the borrowed funds. A leveraging  strategy amplifies
                    the potential  gains or losses on an investment.  The higher
                    the leverage, the greater the potential gains or losses.

--------------------------------------------------------------------------------
Cross-Currency      Borrowing a currency, other than the currency of investment,
Financing           is  referred  to  as  cross-currency  financing.  The  lower
                    financing   costs  of   certain   currencies   can   provide
                    potentially  attractive returns.  However,  adverse currency
                    movements can not only  eliminate  such  benefits,  but also
                    result in substantial losses.  Losses, as such, may occur if
                    the borrowed  currency  strengthens  against the currency of
                    investment,  resulting in a potential shortfall of funds for
                    repayment   of  the  loan  upon  the   liquidation   of  the
                    investment.

                    The use of  leverage as part of a  cross-currency  financing
                    strategy may subject the return on the overall investment to
                    significant fluctuations; at times, resulting in substantial
                    incremental   returns:   at  other   times,   resulting   in
                    significant  losses.  Investors,  therefore,  must carefully
                    consider  the   investment   risks   inherent  in  leveraged
                    strategies,  in cross-currency financing facilities,  and in
                    combinations  thereof,  to determine  if such are  suitable,
                    with regard to their investment objectives.

<PAGE>
--------------------------------------------------------------------------------
Foreign             FX transactions  are suitable only for persons familiar with
Exchange  (FX)      the nature of the currency markets, and who are also willing
                    to accept  the  financial  risks  inherent  in  trading  one
                    currency  versus  one or  more  other  currencies.  In  many
                    respects,  FX  trading is  similar  to  speculative  futures
                    trading,  to the extent that it may involve a high degree of
                    leverage and  significant  market  fluctuations.  Investors,
                    therefore,  must carefully  consider whether such trading is
                    suitable with regard to their investment objectives.

--------------------------------------------------------------------------------
Over the            OTC FX Options involve a high degree of risk.  Purchases may
Counter (OTC)       result in the total loss of the option  premium  and related
Foreign             transaction  costs.  Sales  of put  options  may  result  in
Exchange (FX)       substantial  financial loss.  Sales of call options may also
Options             result in  substantial  financial  loss,  unless  the seller
                    already owns the underlying foreign currency.  OTC FX option
                    purchasers  and  sellers  should also note that there may be
                    times when no market will be available  for the  liquidation
                    of their option positions.                                 
                  

                    Trading OTC FX options  should only be done by persons  with
                    significant   experience  in  options  trading  and  foreign
                    exchange  markets,  and for whom such trading is  consistent
                    with their investment objectives.
--------------------------------------------------------------------------------
I/We hereby acknowledge having read and understood the foregoing  disclosure and
its application to various  transactions,  which respect to my relationship with
Merrill Lynch.


/s/ Joseph A. Schenk
--------------------                                 -----------------------
Client Signature                                     Indemnifier Signature

Tel-Save Holdings, Inc.
-----------------------                              -----------------------
Please print name                                    Please print name

3/11/97
-----------------------                              -----------------------
Dated                                                Dated



<PAGE>

                                                       The Collateral Schedule

Part I:  Securities
                                                           Collateral Value
                                                            A           B
                                                         Advance   Maintenance
Class of Securities                                       Level       Level

Merrill Lynch Funds                                        50%         70%

Equities and Convertible Bonds

Convertible bonds/convertible
  to US equities                                           50%         70%

Fully listed equities traded
  on major exchanges or
  marginable by Merrill
  Lynch Pierce Fenner & Smith Inc.                         50%         70%

Bonds

Fixed Income Bonds "BBB" or better                         75%         85%


Part II:  Cash Deposits

                                                           Collateral Value
                                                            A           B
                                                         Advance   Maintenance
                                                          Level       Level

Deposits with Banks

Deposits with Merrill Lynch
  International Bank Limited in
  any freely convertible
  currency                                                85%           90%

This Schedule is not binding and is for information purposes only. This Schedule
is subject to amendment at the Bank's discretion.



<PAGE>

1.  DEFINITIONS
--------------------------------------------------------------------------------

In this Terms Sheet:

ACCOUNTS means all or any Collateral Accounts or Collateral Deposit Accounts;

ADVANCE  means an advance made or to be made by the Bank to the Client under the
Agreement or, as the case may be, the outstanding  principal  amount of any such
advance;

ADVANCE  VALUE  means at any date,  the value of any item of Blocked  Collateral
expressed  as a Dollar  Amount and  determined  by the Bank in  accordance  with
Clause  10 or  (as  appropriate)  the  available  amount  under  any  Collateral
Guarantee  expressed as a Dollar Amount and determined by the Bank in accordance
with Clause 10 and "COLLATERAL  ADVANCE VALUE" means, at any date, the aggregate
of the value (so determined) of all Blocked Collateral and the available amounts
(so determined) of all Collateral Guarantees;

AFFILIATE  means,  at any time,  in  relation to any  Person,  any other  Person
controlling, controlled by, or under common control with, that Person;

BANK means Merrill Lynch International Bank Limited;

BASE RATE means the  floating  annual  rate of interest  determined  by the Bank
based on a weighted average of rates on the second Business Day before the first
Business  Day of each week at which the Bank  offers  deposits  in the  relevant
currency to leading banks in the London Inter Bank Market,  and for terms of one
night,  one week and one month,  or if at any time such rate does not accurately
reflect the cost to the Bank of funding the  relevant  Advance or other  amount,
the rate as  determined  by the Bank in good  faith at the  relevant  time (such
floating annual rate to change when and as such base rate changes);

BLOCKED  COLLATERAL  means all  Collateral  which is for the time  being held or
blocked by the Bank at its  discretion  for the  purposes of the  Agreement  and
particularly for the purposes of determining Advance and Maintenance Values;

BUSINESS  DAY means a day on which  deposits in Dollars  and any other  relevant
currency  may be dealt in on the London  Inter Bank Market and banks are open in
London, 


<PAGE>

New York City and, for the purposes of making payments in currencies  other than
ECU, the principal  financial  centre of the country of each such other relevant
currency  and, for the purposes of making  payments in ECU, a day on which those
banks which operate a clearing  system in ECU will clear payments in ECU through
such clearing system;

CLIENT means the Person(s)  signing the  acknowledgment  on the Letter as Client
(or  signing  such  other  document  identifying  the  Person(s)  as Client  and
delivering  that  document to the Bank) and to whom the  Facility  has been made
available, subject to the terms hereof,

CLOSE OUT an Open Contract means, in relation to a Foreign Exchange  Contract or
an Option Contract,  the making of a Foreign  Exchange  Contract or, as the case
may be, an Option Contract opposite to an Open Contract  previously entered into
having or  relating  to the same Value  Date and  otherwise  matching  that Open
Contract.  Where only a part of an Open  Contract is Closed Out,  the  remaining
part thereof  shall,  for the purposes of the  Agreement,  be considered an Open
Contract;

COLLATERAL  means all Securities,  including all  certificates,  stock notes and
other  documents  relating  thereto (and the claim in respect  thereof) and cash
balances (and the debt owing in respect thereof) in or credited to the Accounts;

COLLATERAL ACCOUNT means the one or more accounts in the control of the Bank and
wholly or partly opened  pursuant to, or used for the purposes of, the Agreement
with or  through  any other  member of the  Merrill  Lynch  Group in  respect of
Securities  purchased  or  owned  by the  Client  and/or  (as  appropriate)  the
Indemnifier,  all such Collateral  Accounts to be maintained  under the complete
discretion of the Bank,  with such title to reflect the respective  interests of
the Bank and of the Client or (as appropriate) the Indemnifier;

COLLATERAL  DEPOSIT  ACCOUNT  means the one or more deposit  accounts  wholly or
partly  opened  and/or  maintained  by the Client  and/or (as  appropriate)  the
Indemnifier with the Bank and/or,  as the case may be, by the Bank with a member
of the  Merrill  Lynch  Group  pursuant  to, or used for the  purposes  of,  the
Agreement  (there being a separate  account or, as the case may be,  sub-account
for each  currency in which  deposits  are made),  all such  Collateral  Deposit
Accounts to be maintained  under the complete  discretion of the Bank, with such
title to


<PAGE>

reflect  the  respective  interests  of  the  Bank  and  of  the  Client  or (as
appropriate) the Indemnifier;

COLLATERAL GUARANTEE means a letter of credit, guarantee,  indemnity or bond the
benefit of which is available to the Bank in respect of the Client's  and/or the
Indemnifier's  obligations  under the  Agreement in form and  substance  (and in
particular   having  an  expire  date),  and  issued  by  a  bank  or  financial
institution, satisfactory to the Bank at the Bank's discretion;

DOLLAR(s) and USD means the lawful currency of the United States of America;

DOLLAR AMOUNT means, at any date, the value expressed in Dollars of (as the case
may be) (1) an Advance, (2) any Letter of Credit Exposure,  (3) any other amount
outstanding  hereunder,  (4) any Blocked  Collateral or  Collateral,  or (5) the
available  amount  under  any  Collateral  Guarantee  (each of (1) to (5)  being
recalculated,  where in a currency  other than Dollars,  as at that date, at the
Bank's  applicable  spot rate of exchange  for the  purchase  of Dollars  with a
comparable  amount of the relevant  currency or, in the case of any Advance,  to
the extent  the  Client's  foreign  exchange  liabilities  are hedged by an Open
Contract, at the rate of exchange fixed for the purposes of that Open Contract);

ECU means  European  Currency  Units,  being units of account for the time being
used in the European Monetary System;

EVENT OF DEFAULT means one of the events described in Clause 19;

FACILITY  means any or all of the  facilities  for the making of  Advances,  the
entering into of Foreign  Exchange  Contracts  and/or  Option  Contracts and the
Issuance of Letters of Credit as are specified in the Letter;

FOREIGN  EXCHANGE  CONTRACT  means a contract  entered into by the Bank with the
Client under the  Agreement to buy or sell against one currency  agreed  between
the Client and the Bank an amount of another  currency agreed between the Client
and the Bank for spot or forward settlement on a stated Value Date;

INDEMNIFIER means the Person(s) if any, signing the acknowledgment on the Letter
as  Indemnifier  (or signing


<PAGE>

such other document identifying the Person(s) as Indemnifier and delivering that
document to the Bank) and  guaranteeing  the obligations of the Client under the
Agreement;

INTEREST  PERIOD  means a period by reference  to which  interest is  calculated
and/or payable on an Advance;

ISSUANCE includes issue, acceptance,  negotiation,  endorsement and confirmation
(and issued shall in relation to any Letter of Credit be construed accordingly);

the  ownership  of share  capital,  possession  of voting  powers,  contract  or
otherwise) by Merrill Lynch & Co.,  Inc.  and/or any such company  and/or one or
more  of  their  Subsidiaries  including,  but not  limited  to,  Merrill  Lynch
International & Co.;

OPEN CONTRACT means a Foreign Exchange  Contract and/or an Option Contract which
has not been terminated in accordance with Clause 16 or 20.A.2 or Closed Out;

OPTION CONTRACT means a contract  entered into by the Bank with the Client under
the  Agreement  for the  purchase  from,  or sale to, the Client of an option to
purchase or sell one currency  against an amount of another currency on a stated
Value Date, at the rate of exchange agreed between the Bank and the Client;

PERSON(S)   includes/include  any  individual,   company,   corporation,   firm,
partnership, joint venture, association, Organisation, trust, state or agency of
a state (in each case, whether or not having separate legal personality);

RELEVANT DATE means (as the case may be) (1) the date of any payment pursuant to
Clause  7.A.3,  (2) the date on which  any  losses,  expenses,  costs,  damages,
claims, demands, charges or liabilities were made against or suffered,  incurred
or sustained by the Bank (as determined by the Bank in its absolute discretion),
or (3) in the case of any other amount payable to the Bank  hereunder,  the date
of  demand  therefor  by the Bank on the  Client  or,  as the  case may be,  the
Indemnifier;

SCHEDULE means the  Collateral  Schedule  attached to the Letter,  or such other
document  identified  by the Bank as the  Schedule,  as the same may be  amended
and/or supplemented from time to time;


<PAGE>

SECURITIES  means  securities  and  instruments  (including  but not  limited to
options,  futures and bearer  securities and  instruments)  and other rights and
things, in possession or in action;

SUBSIDIARY means, at any time, in relation to a company, any other company which
is  directly  or  indirectly  controlled,  or more  than 50% of whose  issued or
outstanding   shares  or  stock   having   general   voting  power  in  ordinary
circumstances  is  beneficially  owned,  directly or  indirectly,  by that first
company;

SUM OUTSTANDING  means, as at a particular  date, the aggregate Dollar Amount of
all amounts (whether principal, accrued interest, fees or otherwise) outstanding
hereunder,   as  at  that  date,   including  in  respect  of  foreign  exchange
transactions  unrealised and realised losses (less any unrealised profit and any
profit realised  before the applicable  Value Date) (where losses and profit are
as  determined  by the Bank) under the Agreement but not including any Letter of
Credit Exposure;

TAX  includes  any present or future  tax,  levy,  impost,  duty,  charge,  fee,
deduction or withholding of any nature and whatever  called,  by whomsoever,  on
whomsoever and wherever imposed, levied, collected, withheld or assessed;

TAX ON OVERALL NET INCOME of the Bank shall be  construed  as a reference to tax
(other than tax deducted or withheld  from any  payment)  imposed on the Bank by
the  jurisdiction in which its principal  office and/or the office through which
it is acting for the purpose of the  Agreement is located on (1) its net income,
profits or gains worldwide,  or (2) such of its net income,  profits or gains as
arise in or relate to that jurisdiction;

VALUE DATE means the date of  settlement of a Foreign  Exchange  Contract or, as
the case may be, pursuant to the exercise of an Option Contract.

In this Terms Sheet,  references to the "AGREEMENT" or "THIS AGREEMENT" mean and
include  (1) the  Letter,  (2) this  Terms  Sheet,  (3) in the  case of  Foreign
Exchange  Contracts and Option  Contracts,  all  confirmations  (if any) related
thereto,  (4) in the case of Letters of Credit,  the request for Issuance of any
Letter of Credit  made to the Bank as  referred  to in Clause  6.A,  and (5) any
other  document  identified  by the Bank in  writing  to the  Client  and/or the
Indemnifier as being part of the


<PAGE>

"Agreement",  all as  renewed  and/or  amended  from  time  to  time,  and it is
acknowledged  and  agreed  that all  Advances  are made,  all  Foreign  Exchange
Contracts and Option  Contracts are entered into,  and all Letters of Credit are
issued,  in reliance on the fact that this  Agreement  forms a single  agreement
between the parties,  and that the parties would not otherwise make or do any of
the foregoing.  The Schedule does not form part of the Agreement and, as set out
in Clause 28.E, is or may be provided for information only.

Headings shall be ignored in construing the Agreement.


2.  PURPOSE
--------------------------------------------------------------------------------
The Client shall use the Facility to finance the purchase of Securities, for the
repayment of Advances, to reduce amounts owing to the Bank in respect of Letters
of Credit or for such other lawful  purposes as may be disclosed to or agreed by
the Bank.


3.  TERM
--------------------------------------------------------------------------------
Letter)  or, if earlier,  on 30 days'  written  notice  given by the Bank to the
Client  at any  time.  The Sum  Outstanding  may  also be  accelerated  upon the
occurrence  of Events of Default,  and certain other  matters,  described in the
Agreement.


4.  CONDITION PRECEDENT TO EACH ADVANCE
--------------------------------------------------------------------------------
Without  prejudice to (A) any other  requirements of the Bank in relation to any
Advance,  and (B) the  right of the Bank to  refuse  to make an  Advance  in its
absolute discretion, Advances will be made as follows:

               1.     the Client may give to the Bank notice satisfactory to the
                      Bank not  later  than 12 noon  (London  time) on the third
                      Business  Day before the  proposed  date  (which must be a
                      Business  Day)  of the  relevant  Advance  requesting  the
                      advance of all or part of the unused part of the Facility;
                      or

               2.     the Client hereby  requests and authorises the Bank at the
                      Bank's  discretion to make  Advances  (without any further
                      request  by the  Client)  for the  purposes  of  financing
                      amounts  payable  by the


<PAGE>

                      Client  to the Bank  under  the  Agreement  (including  in
                      particular amounts payable under Clause 5.C or 7.A).

For this  purpose,  the unused part of the  Facility  shall be the amount of the
Facility,  as  specified  in the Letter,  or such other amount as the Bank shall
specify as the amount of the Facility from time to time, less the sum of (1) the
aggregate  Dollar  Amount  (as at the  proposed  date  of  the  Advance)  of all
outstanding  Advances  and of the Total Letter of Credit  Exposure,  and (2) the
aggregate  Dollar  Amount  (as at the  proposed  date  of  the  Advance)  of all
outstanding  interest  capitalised  pursuant  to Clause  17-E and (at the Bank's
discretion) of any other amount outstanding hereunder.


5.  FOREIGN EXCHANGE
--------------------------------------------------------------------------------
A.                       The Bank shall be  entitled,  but not bound,  to act on
                         the  request  of the  Client  to enter  into a  Foreign
                         Exchange Contract and/or an Option Contract.

B.                       The  Client  shall  pay to the Bank  such  premiums  in
                         respect of Option  Contracts in such  currencies as the
                         Client and the Bank shall have agreed.

C.                       On each  applicable  Value Date (or any earlier date on
                         which the Foreign Exchange  Contract or Option Contract
                         is terminated  in  accordance  with Clause 16 or Closed
                         Out),  any  costs,  expenses  or losses  to the  Client
                         arising as a result of the Foreign Exchange Contract or
                         the Option  Contract (or its exercise)  shall be either
                         paid by the  Client  to the Bank on that date or (if so
                         determined by the Bank and subject  always to the terms
                         hereof)  paid by the  Client  on  that  date  from  the
                         proceeds of an Advance.

D.                       On each  applicable  Value Date (or any earlier date on
                         which the Foreign Exchange  Contract or Option Contract
                         is terminated  in  accordance  with Clause 16 or Closed
                         Out),  any profits to the Client arising as a result of
                         the Foreign  Exchange  Contract or the Option  Contract
                         (or its  exercise)  shall be credited by the Bank to an
                         appropriate Account.
<PAGE>

E.                       On the date on which any Foreign  Exchange  Contract or
                         Option  Contract is Closed Out, the relevant  Contracts
                         will  automatically  be discharged to the extent of the
                         Closing Out.


6.  LETTERS OF CREDIT
--------------------------------------------------------------------------------
A.                       The Bank shall be  entitled,  but not bound,  to act on
                         any request for  Issuance of a Letter of Credit made to
                         the Bank by the  Client or by the  Indemnifier  for the
                         Client's account specifying the beneficiary, the amount
                         and the expiry  date of such  Letter of Credit and such
                         other information as may be required by the Bank.

B.                       Each of the Client and the Indemnifier agrees that:

B.1.                     the Bank  shall be  entitled  to rely  without  further
                         enquiry on drafts and other  documents  presented under
                         any Letter of Credit  which  appear on their face to be
                         in  compliance  with the terms and  conditions  of that
                         Letter of Credit;

B.2.                     neither  the  Bank  nor  its  correspondents  shall  be
                         responsible  for  performance by any beneficiary of its
                         obligations  to the  Indemnifier  or the Client nor for
                         any loss or damage to any goods  forming the subject of
                         any Letter of Credit,  however caused, nor in the event
                         of  any  misdescription,   misrepresentation,  mistake,
                         error or  irregularity  as to the  goods  or  quantity,
                         quality,  nature,  size  or  value  thereof,  or in the
                         drafts or other documents;

B.3.                     all directions and  correspondence  relating to Letters
                         of Credit  are to be sent at the risk of the Client and
                         the  Indemnifier,  and the Bank  shall not be liable or
                         responsible for any inaccuracy,  interruption, error or
                         delay in transmission or delivery by post, telegraph or
                         cable or for the accuracy of any translation,

C.                       Subject to the law and customs and  practices  of trade
                         existing in the area where the relevant  beneficiary is
                         located or to the extent it is otherwise agreed, or the
                         same is  inconsistent  herewith,  each Letter of Credit
                         which is a "letter of credit", whether trade or
<PAGE>

                         documentary, clean or standby, shall be subject to, and
                         performance  by the Bank, its  correspondents  and each
                         beneficiary of a Letter of Credit shall be governed by,
                         the  Uniform   Customs  and  Practice  for  Documentary
                         Credits (1993 Revision,  ICC Publication No. 500 or its
                         subsequent revisions).

7.  GUARANTEE AND INDEMNITIES
--------------------------------------------------------------------------------
A.                       Each  of  the   Client  and  the   Indemnifier   hereby
                         unconditionally and irrevocably:

A.1.                     agrees on demand to indemnify the Bank from and against
                         all  losses,  expenses,  costs,  actions,  proceedings,
                         damages,  claims, demands, charges or liabilities which
                         the Bank may at any time  suffer,  incur or  sustain or
                         which may be  brought,  made or  preferred  against the
                         Bank in  relation  to or  arising  out of any Letter of
                         Credit   (including,   but  not  limited  to,  (a)  any
                         payment(s)  which  may  be  payable  by or  claimed  or
                         demanded  from the Bank pursuant to a Letter of Credit,
                         (b)  any  taxes  required  to be  paid  by the  Bank on
                         account of which it makes any deduction or  withholding
                         from any such payment, and (c) any legal fees, together
                         with taxes thereon, incurred by the Bank);

A.2.                     authorises  the Bank on first  claim or  demand to make
                         any  payment  which may be, or may appear or purport to
                         be, claimed or demanded from the Bank in relation to or
                         arising  out of any Letter of Credit and to perform any
                         other  obligations which it has, or appears to have, in
                         relation to or arising out of any Letter of Credit,  in
                         each case without  requiring or obtaining  any evidence
                         or proof that the amount claimed or demanded is due and
                         payable and without any notice or  reference  to or the
                         agreement  of or further  authority  from "he Client or
                         the Indemnifier;

A.3.                     agrees  that any  payment  which the Bank shall make in
                         accordance  or  purported  accordance  with a Letter of
                         Credit   shall  be   binding  on  the  Client  and  the
                         Indemnifier and shall be accepted by the Client and the
                         Indemnifier  as  conclusive   evidence  of  the  Bank's
                         liability  to make such payment  (notwithstanding  that
                         such



<PAGE>

                         payment  may have been made after the stated  period of
                         validity or expiry date of any Letter of Credit, unless
                         prior to such  payment  the  relevant  Letter of Credit
                         shall  have  been  returned  to the  Bank or  otherwise
                         entirely  cancelled  in a manner in form and  substance
                         satisfactory to the Bank);

A.4.                     agrees to pay to the Bank on demand and in the currency
                         or currencies  specified by the Bank any amount payable
                         to the Bank under A.1  above,  together  with  interest
                         thereon in such currency(ies) from the Relevant Date to
                         the date on which  the Bank  shall  have  received  all
                         amounts  payable to it  hereunder at the rate per annum
                         pursuant  to Clause  17.F (or such other rate as may be
                         agreed from time to time); and

A.5.                     as security for its obligations under the Agreement and
                         any  other  agreement  between  it and the  Bank or any
                         other member of the Merrill  Lynch  Group,  irrevocably
                         authorises  the Bank (for  itself and as trustee of the
                         benefit of these  authorisations  for each other member
                         of the Merrill  Lynch Group) to debit  (without  demand
                         on, notice or reference to, or further  authority from,
                         it)  any  then  existing  account   (including  without
                         limitation the Collateral Account or Collateral Deposit
                         Account)  of it with the Bank  and/or  such member with
                         the whole or any part of any amount payable to the Bank
                         under the Agreement and/or interest thereon pursuant to
                         A.4 above or 17.F below  and/or  any  amount  under any
                         other such  agreement,  whether or not any such account
                         shall be overdrawn or may become overdrawn by reason of
                         such debit and  whether or not any such  amount  and/or
                         interest  is  payable in the same  currency  as that in
                         which any such account is denominated.

B.                       The Indemnifier hereby  unconditionally and irrevocably
                         agrees  with the Bank (for itself and as trustee of the
                         benefit of these  agreements  for each other  member of
                         the Merrill Lynch Group) that:

B.1.                     if for  any  reason  the  Client  does  not pay any sum
                         payable by the Client as provided in the  Agreement  by
                         the time and on the date specified in the Agreement and
                         otherwise in the manner  specified in the  Agreement or
                         any other  amount



<PAGE>

                         payable  under any other  agreement  between the Client
                         and the Bank or any other  member of the Merrill  Lynch
                         Group (whether on the normal due date, on  acceleration
                         or otherwise), the Indemnifier will pay that sum on the
                         due date and in the required manner;

B.2.                     as between  the  Indemnifier  and the Bank but  without
                         affecting  the Client's  obligations,  the  Indemnifier
                         shall be liable  under B.1 above and B.5 below as if it
                         were the sole principal debtor and not merely a surety.
                         Accordingly,  it shall not be discharged, nor shall its
                         liability be affected, by reason of:

B.2.a.                   any time,  indulgence,  waiver or  consent  at any time
                         given to the Client or any other Person,

B.2.b.                   any  amendment to any other  provision of the Agreement
                         or to any  security or other  agreement,  guarantee  or
                         indemnity,

B.2.c.                   the  making or  absence  of any demand on the Client or
                         any other Person for payment,

B.2.d.                   the  enforcement  or  absence  of  enforcement  of  the
                         Agreement  or  of  any  security  or  other  agreement,
                         guarantee or indemnity,

B.2.e.                   the release of any such agreement,  security, guarantee
                         or indemnity,

B.2.f.                   the   death,   incapacity,    bankruptcy,   insolvency,
                         winding-up, liquidation,  administration,  dissolution,
                         merger, amalgamation, reconstruction, reorganisation or
                         similar  event of or with  respect to the Client or any
                         other Person, or

B.2.g.                   the illegality,  invalidity or  unenforceability  of or
                         any defect in any  provision  of the  Agreement  or any
                         other such agreement or any of the Client's obligations
                         under any of them or any other circumstance which might
                         otherwise  constitute a legal or equitable discharge or
                         defence to it;

B.3.                     the obligations of the Indemnifier  under B.1 above and
                         B.5 below are and will  remain in full force and effect
                         by way of  continuing  security  until the Facility has
                         terminated, the Sum



<PAGE>

                         Outstanding  and all other sums expressed to be payable
                         to the Bank under the Agreement  have been properly and
                         duly  paid  in full  and the  Total  Letter  of  Credit
                         Exposure is zero.  Furthermore,  those  obligations are
                         additional  to, and not  instead  of, any  security  or
                         other  agreement,  guarantee  or  indemnity at any time
                         existing  in  favour  of the  Bank,  whether  from  the
                         Client,  the Indemnifier or otherwise.  The Indemnifier
                         irrevocably waives all notices and demands whatsoever;

B.4.                     until the Facility has terminated,  the Sum Outstanding
                         and all other sums  expressed to be payable to the Bank
                         under the Agreement have been properly and duly paid in
                         full and the Total Letter of Credit Exposure is zero:

B.4.a.                   any right of the Indemnifier,  by reason of performance
                         of any of its obligations under B.1 above or B.5 below,
                         to be  indemnified by the Client or to take the benefit
                         of or  enforce  any  security  or  other  guarantee  or
                         indemnity  shall  be  exercised  and  enforced  by  the
                         Indemnifier  only in such  manner  and on such terms as
                         the Bank may require; and

B.4.b.                   any amount  received or recovered by the Indemnifier as
                         a result of any  exercise  of any such  right  shall be
                         held in trust for the Bank and immediately  paid to the
                         Bank;

B.5.                     the  Indemnifier  shall on  demand  indemnify  the Bank
                         against  any funding or other  cost,  loss,  expense or
                         liability  (including  loss of the Spread  (as  defined
                         below))  sustained  or incurred by the Bank as a result
                         of the Bank being required for any reason to refund all
                         or part of any amount received or recovered by the Bank
                         in respect of any sum  payable by the Client  under the
                         Agreement  and  shall in any  event  pay to the Bank on
                         demand the amount so refunded by the Bank; and

B.6.                     amounts  received or recovered  by the Bank  (otherwise
                         than as a result of a payment by the Client) in respect
                         of any sum  payable by the Client  under the  Agreement
                         may at the discretion of the Bank reasonably  exercised
                         be placed in a suspense account and kept there for such
                         reasonable period as the Bank may decide.

<PAGE>

C.                       As   separate   and   alternative   stipulations,   the
                         Indemnifier unconditionally and irrevocably agrees:

C.1.                     that any sum  expressed  to be  payable  by the  Client
                         under the Agreement which is for any reason (whether or
                         not  now  existing  and  whether  or not now  known  or
                         becoming  known  to any  party  to the  Agreement)  not
                         recoverable  from  the  Indemnifier  on the  basis of a
                         guarantee shall  nevertheless be recoverable from it as
                         if it were the sole principal  debtor and shall be paid
                         by  it  to  the  Bank  on  demand  (the   Indemnifier's
                         liability  under this  Agreement  being  liability  for
                         payment, and not collection); and

C.2.                     as a primary  obligation  to indemnify the Bank against
                         any  loss  suffered  by  it  as a  result  of  any  sum
                         expressed  to  be  payable  by  the  Client  under  the
                         Agreement  not  being  paid by the time and on the date
                         specified in the  Agreement and otherwise in the manner
                         specified in the Agreement or any payment obligation of
                         the Client under the Agreement  being or becoming void,
                         voidable or  unenforceable  for any reason  (whether or
                         not  now  existing  and  whether  or not now  known  or
                         becoming known to any party to the Agreement),

                         the amount of that loss being the amount  expressed  to
                         be payable  by the  Client in  respect of the  relevant
                         sum.

D.                       The Indemnifier  acknowledges that the Bank is entering
                         into the Agreement,  and that all  transactions  by the
                         Bank under the  Agreement  are done, in reliance on the
                         guarantee,  indemnities  and other  undertakings on the
                         part of the Indemnifier in the Agreement,  and that the
                         Bank  would  not,  in the  absence  of such  guarantee,
                         indemnities  and other  undertakings on the part of the
                         Indemnifier in the Agreement,  enter into the Agreement
                         with the Client or do any transactions  with or for the
                         Client under the Agreement.

E.                       If the  Indemnifier  is an  individual,  the  Bank  has
                         separately  advised  the  Indemnifier,  and again gives
                         notice to the Indemnifier:

<PAGE>

E.1.                     that,   by   becoming   party  to  the   Agreement   as
                         Indemnifier,  and in particular by giving the guarantee
                         and  indemnities  in this Clause 7 and/or by  providing
                         Collateral,  the  Indemnifier may become liable instead
                         of or as well as the Client;

E.2.                     that the Indemnifier's  obligations,  and in particular
                         its  obligations  under such guarantee and  indemnities
                         and in respect of such Collateral, will be unlimited as
                         to amount; and

E.3.                     that the  Indemnifier  should in its own interests seek
                         independent  legal advice before  signing the Agreement
                         as Indemnifier.


8.  ADVANCE VALUE
--------------------------------------------------------------------------------

The Client  and/or the  Indemnifier  shall  deposit or  transfer  monies  and/or
Securities  (and all related  documents as the Bank shall direct) with or to the
Bank for the  credit of the  Accounts  and/or  arrange  the issue of  Collateral
Guarantees the benefit of which is available to the Bank, so that:

A.                       In relation to Advances and Letters of Credit either:

A.1.                     as at the  proposed  date of  each  Advance  and/or  of
                         Issuance of each Letter of Credit,  as the case may be,
                         the  aggregate of the Dollar Amount of such Advance or,
                         as the case may be, of the  Letter  of Credit  Exposure
                         under  the  relevant  Letter  of  Credit,  and  the Sum
                         Outstanding  together  with the Total  Letter of Credit
                         Exposure is not  greater  than the  Collateral  Advance
                         Value; or

A.2.                     the aggregate  Advance Value of the Blocked  Collateral
                         deposited   and/or    Collateral    Guarantees   issued
                         (specifically and solely in respect of that Advance or,
                         as the case may be,  the  Issuance  of that  Letter  of
                         Credit) on, or within the three  Business  Days falling
                         before,  the  proposed  date of that Advance or, as the
                         case may be, Issuance of that Letter of Credit is equal
                         to or  exceeds  the  principal  amount of the  proposed
                         Advance or the Letter of Credit


<PAGE>

                         Exposure   under   the   relevant   Letter   of  Credit
                         respectively; and

B.                       in relation to Foreign  Exchange  Contracts  and Option
                         Contracts,  as at the  proposed  date of entry into the
                         relevant contract, and after giving effect thereto, the
                         Sum  Outstanding  together  with the  Total  Letter  of
                         Credit  Exposure  is not  greater  than the  Collateral
                         Advance Value.


9.  MAINTENANCE VALUE/LIQUIDATION PROCEDURES
--------------------------------------------------------------------------------

A.                       If, at any date,  the aggregate of the Sum  Outstanding
                         and the Total  Letter of Credit  Exposure  exceeds  the
                         Collateral  Maintenance  Value,  the Client  and/or the
                         Indemnifier  shall within two Business Days  thereafter
                         deposit or transfer  monies and/or  Securities (and all
                         related  documents  as the Bank shall  direct) with the
                         Bank for  credit to the  Accounts  and/or  arrange  the
                         issue of Collateral  Guarantees the benefit of which is
                         available   to  the  Bank  such  that  the   Collateral
                         Maintenance   Value  equals  or  exceeds  105%  of  the
                         aggregate of the Sum  Outstanding  and the Total Letter
                         of Credit Exposure.

B.                       If the  Client  and/or the  Indemnifier  shall not have
                         complied  with their  obligations  under A above within
                         the time there specified, then without prejudice to its
                         rights and remedies  under Clause 19 or 20 or otherwise
                         under  the   Agreement,   the  Bank  may  at  any  time
                         thereafter,   whether   or   not   such   noncompliance
                         continues,  and  without  notice  to the  Client or the
                         Indemnifier:

B.1.                     exercise  all or any of the rights  which it would have
                         under  Clause  20.A.2,  3 and 4 had an Event of Default
                         occurred; except that

B.2.                     at its absolute  discretion  instead of applying all or
                         any proceeds  and/or cash balances as set out in Clause
                         20.A.4  pay and  credit  the same  into an  appropriate
                         Account.

C.                       If the Bank  exercises  any of its rights under B above
                         it shall within a reasonable period give


<PAGE>

                         notice thereof to the Client and the Indemnifier.


10.  COLLATERAL VALUE CALCULATION
--------------------------------------------------------------------------------

For the purpose of determining  Advance and Maintenance  Values  hereunder,  the
value of Blocked Collateral and Collateral Guarantees shall be calculated by the
Bank in its absolute discretion,  in the case of (A) Securities, as a percentage
of the Dollar  Amount of the fair market value  (which shall  exclude any unpaid
dividend or accrued  interest  thereon and which shall be determined by the Bank
in its  absolute  discretion)  of  such  Securities,  (B)  cash  balances,  as a
percentage  of the  Dollar  Amount of each  deposit  of each  currency,  and (C)
Collateral  Guarantees,  as a percentage  of the Dollar  Amount of the available
amount  (which shall be determined  by the Bank in its absolute  discretion)  of
each Collateral Guarantee.  The percentages referred to above shall be fixed by,
and may be changed by, the Bank without notice to the Client or the  Indemnifier
at or to such levels as (in its absolute discretion) it sees fit.


11.  FEES
--------------------------------------------------------------------------------

A.                       The  arrangement  and other fees (if any)  specified in
                         the Letter  shall be payable  in such  manner,  in such
                         currencies and at such times as specified in the Letter
                         or as the Bank may otherwise allow.

B.                       In addition the Client  shall at or before  Issuance of
                         each  Letter of Credit (or at such  other  times as the
                         Bank  may  allow)  pay to the  Bank  such  fees in such
                         currencies  in respect of such  Letter of Credit as the
                         Client (or the  Indemnifier  for the Client's  account)
                         and the Bank shall have agreed.


12.  SECURITY
--------------------------------------------------------------------------------

A.                       Each of the Client and the  Indemnifier,  as continuing
                         security for the due performance of all its obligations
                         and  payment  of  all  its  liabilities   under  or  in
                         connection  with  the  Agreement  (whether  present  or
                         future,   actual  or  contingent  and   ascertained  or
                         unascertained,   and  including  in  the  case  of  the
                         Indemnifier


<PAGE>

                         its   guarantee  in  Clause  7)  and  under  any  other
                         agreement  between it and the Bank or any other  member
                         of the Merrill Lynch Group and as beneficial  owner and
                         with full title guarantee, hereby:

A.1.                     charges  by way  of  first  fixed  legal  mortgage  (in
                         priority  to all  other  security  whatsoever,  whether
                         fixed or  floating),  and grants a continuing  lien and
                         security  interest in, in favour of the Bank all monies
                         (and all its right,  title and  interest in and to such
                         monies and the debt owing in respect  thereof from time
                         to time  standing  to the  credit of the  Accounts,  in
                         whatever currency and including any interest accrued or
                         accruing thereon;

A.2.                     pledges  and  charges  by  way  of  first  fixed  legal
                         mortgage (in priority to all other security whatsoever,
                         whether  fixed or  floating),  and grants a  continuing
                         lien and  security  interest  in, in favour of the Bank
                         all  its  right,  title  and  interest  in  and  to all
                         Securities  and  all  related  documents  deposited  or
                         transferred  by the Client or the  Indemnifier  for the
                         credit of the  Collateral  Account  and all  Securities
                         from time to time held  therein or subject or  credited
                         thereto  and the  claims  in  respect  thereof  and all
                         proceeds of any  realisation  or redemption of all such
                         Securities;

A.3.                     to the extent  permitted by applicable law, pledges and
                         charges,  and  grants a  continuing  lien and  security
                         interest in, in favour of the Bank all its right, title
                         and  interest  in  and to all  monies,  debts,  claims,
                         Securities and other property deposited with or owed or
                         owing  by the  Bank  and/or  any  other  member  of the
                         Merrill Lynch Group; and

A.4.                     charges  by way  of  first  fixed  legal  mortgage  (in
                         priority  to all  other  security  whatsoever,  whether
                         fixed or  floating),  and grants a continuing  lien and
                         security  interest  in,  in  favour of the Bank all its
                         rights and  benefits  under or in  connection  with the
                         Foreign  Exchange  Contracts,  the Option Contracts and
                         utilisations of Securities  under Clause 2 1, including
                         in  particular  all  monies  paid or payable in respect
                         thereof,  all  Securities  delivered or  deliverable in
                         respect thereof,


<PAGE>

                         and all other  rights  and  benefits  thereunder  or in
                         connection therewith.

B.                       The security  hereby  created  shall affect and include
                         all  dividends,   distributions  and  interest  on  the
                         Securities  and  other   property   hereby  pledged  or
                         charged,  whether  capital or income,  and all property
                         distributed,  paid, accruing or offered at any time on,
                         to,  in  respect  of,  or  in  substitution   for,  any
                         Securities or other property hereby pledged or charged.

C.                       The  security  hereby  created  shall  be a  continuing
                         security  notwithstanding  any intermediate  payment or
                         settlement  of account  and,  without  prejudice to the
                         generality  of the  foregoing,  shall  continue in full
                         force and effect  until the Bank has  executed a formal
                         release  of  such  security  which  it  may  do in  its
                         absolute discretion from time to time in respect of the
                         whole or part only of the Collateral. Any withdrawal of
                         any  of  the  Collateral  shall  operate  as a  release
                         thereof  and  the  provisions  of the  Agreement  shall
                         continue to apply to the remainder of the Collateral.

D.                       None of the monies  from time to time  standing  to the
                         credit of the  Accounts  or  payable  in respect of the
                         Foreign Exchange Contracts or the Option Contracts (nor
                         the Client's or Indemnifier's right, title and interest
                         in and to such  monies  or the debt  owing  in  respect
                         thereof)  shall,  until such time as the  Facility  has
                         terminated,  the Sum  Outstanding  and all  other  sums
                         expressed to be payable to the Bank under the Agreement
                         have been  properly and duly paid in full and the Total
                         Letter of Credit  Exposure is zero, be capable of being
                         withdrawn,  assigned, transferred or otherwise disposed
                         of or  encumbered  except with the Bank's prior written
                         consent or as  otherwise  specifically  provided in the
                         Agreement.  Any  such  consent  of the  Bank  (and  any
                         payment  whether  with or without such  consent)  shall
                         operate  as a release  of the  relevant  monies and the
                         provisions of the Agreement  shall continue to apply to
                         the Accounts,  the Foreign  Exchange  Contracts and the
                         Option  Contracts,  and the  monies  from  time to time
                         standing to the credit


<PAGE>

                         thereof  or,  as  the  case may  be, payable in respect
                         thereof.

E.                       Neither    the   Bank   nor   any   of   its    agents,
                         representatives,  correspondents or nominees shall have
                         any liability whatsoever for any failure to present any
                         Securities  in the  Accounts or other  property  hereby
                         pledged  or  charged  for  payment  of  any  principal,
                         dividends,  interest  or any other  amount  payable  in
                         respect thereof (whether at maturity,  on redemption or
                         otherwise) or to ensure that any such amounts are paid,
                         received  or  collected,  or to ensure that the correct
                         amounts (if any) arc paid, received or collected or for
                         any  failure  to  take  up any  (or  any  offer  of any
                         property paid, distributed,  accruing or offered at any
                         time on, to, in respect of, or in substitution for, any
                         Securities  in the  Accounts or other  property  hereby
                         pledged or charged.

F.                       Each of the Client and the Indemnifier, at its expense,
                         will do or cause to be done all things which are either
                         necessary  or  requested  by the Bank (1) to enable the
                         Bank to enjoy,  exercise  or  enforce  its  rights as a
                         secured  party under the Agreement and (2) to evidence,
                         and to establish and maintain the  perfection and first
                         priority  of,  the  Bank's  security  interest  in  the
                         Collateral.  Without  limiting  the  generality  of the
                         foregoing,  each of the Client and the Indemnifier,  at
                         its expense,  will  execute and give or file,  or both,
                         all  notices  and  documents  in such  manner,  to such
                         persons and at such places as may be  requested  by the
                         Bank to establish and maintain the perfection and first
                         priority  of  the  Bank's  security   interest  in  the
                         Collateral.  If it does  not do so,  the  Bank may (but
                         shall not be obliged to) do so.

G.                       Each of the Client and the Indemnifier hereby by way of
                         security  irrevocably  appoints  the Bank its  attorney
                         (with full power of substitution), on its behalf and in
                         its name or otherwise,  at such time and in such manner
                         as  the  attorney   may  in  its  absolute   discretion
                         determine:

<PAGE>

G.1.                     to do anything which the Client or, as the case may be,
                         the  Indemnifier  is  obliged  to do (but has not done)
                         under the Agreement including,  without limitation,  to
                         execute charges over,  transfers or assignments of, and
                         other instruments relating to, the Collateral; and

G.2.                     generally  to  exercise  all  or  any  of  the  rights,
                         discretions,  remedies  and  powers of a secured  party
                         under the Law of Property Act 1925,  the Insolvency Act
                         1986 and the  Uniform  Commercial  Code of the State of
                         New York,

and ratifies and confirms,  and agrees to ratify and confirm,  whatever any such
attorney shall do or purport to do in the exercise or purported exercise of this
power of attorney.


13.  WITHDRAWALS
--------------------------------------------------------------------------------

Until such time as the security  hereby  created shall become  enforceable,  and
provided  that  thereafter  the aggregate of the Sum  Outstanding  and the Total
Letter of Credit  Exposure does not exceed the  Collateral  Advance  Value,  the
Client  and the  Indemnifier  may  each  request  the  withdrawal  of any of the
Collateral  provided by it and the Bank shall  consider but shall have  absolute
discretion  whether or not to accede to any such request (and, in considering or
acceding  to any such  request  by the Client or the  Indemnifier,  shall not be
obliged to have regard to the interests of the other(s) of them).


14.  PAYMENTS
--------------------------------------------------------------------------------

A.1.                     On each date on which an Advance is to be made the Bank
                         shall make the same available to the Client, subject to
                         Clause 4.2, before close of business at such account of
                         the  Client  as  may  be   specified  at  the  time  of
                         requesting  that  Advance  and  which,  in the  case of
                         payments in ECU, shall be with a bank which is a member
                         of an  ECU  clearing  system.  The  amount  to be  made
                         available shall be the amount in the relevant  currency
                         so  requested  by the Client or, if the  request is for
                         the  equivalent in one currency of an amount in another
                         currency, the equivalent (as determined by the Bank) of
                         that amount in the relevant other currency,

<PAGE>

A.2.                     All  payments  due from the Client  hereunder  shall be
                         made to such  account of the Bank as it shall notify to
                         the  Client  (which,  in the case of  payments  in ECU,
                         shall  be  with  a bank  which  is a  member  of an ECU
                         clearing system) and in the

                         currency  in  which  they  are due by such  time in the
                         relevant  financial  centre as is  necessary  to ensure
                         that the Bank receives on the day in question:

A.2.a.                   in the case of Dollars, same day value funds; and

A.2.b.                   in the case of other  currencies,  such funds as may be
                         generally  accepted for the  settlement in the place of
                         payment of international payments in that currency.

B.                       All  payments by the Client and the  Indemnifier  under
                         the  Agreement  shall  be made  free  and  clear of any
                         restrictions   or   conditions,   without   set-off  or
                         counterclaim,  and free and clear of, and  (subject  as
                         hereinafter   provided)   without  any   deduction   or
                         withholding  whether  for  or  on  account  of  tax  or
                         otherwise.  If any such  deduction  or  withholding  is
                         required  by  law  to  be  made  by  the  Client,   the
                         Indemnifier or any other Person (whether or not a party
                         to, or on behalf of a party to, the Agreement) from any
                         sum paid or payable by, or received or receivable from,
                         the  Client or the  Indemnifier,  the Client or, as the
                         case  may be,  the  Indemnifier  shall  pay in the same
                         manner and at the same time such additional  amounts as
                         will result in the Bank  receiving and retaining  (free
                         from any  liability  other than tax on its  overall net
                         income) such net amount as would have been  received by
                         it had no such deduction or  withholding  been required
                         to be made.


15.  REPAYMENT
--------------------------------------------------------------------------------

Each Advance  shall be repaid by the Client in full and in the currency in which
it is  denominated  on the Maturity  Date or on any earlier date of  termination
pursuant to Clause 3, 20.A.1 or 24.C.4.b.


<PAGE>

16.  PREPAYMENT
--------------------------------------------------------------------------------

The Client may:

A.                       if it gives to the Bank not less  than  three  Business
                         Days' prior notice (which shall be irrevocable)  prepay
                         (1) any  Advance on which  interest  is  calculated  by
                         reference  to LIBOR  on the  last  day of any  Interest
                         Period  relating  thereto  and (2) any Advance on which
                         interest is calculated by reference to Base Rate at any
                         time; and

B.                       if the Bank and the Client so agree, prepay any Advance
                         on which  interest is  calculated by reference to LIBOR
                         at any time,  upon payment of such  administration  fee
                         and  any  amount  payable  in  accordance  with  Clause
                         23.A.2.

Any such  prepayment  must be  accompanied  by accrued  interest  on the Advance
prepaid.  Upon notice of or agreement for any such  prepayment  the Bank may (in
its absolute  discretion)  Close Out any Open Contract or, at the Bank's option,
terminate  any Open  Contract,  whereupon  the  obligations  of the Bank and the
Client  to make  payments  to the  other  shall be  cancelled  and an  amount of
compensation  (calculated  in accordance  with Clause  20.A.2.a,  b and c) shall
automatically become payable by the Client to the Bank in accordance with Clause
5.C or (as  appropriate)  fall  to be  credited  by the  Bank to the  Client  in
accordance with Clause 5.D.


17.  INTEREST
--------------------------------------------------------------------------------

A.                       Interest  shall  be  calculated  and  payable  on  each
                         Advance by reference to successive Interest Periods. In
                         the case of each  Advance  its  first  Interest  Period
                         shall begin on the  proposed  date of that  Advance and
                         each  subsequent one shall begin on the last day of the
                         previous one. Each Interest  Period shall be of 1, 3, 6
                         or 12 months  duration  (or such other period as may be
                         agreed  between the Client and the Bank) as selected by
                         the Client in a notice  received  by the Bank not later
                         than 12:00 noon (London time) on the third Business Day
                         before the first day of that Interest Period.  However,
                         the Client may select an  Interest  Period of 12 months
                         or longer only if the Bank (in its absolute discretion)
                         agrees.


<PAGE>

                         If on  the  first  day  of any  Interest  Period  it is
                         apparent  that such  Interest  Period  would  otherwise
                         extend  beyond the  Maturity  Date or the date (if any)
                         notified by the Bank under Clause 3 then such  Interest
                         Period shall  instead end on the  Maturity  Date or, as
                         the case  may be,  the date so  notified  and,  subject
                         thereto,  any  Interest  Period for which no  effective
                         selection  notice  is  received  shall  be of the  same
                         duration  as the  previous  Interest  Period or, at the
                         Bank's option, of 3 months' duration.

B.                       The  rate  of  interest  applicable  for  a  particular
                         Interest  Period  shall be the rate per annum  equal to
                         the sum of:

B.1.                     the Spread (as specified in the Letter); and

B.2.                     LIBOR for that Interest  Period (or, in relation to any
                         Interest Period of longer than 12 months,  the rate per
                         annum,  as  determined  by the Bank,  at which the Bank
                         would raise funds in an amount comparable to and in the
                         currency of the relevant  Advance and for that Interest
                         Period).

C.                       However,  if the Client so elects,  in  relation  to an
                         Advance to be  denominated  in Dollars  or, if the Bank
                         (in  its  absolute   discretion)   agrees,   any  other
                         currency,  in the request for that Advance  pursuant to
                         Clause  4 that  interest  shall be  calculated  on that
                         Advance by reference to Base Rate,  the provisions of A
                         and B above  shall not  apply and the rate of  interest
                         applicable  to that Advance shall be the rate per annum
                         equal to the sum of the Spread and the applicable  Base
                         Rate.

D.                       On the  last  day of each  Interest  Period  or,  where
                         interest on any Advance is  calculated  by reference to
                         Base Rate,  monthly (or at such other  intervals as may
                         be  determined  by the Bank),  the Client shall pay the
                         unpaid interest accrued during that Interest Period or,
                         as the case  may be,  the  preceding  month  (or  other
                         period so


<PAGE>

                         determined  by the  Bank),  on the  Advance to which it
                         relates,  in the  currency  in which  that  Advance  is
                         denominated  and at the  rate(s)  applicable  for  that
                         Interest Period or, as the case may be, month (or other
                         period so determined by the Bank). However, in the case
                         of an Interest  Period of more than 6 months,  interest
                         shall  be  payable  six-monthly  from  the  date of the
                         relevant  Advance (or at such other intervals as may be
                         determined by the Bank).

E.                       If the Bank (in its absolute discretion) so determines,
                         any unpaid  interest  may be added to the amount of the
                         Advance to which it relates  (or, at the Bank's  option
                         be  treated  as  a  separate   Advance)   and  interest
                         calculated in accordance with B or, as the case may be,
                         C above shall thereafter be paid thereon.

F.                       Without prejudice to any other right or remedy to which
                         the Bank may be  entitled by law,  contract  (including
                         the  Agreement)  or  otherwise,  if the  Client  or the
                         Indemnifier does not pay any sum payable hereunder when
                         due,  it shall pay  interest on the amount from time to
                         time outstanding in respect of that overdue sum for the
                         period beginning on its due date and ending on the date
                         of its  receipt  by the Bank  (both  before  and  after
                         judgment).  Interest  shall be calculated  from time to
                         time at the rate per annum (as  determined by the Bank)
                         equal to the sum of 1%,  the  Spread and the rate equal
                         to the Bank's cost of that overdue sum for such periods
                         as the Bank may from time to time select; such interest
                         shall be payable on demand.  All interest payable under
                         this  sub-clause  which is not paid  when due  shall be
                         added  to the  overdue  sum and  itself  bear  interest
                         accordingly.


18.  REPRESENTATIONS AND WARRANTIES
--------------------------------------------------------------------------------

A.                       Each of the Client and the  Indemnifier  represents and
                         warrants to and agrees with the Bank that:

A.1.                     (if a legal Person)

A.1.a.                   each of them is a company,  society or partnership duly
                         established   and  existing   under  the  laws  of  the
                         jurisdiction of its  incorporation or establishment and
                         has the power and  authority  to own its  assets and to
                         conduct the business which it conducts;

<PAGE>

A.1.b.                   the entry into and performance  under the Agreement and
                         the creation of the security  created by the  Agreement
                         by  each  of  them  will  not  violate  or  exceed  any
                         borrowing,  charging  or other  powers or  restrictions
                         granted  or  imposed  under  any  law  to  which  it is
                         subject, its constitutional documents or any agreement,
                         undertaking  or licence to which it is a party or which
                         is  binding  on it or its assets or (in the case of the
                         Indemnifier) result in its having an unreasonably small
                         capital or render it insolvent; and

A.1.c.                   no  meeting  has  been  convened  for  its  winding-up,
                         liquidation,   administration,   dissolution,   merger,
                         amalgamation,   reconstruction   or  reorganisation  or
                         similar event of or with respect to it, no such step is
                         intended by it and, so far as it is aware, no petition,
                         application or the like is  outstanding  for any of the
                         foregoing;

A.2.                     all acts,  conditions  and things  required to be done,
                         fulfilled and performed in order to enable each of them
                         lawfully to enter into, exercise its rights and perform
                         its obligations  under the Agreement and to ensure that
                         its obligations are legal,  valid and binding have been
                         done, fulfilled and performed;

A.3.                     each of them has the power to enter into,  exercise its
                         rights  and  perform  and comply  with its  obligations
                         under the Agreement and has taken all necessary  action
                         to authorise the execution, delivery and performance of
                         the Agreement;

A.4.                     each of them will:

A.4.a.                   obtain,  make and  maintain  in  effect  all  necessary
                         consents,  registrations  and the  like of and with any
                         governmental  or  other  regulatory  body or  authority
                         applicable to its obligations under the Agreement;

A.4.b.                   comply  with  the  terms  of  the  same  and  with  all
                         applicable laws, regulations and directives or the like
                         (whether or not having the force of law) of such bodies
                         and authorities; and

<PAGE>

A.4.c.                   forthwith upon demand by the Bank,  deliver to the Bank
                         copies of all such  consents,  registrations  and,  the
                         like or such other  evidence  of the  existence  of the
                         same and such evidence of compliance  with the same and
                         with any such  laws,  regulations,  directives  and the
                         like as the Bank may reasonably require;

A. 5.                    their  respective  obligations  under the Agreement are
                         binding and enforceable at law;

A.6.                     neither of them is in default  under any  agreement  to
                         which it is a party or by which it or its assets may be
                         bound and no litigation,  arbitration or administrative
                         proceedings  are  current or  pending,  which  default,
                         litigation,  arbitration or administrative  proceedings
                         are material in the context of the Agreement;

A.7.                     each  of them  understands  that  (in  the  case of the
                         Client)  the  Issuance  of a  Letter  of  Credit  for a
                         Person(s) other than the Client and (in the case of the
                         Indemnifier)  the guarantee of the  obligations  of the
                         Client under the  Agreement  and (as  appropriate)  the
                         deposit of Collateral may result in its becoming liable
                         instead of or as well as that Person(s) or (as the case
                         may be) the Client,  and acknowledges that it has taken
                         or  will  take  such  independent  legal  advice  as it
                         considers appropriate;

A.8.                     the benefit  which the  Indemnifier  receives  from its
                         entry into the  Agreement and the benefit which each of
                         the  Client  and  the  Indemnifier  receives  from  the
                         Issuance of any Letter of Credit will be at least equal
                         to its  liability  with respect to the Agreement or (as
                         the case may be) that Letter of Credit;

A.9.                     it is not necessary or advisable in order to ensure the
                         validity, effectiveness,  performance or enforceability
                         of  the  Agreement   (including   in   particular   the
                         perfection  of the security  created by the  Agreement)
                         that any document be filed,  registered  or recorded in
                         any public office or elsewhere;

A.10.                    its payment  obligations  under the Agreement  rank and
                         will at all times  rank in point of  priority  at least
                         equally and rateably in all respects with all its other
                         indebtedness;

<PAGE>

A.11.                    all  information  disclosed  to the Bank in  connection
                         with the granting of the  Facility or the  operation of
                         the  Agreement  is true,  complete  and accurate in all
                         respects  and  does  not  omit  any  material  facts or
                         circumstances  which could make any of such information
                         misleading in any respect;

A.12.                    except  by  the   Agreement,   it  has  not   assigned,
                         transferred  or  otherwise  disposed of the  Collateral
                         provided  by it  (or  any  of  its  rights,  title  and
                         interest in and to such Collateral), either in whole or
                         in part,  nor agreed to do so, and will not at any time
                         do so or agree to do so, it is and will at all times be
                         the sole beneficial  owner of the same, and it does and
                         will at all times  fully  guarantee  title to the same,
                         and all such Collateral is or, as the case may be, will
                         be freely transferable  without the need of any (or any
                         further) action on its part;

A.13.                    except for the security  created by the  Agreement,  no
                         mortgage,  charge, pledge, lien or other encumbrance or
                         security of any kind  exists on or over the  Collateral
                         provided by it (or its right title and  interest to and
                         in such  Collateral),  either in whole or in part,  nor
                         has it  agreed  to create  any such  mortgage,  charge,
                         pledge,  lien or other encumbrance or security nor will
                         it at any time do so or agree to do so; and

A.14.                    it will on  demand  duly  pay any  calls,  subscription
                         monies  and/or other monies  payable on or with respect
                         to any of the  Securities  comprised in the  Collateral
                         provided  by it or, if the Bank pays the same (which it
                         shall not be obliged to do), shall on demand  indemnify
                         the Bank against such payment.

B.                       Each of the Client and the  Indemnifier  represents and
                         warrants  to the Bank that each of the  representations
                         and  warranties in A above will be correct and complied
                         with  at  all  times  and in all  respects  during  the
                         continuance  of the Facility  and/or so long as any sum
                         remains  payable under the Agreement  and/or so long as
                         there is any  Total  Letter of 

<PAGE>
                         Credit  Exposure  as if  repeated   then  by  reference
                         to  the  then  existing circumstances.

19.  EVENTS OF DEFAULT
--------------------------------------------------------------------------------

It shall be an Event of Default if:

A.                       The  Client  or the  Indemnifier  does  not pay any sum
                         payable  by it under the  Agreement  or under any other
                         agreement with the Bank or with any other member of the
                         Merrill Lynch Group on its due date, or

B.                       The  Client  or  the   Indemnifier   fails  to  provide
                         information  and/or  documents as requested by the Bank
                         pursuant to Clause 24.C.2.a or the Bank gives notice to
                         the  Client  or  the  Indemnifier  pursuant  to  Clause
                         24.C.4.b; or

C.                       Any representation, warranty or statement by the Client
                         or the  Indemnifier in the Agreement or in any document
                         delivered under it is not complied with or is or proves
                         to have been  incorrect in any respect when made or, if
                         it had been made on any later date by  reference to the
                         circumstances then existing,  would have been incorrect
                         in any respect on that later date; or

D.                       The Client or the Indemnifier fails duly to perform any
                         one  or  more  of  its  other   obligations  under  the
                         Agreement or under any other agreement with the Bank or
                         with any other member of the Merrill Lynch Group; or

E.                       At  any  date,  the  aggregate  Dollar  Amount  of  the
                         aggregate of the Sum  Outstanding  and the Total Letter
                         of Credit  Exposure  exceeds  102.5% of the  Collateral
                         Maintenance Value; or

F.                       Any provision of the Agreement which is material to the
                         interests  of the  Bank  is not (or is  claimed  by the
                         Client or the  Indemnifier not to be) in full force and
                         effect; or

G.                       The  Bank  determines  or  has  reasonable  grounds  to
                         believe that the security (in whole or in part) created
                         by the Agreement is not or may not be in full force and
                         effect or does not or may not have the priority  stated
                         in the Agreement; or

<PAGE>

H.                       The  Bank  determines  or  has  reasonable  grounds  to
                         believe that it is or will become  unlawful or contrary
                         to any directive or the like (whether or not having the
                         force of law) of any  governmental or other  regulatory
                         body or authority for the Client,  the  Indemnifier  or
                         the  Bank to  carry  out all or any of its  obligations
                         hereunder; or

I.                       A claim, whether by distress, attachment,  execution or
                         other legal process or otherwise, is made on or against
                         any item of Collateral by any third party; or

J.                       A claim, whether by distress, attachment,  execution or
                         other legal process or otherwise, is made on or against
                         any other asset of the Client or the Indemnifier or (if
                         either  or both is or are a body or  bodies  corporate)
                         any  of  their   respective   Affiliates   and  is  not
                         discharged or stayed Within 7 days; or

K.                       Any step is taken or legal  proceeding  started  by any
                         Person  in  the   bankruptcy   of  the  Client  or  the
                         Indemnifier  or  for  the  appointment  of a  receiver,
                         administrator, trustee or similar officer of the Client
                         or the Indemnifier or of any or all of the revenues and
                         assets of the Client or the  Indemnifier  or (if either
                         or  both  is or are a body  or  bodies  corporate)  the
                         winding-up, liquidation,  administration,  dissolution,
                         merger, amalgamation,  reconstruction or reorganisation
                         or  similar  event of or with  respect to the Client or
                         the Indemmnifier or any of their respective  Affiliates
                         (except   for  the   purpose  of  and   followed  by  a
                         reconstruction, amalgamation or reorganisation on terms
                         approved by the Bank before that step is taken); or

L.                       Any  indebtedness  of the Client or the  Indemnifier to
                         any  member  of the  Merrill  Lynch  Group or any other
                         Person(s)  in respect of monies  borrowed or raised (1)
                         is not paid when due nor  within any  applicable  grace
                         period in any agreement  relating to that indebtedness,
                         or (2)  becomes  due  and  payable  before  its  normal
                         maturity  by reason of a default  or event of  default,
                         however described; or

<PAGE>

M.                       Any mortgage, charge, pledge, lien or other encumbrance
                         or  security on or over any assets of the Client or the
                         Indemnifier  or (if  either or both is or are a body or
                         bodies  corporate) any of their  respective  Affiliates
                         becomes  enforceable and any step (including the taking
                         of possession or the appointment of a receiver, manager
                         or similar Person) is taken to enforce the same; or

N.                       The Client or the  Indemnifier or (if either or both is
                         or  are a  body  or  bodies  corporate)  any  of  their
                         respective Affiliates is (or is, or could be, deemed by
                         law or a court to be)  insolvent,  is unable to pay its
                         debts as they fall due, stops, suspends or threatens to
                         stop or suspend  payment  of all or a material  part of
                         its debts,  begins negotiations or takes any proceeding
                         or other step with a view to readjustment, rescheduling
                         or deferral of all of its  indebtedness  or any part of
                         its  indebtedness  which it would or might otherwise be
                         unable to pay when due or  proposes  or makes a general
                         assignment or an arrangement or composition with or for
                         the benefit of creditors; or

O.                       If the Client and/or the  Indemnifier  is acting in the
                         capacity of trustee of a trust for the purposes hereof,
                         it or they cease to be appropriately authorised or such
                         trust comes or is brought to an end; or

P.                       (If an  individual  or  individuals)  the Client or the
                         Indemnifier  (or,  in the  case  of  joint  Clients  or
                         Indemnifiers,  the sole  survivor  thereof) dies or the
                         Client  or the  Indemnifier  (or,  in the case of joint
                         Clients  or  Indemnifiers,  any of them)  becomes or is
                         declared (by appropriate  authority)  incompetent or of
                         unsound mind; or

Q.                       The authority of any  representative of the estate of a
                         deceased or incapacitated  Client or Indemnifier is not
                         (or is  claimed  by any third  party not to be) in full
                         force and effect; or

R.                       Any event  occurs  which under the laws of any relevant
                         jurisdiction  has an  effect  equivalent  to any of the
                         events referred to in this Clause 19; or

<PAGE>

S.                       The Bank determines that a material  adverse change has
                         occurred   in  the   financial   condition,   business,
                         operations   or   prospects   of  the   Client  or  the
                         Indemnifier since the date of the Letter.


20.  CANCELLATION, ACCELERATION AND ENFORCEMENT
--------------------------------------------------------------------------------

The Client and the  Indemnifier  each  agrees  with the Bank (for  itself and as
trustee of the benefit of the Client's and the Indemnifier's respective promises
for each other member of the Merrill Lynch Group) as follows:

A.                       At any  time  after  an Event  of  Default  occurs  and
                         whether or not any Event of Default is continuing,  the
                         Bank  may,  without  prejudice  to any  other  right or
                         remedy of the Bank, at law, by contract or otherwise:

A.1.                     by notice to the Client  declare all Advances,  accrued
                         interest   thereon  and  any  other  sum  then  payable
                         hereunder  (other  than  the  Total  Letter  of  Credit
                         Exposure)  and/or  declare an amount equal to the Total
                         Letter of Credit  Exposure  to be  immediately  due and
                         payable  by the  Client  and the  Indemnifier  to Bank,
                         whereupon they shall become so due and payable,  and/or
                         declare the  Facility to be  terminated,  whereupon  it
                         shall so terminate.  Without  prejudice to Clause 12 or
                         any other  provision  of the  Agreement  any  amount so
                         received by the Bank in respect of the Total  Letter of
                         Credit  Exposure  may be  retained  by the Bank for the
                         purpose  of  payment   and/or  paid  in  accordance  or
                         purported  accordance  with the  relevant  Letter(s) of
                         Credit  and/or  retained by the Bank for the purpose of
                         application  and/or  applied  by the Bank in or towards
                         satisfaction  of the Client's  obligations  under or in
                         connection with the Agreement;

A.2.                     without   further   notice   to  the   Client   or  the
                         Indemnifier,  Close Out on the Client's behalf,  all or
                         any Open  Contracts  (in  whole or from time to time in
                         part) as the Bank in its sole discretion may determine,
                         whereupon any costs,  expenses and losses  arising as a
                         result  shall be  immediately  due and  payable  by the
                         Client


<PAGE>

                         and the  Indemnifier  to the Bank,  or,  at the  Bank's
                         option,  terminate all or any Open  Contracts (in whole
                         or from  time to time in  part) as the Bank in its sole
                         discretion may determine,  whereupon the obligations of
                         the Bank and the Client to make  payments  to the other
                         shall to the extent of the termination be cancelled and
                         an amount of  compensation  (calculated  by the Bank in
                         accordance with paragraphs  A.2.a to A.2.c below) shall
                         automatically become immediately due and payable by the
                         Client to the Bank (or, subject as provided below, vice
                         versa):

A.2.a.                   the Bank  shall  ascertain  in  relation  to each  Open
                         Contract so terminated on the date of termination  (the
                         "Calculation  Date") the  amount  (if any) which  would
                         fall to be paid to the Bank  (expressed  as a  negative
                         amount)  or  which  would  have to be paid by the  Bank
                         (expressed  as a  positive  amount) if it were to enter
                         into a transaction in the foreign exchange market at or
                         about 11.00 a.m. (London time) on that Calculation Date
                         which  would have the  effect of Closing  Out that Open
                         Contract;

A.2.b.                   if any such amount is in a currency other than Dollars,
                         it shall be  converted  by the Bank into Dollars at the
                         rate of  exchange  at  which,  at or about  11:00  a.m.
                         (London  time) on the relevant  Calculation  Date,  the
                         Bank could  enter  into a  transaction  on the  foreign
                         exchange  market to purchase or sell,  as  appropriate,
                         for  delivery  on the  second  Business  Day after that
                         Calculation  Date a  comparable  amount  of that  other
                         currency in exchange for Dollars;

A.2.c.                   the Bank shall then ascertain the difference between:

                         (i)      the sum of the  positive  amounts  ascertained
                                  under  A.2.a  above  (each   converted   where
                                  applicable in accordance with A.2.b); and

                         (ii)     the sum of the  negative  amounts  ascertained
                                  under  A.2.a  above  (each   converted   where
                                  applicable in accordance  with A.2.b) together
                                  with  any  costs  and  expenses  arising  as a
                                  result of the termination.

<PAGE>

                         If the  amount in (ii)  exceeds  the  amount in (i) the
                         difference  shall be due and  payable  by the Client to
                         the Bank.  If the amount in (i)  exceeds  the amount in
                         (ii) the  difference  shall be paid by the Bank  direct
                         into an appropriate  Account or, subject to the proviso
                         in A.4  below,  be due and  payable  by the Bank to the
                         Client;

A.2.d.                   it  is  agreed   that  the   amount   of   compensation
                         recoverable  by a party under  Clause 9.B or 16 or this
                         Clause 20.A.2 is a reasonable  pre-estimate  of loss in
                         respect  of  Open  Contracts  and not a  penalty.  Such
                         amount is payable for the loss of bargain  and,  except
                         as  otherwise  provided in the  Agreement,  neither the
                         Bank  nor  the  Client  will  be  entitled  to  recover
                         additional  damages  as a  consequence  of such loss of
                         bargain;

A.3.                     without   further   notice   to  the   Client   or  the
                         Indemnifier,  demand payment and/or exercise all or any
                         of its other  rights  under or in  connection  with any
                         Collateral Guarantee;

A.4.                     without further notice to the Client or the Indemnifier
                         and without  prejudice to any other right or remedy, to
                         the extent  permitted by applicable  law,  terminate or
                         cancel any orders or instructions  previously  approved
                         by the Bank to sell or buy any  Securities  in or to be
                         deposited or  transferred  in any of the Accounts,  and
                         dispose or procure the disposal,  by sale or otherwise,
                         of any Securities or of any other  property  whatsoever
                         in  respect  of any one or more  of the  then  existing
                         accounts of the Client or the Indemnifier with the Bank
                         or any or all other  members of the Merrill Lynch Group
                         (including  any  Securities  delivered  or  deliverable
                         under Clause 21), or  otherwise  realise or procure the
                         realisation of the same, at such time or times, in such
                         manner,  on such  terms  and at such  price  or  prices
                         (whether  payable  or  deliverable  immediately,  on  a
                         deferred  basis  or  by  installments)   without  being
                         responsible  for any loss or diminution in price, as it
                         may think fit and  further to  exercise  all the rights
                         and  remedies  of a  secured  party  under  the  Law of
                         Property  Act  1925,  the  Insolvency  Act 1986 and the
                         Uniform


<PAGE>

                         Commercial Code of the State of New York, including the
                         right to take  possession of, collect and get in all or
                         any part of the Collateral and to proceed  forthwith to
                         sell,  assign,  give options to  purchase,  contract to
                         sell or otherwise dispose of and deliver the Collateral
                         or any part  thereof  in one or more parts at public or
                         private  sale at any  exchange or broker's  board or at
                         any of the Bank's  offices or  elsewhere at such prices
                         and on such  terms as the Bank deems  appropriate,  all
                         without demand for performance,  advertisement or other
                         notice of any kind and apply the proceeds thereof,  the
                         proceeds  of any  Collateral  Guarantee  and  all  cash
                         balances in the Accounts as follows:

A.4.a.                   first, in or towards payment of all amounts  (including
                         costs,  expenses,  commissions  and taxes) arising as a
                         result of such disposal;

A.4.b.                   secondly, in or towards payment and satisfaction of all
                         sums  and  liabilities  due  from  the  Client  or  the
                         Indemnifier  to the Bank in respect of the Agreement or
                         on any other  account  in such  order and manner as the
                         Bank may determine;

A.4.c.                   thirdly,  in or towards payment and satisfaction of any
                         sums  and  liabilities  due  from  the  Client  or  the
                         Indemnifier  to any other  member of the Merrill  Lynch
                         Group on any  account  in such  order and manner as the
                         Bank may determine; and

A.4.d.                   fourthly,  in payment of any surplus to the Client, the
                         Indemnifier or other Person entitled thereto.

                         Provided  always  that the Bank shall not be obliged to
                         apply  any part of such  proceeds  in  accordance  with
                         sub-clause  A.4.d or to pay any amount of  compensation
                         in accordance with Clause 9.B or 20.A.2 above until all
                         liabilities    (including    future   and    contingent
                         liabilities)  to, and/or amounts due to, the Bank under
                         the Agreement have been discharged to the  satisfaction
                         of the  Bank  and  until  after  it has  exercised  all
                         set-offs  and other  rights which it is expressed to be
                         entitled to make or exercise under the Agreement. Until
                         such time the proceeds and  compensation  shall be held
                         in


<PAGE>

                         or  credited  to an  appropriate  Account or such other
                         account  with the Bank as the Bank may (in its absolute
                         discretion) decide.

                         Upon  any  disposal  of  any  Securities  or  of  other
                         property  made  or  purported  to  be  made  under  the
                         provisions of this Clause a certificate  of any officer
                         or employee of the Bank that a default has occurred and
                         that the power of disposal has become exercisable shall
                         be  conclusive  evidence  of that fact in favour of any
                         purchaser or other Person to whom any of the Securities
                         or  other  property  may  be  transferred   under  such
                         disposal  and the Client and the  Indemnifier  agree to
                         indemnify  the Bank on a full  indemnity  basis against
                         any  claim  which  may be made  against  it by any such
                         purchaser or Person by reason of any defect in title to
                         such Securities or other property;

A.5.                     initiate,  defend  or take  part in,  on  behalf of the
                         Bank, any other member of the Merrill Lynch Group,  the
                         Client and/or the  Indemnifier,  any legal  proceedings
                         relating to the Collateral,  any Collateral  Guarantee,
                         the Agreement, any Advance or any Letter of Credit that
                         it may, in its absolute discretion, deem necessary;

A.6.                     make or take part in, on  behalf of the  Client  and/or
                         the  Indemnifier,  any arrangement or composition  with
                         creditors in relation to the Collateral, any Collateral
                         Guarantee,  the Agreement, any Advance or any Letter of
                         Credit; and

A.7.                     do all such other  acts and  things as it may  consider
                         necessary   or  desirable   in   connection   with  the
                         realisation   of   the   Collateral,   the   Collateral
                         Guarantees and the security created by the Agreement.

B.                       In addition to any  general  lien,  right to combine or
                         consolidate accounts, set-off or other similar right to
                         which it may be entitled by law, contract or otherwise,
                         the Bank and each  other  member of the  Merrill  Lynch
                         Group may at any time and without  notice to the Client
                         or the Indemnifier  debit any liabilities of the Client
                         or the  Indemnifier  to it or any  other  member of the
                         Merrill Lynch Group to any account of the Client or the
                         Indemnifier with


<PAGE>

                         such member (including  without  limitation in the case
                         of the Bank the  Accounts)  and combine or  consolidate
                         all or any one or more of the then existing  respective
                         accounts  (including  without limitation in the case of
                         the  Bank  the   Accounts)   of  the   Client  and  the
                         Indemnifier  with, and liabilities of the Client or the
                         Indemnifier,  respectively,  to,  it  and/or  any other
                         member  of the  Merrill  Lynch  Group  and/or  set off,
                         transfer  or  apply  any  sum or sums  standing  to the
                         credit  of any  one or  more  of  the  Client's  or the
                         Indemnifier's  respective  accounts  (including without
                         limitation  in the case of the Bank the Accounts) in or
                         towards   satisfaction   of  any   of  the   respective
                         liabilities of the Client and the  Indemnifier to it or
                         any other member of the Merrill  Lynch  Group,  whether
                         such  respective  liabilities  of the  Client  and  the
                         Indemnifier be present or future,  actual or contingent
                         primary or collateral  and several or joint,  and under
                         this  Agreement  or  otherwise,  this  right  being  in
                         addition  and without  prejudice to any  Securities  or
                         other property  whatsoever which the Bank or such other
                         member of the Merrill  Lynch Group may now or hereafter
                         hold by way of security.

C.                       Any or all Securities or other property whatsoever held
                         in  respect  of any one or more  of the  then  existing
                         respective  accounts of the Client and the  Indemnifier
                         with any or all members of the Merrill  Lynch Group may
                         be sold or  realised by or on the  instructions  of any
                         and each such member at any time and without  notice to
                         the Client or the  Indemnifier by such member  whenever
                         in its discretion such member considers it necessary or
                         advisable  and apply the proceeds  thereof and any cash
                         balances in or towards payment and  satisfaction of all
                         sums  and   liabilities   of  the  Client   and/or  the
                         Indemnifier due or owing to such or any other member(s)
                         of the Merrill  Lynch Group (and the  provisions of A.4
                         above shall apply with any necessary modification).

D.                       The Bank (and any other  member  of the  Merrill  Lynch
                         Group)  shall have  authority  to purchase one currency
                         with  another  for the  purposes  of Clauses  7.A.5 and
                         9.B.2 and this Clause 20.

<PAGE>

E.                       The  security   created  by  the  Agreement   shall  be
                         enforceable  upon and at any time after the  occurrence
                         of an Event of  Default  (whether  or not any  Event of
                         Default is continuing at the relevant time). Section 93
                         and  the  restrictions  in  Section  103 of the  Law of
                         Property  Act 1925  shall  not  apply  to the  security
                         created by the Agreement.

21.  BORROWING OF SECURITIES
--------------------------------------------------------------------------------

A.                       Each  of  the   Client  and  the   Indemnifier   hereby
                         authorises  the  Bank  from  time  to  time  to lend to
                         itself,  as principal or otherwise,  or to others,  any
                         Securities subject to the terms hereof, irrespective of
                         the sum  Outstanding  and/or the Total Letter of Credit
                         Exposure at the relevant time.

B.                       Securities  so loaned by the Bank shall  continue to be
                         taken  into  account  in  determining   the  Collateral
                         Advance and Collateral  Maintenance  Values and for all
                         other purposes of the Agreement.

C.                       Until such time as the  Facility is  terminated  or the
                         security   created  by  the   Agreement   shall  become
                         enforceable,  whichever may first occur, the Client or,
                         as the  case may be,  the  Indemnifier  shall  (subject
                         always to the security created by and the provisions of
                         the  Agreement)  have all the incidents of ownership of
                         Securities loaned or transferred by the Bank hereunder,
                         including the right to transfer them to others.

D.                       Principal,   capital,  dividends,  interest  and  other
                         amounts paid on loaned Securities will be automatically
                         credited to an appropriate  Account.  Likewise,  if any
                         other property is distributed, offered or accrues on or
                         in respect of or in substitution for loaned Securities,
                         the  same  will   automatically   be   credited  to  an
                         appropriate Account.

E.                       No losses,  charges or expenses nor any gain or benefit
                         arising  from the  lending  of  Securities  by the Bank
                         shall be borne by  and/or  benefit  the  Client  or the
                         Indemnifier.

<PAGE>

F.                       Notwithstanding   the  use  of   expressions   such  as
                         "borrow",  "loan" and the like in this Clause 21, title
                         to Securities so loaned shall pass,  and the Bank shall
                         be obliged only to return equivalent  Securities (which
                         shall be as determined by the Bank) and it is agreed in
                         relation to legal  proceedings  that neither the Client
                         nor the Indemnifier  will seek specific  performance of
                         the Bank's obligation to deliver,  redeliver, credit or
                         return  Securities,  but without prejudice to any other
                         rights it may have.

22.  ASSIGNMENT
--------------------------------------------------------------------------------

A.                       The  Agreement  shall  benefit  and be  binding  on the
                         parties,  their  respective  successors (but subject to
                         Clause 24) and any permitted  assignee or transferee of
                         some or all of a party's  rights or  obligations  under
                         the Agreement. The Bank shall after any such assignment
                         or transfer  and to the extent (if at all)  appropriate
                         or required hold the authorisations, promises and other
                         undertakings  of the Client and the Indemnifier and the
                         security  created  by the  Agreement  for itself and as
                         trustee for each assignee and transferee. Any reference
                         in  the   Agreement  to  a  party  shall  be  construed
                         accordingly.

B.                       Neither  the Client nor the  Indemnifier  may assign or
                         transfer all or part of its rights or obligations under
                         the Agreement.

C.                       The  Bank  may at any  time  assign  all or part of its
                         rights  and/or  obligations  under the Agreement to any
                         other member(s) of the Merrill Lynch Group or, with the
                         consents  of  the  Client  and  the  Indemnifier,  such
                         consents  not to be  unreasonably  withheld or delayed,
                         any other  Person(s).  Any such assignee of such rights
                         and  obligations  shall be entitled to the full benefit
                         of the  Agreement  to the same  extent as if it were an
                         original  party in respect of the rights or obligations
                         assigned or transferred to it.

D.                       The Bank  may at any time  change  the  office  through
                         which it is acting for the purpose of the Agreement and
                         may at any time act for this purpose  through more than
                         one office.

<PAGE>

E.                       The  Bank  may  disclose  to a  potential  assignee  or
                         transferee  or any  other  Person  who has  entered  or
                         proposes to enter into  contractual  arrangements  with
                         the Bank in relation  to or  concerning  the  Agreement
                         such information about the Client,  the Indemnifier and
                         the Agreement as it may think fit.

23.  MISCELLANEOUS INDEMNITIES
--------------------------------------------------------------------------------

A.                       The  Client  and  the   Indemnifier   shall  on  demand
                         indemnify the Bank against:

A.1.                     any cost or increased cost in maintaining the Facility,
                         the Accounts,  all or any part of any Advance, any Open
                         Contract  or any  Letter of Credit or any other  amount
                         outstanding under the Agreement or any reduction in the
                         effective  return to the Bank under the Agreement or in
                         the rate of overall  return on its  capital  below that
                         which it would  have been able to  achieve  but for its
                         entering  into or giving  effect to the  Agreement,  in
                         each  case,  which,  in the  Bank's  determination,  is
                         sustained  or  incurred  directly  or  indirectly  as a
                         consequence  of, or of compliance  with, any present or
                         future law or  regulation  or any directive or the like
                         (whether  or  not  having  the  force  of  law)  of any
                         governmental  or  other  regulatory  body or  authority
                         including  any law,  regulation,  directive or the like
                         relating  to  reserve  assets,  liquidity  or  monetary
                         control  or  affecting  the  manner  in which  the Bank
                         allocates  capital  resources to its obligations  under
                         the Agreement;

A.2.                     any funding and any other  cost,  expense or  liability
                         (including  loss  of  profit,  legal  fees  and  taxes)
                         sustained  or  incurred  by the Bank (1) to render  the
                         Agreement   (including  the  security  created  by  the
                         Agreement)  enforceable  and  admissible in evidence in
                         England,  (2) in connection with the administration of,
                         or in  protecting or enforcing the Bank's rights under,
                         the Agreement  and/or any amendment  thereto,  (3) as a
                         result of the occurrence or continuance of any Event of
                         Default  (whether in  connection  with any act or thing
                         done as set out in Clause 20 or otherwise), or (4) as a
                         result of the receipt or recovery by the Bank


<PAGE>

                         of all or any part of an Advance (other than an Advance
                         interest on which is  calculated  by  reference to Base
                         Rate) or an overdue sum otherwise  than on the last day
                         of an Interest Period applicable to that Advance or, as
                         the case may be, a period  selected  by the Bank  under
                         Clause 17.F and applicable to that overdue sum; and

A.3.                     any stamp,  documentary,  registration  or similar  tax
                         payable   in   connection    with   the   entry   into,
                         registration, performance, enforcement or admissibility
                         in evidence of the Agreement and/or any such amendment,
                         supplement or waiver,  promptly and in any event before
                         any interest or penalty becomes payable,  together with
                         any  liability  with respect to or  resulting  from any
                         delay in paying or omission to pay any such tax.

B.                       The  currency  specified by the Bank under Clause 7.A.4
                         in  respect of any  particular  sum and  otherwise  the
                         currency  in  which  any  other  sum is due  under  the
                         Agreement (the "Currency of Account") shall be the sole
                         currency of account and payment in respect of that sum.
                         Any amount received or recovered by the Bank in respect
                         of that sum in a Currency  other  than the  appropriate
                         Currency of Account  (whether as a result of, or of the
                         enforcement  of, a judgment  or order of a court of any
                         jurisdiction,  in the  bankruptcy  or winding-up of the
                         Client  or, as the case may be,  the  Indemnifier,  the
                         realisation of any Collateral or otherwise)  shall only
                         constitute  a  discharge  to the Client or, as the case
                         may be, the Indemnifier, to the extent of the amount in
                         that  Currency  of Account  which the Bank is able,  in
                         accordance  with its usual  practice,  to purchase with
                         the  amount so  received  or  recovered  in that  other
                         currency on the date of that  receipt or recovery  (or,
                         if it is not  practicable to make that purchase on that
                         date on the first date on which it is practicable to do
                         so). If that amount in that Currency of Account is less
                         than the amount due to the Bank  hereunder,  the Client
                         and/or the Indemnifier shall,  without prejudice to the
                         generality of A.2 above,  indemnify it against any loss
                         sustained by it as a result.  In any event,  the Client
                         and/or


<PAGE>

                         the  Indemnifier  shall  indemnify the Bank against the
                         cost of making any such purchase.


24.  INTERPRETATION
--------------------------------------------------------------------------------

A.                       Whenever  two or more  persons  become  parties  to the
                         Agreement  as  Clients  or as  Indemnifiers,  the words
                         "Client" and "Indemnifier", respectively shall, in each
                         Clause of the Agreement,  mean and include each and all
                         of those  Persons  and (in the  case of an  individual)
                         shall mean and include the executors and administrators
                         or  other  legal  representatives  of that  Person.  In
                         addition,  all  duties,   obligations  and  liabilities
                         assumed  by  or   imposed   upon  the  Client  and  the
                         Indemnifier,  respectively  under the  Agreement  shall
                         bind all such  respective  Persons  jointly and each of
                         them severally. All duties, obligations and liabilities
                         assumed by or imposed on the Client and the Indemnifier
                         together  under the Agreement  shall be their joint and
                         several duties obligations and liabilities.

B.                       Where any instruction,  notice, demand or request is to
                         be given  by joint  Clients  or joint  Indemnifiers  it
                         shall be  sufficient  if such is given on behalf on the
                         joint Clients or joint  Indemnifiers  by one or more of
                         the joint Clients or joint Indemnifiers,  respectively,
                         and the  Bank  may  rely on such  instruction,  notice,
                         demand or  request as if the same were given by each of
                         the joint Clients or joint Indemnifiers, respectively.

C.                       In the event of the  death of any one of joint  Clients
                         or of any one of joint Indemnifiers:

C.1.                     the  surviving  Client(s)  or,  as  the  case  may  be,
                         Indemnifier(s)  shall  forthwith  give the Bank written
                         notice thereof;

C.2.                     the Bank shall have the right to determine  whether the
                         Facility  shall  continue  in  the  name  of  surviving
                         Client(s) or, as the case may be, with the guarantee of
                         the surviving Indemnifier(s) and in this regard may, at
                         the Client's (or surviving Client's) expense:

<PAGE>

C.2.a.                   request  such  information  and/or  documents  from the
                         surviving  Client(s)  or,  as  the  case  may  be,  the
                         surviving  Indemnifier(s) as it considers  relevant and
                         the  surviving  Client(s)  or, as the case may be,  the
                         surviving  Indemnifier(s)  shall supply the same within
                         14  Business  Days of the date of the  Bank's  request;
                         and/or

C.2.b.                   seek legal  opinions  from its own or the  Client's  or
                         Indemnifier's (or surviving  Client's or Indemnifier's)
                         legal  counsel  as to  such  matters  relevant  to  the
                         continuance  of the  Facility  and/or any  Letter(s) of
                         Credit as the Bank may request; and/or

C.2.c.                   take any action it may deem necessary or advisable with
                         respect thereto:

C.3.                     pending written notice from the Bank under C.4 below:

C.3.a.                   the surviving Client(s) and/or the representative(s) of
                         the estate of the deceased Client(s):

                         (i)      may (x) make any  repayment or  prepayment  of
                                  any amount  outstanding  hereunder  and/or (y)
                                  Close Out any Open Contract;

                         (ii)     may not  request  the making a new  Advance or
                                  the  Issuance  of any  Letter  of  Credit  or,
                                  subject to (i) above,  the entry into of a new
                                  Foreign Exchange  Contract or Option Contract;
                                  and

C.3.b.                   the  surviving  Client(s)  or,  as  the  case  may  be,
                         Indemnifier(s)  and/or  the  representative(s)  of  the
                         estate of the  deceased  Client(s)  or, as the case may
                         be, Indemnifier(s):

                         (i)      may, subject to Clause 13, sell any Securities
                                  hereby pledged or charged by the Client or the
                                  Indemnifier,  respectively,  provided that the
                                  proceeds  of  such  sale  are  credited  to an
                                  appropriate Account;

                         (ii)     subject  to (i)  above,  may not  request  any
                                  withdrawal of Collateral;

<PAGE>

C.4.                     the Bank may, at any time after such event,  by written
                         notice to the  surviving  Client(s)  and the  surviving
                         Indemnifier(s) declare that either:

C.4.a.                   the Facility shall continue unaffected,  subject to the
                         terms of the  Agreement,  in the name of the  surviving
                         Client(s)  and  the  rights  and   obligations  of  the
                         surviving  Indemnifier(s)  shall in any event  continue
                         unaffected,  provided  that the estate of the  deceased
                         Client or, as the case may be,  Indemnifier,  shall not
                         be  liable  for  any  obligations  under  the  Facility
                         incurred  thereafter but those respective estates shall
                         remain liable to the Bank in respect of any sum or loss
                         in  any  way   resulting   from   the   completion   of
                         transactions  initiated,  and all liabilities incurred,
                         before the date of such notice by the Bank; or

C.4.b.                   the  Facility  shall  terminate,  whereupon it shall so
                         terminate  but in every  other  respect  the  Agreement
                         shall continue  unaffected in the name of the surviving
                         Client) or, as the case may,  with the guarantee of the
                         surviving Indemnifier(s) and the estate of the deceased
                         Client  or,  as the  case  may  be,  Indemnifier  shall
                         continue to be liable  jointly and  severally  with the
                         surviving   Client(s)   or,   as  the   case   may  be,
                         Indemnifier(s)   to  the  Bank  for  (i)  all   amounts
                         outstanding,  (ii)  all  other  obligations  under  the
                         Agreement and (iii) all liabilities  incurred under the
                         Agreement at any time (whether before or after the date
                         of  notice  to the  Bank  pursuant  to C.1.  above)  in
                         respect of  Letters  of Credit  issued on or before but
                         not after the date of such notice to the Bank.

25.  INFORMATION
--------------------------------------------------------------------------------

A.                       During the  continuance of the Facility and for as long
                         as any  sum  remains  payable  to the  Bank  under  the
                         Agreement  and/or  there is any Total  Letter of Credit
                         Exposure,  the  Client and the  Indemnifier  shall each
                         immediately  on request by the Bank furnish to the Bank
                         in form and  substance  satisfactory  to the Bank  such
                         documents and such  financial and other  information as
                         to its  affairs  and (in the  case of a body or  bodies
                         corporate) their respective


<PAGE>

                         Affiliates as may from time to time be requested by the
                         Bank.

B.                       Information about the Client, the Indemnifier and their
                         respective  Affiliates  (if  applicable),  including in
                         particular   information   about   the   Accounts   and
                         information  supplied by the Client or the  Indemnifier
                         to  the  Bank,  may be  disclosed  as  required  by any
                         present or future law or regulation or any directive or
                         the like  (whether  or not  having the force of law) of
                         any governmental or other regulatory body or authority,
                         or made  available  to any other  member of the Merrill
                         Lynch Group, for both marketing and other purposes.

26.  REMEDIES AND WAIVERS
--------------------------------------------------------------------------------

No failure by the Bank to exercise, and no delay by the Bank in exercising,  any
right will operate as a waiver thereof,  nor will any single or partial exercise
of any such right preclude any other or further exercise thereof or the exercise
of any other right.  The authority to debit,  charge and pledge and the right of
set-off and other rights and remedies  provided in the  Agreement  are separate,
independent  and  cumulative  and not  exclusive of any other rights or remedies
(including  any other  security,  right of  set-off,  lien,  right to combine or
consolidate  accounts or similar right to which the Bank is at any time entitled
anywhere, whether by operation of law, contract or otherwise).

27.  PARTIAL INVALIDITY
--------------------------------------------------------------------------------

If at any time any provision of the Agreement is or becomes illegal,  invalid or
unenforceable  in any  respect  under the law of any  jurisdiction,  neither the
legality,  validity  or  enforceability  of  the  remaining  provisions  of  the
Agreement, nor the legality,  validity or enforceability of such provision under
the law of any other  jurisdiction,  shall in any way be  affected  or  impaired
thereby.  If and to the extent that the security  expressed to be created by the
Agreement is at any time and for any reason not effective as a fixed charge,  it
shall instead take as a floating charge.

28.  MISCELLANEOUS
--------------------------------------------------------------------------------

A.                       All interest  shall accrue from day to day and shall be
                         calculated  on the  basis of a 360 day year  (365  days
                         where market  practice  dictates,


<PAGE>

                         as determined  by the Bank in its absolute  discretion)
                         and the number of days elapsed.

B.                       The  certificate  of an officer or employee of the Bank
                         or any member of the Merrill  Lynch Group as to any sum
                         payable to it or any other member of the Merrill  Lynch
                         Group  shall be  conclusive  and  binding on the Client
                         and/or, as the case may be, the Indemnifier.

C.                       All  communications  and documents  under the Agreement
                         shall  either  be  in  English  or   accompanied  by  a
                         certified  translation  into  English  by a  translator
                         acceptable  to the Bank.  If there is a  conflict,  the
                         English  translation  shall  prevail  over the original
                         language version.

D.                       The English  text of this Terms  Sheet is the  original
                         authentic  version  and  shall  prevail  if  there is a
                         conflict  between it and any  translation  into another
                         language.

E.                       The   Schedule  is  provided  to  the  Client  and  the
                         Indemnifier for information only. It does not form part
                         of the Agreement,  and has no binding effect.  The Bank
                         may (but is not  obliged  to) inform the Client  and/or
                         the Indemnifier of any change to the information in the
                         Schedule.  However, whether or not it does so shall not
                         affect  the  Bank's  discretions  under  Clause  10  or
                         otherwise under the Agreement.

F.                       The Bank may at any time amend and/or supplement all or
                         any of the provisions of the  Agreement.  The Bank will
                         promptly give notice to the Client and the  Indemnifier
                         of any such amendment and/or  supplement.  However,  no
                         failure  of the Bank to give (or of the  Client  or the
                         Indemnifier  to receive)  any such notice  shall affect
                         the  validity  of  the   amendment  or   supplement  in
                         question.  Such notice  shall be given not less than 30
                         days before the  amendment or supplement in question is
                         to take  effect,  except  that,  if the  Bank is of the
                         opinion that the amendment or supplement in question is
                         of a  formal  or  technical  nature  or  to  correct  a
                         manifest error, or is not materially prejudicial to the
                         interests  of  the  Client  or  the  Indemnifier,   the
                         amendment  or


<PAGE>

                         supplement  in  question  may  take  effect  sooner  or
                         immediately.


29.  SECURITY ADDITIONAL
--------------------------------------------------------------------------------

The  security  hereby  created  shall  be  additional  to any  other  indemnity,
guarantee or security held by the Bank at any time.


30.  NOTICES
--------------------------------------------------------------------------------

A.                       The Client,  the Indemnifier  and/or, the Bank may from
                         time to time issue  instructions,  notices,  demands or
                         requests  either  orally or in writing  (but in writing
                         only where so  provided  under the  Agreement)  via any
                         officer or employee  of a member of the  Merrill  Lynch
                         Group  and any such  officer  or  employee  shall  have
                         authority  from  the  Bank to give  or  receive  on its
                         behalf such instructions,  notices, demands or requests
                         which when  delivered to or by such officer or employee
                         shall be deemed to have been made by the  Client or the
                         Indemnifier, respectively direct to the Bank or made by
                         the  Bank  direct  to the  Client  or the  Indemnifier,
                         respectively  (as the case may be).  The Bank  shall be
                         entitled  to rely on and shall  not be  liable  for any
                         action  taken or  omitted  to be  taken  in good  faith
                         pursuant to instructions,  notices, demands or requests
                         so deemed given by the Client or the  Indemnifier or on
                         any  communication  or  document  believed  by it to be
                         genuine.

B.                       Each oral  communication  under the Agreement  shall be
                         directed if to the Bank, to such officer(s) of the Bank
                         as it may notify to the Client and the Indemnifier from
                         time to time, and if to the Client or the  Indemnifier,
                         to him or such representative(s) of it or him as may be
                         notified  by it or him to the Bank  from  time to time.
                         Each written  communication  under the Agreement to the
                         Bank  shall be  addressed  to it at its  offices  at 33
                         Chester Street,  London,  SWIX 7XD,  attention:  Client
                         Services (or such other  address or attention as it may
                         notify to the Client and the  Indemnifier),  and to the
                         Client or the  Indemnifier  may be  addressed  to it at
                         such address as the Client or the


<PAGE>

                         Indemnifier  (as the case may be)  notifies to the Bank
                         in writing from time to time.  Notices to the Bank will
                         not be effective  until actually  received by the Bank.
                         Notices  to the  Client  or the  Indemnifier  shall  be
                         deemed to have been  received  five  days  after  being
                         posted and  immediately in the case of a telex,  fax or
                         oral communication.


31.  GOVERNING LAW
--------------------------------------------------------------------------------

A.                       The  Agreement  shall be governed by and  construed  in
                         accordance with English law.

B.                       In relation to any legal action or proceedings  arising
                         out   of   or  in   connection   with   the   Agreement
                         ("Proceedings"),  the Client and the Indemnifier  each,
                         for the benefit of the Bank, irrevocably submits to the
                         jurisdiction  of the courts of  England  and waives any
                         objection to  Proceedings in such courts on the grounds
                         of venue or on the grounds  that the  Proceedings  have
                         been brought in an inconvenient forum.

C.                       Nothing  shall affect the right to serve process in any
                         manner permitted by law.

D.                       Each of the Client and the Indemnifier  irrevocably and
                         generally   consents  in  respect  of  any  Proceedings
                         anywhere  to the  giving of any  relief or the issue of
                         any  process  in  connection  with  those   Proceedings
                         including,  without limitation, the making, enforcement
                         or  execution  against  any  of its  assets  whatsoever
                         (irrespective  of their,  use or  intended  use) of any
                         order or  judgment  which may be made or given in those
                         Proceedings,  and agrees that, should the Bank take any
                         Proceedings   anywhere   (whether  for  an  injunction,
                         specific   performance,   damages  or  otherwise),   no
                         immunity  (to the extent that it may at any time exist,
                         whether on the  grounds of  sovereignty  or  otherwise)
                         from those Proceedings, from attachment (whether in aid
                         of  execution,  before  judgment or  otherwise)  of its
                         assets or from  execution of judgment  shall be claimed
                         by it or on its behalf or with  respect to its  assets,
                         any such immunity being irrevocably waived.


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