KMART CORP, S-3/A, 1994-07-25

KMART CORP
S-3/A, 1994-07-25
VARIETY STORES

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<PAGE> 1

As filed with the Securities and Exchange Commission on July 25, 1994

REGISTRATION NO. 33-54043

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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------

AMENDMENT NO. 1

FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
KMART CORPORATION
(Exact Name of Registrant as Specified in its Charter)

MICHIGAN
(State or other jurisdiction of incorporation or organization)
38-0729500
(I.R.S. Employer Identification No.)

3100 WEST BIG BEAVER ROAD
TROY, MICHIGAN 48084
(810) 643-1000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
---------------------

A. N. PALIZZI
EXECUTIVE VICE PRESIDENT AND
GENERAL COUNSEL
KMART CORPORATION
3100 WEST BIG BEAVER ROAD
TROY, MICHIGAN 48084
(810) 643-1000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)

Copies to:

Verne C. Hampton, II
Dickinson, Wright, Moon,
Van Dusen & Freeman
500 Woodward Avenue, Suite 4000
Detroit, Michigan 48226

Norman C. Storey
Squire, Sanders & Dempsey
Two Renaissance Square
40 North Central Avenue, Suite 2700
Phoenix, Arizona 85004

James L. Purcell
Paul, Weiss, Rifkind,
Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.

If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following box./ /

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
---------------------
CALCULATION OF REGISTRATION FEE

<TABLE>
<S> <C> <C> <C> <C>
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PROPOSED MAXIMUM
PROPOSED MAXIMUM AGGREGATE AMOUNT OF
TITLE OF AMOUNT BEING OFFERING PRICE OFFERING REGISTRATION
SECURITIES BEING REGISTERED REGISTERED PER UNIT PRICE FEE
- -------------------------------------------------------------------------------------------------
Mortgage Pass-Through
Certificates................... $250,000,000 100% $250,000,000 $86,206.90*
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- -------------------------------------------------------------------------------------------------

* Previously paid.

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</TABLE>
<PAGE> 2

Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there by any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws
of any such State.

SUBJECT TO COMPLETION, DATED JULY 25, 1994

PROSPECTUS

$250,000,000
MORTGAGE PASS-THROUGH CERTIFICATES
(ISSUABLE IN SERIES)
-------------------------

The Mortgage Pass-Through Certificates (the "Certificates") offered hereby
and by the related Prospectus Supplements will be offered from time to time in
one or more Series in amounts, at prices and on terms to be determined at the
time of the offering. Capitalized terms used herein and not defined herein shall
have the respective meanings assigned to them in the glossary set forth on pages
through of this Prospectus (the "Glossary").

Each Certificate of each Series offered hereby will evidence a fractional
undivided beneficial ownership interest in the assets of a single separate Trust
to be created pursuant to the related Trust Agreement between National Tenant
Finance Corporation, a Delaware corporation (the "Depositor"), and the Trustee
identified in the related Prospectus Supplement. If more than one Series of
Certificates is offered by a related Prospectus Supplement, each such Series
will be issued pursuant to a single separate Trust.

The Trust Property of each Trust will include, but not be limited to, one or
more Mortgage Notes (each, a "Mortgage Note," and collectively, the "Mortgage
Notes"). Generally, each such Mortgage Note will evidence the non-recourse
obligation of a Borrower under a Loan Agreement between such Borrower and the
Depositor pursuant to which the Depositor will loan a portion of the proceeds of
the offering of the related Series of Certificates to such Borrower to finance
the acquisition or the acquisition and construction of, or to provide permanent
financing for, a facility described in the Prospectus Supplement (a "Facility")
which will be leased for use as a retail store to a tenant ("Tenant") which will
be ("Kmart") or a subsidiary (a "Subsidiary") of Kmart
identified in the Prospectus Supplement.

The Trust Property will generally also include, with respect to each
Facility, the following Collateral for the related Mortgage Note(s): (i) a
Mortgage on such Facility securing each such Mortgage Note; (ii) all of the
Depositor's rights under the Loan Agreement pursuant to which the related
Mortgage Note(s) were issued; (iii) an assignment of the related Lease, Lease
Payments and (if the Tenant is a Subsidiary) Lease Guaranty; (iv) a pledge of
certain moneys held in certain funds established pursuant to the Trust
Agreement, or Collateral Trust Agreement, if applicable; (v) a Note Put
Agreement requiring the Tenant and Kmart (if the Tenant is a Subsidiary) to
purchase the related Mortgage Note(s) upon the occurrence of a Triggering Event;
(vi) an assignment of the Borrower's right, title and interest in and to any
Construction Fund Disbursement Agreement and Construction Fund Disbursement
Agreement-Common Area related to such Facility; (vii) a pledge of certain
investments of fund balances held in the Trust, or the Collateral Trust if
applicable, and income earned thereon; and (viii) any other Loan Documents.

In some cases a Loan Agreement may provide that a Mortgage Loan will be
evidenced by two or more Mortgage Notes having different maturities. In such
event, (i) each such Mortgage Note (and, if Mortgage Notes of different
maturities are issued pursuant to two or more Loan Agreements, all of such
Mortgage Notes having the same maturity) will be held by a separate Pass-Through
Trust, and, in the case of Mortgage Notes issued under two or more Loan
Agreements, all Mortgage Notes held by each separate Pass-Through Trust will
have the same maturity, (ii) each Certificate will evidence a fractional
undivided beneficial ownership interest in the assets of the related
Pass-Through Trust and will have no rights, benefits or interests in respect of
any other Pass-Through Trust or the Pass-Through Trust Property held in any
other Pass-Through Trust, and (iii) the Collateral securing such Mortgage Notes
will be held by a Collateral Trustee for the benefit, pari passu, of all
Pass-Through Trusts holding any of the Mortgage Notes secured by such
Collateral.

Scheduled Payments on the Mortgage Notes will be passed through to the
Certificateholders of each Trust on the dates set forth in the related
Prospectus Supplement until the final scheduled Remittance Date for such Trust.
The maturity date of the Mortgage Notes acquired by each Trust will correspond
to the final scheduled Remittance Date applicable to the Certificates evidencing
interests in such Trust. Each Trust will acquire Mortgage Notes having an
interest rate higher than the interest rate on the Certificates evidencing
interests in such Trust. The aggregate principal amount of the Certificates
evidencing interests in each Trust will be equal to the aggregate principal
amount of the Mortgage Notes held in such Trust, plus the costs of issuance of
the Certificates. The difference between the interest rates on the Mortgage
Notes and the Certificates over the term of the Mortgage Notes, when added to
the payment of the principal of the Mortgage Notes, will be scheduled to result
in an amount equal to the full principal amount of the Certificates being
distributed to the Certificateholders. If the Mortgage Notes are prepaid in full
or if they are sold pursuant to the related Note Put Agreement, the Make-Whole
Premium or Termination Premium required to be paid in connection with such
prepayment or sale will, if paid, result in an amount equal to the full
principal amount of the Certificates being distributed to the
Certificateholders. However, if prepayment of the Mortgage Notes is required as
the result of a permissible Lease termination by the related Tenant, there may
be insufficient funds available to pay such full principal amount, including the
Make-Whole Premium.

The Prospectus Supplement relating to a Series of Certificates will set
forth, among other things, the following information if applicable to such
Series: (i) the aggregate principal amount, interest rate and authorized
denominations of such Certificates, (ii) certain information concerning the
Mortgage Notes and the nature of the related Facilities, (iii) the Remittance
Dates on which periodic distributions will be made to Certificateholders, and
(iv) additional information with respect to the plan of distribution of such
Certificates. The Prospectus Supplement will also set forth whether the Mortgage
Note(s) have the same maturity, in which case the Collateral will be held by the
related Trust, or whether the Mortgage Notes have different maturities, in which
case the Collateral will be held by the related Collateral Trust.

ALTHOUGH LEASE PAYMENTS IN AMOUNTS NECESSARY TO PERMIT THE TIMELY PAYMENT OF
THE REGULARLY SCHEDULED INSTALLMENTS OF PRINCIPAL OF AND INTEREST ON THE
MORTGAGE NOTE(S) WILL BE A DIRECT OBLIGATION OF A TENANT, WHICH LEASE PAYMENTS
WILL BE GUARANTEED BY KMART IF IT IS NOT THE TENANT, NEITHER THE CERTIFICATES
NOR THE MORTGAGE NOTES WILL REPRESENT AN INTEREST IN OR A DIRECT OBLIGATION OF,
OR BE GUARANTEED BY, KMART, ANY SUBSIDIARY, ANY TRUSTEE, ANY PASS-THROUGH
TRUSTEE, ANY COLLATERAL TRUSTEE, ANY BORROWER OR THE DEPOSITOR.

THE CERTIFICATES WILL REPRESENT AN INTEREST IN THE RELATED TRUST ONLY, AND
WILL NOT BE GUARANTEED BY ANY GOVERNMENTAL AGENCY OR DEPARTMENT, OR BY THE
DEPOSITOR, KMART, ANY SUBSIDIARY, THE TRUSTEE, THE COLLATERAL TRUSTEE, THE
PASS-THROUGH TRUSTEE, OR BY ANY OF THEIR RESPECTIVE AFFILIATES, OR BY ANY OTHER
PERSON OR ENTITY.

SEE "SPECIAL CONSIDERATIONS" FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD
BE CONSIDERED BEFORE PURCHASING THE CERTIFICATES OF ANY SERIES.
-------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
-------------------------

THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED THE
MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
-------------------------

The Certificates are offered when, as and if delivered to and accepted by
Sutro & Co. Incorporated and the other underwriters, if any, subject to prior
sale, withdrawal or modification of the offer without notice, the approval of
counsel and other conditions. Retain this Prospectus for future reference. This
Prospectus may not be used to consummate sales of the Certificates offered
hereby unless accompanied by a Prospectus Supplement.

SUTRO & CO. INCORPORATED
THE DATE OF THIS PROSPECTUS IS , 1994
<PAGE> 3

AVAILABLE INFORMATION

Kmart Corporation ("Kmart" or the "Company") is subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and in accordance therewith files reports, proxy
statements and other information with the Securities and Exchange Commission
(the "Commission"). Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Commission's regional offices at 7 World Trade Center, 13th Floor, New York, New
York 10048 and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 upon
payment of prescribed rates. Kmart's common stock is listed on the New York
Stock Exchange, the Chicago Stock Exchange and the Pacific Stock Exchange. Such
reports, proxy statements and other information can also be inspected and copied
at the New York Stock Exchange, 20 Broad Street, 7th Floor, New York, New York
10005.

Kmart has filed with the Commission a registration statement on Form S-3
(herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the Certificates. This Prospectus does not
contain all of the information set forth in the Registration Statement, certain
parts of which are omitted in accordance with the rules and regulations of the
Commission. The Registration Statement may be inspected without charge at the
public reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and copies thereof may be obtained from
the Commission upon payment of prescribed rates.

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

REPORTS TO CERTIFICATEHOLDERS

The Trustee will furnish to Certificateholders of each Series periodic
statements containing information with respect to principal and interest
distributions on the Certificates of that Series. Any financial information
contained in such reports will not have been examined or reported upon by an
independent public accountant. See "THE TRUSTS, PASS-THROUGH TRUSTS AND
COLLATERAL TRUSTS -- The Trust Agreements and Pass-Through Trust Agreements --
Reports to Certificateholders." Unless and until Definitive Certificates are
issued, such statements will be sent to Cede & Co., the nominee of The
Depository Trust Company, as registered holder of the Certificates. See "THE
CERTIFICATES -- Book-Entry Registration."
-------------------------

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents filed with the Commission (File No. 1-327) pursuant
to the Exchange Act are incorporated or deemed to be incorporated herein by
reference.

1. The Company's Annual Report on Form 10-K for the fiscal year ended
January 26, 1994, its Quarterly Report on Form 10-Q for the quarter ended
April 27, 1994, and its Form 8-K filed on June 8, 1994; and

2. All other documents filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
this Prospectus and prior to the termination of the offering of the
Certificates.

Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for all purposes to the extent that a statement contained in any other
subsequently filed document which is also, or is deemed to be, incorporated by
reference, modifies or replaces such statement. Any such statement so modified
or superseded shall not be deemed to constitute a part of this Prospectus,
except as so modified or superseded.

The Company will provide without charge to each person to whom this
Prospectus has been delivered, on written or oral request of such person, a copy
(without exhibits, unless such exhibits are specifically incorporated by
reference into such document(s)) of any or all documents incorporated by
reference in this Prospectus. Requests for such copies should be addressed to
Kmart Corporation, Corporate Reporting Department, 3100 West Big Beaver Road,
Troy, Michigan 48084, telephone number (810) 643-1093.

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<PAGE> 4
PROSPECTUS SUMMARY

The following summary is qualified in its entirety by reference to detailed
information appearing elsewhere in, or incorporated by reference in, this
Prospectus and by reference to the information with respect to each Series of
Certificates contained in the related Prospectus Supplement and in the Trust
Agreement, the Pass-Through Trust Agreement, the Collateral Trust Agreement, if
applicable, the Mortgage Note(s) and the Loan Documents with respect to such
Series. The forms of the Trust Agreement, the Pass-Through Trust Agreement, the
Collateral Trust Agreement and certain of the Loan Documents, each in
substantially the form in which it will be used, have been filed as exhibits to
the Registration Statement of which this Prospectus is a part.

Capitalized terms used herein and not defined herein shall have the
respective meanings assigned to them in the Glossary.

CERTIFICATES OFFERED. . . . . Mortgage Pass-Through Certificates (the
"Certificates"), issuable in Series, all as
more fully described in the related Prospectus
Supplement. The Certificates of each Series
will represent fractional undivided beneficial
ownership interests in a single separate Trust
established for the benefit of the
Certificateholders of such Series. If more than
one Series is offered by a related Prospectus
Supplement, such Series will be issued pursuant
to separate Trusts and each Certificate will
represent a fractional undivided beneficial
ownership interest in one of such separate
Trusts. Each Certificate will evidence a
fractional undivided beneficial ownership
interest in the assets of one Trust and will
have no rights, benefits or interests in
respect of any other Trust or the Trust
Property held in any other Trust. The
Certificates will mature on the date specified,
and will be subject to prepayment
distributions, as described herein, as a
consequence of the prepayment, sale or other
liquidation of the Mortgage Note(s) held by the
related Trust. See "THE CERTIFICATES."

BOOK-ENTRY REGISTRATION . . . The Certificates will be issued in
fully-registered form only and in denominations
of $1,000 or integral multiples thereof unless
otherwise specified in the related Prospectus
Supplement. Each Series will be represented by
one or more global Certificates registered in
the name of Cede & Co. as the nominee of The
Depository Trust Company. No person acquiring
an interest in the Certificates of such Series
will be entitled to receive a Definitive
Certificate representing such person's interest
in the related Trust, except in the event that
Definitive Certificates are issued under the
limited circumstances described herein. See
"THE CERTIFICATES -- Book-Entry Registration."

DISTRIBUTIONS . . . . . . . . Distributions from funds held in the
Certificate Account established pursuant to
each Trust Agreement will be made by the
Trustee to the Certificateholders to pay Debt
Service on the Remittance Dates specified in
the related Prospectus Supplement. Interest
will be paid on each Certificate at the rate of
interest specified in the related Prospectus
Supplement and will be calculated on the basis
of a 360-day year consisting of twelve 30-day
months. See "THE CERTIFICATES -- Distribution
of Scheduled Payments."

THE COMPANY . . . . . . . . . Kmart is one of the world's largest
mass-merchandise retailers. The Subsidiaries
consist of five companies which are
subsidiaries of

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<PAGE> 5
Kmart: Borders, Inc., which operates large
format book superstores; Walden Book Company
Inc., which operates mall-based bookstores;
Builders Square, Inc., which operates home
improvement superstores; OfficeMax Inc., which
operates office supply superstores; and The
Sports Authority, Inc., which operates large
format sporting goods megastores. See "KMART."

DEPOSITOR . . . . . . . . . . The Depositor is a limited purpose finance
corporation formed solely for the purpose of
facilitating the financing and sale of mortgage
loans. See "THE DEPOSITOR."
THE TRUSTS, PASS-THROUGH
TRUSTS AND COLLATERAL TRUSTS. Each Series of Certificates will be issued
pursuant to a Trust Agreement between the
Depositor and the Trustee identified in the
related Prospectus Supplement. Each Trust will
hold one or more Mortgage Notes, evidencing one
or more Mortgage Loans.

Each Mortgage Loan will be made to a separate
Borrower, pursuant to a separate Loan
Agreement, and with respect to a separate
Facility. If the Loan Agreement(s) provide for
Mortgage Loan(s) evidenced by Mortgage Note(s)
of one maturity, then, pursuant to a single
Trust Agreement, the Depositor will convey to
the Trustee, without recourse, all of its
right, title and interest in and to such
Mortgage Loan(s) and the related Mortgage
Note(s) and Loan Documents. If the Loan
Agreement(s) provide for Mortgage Notes having
different maturities, then (i) all of such
Mortgage Notes having the same maturity will be
conveyed to a separate Trust ("Pass-Through
Trust") which will be established pursuant to a
form of Trust Agreement sometimes referred to
herein as a "Pass-Through Trust Agreement" and
(ii) the Collateral for all of the Mortgage
Notes issued pursuant to such Loan Agreement(s)
will be conveyed by the Depositor to a single
Collateral Trust pursuant to a Collateral Trust
Agreement for the benefit, pari passu, of all
Pass-Through Trusts holding any of the Mortgage
Notes secured by such Collateral. If the
Mortgage Notes are issued pursuant to more than
one Loan Agreement, the Mortgage Notes relating
to separate Loan Agreements will not be
cross-collateralized or subject to
cross-default provisions. See "THE TRUSTS,
PASS-THROUGH TRUSTS AND COLLATERAL TRUSTS."

The maturity date of the Mortgage Notes
acquired by each Trust will correspond to the
final scheduled Remittance Date applicable to
the Certificates evidencing interests in such
Trust. Each Trust will acquire Mortgage Notes
having an interest rate higher than the
interest rate on the Certificates evidencing
interests in such Trust. The aggregate
principal amount of the Certificates evidencing
interests in each Trust will be equal to the
aggregate principal amount of the Mortgage
Notes held in such Trust, plus the costs of
issuance of the Certificates. The difference
between the interest rates on the Mortgage
Notes and the Certificates over the term of the
Mortgage Notes, when added to the payment of
the principal of the Mortgage Notes, will be
scheduled to result in an amount equal to the
full principal amount of the Certificates being
distributed to the Certificateholders. If the
Mortgage Notes are prepaid in full or if they
are sold pursuant to the related Note Put
Agreement, the

4
<PAGE> 6
Make-Whole Premium or Termination Premium
required to be paid in connection with such
prepayment or sale will, if paid, result in an
amount equal to the full principal amount of
the Certificates being distributed to the
Certificateholders. However, if prepayment of
the Mortgage Notes is required as the result of
a permissible Lease termination by the related
Tenant, there may be insufficient funds
available to pay such full principal amount,
including the Make-Whole Premium.

The Trust Property held by either the Trust or
the Collateral Trust will generally also
include, with respect to each Facility, the
following Collateral for the related Mortgage
Note(s): (i) a Mortgage on such Facility; (ii)
all of the Depositor's rights under the Loan
Agreement pursuant to which the related
Mortgage Note(s) were issued; (iii) an
assignment of the related Lease, Lease Payments
and, if the related Tenant is a Subsidiary,
Lease Guaranty; (iv) a pledge of certain moneys
held in certain funds established pursuant to
the Trust Agreement, or Collateral Trust
Agreement if applicable, (v) a Note Put
Agreement requiring the Tenant and Kmart (if
the Tenant is a Subsidiary) to purchase the
related Mortgage Note(s) upon the occurrence of
a Triggering Event; (vi) an assignment of the
Borrower's right, title and interest in and to
any Construction Fund Disbursement Agreement
and any Construction Fund Disbursement
Agreement-Common Area related to such Facility;
(vii) a pledge of certain investments of fund
balances held in the Trust or the Collateral
Trust, if applicable, and income earned
thereon; and (viii) any other Loan Documents.
See "STRUCTURE OF THE FINANCINGS" and "THE
TRUSTS, PASS-THROUGH TRUSTS AND COLLATERAL
TRUSTS."

MORTGAGE NOTES . . . . . . . . Each Mortgage Note will evidence the
non-recourse obligation of a Borrower under a
Loan Agreement between such Borrower and the
Depositor pursuant to which the Depositor will
loan a portion of the proceeds of the offering
of the related Series of Certificates to such
Borrower to finance the acquisition or the
acquisition and construction of, or to provide
permanent financing for, a Facility which will
be leased to a Tenant. Scheduled Payments on
the Mortgage Notes will be passed through to
the Certificateholders of each Trust on the
dates set forth in the related Prospectus
Supplement until the final scheduled Remittance
Date for such Trust. The Mortgage Notes will be
subject to prepayment prior to maturity as
described herein. Although the Mortgage Note(s)
will not be a direct obligation of, or
guaranteed by, Kmart or a Subsidiary, Lease
Payments payable by the Tenant of the related
Facility (the payment of which will be
guaranteed by Kmart if a Subsidiary is the
Tenant), together with any payments to be made
from funds on deposit in any related
Capitalized Debt Service Account, will be
scheduled to be sufficient to pay the Scheduled
Payments on the Mortgage Notes which, in turn,
will be scheduled to be sufficient to pay Debt
Service on the Certificates. See "THE MORTGAGE
NOTES, THE LOAN AGREEMENTS AND RELATED
DOCUMENTS."

5
<PAGE> 7
NOTE PUT AGREEMENT . . . . . . Kmart, a Subsidiary (if it is the Tenant) and
the Depositor will enter into a Note Put
Agreement with respect to each Mortgage Loan.
Each Note Put Agreement will provide that, in
the event (a)(i) a Tenant fails to pay when due
any Lease Payment within 10 days (or 30 days if
the Tenant is Kmart) after notice to the Tenant
of such default and (ii) if the Tenant is a
Subsidiary, Kmart fails to pay any such Lease
Payment within 30 days after notice to Kmart of
such Subsidiary's failure to do so (which
notice may be given concurrently with the
corresponding notice to such Subsidiary), (b)
completion of construction of the Facility to
be leased to the Tenant does not occur prior to
the Completion Date, or (c) if the Tenant is a
Subsidiary, a Lease Guaranty Termination occurs
(each, a Triggering Event), the Trustee, or the
Collateral Trustee if applicable, will have the
right to require the Tenant, and in the event
of the Tenant's failure to do so when the
Tenant is a Subsidiary, to require Kmart to
purchase the related Mortgage Note(s) in whole
(but not in part) at the Purchase Price (which
Purchase Price will include the Make-Whole
Premium or, under certain circumstances, the
Termination Premium). In the event the Trustee,
or the Collateral Trustee if applicable,
exercises such right, the Purchase Price will
be deposited with the Trustee, or initially
with the Collateral Trustee if applicable, and
on the next Business Day with the Pass-Through
Trustee, and such amount, less any costs and
expenses incurred by the Trustee, the Pass-
Through Trustee or the Collateral Trustee in
connection with the exercise of their rights
under the Note Put Agreement, will be
distributed to the related Certificateholders.
If the Trust holds no other Mortgage Notes,
such distribution will be the final
distribution with respect to that Series of
Certificates. If the Trust holds other Mortgage
Notes, subsequent Debt Service on the
Certificates will be adjusted as provided in
the Trust Agreement. All of the Depositor's
right, title and interest in and to the Note
Put Agreement will be assigned to the Trustee,
or to the Collateral Trustee if applicable. See
"THE NOTE PUT AGREEMENTS."

LEASE. . . . . . . . . . . . . Each Facility will be leased to a Tenant by the
related Borrower. The term of each Lease,
excluding renewal or extension terms, will
expire on or after maturity of the related
Mortgage Loan unless earlier terminated due to
certain bankruptcy, casualty loss or
condemnation events. Lease Payments will be
scheduled to be in amounts sufficient to pay
the Scheduled Payments on the related Mortgage
Notes, and such Scheduled Payments will be
scheduled to be in amounts sufficient to pay
Debt Service on the related Certificates. The
Lease Payments will be made by the related
Tenant directly to the Trustee or, if Mortgage
Notes of different maturities are issued by the
related Borrower, to the Collateral Trustee.
The obligation of the Tenant to make Lease
Payments will commence on the date the related
Mortgage Loan is made, if no construction of
the Facility is required, or, if construction
of the Facility is required, on the date
specified in the Lease regardless of whether
construction has been completed. All of the
Borrower's right, title and interest in and to
the Lease will be assigned to the Trustee, or
the Collateral Trustee if applicable. See "THE

6
<PAGE> 8
LEASES, LEASE GUARANTIES AND RELATED DOCUMENTS"
and "THE MORTGAGE NOTES, THE LOAN AGREEMENTS
AND RELATED DOCUMENTS -- The Assignments of
Leases and Rents."

LEASE GUARANTY. . . . . . . . . Kmart will enter into a Lease Guaranty with
respect to each Facility leased by a Borrower
to a Subsidiary. Pursuant to such Lease
Guaranty, Kmart will guarantee to the Borrower
the full and punctual payment, performance and
observance by the related Subsidiary of all of
the terms, conditions, covenants and
obligations to be performed and observed by the
Subsidiary under the related Lease. Except for
Kmart's or the Subsidiary's right to terminate
the Lease Guaranty in certain specific
circumstances stated in the Lease Guaranty, the
liability of Kmart under the Lease Guaranty
will be irrevocable so long as the Lease is not
terminated as permitted in the Lease. All of
the Borrower's right, title and interest in and
to the Lease Guaranty will be assigned to the
Trustee, or the Collateral Trustee if
applicable. See "THE LEASES, THE LEASE
GUARANTIES AND RELATED DOCUMENTS -- The Lease
Guaranty Agreements" and "THE MORTGAGE NOTES,
THE LOAN AGREEMENTS AND RELATED DOCUMENTS --
The Assignments of Leases and Rents."
FEDERAL INCOME TAX
CONSEQUENCES. . . . . . . . . . A Trust should be classified as a grantor trust
and not as an association taxable as a
corporation for federal income tax purposes.
Each Beneficial Owner will be treated as the
owner of a fractional undivided interest in the
Trust Property and, as such, will be required
to report a pro rata share of the income of
such Trust on its federal income tax return in
accordance with such Beneficial Owner's method
of accounting. See "CERTAIN FEDERAL INCOME TAX
CONSEQUENCES."

ERISA CONSIDERATIONS. . . . . . A fiduciary of any employee benefit plan
subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or
the Internal Revenue Code of 1986, as amended
(the "Code"), should review carefully with its
legal counsel whether the purchase or holding
of the Certificates could give rise to a
transaction prohibited or otherwise not
permissible under ERISA or the Code. See "ERISA
CONSIDERATIONS."

LEGAL INVESTMENT. . . . . . . . Institutions whose investment authority is
subject to review by federal or state
regulatory authorities should consult with
their counsel or the applicable authorities to
determine whether and to what extent the
Certificates constitute legal investments for
them. The Certificates will not constitute
"mortgage related securities" for purposes of
the Secondary Mortgage Market Enhancement Act
of 1984, as amended. See "LEGAL INVESTMENT
CONSIDERATIONS."

USE OF PROCEEDS. . . . . . . . . The proceeds from the sale of each Series of
Certificates, net of certain issuance costs
will be used by the Depositor to make Mortgage
Loans to Borrowers to finance the acquisition
or acquisition and construction of, or to
provide permanent financing for,

7
<PAGE> 9
Facilities. In the case of Mortgage Loans made
to finance the construction of Facilities, a
portion of the Mortgage Loan proceeds will be
deposited in a Capitalized Debt Service Account
maintained in a Trust or Collateral Trust, if
applicable. See "USE OF PROCEEDS."

RATING. . . . . . . . . . . . Unless otherwise specified in the related
Prospectus Supplement, each Series of
Certificates offered by means of this
Prospectus and the related Prospectus
Supplement will have an Investment Grade Rating
from the rating agency or rating agencies
identified in such Prospectus Supplement. See
"SPECIAL CONSIDERATIONS -- Limited Nature of
Credit Ratings."

8
<PAGE> 10

SPECIAL CONSIDERATIONS

Investors should consider, among other things, the following factors in
connection with the purchase of Certificates.

NON-RECOURSE OBLIGATIONS OF SPECIAL PURPOSE BORROWER; RELIANCE ON LEASE PAYMENTS

Each Borrower will be a special purpose entity without assets other than
the related Facility and its interest as landlord under the related Lease, and
the related Mortgage Note(s) will be non-recourse obligation(s) of such
Borrower. Accordingly, the only source of payments under, or with respect to,
any Mortgage Note will be the related Lease Payments (which will be guaranteed
by Kmart if the Tenant is a Subsidiary), the proceeds of any foreclosure of the
related Facility, the right, under certain circumstances, to sell such Mortgage
Note to the related Tenant or to Kmart (if the Tenant is a Subsidiary) pursuant
to the related Note Put Agreement, and, under certain other circumstances,
Insurance Proceeds or Condemnation Proceeds payable in respect of such Facility.
Although the Lease Payments under each Lease, together with amounts in the
related Capitalized Debt Service Account, if any, will be scheduled to be in
amounts sufficient to pay the Scheduled Payments under the related Mortgage
Note(s), there can be no assurance, in the event of a default under such Lease
and the related Lease Guaranty and Note Put Agreement, or a termination of such
Lease in connection with a casualty, condemnation or Borrower bankruptcy, that
the value of the related Facility, and, if applicable, the amount of Insurance
Proceeds or Condemnation Proceeds, will be sufficient to permit the payment in
full of all amounts due under the Mortgage Note(s), or that Insurance Proceeds
or Condemnation Proceeds will be received in time to make Scheduled Payments on
the dates when due.

OPTION OF TENANT TO TERMINATE LEASE UNDER CERTAIN CIRCUMSTANCES

Each Lease will provide that in the event that all of the related Facility
is permanently expropriated, the Lease will automatically terminate. If (i) the
points of ingress and egress to the public roadways are materially impaired by a
permanent expropriation by a public or quasi-public authority (with no
reasonable replacement points of ingress and egress provided) so as to render
such Facility unsuitable for its intended use, (ii) less than the whole, but
more than 10% or such other higher percentage specified in the Prospectus
Supplement, of the square footage of the building or land constituting the
Facility is permanently expropriated by public or quasi-public authority, or
(iii) damage or destruction to the Facility takes place within two years prior
to the expiration date of the initial term of the Lease and the cost of
restoration exceeds 50% of the fair market value of the Facility immediately
prior to the time such damage or destruction took place, the Tenant will have
the right to terminate the Lease. If the Lease automatically terminates or the
Tenant exercises its right to terminate the Lease, the Tenant will have no
further obligation to make Lease Payments, the related Lease Guaranty (if the
Tenant is a Subsidiary) will be terminated, and the related Mortgage Note(s)
will automatically become due and payable, together with accrued but unpaid
interest and the Make-Whole Premium. Such termination of the Lease and Lease
Guaranty (if the Tenant is a Subsidiary) and the acceleration of the maturity of
the related Mortgage Note(s) will not give the Trustee or Collateral Trustee, if
applicable, the right to sell such Mortgage Note(s) under the related Note Put
Agreement. Accordingly, the only source from which to pay the amounts due under
such Mortgage Note(s) will be any Condemnation Proceeds or Insurance Proceeds
and the proceeds of foreclosure or other sale. There can be no assurance that
such proceeds will be sufficient to pay all amounts then due under the Mortgage
Note(s), although, in the case of a termination resulting from damage or
destruction during the last two years of the term of the Lease, the resulting
Insurance Proceeds may, in light of the fact that each Mortgage Note fully
amortizes during its term, be sufficient to pay all amounts due under such
Mortgage Note, except in the case of extraordinary devaluation of the Facility
during the term of such Mortgage Note.

OPTION OF SUBSIDIARY OR KMART TO TERMINATE LEASE GUARANTY UNDER CERTAIN
CIRCUMSTANCES

Each Lease Guaranty will provide that at the option of the related
Subsidiary or Kmart, the obligations of Kmart under the Lease Guaranty may be
terminated upon the occurrence of any of the following events: (a) the related
Subsidiary achieves Investment Grade Status without regard to Kmart's credit
rating, (b) the related Lease is assigned to a third party and such third party,
or an affiliate of such third party which has

9
<PAGE> 11

guaranteed such third party's obligations under the related Lease, has achieved
or subsequently achieves Investment Grade Status, or (c) more than 50% of the
issued and outstanding capital stock of the related Subsidiary is acquired by a
third party and such third party, or affiliate thereof, which has guaranteed the
Subsidiary's obligations under the related Lease and has achieved or
subsequently achieves Investment Grade Status. Termination of the Lease Guaranty
as a result of either (a), (b) or (c) above constitutes a Triggering Event
pursuant to the related Note Put Agreement and unless the holders of
Certificates evidencing not less than a 66 2/3% Percentage Interest in the
related Mortgage Note(s) direct the Trustee not to exercise its rights under the
Note Put Agreement, the related Subsidiary, or upon the failure of the
Subsidiary to do so, Kmart must purchase the related Mortgage Note(s). A
Termination Premium is payable in connection with any such purchase. See "THE
LEASES, THE LEASE GUARANTIES AND RELATED DOCUMENTS -- The Lease Guaranty
Agreements" and "THE NOTE PUT AGREEMENTS."

BANKRUPTCY

In the event that a bankruptcy petition should be filed by or against a
Borrower under the Bankruptcy Code, the rights of Certificateholders may be
adversely affected as a result of the Borrower's exercise of certain rights and
remedies available to a debtor-in-possession under the Bankruptcy Code. If a
Borrower is in bankruptcy and rejects the related Lease, the related Consent and
Agreement will require the related Tenant to elect under Section 365(h) of the
Bankruptcy Code to remain in possession of the Facility, and to continue making
Lease Payments, for the remaining term of the Lease. However, if notwithstanding
such election, the Tenant is deprived of possession of the Facility as a result
of the Lease having been rejected by such Borrower in the bankruptcy proceeding,
such Tenant and Kmart (if the Tenant is a Subsidiary) will have no further
obligation to make Lease Payments or any further obligations under such Lease,
the related Lease Guaranty or the related Note Put Agreement.

In the event that a Tenant should become the subject of a bankruptcy
proceeding, such Tenant as a debtor-in-possession, or its bankruptcy trustee,
may reject the related Lease, thereby leaving the Borrower with an unsecured
claim for damages limited to an amount equal to the rent reserved under such
Lease, without acceleration, for the greater of one year or 15 percent (not to
exceed three years) of the remaining term of such Lease (plus rent already due
but unpaid). Alternatively, such Lease may be recharacterized by the bankruptcy
court as a secured loan to such Tenant, thereby subjecting the Borrower (and,
indirectly, the Trustee or Collateral Trustee) to certain risks associated with
being a secured creditor of such Tenant. In the event of bankruptcy proceedings
instituted by or against a Subsidiary which is a Tenant, Kmart would continue to
be obligated under the related Lease Guaranty for the payment of the
Subsidiary's obligations under the Lease, and Kmart would remain obligated under
the Note Put Agreement to purchase the related Mortgage Note(s) upon the
occurrence of a Triggering Event. See "CONSEQUENCES OF BANKRUPTCY OF A TENANT OR
A BORROWER."

LIMITED LIQUIDITY

There can be no assurance that a secondary market for the Certificates of
any Series will develop or, if it does develop, that it will provide
Certificateholders with liquidity of their investment or will continue for the
life of the Certificates. In addition, the market value of Certificates of each
Series will fluctuate with changes in prevailing interest rates. Consequently,
sale of the Certificates in any secondary market which may develop may be at a
discount from par value or from their purchase price. Certificateholders have no
optional redemption rights.

LIMITED NATURE OF CREDIT RATINGS

Any rating assigned to the Certificates by a rating agency will reflect
only such rating agency's assessment of the likelihood that timely distributions
will be made with respect to such Certificates. Such rating will not constitute
an assessment of the risk that the Leases will be terminated, or of the
likelihood that principal prepayments on the Mortgage Notes comprising part of
the Trust Property will be made by Borrowers, or address the effect of any
Make-Whole Premium or Termination Premium on the anticipated yield for any

10
<PAGE> 12

Series. As a result, such rating will not address the possibility that a
prepayment of a Mortgage Loan may cause such investor to experience a lower than
anticipated yield.

Kmart will be either the Tenant under, or (unless the guaranty is
terminated as described above) the guarantor of, all of the Leases, and, as
such, may become the ultimate source of payment on the Mortgage Loans and,
therefore, the ultimate source of payments on the Certificates. Because of this
dependence upon Kmart for the ultimate payment of the Certificates, the ratings
on the Certificates are directly related to the credit of Kmart. It should,
therefore, be expected that a reduction or withdrawal of the debt ratings of
Kmart will adversely affect the ratings on the Certificates. The long-term
unsecured debt obligations of Kmart are currently rated "BBB+" by S&P, "A3" by
Moody's and "A-" by Duff & Phelps Credit Rating Co.

KMART

BACKGROUND

Kmart Corporation ("Kmart" or "Company") is one of the world's largest mass
merchandise retailers. The dominant portion of Kmart's business consists of the
Kmart Group which as of January 26, 1994 operated a chain of 2,323 Kmart
discount stores with locations in each of the 50 United States and Puerto Rico.
The Kmart Group's international operations consisted primarily of 127 Kmart
stores in Canada and 13 department stores located in the Czech Republic and
Slovakia as of January 26, 1994. The Central European stores were acquired in
mid-1992 and represent Kmart's entry into that market. Kmart is developing
advanced distribution methods and merchandising skills to modernize, refurbish
and streamline operations in the two Central European countries. As part of its
international expansion strategy, the Kmart Group has formed joint ventures in
Mexico and Singapore and expects to open stores in those countries in 1994.
Kmart also holds significant equity interest in Coles Myer Ltd., Australia's
largest retailer, and substantially all of the Meldisco subsidiaries of Melville
Corporation, which operate the footwear departments in domestic Kmart stores.
The Kmart Group also includes the operations of PayLess Drug Stores Northwest,
Inc., which was sold in the first quarter of 1994, and PACE Membership
Warehouse, Inc., substantially all of the assets of which were sold in January
1994, each of which has been presented as a discontinued operation in the
Company's consolidated financial statements.

Kmart's Specialty Retail Groups consist of the Borders-Walden Group, the
Builders Square Group, the OfficeMax Group and The Sports Authority Group. The
Borders-Walden Group is a leading book retailer in the United States, and is
comprised of the Company's Borders, Inc. ("Borders") and Walden Book Company,
Inc. ("Walden") subsidiaries. As of January 23, 1994, Borders operated 44 large
format superstores in 22 states and the District of Columbia, each of which is
designed to be the premier book retailer in its market, and Walden, which is the
largest operator of mall-based bookstores in the United States, operated 1,159
book stores in 50 states and the District of Columbia. Although Borders and
Walden will continue to operate independently, Borders and Walden recently have
been combined under common executive leadership in order to realize synergies in
certain areas, including in the development of inventory control systems and in
merchandise distribution. The Builders Square Group, comprised of the Company's
Builders Square, Inc. subsidiary operated 177 home improvement stores in 26
states and Puerto Rico at January 23, 1994, of which 130 were Builders Square I
Stores and 47 were Builders Square II Stores. The business strategy of Builders
Square is to phase out its self-service warehouse-style home improvement stores
and operate large format superstores that emphasize customer service and provide
an extensive selection of quality products and services to repair, remodel,
redecorate and maintain both home and garden. The OfficeMax Group is one of the
largest operators of high-volume, deep discount office products superstores in
the United States, and is comprised of the Company's OfficeMax, Inc. subsidiary.
It operated 328 superstores in 38 states as of January 22, 1994. The Sports
Authority Group is the largest operator of large format sporting goods stores in
the United States in terms of both sales and number of stores and is also the
largest full-line sporting goods retailer in the United States in terms of
sales. It is comprised of the Company's The Sports Authority, Inc. subsidiary
which operated 80 sporting goods megastores at January 23, 1994.

Kmart was incorporated under the laws of the State of Michigan on March 9,
1916. The principal executive offices of Kmart are located at 3100 West Big
Beaver Road, Troy, Michigan 48084, and its telephone number is (810) 643-1000.

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<PAGE> 13

FINANCIAL INFORMATION

On January 5, 1994, the Board of Directors approved a restructuring plan
involving the Kmart Group (including Kmart Canada), the Builders Square Group
and the Borders-Walden Group. As a result, in the fourth quarter of 1993, Kmart
recorded a charge (Store Restructuring and Other Charges) to earnings of $1,348
million before taxes. Net of taxes, the charge was $862 million. The provision
included anticipated costs associated with Kmart stores which will be closed and
relocated, enlarged or refurbished in the United States and Canada, the closing
and relocation of certain Builders Square stores and the closing of
underperforming Walden stores. These costs, which represent approximately 85% of
the total, include lease obligations for store closings as well as fixed asset
writedowns, primarily furniture and fixtures, and inventory dispositions for all
affected stores. The remainder of the charge is for costs related to certain
changes to Walden's accounting policies in connection with its combination with
Borders, re-engineering programs (principally severance) and non-routine legal
contingency accrual.

In January 1994, PACE Membership Warehouse, Inc. ("PACE") sold the assets
and lease obligations of 93 of its warehouses and virtually all of the inventory
and membership files in the 34 warehouses not included in the transaction to
Sam's Club, a division of Wal-Mart, Stores, Inc. for $774 million. The book
value of the assets sold to Wal-Mart was $624 million. Operations of the 34
remaining PACE sites not included in the transaction were discontinued and PACE
is in the process of evaluating and marketing these leased sites as well as
leased premises for unopened warehouses and corporate facilities. Included in
the loss on the disposition of PACE was unamortized goodwill of $395 million,
expected remaining lease obligations in the warehouses not sold, other PACE
liabilities and a provision for additional costs anticipated during the wind-
down of PACE operations. The Company has accounted for PACE as a discontinued
operation in its financial statements.

In addition, Kmart sold its PayLess Drug Stores Northwest, Inc. ("PayLess")
subsidiary to Thrifty PayLess Holdings, Inc. ("TPH") and its subsidiary Thrifty
PayLess, Inc. for approximately $595 million in cash, $100 million in senior
notes of TPH and approximately 46% of the common equity of TPH. The book value
of PayLess' net assets sold was $1,186 million at January 26, 1994. The
structure of the sale was designed to maximize value received for PayLess. It is
Kmart's intention to divest substantially all of its interest in TPH within one
year. Management expects the disposition to be achieved either through a private
offering or other alternative means. Accordingly, Kmart has reported PayLess as
a discontinued operation in its financial statements and has recorded its
investment in TPH at anticipated net realizable value.

Kmart has called for early redemption $300 million of its 8 3/8% debentures
due January 15, 2017, using the proceeds of the sale of PayLess to redeem the
issue. The resulting redemption premium and associated cost of $18 million, net
of applicable income taxes, was recorded in 1993 as part of the loss on disposal
of the discontinued operations. The $300 million principal amount has been
included in the current portion of long-term debt. Kmart believes the effect of
recognizing the charge in 1993 rather than in the first quarter of 1994 would
not have a material effect on the results of operations for its 1993 or 1994
fiscal years.

Net income (loss) from continuing retail operations in 1993 was $(328)
million, as compared to $882 million and $789 million in 1992 and 1991,
respectively. Excluding the net of tax $862 million store restructuring and
other charges, 1993 net income from continuing retail operations was $534
million. The decrease in net income from continuing retail operations in 1993,
exclusive of the store restructuring and other charges, resulted primarily from
the inventory reduction program and gross margin pressure in U.S. Kmart stores.

Net income (loss) from discontinued operations in 1993 was $(81) million,
as compared to $59 million and $70 million in 1992 and 1991, respectively.
Discontinued operations include the results of PayLess and PACE, which have been
reclassified to reflect their respective dispositions announced in the fourth
quarter of 1993. The $81 million after-tax loss from the operation of
discontinued businesses in 1993 was the result of a significant net operating
loss at PACE which more than offset net income from PayLess. Additionally, in
1993, an after-tax loss of $521 million was realized from the disposal of
discontinued businesses.

12
<PAGE> 14

Sales in 1993 were $34.16 billion, an increase of 10.1% from the $31.03
billion in the preceding year, as restated to exclude the PACE and PayLess
businesses.

Net income from continuing retail operations for the 13 weeks ended April
27, 1994 declined to $18 million from $58 million for the 13 weeks ended April
28, 1993 as restated to exclude the discontinued PACE and PayLess businesses and
before an extraordinary item and accounting changes. First-quarter sales reached
$7.81 billion, an increase of 6.2% from $7.35 billion for the same period of
1993.

Moody's, S&P and Duff & Phelps Credit Rating Co. ("D&P") have assigned the
ratings of "A3," "BBB+" and "A-," respectively, to the senior unsecured debt of
Kmart. There can be no assurance that the ratings set forth above may not be
changed by the respective rating agency at any time.

RECENT DEVELOPMENTS

Following its regular meeting on July 19, 1994, Kmart's Board of Directors
announced that the Board and management continue their review of the total
strategy of Kmart, including the core business and the status of the specialty
retail businesses. See "SPECIAL CONSIDERATIONS -- Option of Subsidiary or Kmart
to Terminate Lease Guaranty under Certain Circumstances."

On July 21, 1994, Kmart announced that it accepted an offer from Coles Myer
which provides for the purchase of Kmart's 21.5 percent equity interest in the
Australian retailer. The transaction is conditional upon the approval of Coles
Myer shareholders and is subject to Coles Myer obtaining any necessary approval
by the Australian regulatory authorities. Under the terms of the agreement,
Kmart will receive the equivalent of A$4.55 per share for its Coles Myer shares,
which represented a premium over the then-current market price for the shares.
The closing price per share on July 20, 1994 was A$4.31. The total proceeds will
amount to approximately A$1,259 million (equivalent to U.S. $924 million.) Kmart
expects to realize a gain in the third quarter of 1994 if the transaction is
completed.

13
<PAGE> 15

KMART CORPORATION
SELECTED FINANCIAL INFORMATION
(DOLLARS IN MILLIONS)

<TABLE>
<CAPTION>
13 WEEKS ENDED
----------------------
APRIL 27, APRIL 28,
1989(1) 1990 1991 1992 1993(2) 1994 1993
------- ------- ------- ------- ------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
Summary of Operations
Sales...................... $27,670 $28,133 $29,042 $31,031 $34,156 $ 7,810 $ 7,352
Cost of merchandise sold... 20,310 20,614 21,243 22,800 25,646 5,840 5,466
Selling, general and
administrative
expenses................ 6,277 6,435 6,603 6,875 7,636 1,886 1,744
Interest expense -- net.... 353 384 384 414 477 124 122
Income (loss) from
continuing retail
operations before income
taxes................... 444 1,070 1,189 1,327 (550) 28 83
Net income (loss) from
continuing retail
operations.............. 282 712 789 882 (328) 18 58
Ratio of earnings from
continuing retail
operations to fixed
charges................. 1.8 2.9 3.0 3.0 (3) (4) (4)
Balance Sheet (at end of
period):
Working capital............ $ 3,685 $ 3,519 $ 4,682 $ 5,014 $ 4,123 $ 4,042 $ 4,593
Merchandise inventories.... 6,933 6,891 7,546 8,752 7,252 7,815 9,747
Total assets............... 13,145 13,899 15,999 18,931 17,504 17,963 20,090
Long-term debt............. 1,480 1,701 2,287 3,237 2,227 2,224 3,041
Capital leases............. 1,549 1,598 1,638 1,698 1,720 1,764 1,762
Shareholders' equity....... 4,972 5,384 6,891 7,536 6,093 6,010 7,464
</TABLE>

- -------------------------
(1) Results of operations for 1989 include a pre-tax provision of $640 million
($422 million net of tax) for store restructuring and other charges.

(2) Results of operations for 1993 include a pre-tax provision of $1,348 million
($862 million net of tax) for store restructuring and other charges.

(3) Fixed charges represent total interest charges, a portion of operating
rentals representative of the interest factor and amortization of debt
discount and expense. The deficiency of income from continuing retail
operations versus fixed charges was $581 million for the fiscal year ended
January 26, 1994.

(4) Due to the seasonality of Kmart's business, the ratio of earnings from
continuing retail operations to fixed charges for the interim period
computed as described in (3) above using 52 weeks ended April 28, 1993 was
2.8. The deficiency of income from continuing retail operations versus
fixed charges was $663 million for the 52 weeks ended April 27, 1994.

THE DEPOSITOR

National Tenant Finance Corporation will be a Delaware corporation to be
formed prior to the initial issuance of Certificates. The Depositor will be a
limited purpose financing corporation formed solely for the purpose of
facilitating the origination and sale of Mortgage Loans. The Depositor's
certificate of incorporation will limit its business to the foregoing and will
place certain other restrictions on its activities.

The Depositor's principal executive office will be located in Phoenix,
Arizona.

USE OF PROCEEDS

The proceeds from the sale of each Series of Certificates (net of expenses
incurred in connection with the issuance of such Series) will be used by the
Depositor to make Mortgage Loans to Borrowers for permanent financing of, or for
the acquisition or acquisition and construction of, Facilities.

14
<PAGE> 16

DIAGRAM OF TRANSACTION STRUCTURE
INVOLVING A MORTGAGE NOTE WITH ONE MATURITY

15
<PAGE> 17

FOOTNOTES TO DIAGRAM WITH SINGLE MATURITY:

(1) On the Closing Date, the Certificates will be issued to the
Certificateholders by the Trust in exchange for the proceeds thereof.

(2) On the Closing Date, the Trust will provide funds to the Depositor to make
a Mortgage Loan to a Borrower.

(3) On the Closing Date, the Depositor will enter into a Loan Agreement with a
Borrower pursuant to which such Borrower will deliver to the Depositor a
Mortgage Note equal to the amount of the Mortgage Loan, a Mortgage on the
Facility to be leased to the Tenant, and an assignment of the Lease and
Lease Guaranty, if applicable.

(4) On the Closing Date, if construction of the Facility is complete, the net
proceeds of the Mortgage Loan will be disbursed to the Borrower. If the
Facility will be constructed with such proceeds, then such proceeds (net of
land costs and the amount placed in the Capitalized Debt Service Account)
will be disbursed to the Escrow Agent pursuant to a Construction Fund
Disbursement Agreement among the Borrower, the Depositor, the Tenant, Kmart
(if the Tenant is a Subsidiary), the Escrow Agent, and, if applicable, the
Construction Monitor.

(5) On the Closing Date, the Borrower will enter into a Lease with the Tenant
pursuant to which the Tenant will lease the Facility for use as a retail
store.

(6) On the Closing Date, if the Tenant is a Subsidiary, the Borrower will enter
into a Lease Guaranty with Kmart pursuant to which Kmart will guaranty the
payment and performance of the Subsidiary's obligations under the Lease.

(7) On the Closing Date, the Depositor, the Tenant and Kmart (if the Tenant is
a Subsidiary) will enter into a Note Put Agreement pursuant to which the
Depositor, upon the occurrence of a Triggering Event, will be entitled to
require the Tenant and, if the Tenant is a Subsidiary and fails to perform,
to require Kmart to purchase the related Mortgage Note(s) at the Purchase
Price.

(8) On the Closing Date, if the Tenant is a Subsidiary, the Depositor and Kmart
will enter into an Indemnity Agreement pursuant to which Kmart will
indemnify the Depositor in the event any Lease Payments under the Lease or
Lease Guaranty are asserted to be voidable in any bankruptcy proceeding
filed by or against the Subsidiary.

(9) On the Closing Date, the Depositor will assign to the Trust for the benefit
of the Certificateholders the Depositor's interest in the Mortgage Note and
the related Loan Documents including the Loan Agreement, the Mortgage, the
Lease, the Lease Guaranty, if applicable, the Note Put Agreement, the
Construction Fund Disbursement Agreement, if applicable, and the Indemnity
Agreement, if applicable.

(10) On the Closing Date, if the Facility will be constructed with the proceeds
of a Mortgage Loan, the Borrower will grant the Tenant a second mortgage on
the Facility to secure the Borrower's obligation to construct the Facility
and also will grant the Tenant an option to purchase the Facility in the
event Borrower does not complete such construction on or before the
Completion Date. If the Tenant is a Subsidiary, it will assign its rights
under the second mortgage and the option to purchase to Kmart to secure the
performance by the Subsidiary of its reimbursement obligations to Kmart
with respect to payments made by Kmart under the Lease Guaranty and the
Note Put Agreement.

(11) As construction of the Facility continues, the Borrower will receive
drawdowns from the Escrow Agent pursuant to the Construction Fund
Disbursement Agreement. Each drawdown will require the approval of the
Tenant.

(12) The Tenant will make Lease Payments directly to the Trust.

(13) On each Due Date, the Trustee will use such Lease Payments to pay Scheduled
Payments on the Mortgage Note and, on each Remittance Date, will use such
Scheduled Payments on the Mortgage Note to pay Debt Service on the
Certificates. As long as no Event of Default exists under any of the
related Loan Documents (other than a non-monetary default by the Tenant
under the Lease), on every Due Date, Lease Payments received by the Trustee
in excess of amounts needed to pay Scheduled Payments on the Mortgage Note
and certain other expenses will be remitted to the Borrower.

See "STRUCTURE OF THE FINANCINGS" herein for a more detailed description of
the transaction set forth in the foregoing diagram.

16
<PAGE> 18

DIAGRAM OF TRANSACTION STRUCTURE
INVOLVING MORTGAGE NOTES WITH TWO MATURITIES

17
<PAGE> 19

FOOTNOTES TO DIAGRAM WITH TWO MATURITIES:

(1) On the Closing Date, the Certificates Series A will be issued to the
Certificateholders Series A by the Pass-Through Trust Series A in exchange
for the proceeds thereof, and the Certificates Series B will be issued to
the Certificateholders Series B by the Pass-Through Trust Series B in
exchange for the proceeds thereof. The Certificates Series A and the
Certificates Series B will have different maturities.

(2) On the Closing Date, the Pass-Through Trust Series A and the Pass-Through
Trust Series B will provide funds to the Depositor to make a Mortgage Loan
to a Borrower.

(3) On the Closing Date, the Depositor will enter into a Loan Agreement with
the Borrower pursuant to which the Borrower will deliver to the Depositor
the Mortgage Note Series A and the Mortgage Note Series B, the aggregate
principal amount of which will equal the principal amount of the Mortgage
Loan, a Mortgage on the Facility to be leased to the Tenant, and an
assignment of the Lease and Lease Guaranty, if applicable.

(5) On the Closing Date, the Borrower will enter into a Lease with the Tenant
pursuant to which the Tenant will lease the Facility for use as a retail
store.

(9) On the Closing Date, the Depositor will assign to the Pass-Through Trust
Series A for the benefit of Certificateholders Series A the Mortgage Note
Series A and will assign to the Pass-Through Trust Series B for the benefit
of Certificateholders Series B the Mortgage Note Series B. The Mortgage
Note Series A and the Mortgage Note Series B will have different maturities
that correspond, respectively, to the maturities of the Certificates Series
A and of the Certificates Series B.

(10) On the Closing Date, the Depositor will assign to the Collateral Trustee
for the benefit of the Pass-Through Trust Series A and the Pass-Through
Trust Series B the Depositor's interest in the Loan Documents including the
Loan Agreement, the Mortgage, the Lease, the Lease Guaranty, if applicable,
the Note Put Agreement, the Construction Fund Disbursement Agreement, if
applicable, and the Indemnity Agreement, if applicable.

(11) On the Closing Date, if the Facility will be constructed with the proceeds
of a Mortgage Loan, the Borrower will grant the Tenant a second mortgage on
the Facility to secure the Borrower's obligation to construct the Facility
and also will grant the Tenant an option to purchase the Facility in the
event Borrower does not complete such construction on or before the
Completion Date. If the Tenant is a Subsidiary, it will assign its rights
under the second mortgage and the option to purchase to Kmart to secure the
performance by the Subsidiary of its reimbursement obligations to Kmart
with respect to payments made by Kmart pursuant to the Lease Guaranty and
the Note Put Agreement.

(12) As construction of the Facility continues, the Borrower will receive
drawdowns from the Escrow Agent pursuant to the Construction Fund
Disbursement Agreement. Each drawdown will require the approval of the
Tenant.

(13) The Tenant will make Lease Payments directly to the Collateral Trust.

(14) On each Due Date, the Collateral Trustee will use such Lease Payments to
pay to the Pass-Through Trust Series A Scheduled Payments due on the
Mortgage Note Series A and to the Pass-Through Trust Series B Scheduled
Payments due on the Mortgage Note Series B. As long as no Event of Default
exists under any of the related Loan Documents (other than a non-monetary
default by the Tenant under the Lease), on every Due Date, Lease Payments
received by the Collateral Trustee in excess of amounts needed to pay
Scheduled Payments on the Mortgage Note Series A and on the Mortgage Note
Series B and certain other expenses will be remitted to the Borrower.

(15) On each Remittance Date, the Pass-Through Trustee Series A will use such
Scheduled Payments on the Mortgage Note Series A to pay Debt Service on the
Certificates Series A, and the Pass-Through Trustee Series B will use such
Scheduled Payments on the Mortgage Note Series B to pay Debt Service on the
Certificates Series B.

NOTE: If the proceeds of the sale of Certificates are used to finance more than
one Facility, then each Facility will be owned and, if applicable, constructed
by a different Borrower, each Loan Agreement, the Mortgage Notes issued
thereunder and related Loan Documents will relate to only one Facility, the
Facilities may be leased by the same Tenant or by different Tenants and the
foregoing structure will apply to each Mortgage Loan except that only a portion
of the proceeds of the sale of Certificates will be used to finance such
Mortgage Loan. If a Mortgage Loan is evidenced by Mortgage Notes of more than
two maturities, there will be a different Pass-Through Trust and a different
series of Certificates for each maturity. In all other respects, the foregoing
structure will apply.

See "STRUCTURE OF THE FINANCINGS" herein for a more detailed description of
the transaction set forth in the foregoing diagram.

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STRUCTURE OF THE FINANCINGS

Concurrently with the issuance of each Series of Certificates, the
Depositor will make a Mortgage Loan to a Borrower or multiple Mortgage Loans,
each to a different Borrower, with the net proceeds from the sale of the
Certificates to be used as permanent financing for, or for the financing of the
acquisition or the acquisition and construction of, one or more Facilities. Each
Facility will be owned or owned and constructed by a different Borrower
(provided that in certain cases the Borrower may have a ground leasehold
interest in, and not fee simple title to, the Demised Premises) and will be a
retail or warehouse facility to be leased to a Tenant pursuant to a Lease
between such Borrower and such Tenant. Lease Payments will be guaranteed by
Kmart pursuant to a Lease Guaranty (if the Tenant is a Subsidiary). Lease
Payments will be made by the Tenant directly to the Trustee or to the Collateral
Trustee, if applicable, and will be scheduled to be sufficient to pay Scheduled
Payments on the related Mortgage Note(s) for the period from and after the
commencement of such Lease Payments. If the Facility is constructed when the
Mortgage Loan is made, Lease Payments will commence immediately. If the Facility
is to be constructed with the proceeds of the Mortgage Loan, Lease Payments will
commence on a date specified in the Lease even if construction of the Facility
is not complete. With respect to each Mortgage Loan when Lease Payments do not
commence immediately, a portion of such Mortgage Loan will be deposited in a
related Capitalized Debt Service Account, and such amount will be sufficient to
pay Scheduled Payments that become due or accrue prior to the commencement of
Lease Payments. In connection with each Mortgage Loan, the related Borrower will
execute and deliver, or cause to be executed and delivered, to the Depositor (i)
a Mortgage Note or Mortgage Notes and Mortgage (ii) an assignment of the Lease,
Lease Payments and, if the Tenant is a Subsidiary, the Lease Guaranty and (iii)
other Loan Documents.

With respect to each Mortgage Loan, the related Tenant and Kmart (if the
Tenant is a Subsidiary) will enter into a Note Put Agreement with the Depositor
giving the Depositor the right to require such Tenant and Kmart, if applicable,
to purchase the related Mortgage Note(s) at the Purchase Price upon the
occurrence of (i) a default in the payment of Lease Payments by such Tenant
after 10 days notice (or 30 days notice if the Tenant is Kmart) of such default
and, if the Tenant is a Subsidiary, by Kmart after 30 days notice of such
default (which notice may be given concurrently with the corresponding notice to
such Subsidiary), (ii) a failure to complete construction of the related
Facility by the Completion Date or (iii) if the Tenant is a Subsidiary, the
occurrence of a Lease Guaranty Termination of the related Lease Guaranty (each,
a Triggering Event).

In consideration for the proceeds of the sale of the Certificates, and if
the related Loan Agreements provide for Mortgage Notes of a single maturity, the
Depositor will convey to the Trustee, without recourse, such Mortgage Notes and
all of the Depositor's right, title and interest in and to the related Loan
Documents, including the related Lease, Lease Guaranty, if applicable, Indemnity
Agreement, if applicable, Loan Agreement, Mortgage and Note Put Agreement. When
the Loan Agreements provide for Mortgage Notes of different maturities, the
Depositor will convey the Mortgage Notes to different Pass-Through Trustees such
that each Pass-Through Trustee will hold only Mortgage Notes having the same
maturity. All of the Depositor's right, title and interest in and to the related
Loan Documents, including the related Lease, Lease Guaranty, if applicable,
Indemnity Agreement, if applicable, Loan Agreement, Mortgage and Note Put
Agreement, will be conveyed by the Depositor to the Collateral Trustee which
will hold such property in trust for the benefit, pari passu, of the
Pass-Through Trustees as holders of the related Mortgage Notes. In no case will
Mortgage Notes issued under different Loan Agreements be cross-collateralized or
subject to cross-default provisions.

If the proceeds of a Mortgage Loan will be used to construct a Facility,
the Depositor, the related Borrower, the related Tenant, Kmart (if the Tenant is
a Subsidiary), an Escrow Agent and, in some cases, a Construction Monitor
engaged at the request of such Tenant will enter into a Construction Fund
Disbursement Agreement, which will provide that the Borrower will deposit the
net proceeds of the Mortgage Loan (less amounts used to acquire land or ground
leasehold interest, amounts used to fund the related Capitalized Debt Service
Account and amounts deposited in the related Escrow Account-Common Area, if any)
into the Escrow Account created pursuant to such Construction Fund Disbursement
Agreement. Amounts deposited in each Escrow Account will be disbursed to a
Borrower in connection with the acquisition and construction of

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<PAGE> 21
a Facility upon approval by the related Tenant and the Construction Monitor, if
one is appointed, of draw requests submitted by such Borrower. In certain
instances, Borrowers may own or acquire, or may lease, contiguous but separate
parcels of land for the purpose of constructing a shopping center to be occupied
by more than one Tenant. If the Common Area of such a shopping center is to be
built using a portion of the proceeds of the Mortgage Loans related to such
Facilities, then, in addition to the Construction Fund Disbursement Agreement,
there will be a Construction Fund Disbursement Agreement -- Common Area among
the same parties together with each additional Borrower and each additional
Tenant that is leasing a Facility that will be utilizing such Common Area. The
portion of the related Mortgage Loans that will be used to construct such Common
Area will be deposited in an Escrow Account -- Common Area established pursuant
to such Construction Fund Disbursement Agreement -- Common Area, and will be
disbursed upon approval of such Tenants and the Construction Monitor, if one is
appointed, of draw requests submitted by the Borrowers constructing such Common
Area. All of each Borrower's right, title and interest in and to any
Construction Fund Disbursement Agreement and any Construction Fund Disbursement
Agreement -- Common Area will be pledged, subject to the rights of the Tenants
and Kmart under such Agreements, to the Trustee, or to the Collateral Trustee,
if applicable.

Each Trust Agreement will provide for the establishment of a Certificate
Account and, if there is no Collateral Trust, a Rental Payment Account. Each
Collateral Trust Agreement will provide for the establishment of a Rental
Payment Account and a Mortgage Note Account. The Lease Payments related to the
Mortgage Notes held by the Trustee, or Pass-Through Trustees, if applicable,
will be paid directly by the related Tenants to such Trustee, or the Collateral
Trustee if applicable, and, unless an Event of Default has occurred under any of
the Loan Documents (other than a non-monetary default by the related Tenant
under the related Lease), deposited in the related Rental Payment Account. Such
Lease Payments will be scheduled to be in amounts sufficient to pay Scheduled
Payments on such Mortgage Notes. On the Business Day immediately preceding each
Remittance Date, amounts on deposit in the Rental Payment Account(s) equal to
Scheduled Payments due under the related Mortgage Note or Mortgage Notes will be
deposited in the Certificate Account(s) in the related Trust or Pass-Through
Trust, as applicable, and will be applied to pay Debt Service on the
Certificates as set forth in the related Prospectus Supplement. The Scheduled
Payments on the Mortgage Note(s) will be scheduled to be sufficient to pay the
interest applicable to the related Series of the Certificates and over the term
of such Mortgage Notes to pay the principal of such Series of Certificates,
including the amount of such principal expended for issuance costs. The maturity
date of each Mortgage Note acquired by a Trust or Pass-Through Trust will
correspond to the final Remittance Date applicable to the related Series of the
Certificates.

THE CERTIFICATES

The Certificates described herein and in the related Prospectus Supplements
will be issued from time to time in Series pursuant to one or more Trust
Agreements or Pass-Through Trust Agreements. Each Pass-Through Trust Agreement
(used when there are Mortgage Notes of different maturities) will contain
substantially the same terms as each other such Pass-Through Trust Agreement,
except that interest rates, scheduled payments of principal, aggregate principal
amount and final distribution dates applicable to each Series of Certificates
may differ. When there are Mortgage Notes of different maturities, the
Collateral for all such Mortgage Notes will be held in a Collateral Trust for
the benefit, pari passu, of all Pass-Through Trusts holding any of the Mortgage
Notes secured by such Collateral. The following summaries describe certain
provisions common to each Series of Certificates. The summaries do not purport
to be complete and are subject to, and are qualified in their entirety by
reference to, the Prospectus Supplement and the provisions of the Trust
Agreement or Pass-Through Trust Agreement relating to each such Series of
Certificates, the forms of which have been filed as exhibits to the Registration
Statement of which (in substantially the form in which they will be used) this
Prospectus is a part.

GENERAL

The Certificates will be issued in fully registered form only. Each
Certificate will represent a fractional undivided beneficial ownership interest
in the assets conveyed to the Trust or Pass-Through Trust pursuant to

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<PAGE> 22
which such Series of Certificates was issued. Each Certificate will correspond
to a pro rata share of the outstanding principal amount of the Mortgage Notes
held in the related Trust or Pass-Through Trust, plus a pro rata share of
issuance costs, and will be issued in minimum denominations of $1,000 initial
principal amount and integral multiples of $1,000 in excess thereof unless
otherwise specified in the related Prospectus Supplement. The Certificates will
be registered in the name of Cede & Co. ("Cede") as the nominee of The
Depository Trust Company ("DTC"). No person acquiring an interest in the
Certificates (a "Beneficial Owner") will be entitled to receive a Certificate
representing such person's interest in the Certificates, except as set forth
below under "Book-Entry Registration -- Definitive Certificates." Unless and
until Definitive Certificates are issued under the limited circumstances
described herein, all references to actions by Certificateholders shall refer to
actions taken by DTC upon instructions from DTC Participants (as defined below)
and all references herein to distributions, notices, reports and statements to
Certificateholders shall refer, as the case may be, to distributions, notices,
reports and statements to DTC or Cede, as the registered holder of the
Certificates, or to DTC Participants for distribution to Beneficial Owners in
accordance with DTC procedures. See "Book-Entry Registration."

Scheduled Payments made on the Mortgage Notes held in a Trust or a
Pass-Through Trust will be passed through to Certificateholders of such Trust or
Pass-Through Trust on the dates set forth in the related Prospectus Supplement
until the final scheduled Remittance Date for such Trust.

Each Certificate will represent a fractional undivided beneficial ownership
interest in the related Trust or Pass-Through Trust and will not have any
rights, benefits or interest in respect of any other Trust or Pass-Through Trust
or in the property held by any other Trust or Pass-Through Trust. All payments
and distributions on each Series of Certificates will be made only from the
Trust Property in which such Series of Certificates evidences an interest.
Although Lease Payments in amounts necessary to permit the timely payment of
Scheduled Payments on the Mortgage Notes, and consequently Debt Service on the
Certificates, will be direct obligations of one or more Tenants, which Lease
Payments will be guaranteed by Kmart if the related Tenant is a Subsidiary, the
Certificates themselves will not represent an interest in or obligation of
Kmart, any Subsidiary, any Trustee, any Pass-Through Trustee, any Collateral
Trustee, any Borrower or the Depositor. Each purchaser of a Certificate will
look solely to the income and proceeds from the Trust Property to the extent
available for distribution as provided in the Trust Agreement or Pass-Through
Trust Agreement.

No Trust Agreement, Pass-Through Trust Agreement, Collateral Trust
Agreement, Lease, Lease Guaranty, if applicable, Note Put Agreement or other
Loan Document will include financial covenants or other provisions that would
afford Certificateholders protection in the event of highly leveraged or other
transactions involving Kmart. The Certificateholders will have the benefit
solely of the Collateral securing the Mortgage Loan held in the related Trust
Agreement or Collateral Trust, as applicable. See "THE MORTGAGE NOTES, THE LOAN
AGREEMENTS AND RELATED DOCUMENTS."

BOOK-ENTRY REGISTRATION

General

DTC is a limited purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered pursuant to Section 17A of the Exchange Act. DTC
was created to hold securities for its participants ("DTC Participants") and to
facilitate the clearance and settlement of securities transactions between DTC
Participants through electronic book-entries, thereby eliminating the need for
physical movement of certificates. DTC Participants include securities brokers
and dealers, banks, trust companies and clearing corporations. Indirect access
to the DTC system also is available to others such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship with
a DTC Participant either directly or indirectly ("Indirect Participants").

Beneficial Owners that are not DTC Participants or Indirect Participants
but desire to purchase, sell or otherwise transfer ownership of, or other
interests in, Certificates may do so only through DTC Participants and Indirect
Participants. In addition, Beneficial Owners will receive all distributions of
principal and interest from the Trustee through DTC Participants or Indirect
Participants, as the case may be. Under a book-entry

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<PAGE> 23
format, Beneficial Owners may experience some delay in their receipt of
payments, since such payments will be forwarded by the Trustee to Cede, as
nominee for DTC. DTC will forward such payments to DTC Participants, which
thereafter will forward them to Indirect Participants or Beneficial Owners, as
the case may be, in accordance with customary industry practices. The forwarding
of such distributions to the Beneficial Owners will be the responsibility of
such DTC Participants and Indirect Participants. When book-entry registration is
used, the only "Certificateholder" of a Trust will be Cede, as nominee of DTC.
Beneficial Owners will not be recognized by the Trustee as Certificateholders,
as such term is used in the Trust Agreement or Pass-Through Trust Agreement, and
Beneficial Owners will be permitted to exercise the rights of Certificateholders
only indirectly through DTC and DTC Participants.

Under the rules, regulations and procedures creating and affecting DTC and
its operations (the "Rules"), DTC is required to make book-entry transfers of
Certificates among DTC Participants on whose behalf it acts with respect to the
Certificates and to receive and transmit distributions of principal of, premium,
if any, and interest on, the Certificates to DTC Participants. DTC Participants
and Indirect Participants with which Beneficial Owners have accounts with
respect to the Certificates similarly are required to make book-entry transfers
and receive and transmit such payments on behalf of their respective Beneficial
Owners. Accordingly, although Beneficial Owners will not possess Certificates,
the Rules provide a mechanism by which Beneficial Owners will receive payments
and will be able to transfer their interests.

Because DTC can only act on behalf of DTC Participants, who in turn act on
behalf of Indirect Participants, the ability of a Beneficial Owner to pledge
Certificates to persons or entities that do not participate in the DTC system,
or to otherwise act with respect to such Certificates, may be limited due to the
absence of a physical certificate for such Certificates.

DTC has advised the Depositor that it will take any action permitted to be
taken by a Certificateholder under the Trust Agreement only at the direction of
one or more DTC Participants to whose accounts with DTC the Certificates are
credited. Additionally, DTC has advised the Depositor that it will take such
actions with respect to any percentage of Certificateholders of each Trust only
at the direction of and on behalf of DTC Participants whose holdings include
fractional undivided interests that satisfy any such percentage. DTC may take
conflicting actions with respect to other fractional undivided interests to the
extent that such actions are taken on behalf of DTC Participants whose holdings
include such fractional undivided interests. All notices to Certificateholders
under a Trust Agreement or Pass-Through Trust Agreement will be sent to Cede so
long as the Series of Certificates issued pursuant to such Trust Agreement or
Pass-Through Trust Agreement is represented by a single Certificate registered
in the name of Cede.

None of the Company, the Depositor, the Trustee or the Pass-Through Trustee
will have any liability for any aspect of the records relating to or payments
made on account of beneficial ownership interests in the Certificates held by
Cede, as nominee for DTC, or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.

The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Company and the Depositor believe to be
reliable, but neither the Company nor the Depositor takes any responsibility for
the accuracy thereof.

Definitive Certificates

The Certificates will be issued in fully registered, certificated form
("Definitive Certificates") to Beneficial Owners or their nominees, rather than
to DTC or its nominee, only if (i) the Depositor advises the Trustee or
Pass-Through Trustee in writing that DTC is no longer willing or able to
discharge properly its responsibilities as depository with respect to the
Certificates and the Depositor is unable to appoint a qualified successor or
(ii) the Depositor, at its option and only with the prior written consent of
Kmart, elects to terminate the book-entry system through DTC.

Upon the occurrence of any event described in the immediately preceding
paragraph, the Trustee or Pass-Through Trustee will be required to notify all
Beneficial Owners through DTC Participants of the availability of Definitive
Certificates. Upon surrender by DTC of the global certificates representing the

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Certificates and receipt of instructions for re-registration, the Trustee or
Pass-Through Trustee will reissue the Certificates as Definitive Certificates to
Beneficial Owners.

Definitive Certificates will be freely transferable and exchangeable at the
office of the Trustee or Pass-Through Trustee upon compliance with the
requirements set forth in the Trust Agreement or Pass-Through Trust Agreement.
No service charge will be imposed for any registration of transfer or exchange,
but payment of a sum sufficient to cover any tax or other governmental charge
will be required.

Settlement and Payment

So long as the Certificates are registered in the name of Cede, as nominee
of DTC, all payments of distributions pursuant to the Trust Agreement or
Pass-Through Trust Agreement will be paid to DTC in immediately available funds.

Secondary trading in long-term notes and debentures of corporate issuers is
generally settled in clearing-house or next-day funds. In contrast, the
Certificates will trade in DTC's Same-Day Funds Settlement System until
maturity, and secondary market trading activity in the Certificates will
therefore be required by DTC to settle in immediately available funds. No
assurance can be given as to the effect, if any, of settlement in immediately
available funds on trading activity in the Certificates.

DISTRIBUTIONS OF SCHEDULED PAYMENTS

The Prospectus Supplement for a Series will specify the Due Dates on which
payments of interest and principal on each Mortgage Note ("Scheduled Payments")
held by a related Trust or Pass-Through Trust are due and the Remittance Dates
on which the Trustee or Pass-Through Trustee will distribute to each
Certificateholder its pro rata share of the Available Distribution Amount for
the payment of Debt Service. Each such distribution will be made by the Trustee
to holders of record of the Certificates on the close of business of the
fifteenth day preceding the related Remittance Date, except with respect to
Scheduled Payments received after the Due Date (the "Record Date"). Lease
Payments related to any Mortgage Note will be paid directly to the Trustee, or
the Collateral Trustee if applicable. On each Due Date, the Trustee will use
such Lease Payments to pay the Scheduled Payments on the related Mortgage Note
or the Collateral Trustee will transfer to the Pass-Through Trustee amounts
sufficient to pay the Scheduled Payments on the related Mortgage Notes. Such
Scheduled Payments will then be used by the Trustee, or Pass-Through Trustee, if
applicable, to pay Debt Service to the Certificateholders on the related
Remittance Date. See "THE TRUSTS, PASS-THROUGH TRUSTS AND COLLATERAL TRUSTS."

Each Mortgage Note will provide for interest at an overdue rate as
specified in the related Prospectus Supplement on any Scheduled Payments, or
portions thereof, that are not paid when due. The related Lease will provide for
a late payment rate applicable to any Lease Payments, or portions thereof, that
are not paid when due (including any grace period). The late payment rate in the
Lease is scheduled to be sufficient to pay the overdue rate on the related
Mortgage Note(s). Any portion of Scheduled Payments and overdue interest thereon
received by the Trustee or Pass-Through Trustee after the related Due Date will
be distributed to the Certificateholders, based upon their Percentage Interests,
within 10 Business Days of receipt of the corresponding late Lease Payments by
the Trustee or Collateral Trustee. The Record Date with respect to such
distributions will be the close of business on the fifteenth day prior to the
Remittance Date on which the related Scheduled Payment would have been
distributable to Certificateholders had such Scheduled Payment been timely paid
in full. See "THE MORTGAGE NOTES AND THE LOAN AGREEMENTS -- Scheduled Payments."

OTHER DISTRIBUTIONS

Certificateholders may receive other distributions on the Certificates due
to the optional prepayment of a Mortgage Note by the related Borrower, the sale
of a Mortgage Note as a result of the occurrence of a Triggering Event under the
related Note Put Agreement, the termination of a Lease due to certain casualty
or condemnation events, a condemnation that does not result in a termination of
the related Lease, or the liquidation of a Mortgage Note. The Trustee or
Pass-Through Trustee will send notice of any such distribution

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to the Certificateholders at the address shown on the Certificate Register not
less than 10 days prior to the date fixed for such distribution. The reasonable
costs of such notices incurred by the Trustee or Pass-Through Trustee will be
deducted from the amount of any such distribution.

Optional Prepayment Distribution

Unless otherwise specified in the related Prospectus Supplement, any
Mortgage Note may be prepaid at any time, in whole or in part (but if in part,
then in units of $1,000,000 or an integral multiple of $100,000 in excess
thereof), at the option of the related Borrower at a price equal to the Purchase
Price. See "THE MORTGAGE NOTES, THE LOAN AGREEMENTS AND RELATED DOCUMENTS --
Prepayments -- Optional Prepayments." Any such prepayment will be deposited with
the Trustee, or, if applicable, the Collateral Trustee, which will transfer it
to the related Pass-Through Trustees on the next Business Day. Any such
prepayment will be distributed to the Certificateholders, based on their
Percentage Interests, within 30 days of receipt by the Trustee or Collateral
Trustee. Subsequent distributions to Certificateholders of Debt Service will be
proportionately reduced as a consequence of the reduction of the aggregate
outstanding principal balance of the Mortgage Note(s) and the corresponding
reduction of Scheduled Payments.

Distribution from Proceeds of Purchase of Mortgage Note

A distribution will be made with respect to the Certificates of any Series
in the event that a Tenant or Kmart (if the Tenant is a Subsidiary) purchases a
Mortgage Note pursuant to the related Note Put Agreement. Each Note Put
Agreement will provide that, in the event (a)(i) a Tenant fails to pay when due
any Lease Payment within 10 days (or 30 days if the Tenant is Kmart) after
notice to the Tenant of such default and (ii) if the Tenant is a Subsidiary,
Kmart fails to pay any such Lease Payment within 30 days after notice to Kmart
of such Subsidiary's failure to do so (which notice may be given concurrently
with the corresponding notice to such Subsidiary), (b) completion of
construction of the Facility to be leased to the Tenant does not occur prior to
the Completion Date, or (c) if the Tenant is a Subsidiary, a Lease Guaranty
Termination occurs (each, a Triggering Event), the Trustee, or Collateral
Trustee, if applicable, will have the right to require the Tenant, and in the
event of the Tenant's failure to do so when the Tenant is a Subsidiary, to
require Kmart to purchase the related Mortgage Note(s) in whole (but not in
part) at the Purchase Price. In the event the Trustee or Collateral Trustee
exercises such right, the Purchase Price will be deposited with the Trustee, or,
if applicable, the Collateral Trustee which will transfer it to the related
Pass-Through Trustees on the next Business Day. Upon receipt of the Purchase
Price with respect to such Mortgage Note(s), the Trustee, or the Pass-Through
Trustee if applicable, will endorse the related Mortgage Notes(s), and the
Trustee, or the Collateral Trustee if applicable, will assign the related Loan
Documents to the purchaser of the Mortgage Note(s), whereupon the Trust, or the
Pass-Through Trust and the Collateral Trust if applicable, will terminate as to
such Mortgage Note(s) and the related Collateral. Any Purchase Price received by
the Trustee or Pass-Through Trustee as a result of its exercise of its rights
under a Note Put Agreement, less any expense incurred by the Trustee, or the
Pass-Through Trustee and Collateral Trustee, will be distributed to the related
Certificateholders within 30 days of the receipt of such Purchase Price by the
Trustee, or Collateral Trustee if applicable. If the Trust or Pass-Through Trust
holds any other Mortgage Note(s), Debt Service distributable to the
Certificateholders will be proportionately reduced to reflect the reduction in
the aggregate Scheduled Payments payable to the Trust or Pass-Through Trust
after the sale of the Mortgage Note(s) pursuant to the Note Put Agreement. See
"THE NOTE PUT AGREEMENTS."

Distribution Due to Casualty or Condemnation

If a Lease is terminated pursuant to the terms thereof by the related
Tenant as a result of casualty loss or condemnation, the Borrower will be
required to prepay the related Mortgage Note(s) at the Purchase Price. Any
related Condemnation Proceeds or Insurance Proceeds will be used to make such
prepayment, but there can be no assurance that such amounts will be sufficient
for that purpose. Unless the Borrower prepays the related Mortgage Note(s) at
the Purchase Price, the only additional sources of funds to make such prepayment
will be any amounts recoverable through foreclosure or other disposition of any
remaining part of the Mortgaged Property. Any such Borrower prepayment,
Insurance Proceeds or Condemnation Proceeds will

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be deposited with the Trustee, or the Collateral Trustee if applicable which on
the next Business Day will transfer a proportionate amount of such prepayment
(based upon the respective Purchase Prices of the related Mortgage Notes) to the
related Pass-Through Trustees. Any such prepayments will be distributed by the
Trustee, or Pass-Through Trustee if applicable, to the Certificateholders within
30 days of receipt of such amounts by the Trustee, or Collateral Trustee if
applicable. If the Trust or Pass-Through Trust holds Mortgage Notes relating to
other Facilities, subsequent distributions to the Certificateholders of Debt
Service will be proportionately reduced to reflect the deduction from aggregate
Scheduled Payments of principal and interest payable under the Mortgage Note(s)
required to be prepaid. In the event that Condemnation Proceeds or Insurance
Proceeds deposited with the Trustee exceed the Purchase Price for the related
Mortgage Note(s), such excess amount will be distributed to the related
Borrower.

If Lease Payments under a Lease are abated due to a condemnation which does
not result in a termination of the related Lease, Scheduled Payments on the
related Mortgage Note(s) will be reduced in proportion to the reduced Lease
Payments, and Debt Service will be correspondingly reduced. Any Condemnation
Proceeds resulting from such condemnation will be applied first by the related
Tenant toward restoration of the related Facility. In the unlikely event that
such Condemnation Proceeds exceed the amount necessary to restore the Facility,
such excess will be used to prepay a portion of the related Mortgage Note(s)
(including the Make-Whole Premium with respect to such portion). Unless such
excess Condemnation Proceeds are sufficient to prepay the portion of the related
Mortgage Note(s) that is proportionate to the reduction of Scheduled Payments as
a consequence of such Lease Payment abatement, Scheduled Payments following such
condemnation will be less than the amounts necessary to amortize the remaining
principal balance of the related Mortgage Note and to pay the interest thereon.
In that event: (i) subsequent Scheduled Payments will be applied first to pay
accrued interest on the related Mortgage Note(s) and then to reduce the
principal of such Mortgage Note(s); (ii) if any such Scheduled Payments are
insufficient to pay accrued interest on a related Mortgage Note, such unpaid
interest will, to the extent permitted under applicable law, be added to
principal; and (iii) the unpaid principal balance of the related Mortgage
Note(s), together with all accrued and unpaid interest thereon, will, if not
already paid, be due and payable at the maturity date of the Mortgage Note with
the longest term issued pursuant to the related Loan Agreement. At such maturity
date, if such amounts are not paid by the related Borrower, the only source of
payment will be the proceeds recovered from a foreclosure on the related
Facility, which depends upon the fair market value of the Facility, and there
can be no assurance that such proceeds will be sufficient to make such payments.
Such modification of the Lease Payments, the related Scheduled Payments and the
amortization of the related Mortgage Note(s) will not constitute an Event of
Default under such Mortgage Note(s) or any of the related Loan Documents or give
rise to any rights under the related Note Put Agreement. See "THE MORTGAGE
NOTES, THE LOAN AGREEMENTS AND RELATED DOCUMENTS -- Prepayments -- Mandatory
Prepayments and -- Purchase Price" and "THE LEASES, THE LEASE GUARANTIES AND
RELATED DOCUMENTS -- The Leases -- Condemnation and Casualty."

Distribution Due to Liquidation

If any Mortgage Note is liquidated as a result of foreclosure or other
disposition pursuant to the terms of the related Loan Documents, any amounts
received with respect to such liquidation, net of expenses incurred in
connection with such liquidation, will be distributed to the related
Certificateholders within 30 days of receipt by the Trustee, or Collateral
Trustee if applicable. There can be no assurance that the amounts realized from
a foreclosure or other disposition of a Mortgage Note will be sufficient to pay
the principal of, interest on and Make-Whole Premium with respect thereto. If
the Trust or Pass-Through Trust holds other Mortgage Notes, subsequent
distributions to the Certificateholders of Debt Service will be proportionately
reduced to reflect the deduction from aggregate Scheduled Payments of principal
and interest payable under the liquidated Mortgage Note. See "THE MORTGAGE
NOTES, THE LOAN AGREEMENTS AND RELATED DOCUMENTS -- Prepayments -- Liquidation."

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THE TRUSTS, PASS-THROUGH TRUSTS AND COLLATERAL TRUSTS

The following summaries describe certain provisions of the Trust
Agreements, the Pass-Through Trust Agreements and the Collateral Trust
Agreements. The summaries do not purport to be complete and are subject to, and
qualified in their entirety by reference to, the provisions of such documents,
the forms of which (each in substantially the form in which it will be used)
have been filed as exhibits to the Registration Statement of which this
Prospectus is a part. The Pass-Through Trust Agreement and the Collateral Trust
Agreement will be used when there are Mortgage Notes of more than one maturity
issued pursuant to one or more Loan Agreements. A Pass-Through Trust Agreement
will provide for the Pass-Through Trustee to hold one or more Mortgage Notes,
but Collateral securing such Mortgage Note(s), including, with respect to each
such Mortgage Note, the related Loan Agreement, Mortgage, Note Put Agreement,
Lease, Lease Guaranty, if applicable, and all other Loan Documents, will be held
by the related Collateral Trustee. For purposes of the following summaries,
unless otherwise indicated, the Trust Agreements and Pass-Through Trust
Agreements are each referred to as a "Trust Agreement," the Trust and
Pass-Through Trust are each referred to as a "Trust" and the Trustee and
Pass-Through Trustee are each referred to as a "Trustee."

GENERAL

The Depositor will sell, transfer, assign, set over and convey the Mortgage
Note(s) to the Trustee without recourse for the benefit of the
Certificateholders of each Series. If the related Loan Agreements provide for
Mortgage Notes of a single maturity, then the Trust Property of the Trust will
also include, but not be limited to, the following Collateral with respect to
each Mortgage Loan: (i) a Mortgage on the Facility securing the related Mortgage
Note(s), (ii) all of the Depositor's rights under the Loan Agreement pursuant to
which the related Mortgage Note(s) were issued, (iii) an assignment of the
related Lease, Lease Payments and Lease Guaranty, if applicable, (iv) a pledge
of certain moneys held in certain funds established pursuant to the Trust
Agreement, (v) a Note Put Agreement, (vi) an assignment of the Borrower's right,
title and interest in and to any Construction Fund Disbursement Agreement and
any Construction Fund Disbursement Agreement -- Common Area, (vii) a pledge of
certain investments of fund balances held under the Trust Agreement and income
earned thereon, and (viii) any other Loan Documents.

In some cases a Loan Agreement may provide that a Mortgage Loan will be
evidenced by two or more Mortgage Notes having different maturities. In such
case, the Depositor will sell, transfer, assign, set over and convey each such
Mortgage Note to a different Pass-Through Trust. In the event Mortgage Notes are
issued pursuant to more than one Loan Agreement, all Mortgage Notes having the
same maturity will be conveyed to a different Pass-Through Trust such that each
Pass-Through Trust will hold only Mortgage Notes having the same maturity. Each
Certificate will evidence a fractional undivided beneficial ownership interest
in the assets of the related Pass-Through Trust and will have no rights,
benefits or interests in respect of any other Pass-Through Trust or the Trust
Property held in any other Pass-Through Trust. When Mortgage Notes having
different maturities are issued, the Collateral with respect to such Mortgage
Notes will be held by the Collateral Trustee in a separate Collateral Trust for
the benefit, pari passu, of the separate Pass-Through Trusts holding the
Mortgage Notes.

ACCOUNTS

Rental Payment Account

Lease Payments (including Lease Payments made after any Due Date), payments
pursuant to any Lease Guaranty and payments pursuant to any Indemnity Agreement
with respect to each Facility will be deposited in a Rental Payment Account
created and maintained pursuant to the Trust Agreement, or, if applicable,
pursuant to the Collateral Trust Agreement, for the related Series of
Certificates to secure the obligations of the Borrower under the related Loan
Documents and Mortgage Note(s). Each Rental Payment Account will be maintained
as a fund separate and distinct from other accounts created under the Trust
Agreement or Collateral Trust Agreement and will remain the property of the
related Borrower subject to the rights of the Trustee, or the Collateral
Trustee, as the case may be, under the related Loan Documents, the related Trust
Agreement or Collateral Trust Agreement and the pledge of the Rental Payment
Account by such Borrower

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to secure the related Mortgage Loan. On each Due Date, amounts on deposit in
such Rental Payment Account equal to Scheduled Payments due under the related
Mortgage Note will be deposited in the Certificate Account maintained pursuant
to the Trust Agreement, or, if such Rental Payment Account is maintained in a
Collateral Trust pursuant to a Collateral Trust Agreement, transferred to the
Certificate Accounts maintained pursuant to the related Pass-Through Trust
Agreements and will be applied on the related Remittance Date to pay Debt
Service on the Certificates. On the second scheduled Remittance Date after the
Closing Date and on each anniversary thereafter of such Remittance Date, amounts
remaining in such Rental Payment Account after such deposit in or transfer to
the Certificate Account will be distributed to the related Borrower. If the
Trustee, or the Collateral Trustee if applicable, becomes aware of an Event of
Default under any of the related Loan Documents (other than a non-monetary
default by the related Tenant under the related Lease), amounts in the Rental
Payment Account will be transferred to the Certificate Account in the Trust or,
if applicable, to the related Mortgage Note Account in the Collateral Trust and
will continue to be held as Collateral by the Trustee or, if applicable, the
Collateral Trustee.

On the next Business Day after receipt, any Lease Payments made after the
applicable Due Date will be deposited in the Certificate Account maintained
pursuant to the Trust Agreement, or if the Rental Payment Account into which
such Lease Payments were initially deposited is maintained in a Collateral Trust
pursuant to a Collateral Trust Agreement, transferred to the Certificate Account
maintained pursuant to the related Pass-Through Trust Agreements and will be
distributed to Certificateholders within ten Business Days of receipt.

Certificate Account

All Scheduled Payments required to be made by a Borrower pursuant to the
terms of the related Mortgage Note(s) and Loan Documents will be paid from the
Lease Payments deposited in the related Rental Payment Account and will be
transferred to a Certificate Account maintained pursuant to the Trust Agreement
or, in the case of Mortgage Notes with different maturities, will be transferred
from the Rental Payment Account or Mortgage Note Account, if applicable,
maintained in the Collateral Trust to the Certificate Accounts maintained
pursuant to the Pass-Through Trust Agreements. On each Remittance Date, the
Trustee or Pass-Through Trustee will distribute to each Certificateholder its
pro rata share of the Available Distribution Amount for the payment of Debt
Service due on such Remittance Date. See "THE CERTIFICATES -- Distribution of
Scheduled Payments." In addition, any prepayments on the related Mortgage
Note(s), Insurance Proceeds or Condemnation Proceeds (to the extent required for
mandatory prepayment of the related Mortgage Note(s) pursuant to the related
Loan Agreement), net proceeds from the liquidation of the related Mortgage and
the Purchase Price under the Note Put Agreement will be deposited in the
Certificate Account, or, if there is a Collateral Trust, deposited in the
Mortgage Note Account and the next Business Day deposited in the Certificate
Accounts of the related Pass-Through Trusts, for distribution in accordance with
the Trust Agreement or Pass-Through Trust Agreements. See "THE CERTIFICATES --
Other Distributions." If an Event of Default occurs and is continuing with
respect to any Mortgage Loan (other than a non-monetary default by the related
Tenant under the related Lease), all amounts in the related Rental Payment
Account will be transferred to the Certificate Account established by such Trust
or to the Mortgage Note Account in the Collateral Trust, if applicable. All
related Lease Payments subsequently received by the Trustee will be deposited in
such Certificate Account, and all related Lease Payments subsequently received
by the Collateral Trustee will be deposited in the Mortgage Note Account. All
such amounts deposited into the Certificate Account or the Mortgage Note Account
after the occurrence of, and during the continuation of, an Event of Default
will continue to be held as Collateral by the Trustee or Collateral Trustee.

Capitalized Debt Service Account

In cases where proceeds of the Certificates are to be used to finance
construction of a Facility, Lease Payments will not commence until a date
specified in the related Prospectus Supplement. In such event, the Depositor
will establish, out of the proceeds of the related Mortgage Loan, a Capitalized
Debt Service Account in an amount sufficient to pay Scheduled Payments on the
related Mortgage Note(s) before Lease

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Payments commence. Each Capitalized Debt Service Account will be maintained as a
fund separate and distinct from other accounts created under the Trust
Agreement, or under the Collateral Trust Agreement, if applicable, and will
remain the property of the Borrower on whose behalf it was established, subject
to the rights of the Trustee, or the Collateral Trustee, as the case may be,
under the Loan Documents, the Trust Agreement or the Collateral Trust Agreement,
and the pledge of the Capitalized Debt Service Account by such Borrower to
secure the related Mortgage Loan. Amounts in the Capitalized Debt Service
Account will be transferred to the related Certificate Account(s) on the Due
Dates and in the amounts specified in the related Trust Agreement, or Collateral
Trust Agreement if applicable, to pay, in whole or in part, the Scheduled
Payments on the Mortgage Note(s). After all amounts required to be transferred
from a Capitalized Debt Service Account to the related Certificate Account have
been so transferred, any amounts remaining in such Capitalized Debt Service
Account will be transferred to the related Tenant. If an Event of Default occurs
under any of the related Loan Documents (other than a non-monetary default by
the related Tenant under the related Lease), all amounts in the related
Capitalized Debt Service Account will be transferred to the Certificate Account
or, if applicable, the related Mortgage Note Account and will continue to be
held as Collateral by the Trustee or, if applicable, the Collateral Trustee.

Mortgage Note Account

With respect to each Mortgage Loan evidenced by Mortgage Notes of different
maturities, the Collateral Trustee will establish a separate Mortgage Note
Account. Each Mortgage Note Account will be maintained as a fund separate and
distinct from other accounts created under the Collateral Trust Agreement. The
Collateral Trustee will deposit in the Mortgage Note Account any prepayments on
the related Mortgage Notes, including any Condemnation Proceeds or Insurance
Proceeds (to the extent required for mandatory prepayments of the related
Mortgage Notes pursuant to the related Loan Agreement), any Purchase Price
received pursuant to any Note Put Agreement, and any net proceeds from the
liquidation of the related Mortgage. All amounts in the Mortgage Note Account
used to pay Scheduled Payments on the Mortgage Notes will be transferred to the
Certificate Accounts of the related Pass-Through Trusts on the Due Dates. All
other amounts in the Mortgage Note Account will be transferred to the related
Pass-Through Trusts the next Business Day after receipt thereof. If an Event of
Default occurs and is continuing with respect to any Mortgage Loan or any
related Loan Document (other than a non-monetary default by the related Tenant
under the related Lease), all amounts in the related Rental Payment Account and
any Capitalized Debt Service Account will be transferred to such Mortgage Note
Account, and all related Lease Payments subsequently received will be deposited
in such Mortgage Note Account. All such amounts transferred or deposited into
the Mortgage Note Account will continue to be held as Collateral by the
Collateral Trustee.

THE TRUST AGREEMENTS AND PASS-THROUGH TRUST AGREEMENTS

The Trustee

The Trustee under each Trust Agreement will be named in the related
Prospectus Supplement. The Trustee must be a corporation or national banking
association organized under the laws of the United States of America or of any
State, must be authorized to exercise corporate trust powers, must have a
combined capital and surplus of at least $50,000,000 in the case of United
States Trust Company of New York and of at least $100,000,000 in the case of any
other trustee and must be subject to regulation and examination by state or
federal regulatory authorities.

The Trustee may resign at any time by giving written notice to the
Depositor and the Certificateholders. If a Trustee (i) fails to comply with
certain requirements of the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act") after written request for such compliance by any
Certificateholder who has been a bona fide Certificateholder for at least six
months, or (ii) ceases to be eligible to continue as Trustee under a Trust
Agreement and fails to resign after written request therefor by the Depositor or
any such bona fide Certificateholder, or (iii) becomes incapable of acting as
Trustee or becomes insolvent, then, in any such case, (i) the Depositor may
remove the Trustee and appoint a successor trustee, or (ii) subject to certain
provisions of the Trust Agreement, any Certificateholder who has been a bona
fide Certificateholder for at least six months may, on behalf of itself and all
others similarly situated, petition any court of competent jurisdiction

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for the removal of the Trustee and the appointment of a successor trustee. A
Trustee may also be removed at any time by the holders of Certificates
evidencing not less than a 66 2/3 Percentage Interest. Any resignation or
removal of a Trustee will not become effective until acceptance of the
appointment by the successor Trustee.

Each Trust Agreement will provide that the Trustee's Fees will be paid by
the Tenants pursuant to the Consent and Agreements. See "THE LEASES, LEASE
GUARANTIES AND RELATED DOCUMENTS -- The Consent and Agreements."

Modification of the Trust Agreements

Each Trust Agreement will contain provisions permitting the Depositor and
the Trustee to enter into a supplement to the Trust Agreement with the consent
of Kmart (except that no consent will be required with respect to (vii) below)
but without the consent of the Certificateholders, (i) to evidence the
succession of another Person to the Depositor and the assumption by such Person
of the Depositor's obligations under such Trust Agreement; (ii) to add to the
covenants of the Depositor for the benefit of the Certificateholders; (iii) to
cure any ambiguity, to correct or supplement any defective or inconsistent
provisions of such Trust Agreement or any supplement, or to make any other
provisions with respect to matters or questions arising under such Trust
Agreement or any supplement, provided such action will not materially adversely
affect the interests of the Certificateholders; (iv) to correct or amplify the
description of any property constituting property of the Trust or to acknowledge
any change relating to title to a Mortgaged Property that does not materially
adversely affect the rights of the Certificateholders; (v) to surrender any
rights or powers conferred upon the Depositor or add to the rights of the
Certificateholders; (vi) to evidence or provide for the appointment of a
successor trustee or to add or change any provision of such Trust Agreement as
may be necessary to provide for or facilitate the administration of the Trust
created thereby by more than one Trustee; or (vii) to add, eliminate or change
any provision under such Trust Agreement to the extent necessary to continue the
qualification of the Trust Agreement under the Trust Indenture Act; provided,
that in each case such supplement does not cause the Trust to fail to be
characterized as a trust for federal income tax purposes or the Collateral
Trust, if applicable, to become taxable as an association within the meaning of
Treasury Regulation Section 301.7701-2.

Each Trust Agreement will also contain provisions permitting the Depositor
and the Trustee, with the consent of the Certificateholders evidencing
fractional undivided beneficial ownership interests aggregating not less than a
66 2/3 Percentage Interest of the Trust, to execute supplements adding any
provisions to or changing or eliminating any of the provisions of the Trust
Agreement or modifying the rights of the Certificateholders, except that no such
supplement may, without the consent of each affected Certificateholder and, with
respect to (ii) and (unless there is a monetary default under the related Lease)
(iii), Kmart, (i) modify the provision of the Trust Agreement that concerns
notifying Certificateholders and Kmart of the occurrence of an Event of Default,
modify the provision of the Trust Agreement concerning approval by
Certificateholders of supplements to the Trust Agreement, or modify the
definition of "Certificateholder" in the Trust Agreement; (ii) modify the
definition of "Percentage Interest" in the Trust Agreement or reduce the
Percentage Interests, the consent of the Holders of Certificates of which is
required for any such supplement to the Trust Agreement, or the consent of the
Holders of Certificates of which is required for any waiver provided for in the
Trust Agreement; (iii) reduce the amount or extend the time of payment of any
amount owing or payable under the Mortgage Note(s) or distributions to be made
on any Certificate; (iv) impair the right of any Certificateholder to commence
legal proceedings to enforce a right to receive payment under such Certificate
or under the Trust Agreement; or (v) create or permit the creation of any lien
on the Trust Property or any part thereof, or deprive any Certificateholder of
the benefit of the Trust Agreement, whether by disposition of such Trust
Property or otherwise; provided however, in each case such supplement does not
cause the Trust to fail to be characterized as a trust for federal income tax
purposes or the Collateral Trust, if applicable, to become taxable as an
association within the meaning of Treasury Regulations Section 301.7701-2.

Events of Default

Events of Default under a Trust Agreement in respect of a Series of
Certificates will consist of the occurrence of any event constituting an Event
of Default under any of the Loan Documents or Mortgage

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Note(s) held by the Trustee, or Collateral Trustee if applicable. The Trustee
will be obligated to notify the Certificateholders and Kmart of any Event of
Default within the later of 90 days from the occurrence thereof or 30 days after
obtaining knowledge thereof, unless such Event of Default has been cured or
waived before the giving of such notice. Except in the case of a default in the
payment of principal of, or interest on, the Mortgage Note(s), the Trustee may
withhold such notice so long as its board of directors, the executive committee
or a committee of its directors and/or responsible officers in good faith
determines that the withholding of such notice is in the interests of the
Certificateholders.

Rights Upon Event of Default

So long as an Event of Default has not been remedied, the Trustee, at the
written direction of the holders of Certificates evidencing not less than a
66 2/3 Percentage Interest, will exercise any rights and remedies that it may
have against a Borrower, a Tenant or Kmart (if the Tenant is a Subsidiary)
pursuant to the related Loan Documents, Mortgage Note(s), Lease or Lease
Guaranty, if applicable, or at law or in equity, including injunctive relief and
specific performance, subject to the rights of the related Tenant and Kmart (if
the Tenant is a Subsidiary) under the related Lease, the related Consent and
Agreement, the related Construction Fund Disbursement Agreement, if any, and the
related Construction Fund Disbursement Agreement -- Common Area, if any;
provided that, if as a result of the occurrence of an Event of Default, the
Trustee acquires any property other than cash, whether pursuant to foreclosure
or otherwise, the Trustee will be required to sell such property as promptly as
is reasonably possible. In addition, the Trustee will not be required to take
title to a Facility in a foreclosure or similar proceeding if the Trustee has
actual knowledge or reasonably believes that all or any part of such Facility is
affected by hazardous or toxic wastes or substances. In the case of an Event of
Default which also constitutes a Triggering Event, the Trustee's rights will
include the right to require the related Tenant or Kmart (if the Tenant is a
Subsidiary) to purchase the related Mortgage Note(s) pursuant to the Note Put
Agreement. See "THE NOTE PUT AGREEMENTS."

Where there is both a Collateral Trust and a Pass-Through Trust, the
Pass-Through Trustee will hold a Mortgage Note but not the related Loan
Documents. Consequently, upon an occurrence of an Event of Default under the
Pass-Through Trust Agreement with respect to a Mortgage Note, the Pass-Through
Trustee's principal right and remedy will be to vote the principal balance of
such Mortgage Note, as directed by the Certificateholders of such Pass-Through
Trust, in favor of the exercise by the Collateral Trustee of its rights and
remedies under the related Loan Documents, and accordingly to direct the related
Collateral Trustee to exercise such rights and remedies. The Collateral Trustee
will be required to exercise such rights and remedies if such Collateral Trustee
receives written directions in favor of such exercise from the related
Pass-Through Trustees voting not less than 66 2/3% of the outstanding principal
balance of all Mortgage Note(s) affected by such Event of Default.

The occurrence of an Event of Default pursuant to the Loan Documents
relating to any Mortgage Loan, the related Mortgage Note(s), the related Lease
or the related Lease Guaranty, if applicable, will not give rise to an election
to terminate the Trust. The occurrence of such an Event of Default will not
constitute a cross default with respect to any other Mortgage Loan and will have
no effect on any Loan Documents, Mortgage Note, Lease or Lease Guaranty with
respect to any such other Mortgage Loan. Consequently, remedies may be exercised
only with respect to the related Mortgage Note and Loan Documents. Any amounts
realized upon the exercise of such remedies may be less than the Purchase Price
for such Mortgage Note. No person or entity, including the related Tenant, Kmart
(if the Tenant is a Subsidiary), the related Borrower or the Depositor has any
liability for any deficiency which may result from a sale of a Facility upon
foreclosure of the related Mortgage.

Each Trust Agreement will contain a provision entitling the Trustee,
subject to the duty of the Trustee during the continuance of an Event of Default
to act with the required standard of care, to be indemnified by the
Certificateholders before exercising any right or power under such Trust
Agreement or the related Loan Documents.

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Rights Upon Triggering Event

If a Triggering Event other than a Lease Guaranty Termination occurs, the
Trustee, at the written direction of the holders of Certificates evidencing not
less than a 66 2/3 Percentage Interest (which direction must be given within 90
days after the giving by the Trustee to the Certificateholders of a notice
stating that such Triggering Event has occurred), will exercise its rights under
the Note Put Agreement. If the Triggering Event is a Lease Guaranty Termination,
the Trustee will exercise its rights under the Note Put Agreement unless, within
30 days after notice by the Trustee to the Certificateholders of the occurrence
of such Lease Guaranty Termination, holders of Certificates evidencing not less
than a 66 2/3 Percentage Interest elect not to exercise such rights. In cases
where the Note Put Agreement is held in a Collateral Trust, the 66 2/3
Percentage Interest required for the exercise of such rights (or, in the case of
a Lease Guaranty Termination, the election not to exercise such rights) will be
computed by reference to the outstanding principal amount of all Mortgage Notes
issued pursuant to the applicable Loan Agreement. See "THE NOTE PUT AGREEMENTS."

Termination

Each Trust Agreement and the obligations of the Depositor and the Trustee
created thereby will terminate as to any Mortgage Note and the related Loan
Documents upon the final payment, prepayment in full or other liquidation of
such Mortgage Note, including the disposition of all property acquired upon
foreclosure of such Mortgage Note and the remittance of all funds due thereunder
with respect to such Mortgage Note. In no event, however, will any Trust
continue beyond the expiration of 21 years from the death of the survivor of
certain persons described in such Trust Agreement. Written notice of termination
of the Trust Agreement will be given to each Certificateholder and the final
payment on the Certificates will be made only upon surrender and cancellation of
the Certificates at the corporate trust office of the Trustee.

Reports to Certificateholders

The Trustee will furnish to Certificateholders on each Remittance Date a
statement setting forth the following information (per $1,000 aggregate
principal amount, as to (i) and (ii) below):

(i) that portion of the distribution paid on such Remittance Date
which is allocable to principal on the related Mortgage Note(s);

(ii) that portion of such distribution which is allocable to interest
on the related Mortgage Note(s);

(iii) any amounts expended by the Trustee or the Collateral Trustee,
if applicable, following an Event of Default under any of the Loan
Documents in connection with enforcing the Trustee's or the Collateral
Trustee's rights and remedies thereunder for the benefit of the
Certificateholders; and

(iv) whether any Mortgage Note is delinquent.

So long as the Certificates of any Series are registered in the name of
Cede, as nominee for DTC, on the Record Date prior to each Remittance Date, the
Trustee will request from DTC a securities position listing setting forth the
names of all DTC Participants reflected on DTC's books as holding positions in
such Certificates on such Record Date. On each Remittance Date, the Trustee will
mail to each such DTC Participant the statement described above, and will make
available additional copies as requested by such DTC Participant, to be
available for forwarding to the related Beneficial Owners.

In addition, within 90 days after the end of each calendar year, the
Trustee will prepare for each Certificateholder a report setting forth the
interest paid on the related Mortgage Note(s) during the year with respect to
the Certificates held by such Certificateholder. Such report will be prepared by
the Trustee and will be delivered by the Trustee to such DTC Participants to be
available for forwarding by DTC Participants to Beneficial Owners in the manner
described in the immediately preceding paragraph for so long as the Certificates
of any Series are registered in the name of Cede, as nominee for DTC. If the
Certificates of any Series are issued as Definitive Certificates, the Trustee
will prepare and deliver the information described above to each
Certificateholder of record as the name of such Certificateholder appears on the
records of the Trustee.

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THE COLLATERAL TRUST AGREEMENTS

The Collateral Trustee

The Collateral Trustee under each Collateral Trust Agreement, if any, will
be named in the related Prospectus Supplement. The Collateral Trustee must be a
corporation or national banking association organized under the laws of the
United States of America or of any State, authorized to exercise corporate trust
powers, must have a combined capital and surplus of at least $50,000,000 in the
case of United States Trust Company of New York and of at least $100,000,000 in
the case of any other trustee and must be subject to regulation and examination
by state or federal regulatory authorities. The same entity may serve as
Trustee, Pass-Through Trustee and Collateral Trustee.

The Collateral Trustee may resign at any time by giving written notice to
the related Pass-Through Trustees for distribution to their Certificateholders.
If a Collateral Trustee (i) ceases to be eligible to continue as Collateral
Trustee under the Collateral Trust Agreement, and fails to resign after written
request therefor by the Depositor or a related Pass-Through Trustee at the
direction of a bona fide Certificateholder who has been a bona fide
Certificateholder for at least six months or (ii) becomes incapable of acting as
Collateral Trustee or becomes insolvent, then, in any such case, the Depositor
or the related Pass-Through Trustees may remove the Collateral Trustee and
appoint a successor collateral trustee. A Collateral Trustee may also be removed
at any time by the related Pass-Through Trustees, at the direction of holders of
Certificates evidencing not less than a 66 2/3 Percentage Interest. Any
resignation or removal of a Collateral Trustee will not become effective until
acceptance of the appointment by the successor Collateral Trustee.

Each Collateral Trust Agreement will provide that the Collateral Trustee's
Fees will be paid by the related Tenants pursuant to the Consent and Agreements.
See "THE LEASE, THE LEASE GUARANTIES AND RELATED DOCUMENTS -- The Consent and
Agreements."

Modification of the Collateral Trust Agreements

Each Collateral Trust Agreement will contain provisions permitting the
Depositor and the Collateral Trustee to enter into a supplement to the
Collateral Trust Agreement with the consent of Kmart but without the consent of
the Pass-Through Trustees or the Certificateholders, (i) to evidence the
succession of another Person to the Depositor and the assumption by such Person
of the Depositor's obligations under such Collateral Trust Agreement; (ii) to
add to the covenants of the Depositor for the benefit of the Pass-Through
Trustees and the Certificateholders; (iii) to cure any ambiguity, to correct or
supplement any defective or inconsistent provisions of such Collateral Trust
Agreement or any supplement, or to make any other provisions with respect to
matters or questions arising under such Collateral Trust Agreement or any
supplement, provided such action will not materially adversely affect the
interests of the Pass-Through Trustees or the Certificateholders; (iv) to
correct or amplify the description of any property constituting property of the
Collateral Trust or to acknowledge any change relating to title to the Mortgaged
Property that does not materially adversely affect the rights of the
Certificateholders; (v) to surrender any rights or powers conferred upon the
Depositor or add to the rights of the Pass-Through Trustees for the benefit of
the Certificateholders; or (vi) to evidence or provide for a successor
Collateral Trustee or to add or change any provision of such Collateral Trust
Agreement as may be necessary to provide for or facilitate the administration of
the Collateral Trust created thereby by more than one Collateral Trustee;
provided, that in each case such supplement does not cause the Collateral Trust
to become taxable as an association within the meaning of Treasury Regulation
Section 301.7701-2 or cause any Trust to fail to be characterized as a trust for
federal income tax purposes.

Each Collateral Trust Agreement will also contain provisions permitting the
Depositor and the Collateral Trustee, with the consent of the Pass-Through
Trustees at the direction of holders of Certificates evidencing pass-through
ownership of not less than 66 2/3% of the aggregate outstanding principal
balance of all Mortgage Notes, to execute supplements adding any provisions to
or changing or eliminating any of the provisions of the Collateral Trust
Agreement or modifying the rights of the Pass-Through Trustees or the
Certificateholders, except that no such supplement may, without the consent of
each affected Certificateholder and, with respect to (ii) and (unless there is a
monetary default under the related Lease) (iii), Kmart, (i) modify the provision
of the Collateral Trust Agreement that concerns notifying the related
Pass-Through Trustees and Kmart of

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the occurrence of an Event of Default, modify the provision of the Collateral
Trust Agreement concerning approval by the related Pass-Through Trustees and
Certificateholders of supplements to the Collateral Trust Agreement, or modify
the definitions of "Pass-Through Trust," "Pass-Through Trustee" or
"Certificateholder" in the Collateral Trust Agreement, (ii) modify the
definition of "Percentage Interest" in the Collateral Trust Agreement or reduce
the Percentage Interest vote that is required for any such supplement to the
Collateral Trust Agreement, or the consent required from the related
Pass-Through Trustees for any waiver provided for in the Collateral Trust
Agreement; (iii) reduce the amount or extend the time of payment of any amount
owing or payable under the Mortgage Note(s); (iv) impair the right of any
related Pass-Through Trustee or Certificateholder to commence legal proceedings
to enforce a right to receive payment on a related Mortgage Note; or (v) create
or permit the creation of any lien on the Collateral Trust Property or any part
thereof, or deprive any Certificateholder of the benefit of the Collateral Trust
Agreement, whether by disposition of such Collateral Trust Property or
otherwise; provided, that in each such case such supplement does not cause the
Collateral Trust to become taxable as an association within the meaning of
Treasury Regulation Section 301.7701-2 or cause any Pass-Through Trust to fail
to be characterized as a trust for federal income tax purposes.

Events of Default

Events of Default under a Collateral Trust Agreement will consist of the
occurrence of any event constituting an Event of Default under any of the Loan
Documents held by the Collateral Trustee or the Mortgage Notes held by the
related Pass-Through Trustees. The Collateral Trustee will be obligated to
notify the Pass-Through Trustees of such Event of Default within five Business
Days after the Collateral Trustee obtains knowledge thereof, unless such Event
of Default has been cured or waived before the giving of such notice.

Rights Upon Event of Default

So long as an Event of Default has not been remedied, the Collateral
Trustee, at the written direction of Pass-Through Trustees voting not less than
66 2/3% of the outstanding principal balance of the Mortgage Notes affected by
such Event of Default, will exercise any rights and remedies that it may have
against a Borrower, a Tenant or, if the Tenant is a Subsidiary, Kmart pursuant
to the related Loan Documents, Mortgage Notes, Lease or Lease Guaranty, if
applicable, or at law or in equity, including injunctive relief and specific
performance, subject to the rights of the Tenant and, if the Tenant is a
Subsidiary, Kmart under the related Lease, the related Consent and Agreement,
the related Construction Fund Disbursement Agreement, if any, and the related
Construction Fund Disbursement Agreement -- Common Area, if any; provided that,
if as a result of the occurrence of an Event of Default, the Collateral Trustee
acquires any property other than cash, whether pursuant to foreclosure or
otherwise, the Collateral Trustee will sell such property as promptly as is
reasonably possible. In addition, the Collateral Trustee will not be required to
take title to a Facility in a foreclosure or similar proceeding if the
Collateral Trustee has actual knowledge or reasonably believes that all or any
part of such Facility is affected by hazardous or toxic wastes or substances. In
the case of an Event of Default which also constitutes a Triggering Event, the
rights of the Collateral Trustee will include the right to require the related
Tenant or Kmart (if the Tenant is a Subsidiary) to purchase the related Mortgage
Note(s) pursuant to the Note Put Agreement. See "THE NOTE PUT AGREEMENTS."

The occurrence of an Event of Default pursuant to any of the Loan Documents
relating to any Mortgage Loan, the related Mortgage Notes, the related Lease or
the related Lease Guaranty, if applicable, will not give rise to an election to
terminate the Collateral Trust as to such Mortgage Loan. The occurrence of such
an Event of Default will not constitute a cross default with respect to any
other Mortgage Loan held by the Collateral Trust and will have no effect on any
Loan Documents, Mortgage Note, Lease or Lease Guaranty, if applicable, with
respect to any such other Mortgage Loan. Consequently, remedies may only be
exercised with respect to the related Mortgage Note and Loan Documents. Any
amounts realized upon the exercise of such remedies may be less than the
Purchase Price for such Mortgage Note.

Each Collateral Trust Agreement will contain a provision entitling the
Collateral Trustee, subject to the duty of the Collateral Trustee during the
continuance of an Event of Default to act with the required standard

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of care, to be indemnified by the holders of Certificates evidencing
pass-through ownership of not less than 66 2/3% of the aggregate outstanding
principal balance of the Mortgage Notes before exercising any right or power
under such Collateral Trust Agreement.

Termination

Each Collateral Trust Agreement and the obligations of the Depositor and
the Collateral Trustee created thereby will terminate with respect to any
Mortgage Loan and related Loan Documents upon the final payment, prepayment in
full or other liquidation of the Mortgage Notes held by the related Pass-Through
Trusts, including the disposition of all property acquired upon foreclosure of
such Mortgage Notes, and the remittance to the Pass-Through Trustee of all funds
due with respect thereto under the Collateral Trust Agreement. In no event,
however, will any Collateral Trust continue beyond the expiration of 21 years
from the death of the survivor of certain persons described in such Collateral
Trust Agreement.

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THE MORTGAGE NOTES, THE LOAN AGREEMENTS AND RELATED DOCUMENTS

The following summaries describe certain provisions of the Mortgage Notes,
the Loan Agreements, the Mortgages and the Assignments of Leases and Rents. The
summaries do not purport to be complete and are subject to, and qualified in
their entirety by reference to, the provisions of such documents, the forms of
which (each in substantially the form in which it will be used) have been filed
as exhibits to the Registration Statement of which this Prospectus is a part.

GENERAL

Concurrently with the issuance of each Series of Certificates, the
Depositor will make one or more Mortgage Loans from the net proceeds of such
issuance to one or more Borrowers. Each Mortgage Loan will be made to a
different Borrower, which will enter into a Loan Agreement with the Depositor.
The Loan Agreements will require the Borrowers to execute and deliver to the
Depositor Mortgage Notes evidencing the Mortgage Loans together with the other
Loan Documents securing the Mortgage Loans. The Depositor in turn will assign
all of its right, title and interest in, under and to the Loan Documents and the
Mortgage Notes to the Trustee under the related Trust Agreement for such Series
if all Mortgage Notes have the same maturity. If the Mortgage Notes have
different maturities, the Depositor will assign all of its right, title and
interest in, under and to the Mortgage Notes to different Pass-Through Trusts
such that all the Mortgage Notes in any Pass-Through Trust will have the same
maturity, and the Depositor will assign all of its right, title and interest in,
under and to the other Loan Documents to the Collateral Trustee under the
related Collateral Trust Agreement.

SCHEDULED PAYMENTS

Each Mortgage Note will be a promissory note obligating a Borrower to make
Scheduled Payments which will be passed through to the Trust or Pass-Through
Trust to pay Debt Service on the related Series of Certificates. The Lease
Payments due pursuant to a Lease will be scheduled to be sufficient to pay
Scheduled Payments on the related Mortgage Notes(s). The maturity date of the
Mortgage Notes acquired by each Trust will correspond to the final scheduled
Remittance Date applicable to the Certificates evidencing interests in such
Trust. Each Mortgage Note will provide for an increased interest rate applicable
to any overdue principal or interest payments with respect to such Mortgage
Note. The related Lease will provide for a late payment rate on any Lease
Payments or portions thereof that are not paid when due (including any grace
period). The late payment rate in a Lease is scheduled to be sufficient to pay
the overdue rate on the related Mortgage Note(s). See "THE CERTIFICATES --
Distributions of Scheduled Payments."

Each Trust will acquire Mortgage Notes having an interest rate higher than
the interest rate on the Certificates evidencing interests in such Trust. The
aggregate principal amount of the Certificates evidencing interests in each
Trust will be equal to the aggregate principal amount of the Mortgage Notes held
in such Trust, plus the costs of issuance of the Certificates. The difference
between the interest rates on the Mortgage Notes and the Certificates over the
term of the Mortgage Notes, when added to the payment of the principal of the
Mortgage Notes, will be scheduled to result in an amount equal to the full
principal amount of the Certificates being distributed to the
Certificateholders.

PREPAYMENTS

Optional Prepayment

Unless otherwise specified in the related Prospectus Supplement, each
Borrower will have the option at any time and from time to time to prepay a
Mortgage Note in whole or in part (but if in part, then in units of $1,000,000
or an integral multiple of $100,000 in excess thereof) by payment of the
Purchase Price. Any optional prepayment of a Mortgage Note will be distributed
by the Trustee or Pass-Through Trustee to the related Certificateholders based
upon their Percentage Interests. See "THE CERTIFICATES -- Other Distributions --
Optional Prepayment Distribution."

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Mandatory Prepayments

A Borrower will be required to prepay a Mortgage Note at the Purchase Price
in the event the related Lease is terminated in connection with a taking by
condemnation of all or any part of, or a casualty affecting, the related
Facility. See "THE LEASES, LEASE GUARANTIES AND RELATED DOCUMENTS -- The Leases
- -- Condemnation and Casualty." In the event of any such required prepayment, any
Insurance Proceeds or Condemnation Proceeds will be used to pay the Purchase
Price of the related Mortgage Loan. There can be no assurance that such
Insurance Proceeds or Condemnation Proceeds will be sufficient to pay such
Purchase Price in full, although, in the case of a termination resulting from
damage or destruction during the last two years of the term of the Leases, the
resulting Insurance Proceeds may, in light of the fact that the Mortgage Note
fully amortizes during its term, be sufficient to pay all amounts due under the
Mortgage Note, except in the case of extraordinary devaluation of the Facility
during the term of the Mortgage Note. If the Insurance Proceeds or Condemnation
Proceeds are insufficient to pay the Purchase Price in full, the Borrower will
in all likelihood not have sufficient funds to pay the deficiency, and there can
be no assurance that such deficiency will be satisfied out of the proceeds of
any subsequent foreclosure of the related Facility.

In the event of any condemnation of a Facility which does not result in the
termination of the related Lease, the Lease Payments under such Lease may be
abated (see "THE LEASES, LEASE GUARANTIES AND RELATED DOCUMENTS -- The Leases --
Condemnation and Casualty") and, in such event, Scheduled Payments under the
related Mortgage Note(s) will be reduced in the same proportion as Lease
Payments have been abated under such Lease. Any Condemnation Proceeds resulting
from such condemnation will be applied by the related Tenant to restore the
related Facility. In the unlikely event that such Condemnation Proceeds exceed
the amount necessary to restore the Facility, such excess will be used to prepay
a portion of the related Mortgage Note(s) (including the Make-Whole Premium with
respect to such portion). Subsequent Scheduled Payments will be applied first to
pay accrued interest on the related Mortgage Note(s) and then to reduce the
principal of such Mortgage Note(s), and any unpaid interest will, to the extent
permitted under applicable law, be capitalized. The unpaid principal amount of
such Mortgage Note(s), together with all accrued and unpaid interest, will be
due and payable at the maturity date of Mortgage Note with the longest term
issued pursuant to the related Loan Agreement. See "THE CERTIFICATES -- Other
Distributions -- Distribution Due to Casualty or Condemnation."

Any prepayment of any Mortgage Loan in connection with a casualty or
condemnation will be distributed by the Trustee or Pass-Through Trustee to the
related Certificateholders based upon their Percentage Interests.

Liquidation

If an Event of Default under a Loan Document occurs (other than a
non-monetary default by a Tenant under a Lease) and if the Trustee, or
Collateral Trustee if applicable, accelerates the related Mortgage Note, the
related Borrower will be required to pay the Purchase Price to the Trustee or
Collateral Trustee. All proceeds of any foreclosure or any other liquidation of
the related Mortgage Note under the related Loan Documents, net of expenses
incurred in connection therewith, from such liquidation will be applied toward
payment of such Purchase Price. All of such net proceeds will be distributed by
the Trustee, or the Pass-Through Trustee if applicable, to the
Certificateholders based upon their Percentage Interests. There can be no
assurance that the proceeds of any such liquidation will be sufficient to pay
the Purchase Price of the related Mortgage Note(s). See "THE CERTIFICATES --
Other Distributions -- Distribution Due to Liquidation."

Purchase Price

The Purchase Price for a Mortgage Note in case of an optional prepayment,
mandatory prepayment or liquidation will be equal to the outstanding principal
balance of such Mortgage Note, accrued interest thereon and the Make-Whole
Premium related thereto. Under the laws of certain states the enforceability of
the obligation to pay amounts similar to the Make-Whole Premium is unclear, and
there can be no assurance that

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the obligation to pay the Make-Whole Premium will be enforceable in the event of
a prepayment or acceleration of a Mortgage Note.

EVENTS OF DEFAULT

Unless otherwise provided in the Prospectus Supplement for a Series, Events
of Default under each Loan Agreement and Mortgage Note will include the
following (after the expiration of any applicable cure periods):

(i) a default in the payment or prepayment of the principal of,
Make-Whole Premium, if any, or interest on, a Mortgage Note when due;

(ii) if applicable, the construction of a Facility ceases for a period
longer than that specified in the Loan Agreement or is abandoned or is not
completed in compliance with the Loan Agreement on or before the date
specified in the Loan Agreement;

(iii) the occurrence of a default under a Lease, a Lease Guaranty, if
applicable, or an Indemnity Agreement, if applicable; and

(iv) the occurrence of any default by Kmart in the performance of its
obligations under a Note Put Agreement.

Each Loan Agreement also will provide for other Events of Default that are
customary in mortgage loan transactions. An event or condition giving rise to an
Event of Default under a Loan Agreement will not necessarily give rise to an
Event of Default under the related Lease or permit the Trustee, or the
Collateral Trustee if applicable, to exercise any remedy against the Tenant or,
if the Tenant is a Subsidiary, Kmart under the related Lease, Lease Guaranty, if
applicable, or Note Put Agreement. An Event of Default with respect to one
Mortgage Loan will not constitute an Event of Default under any other Mortgage
Loan or the Loan Documents related thereto or permit the Trustee, or Collateral
Trustee if applicable, to exercise any remedies with respect to any other
Mortgage Loan or the Loan Documents related thereto.

REMEDIES UPON EVENT OF DEFAULT

If any Event of Default occurs and is continuing following any applicable
cure period, the Trustee, or the Collateral Trustee if applicable, as assignee
of the Depositor will upon the direction of 66 2/3 Percentage Interests of the
Certificateholders, declare the entire unpaid principal amount of such Mortgage
Note, interest accrued thereon and the Make-Whole Premium immediately due and
payable and the Trustee, or the Collateral Trustee if applicable, will be
entitled to commence proceedings for immediate foreclosure of the Mortgage and
may avail itself of any other relief to which the Trustee, or the Collateral
Trustee if applicable, may be legally or equitably entitled under the other Loan
Documents, the Mortgage Notes, or otherwise. The Trustee, or the Collateral
Trustee if applicable, will, upon becoming the owner of the Facility pursuant to
any such foreclosure, take title subject to the related Lease, provided that, if
a monetary Event of Default exists under such Lease and, if the Tenant is a
Subsidiary, any Lease Guaranty, the Trustee, or the Collateral Trustee if
applicable, will have the right, after completion of such foreclosure (possibly
including the expiration of any redemption period) or prior to such completion
if permitted under the laws of the state in which the Facility is located, to
exercise the right of the Borrower as lessor to terminate such Lease. In the
case of an Event of Default which also constitutes a Triggering Event, the
rights of the Trustee, or Collateral Trustee if applicable, will include the
right to require the related Tenant or Kmart (if the Tenant is a Subsidiary) to
purchase the related Mortgage Note(s) pursuant to the Note Put Agreement. See
"THE NOTE PUT AGREEMENTS."

LIMITATION OF A BORROWER'S LIABILITY

Each Loan Agreement will provide that the recourse of the Trustee, or the
Collateral Trustee if applicable, will be limited to foreclosure and other
remedies set forth in the Loan Documents. Generally, neither a Borrower nor any
of its affiliates will be personally liable for payment of principal, interest
or other amounts which may become due and payable under any of the Loan
Documents, the holder of a Mortgage Note will be entitled to look solely to the
security provided for in the Loan Documents, and no deficiency

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judgment for amounts unsatisfied after the application of such security and the
proceeds thereof may be obtained against a Borrower or its affiliates. The
general limitation on the personal liability of the Borrower and its affiliates
will not prejudice the rights of the Trustee, or the Collateral Trustee if
applicable, to recover (i) for fraud, intentional misrepresentation or breach of
any representation or warranty or willful misconduct by or on behalf of a
Borrower, (ii) certain funds, deposits, advances and other amounts which may be
held by or for a Borrower at the time of an Event of Default under a Mortgage
Note or any other Loan Documents, and (iii) amounts recoverable for certain
environmental hazards. However, because each Borrower is expected to be an
entity without any assets (other than the related Facility) the recourse of the
Trustee or the Collateral Trustee will be limited even in those instances where
personal liability may be established against a Borrower.

THE MORTGAGES

General

The Mortgage Note(s) issued under a Loan Agreement, and the payment and
performance of all of the obligations of the Borrower under such Loan Agreement,
will be secured by a first mortgage and security interest in (i) a Facility and
all improvements thereon; (ii) all leases, rents, profits, royalties and income
and other benefits derived from the Facility; (iii) all right, title and
interest of a Borrower in and to all tangible personal property, whenever
acquired by the Borrower, which is located on or at the Facility and used solely
in connection therewith; (iv) all of the Borrower's interest in intangible
property related to the acquisition, ownership, leasing, construction,
operation, servicing or management of the Facility; and (v) all of the
Borrower's interest in claims or demands including those with respect to
Insurance Proceeds and Condemnation Proceeds of the whole or any part of the
Facility. Each Mortgage will be subordinate to the related Lease.

Each Mortgage will provide that the Borrower may transfer its interest in
the Facility prior to the completion of construction only with the consent of
the Trustee, or Collateral Trustee if applicable, as assignee of the Depositor.
Thereafter, if no default under the Mortgage has occurred and is continuing, and
subject to satisfying certain conditions set forth in the Mortgage, the Borrower
may transfer its interest in the Facility without the consent of the Trustee or
the Collateral Trustee.

Events of Default

An Event of Default under a Loan Agreement will also be an Event of Default
under the related Mortgage. In addition, any failure on the part of a Borrower
to perform any covenants or agreements contained in the related Mortgage which
are not cured within 30 days after notice thereof will constitute an Event of
Default under such Mortgage.

Remedies Upon Event of Default

Upon the occurrence of an Event of Default, the Trustee, or the Collateral
Trustee if applicable, may declare all obligations secured by a Mortgage to be
due and payable and thereafter, subject to the provisions of applicable state
law, the Trustee, or Collateral Trustee if applicable, may (i) enter upon and
take possession of the related Facility; (ii) commence an action to foreclose
the Mortgage; (iii) exercise any and all of the remedies available to a secured
party under applicable law; and (iv) apply to any court having jurisdiction to
appoint a receiver of the Facility or to specifically enforce any of the
covenants set forth in the Mortgage.

If the Trustee, or the Collateral Trustee if applicable, forecloses by
reason of the occurrence of an Event of Default prior to the completion of
construction of a Facility, the Tenant will, prior to the occurrence of a
Triggering Event, retain its right under the related Construction Fund
Disbursement Agreement and any Construction Fund Disbursement Agreement --
Common Area to complete construction of the Facility and Common Area. See "THE
LEASES, THE LEASE GUARANTIES AND RELATED DOCUMENTS -- Construction Fund
Disbursement Agreements."

If the Trustee, or Collateral Trustee if applicable, forecloses on a
Facility, it may not be able subsequently to exercise its rights under the
related Note Put Agreement if the Mortgage Note is deemed to have been
extinguished in or satisfied by the foreclosure proceeding. However, a
foreclosure will not affect the continuing

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rights and obligations of the Tenant under the Lease or of Kmart (if the Tenant
is a Subsidiary) under the Lease Guaranty.

THE ASSIGNMENTS OF LEASES AND RENTS

Pursuant to an Assignment of Leases and Rents, all Lease Payments due under
a related Lease will be assigned to the Trustee or Collateral Trustee, if
applicable. The Assignment of Leases and Rents will also give the Trustee or
Collateral Trustee the right, upon the occurrence of an Event of Default under
the related Loan Agreement, to exercise the rights and remedies of the related
Borrower as lessor under the Lease. Although each Assignment of Leases and Rents
will, by its terms, be a present assignment of the related Lease and Lease
Payments, it may, under the laws of certain states in which Facilities are
located, be deemed a collateral assignment. In such event, the rights of the
Trustee or Collateral Trustees thereunder may be exercisable only upon
completion of a foreclosure of the related Mortgage (possibly including the
expiration of any redemption period) or otherwise as permitted or required under
the laws of the applicable state.

THE NOTE PUT AGREEMENTS

The following summary describes certain provisions of the Note Put
Agreements to be entered into by and among Kmart, a Subsidiary (if it is a
Tenant) and the Depositor. The summary does not purport to be complete and is
subject to, and qualified in its entirety by reference to, the provisions of
each Note Put Agreement, the form of which (in substantially the form in which
it will be used) has been filed as an exhibit to the Registration Statement of
which this Prospectus is a part.

Each Note Put Agreement will provide that, in the event (a) (i) a Tenant
fails to pay when due any Lease Payment within 10 days (or 30 days if the Tenant
is Kmart) after notice to the Tenant of such default and (ii) if the Tenant is a
Subsidiary, Kmart fails to pay any such Lease Payment within 30 days after
notice to Kmart of such Subsidiary's failure to do so (which notice may be given
concurrently with the corresponding notice to such Subsidiary), (b) completion
of construction of the Facility to be leased to the Tenant does not occur prior
to the Completion Date, or (c) if the Tenant is a Subsidiary, a Lease Guaranty
Termination occurs (each, a Triggering Event), the Trustee, or Collateral
Trustee if applicable, will have the right to require the Tenant, and in the
event of the Tenant's failure to do so when the Tenant is a Subsidiary, to
require Kmart to purchase the related Mortgage Note(s) in whole (but not in
part) at the Purchase Price. If a Triggering Event other than a Lease Guaranty
Termination occurs, the Trustee, at the written direction of the holders of
Certificates evidencing not less than a 66 2/3 Percentage Interest (which
direction must be given within 90 days after the giving by the Trustee to the
Certificateholders of a notice stating that such Triggering Event has occurred),
will exercise its rights under the Note Put Agreement. If the Triggering Event
is a Lease Guaranty Termination, the Trustee will exercise its rights under the
Note Put Agreement unless, within 30 days after notice by the Trustee to the
Certificateholders of the occurrence of such Lease Guaranty Termination, holders
of Certificates evidencing not less than a 66 2/3 Percentage Interest elect not
to exercise such rights. In cases where the Note Put Agreement is held in a
Collateral Trust, the 66 2/3 Percentage Interest required for the exercise of
such rights (or, in the case of a Lease Guaranty Termination, the election not
to exercise such rights) will be computed by reference to the outstanding
principal amount of all Mortgage Notes issued pursuant to the applicable Loan
Agreement.

The Purchase Price for a Mortgage Note pursuant to the Note Put Agreement
will be equal to (i) the outstanding principal balance of such Mortgage Note,
(ii) accrued interest thereon and (iii) the Make-Whole Premium related thereto,
or, in the case of a purchase of a Mortgage Note as a result of a Lease Guaranty
Termination, the lesser of the Make-Whole Premium and the Termination Premium.
Under the laws of certain states the enforceability of the obligation to pay
amounts similar to the Make-Whole Premium or the Termination Premium is unclear,
and there can be no assurance that the obligation to pay the Make-Whole Premium
or the Termination Premium will be enforceable upon the occurrence of a
Triggering Event.

In the event the Trustee, or the Collateral Trustee, if applicable,
exercises its rights under the related Note Put Agreement, the date of sale of
the Mortgage Note(s) will be not more than 35 Business Days after the Trustee,
or Collateral Trustee, receives direction to sell such Mortgage Note(s). The
Purchase Price will

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be deposited with the Trustee, or, if applicable, with the Collateral Trustee
which will transfer it to the related Pass-Through Trustees on the next Business
Day. Any Purchase Price received by a Trustee, or Collateral Trustee, pursuant
to the exercise of rights under a Note Put Agreement, less any expense incurred
by the Trustee, or Pass-Through Trustees and Collateral Trustee, if applicable,
will be distributed to Certificateholders within 30 days of receipt. See "THE
CERTIFICATES -- Other Distributions -- Distribution from Proceeds of Purchase of
Mortgage Note."

THE LEASES, THE LEASE GUARANTIES AND RELATED DOCUMENTS

The following summaries describe certain provisions of the Leases, the
Lease Guaranties, the Consent and Agreements, the Indemnity Agreements and the
Construction Fund Disbursement Agreements. The summaries do not purport to be
complete and are subject to, and qualified in their entirety by reference to the
provisions of, such documents, the forms of which (each in substantially the
form in which it will be used) have been filed as exhibits to the Registration
Statement of which this Prospectus is a part.

THE LEASES

General

Each Facility will be leased to a Tenant which will be either Kmart or a
Subsidiary. The obligations of a Subsidiary under a Lease will be guaranteed by
Kmart pursuant to a Lease Guaranty. The Leases will be assigned by the Borrower
to the Depositor pursuant to an Assignment of Leases and Rents and the Mortgage,
and the Depositor's rights under those documents will then be assigned to the
Trustee, or to the Collateral Trustee if applicable.

Term and Rental

Each Lease will have a primary term that, excluding renewal or extension
terms, will expire on or after the scheduled maturity of the related Mortgage
Note(s) unless terminated due to certain casualty, condemnation or bankruptcy
events. Lease Payments will be payable monthly and will be scheduled to be in
amounts sufficient to pay Scheduled Payments on the related Mortgage Note(s).
The term of each Lease and the obligation of the Tenant to make Lease Payments
will commence on the date specified in each Lease whether or not construction of
the Facility has been completed, the Tenant takes occupancy or accepts the
Facility as constructed.

Net Lease

The obligation of the Tenant under each Lease will, except with respect to
the cost of construction and certain environmental costs and liabilities, be
that of a lessee under a "net lease." The Tenant's obligation to pay rent under
each Lease will be absolute and unconditional and amounts payable by the Tenant
under each Lease will be paid as absolute net sums, without diminution for any
reason except for a permitted termination by the Tenant by reason of certain
casualty or condemnation events as described below (see "Condemnation and
Casualty"), a rejection of the Lease by a Borrower as lessor in a bankruptcy
proceeding if the Tenant is deprived of possession of the Facility by reason of
such rejection, certain Tenant bankruptcy events (see "CONSEQUENCES OF
BANKRUPTCY OF A TENANT OR A BORROWER") or an abatement of Lease Payments
following a condemnation which does not result in a Lease termination. The
Tenant will be obligated to pay all costs, including without limitation real
estate taxes and utilities, associated with the Facility, except for the costs
of construction and acquisition and certain environmental costs and liabilities.

Maintenance and Alterations

Each Lease will require the Tenant to make and pay for all maintenance,
replacement and repair necessary to keep the related Facility in a good state of
repair and tenantable condition. The Tenant may, at its own expense, from time
to time, make such additions or changes, structural or otherwise in and to the
Facility as it may deem necessary or suitable, which additions or changes (other
than a Tenant's trade fixtures) will

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become the property of the related Borrower. The Tenant may also, at its own
expense, at any time, erect or construct additional buildings, structures or
improvements, which will become a part of the Facility and subject to all
obligations under the Lease. Any alterations, additions or improvements will be
required to be made in a good and workmanlike manner and in compliance with
applicable law.

Use, Assignment and Subletting

Except as otherwise specified in the related Prospectus Supplement, each
Lease will generally provide that the related Facility may be used for any
lawful purpose. Each Lease will permit the Tenant to assign the Lease or sublet
the whole or any part of the related Facility without the consent of the
Borrower or the related Trustee, or Collateral Trustee if applicable, but in any
such case, the Tenant will remain primarily liable under the Lease, and Kmart,
if the Tenant is a Subsidiary, will remain liable under the Lease Guaranty. The
Tenant will not be required continuously to operate or occupy the Facility.

Insurance

Provided that the net worth of the Tenant or Kmart (if the Tenant is a
Subsidiary) exceeds $100,000,000, as determined in accordance with generally
accepted accounting principles consistently applied, the Tenant will be
permitted under each Lease to self-insure. If the Tenant elects not to, or is
not entitled to, self-insure, the Tenant will be required, at its own cost and
expense, to obtain and maintain insurance in the amounts and upon the terms and
conditions set forth in the Lease. All property insurance maintained by the
Tenant must be for 100% of the replacement value of the Facility, exclusive of
excavation costs.

Condemnation and Casualty

In the event that at any time during the term of a Lease the related
Facility is damaged or destroyed (partially or totally) by fire or other
casualty, the Lease will require that the Tenant, at its own expense, promptly
repair, rebuild and restore the Facility to the condition existing just prior to
such damage or destruction, or for the same use and purpose but in accordance
with such plans and specifications as are then generally in use by the Tenant
for the construction of the Tenant's stores and related structures; provided,
however, the repaired, rebuilt or replaced building has a value not less than
its fair market value immediately prior to such loss. Notwithstanding the
foregoing, each Lease will provide that if such damage or destruction takes
place within two years prior to the expiration date of the current term of the
Lease and if the cost of restoration exceeds 50% of the fair market value of the
Facility at the time such damage or destruction took place, the Tenant will have
the option to terminate the Lease as of the date such damage or destruction took
place by giving written notice to the Borrower within 30 days thereafter. After
such termination, the Tenant will have an additional 60 days, rent free, within
which to remove its property from the Facility. If the Tenant so terminates the
Lease and is carrying property insurance, all Insurance Proceeds will be paid to
the Trustee, or the Collateral Trustee if applicable. If the Facility is
self-insured and the Tenant terminates the Lease, the Tenant will pay the
Trustee, or the Collateral Trustee if applicable, an amount sufficient to
rebuild the Facility whether or not rebuilt.

In the event that all of a Facility is permanently expropriated, the
related Lease will automatically terminate. If (i) the points of ingress and
egress to public roadways are materially impaired by a permanent expropriation
by a public or quasi-public authority (with no reasonable replacement points of
ingress and egress) so as to render the Facility unsuitable for its intended
use, or (ii) less than the whole, but more than 10%, or such other greater
percentage as may be specified in the Prospectus Supplement, of the square
footage of the building or land constituting the Facility is permanently
expropriated by public or quasi-public authority, the Tenant will have the
option to terminate the related Lease as of the date of such permanent
expropriation.

In the event a Lease is terminated because of casualty loss or
condemnation, the only source of funds to prepay the related Mortgage Note(s) is
likely to be the Insurance Proceeds or Condemnation Proceeds, respectively, and
any amounts that could be realized from the liquidation of the related Mortgaged
Property.

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There can be no assurance that such amounts would be sufficient to pay the
Purchase Price of the related Mortgage Note(s).

In the event of an expropriation of a portion of a Facility under
circumstances where the Lease is not terminated, the Lease will continue as to
the portion of the Facility which has not been expropriated or taken. If the
floor area of the Facility is reduced as a result of such expropriation, Lease
Payments will be proportionately reduced to reflect such reduction. The Tenant
will be required, at its sole cost and expense, promptly to restore the Facility
as nearly as practicable to the condition existing prior to such expropriation,
or for the same use and purpose but in accordance with such plans and
specifications as are then generally in use by the Tenant for the construction
of the Tenant's stores and related structures. All Condemnation Proceeds will be
paid over to the Tenant for restoration, and restoration costs in excess of the
Condemnation Proceeds will be paid by the Tenant. Any Condemnation Proceeds in
excess of restoration costs will be paid to the Trustee, or the Collateral
Trustee if applicable, as assignee of the Depositor and will be applied against
amounts outstanding under the related Mortgage Note(s). See "THE CERTIFICATES --
Other Distributions -- Distribution Due to Casualty or Condemnation" and "THE
MORTGAGE NOTES AND THE LOAN AGREEMENTS -- Prepayments -- Mandatory Prepayments."

Borrower Bankruptcy

If a Borrower is in bankruptcy and rejects the related Lease, the related
Consent and Agreement will require the related Tenant to elect under Section
365(h) of the Bankruptcy Code to remain in possession of the Facility for the
remaining term of such Lease. However, if, notwithstanding such election, the
Tenant is deprived of possession of the Facility as a result of such Borrower's
rejection of the Lease in the bankruptcy proceeding, the Lease will terminate
and such Tenant and Kmart (if the Tenant is a Subsidiary) will have no further
obligations under such Lease, the related Lease Guaranty or the related Note Put
Agreement.

Remedies Upon Event of Default

Each Lease will provide that in the case of nonpayment of rent, if the
Tenant is in default for a period of 10 days after notice to the Tenant, and (if
the Tenant is a Subsidiary) Kmart is in default under the related Lease Guaranty
for 30 days after written notice to Kmart, then the Borrower, as lessor under
the Lease, with the consent of the Trustee, or Collateral Trustee if applicable,
may by giving notice to the Tenant at any time thereafter during the continuance
of such default either terminate the Lease, or reenter the related Facility by
summary proceedings or otherwise, and, in either case, expel the Tenant and
remove all property therefrom, relet the Facility at the best possible rent
readily attainable and receive the rent from the Facility; provided, however
that the Tenant and, if the Tenant is a Subsidiary, Kmart, as guarantor under
the Lease Guaranty, will remain liable for any and all deficiencies in Lease
Payments. The Lease by its terms gives neither the Borrower, as lessor under the
Lease, nor the Trustee (or Collateral Trustee, if applicable) as assignee of the
Borrower's rights under the Lease, any right to collect such deficiencies on an
accelerated basis. The Borrower (or the Trustee or Collateral Trustee) must
instead proceed against the Tenant for such deficiencies as and when they become
due. However, in the event of a payment default under the Lease and a default
under the related Lease Guaranty, the Trustee or Collateral Trustee, if
applicable, will be entitled, if such defaults are not cured within the period
specified in the Note Put Agreement, to exercise its rights under the Note Put
Agreement. See "THE NOTE PUT AGREEMENTS." Neither the Borrower nor the Trustee
(or Collateral Trustee, if applicable) have the right to terminate the Lease by
reason of non-monetary defaults by the Tenant; however, the Borrower will, in
the event of any such default, be entitled to bring an action against the Tenant
for damages or injunctive relief.

Indemnification

Each Lease will contain provisions obligating the Tenant to indemnify the
related Borrower and the Trustee, or the Collateral Trustee if applicable, as
assignee of the Depositor against any liability for damage to property or
injuries sustained by any person within the Facility prior to or during the term
of the Lease, except for liabilities arising from the Borrower's negligence.
Each Lease and the related Consent and Agreement will further contain provisions
obligating the Tenant to indemnify the Borrower, the Depositor and the Trustee,
or

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the Collateral Trustee if applicable, and to provide insurance, against
liabilities caused by the Tenant, its employees or agents during the Tenant's
occupancy of the Facility (although not during any construction at the Facility
by the Tenant prior to its taking occupancy) and arising out of the release,
use, storage, treatment, transportation, transfer, manufacture, refinement,
handling, production, disposal or threatened release of hazardous materials or
related violations of environmental laws.

The Borrower will be required under the Lease to indemnify the Tenant
against environmental liabilities which are not caused by the Tenant, its
employees or agents. If the Borrower incurs any liability under its indemnity in
favor of the Tenant, or any liability to a third party by reason of any
environmental condition as to which the Tenant has not given its indemnity, the
Borrower will in all likelihood not have any assets (other than the Facility) in
order to satisfy such liability (although, under the Lease, the Tenant will have
no recourse against the Borrower until the earlier of the expiration of the
initial term of the Lease or the payment in full of the related Mortgage
Note(s)). In addition, if the Trustee or Collateral Trustee, if applicable,
becomes the owner of a Borrower's interest in a Facility as the result of a
foreclosure, it may become subject to liability for environmental costs and
liabilities as to which it has not been indemnified by the Tenant or, if the
Tenant is a Subsidiary, by Kmart pursuant to the related Lease Guaranty. It will
be a condition to the making of each Mortgage Loan that the Depositor obtain or
cause to be obtained a phase I environmental audit of the related Facility
satisfactory to the Depositor and such further information or studies as the
Depositor deems necessary. In addition, the Loan Documents will require the
maintenance of insurance against environmental liabilities, although there can
be no assurance that such insurance will cover all environmental risks or that
such insurance will remain available at all times. The Tenant will pay premiums
for such environmental liability insurance pursuant to the Consent and
Agreement.

THE LEASE GUARANTY AGREEMENTS

General

If the Tenant is a Subsidiary, Kmart will enter into a Lease Guaranty
Agreement ("Lease Guaranty") with a Borrower with respect to the related
Facility. The Lease Guaranty will be assigned by the Borrower to the Depositor
pursuant to an Assignment of Leases and Rents and the Mortgage, and the
Depositor's rights under those documents then will be assigned to the Trustee,
or to the Collateral Trustee if applicable.

The Lease Guaranty

Pursuant to the terms of each Lease Guaranty, Kmart will absolutely and
unconditionally guarantee to a Borrower the full and punctual payment,
performance and observance by the related Subsidiary of all of the terms,
conditions, covenants and obligations to be performed and observed by the
Subsidiary under the related Lease. Except for the right of Kmart and the
Subsidiary to terminate the Lease Guaranty in certain circumstances described
below, the liability of Kmart under the Lease Guaranty will be irrevocable,
continuing, absolute, independent and unconditional except that Kmart will be
relieved of any liability under the Lease Guaranty if the Lease is rejected and
terminated by a trustee or debtor-in-possession in the Borrower's bankruptcy
proceeding and, as a result, the Subsidiary has been deprived of its possessory
rights pursuant to the Lease. Kmart will also be relieved of liability under the
Lease Guaranty if the Lease is terminated by the Subsidiary in the event of a
condemnation or casualty.

Termination

Kmart or a Subsidiary may terminate Kmart's obligations under a Lease
Guaranty if (i) the related Subsidiary achieves Investment Grade Status without
regard to Kmart's credit rating, (ii) the related Lease is assigned to a third
party (a) which has achieved or achieves Investment Grade Status or (b) an
affiliate of which has achieved or achieves Investment Grade Status and such
affiliate delivers to the Trustee, or the Collateral Trustee if applicable, a
new lease guaranty agreement with substantially the same terms as the Lease
Guaranty, or (iii) more than 50% of the issued and outstanding stock of the
Subsidiary is acquired by a third party and such third party has achieved or
achieves Investment Grade Status or an affiliate of such third party has
achieved or achieves Investment Grade Status and delivers to the Trustee, or the
Collateral Trustee

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if applicable, a new lease guaranty agreement with substantially the same terms
as the Lease Guaranty. In the case of a termination of a Lease Guaranty in
connection with an assignment of the Lease or the delivery of a new lease
guaranty, the third party assignee or the new guarantor will be required to
deliver to the Trustee, or the Collateral Trustee if applicable, a new note put
agreement with substantially the same terms as the Note Put Agreement. For
purposes of the Lease Guaranty, an entity will have achieved "Investment Grade
Status" if the senior debt of such entity will have been rated at least Standard
& Poor's rating of BBB- or Moody's rating of Baa3 for the immediately preceding
twelve month period. The exercise by Kmart or a Subsidiary of the right to
terminate a Lease Guaranty is a Triggering Event under the related Note Put
Agreement. See "THE NOTE PUT AGREEMENTS."

THE CONSENT AND AGREEMENTS

Each Consent and Agreement will provide that Kmart, the related Tenant if
it is a Subsidiary and the related Borrower consent to the Depositor's sale,
conveyance, transfer and absolute assignment of all of its right, title and
interest in the related Loan Documents and Lease to the Trustee, or the
Collateral Trustee if applicable. Each Consent and Agreement will further
provide that all Lease Payments will be paid directly to the Trustee, or the
Collateral Trustee if applicable, for the benefit of the Borrower and that such
payment will constitute payment to the Borrower in accordance with the Lease.
Each Consent and Agreement will also provide that the Tenant will pay the annual
Trustee's Fee and the Collateral Trustee's Fee, if applicable, and premiums for
environmental liability insurance. Kmart, the Tenant (if it is a Subsidiary),
the Borrower and the Depositor will acknowledge and agree that the Trustee, or
the Collateral Trustee if applicable, will have the sole right to pursue any
claim for Lease Payments and, subject to the rights of the Tenant and Kmart (if
the Tenant is a Subsidiary) under the related Construction Fund Disbursement
Agreement and any Construction Fund Disbursement Agreement -- Common Area, to
perform all other necessary and appropriate acts to protect and preserve any
right, title and interest of the Trustee, or the Collateral Trustee if
applicable, Borrower and Depositor in and to the Loan Documents. Each Consent
and Agreement will provide that without the prior consent of the Trustee or
Collateral Trustee, if applicable, the Borrower will not modify the Lease,
except with respect to modifications that do not reduce Lease Payments, alter
the initial term of the Lease, add to the Borrower's covenants under the Lease
or limit the obligations of the Tenant under the Lease. Each Consent and
Agreement will also provide that no amendment to the Loan Agreement, the
Mortgage Notes or the Loan Documents may be made without the prior consent of
the Tenant and, if the Tenant is a Subsidiary, Kmart, unless a monetary default
exists under the related Lease.

THE INDEMNITY AGREEMENTS

If the Tenant is a Subsidiary, Kmart will enter into an Indemnity Agreement
pursuant to which Kmart will indemnify the Trustee, or the Collateral Trustee if
applicable, in the event any Lease Payments made to such Trustee or Collateral
Trustee by such Subsidiary pursuant to the related Lease or by Kmart pursuant to
the related Lease Guaranty are asserted to be voidable under the Bankruptcy
Code, whether by preference or otherwise, in a proceeding in a bankruptcy case
filed by or against such Subsidiary.

THE CONSTRUCTION FUND DISBURSEMENT AGREEMENTS

General

In those cases where Mortgage Loan proceeds are being used in whole or in
part to construct a Facility, the related Borrower will be obligated under its
Lease with the related Tenant to construct the Facility in accordance with the
provisions of the Lease. The obligation of such Tenant to make Lease Payments
will commence on the date specified in the Lease whether or not the Facility is
completed, the Tenant takes occupancy, or the Tenant accepts the improvements as
constructed. In addition, the Tenant and, if the Tenant is a Subsidiary, Kmart
will be obligated under the related Note Put Agreement to purchase the related
Mortgage Note(s) in the event construction of the Facility is not completed on
or before the Completion Date. In an effort to provide assurance to the Tenant
that each such Facility will be developed and constructed in a timely manner in
accordance with the plans and specifications referred to in the related Loan
Agreement, the Depositor, the related Tenant, the related Borrower, Kmart (if
the Tenant is a Subsidiary), an Escrow

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Agent and, in some cases, a Construction Monitor engaged at the request of the
Tenant will enter into a Construction Fund Disbursement Agreement which will
provide that the proceeds of the Mortgage Loan being used for the construction
of the Facility will be deposited in an Escrow Account and disbursed to the
Borrower upon approval by the Tenant. It will also provide for certain remedies
in favor of the Tenant and Kmart, including the right to foreclose on a second
mortgage on the Facility given by the Borrower to the Tenant and the right to
acquire the Facility pursuant to an option granted by the Borrower to the
Tenant, in the event of a default by the Borrower in the performance of its
obligations under the related Lease to construct the Facility in accordance with
such Lease and the Construction Fund Disbursement Agreement.

If a portion of the proceeds from more than one Mortgage Loan will be used
to construct a Common Area to be used by the Tenants leasing the Facilities to
be constructed with the balance of such Mortgage Loans, then, in addition to the
previously described Construction Fund Disbursement Agreement, there will be a
Construction Fund Disbursement Agreement -- Common Area among the Depositor, the
related Borrowers, an Escrow Agent, such Tenants, Kmart (if any of the Tenants
are Subsidiaries) and a Construction Monitor, if applicable. Such Construction
Fund Disbursement Agreement -- Common Area will provide that the proceeds from
such Mortgage Loans which will be used for the construction of such Common Area
will be deposited in an Escrow Account -- Common Area and disbursed upon
approval by the applicable Tenants. It will also provide for certain remedies in
favor of such Tenants and Kmart (if any of the Tenants are Subsidiaries) in the
event of the default by the related Borrowers in the performance of their
obligations to construct such Common Area.

Prior to a Triggering Event under the related Note Put Agreement, neither
the Depositor, the Trustee, nor the Collateral Trustee, if applicable, will have
any rights with respect to the disbursement of Mortgage Loan proceeds used in
the construction of the related Facility and, if applicable, the related Common
Area. In addition, in the event the Trustee or Collateral Trustee forecloses on
a related Facility, it will do so subject to the right of the related Tenant or
Tenants to control disbursements from the Escrow Account and, if applicable, the
Escrow Account -- Common Area and to complete construction of the Facility and
the Common Area, if any.

Remedies Upon Default Under Lease

Upon the occurrence of a default by a Borrower in the performance of its
obligation in favor of the related Tenant under the Lease and prior to the
occurrence of a Triggering Event, such Tenant may, in addition to any remedies
it may have at law or in equity, (i) within the first three (3) years of the
term of the Mortgage Loan, foreclose on the second mortgage on the Facility
given by the Borrower to the Tenant or, at any time prior to completion of
construction acquire the Facility pursuant to the option granted by the Borrower
to the Tenant, and (ii) if Borrower's default is related to construction of the
Facility, (x) cease approving disbursements to a Borrower from the Escrow
Account, (y) exercise its rights under the license granted to the Tenant under
the Construction Fund Disbursement Agreement to complete the construction of the
Facility if the Borrower fails to do so, or (z) specifically enforce the
Borrower's obligations to complete the work. However, the Tenant will not have
the right, prior to the earlier of the payment in full of the related Mortgage
Note(s) or the expiration of the initial term of the Lease, to withhold Lease
Payments, terminate the Lease, or recover monetary damages by reason of the
Borrower's default under the Lease, including Borrower's failure to complete the
Facility.

THE BORROWERS

Each Borrower will be a special purpose corporation, limited partnership,
limited liability company or other entity that will not be permitted to have any
significant assets or sources of funds other than the Mortgage Loan made to such
Borrower and the Facility owned or leased by such Borrower and leased or
subleased to a Tenant. No Borrower will receive the proceeds of or be a party to
more than one Loan Agreement, and no Borrower will own or lease more than one
Facility. No Borrower will be an affiliate of Kmart, any Subsidiary, the
Depositor, the Trustee or the Collateral Trustee.

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CONSEQUENCES OF BANKRUPTCY OF A TENANT
OR A BORROWER

In the event a bankruptcy case is commenced by or against a Tenant, such
Tenant, as a debtor-in-possession, or its trustee in bankruptcy would have the
right, subject to bankruptcy court approval, to assume or reject any Lease. If
such Tenant were to reject a Lease its payments thereunder would terminate,
thereby leaving the related Borrower without cash flow to make payments on the
related Mortgage Note(s). In addition, under Section 502(b)(6) of the Bankruptcy
Code, any unsecured claim of the Trustee or the Collateral Trustee, as the case
may be, for termination damages would be limited to an amount equal to the rent
reserved under such Lease, without acceleration, for the greater of one year or
15 percent (not to exceed three years) of the remaining term of such Lease (plus
rent already due but unpaid as of the commencement date of the bankruptcy
proceeding). Therefore, if such Tenant were to reject the Lease, the damages
that could be claimed for rejection, even assuming full recovery on such claims
(which may not occur), would, in all likelihood, not be sufficient to repay the
related Mortgage Note(s). Subject to bankruptcy court approval, such Tenant, as
a debtor-in-possession, or its trustee, would also have the right, in lieu of
rejecting the Lease, to assume and to assign all of its rights and obligations
under the Lease provided, among other requirements, adequate assurance of future
performance by the assignee were provided.

It is possible that a bankruptcy court could characterize the transactions
described herein not as a lease that may be rejected, but instead as a secured
loan to the bankrupt Tenant. In such event, the Borrower, as a secured creditor,
would be prohibited by operation of the automatic stay contained in Section
362(a) of the Bankruptcy Code from taking any action against the Tenant or its
property without bankruptcy court approval. In addition, the Tenant may be
permitted to use or, under certain circumstances, sell the related Facility,
together with any other property securing the Tenant's obligations to the
Borrower, over the objection of the Trustee or the Collateral Trustee. Finally,
as a secured creditor of the Tenant, the Borrower may be required to accept
restructured payments under a Chapter 11 plan filed by the Tenant provided that
it satisfies certain plan confirmation requirements set forth in the Bankruptcy
Code. The occurrence of any of these events would have a material adverse effect
on the Certificateholders.

In the event of bankruptcy proceedings instituted by or against a
Subsidiary that is a Tenant, Kmart would continue to be obligated under the
Lease Guaranty for the payment of the Subsidiary's obligations under the Lease,
even if the Lease were rejected in bankruptcy, and would continue to be
obligated under the Note Put Agreement to purchase the related Mortgage Note(s)
if a Triggering Event occurred. See "THE LEASES, THE LEASE GUARANTIES AND
RELATED DOCUMENTS" and "THE NOTE PUT AGREEMENTS."

Although Lease Payments under each Lease will be scheduled to be sufficient
to pay Scheduled Payments under the related Mortgage Notes, and although the
Tenant under each Lease will be required to pay substantially all of the
expenses relating to the Facility, each Borrower will incur certain obligations
which will not be passed on to the Tenant under the Lease. The most significant
of these obligations will consist of agreements to compensate contractors,
architects and other third parties in connection with the construction of the
Facility, to pay certain environmental liabilities for which the Tenant is not
responsible under the Lease, and to pay any Make-Whole Premium in connection
with the prepayment of the related Mortgage Note(s). It is also possible that
the Borrower will, in violation of the Loan Documents, incur obligations which
are unrelated to the Facility. If the cost of completing the Facility exceeds
the amount of Mortgage Loan proceeds available to the Borrower, or if the
Borrower otherwise lacks the funds to pay obligations which are not required to
be paid by the Tenant under the Lease, it is possible that a bankruptcy petition
may be filed by or against the Borrower even in the absence of a default by the
Tenant in its obligations under the Lease. In such event, the Borrower may
benefit from various powers and remedies available to debtors-in-possession
under the Bankruptcy Code. Although the outcome of a bankruptcy case involving
the Borrower is difficult to predict, events may transpire in the case that may
adversely affect the interests of the Certificateholders. For example, upon the
filing of its bankruptcy petition, the Borrower would enjoy the protection of
the automatic stay that would prohibit the Trustee or the Collateral Trustee, as
the case may be, from taking any action against the Borrower or its property,
including foreclosing upon the related Facility and collecting the Lease
Payments directly. In order to take such action, the Trustee or the Collateral
Trustee, as the case may be,

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would be required to obtain permission from the bankruptcy court by satisfying
certain requirements set forth in Section 362(d) of the Bankruptcy Code for
obtaining relief from the stay. In addition, the Borrower may be able to use the
Collateral, including the funds in the Capitalized Debt Service Account, the
Rental Payment Account, the Certificate Account and the Mortgage Note Account,
without the consent of the Trustee or the Collateral Trustee, if the Borrower
obtains bankruptcy court approval and provides such parties with adequate
protection (which adequate protection may take the form of a replacement lien,
substitute collateral or periodic cash payments). The Borrower may also have
access to the funds in the Escrow Account established under the Construction
Fund Disbursement Agreement or in the Escrow Account -- Common Area established
under the Construction Fund Disbursement Agreement -- Common Area. So long as
Lease Payments are made in accordance with the terms of the Lease or, if
applicable, the related Lease Guaranty or as otherwise ordered by the bankruptcy
court, the Trustee, or Collateral Trustee if applicable, would in no event have
any right to proceed against the Tenant or (if the Tenant is a Subsidiary) Kmart
under such Lease, such Lease Guaranty or the related Note Put Agreement.

It is also possible that the secured claims of the Trustee or the
Collateral Trustee, as the case may be, may receive economically unfavorable
treatment under the Borrower's Chapter 11 plan. For example, in the event that
it is determined that the value of the Collateral is less than the indebtedness
evidenced by the Mortgage Note(s), there may be no entitlement to receive
interest that accrued on the Mortgage Note(s) after the filing of the Borrower's
petition. In addition, if the Borrower were unable to satisfy all of the
requirements of Section 1129(a) of the Bankruptcy Code to confirm a consensual
Chapter 11 plan, the Borrower might attempt to restructure the secured claims of
the Trustee or the Collateral Trustee over its objections by invoking the
"cramdown" provisions of Section 1129(b). In such event Certificateholders may
be required, for example, to accept deferred payments in respect to the
Certificates over a longer period of time than the original term of the Mortgage
Notes.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

GENERAL

The following is a general discussion of the anticipated federal income tax
consequences of the purchase, ownership and disposition of Certificates. The
summary is based upon laws, regulations, rulings and decisions now in effect,
all of which are subject to change or possibly differing interpretations. The
discussion below does not purport to deal with federal income tax consequences
applicable to all categories of investors, such as foreign persons or tax exempt
entities, some of which may be subject to special rules. Investors should
consult their own tax advisors in determining the federal, state, local and any
other tax consequences to them of the purchase, ownership and disposition of the
Certificates.

Unless otherwise specified in the Prospectus Supplement for a Series of
Certificates, it is intended that each Trust will be classified for federal
income tax purposes as a grantor trust and that each Trust and any Collateral
Trust will not be classified as an association taxable as a corporation. For
each Series, Squire, Sanders & Dempsey, counsel to the Depositor, will deliver a
separate opinion to that general effect.

In rendering its opinion for each Series that each Trust will be classified
as a grantor trust, counsel will have considered whether two or more Trusts
holding separate Mortgage Notes from (i) the same obligor with respect to the
same Facility or (ii) different obligors with respect to different Facilities,
to the extent those facts are present, could be recharacterized as a "taxable
mortgage pool" or as a single grantor trust with impermissible multiple classes
of ownership, each of which is treated as a corporation for federal income tax
purposes. Generally, an entity is classified as a "taxable mortgage pool" only
if, among other requirements, the entity is the obligor on debt obligations (or
equity interests treated as debt obligations) with two or more maturities.
Similarly, if certificates in a single grantor trust have different maturities,
it would have multiple classes of ownership. However, under Treasury
Regulations, such multiple classes are permissible if the trust was formed to
facilitate direct investment in the assets of the trust, and the existence of
multiple classes of ownership interests is incidental to that purpose. Because
each Trust will generally issue only one class of beneficial ownership interest
having only one maturity date, such Trust could be treated as a "taxable

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mortgage pool" or as a single grantor trust with potentially impermissible
multiple classes of ownership only if such Trust is integrated with one or more
other Trusts, or if the Trusts serve to recast the manner in which principal and
interest on the debt obligations held therein are paid to Certificateholders.
While there is no authority directly on point, each Trust should be respected as
a separate entity because (i) each Trust will own separate assets in the form of
100 percent interests in separate Mortgage Notes issued directly by the obligors
thereof to such Trusts, which Mortgage Notes will not be secured by other debt
obligations, (ii) each Trust will issue a separate Series of Certificates to a
substantially separate set of Beneficial Owners, and (iii) each Trust will have
independent economic substance, in that the Trusts serve primarily to facilitate
the offering of fractional undivided participation interests in one or more
separate Mortgage Notes without recasting the interest and principal payments
thereon. Moreover, even if two or more Trusts were integrated (e.g., Trusts
holding Mortgage Notes with different maturities issued by the same obligor with
respect to the same Facility were treated as a single Trust), the integrated
single Trust will not alter the payment terms of the Mortgage Notes held;
rather, Beneficial Owners will have a fractional undivided interest in all of
the principal and interest payments received by the Trusts with respect to only
one or the other Mortgage Note (or groups of Mortgage Notes having the same
maturity). Accordingly, because the integrated single Trust would serve merely
to facilitate investment in assets that might have been separately invested in,
it should not be treated as having impermissible multiple classes of ownership.
Finally, pursuant to proposed regulations under the taxable mortgage pool
provisions, an ownership interest in an entity that is classified as an
investment trust will not be treated as a debt obligation of the trust.
Accordingly, if such proposed regulations are ultimately adopted, assuming that
the Trusts qualify as trusts under the analysis set forth above, they should not
be subject to taxable mortgage pool treatment.

Each Beneficial Owner will be treated as the owner of a pro rata fractional
undivided interest in the related Trust Property. Each Beneficial Owner, in
accordance with its method of accounting, will be required to report on its
federal income tax return its pro rata share of the interest and other income
from any Mortgage Note or other property held in the related Trust and may
deduct its pro rata share of the deductible expenses of the related Trust, at
the same time and to the same extent as if it held directly a pro rata interest
in the Trust Property and received and paid directly the amounts received by the
Trust. A Beneficial Owner who is an individual, trust or estate will be allowed
a deduction for certain itemized deductions subject to certain limitations in
the Code.

Collateral Trusts will be viewed as mere security arrangements and not as
separate entities for federal income tax purposes.

Market Discount

A purchaser of a Certificate of any Series will be treated as purchasing an
interest in any Mortgage Note and other Trust Property in the related Trust at a
price determined by allocating the purchase price paid for the Certificate among
such Mortgage Note and other Trust Property in proportion to their respective
fair market values at the time of purchase of the Certificate. To the extent
that the portion of the purchase price of a Certificate allocated to a Mortgage
Note is less than the portion of the principal balance of the Mortgage Note
allocable to the Certificate, that interest in the Mortgage Note will be deemed
to have been acquired with discount. It is not anticipated that the Mortgage
Notes will have "original issue discount" because the purchase price of a
Certificate of any Series, as well as the portion of such purchase price
allocable to the related Mortgage Note, are expected to exceed the principal
amount of such related Mortgage Note. A Beneficial Owner may have market
discount if it purchases a Certificate subsequent to the origination of the
respective Trust and the remaining principal amount of the Mortgage Note
allocable to the Certificate exceeds the Beneficial Owner's tax basis allocable
to such Mortgage Note, unless the excess does not exceed a prescribed de minimis
amount. In the event such excess exceeds the de minimis amount, the Beneficial
Owner will be subject to the market discount rules of sections 1276 to 1278 of
the Code with regard to its interest in the Mortgage Note, with the result that
actual or deemed receipts of principal on a Mortgage Note may be treated as the
receipt of taxable interest income to the extent of accrued market discount. In
particular, in the case of a sale or certain other dispositions of a Mortgage
Note subject to the market discount rules, any gain from such sale or
disposition will be treated as ordinary income to the extent such payment does
not exceed

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the market discount that has accrued on such Mortgage Note during the period in
which it was held. A partial principal payment on a Mortgage Note subject to the
market discount rules will be included in gross income as ordinary income to the
extent such payment does not exceed the market discount that has accrued on such
Mortgage Note during the period in which it was held, with adjustments to
prevent double inclusion.

Generally, market discount accrues under a straight line method, unless the
taxpayer elects a constant interest method. However, in the case of installment
obligations, such as the Mortgage Notes, Congress has indicated its intent that,
until Treasury regulations are issued, holders of installment obligations with
market discount may elect to accrue market discount either on the basis of a
constant interest rate or, assuming the installment obligation was issued
without original issue discount, on the basis of that portion of remaining
market discount which corresponds to the ratio of the amount of stated interest
paid in the accrual period to the total amount of stated interest remaining to
be paid on the installment obligation as of the beginning of such period. Rules
are also provided that defer the deduction of part or all of the interest paid
or accrued on indebtedness incurred or continued to purchase or carry market
discount indebtedness to the extent it exceeds the interest currently includable
in income with respect to such market discount indebtedness. As an alternative
to the rules stated in this section, taxpayers can elect to include market
discount in gross income currently, without regard to the actual or deemed
receipt of principal payments, as discussed above.

A Beneficial Owner purchasing Certificates subsequent to the creation of
the respective Trust at a price which is less than the allocable principal
amount of a Mortgage Note should consult its tax advisor with respect to the
manner of reporting accrued market discount on its annual tax return and on sale
or other disposition of its Certificates.

Premium

A Beneficial Owner will generally be considered to have acquired an
interest in a Mortgage Note at a premium to the extent that its tax basis
allocable to such interest, determined as described above, exceeds the principal
amount of the Mortgage Note allocable to such interest (or the remaining
principal amount of the Mortgage Note allocable to such interest in the case of
Certificates purchased subsequent to the creation of the respective Trust). It
is anticipated that Certificates will be issued at a premium above the principal
amount of the Mortgage Notes because the aggregate principal amount of the
Certificates evidencing interests in each Trust will be equal to the aggregate
principal amount of the Mortgage Notes held in such Trust plus costs of issuance
of the Certificates (see "THE MORTGAGE NOTES, THE LOAN AGREEMENTS AND RELATED
DOCUMENTS -- Scheduled Payments"). As a result, initial purchasers of
Certificates will be required to include in taxable income the stated interest
on the underlying Mortgage Notes, net of premium amortization, calculated as
described herein, rather than the stated interest on the Certificates. The
existence of a premium with respect to Certificates acquired subsequent to
original issuance is, of course, a function of market conditions. A Beneficial
Owner owning a Certificate as a capital asset may elect to amortize any such
premium as an offset to interest income under section 171 of the Code, with
corresponding reductions in the Beneficial Owner's tax basis in that Mortgage
Note. Generally, such amortization is on a constant yield basis, based on the
Beneficial Owner's yield to maturity. However, Congress has indicated its intent
that, until regulations are issued by the Treasury Department, an alternate
method of amortization may be used where, as here, installment obligations are
involved. Such alternate method is based on the ratio of stated interest paid
during a particular period to stated interest remaining to be paid on the
Mortgage Note at the beginning of such period, multiplied by the amount of
unamortized premium. Beneficial Owners are urged to consult their own tax
advisors as to the amount of any such amortizable premium.

Sale of Certificates

If a Certificate is sold, gain or loss will be recognized equal to the
difference between the amount realized on the sale and the Beneficial Owner's
adjusted tax basis in the Certificate. Such tax basis will equal the Beneficial
Owner's cost for the Certificate, increased by any discount previously included
in income, and decreased by any deduction previously allowed for amortization of
premium and by the amount of principal payments previously received on the
Certificate. Any such gain or loss will be capital gain or loss if the

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Certificate was held as a capital asset for more than one year, except that gain
may be treated in whole or in part as ordinary interest income under the market
discount rules of the Code.

Backup Withholding

Payments made on the Certificates, and proceeds from the sale of the
Certificates to or through certain brokers, may be subject to a "backup"
withholding tax of 31% unless the Beneficial Owner complies with certain
reporting procedures or is an exempt recipient under section 6049(b)(4) of the
Code. Any such withheld amounts will be allowed as a credit against the
Beneficial Owner's federal income tax.

STATE AND LOCAL TAX CONSIDERATIONS

In addition to the federal income tax consequences described in "Certain
Federal Income Tax Consequences," potential investors should consider the state
and local income tax consequences of the acquisition, ownership and disposition
of the Certificates. State and local income tax law may differ substantially
from the corresponding federal law, and this discussion does not purport to
describe any aspect of the income tax law of any state or other political
subdivision. Therefore, potential investors should consult their own tax
advisors with respect to the various state and local consequences of an
investment in the Certificates.

ERISA CONSIDERATIONS

In considering an investment of the assets of an employee benefit plan in a
Certificate, a fiduciary should consider, among other things (i) the purposes,
requirements and liquidity needs of such plan; (ii) the plan asset rules under
ERISA and the U.S. Department of Labor regulations; (iii) whether the investment
satisfies the diversification standards of Section 404(a)(1)(C) of ERISA, (iv)
whether the investment is prudent, considering the nature of an investment in
the Certificate; and (v) whether the investment can be valued annually. The
prudence of a particular investment must be determined by the responsible
fiduciary (usually the trustee or investment manager) with respect to each
employee benefit plan taking into account all of the facts and circumstances of
the investment.

Section 406 of ERISA and Section 4975 of the Code prohibit certain pension,
profit sharing or other employee benefit plans, individual retirement accounts
("IRAs") or annuity and employee annuity plans from engaging in certain
transactions involving "plan assets" with persons that are "parties in interest"
under ERISA or "disqualified persons" under the Code with respect to the plan. A
violation of these "prohibited transaction" rules may generate excise tax and
other liabilities under ERISA and the Code for such persons.

The U.S. Department of Labor has issued a regulation (the "Plan Asset
Regulation") concerning "plan assets" of certain employee benefit plans
(including annuities and individual retirement accounts) that are subject to
ERISA or to the prohibited transaction provisions of the Code (collectively
referred to as "Benefit Plans"). Under the Plan Asset Regulation the assets and
properties of corporations, partnerships and certain other entities in which a
Benefit Plan makes an equity investment could be deemed to be assets of the
Benefit Plan in certain circumstances.

In general, the Plan Asset Regulation applies to the purchase by a Benefit
Plan of an "equity interest" in an entity. An equity interest is defined as any
interest in an entity other than an instrument that is treated as debt under
applicable local law and which has no substantial equity features. Although no
assurance can be given that the Certificates will be treated as debt under
applicable law, if the Certificates are deemed to be debt rather than equity
interests, the Trust's assets would not be treated as plan assets solely as a
result of the purchase of a Certificate by a Benefit Plan.

If the Certificates represent equity interests, however, and investments
are made in a Trust by Benefit Plans, the Trust could be deemed to hold plan
assets unless an exception is applicable to the Trust. The Plan Asset Regulation
states that an entity's assets will not be deemed to be plan assets if equity
participation in the entity by "benefit plan investors" is not significant.
Benefit plan investors include employee welfare benefit

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plans and employee pension benefit plans that are employee benefit plans as
defined pursuant to Section 3(3) of ERISA, trusts described in Section 401(a) of
the Code or plans described in Section 403(a) of the Code, which are exempt from
tax under Section 501(a) of the Code, IRAs under Section 408 of the Code and any
entity whose underlying assets include plan assets by reason of a plan's
investment in the entity. Equity participation in an entity by benefit plan
investors is not significant on any date if, immediately after the most recent
acquisition of any equity interest in the entity, less than 25% of the value of
any class of equity interests in the entity is held by benefit plan investors.

If an exception is not applicable, then (i) the prudence standards and
other provisions of Part 4 of Title I of ERISA applicable to investments by
Benefit Plans (other than IRAs) and their fiduciaries would extend to
investments of the Trust; (ii) fiduciaries of Benefit Plans that are subject to
ERISA could be liable for investments of the Trust that do not conform to such
ERISA standards; (iii) certain transactions that may be entered into between or
among the Depositor, the Trustee, the Collateral Trustee, Kmart, or a Subsidiary
might be "prohibited transactions" under ERISA and/or the Code; and (iv) the
assets of the Trust would be subject to certain reporting and disclosure
requirements under ERISA.

Finally, fiduciaries of certain types of Benefit Plans are required to
determine the fair market value of the assets of the Benefit Plan as of the
close of the Benefit Plan's fiscal year. To the extent there is a public market
in the Certificates, fiduciaries should be able to value the Benefit Plan's
investment; however, no assurances can be given that a public market will
develop or that the fiduciary will be able to determine precisely the fair
market value of the Certificates. Although the Trustee will provide periodic
statements to investors with respect to principal and interest distributions on
the Certificates, these statements will not state the fair market value of the
Certificates, and neither Kmart, the Depositor nor the Trustee can assume any
responsibility for providing such a valuation.

In light of the foregoing, fiduciaries of a Benefit Plan considering the
purchase of Certificates should consult their own counsel regarding the impact
of ERISA and the Code upon such an investment.

No transfer of a Certificate or of a beneficial ownership interest in a
Certificate will be made unless the Trustee or Pass-Through Trustee (i) has
received a representation from the transferee of the Certificate or from the
proposed Beneficial Owner of a beneficial interest in a Certificate that such
transferee or Beneficial Owner is not a Benefit Plan, or a person acting on
behalf of or purchasing for the benefit of any such Benefit Plan; (ii) has
received an opinion of counsel reasonably satisfactory to the Trustee or
Pass-Through Trustee to the effect that the purchase or holding of such
Certificate or beneficial interest in a Certificate will not result in the
assets of the Trust or Pass-Through Trust being deemed to be "plan assets"
subject to the prohibited transaction provisions of ERISA or the Code, or that
the purchase or holding of such Certificates or such beneficial interest
qualifies as an exempt prohibited transaction under the provisions of ERISA or
the Code, and will not subject the Trustee or Pass-Through Trustee or the
Depositor to any obligation in addition to those undertaken in the Trust
Agreement or Pass-Through Trust Agreement, or (iii) otherwise authorizes such
transfer. In the absence of an opinion of counsel or the Trustee's or
Pass-Through Trustee's authorization as provided in (ii) or (iii) above, the
representation as described in (i) above shall be deemed to have been made to
the Trustee or Pass-Through Trustee by the transferee's or Beneficial Owner's
acceptance of a Certificate or beneficial interest therein. In the event that
such representation is violated, or any attempt is made to transfer a
Certificate or a beneficial interest therein to a Benefit Plan, or a person
acting on behalf of or purchasing for the benefit of any such Benefit Plan,
without an opinion of counsel or the Trustee's or Pass-Through Trustee's
authorization as provided in (i) or (ii) above, such attempted transfer shall be
void and of no effect.

LEGAL INVESTMENT CONSIDERATIONS

The Certificates will not constitute "mortgage related securities" for
purposes of the Secondary Mortgage Market Enhancement Act of 1984. There may be
restrictions on the ability of certain investors, including depository
institutions, either to purchase the Certificates or to purchase Certificates
representing more than a specified percentage of the investor's assets.
Investors should consult their own legal advisors in determining whether and to
what extent the Certificates constitute legal investments for such investors.

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PLAN OF DISTRIBUTION

The Certificate offered hereby will be sold through Sutro & Co.
Incorporated ("Sutro") or through Sutro and one or more other underwriters or
underwriting syndicates. The Prospectus Supplement for each Series will set
forth the terms of the offering of such Series, including the name or names of
the underwriters, the use of proceeds thereof, and either the initial offering
price, the discounts and commissions to the underwriters and any discounts or
concessions allowed or reallowed to certain dealers, or the method by which the
price at which the underwriters will sell the Certificates will be determined.

The Certificates of a Series may be acquired by the underwriters for their
own account and may be resold from time to time in one or more transactions,
including negotiated transactions, at a fixed public offering price or at
varying prices determined at the time of sale. The obligations of any
underwriter will be subject to certain conditions precedent and such
underwriters will be severally obligated to purchase all the Certificates of a
Series described in the related Prospectus Supplement, if any are purchased.

The place and time of delivery for the Certificates of a Series in respect
of which this Prospectus is delivered will be set forth in the Prospectus
Supplement.

LEGAL MATTERS

The legality of the Certificates and certain other legal matters will be
passed upon for the Depositor by Squire, Sanders & Dempsey. Certain legal
matters will be passed upon for Kmart by its general counsel and Dickinson,
Wright, Moon, Van Dusen & Freeman, Detroit, Michigan, and for the underwriter by
Paul, Weiss, Rifkind, Wharton & Garrison, New York, New York. The material
federal income tax consequences of the Certificates will be passed upon by
Squire, Sanders & Dempsey.

EXPERTS

The consolidated financial statements and schedules of Kmart appearing in
or incorporated by reference in Kmart's 1993 Annual Report on Form 10-K to the
Commission have been examined by Price Waterhouse, independent accountants, to
the extent stated in their report incorporated by reference therein and herein.
The financial statements referred to are incorporated by reference herein in
reliance upon such report and the authority of such firm as experts in
accounting and auditing.

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GLOSSARY

There follows an abbreviated definition of certain capitalized terms used
in this Prospectus and in the Prospectus Supplement. The Trust Agreement, the
Pass-Through Trust Agreement, the Collateral Trust Agreement if applicable, and
the Loan Agreement may contain a more complete definition of certain of the
terms defined herein and reference should be made to such documents for a more
complete definition of such terms. If there is a conflict between the definition
of any term contained in any agreement referred to in this Prospectus and the
definition included herein, the definition contained in such agreement controls.

"Assignment of Leases and Rents": Each Assignment of Leases and Rents by
and between a Borrower and the Depositor pursuant to which a Borrower will
assign to the Depositor all its rights under a Lease and Lease Guaranty, if
applicable, including, where permitted by law, a present assignment of its
rights to Lease Payments.

"Available Distribution Amount": As to any Remittance Date, an amount equal
to the amount on deposit in the Certificate Account as of the close of business
on the Business Day immediately preceding such Remittance Date.

"Bankruptcy Code": Title 11 of the United States Code.

"Beneficial Owner": A Person having a beneficial ownership interest in any
Certificate which is registered in the name of Cede.

"Borrower": A special purpose corporation, limited partnership, limited
liability company or other entity which is the obligor under the related Loan
Agreement and Mortgage Note and the lessor under the related Lease.

"Business Day": Any day other than (i) a Saturday or Sunday, or (ii) a day
on which banks in New York or California are required by law to be closed or are
customarily closed.

"Called Principal": With respect to a Mortgage Note, the principal of such
Mortgage Note that is to be paid or prepaid or is declared to be immediately due
and payable or, in the case of the purchase of a Mortgage Note under the related
Note Put Agreement, the outstanding principal balance of such Mortgage Note.

"Called Principal Percentage": The percentage shown on an exhibit to a Loan
Agreement and a Note Put Agreement for each corresponding year during the term
thereof as designated on such exhibit.

"Capitalized Debt Service Account": Each Capitalized Debt Service Account
created and maintained pursuant to a Trust Agreement, or a Collateral Trust
Agreement if applicable, from which Scheduled Payments on the related Mortgage
Note(s) will be made prior to the date Lease Payments are scheduled to commence
under the related Lease.

"Capitalized Debt Service Reserve": With respect to each Mortgage Loan, an
amount equal to all Scheduled Payments due (on a prorated basis) under the
related Mortgage Note(s) through the date when Lease Payments under the related
Lease will commence as specified in the Prospectus Supplement.

"Cede": Cede & Co. as nominee of DTC.

"Certificate Account": Each Certificate Account created and maintained
pursuant to a Trust Agreement or Pass-Through Trust Agreement.

"Certificateholder" or "Holder": The person in whose name a Certificate is
registered in the Certificate Register.

"Certificate Register": The register maintained pursuant to a Trust
Agreement or Pass-Through Trust Agreement.

"Certificates": The mortgage pass-through certificates, issuable in Series.

"Closing Date": The date on which the sale of a Series is closed and the
Certificates issued.

"Code": The Internal Revenue Code of 1986, as amended.

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"Collateral": The Collateral for the Mortgage Note(s) issued pursuant to a
Loan Agreement will consist of the following: (i) a Mortgage on the related
Facility securing such Mortgage Note(s); (ii) all of the Depositor's rights
under the Loan Agreement pursuant to which the related Mortgage Note(s) were
issued; (iii) an assignment of the related Lease, Lease Payments and Lease
Guaranty, if applicable; (iv) a pledge of certain moneys held in certain funds
established pursuant to the Trust Agreement or Collateral Trust Agreement, if
applicable; (v) a Note Put Agreement requiring the related Tenant and Kmart (if
the Tenant is a Subsidiary) to purchase the related Mortgage Note(s) upon the
occurrence of a Triggering Event; (vi) an assignment of the Borrower's right,
title and interest in and to any Construction Fund Disbursement Agreement and
Construction Fund Disbursement Agreement-Common Area related to such Facility;
(vii) a pledge of certain investments of fund balances held under the Trust
Agreement, or Collateral Trust Agreement if applicable, and income earned
thereon; and (viii) any other Loan Documents.

"Collateral Trust": A collateral trust created pursuant to a Collateral
Trust Agreement.

"Collateral Trustee": The bank, trust company or other fiduciary named in
the Prospectus Supplement for each Series of Certificates for which a Collateral
Trust has been established as the collateral trustee under the Collateral Trust
Agreement related to such Series.

"Collateral Trustee's Fee": The amount of the annual fee paid to a
Collateral Trustee for its ordinary fees and expenses arising under a Collateral
Trust Agreement.

"Collateral Trust Agreement": An agreement between the Depositor and a
Collateral Trustee pursuant to which the Depositor will transfer, convey and
assign to such Collateral Trustee all of the Collateral related to Mortgage
Notes having different maturities to be held for the benefit, pari passu, of the
Pass-Through Trusts holding such Mortgage Notes.

"Collateral Trust Property": The corpus of the Collateral Trust created by
a Collateral Trust Agreement related to certain Mortgage Notes, consisting of
(i) the Collateral related to such Mortgage Notes; (ii) property which secured
any related Mortgage Loan and which has been acquired by foreclosure or deed in
lieu of foreclosure; and (iii) Insurance Proceeds, Condemnation Proceeds and any
other amounts receivable under any related Loan Document.

"Commission": The Securities and Exchange Commission.

"Common Area": Area used in common by more than one Facility in a shopping
center.

"Completion Date": With respect to any Note Put Agreement, the second
anniversary of the related Mortgage Note(s).

"Condemnation Proceeds": Awards in respect of, or settlements in lieu of,
condemnation proceedings affecting the Mortgaged Property, net of any amounts to
which Tenant is entitled under the Lease in respect of unamortized leasehold
improvements by Tenant, Tenant's relocation expenses and Tenant's loss of
goodwill.

"Consent and Agreement": A Consent and Agreement among a Tenant, Kmart (if
the Tenant is a Subsidiary), a Borrower, the Depositor and the Trustee, or
Collateral Trustee if applicable, (i) providing for the direct payment of Lease
Payments to the Trustee, or Collateral Trustee if applicable, (ii) requiring
such Tenant to pay the Trustee's Fee, or Collateral Trustee's Fee if applicable,
(iii) requiring such Tenant to pay the premium on certain required environmental
insurance, and (iv) concerning certain other matters.

"Construction Fund Disbursement Agreement": Each Construction Fund
Disbursement Agreement among a Borrower, Tenant, Kmart (if the Tenant is a
Subsidiary), the Depositor, a Construction Monitor, if applicable, and an Escrow
Agent pursuant to which an Escrow Account will be created and certain procedures
regarding the disbursement of the proceeds from a Mortgage Loan for construction
of a Facility will be established.

"Construction Fund Disbursement Agreement -- Common Area": Each
Construction Fund Disbursement Agreement -- Common Area among two or more
Borrowers, Kmart, two or more Tenants, the Depositor, a Construction Monitor, if
applicable, and an Escrow Agent pursuant to which an Escrow Account

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- -- Common Area will be created and certain procedures for the disbursement of
the portion of the proceeds from two or more Mortgage Loans to be used for
construction of a Common Area will be established.

"Construction Monitor": A party, in some cases, to a Construction Fund
Disbursement Agreement or a Construction Fund Disbursement Agreement -- Common
Area who is responsible for monitoring the progress of the construction of the
related Facility or Common Area.

"Debt Service": The principal and interest which is scheduled to be paid
with respect to a Series of Certificates in the amounts specified in the
Prospectus Supplement on each scheduled Remittance Date.

"Definitive Certificates": Certificates issued in fully registered,
certificated form to Certificateholders other than DTC or its nominee.

"Demised Premises": The interest of a Borrower (which may be fee title
ownership or a ground leasehold) in the land on which the Facility is or will be
located and which will be leased to a Tenant pursuant to a Lease, including the
Borrower's interest in any rights, licenses, privileges and easements
appurtenant thereto.

"Depositor": National Tenant Finance Corporation, a Delaware corporation
and its successors and assigns.

"Discounted Prepayment Value": With respect to the Called Principal, the
amount obtained by discounting all Remaining Scheduled Payments with respect to
such Called Principal from their respective scheduled Due Dates to the Purchase
Date with respect to such Called Principal, in accordance with generally
accepted financial practice and at a discount factor (applied generally on a
semiannual basis) equal to the Reinvestment Yield.

"DTC": The Depository Trust Company.

"DTC Participants": Those participants for whom DTC holds securities on
deposit.

"Due Date": With respect to a Mortgage Note, the last Business Day of the
month on which each Scheduled Payment is due, exclusive of any days of grace.

"ERISA": The Employee Retirement Income Security Act of 1974, as amended.

"Escrow Account": An escrow account created pursuant to a Construction Fund
Disbursement Agreement.

"Escrow Account -- Common Area": An escrow account created pursuant to a
Construction Fund Disbursement Agreement -- Common Area.

"Escrow Agent": The bank, trust company or other fiduciary named in the
Prospectus Supplement for each Series of Certificates as the escrow agent under
a Construction Fund Disbursement Agreement or Construction Fund Disbursement
Agreement -- Common Area related to such Series.

"Event of Default": For any Trust Agreement, Pass-Through Trust Agreement,
Collateral Trust Agreement, Mortgage Note or Loan Document, an event of default
described in such Trust Agreement, Pass-Through Trust Agreement, Collateral
Trust Agreement, Mortgage Note or Loan Document, as the context requires.

"Exchange Act": The Securities Exchange Act of 1934, as amended.

"Facility": Each Demised Premises and the improvements constructed or to be
constructed thereon, as described in the Prospectus Supplement for each Series.

"Indemnity Agreement": Each Indemnity Agreement between Kmart and the
Depositor when the Tenant is a Subsidiary pursuant to which Kmart will indemnify
the Depositor and its successors and assigns in the event that any Lease Payment
under the related Lease or Lease Guaranty is asserted to be voidable in any
bankruptcy case filed by or against such Subsidiary.

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"Indirect Participants": Those Persons who clear through, or maintain a
custodial relationship with, a DTC Participant, either directly or indirectly.

"Insurance Proceeds": Proceeds paid by any insurer pursuant to any
insurance policy (other than liability insurance) and self-insurance proceeds
paid by any of the Tenants or, pursuant to a Lease Guaranty, Kmart with respect
to any Mortgaged Property.

"Investment Grade Rating": A rating by Standard & Poor's of BBB- or better
or a rating by Moody's of Baa3 or better.

"Investment Grade Status": The long-term senior secured debt of the entity
issuing such debt has continuously had an Investment Grade Rating for a period
of not less than 12 full calendar months immediately prior to the related Lease
Guaranty Termination.

"Kmart" or "Kmart Corporation": Kmart Corporation, a Michigan corporation.

"Lease": Each Lease by and between a Tenant and a Borrower pursuant to
which such Borrower will lease a Facility to the Tenant described in the
Prospectus Supplement for each Series.

"Lease Guaranty": Each Lease Guaranty Agreement by and between Kmart and a
Borrower pursuant to which Kmart will guarantee to such Borrower the obligations
of a Tenant which is a Subsidiary under the related Lease.

"Lease Guaranty Termination": The giving of notice by Kmart or a Subsidiary
to the Borrower and the Trustee, or the Collateral Trustee if applicable, that
Kmart or the Subsidiary has elected to terminate the related Lease Guaranty
because such Subsidiary which is a Tenant under the related Lease, the new
tenant pursuant to an assignment of the related Lease, or a new guarantor of the
performance of such Lease, as the case may be, has achieved Investment Grade
Status and provided that certain other conditions are satisfied.

"Lease Payments": The annual rental and additional rent payable by a Tenant
under a Lease, other than real estate taxes and amounts payable directly to a
third party, which will be payable in accordance with such Lease.

"Loan Agreement": Each Loan Agreement between a Borrower and the Depositor
pursuant to which the Depositor will loan funds to a Borrower to provide
permanent financing for, or to finance the acquisition or acquisition and
construction of, a Facility described in the Prospectus Supplement for each
Series of Certificates.

"Loan Documents": Collectively, each Loan Agreement, Mortgage, Assignment
of Leases and Rents, Lease, Lease Guaranty, if applicable, Construction Fund
Disbursement Agreement, Construction Fund Disbursement Agreement - Common Area,
and Note Put Agreement related to a Mortgage Loan, and any other document
identified in any Loan Agreement as a Loan Document.

"Make-Whole Premium": With respect to any amount of Called Principal of a
Mortgage Note, an amount equal to the sum of (x) the positive excess, if any, as
of the Purchase Date of the Discounted Prepayment Value of the Called Principal
of such Mortgage Note over such Called Principal and (y) an amount equal to the
product of the Called Principal multiplied by the Called Principal Percentage.

"Moody's": Moody's Investors Service, Inc., a corporation organized and
existing under the laws of the State of Delaware, its successors and assigns.

"Mortgage": Each Mortgage, Security Agreement, Assignment of Leases and
Rents and Fixture Filing by and between the Depositor and a Borrower which will
create a first lien priority interest in the Facility securing each Mortgage
Note.

"Mortgage Loan": Each loan from the Depositor to a Borrower evidenced by
one or more Mortgage Notes and secured by a Mortgage and other Collateral.

"Mortgage Note": Each promissory note executed and delivered by a Borrower
to the Depositor which evidences all or a portion of a Mortgage Loan, which is
sold and assigned by the Depositor to the Trustee or

56
<PAGE> 58
Pass-Through Trustee and which is the subject of a Trust Agreement or
Pass-Through Trust Agreement pursuant to which a Series of Certificates is
issued.

"Mortgage Note Account": Each Mortgage Note Account created and maintained
pursuant to a Collateral Trust Agreement.

"Mortgaged Property": The real and personal property securing a Mortgage
Note.

"Note Put Agreement": Each Note Put Agreement by and among a Tenant, Kmart
(if the Tenant is a Subsidiary) and a Depositor pursuant to which the Tenant and
Kmart agree to purchase the related Mortgage Note at the Purchase Price upon the
occurrence of a Triggering Event.

"Pass-Through Trust": A grantor trust created pursuant to a Pass-Through
Trust Agreement.

"Pass-Through Trustee": The bank, trust company or other fiduciary named in
a Prospectus Supplement for a Series of Certificates as the trustee under a
Pass-Through Trust Agreement pursuant to which such Series is issued.

"Pass-Through Trust Agreement": A Trust Agreement when Mortgage Notes of
different maturities are issued pursuant to one or more Loan Agreements.

"Pass-Through Trust Property": The corpus of a Pass-Through Trust created
by a Pass-Through Trust Agreement for a Series of Certificates, consisting of
(i) one or more Mortgage Notes; and (ii) all assets deposited in the Certificate
Account, including investments of funds in such account.

"Percentage Interest": (i) In the case of property held in a Trust (other
than a Collateral Trust) the percentage of the whole undivided beneficial
interest in such property held by a holder of one or more Certificates of such
Trust and evidenced by such Certificates, and (ii) in the case of property held
in a Collateral Trust, the percentage of the whole undivided beneficial interest
in such property held indirectly by a holder of one or more Certificates in a
Pass-Through Trust having an interest in such Collateral Trust. When used in
connection with the exercise of any right which by its terms can be exercised
only by holders of Certificates of a single Pass-Through Trust, such term shall
mean the percentage of the whole undivided interest in the Mortgage Note(s)
owned by such Trust held by a holder of one or more Certificates in such
Pass-Through Trust and evidenced by such Certificates.

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

"Purchase Date": With respect to the Called Principal of a Mortgage Note or
with respect to the purchase of a Mortgage Note pursuant to a Note Put
Agreement, the date on which such Called Principal is to be paid or prepaid or
is declared to be immediately due and payable under any of the related Loan
Documents or the date on which such Mortgage Note is to be purchased.

"Purchase Price": The sum of the Called Principal plus the Make-Whole
Premium and accrued interest with respect to the Called Principal to the
Purchase Date, except that if a Mortgage Note is being purchased pursuant to a
Note Put Agreement as a consequence of a Lease Guaranty Termination, the
Purchase Price will include the Termination Premium instead of the Make-Whole
Premium.

"Record Date": The close of business on the fifteenth day preceding the
related Remittance Date, except that the Record Date with respect to Scheduled
Payments received after the Due Date shall mean the close of business on the
fifteenth day preceding the Remittance Date such Scheduled Payments would have
been distributable to the Certificateholders if they had been paid on such Due
Date.

"Reinvestment Yield": With respect to the Called Principal of a Mortgage
Note, the sum of (x) the yield to maturity implied by the following: (i) the
yields reported, as of 10:00 a.m. (New York City time) on the third Business Day
preceding the Purchase Date with respect to such Called Principal, on the
display designated as "Page 678" on the Telerate Service (or such other display
as may replace Page 678 on the Telerate Service) for actively traded U.S.
Treasury securities having a maturity equal (as nearly as

57
<PAGE> 59
practicable) to the Remaining Average Life of the Called Principal being paid or
prepaid as of such Purchase Date, or (ii) if such yields have been reported as
of such time or the yields reported as of such time are not ascertainable, the
Treasury Constant Maturity Series yields reported, for the latest day for which
such yields have not been so reported as of the third Business Day preceding the
Purchase Date with respect to such Called Principal, in Federal Reserve
Statistical Release H.15 (519) (or any comparable successor publication) for
actively traded U.S. Treasury securities having a constant maturity equal (as
nearly as practicable) to the Remaining Average Life of the Called Principal
being paid or prepaid as of such Purchase Date; and (y) 50 basis points. Such
implied yield will be determined, if necessary, by (a) converting U.S. Treasury
bill quotations to bond-equivalent yields in accordance with accepted financial
practice and (b) interpolating linearly between reported yields.

"Remaining Average Life": With respect to any amount of Called Principal of
a Mortgage Note, the number of years (calculated to the nearest one-twelfth
year) obtained by dividing (i) such Called Principal into (ii) the sum of the
products obtained by multiplying (a) each Remaining Scheduled Payment of such
Called Principal (excluding interest thereon) by (b) the number of years
(calculated to the nearest one-twelfth year) which will elapse between the
Purchase Date with respect to such Called Principal and the scheduled due date
of such Remaining Scheduled Payment.

"Remaining Scheduled Payments": With respect to the Called Principal, all
payments of such Called Principal and interest thereon that would be due on or
after the Purchase Date with respect to such Called Principal if no payment of
such Called Principal were made prior to its maturity date.

"Remittance Date": Each date specified in the Prospectus Supplement for
each Series of Certificates on which principal of, and/or interest on, the
Mortgage Notes is distributable to the Certificateholder or such other date on
which a distribution is made to Certificateholders as a result of the prepayment
or other liquidation of a Mortgage Note or as a result of the sale of a Mortgage
Note pursuant to the related Note Put Agreement.

"Rental Payment Account": Each Rental Payment Account created and
maintained pursuant to a Trust Agreement or a Collateral Trust Agreement if
applicable.

"Scheduled Payments": Payments of principal of, if any, and interest on, a
Mortgage Note held in a Trust or a Pass-Through Trust which will be scheduled to
be received by the Trustee or Collateral Trustee on each Due Date.

"Securities Act": The Securities Act of 1933, as amended.

"Series": A group of Certificates issued by a separate Trust or
Pass-Through Trust.

"Standard & Poor's" or "S&P": Standard & Poor's Ratings Group or its
successor in interest.

"Subsidiary": One or more of the following subsidiaries of Kmart identified
in the related Prospectus Supplement as the Tenant under a related Lease:
Borders, Inc.; Walden Book Company Inc.; Builders Square, Inc.; OfficeMax Inc.;
or The Sports Authority, Inc.

"Tenant": The lessee under each Lease named in the Prospectus Supplement
for each Series of Certificates, which lessee will be either Kmart or a
Subsidiary.

"Termination Premium": With respect to any Mortgage Note, an amount equal
to the unpaid principal balance of such Mortgage Note multiplied by a percentage
as set forth in the related Prospectus Supplement.

"Triggering Event": With respect to a Note Put Agreement, (a) (i) the
failure by a Tenant to pay when due any related Lease Payment within 10 days (or
30 days if the Tenant is Kmart) after notice to such Tenant of such default and
(ii) if the Tenant is a Subsidiary, the failure by Kmart to pay such Lease
Payment within 30 days after notice to Kmart of such Subsidiary's failure to do
so (which notice may be given concurrently with the corresponding notice to such
Subsidiary), (b) completion of construction of the Facility to be leased to the
Tenant does not occur prior to the related Completion Date, or (c) if the Tenant
is a Subsidiary, a Lease Guaranty Termination occurs.

58
<PAGE> 60

"Trust": A grantor trust created pursuant to a Trust Agreement.

"Trust Agreement": An agreement between the Depositor and the Trustee
pursuant to which a Series of Certificates will be issued and, if Mortgage Notes
having the same maturity are issued pursuant to a Loan Agreement, pursuant to
which the Collateral with respect to the related Mortgage Notes will be held.

"Trust Indenture Act": The Trust Indenture Act of 1939, as amended.

"Trust Property": The corpus of the Trust created by a Trust Agreement for
each Series of the Certificates, consisting of (i) one or more Mortgage Notes;
and (ii) all assets deposited in the Certificate Account, including the
investment of funds in such account. If Mortgage Notes of the same maturity are
issued pursuant to the related Loan Documents, then any Trust Property will also
include: (i) all rights which secure the obligations of the Borrowers of the
proceeds of such Mortgage Notes, (ii) all related Loan Documents and any rights
thereunder of holders of the Mortgage Notes; (iii) property which secured the
related Mortgage and which has been acquired by foreclosure or deed in lieu of
foreclosure; and (iv) Insurance Proceeds, Condemnation Proceeds and any other
amounts receivable under any related Loan Document.

"Trustee": The bank, trust company or other fiduciary named in a Prospectus
Supplement for a Series of Certificates as the trustee under a Trust Agreement
pursuant to which such Series is issued.

"Trustee's Fee": The amount of the annual fee(s) paid to the Pass-Through
Trustees, if applicable, or the Trustee for its ordinary fees and expenses
arising under the Pass-Through Trust Agreements, if applicable, or the Trust
Agreement.

59
<PAGE> 61

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

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THE PROSPECTUS SUPPLEMENT OR THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON. THE PROSPECTUS SUPPLEMENT AND THIS PROSPECTUS DO NOT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE
CERTIFICATES OFFERED HEREBY, NOR AN OFFER OF THE CERTIFICATES IN ANY STATE OR
JURISDICTION IN WHICH, OR TO ANY PERSON TO WHOM, SUCH OFFER WOULD BE UNLAWFUL.
THE DELIVERY OF THE PROSPECTUS SUPPLEMENT OR THIS PROSPECTUS AT ANY TIME DOES
NOT IMPLY THAT INFORMATION HEREIN OR THEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO ITS DATE; HOWEVER, IF ANY MATERIAL CHANGE OCCURS WHILE THE
PROSPECTUS SUPPLEMENT OR THIS PROSPECTUS IS REQUIRED BY LAW TO BE DELIVERED, THE
PROSPECTUS SUPPLEMENT OR THIS PROSPECTUS WILL BE AMENDED OR SUPPLEMENTED
ACCORDINGLY.

------------------
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS
Available Information........................ 2
Reports to Certificateholders................ 2
Incorporation of Certain Documents by
Reference.................................. 2
Prospectus Summary........................... 3
Special Considerations....................... 9
Kmart........................................ 11
The Depositor................................ 14
Use of Proceeds.............................. 14
Diagrams of Transaction Structure............ 15
Structure of the Financings.................. 19
The Certificates............................. 20
The Trusts, Pass-Through Trusts and
Collateral Trusts.......................... 26
The Mortgage Notes, the Loan Agreements and
Related Documents.......................... 35
The Note Put Agreements...................... 39
The Leases, the Lease Guaranties and Related
Documents.................................. 40
The Borrowers................................ 45
Consequences of Bankruptcy of a Tenant or a
Borrower................................... 46
Certain Federal Income Tax
Consequences............................... 47
State and Local Tax Considerations........... 50
ERISA Considerations......................... 50
Legal Investment Considerations.............. 51
Plan of Distribution......................... 52
Legal Matters................................ 52
Experts...................................... 52
Glossary..................................... 53
</TABLE>

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

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

$250,000,000

KMART
CORPORATION

MORTGAGE PASS-THROUGH CERTIFICATES

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

PROSPECTUS

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

SUTRO & CO. INCORPORATED

---------------------------------------------------------------
---------------------------------------------------------------
<PAGE> 62

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

<TABLE>
<S> <C>
SEC Filing Fee................................................................ $ 86,206.90
Printing and Engraving........................................................ 130,000.00*
Legal Fees and Expenses....................................................... 2,500,000.00*
Trustee Fees and Expenses..................................................... 60,000.00**
Blue Sky Fees and Expenses (including fees and expenses of counsel)........... 30,000.00*
Rating Agency Fees............................................................ 250,000.00*
Miscellaneous Expenses........................................................ 100,000.00*
-------------
Total.................................................................... $3,156,206.90
============
</TABLE>

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

* Estimated.

** Estimated; does not include annual Trustee expense.

ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS

The Registrant's By-Laws and the Michigan Business Corporation Act permit
the Registrant's officers and directors to be indemnified under certain
circumstances for expenses, and in some instances, for judgments, fines or
amounts paid in settlement of civil, criminal, administrative and investigative
suits or proceedings, including those involving alleged violations of the
Securities Act of 1933. In addition, the Registrant maintains directors' and
officers' liability insurance which, under certain circumstances, would cover
alleged violations of the Securities Act of 1933.

ITEM 16. EXHIBITS

EXHIBIT NO. DESCRIPTION
- ----------- ---------------------------------------------------------------------------------
<S> <C>
1.1 Form of Underwriting Agreement*
3.1 Certificate of Incorporation of National Tenant Finance Corporation*
3.2 By-Laws of National Tenant Finance Corporation*
4.1 Form of Trust Agreement between the Depositor and the Trustee*
4.2 Form of Pass-Through Trust Agreement between the Depositor and the Pass-Through
Trustee*
4.3 Form of Collateral Trust Agreement between the Depositor and the Collateral
Trustee*
4.4 Form of Certificate used with Trust Agreement (included in 4.1)*
4.5 Form of Certificate used with Pass-Through Trust Agreement (included in 4.2)*
4.6 Form of Loan Agreement
4.7 Form of Mortgage Note
4.8 Form of Leases
4.9 Form of Lease Guaranty
4.10 Form of Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture
Filing
4.11 Form of Assignment of Leases and Rents
4.12 Form of Construction Fund Disbursement Agreement
4.13 Form of Construction and Disbursement Agreement -- Common Area
4.14 Form of Note Put Agreement*
4.15 Form of Consent and Agreement
</TABLE>

II-1
<PAGE> 63

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- ---------------------------------------------------------------------------------
<S> <C>
4.16 Form of Indemnity Agreement
5.1 Opinion of Squire, Sanders & Dempsey regarding validity of Certificates,
including consent*
8.1 Opinion of Squire, Sanders & Dempsey as to certain tax matters, including
consent*
12 Computation of Ratio of Earnings to Fixed Charges*
23.1 Consent of Price Waterhouse*
23.2 Consent of Squire, Sanders & Dempsey (included in Exhibit 5.1)*
23.3 Consent of Squire, Sanders & Dempsey (included in Exhibit 8.1)*
24.1 Power of Attorney (included as part of signature page of this Registration
Statement)
25.1 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of
Trustee*
</TABLE>

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

* Filed with this Amendment No. 1

ITEM 17. UNDERTAKINGS.

The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:

(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933 unless the information required to be included in
such post-effective amendment is contained in a periodic report filed by
the Registrant pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934 and incorporated herein by reference;

(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement unless the information required to be
included in such post-effective amendment is contained in a periodic
report filed by the Registrant pursuant to section 13 or section 15(d)
of the Securities Exchange Act of 1934 and incorporated herein by
reference;

(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement.

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.

The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

If the Trustee is not identified until after the Registration Statement is
declared effective, the undersigned registrant hereby undertakes to file an
application for the purpose of determining the eligibility of the trustee to

II-2
<PAGE> 64

act under subsection (a) of section 310 of the Trust Indenture Act of 1939, as
amended (the "TIA"), in accordance with the rules and regulations prescribed by
the Commission under section 305(b)(2) of the TIA.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 15 above or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted against the Registrant by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at the
time shall be deemed to be the initial bona fide offering thereof.

II-3
<PAGE> 65

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Troy and State of Michigan on July 25,
1994.

KMART CORPORATION

By: /s/ JOSEPH E. ANTONINI*

------------------------------------
Joseph E. Antonini
Chairman of the Board, President
and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed below by the following
persons in the capacities indicated on July 25, 1994.

<TABLE>
<CAPTION>
SIGNATURE TITLE
- --------------------------------------------- ---------------------------------------
<S> <C>
/s/ JOSEPH E. ANTONINI* Chairman of the Board, President
- --------------------------------------------- (Principal Executive Officer) and
Joseph E. Antonini Director

/s/ THOMAS F. MURASKY* Executive Vice President
- --------------------------------------------- (Principal Financial and Accounting
Thomas F. Murasky Officer)

/s/ LILYAN H. AFFINITO* Director
- ---------------------------------------------
Lilyan H. Affinito

/s/ JOSEPH A. CALIFANO, JR.* Director
- ---------------------------------------------
Joseph A. Califano, Jr.

/s/ WILLIE D. DAVIS* Director
- ---------------------------------------------
Willie D. Davis

/s/ ENRIQUE C. FALLA* Director
- ---------------------------------------------
Enrique C. Falla

/s/ JOSEPH P. FLANNERY* Director
- ---------------------------------------------
Joseph P. Flannery

/s/ DAVID B. HARPER* Director
- ---------------------------------------------
David B. Harper

/s/ F. JAMES MCDONALD* Director
- ---------------------------------------------
F. James McDonald
</TABLE>

II-4
<PAGE> 66

<TABLE>
<CAPTION>
SIGNATURE TITLE
- --------------------------------------------- ---------------------------------------

<S> <C>
/s/ RICHARD S. MILLER* Director
- ---------------------------------------------
Richard S. Miller

/s/ J. RICHARD MUNRO* Director
- ---------------------------------------------
J. Richard Munro

Director
- ---------------------------------------------
Donald S. Perkins

/s/ GLORIA M. SHATTO* Director
- ---------------------------------------------
Gloria M. Shatto

/s/ JOSEPH R. THOMAS* Director
- ---------------------------------------------
Joseph R. Thomas
</TABLE>

*By: /s/ NANCIE W. LaDUKE

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

Nancie W. LaDuke

Attorney-in-Fact

II-5
<PAGE> 67

APPENDIX

Appendix of Graphic Materials Pursuant to Regulation S-T Item 304(a)

<TABLE>
<CAPTION>
CHART NARRATIVE
PAGE DESCRIPTION
NUMBER DESCRIPTION PAGE NUMBER
- ------ ------------------------------------------------------------------------------------ -----------
<S> <C> <C>
16 Flow Chart of Transaction with One Maturity 17
18 Flow Chart of Transaction with Multiple Maturities 19
</TABLE>
<PAGE> 68

EXHIBIT INDEX

<TABLE>
<CAPTION>
SEQUENTIALLY
NUMBERED
EXHIBIT NO. DESCRIPTION PAGES
- ----------- ---------------------------------------------------------------------- ------------
<S> <C> <C>
1.1 Form of Underwriting Agreement*
3.1 Certificate of Incorporation of National Tenant Finance Corporation*
3.2 By-Laws of National Tenant Finance Corporation*
4.1 Form of Trust Agreement between the Depositor and the Trustee*
4.2 Form of Pass-Through Trust Agreement between the Depositor and the
Pass-Through Trustee*
4.3 Form of Collateral Trust Agreement between the Depositor and the
Collateral Trustee*
4.4 Form of Certificate used with Trust Agreement (included in 4.1)*
4.5 Form of Certificate used with Pass-Through Trust Agreement (included
in 4.2)*
4.6 Form of Loan Agreement
4.7 Form of Mortgage Note
4.8 Form of Leases
4.9 Form of Lease Guaranty
4.10 Form of Mortgage, Security Agreement, Assignment of Leases and Rents
and Fixture Filing
4.11 Form of Assignment of Leases and Rents
4.12 Form of Construction Fund Disbursement Agreement
4.13 Form of Construction and Disbursement Agreement -- Common Area
4.14 Form of Note Put Agreement*
4.15 Form of Consent and Agreement
4.16 Form of Indemnity Agreement
5.1 Opinion of Squire, Sanders & Dempsey regarding validity of
Certificates, including consent*
8.1 Opinion of Squire, Sanders & Dempsey as to certain tax matters,
including consent*
12 Computation of Ratio of Earnings to Fixed Charges*
23.1 Consent of Price Waterhouse*
23.2 Consent of Squire, Sanders & Dempsey (included in Exhibit 5.1)*
23.3 Consent of Squire, Sanders & Dempsey (included in Exhibit 8.1)*
24.1 Power of Attorney (included as part of signature page of this
Registration Statement)
25.1 Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939 of Trustee*
</TABLE>

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

* Filed with this Amendment No. 1

<PAGE> 1
EXHIBIT 1.1

UNDERWRITING AGREEMENT

__________, 19__

Sutro & Co. Incorporated
555 South Flower Street, 46th Floor
Los Angeles, CA 90071

Dear Sirs:

National Tenant Finance Corporation ("Depositor") proposes to
cause United States Trust Company of New York, as trustee ("Trustee") under [a
Trust Agreement dated as of , 199 ] [the several trust agreements
(collectively, "Trust Agreements," and each a "Trust Agreement") identified in
the Schedule of Trust Agreements annexed hereto as Exhibit A] to issue, and
Depositor proposes to sell to you, as [manager of the several] underwriter[s],
$__________ aggregate principal amount of Mortgage Pass-Through Certificates,
in series, as more particularly described in the Schedule of Mortgage
Pass-Through Certificates annexed hereto as Exhibit [A] [B] (the
"Certificates"). Capitalized terms used and not otherwise defined herein shall
have the meanings ascribed to them in the registration statement, dated June 8,
1994, filed by or on behalf of Kmart Corporation ("Kmart") (Registration No.
33-54043)] as from time to time amended and supplemented.

The Certificates of each series will represent fractional
undivided beneficial ownership interests in a single separate trust (a "Trust")
established for the benefit of the Certificateholders of such series. Each
Certificate will represent a fractional undivided beneficial ownership interest
in the assets of one Trust and will have no rights, benefits or interests in
respect of any other Trust or the assets held in any other trust. [The] [Each]
Trust will hold [a] [one or more] Mortgage Note[s] evidencing [a] [one or more]
Mortgage Loan[s]. [The] [Each] Mortgage Loan will be made by the Depositor to
a separate borrower (each a "Borrower") pursuant to a separate Loan Agreement
to finance the [acquisition,] [or] [acquisition and construction,] of a
separate Facility, [or] [to provide permanent financing for a Facility]. If a
Loan Agreement provides for a Mortgage Loan evidenced by Mortgage Notes of one
maturity, then pursuant to a single Trust Agreement, the Depositor will convey
to the Trustee all of its right, title and interest in and to such Mortgage
Loan and the related Mortgage Notes and Loan Documents. In some cases a Loan
Agreement may provide that a Mortgage Loan will be evidenced

<PAGE> 2
2

by two or more Mortgage Notes having different maturities. In such event, (i)
each such Mortgage Note (and, if Mortgage Notes of different maturities are
issued pursuant to two or more Loan Agreements, all of such Mortgage Notes
having the same maturity) will be held by a separate Pass-Through Trust, and,
in the case of Mortgage Notes issued under two or more Loan Agreements, all
Mortgage Notes held by each separate Pass-Through Trust will have the same
maturity, (ii) each Certificate will evidence a fractional undivided beneficial
ownership interest in the assets of the related Pass-Through Trust and will
have no rights, benefits or interests in respect of any other Pass-Through
Trust Property held in any other Pass-Through Trust, and (iii) the Collateral
securing such Mortgage Notes will be held by a Collateral Trustee for the
benefit, pari passu, of all Pass-Through Trusts holding any of the Mortgage
Notes secured by such Collateral. The assets held by either a Trust or a
Collateral Trust will generally include with respect to each Facility the
following collateral for the Mortgage Note[s] relating to such Facility: (i) a
Mortgage on such Facility; (ii) all of the Depositor's rights under the Loan
Agreement pursuant to which the related Mortgage Note[s] were issued; (iii) an
assignment of the related Lease, Lease Payments and, if the related Tenant is a
subsidiary of Kmart (a "Subsidiary"), a Lease Guaranty by Kmart of the lease
obligations of such Tenant; (iv) a pledge of certain moneys held in certain
funds established pursuant to the Trust Agreement, or Collateral Trust
Agreement if applicable; (v) a Note Put Agreement requiring the Tenant and
Kmart (if the Tenant is a Subsidiary) to purchase the related Mortgage
Note(s) upon the occurrence of a Triggering Event; (vi) an assignment of the
Borrower's right, title and interest in and to any Construction Fund
Disbursement Agreement and any Construction Fund Disbursement Agreement-Common
Area related to such Facility; (vii) a pledge of certain investments of fund
balances held in the Trust or the Collateral Trust, if applicable and income
earned thereon; and (viii) any other Loan Documents. The Trust Agreement, the
Loan Agreement, the Mortgage, the Mortgage Note, the Lease, the Lease Guaranty,
the Note Put Agreement, the Pledge Agreement, the Construction Fund
Disbursement Agreement and any other Loan Document are referred to herein as
the "Transaction Documents."

[We understand that you are acting as manager (the "Manager")
on behalf of yourself and the underwriters named below (such underwriter or
underwriters being referred to herein as the "Underwriters").] Subject to the
terms and conditions set forth or incorporated by reference herein, Kmart
agrees to cause the Depositor to sell and the Depositor agrees to sell, and
[you] [the Underwriters] agree to purchase, [severally and not jointly,] the
[respective] principal amounts of Certificates [of each series] set forth
<PAGE> 3
3

opposite [your] [their] name[s] in the Schedule of Underwriters annexed hereto
as Exhibit [B] [C] at the purchase price (expressed as a percentage of the
principal amount of each series of Certificates) set forth in such schedule.

[You] [The Underwriters] will pay for the Certificates in
immediately available funds upon delivery thereof at [location], 10:00 a.m.
(New York time) on _________ or at such other time, not later than 5:00 p.m.
(New York time) on _____________ as shall be designated by [you] [the Manager]
and Kmart. The time and date of such payment and delivery are hereinafter
referred to as the "Closing Date."

The Certificates shall have the terms set forth in the
Prospectus dated _________, as modified by the Definitive Prospectus Supplement
[to be] dated ____________.

1. Representations and Warranties of Kmart. Kmart
represents and warrants to, and agrees with, [you] [each Underwriter] as
follows:

(a) Kmart meets the requirements for the use of
Form S-3 under the Securities Act of 1933, as amended (the "Act"), and
has filed with the Securities and Exchange Commission (the
"Commission") a registration statement (Registration No. 33-54043) on
such Form (as amended and supplemented, the "Registration Statement"),
including a basic prospectus (the "Basic Prospectus"), for
registration under the Act of the offering and sale of mortgage pass
through certificates, including the Certificates. Kmart has filed
[number] amendments and supplements thereto [and has used a
Preliminary Prospectus], each of which has previously been furnished
to [you] [the Manager]. The Registration Statement has become
effective. No stop order suspending the effectiveness of the
Registration Statement is in effect, and no proceedings for such
purpose are pending before, or, to Kmart's knowledge, are threatened
by the Commission. Although the Basic Prospectus does not include all
the information with respect to the Certificates and the offering
thereof required by the Act and the rules thereunder, the Basic
Prospectus includes all such information required by the Act and the
rules and regulations thereunder to be included therein as of the
Effective Date. Kmart will next file with the Commission pursuant to
Rule 424(b)(2) or (5) a definitive prospectus supplement (the
"Definitive Prospectus Supplement") to the form of Basic Prospectus
included in such registration statement relating to the Certificates
and the offering thereof. As filed, such Definitive Prospectus
Supplement, together with the Basic Prospectus, shall
<PAGE> 4
4

include all such required information with respect to the
Certificates and the offering thereof and, except to the extent [you]
[the Manager] shall agree in writing to a modification, shall be in
all substantive respects in the form furnished to [you] [the Manager]
prior to the Execution Time or, to the extent not completed at the
Execution Time, shall contain only such specific additional
information and other changes (beyond those contained in the Basic
Prospectus and any Preliminary Prospectus) as Kmart has advised you,
prior to the Execution Time, will be included or made herein.

(b) The terms which follow, when used in this
Agreement, shall have the meanings indicated. The term "Effective
Date" shall mean each date that the Registration Statement and any
post-effective amendment or amendments thereto became or become
effective. "Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto. "Basic
Prospectus" shall mean the prospectus referred to in paragraph (a)
above contained in the Registration Statement at the Effective Date.
"Preliminary Prospectus" shall mean any preliminary prospectus
supplement to the Basic Prospectus which describes the Certificates
and the offering thereof and is used prior to filing of the Definitive
Prospectus Supplement. "Prospectus" shall mean the Definitive
Prospectus Supplement relating to the Certificates that is first filed
pursuant to Rule 424(b) after the Execution Time, together with the
Basic Prospectus. "Registration Statement" shall mean the
registration statement referred to in paragraph (a) above, including
incorporated documents, exhibits and financial statements, as amended
at the Execution Time (or, if not effective at the Execution Time, in
the form in which it shall become effective) and, in the event any
post-effective amendment thereto becomes effective prior to the
Closing Date (as defined above), shall also mean such registration
statement as so amended. Such term shall include any Rule 430A
Information deemed to be included therein at the Effective Date as
provided by Rule 430A. "Rule 415," "Rule 424," "Rule 430A" and
"Regulation S-K" refer to such rules or regulations under the Act.
"Rule 430A Information" means information with respect to the
Certificates and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule
430A. Any reference herein to the Registration Statement, the Basic
Prospectus, any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 which were filed under the
Securities Exchange Act of 1934, as

<PAGE> 5
5

amended (the "Exchange Act"), on or before the Effective Date or the
issue date of the Basic Prospectus, any Preliminary Prospectus or the
Prospectus, as the case may be; and any reference herein to the terms
"amend," "amendment" or "supplement" with respect to the Registration
Statement, the Basic Prospectus, any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the filing of any
document under the Exchange Act after the Effective Date or the issue
date of the Basic Prospectus, any Preliminary Prospectus or the
Prospectus, as the case may be, deemed to be incorporated therein by
reference.

(c) (i) Each document, if any, filed or to be
filed by Kmart pursuant to the Exchange Act prior to the termination
of the offering of the Certificates complied or will comply when so
filed in all material respects with the Exchange Act and the
applicable rules and regulations thereunder; (ii) each part of the
Registration Statement, when such part became effective, did not
contain, and each such part, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that
the representations and warranties set forth in this Section 1(c) do
not apply to statements or omissions in the Registration Statement or
the Prospectus based upon information furnished to Kmart in writing by
or on behalf of [you] [an Underwriter through the Manager] expressly
for use therein or to that part of the Registration Statement that
shall constitute the statement of eligibility and qualification under
the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act") of any Trustee on Form T-1; (iii) on the Effective Date, and
when the Definitive Prospectus Supplement is first filed (if required)
in accordance with Rule 424(b), and on the Closing Date (X) the
Registration Statement and the Prospectus (and each preliminary
prospectus or prospectus supplement filed as part of any amendment to
the Registration Statement) did and will comply in all material
respects with the applicable requirements of the Act and the Exchange
Act and the respective rules thereunder and (Y) at the Closing Date,
the Trust Agreement complied in all material respects with the
requirements of the Trust Indenture Act and the rules thereunder; and
(iv) each of the Transaction Documents to which Kmart is, or is to be,
a party conforms in all material respects to the description thereof
in the Prospectus.

<PAGE> 6
6

(d) Kmart is a corporation duly incorporated, is
validly existing as a corporation in good standing under the laws of
the State of Michigan, has the full power and authority and legal
right to own and lease the property used by it, to conduct its
business as described in the Prospectus and to execute and deliver
this Agreement and each Transaction Document to which it is a party
and to perform its obligations under this Agreement and each
Transaction Document to which it is a party, and is duly qualified to
transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a
material adverse effect on Kmart and its subsidiaries, taken as a
whole.

(e) This Agreement and each Transaction Document
to which Kmart is a party have been duly authorized, executed and
delivered by Kmart and are legal, valid and binding agreements of
Kmart, enforceable against Kmart in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally, and subject to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).

(f) The execution, delivery and performance by
Kmart of this Agreement and each Transaction Document to which it is a
party and the consummation by Kmart of the transactions contemplated
hereby and thereby (i) do not and will not violate the articles of
incorporation or by-laws of Kmart or any order, injunction, ruling or
decree by which Kmart is bound, (ii) do not and will not constitute a
breach of or a default under any material agreement, indenture,
mortgage, lease, note, instrument or arrangement to which Kmart is a
party or by which Kmart is bound, and (iii) do not and will not
contravene or constitute a material violation of any law, statute,
ordinance, rule or regulation to which Kmart is subject, and (iv) have
been duly authorized by all necessary corporate action on the part of
Kmart, and do not require any stockholder approval.

(g) Neither the authorization, execution or
delivery by Kmart of this Agreement or any Transaction Document to
which it is a party in accordance with the provisions hereof and
thereof, nor the consummation by Kmart of any of the transactions
contemplated hereby or

<PAGE> 7
7

thereby, requires the consent or the approval of, the giving of notice
to, or the registration with, or the taking of any other action in
respect of, any federal or state governmental authority or agency,
other than (i) registration of the issuance and sale of the
Certificates under the Act and under the securities laws of any state
in which the Certificates may be offered for sale if the laws of such
state requires such action, (ii) the qualification of [each of] the
Trust Agreement[s] under the Trust Indenture Act and (iii) the
granting of the application in respect of the Trustee pursuant to
Section 305(b)(2) of the Trust Indenture Act.

(h) Price Waterhouse, who certified the
consolidated financial statements of Kmart and its consolidated
subsidiaries for the year ended January 26, 1994, incorporated by
reference in the Registration Statement and Prospectus, are
independent public accountants as required by the Act and the rules
thereunder.

(i) The financial statements filed as part of the
Registration Statement or included in, or incorporated by reference
into, the Basic Prospectus or the Prospectus or Definitive Prospectus
Supplement present fairly, and will present fairly, the financial
condition and results of operations of the entities purported to be
shown thereby, at the dates and for the periods indicated, and have
been, and, in the case of financial statements subsequently
incorporated by reference, will be, prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved, except as approved by Price
Waterhouse.

(j) There has not occurred any material adverse
change, to Kmart's knowledge, in the condition, financial or
otherwise, or in the earnings, business or operations of Kmart and its
subsidiaries, taken as a whole, from that set forth in either the most
recent annual report on Form 10-K or the most recent quarterly report
on Form 10-Q or Form 8-K filed by Kmart with the Commission or the
Prospectus.

(k) There are no legal or governmental
proceedings pending or, to Kmart's knowledge, threatened to which
Kmart or any of its subsidiaries is or may become a party or to which
any of their respective properties is or may be subject that are
required to be described in the Registration Statement or the
Prospectus and are not so described or any statutes, regulations,
contracts or other documents that are

<PAGE> 8
8

required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement
that are not described or filed as required.

2. Representations and Warranties of the Depositor. The
Depositor represents and warrants to, and agrees with, [you] [each Underwriter]
as follows:

(a) The Depositor is a corporation duly
incorporated, is validly existing as a corporation in good standing
under the laws of the State of Delaware, has the full power and
authority and legal right to own and lease the property used by it, to
conduct its business as described in the Prospectus and to execute and
deliver this Agreement and each Transaction Document to which it is a
party and to perform its obligations under this Underwriting Agreement
and each Transaction Document to which it is a party, and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification.

(b) This Underwriting Agreement and each
Transaction Document to which it is a party, including [each of] the
Trust Agreement[s], have been duly authorized, executed and delivered
by the Depositor and are legal, valid and binding agreements of the
Depositor, enforceable against the Depositor in accordance with their
respective terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally, and subject to
general principles of equity (regardless of whether enforcement is
sought in a proceeding at law or in equity).

(c) The Certificates have been duly authorized
and, when executed and authenticated in accordance with the Trust
Agreement[s] and delivered to and duly paid for by [you] [the
Underwriters] in accordance with the terms hereof, will be entitled to
the benefits of the Trust Agreement[s], will be validly issued under
the Trust Agreement[s] and will be legal, valid and binding
obligations of the Trust[s], enforceable in accordance with their
respective terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally, and subject to
general principles of equity (regardless of whether enforcement is
sought in a proceeding at law or in equity).

<PAGE> 9
9

(d) The execution, delivery and performance by
the Depositor of this Underwriting Agreement and each Transaction
Document to which it is a party, including [each of] the Trust
Agreement[s], and the consummation by the Depositor of the
transactions contemplated hereby and thereby (A) do not and will not
violate the certificate of incorporation or by-laws (or similar
governing instruments) of the Depositor or any order, injunction,
ruling or decree by which the Depositor is bound, (B) do not and will
not constitute a breach of or a default under any agreement,
indenture, mortgage, lease, note, instrument or arrangement to which
the Depositor is a party (there being none other than the Transaction
Documents and other similar transaction documents described in the
Basic Prospectus) or by which the Depositor or any of its property is
bound, and (C) do not and will not contravene or constitute a
violation of any law, statute, ordinance, rule or regulation to which
the Depositor or any of its property is subject, and (D) have been
duly authorized by all necessary corporate action on the part of the
Depositor, and do not require any stockholder approval or approval or
consent of any trustee or holder of any indebtedness or obligations of
the Depositor (there being none).

(e) Neither the authorization, execution or
delivery by the Depositor of this Underwriting Agreement or any
Transaction Document to which it is a party in accordance with the
provisions hereof or thereof, nor the consummation by the Depositor of
any of the transactions contemplated hereby or thereby, requires the
consent or the approval of, the giving of notice to, or the
registration with, or the taking of any other action in respect of,
any federal or state governmental authority or agency, other than (i)
registration of the issuance and sale of the Certificates under the
Act and under the securities laws of any state in which the
Certificates may be offered for sale if the laws of such state
requires such action, (ii) the qualification of [each of] the Trust
Agreement[s] under the Trust Indenture Act and (iii) the granting of
the application in respect of the Trustee pursuant to Section
305(b)(2) of the Trust Indenture Act.

(f) There are no legal or governmental
proceedings pending or, to the knowledge of Depositor, threatened to
which the Depositor is or may become a party or to which any of its
properties is or may be subject.

<PAGE> 10
10

3. Public Offering. Kmart and the Depositor are advised
by [you] [the Manager] that [you] [the Underwriters] propose to make a public
offering of [their respective portions of] the Certificates as soon after this
Agreement has been entered into as in [your] [the Manager's] judgment is
advisable. The terms of the public offering of the Certificates are set forth
in the Prospectus.

4. Purchase and Delivery. Except as otherwise provided
in this Section 4, payment for the Certificates shall be made by wire transfer
or certified or official bank check or checks payable to the order of the
Trustee in immediately available funds at the time and place set forth above,
upon delivery to [The Depository Trust Company ("Cede") for] [your account]
[the respective accounts of the several Underwriters] [you] [the Manager for
the respective accounts of the several Underwriters] of the Certificates,
registered in [the name of Cede] [such names and in such denominations as [you]
[the Manager] shall request in writing not less than two full business days
prior to the date of delivery, with any transfer taxes payable in connection
with the transfer of the Certificates to [[you] [the Underwriters]] duly paid.]

5. Covenants of Kmart and the Depositor. In further
consideration of [your] [the] agreements [of the Underwriters] contained
herein, Kmart and the Depositor severally covenant as follows:

(a) To furnish [you] [the Manager], without
charge, a copy of the Registration Statement (including exhibits
thereto and documents incorporated by reference therein) as originally
filed electronically in compliance with Regulation S-T of the Act [and
a sufficient number of conformed copies of the Registration Statement
(without exhibits thereto) for delivery by the Manager to each of the
other Underwriters], and, during the period mentioned in paragraph (c)
below, as many copies of the Prospectus, any documents incorporated by
reference therein and any supplements and amendments thereto or to the
Registration Statement as [you] [the Manager] may reasonably request.

(b) Before amending or supplementing the
Registration Statement or the Prospectus with respect to the
Certificates, to furnish to [you] [the Manager], a reasonable amount
of time prior to filing such amendment or supplement, a copy of each
such proposed amendment or supplement; provided, however, that the
foregoing requirement shall not apply to any of Kmart's periodic
filings with the Commission required to be filed pursuant to Section
13(a), 13(c), 14 or 15(d) of

<PAGE> 11
11

the Exchange Act, all of which required filings Kmart hereby agrees
timely to make during the period when the Prospectus relating to the
Certificates is required to be delivered under the Act, and copies of
which filings Kmart will upon request cause to be delivered to [you]
[the Manager] promptly after being filed with the Commission.

(c) Subject to the provisions of Section 5(b),
if, during such period after the first date of the public offering of
the Certificates that the Prospectus is required by law to be
delivered in connection with sales by [you] [an Underwriter] or a
dealer, any event shall occur or condition exist as a result of which
it would be necessary to amend or supplement the Prospectus so that
the Prospectus as so amended or supplemented will not contain an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary to amend or supplement the Prospectus, Kmart shall forthwith
prepare, file with the Commission and furnish, at its own expense, to
[you] [the Underwriters], and to the dealers (whose names and
addresses [you] [the Manager] will furnish to Kmart) to which
Certificates may have been sold by [you] [the Underwriters] and to any
other dealer upon request, such amendments or supplements to the
Prospectus so that the Prospectus as so amended or supplemented will
not contain an untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein, in the
light of the circumstances under which they are made, not misleading
or so that the Prospectus, as so amended or supplemented, will comply
with law.

(d) To endeavor to qualify the Certificates for
offer and sale under the securities or Blue Sky laws of such
jurisdictions as [you] [the Manager] shall reasonably request, to
endeavor to maintain such qualification for so long as the laws of
such jurisdictions so require and to notify [you] [the Manager] of any
termination of such qualifications; provided, however, that neither
Kmart nor the Depositor shall be obligated so to qualify the
Certificates if such qualification requires it to file any general
consent to service of process or to qualify as a foreign corporation
in any jurisdiction in which it is not so qualified.

(e) Kmart will promptly advise [you] [the
Manager] (i) when, prior to the termination of the offering of the
Certificates, any amendment to the Registration Statement shall have
been filed or become

<PAGE> 12
12

effective, (ii) of any request by the Commission for any amendment to
the Registration Statement or supplement to the Prospectus or for
additional information, (iii) the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement
or the institution or threatening of any proceedings for that purpose
and (iv) of the receipt by Kmart of any notification with respect to
the suspension of the qualification of the Certificates for sale in
any jurisdiction with the initiation or threatening of any proceeding
for such purpose. Kmart will use its best efforts to prevent the
issuance of any stop order and, if issued, to obtain as soon as
possible the withdrawal thereof.

6. Expenses.

6.1 Sutro & Co. Incorporated ("Sutro") has
advanced or incurred, or shall advance or incur, expenses incident to the shelf
registration by Kmart of $250,000,000 of securities (of which the Certificates
covered by this Underwriting Agreement are a part), including (i) those
incurred in connection with preparation and filing of the Registration
Statement and first amendment thereto, the Basic Prospectus (and preliminary
version thereof), and all exhibits thereto (including the basic forms of
underwriting agreement and Transaction Documents), (ii) the filing fee paid to
the Commission in respect of such registration, (iii) the related fees,
disbursements and other charges of Kmart's counsel, (iv) the related fees,
disbursements and other charges of special counsel to the Depositor, (v) the
related fees, disbursements and other charges of special counsel to Sutro, and
(vi) the printing and delivery to [you] [each Underwriter] in quantities as
hereinabove stated of copies of the Registration Statement, the first amendment
thereto and the Basic Prospectus. Sutro shall be reimbursed for the expenses
advanced or incurred by it by the allowance to Sutro of a shelf filing expense
recovery fee of [ %] of the principal amount of all securities included in
the shelf registration. Such allowance shall be deducted from the purchase
price of all such securities and be retained by, and/or paid to, Sutro.

6.2 In addition to the expenses to be deducted
pursuant to Section 6.1, the following expenses incident to the proposed sale
of Certificates contemplated by this Underwriting Agreement, including (i)
expenses in connection with the preparation of any amendments to the
Registration Statement that relate specifically to the sale of such
Certificates, the Definitive Prospectus Supplement (and any preliminary
versions thereof) and any exhibits to any thereof (including, without
limitation, this Underwriting Agreement), (ii) the preparation, issuance and

<PAGE> 13
13

delivery of such Certificates, (iii) the fees, disbursements and other charges
of Kmart's counsel, (iv) the fees, disbursements and other charges of special
counsel to the Depositor, (v) the fees, disbursements and other charges of
local counsel, (vi) the first year's fees of the Trustee(s), (vii) any fees
charged by rating agencies for the rating of such Certificates, (viii) the
printing and delivery to [you] [each Underwriter] in quantities as hereinabove
stated of copies of the relevant amendments to the Registration Statement and
of the Definitive Prospectus Supplement (and any preliminary versions thereof)
and any amendments or supplements thereto, and (ix) the printing and delivery
to [you] [each Underwriter] of copies of [each of] the Trust Agreement[s] and
any Blue Sky Memorandum, shall be deducted and paid from the proceeds of sale
of the Certificates; provided, however, that the maximum amount of expenses so
to be deducted and paid pursuant to this Section 6.2 shall be $50,000
multiplied by the number of projects to be financed by the sale of such
Certificates.

7. Conditions to Closing. The several obligations of
[you] [the Underwriters] will be subject to the accuracy of the representations
and warranties on the part of Kmart and the Depositor herein on the date hereof
and on the Closing Date, to the accuracy of the statements of officers of Kmart
and the Depositor made in each certificate furnished pursuant to the provisions
hereof, to the performance and observance by Kmart, the Subsidiary, the Trustee
and the Depositor of all covenants and agreements contained in the Transaction
Documents on their part to be performed and observed and to the following
additional conditions precedent:

(a) Subsequent to the execution and delivery of
this Agreement and the most recent quarterly report on Form 10-Q filed
by Kmart with the Commission and prior to the Closing Date,

(i) no stop order suspending the
effectiveness of the Registration Statement shall be in effect
and no proceedings for that purpose shall have been instituted
or threatened;

(ii) there shall not have occurred any
change, or any event reasonably likely to result in any
change, in (x) the letter or letters referred to in Section
7(e) or (y) the condition, financial or otherwise, or in the
earnings, business or operations, of Kmart and its
subsidiaries, taken as a whole, from that set forth in such
Form 10-K, Form 10-Q, Form 8-K or the Prospectus, as amended
or supplemented through the date hereof that, in [your] [the]
reasonable

<PAGE> 14
14

judgment [of the Manager], is material and adverse and
that makes it, in [your] [the] reasonable judgment [of the
Manager], impracticable to market the Certificates on the
terms and in the manner contemplated in the Prospectus, as so
amended or supplemented;

(iii) there shall not have occurred any
(A) suspension or material limitation of trading, either
generally or of any securities of Kmart, on or by, as the case
may be, the New York Stock Exchange or the Chicago Stock
Exchange, (B) suspension of trading of any securities of Kmart
on any exchange or in any over-the-counter market, (C)
declaration of a general moratorium on commercial banking
activities in New York by either Federal or New York State
authorities or (D) any outbreak or escalation of hostilities
or any change in financial markets or any calamity or crisis
that, in [your] [the] reasonable judgment [of the Manager], is
material and adverse and, in the case of any of the events
described in clauses (iii)(A) through (D), such event, singly
or together with any other event, makes it, in [your] [the]
reasonable judgment [of the Manager], impracticable to market
the Certificates on the terms and in the manner contemplated
by the Prospectus, as amended or supplemented; and

(iv) other than as disclosed in the
Prospectus, there shall not have been any downgrading, nor any
notice given of any intended or potential downgrading, or
review or possible change that does not indicate the direction
of the possible change, in the rating accorded any of Kmart's
securities by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule
436(g)(2) under the Act.

(b) [You] [The Manager] shall have received on
the Closing Date:

(i) An opinion of A.N. Palizzi, Esq.,
Executive Vice President and General Counsel of Kmart, dated
as of such date, addressed to [you] [the Manager] in form and
substance satisfactory to [you] [the Manager] to the effect
that:

(1) Kmart is a corporation duly
organized and validly existing as a corporation in
good standing under the laws of the State of
Michigan.
<PAGE> 15
15

(2) Kmart is duly authorized by its
Articles of Incorporation, as amended, to conduct the
business which it is described in the Prospectus (or
in any document incorporated therein by reference) as
conducting.

(3) The Transaction Documents to
which Kmart is a party and this Agreement have each
been duly authorized, executed and delivered by
Kmart.

(4) To such counsel's knowledge, no
further approval, authorization, consent or other
order of any governmental body (other than in
connection or compliance with the provisions of the
securities or blue sky laws of any jurisdiction) is
legally required to permit the execution, delivery
and performance by Kmart of the Transaction Documents
to which it is a party and this Agreement.

(5) The execution, delivery and
performance by Kmart of each of the Transaction
Documents to which it is a party and this Agreement
(A) will not violate any provision of Kmart's
Articles of Incorporation or By-laws, each as
amended, (B) will not, to such counsel's knowledge,
violate any provisions of, or constitute a default
under, or (except as contemplated by the Transaction
Documents) result in the creation or imposition of
any lien, charge or encumbrance on, or security
interest in, any of the assets of Kmart pursuant to
the provision of, any mortgage, indenture, contract,
agreement or other undertaking to which Kmart is a
party or which purports to be binding upon Kmart and
which is, or is required to be, filed by Kmart with
the Commission pursuant to the Act or the Exchange
Act and (C) to such counsel's knowledge will not
violate any provision of any state law or regulation
applicable to Kmart (other than state securities or
blue sky laws, upon which such counsel need not pass)
or, to such counsel's knowledge, any provision of any
order, writ, judgment or decree of any governmental
instrumentality applicable to Kmart.

(ii) An opinion of Dickinson, Wright,
Moon, Van Dusen & Freeman, counsel for Kmart, dated as of such
date, addressed to [you] [the

<PAGE> 16
16

Manager] in form and substance satisfactory to [you] [the Manager] to
the effect that:

(1) Each of the Transaction
Documents to which Kmart or a Subsidiary is a party
conforms in all material respects to the descriptions
thereof contained in the Prospectus.

(2) Except as to the financial
statements and other financial or statistical data
contained or incorporated by reference therein and in
the Statement[s] of Eligibility and Qualification
under the Trust Indenture Act (each a "Form T-1") of
the Trustee(s), and the sections contained in the
Registration Statement and Prospectus under the
headings "CERTAIN FEDERAL INCOME TAX CONSEQUENCES,"
"PROSPECTUS SUMMARY - Federal Income Tax
Consequences" and "ERISA CONSIDERATIONS," upon which
such counsel is not required to state a belief, the
Registration Statement, at the time it became
effective, and the Prospectus complied as to form in
all material respects with the applicable
requirements of the Securities Act and (except with
respect to the parts of the Registration Statement
that constitute the statements of eligibility and
qualification of the Trustee[s] under the Trust
Agreement[s], upon which such counsel need not opine)
the Trust Indenture Act, and the applicable
instructions, rules and regulations promulgated by
the Commission thereunder or pursuant to said
instructions, rules and regulations are deemed to
comply therewith; and, with respect to the documents
or portions thereof filed with the Commission
pursuant to the Exchange Act, and incorporated by
reference in the Prospectus pursuant to Item 12 of
Form S-3, such documents or portions thereof, on the
date first filed with the Commission, complied as to
form in all material respects with the applicable
provisions of the Exchange Act, and the applicable
instructions, rules and regulations promulgated by
the Commission thereunder or pursuant to said
instructions, rules and regulations are deemed to
comply therewith; the Registration Statement has
become and is effective under the Securities Act;
and, to the best knowledge of such counsel, no stop
order suspending the effectiveness of

<PAGE> 17
17

the Registration Statement has been issued and
no proceedings for a stop order with respect thereto
are pending or threatened under Section 8(d) of the
Act.

Such opinion may state that in passing upon
the forms of the Registration Statement and the Prospectus,
such counsel assumes the correctness, completeness and
fairness of the statements made by Kmart and the Depositor and
information included or incorporated by reference in the
Registration Statement and the Prospectus and any
representations of Kmart or the Depositor contained in this
Agreement and that they take no responsibility therefor. The
opinion should also state that, in connection with the
preparation of the Registration Statement and the Prospectus,
such counsel has had discussions with certain of Kmart's
officers and representatives, with other counsel for Kmart,
with counsel for the Depositor, with Price Waterhouse, the
independent certified public accountants who audited certain
of the financial statements incorporated by reference in the
Registration Statement, and with the Underwriters'
representatives, and that such counsel's examination of the
Registration Statement and the Prospectus and its discussions
did not disclose to them any information which gives them
reason to believe that, at the Effective Date, the
Registration Statement contained any untrue statement of a
material fact or omitted to state any material fact required
to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they
were made, not misleading or that the Prospectus, as of the
date thereof and the date hereof, included or includes any
untrue statement of a material fact or omitted or omits to
state any material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading. Such counsel need not
express any belief or opinion as to the financial statements
or other financial or statistical data contained or
incorporated by reference in the Registration Statement or the
Prospectus, applicable antitrust laws, the Form(s) T-1, or the
sections of the Prospectus under the heading "CERTAIN FEDERAL
INCOME TAX CONSEQUENCES," "PROSPECTUS SUMMARY - Federal Income
Tax Consequences" and "ERISA CONSIDERATIONS."

(iii) An opinion of in-house counsel
satisfactory to [you] [the Manager] for each
<PAGE> 18
18

Subsidiary that is a party to any of the Transaction Documents, dated
as of such date, addressed to [you] [the Manager], in form and
substance satisfactory to [you] [the Manager] to the effect that:

(1) The Subsidiary is a corporation
duly organized and validly existing as a corporation
in good standing under the laws of the State of its
incorporation.

(2) The Subsidiary is duly
authorized by its [Articles] [Certificate] of
Incorporation, as amended, to conduct the business
which it is described in the Prospectus (or in any
document incorporated therein by reference) as
conducting.

(3) The Transaction Documents to
which such Subsidiary is a party have each been duly
authorized, executed and delivered by such
Subsidiary.

(4) To such counsel's knowledge, no
further approval, authorization, consent or other
order of any governmental body is legally required to
permit the execution, delivery and performance by
such Subsidiary of the Transaction Documents to which
it is a party.

(5) The execution, delivery and
performance by such Subsidiary of each of the
Transaction Documents to which it is a party will not
violate any provision of such Subsidiary's [Articles]
[Certificate] of Incorporation or By-laws, each as
amended.

(iv) An opinion of Squire, Sanders &
Dempsey, special counsel for the Depositor, dated as of such
date, addressed to [you] [the Manager], in form and substance
satisfactory to [you] [the Manager] to the effect that:

(1) The Depositor is a corporation
duly incorporated and validly existing in good
standing under the laws of the State of Delaware.

(2) This Agreement, and also each
of the Transaction Documents governed by New York law
to which any one or more of

<PAGE> 19
19

Kmart, any Subsidiary or the Depositor is a
party, constitutes the valid and binding agreement of
Kmart, such Subsidiary and/or the Depositor, as the
case may be, enforceable against Kmart, such
Subsidiary and/or the Depositor, as the case may be,
in accordance with the respective terms thereof,
except, in each case, as enforcement thereof may be
limited by bankruptcy, insolvency or other laws
affecting enforcement of creditors' rights generally,
and subject to general principles of equity
(regardless of whether enforcement is sought in a
proceeding at law or in equity). In giving the
opinion specified in the preceding sentence, Squire,
Sanders & Dempsey may state that they have read and
relied upon the opinion of A.N. Palizzi, Esq.
referred to in Section 7(b)(i), and the opinions of
counsel to the Subsidiar[y] [ies] referred to in
Section 7(b)(iii), to the extent that such opinions
are relevant in forming the opinions required by the
next preceding sentence.

(3) The Transaction Documents to
which the Depositor is a party have been duly
authorized, executed and delivered by the Depositor.

(4) The Certificates and the
Transaction Documents to which the Depositor is a
party conform in all material respects to the
descriptions thereof contained in the Prospectus.

(5) The statements and legal
conclusions contained in the Prospectus under the
caption "CERTAIN FEDERAL INCOME TAX CONSEQUENCES" are
correct, and the discussion thereunder does not omit
any considerations that are material to purchasers or
holders of the Certificates with respect to the
matters covered.

(6) Except as to the financial
statements and other financial or statistical data
contained or incorporated by reference therein and in
the Statement[s] of Eligibility and Qualification
under the Trust Indenture Act (each a "Form T-1") of
the Trustee(s), and the sections contained in the
Registration Statement and Prospectus under the
headings "AVAILABLE INFORMATION,"

<PAGE> 20
20

"INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE," "PROSPECTUS SUMMARY -- The Company,"
"PROSPECTUS SUMMARY -- Erisa Considerations,"
"KMART," "KMART CORPORATION SELECTED FINANCIAL
INFORMATION" "ERISA CONSIDERATIONS," "PLAN OF
DISTRIBUTION" and "EXPERTS," upon which such counsel
is not required to state a belief, the Registration
Statement, at the time it became effective, and the
Prospectus complied as to form in all material
respects with the applicable requirements of the Act
and (except with respect to the parts of the
Registration Statement that constitute the Statements
of Eligibility and Qualification of the Trustee[s]
under the Trust Agreement[s], upon which such counsel
need not opine) the Trust Indenture Act, and the
applicable instructions, rules and regulations
promulgated by the Commission thereunder or pursuant
to said instructions, rules and regulations are
deemed to comply therewith; the Registration
Statement has become and is effective under the Act;
and, to the best knowledge of such counsel, no stop
order suspending the effectiveness of the
Registration Statement has been issued and no
proceedings for a stop order with respect thereto are
pending or threatened under Section 8(d) of the Act.

of the circumstances under which they were made, not misleading or
that the Prospectus, as of the date thereof and the date hereof,
included or includes any untrue statement of a material fact or
omitted or omits to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which
they were made, not misleading. Such counsel need not express any
belief or opinion as to the financial statements or other financial or
statistical data contained or incorporated by reference in the
Registration Statement or the Prospectus, applicable antitrust laws,
the Form(s) T-1 or the sections of the Prospectus under the headings
"AVAILABLE INFORMATION," "INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE," "PROSPECTUS SUMMARY -- The Company," "PROSPECTUS SUMMARY
-- Erisa Considerations," "KMART," "KMART CORPORATION SELECTED
FINANCIAL INFORMATION" "ERISA CONSIDERATIONS," "PLAN OF DISTRIBUTION"
and "EXPERTS."

(v) An opinion of local counsel
licensed to practice in the jurisdiction, the laws of which
govern any Transaction Document that is not governed by New
York law, and satisfactory to [you] [the Manager], dated as of
such date, addressed to [you] [the Manager] and satisfactory
in form and substance to [you] [the Manager], which, among
other things, shall be to the effect that each of the
Transaction Documents governed by the laws of such
jurisdiction to which any one or more of Kmart, any Subsidiary
or the Depositor is a party, constitutes the valid and binding
agreement of Kmart, such Subsidiary and/or the Depositor, as
the case may be, enforceable against Kmart, such Subsidiary
and/or the Depositor, as the case may be, in accordance with
the respective terms thereof, except, in each case, as
enforcement thereof may be limited by bankruptcy, insolvency
or other laws affecting enforcement of creditors' rights
generally, and subject to general principles of equity
(regardless of whether enforcement is sought in a proceeding
at law or in equity). In giving the opinion specified in the
preceding sentence, such counsel may state that they have read
and relied upon the opinion of A.N. Palizzi, Esq. referred to
in Section 7(b)(i), the opinions of counsel to the
Subsidiar[y] [ies] referred to in Section 7(b)(iii), and the
opinion of Squire, Sanders & Dempsey referred to in Section
7(b)(iv), to the extent that such opinions are relevant in
forming the opinions required by the next preceding sentence.
<PAGE> 22
22

(vi) The favorable opinion of Brown &
Wood, counsel for the Trustee, dated as of such date,
addressed to [you] [the Manager] and to Kmart, in form and
substance satisfactory to [you] [the Manager] and Kmart to the
effect that:

(1) The Trustee has been duly
incorporated and is validly existing as a banking
corporation in good standing under the laws of the
State of New York.

(2) The Trustee has full corporate
trust power and authority to enter into and perform
its obligations under the Trust Agreement[s] and, on
behalf of the Trust[s], the obligations under the
Transaction Documents to which such Trust[s] [is a
party] [are parties].

(3) The execution and delivery of
the Trust Agreement[s] and, on behalf of the
Trust[s], each of the Transaction Documents to which
a Trust is a party and the performance by the Trustee
of the Trustee's obligations under the Trust
Agreement[s], and the Transaction Documents, have
been duly authorized by all necessary corporate
action of the Trustee, and each has been duly
executed and delivered by the Trustee.

(4) The Trust Agreement[s] and each
of the Transaction Documents to which a Trust is a
party constitute valid and binding agreements of the
Trustee, enforceable against the Trustee in
accordance with their terms, subject, as to
enforcement of remedies, to applicable bankruptcy,
insolvency, reorganization, and other similar laws
affecting the rights of creditors generally and to
general principles of equity (regardless of whether
such enforceability is considered in a proceeding in
equity or at law).

(5) The execution and delivery by
the Trustee of the Trust Agreement[s] and, on behalf
of the Trust[s], each of the Transaction Documents to
which the Trust is a party, and the performance by
the Trustee of its obligations thereunder do not
conflict with, result in a breach or violation of or
constitute a default under, the Certificate of
Incorporation or By-laws of the Trustee.
<PAGE> 23
23

(6) The Certificates have been duly
and validly authorized, executed, authenticated and
issued by the Trust[s] and, when delivered, the
Certificates have been validly issued and are
entitled to the benefits of the Trust Agreement[s].

(vii) An opinion of counsel to each
Borrower, dated as of such date, addressed to you, Kmart and
the Depositor in form and substance satisfactory to [you] [the
Manager], Kmart and the Depositor.

(viii) An opinion of Paul, Weiss,
Rifkind, Wharton & Garrison, [your] counsel [to the
Underwriters], dated as of such date, in a form acceptable to
[you] [the Manager]. Such opinion may state that in passing
upon the forms of the Registration Statement and the
Prospectus, such counsel assumes the correctness, completeness
and fairness of the statements made by Kmart and the Depositor
and information included or incorporated by reference in the
Registration Statement and the Prospectus and any
representations of Kmart or the Depositor contained in this
Agreement and that they take no responsibility therefor. The
opinion should also state that, in connection with the
preparation of the Registration Statement and the Prospectus,
such counsel has had discussions with certain of Kmart's
officers and representatives, with counsel for Kmart and the
Depositor, with Price Waterhouse, the independent certified
public accountants who audited certain of the financial
statements incorporated by reference in the Registration
Statement, and with the Underwriters' representatives, and
that such counsel's examination of the Registration Statement
and the Prospectus and its discussions did not disclose to
them any information which gives them reason to believe that,
at the Effective Date, the Registration Statement contained
any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary
to make the statements therein, in the light of the
circumstances under which they were made, not misleading or
that the Prospectus, as of the date thereof and the date
hereof, included or includes any untrue statement of a
material fact or omitted or omits to state any material fact
necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading. Such counsel need not express any belief or
opinion as to the financial statements

<PAGE> 24
24

or other financial or statistical data contained or
incorporated by reference in the Registration Statement or the
Prospectus, applicable antitrust laws, the Trust Indenture
Act, the Form(s) T-1, or the sections of the Prospectus under
the headings "CERTAIN FEDERAL INCOME TAX CONSEQUENCES,"
"PROSPECTUS SUMMARY - Federal Income Tax Consequences," or
"ERISA CONSIDERATIONS."

(c) [You] [The Manager] shall have received, on
the Closing Date, certificates of Kmart and the Depositor,
respectively, signed by their respective Chairman of the Board,
President, Treasurer or other Chief Financial Officer, or in the case
of the Depositor, any Vice President, dated as of the Closing Date,
and in the case of the certificate of the Depositor, addressed to both
you and Kmart, to the effect that the signer of such certificate has
examined the Registration Statement, the Basic Prospectus, the
Prospectus, the Definitive Prospectus Supplement and this Agreement
and that:

(i) the representations and warranties
of Kmart or the Depositor, as the case may be, in this
Agreement and each of the other Transaction Documents to which
it is a party are true and correct in all material respects
(except for those representations and warranties that are
already subject to a materiality or similar qualification,
which shall be true and correct in all respects as so
qualified) on and as of the date of such certificate, and
Kmart or the Depositor, as the case may be, has complied with
all the agreements and satisfied all the conditions on its
part to be performed or satisfied at or prior to the date of
such certificate;

(ii) no stop order suspending the
effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or,
to the knowledge of Kmart or the Depositor, as the case may
be, threatened;

(iii) there has been no change or any
event reasonably likely to result in any change, in the
condition, financial or otherwise, or in the earnings,
business or operations, of Kmart or the Depositor, as the case
may be, and its subsidiaries, if any, taken as a whole, from
that set forth in the Prospectus, as amended or supplemented
through the date hereof, or the most recent quarterly report
of Kmart on Form 10-Q filed with the Commission, that is
material and adverse; and
<PAGE> 25
25

(iv) no event has occurred that constitutes or is
reasonably likely to result in a default under a Lease or a
Lease Guaranty or any other Transaction Document to which
Kmart or the Depositor, as the case may be, is a party.

(d) [You] [The Manager] shall have received from
each Subsidiary that is a party to any of the Transaction Documents, a
Closing Date certificate signed by its Chairman of the Board,
President or any Vice President, and by its Treasurer or other Chief
Financial Officer, in the form annexed hereto as Exhibit [C] [D].

(e) [You] [The Manager] shall have received on
the Closing Date, from Price Waterhouse, Kmart's independent certified
public accountants, a letter or letters, dated as of the Closing Date,
addressed to both you and Kmart, in form and substance satisfactory to
[you] [the Manager] confirming that they are independent accountants
within the meaning of the Act and the Exchange Act and the respective
applicable published rules and regulations thereunder, and containing
statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in or
incorporated by reference into the Registration Statement and the
Prospectus, including, without limitation, those set forth on Exhibit
[D] [E].

(f) The Depositor shall have received a letter
from Standard & Poor's rating the Certificates "[ ]" and true copies
thereof shall have been provided to [you] [the Manager].

(g) All conditions specified in each of the
Transaction Documents to be performed or satisfied on or prior to the
Closing Date shall have been so performed or satisfied on the Closing
Date and [you] [the Manager] shall have received executed copies of
all documents delivered in connection therewith.

(h) [You] [The Manager] shall have received on
the Closing Date, such appropriate further information, certificates
and documents as [you] [the Manager] may reasonably request.

(i) Each of the transactions contemplated herein
or in the Prospectus as occurring on or before the Closing Date shall
have occurred as anticipated.
<PAGE> 26
26

If any of the conditions specified in this Section 7 shall not
have been fulfilled in all material respects when and as provided in this
Underwriting Agreement, or if any of the opinions and certificates mentioned
above or elsewhere in this Underwriting Agreement shall not be in all material
respects reasonably satisfactory in form and substance to [you] [the Manager]
and to [your] [the Underwriters'] counsel, this Agreement and all of [your]
[the Underwriters'] obligations hereunder may be canceled at, or at any time
prior to, the Closing Date by [you] [the Manager]. Notice of such cancellation
shall be given to Kmart and the Depositor in writing or by telephone or
telegraph confirmed in writing.

8. Indemnification and Contribution.

(a) Kmart agrees to indemnify and hold harmless
[you] [each Underwriter] and each person, if any, who controls [you] [such
Underwriter] within the meaning of either Section 15 of the Act or Section 20
of the Exchange Act from and against any and all losses, claims, damages or
liabilities (including, without limitation, the reasonable fees and expenses of
counsel in connection with any investigation or proceeding), whether or not
arising from third party claims, arising out of or based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement as originally filed or in any amendment or supplement
thereto, or the Prospectus as originally filed or in any amendment or
supplement thereto, or arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (ii) any breach of
a representation or warranty or covenant or agreement herein of Kmart;
provided, however, that Kmart will not be liable in any such case to the extent
that such losses, claims, damages or liabilities are caused by any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein based upon and in conformity with information furnished in writing to
Kmart by or on behalf of [you] [such Underwriter through the Manager] expressly
for use therein; and provided, further, that the indemnity agreement described
in this subsection shall not inure to the benefit of [you] [any Underwriter] or
of any person controlling [you] [such Underwriter] on account of any such
losses, claims, damages, liabilities, expenses or actions arising from the sale
of Certificate to any person in respect of the Prospectus, as supplemented or
amended (excluding, however, any document then incorporated or deemed
incorporated by reference therein pursuant to Item 12 of Form S-3) furnished by
[you] [such Underwriter] to a person to whom any of the Certificates were sold,
insofar as such indemnity relates to any untrue or misleading statement

<PAGE> 27
27

or omission made in a Preliminary Prospectus or the Prospectus but eliminated
or remedied prior to the consummation of such sale in the Prospectus, or any
amendment or supplement thereto furnished pursuant to Section 5 hereof,
[respectively,] unless a copy of such amendment or supplement is furnished by
[you] [such Underwriter] to such person (i) with or prior to the written
confirmation of the sale involved or (ii) as soon as available after such
written confirmation.

(b) [You] [Each Underwriter] agree[s], severally
and not jointly, to indemnify and hold harmless Kmart, its directors, its
officers who signed the Registration Statement and each person, if any, who
controls Kmart within the meaning of either Section 15 of the Act or Section 20
of the Exchange Act to the same extent as the foregoing indemnity from Kmart to
[you] [such Underwriter], but only with reference to the respective information
relating to [you] [such Underwriter], as the case may be, furnished in writing
by or on behalf of [you] [such Underwriter] expressly for use in the
Registration Statement, the Prospectus or any amendments or supplements
thereto.

(c) If any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either paragraph (a) or (b) above, such
person (the "indemnified party") shall promptly notify the person against whom
such indemnity may be sought (the "indemnifying party") in writing of the
institution of such proceeding and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
parties to any such proceeding (including any impleaded parties) include both
the indemnifying party (or any other person represented by such counsel) and
the indemnified party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between
them. Except as provided in the preceding sentence, it is understood that the
indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm (in addition to any local counsel) for
all such indemnified parties and that all such fees and expenses as are

<PAGE> 28
28

reimbursable hereunder shall be reimbursed as they are incurred. In the case
of parties indemnified pursuant to paragraph (a) above, such separate firm
shall be designated in writing by [you] [the Manager], and by Kmart in the case
of parties indemnified pursuant to paragraph (b) above. The indemnifying party
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.

(d) If the indemnification provided for in
paragraph (a) or (b) of this Section 8 is unavailable to an indemnified party
or insufficient in respect of any losses, claims, damages or liabilities
referred to therein, then each indemnifying party under such paragraph, in lieu
of indemnifying such indemnified party thereunder, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (i) in such proportion as is appropriate to
reflect the relative benefits received by Kmart on the one hand and [you] [the
Underwriters] on the other from the offering of the Certificates or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of Kmart on the one
hand and of [you] [the Underwriters] on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by Kmart (and the Trust) on the one hand and [you]
[the Underwriters] on the other in connection with the offering of the
Certificates shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Certificates (before deducting expenses)
received by Kmart bears to the total commissions received by [you] [the
Underwriters] in respect thereof. The relative fault of Kmart on the one hand
and of [you] [the Underwriters] on the other, shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by or on behalf of Kmart or by or on behalf of
[you] [the

<PAGE> 29
29

Underwriters] and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
For purposes of this Section 8, each person who controls [any of] you within
the meaning of the Act shall have the same rights to contribution as [any of]
you, and each person who controls Kmart within the meaning of either the Act or
the Exchange Act, each officer of Kmart who shall have signed the Registration
Statement and each director of Kmart shall have the same rights to contribution
as Kmart, subject in each case to the provisions of this paragraph (d) and
paragraph (e). Any party entitled to contribution will, promptly after receipt
of notice of commencement of any action, suit or proceeding (including any
governmental investigation) against such party in respect of which a claim for
contribution may be made against another party or parties under this paragraph
(d), notify such party or parties from whom contribution may be sought, but the
omission to so notify such party or parties shall not relieve the party or
parties from whom contribution may be sought from any other obligation it or
they may have hereunder or otherwise than under this paragraph (d), except and
only to the extent that the party or parties is materially prejudiced thereby.

(e) Kmart and [you] [the Underwriters] agree that
it would not be just and equitable if contribution pursuant to this Section 8
were determined by pro rata allocation [(even if the Underwriters were treated
as one entity for such purpose)] or by any other method of allocation that does
not take account of the considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of
the losses, claims, damages and liabilities referred to in paragraph (d) above
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8, [you] [no Underwriter] shall
[not] be required to contribute any amount in excess of the amount by which the
total price at which the Certificates underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages that [you
have] [such Underwriter has] otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. [The Underwriters' obligations to
contribute pursuant to this Section 8 are several in proportion to the total
commissions received by each Underwriter pursuant to this Agreement and not
joint.] The remedies provided for in this Section 8 are not exclusive

<PAGE> 30
30

and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.

The indemnity and contribution provisions contained in this
Section 8 and the representations and warranties and covenants and agreements
of Kmart and the Depositor contained herein shall remain operative and in full
force and effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on [your] behalf [of any Underwriter], or any person
controlling [you] [any Underwriter] or by or on behalf of Kmart, its directors
or officers or any person controlling Kmart and (iii) acceptance and payment
for any of the Certificates.

9. Termination. This Agreement shall be subject to
termination, by notice given by [you] [the Manager] to Kmart, if after the
execution and delivery of this Agreement and prior to the Closing Date (i)
there has been any material adverse change in the condition, financial or
otherwise, or in the earnings, business or operations of Kmart and its
subsidiaries, taken as a whole, or (ii) there has occurred any outbreak or
escalation of hostilities or other calamity or crisis the effect of which on
the financial markets of the United States is such as to make it, in [your]
[the Manager's] judgment, impracticable to market the Certificates, or (iii)
trading in securities, either generally or of Kmart, on the New York Stock
Exchange has been suspended or materially limited or if a general moratorium on
commercial banking activities has been declared by either Federal or New York
State authorities, or (iv) except as disclosed in the Prospectus, there has
been any downgrading, or any notice given of any intended or potential
downgrading, in the rating accorded any of Kmart's securities by any
"nationally recognized statistical rating organization," as such term is
defined for purposes of Rule 436(g)(2) under the Act, or (v) all of the
conditions of Section 7 shall not have been fulfilled.

[10. Defaulting Underwriters. If, on the Closing Date, any
one or more of the Underwriters shall fail or refuse to purchase Certificates
that it has or they have agreed to purchase hereunder on such date, and the
aggregate amount of Certificates which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than
one-tenth of the aggregate amount of the Certificates to be purchased on such
date, the other Underwriters shall be obligated severally in the proportions
that the amount of Certificates set forth opposite their respective names in
Exhibit [B] [C] bears to the aggregate amount of Certificates set forth
opposite the names of all such non- defaulting Underwriters, or in such other
proportions as the Manager may specify, to purchase the Certificates which such

<PAGE> 31
31

defaulting Underwriter or Underwriters agreed but failed or refused to purchase
on such date; provided, that in no event shall the amount of Certificates that
any Underwriter has agreed to purchase pursuant to this Agreement be increased
pursuant to this Section 10 by an amount in excess of one-ninth of such amount
of Certificates without the written consent of such Underwriter. If, on the
Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase
Certificates and the aggregate amount of Certificates with respect to which
such default occurs is more than one-tenth of the aggregate amount of
Certificates to be purchased on such date, and arrangements satisfactory to the
Manager and Kmart for the purchase of such Certificates is not made within 36
hours after such default, this Agreement shall terminate without liability on
the part of any nondefaulting Underwriter or Kmart. In any such case the
Manager or Kmart shall have the right to postpone the Closing Date but in no
event for longer than seven days, in order that the required changes, if any,
in the Registration Statement and in the Prospectus or in any other documents
or arrangements may be effected. Any action taken under this paragraph shall
not relieve any defaulting Underwriter from liability in respect of any default
of such Underwriter under this Agreement.

If this Agreement shall be terminated by the Underwriters, or
any of them, because of any failure or refusal on the part of Kmart or the
Depositor to comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason Kmart shall be unable to perform its
obligations under this Agreement, Kmart or the Depositor will reimburse the
Underwriters or such Underwriters as have so terminated this Agreement with
respect to themselves, severally, for all out-of-pocket expenses (including the
fees and disbursements of their counsel) reasonably incurred by such
Underwriters in connection with this Agreement or the offering of the
Certificates.]

11. Miscellaneous. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.

This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.

12. Notices. All communications hereunder will be in
writing and effective only on receipt, and, if sent to you at the address set
forth above (telecopy no.:_______); if sent to Kmart, will be mailed, delivered
or telecopied to it at 3100 West Big Beaver Road, Troy, Michigan 48084
(telecopy no.________), attention of Executive Vice President and Chief
Financial Officer (with a copy to the General

<PAGE> 32
32

Counsel); and if sent to the Depositor, will be mailed, delivered or telecopied
to it at __________ (telecopy no. ____________), attention of ______________,
with a copy to Squire Sanders & Dempsey, 40 North Central Avenue, Suite 2700,
Phoenix, Arizona 85004, attention of Norman C. Storey, Esq.

13. Successors. This Agreement will inure to the benefit
of and be binding upon the parties hereto and their respective successors and
the officers and directors and controlling persons referred to in Section 8
hereof, and no other person will have any right or obligation hereunder.

14. Headings. The headings of the sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed a part of this Agreement.

Please confirm your agreement by having an authorized officer
sign a copy of this Agreement in the space set forth below.

Very truly yours,

KMART CORPORATION

By:____________________________________
Name:
Title:

NATIONAL TENANT FINANCE CORPORATION

By:____________________________________
Name:
Title:

Accepted:

SUTRO & CO. INCORPORATED[,]
[On behalf of itself and the several
Underwriters named in Exhibit [B] [C] hereto]

By:_________________________________
Name:
Title:
<PAGE> 33
EXHIBIT [C] [D]

OFFICERS' CERTIFICATE

We, ______________, [Chairman] [President] [a Vice President],
and _______________________, [Treasurer] [Other] and Chief Financial Officer,
of [Name of Subsidiary] (the "Subsidiary"), deliver this certificate in
accordance with Section 7(d) of the Underwriting Agreement (the "Underwriting
Agreement"), dated _________, 199_, among Sutro & Co. Incorporated ("Sutro")
[on behalf of itself and the other underwriters identified in the exhibit
thereto], Kmart Corporation ("Kmart") and National Tenant Finance Corporation
(the "Depositor"), relating to the sale of $___________ aggregate principal
amount of Mortgage Pass-Through Certificates (the "Certificates") pursuant to a
registration statement on Form S-3 (Registration No. 33-54043) (as amended and
supplemented, the "Registration Statement") filed by Kmart with the Securities
and Exchange Commission.

Capitalized terms used, but not otherwise defined, herein have
the meanings ascribed to them in the Underwriting Agreement or, if not defined
therein, in the Registration Statement.

We hereby certify as follows:

(a) The Subsidiary has been duly incorporated, is
validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has full power and authority
and legal right to own and lease the property used by it, to conduct
its business as described in the Prospectus and the Definitive
Prospectus Supplement and to execute and deliver, and to perform its
obligations under, each Transaction Document to which it is a party.
The Subsidiary is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Subsidiary.

(b) Each Transaction Document to which the
Subsidiary is a party has been duly authorized, executed and delivered
by the Subsidiary and is a legal, valid and binding agreement of the
Subsidiary, enforceable against the Subsidiary in accordance with its
terms except as the enforcement thereof may be limited by bankruptcy,
insolvency or other laws affecting
<PAGE> 34
2

enforcement of creditors' rights generally, and subject to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).

(c) The execution, delivery and performance by
the Subsidiary of any Transaction Document to which it is a party and
the consummation by the Subsidiary of the transactions contemplated
thereby (i) do not and will not violate the [Articles] [Certificate]
of Incorporation or by-laws of the Subsidiary or any order,
injunction, ruling or decree by which the Subsidiary is bound, (ii) do
not and will not constitute a breach of or a default under any
material agreement, indenture, mortgage, lease, note, instrument or
arrangement to which the Subsidiary is a party or by which the
Subsidiary is bound, (iii) do not and will not contravene or
constitute a violation of any law, statute, ordinance, rule or
regulation to which the Subsidiary or any of its property is subject
and (iv) have been duly authorized by all necessary corporate action
on the part of the Subsidiary and do not require any stockholder
approval or approval or consent of any trustee or holder of any
indebtedness or obligations of the Subsidiary.

(d) Neither the authorization, execution or
delivery by the Subsidiary of any Transaction Document to which it is
a party in accordance with the provisions thereof nor the consummation
by the Subsidiary of any of the transactions contemplated thereby
requires the consent or the approval of, the giving of notice to, or
the registration with, or the taking of any other action in respect
of, any federal or state governmental authority or agency.

IN WITNESS WHEREOF, we have executed this certificate on the
____ day of ___________, 199_.

[Name of Subsidiary]

By:__________________________
Name:
Title:

By:__________________________
Name:
Title:
(Chief Financial Officer)

<PAGE> 1
EXHIBIT 3.1

CERTIFICATE OF INCORPORATION
OF
NATIONAL TENANT FINANCE CORPORATION

FIRST: The name of the Corporation is National Tenant Finance Corporation.

SECOND: The address of its registered office in the State of Delaware is
Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County
of New Castle, Delaware. The name of its registered agent at such address is
The Corporation Trust Company.

THIRD: The purpose of the Corporation is to engage solely in the following
business and activities:

(a) to lend funds to one or more special purpose entities acting as the
Borrower/Landlord in lease transactions with one or more tenants which will
occupy the demised premises in such lease transactions, which loans will be
evidenced by a Note or Notes to be issued by the Borrower/Landlord in favor of
the Corporation pursuant to a Loan Agreement and secured by a Mortgage (or
similar security instrument) and Assignment of Leases and Rents and certain
other security documents between each Borrower/Landlord and the Corporation,
each of which shall thereafter be deposited by the Corporation, acting as
settlor or depositor, with an institutional trustee as Trustee of a Mortgage
Pass-Through Trust or Collateral Trust;

(b) to cause the issuance of Mortgage Pass-Through Certificates
("Certificates") in an amount equal to the aggregate of the issuance and
offering costs relating to the Certificates and the loans to be made by the
Corporation to the Borrower/Landlords, which Certificates will be issued
pursuant to a Trust Agreement or one or more Mortgage Pass-Through Trust
Agreements entered into by and between the Corporation as settlor or depositor
and an institutional trustee, its successors and assigns (collectively,
"Trustee"), designated therein establishing one or more Trusts to which the
Corporation will convey its interest in the loan or loans funded with net
proceeds of the issuance and sale of the Certificates; and

(c) to engage in any lawful act or activity and to exercise any powers
permitted to corporations under the Delaware General Corporation Law, so long
as the same are necessary, appropriate, suitable, incidental or convenient to
accomplish only those purposes specified in subparagraphs (a) and (b) of this
Article THIRD.

FOURTH: The authorized capital stock of the Corporation shall be One Hundred
Thousand (100,000) shares as set forth below:

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<PAGE> 2
(a) The Corporation shall have authority to issue Ten Thousand (10,000)
shares of no par value voting common stock ("Common Stock"). Each holder of
the Common Stock will be entitled to one vote per share on all matters.

(b) The Corporation shall have the authority to issue Ninety Thousand
(90,000) shares of no par value preferred stock ("Preferred Stock"). The
Preferred Stock will be nonvoting in all matters except those involving the
adoption of one or more amendments to the Corporation's Certificate of
Incorporation or Bylaws or Restated Certificate of Incorporation or Bylaws and
the removal of the Independent Director ("Voting Matters"). The vote accorded
each share of Preferred Stock will be equal to the votes accorded a holder of
five (5) shares of Common Stock (or five votes) on all Voting Matters and
voting with respect to Voting Matters shall not be by class. With respect to
the election of directors and all other matters, except Voting Matters, the
Preferred Stock will be nonvoting. Each share of Preferred Stock will be
convertible at any time at the election of the holder of such Preferred Stock
into five (5) shares of Common Stock. The Preferred Stock will be
nonredeemable. Dividends may be paid on the Preferred Stock in the discretion
of the Board of Directors; provided, however, that in no event will dividends
be paid on the Preferred Stock in an amount that exceeds 24.9% of the aggregate
dividends paid on all outstanding classes of stock of the Corporation. The
Preferred Stock will have a liquidation preference of $100 per share.

FIFTH: Subject to Articles SEVENTH and EIGHTH of this Certificate of
Incorporation, the ongoing business and affairs of the Corporation shall be
managed by and under the direction of the Board of Directors, which may
exercise all powers of the Corporation. The name and mailing address of the
initial Directors of the Corporation, who shall serve as directors until the
first annual meeting of the stockholders or until a successor is elected and
qualified, are:

Daniel L. Mercer
25 West Lawrence Road
Phoenix, Arizona 85013

James B. Fijan
110 W. Myrtle Avenue
Phoenix, Arizona 85021

SIXTH: At any time, at least one director of the Corporation ("Independent
Director") shall be a person who is not and has not for the period commencing
twenty-four (24) months prior to such member's election to the Board of
Directors and continuing through the date as of which such term commenced been
(i) a shareholder of the Corporation or (ii) a director, officer or employee of
any corporate entity owning beneficially, directly or indirectly more than five
percent (5%) of the outstanding shares of the Corporation's capital stock with
voting rights regardless of

2
<PAGE> 3

class or a director, officer or employee of such beneficial owner's
subsidiaries or affiliates other than the Corporation. The Independent
Director shall not be removed except by the vote of fifty-one percent (51%) or
more of the holders of the shares entitled to vote thereon without regard to
class.

SEVENTH: Notwithstanding any other provision of this Certificate of
Incorporation and any other provision of law which otherwise so empowers the
Corporation, the Corporation shall not without the prior written consent of a
majority of the directors of the Corporation (which majority must include the
Independent Director as a part thereof) do any of the following:

(a) take any action to dissolve or liquidate the Corporation or seek
relief under State or Federal bankruptcy law;

(b) merge or consolidate with or into any other entity or transfer its
property and assets substantially as an entirety to any other entity provided
that nothing herein contained shall prevent or restrict the Corporation from
assigning or pledging its assets in any manner consistent with Article THIRD of
this Certificate of Incorporation; or

(c) amend this Certificate of Incorporation to alter in any manner or
delete Article THIRD, Article SIXTH or this Article SEVENTH or Article EIGHTH,
and, provided further, the corporation shall not amend this Certificate of
Incorporation without giving notice in writing to Trustee not less than thirty
(30) days nor more than ninety (90) days prior to the date on which such
amendment is to become effective and without first obtaining the written
consent of Trustee.

EIGHTH: So long as any Certificates remain outstanding, the fiduciary duty of
the directors of the Corporation shall not include a duty to: (i) institute
proceedings to have the Corporation adjudicated a bankruptcy or insolvent; (ii)
consent to the institution of bankruptcy or insolvency proceedings against the
Corporation; (iii) file a petition or consent to a petition seeking
reorganization or relief on behalf of the Corporation under any applicable
Federal or State law relating to bankruptcy; (iv) consent to the appointment of
a receiver, liquidator, assignee, trustee, sequestrator (or any similar
official) of the Corporation or a substantial portion of its property; (v) make
any assignment for the benefit of the Corporation's creditors; (vi) cause the
Corporation to admit in writing its inability to pay its debts generally as
they become due; (vii) take any action or cause the Corporation to take any
action in furtherance of any of the foregoing (any of the above foregoing
actions a "Bankruptcy Action"). No director or officer of the Corporation
shall be liable to the Corporation or any stockholder on account of such
director's or officer's good faith reliance on the provisions of this Article
EIGHTH and neither the Corporation nor any stockholder of the Corporation shall
have any claim for breach of fiduciary

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<PAGE> 4
duty or otherwise against any director or officer for failing to take any
bankruptcy action.

NINTH: The name and mailing address of the incorporator is as follows:

Norman C. Storey
40 North Central Avenue, Suite 2700
Phoenix, Arizona 85004

All powers, duties and responsibilities of the incorporator shall terminate
upon filing this Certificate of Incorporation with the Secretary of State of
the State of Delaware.

TENTH: Subject to Article SEVENTH, the Corporation reserves the right to
amend, alter, change or repeal any provision contained in this Certificate of
Incorporation, in the manner now or hereafter prescribed by statute, and all
rights conferred upon stockholders herein are granted subject to this
reservation.

ELEVENTH: A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director except for liability (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involved intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law, or (iv) for any transaction from which the director derived
any improper personal benefit. If the Delaware General Corporation Law
hereafter is amended to authorize the further elimination or limitation of the
liability of directors, then the liability of a director of the Corporation, in
addition to the limitation on personal liability provided herein, shall be
limited to the fullest extent permitted by the amended Delaware General
Corporation Law. No amendment to or repeal of this Article ELEVENTH shall
apply to or have any effect on the liability or alleged liability of any
director of the Corporation for or with respect to any acts or omissions of
such director occurring prior to such amendment or repeal.

I, THE UNDERSIGNED, being the sole incorporator hereinbefore named, for the
purpose of forming a corporation pursuant to the General Corporation Law of the
State of Delaware, do make this Certificate, hereby declaring and certifying
that this is my act and deed and the facts herein stated are true, and
accordingly have hereunto set my hand this ____ day of July, 1994.

INCORPORATOR:

Norman C. Storey

<PAGE> 1
EXHIBIT 3.2

BY-LAWS
OF
NATIONAL TENANT FINANCE CORPORATION

ARTICLE I
MEETINGS OF STOCKHOLDERS

Section 1. Annual Meetings. The annual meetings of the Stockholders shall
be held on the third Wednesday of March of each year at the principal office of
the corporation or at such other location as the Board of Directors shall
determine. At such meetings, directors shall be elected, reports of the
affairs of the corporation shall be considered, and any other business may be
transacted which is within the powers of the stockholders.

Section 2. Special Meetings. Special meetings of each of the stockholders,
for any purpose or purposes whatsoever set forth in the notice of such meeting
or in any waiver of notice thereof, may be called at any time by the president,
or by one or more stockholders holding, in the aggregate, not less than forty
percent (40%) of the voting power of the corporation.

Section 3. Notices. Notices of all meetings of the stockholders shall
conform to the provisions of Article IV of these By-Laws.

Section 4. Voting and Proxies. Every person entitled to vote shall have the
right to do so either in person or by one or more agents authorized by a
written proxy executed by such person or his duly authorized agent and filed
with the secretary of the corporation. Any proxy duly executed is not revoked
and continues in full force and effect until an instrument revoking it, or a
newly executed proxy bearing a later date, is filed with the secretary of the
corporation; provided, however, that no proxy shall be valid after the
expiration of three (3) years from the date of its execution, unless the person
executing it specifies therein a longer period of time for which such proxy is
to continue in force.

Section 5. Stockholders of Record. Only such persons shall be entitled to
vote in person or by proxy as appear as stockholders upon the transfer books of
the corporation on a record date adopted by the Board of Directors, which
record date shall be not more than sixty or less than ten days before the date
of such vote.

Section 6. Quorum. The presence, in person or by proxy, of persons entitled
to vote a majority of the shares entitled to vote at any meeting shall
constitute a quorum for the transaction of business. The stockholders present
at a meeting at which a quorum is present may continue to do business until
adjournment,

<PAGE> 2
notwithstanding the withdrawal of enough stockholders to leave less than a
quorum.

Any stockholders' meeting, annual or special, whether or not a quorum is
present, may be adjourned from time to time by the vote of a majority of the
shares entitled to vote, the holders of which are either present in person or
represented by proxy; but in the absence of a quorum, no other business may be
transacted at such meeting. At any adjourned meeting at which a quorum shall
be present, any business may be transacted which might have been transacted at
the original meeting.

Section 7. Informalities. All informalities or irregularities, or both, in
calls, notices of meetings, the manner of voting, form of proxies, credentials,
and method of ascertaining those present, shall be deemed waived if no
objection is made at the meeting.

ARTICLE II
BOARD OF DIRECTORS

Section 1. Powers. Subject to limitations of the Certificate of
Incorporation and of Delaware General Corporation Law as to action to be
authorized or approved by the stockholders, the ongoing business and affairs of
the corporation shall be managed by and under the direction of the Board of
Directors which may exercise all powers of the Corporation.

Section 2. Number of Directors. The authorized number of directors of the
corporation shall be two (2) and at any time at least one director shall be an
Independent Director as defined in the Certificate of Incorporation.

Section 3. Vacancies. Vacancies on the Board of Directors may be filled by
a majority of the remaining directors, though less than a quorum, or by a sole
remaining director, and each director so elected shall hold office until his
successor is elected at an annual or a special meeting of the stockholders.

A vacancy or vacancies on the Board of Directors shall be deemed to exist in
the case of the death, resignation, or removal of any director, or if the
authorized number of directors is increased, or if the stockholders fail, at
any annual or special meeting of the stockholders at which a director, or
directors, is elected, to elect the full authorized number of directors to be
voted for at the meeting.

The stockholders may elect a director, or directors, at any time to fill any
vacancy, or vacancies, not filled by the directors. If the Board of Directors
accepts the resignation of a director intended to take effect at a future time,
the board or the stockholders shall have the power to elect a successor to take
office when the resignation becomes effective.

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<PAGE> 3
Section 4. Organization Meetings. Immediately following each annual meeting
of the stockholders, the Board of Directors shall hold a regular meeting for
the purpose of organization, election of officers, and the transaction of other
business. Notice of such meeting shall not be required.

Section 5. Other Regular Meetings. Other regular meetings of the Board of
Directors shall be held without call or notice at such other times, at regular
intervals, as the Board of Directors may from time to time by resolution
specify.

Section 6. Special Meetings. Special meetings of the Board of Directors for
any purpose or purposes, shall be called at any time by the president or by the
two directors. Notices of special meetings shall conform to the provisions of
Article IV of these By-Laws.

Section 7. Telephone Meetings. Directors may participate in a meeting of
the Board of Directors by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other and participation in a meeting pursuant to this
Section 7 shall constitute presence in person at such meeting.

Section 8. Quorum. A majority of the authorized number of directors shall
be necessary to constitute a quorum for the transaction of business, except to
adjourn. Every act or decision done or made by a majority of the directors
present at a meeting at which a quorum is present shall be regarded as the act
of the Board of Directors, unless otherwise required by the Certificate of
Incorporation or by law.

Section 9. Adjournment. A quorum of the directors may adjourn any directors
meeting to meet again at a stated date and hour; provided, however, that in the
absence of a quorum, a majority of the directors present at any directors
meeting, either regular or special, may adjourn from time to time until the
time fixed for the next regular meeting of the board.

Notice of the time or place of holding an adjourned meeting need not be
given to absent directors if the time and place be fixed at the meeting
adjourned.

Section 10. Fees and Compensation. Directors and members of committees may
receive such compensation, if any, for their services, and such reimbursement
for expenses, as may be fixed or determined by resolution of the Board of
Directors.

ARTICLE III
OFFICERS

Section 1. Officers. The officers of the corporation shall be a president,
secretary and a treasurer. The corporation may also have, at the discretion of
the Board of Directors, one or

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<PAGE> 4
more vice-presidents, one or more assistant secretaries, one or more assistant
treasurers, and such other officers as may be appointed in accordance with the
provisions of Section 3 of this Article. One person may hold any number of
offices.

Section 2. Election. The officers of corporation, except such officers as
may be appointed in accordance with the provisions of Section 3 or 5 of this
Article, shall be chosen annually by the Board of Directors, and each shall
hold his office until his successor shall be elected and qualify or until such
officer's earlier death, resignation or removal.

Section 3. Subordinate Officers. The Board of Directors may appoint such
other officers as the business of the corporation may require, each of whom
shall hold office for such period, have such authority, and perform such duties
as are provided in the By-Laws or as the Board of Directors may from time to
time determine.

Section 4. Removal and Resignation. Any officer may be removed, either with
or without cause, by the Board of Directors, at any regular or special meeting
thereof, or except in the case of an officer chosen by the Board of Directors,
by an officer upon whom such power or removal may be conferred by the Board of
Directors.

Any officer may resign at any time by giving written notice to the Board of
Directors, or to the president, or to the secretary of the corporation. Any
such resignation shall take effect at the date of the receipt of such notice or
at any later time specified therein; and, unless otherwise specified therein,
the acceptance of such resignation shall not be necessary to make it effective.

Section 5. Vacancies. A vacancy in any office because of death, resignation
or removal shall be filled by the Board of Directors.

Section 6. President. The president shall preside at all meetings of the
Board of Directors and shall have all general powers and duties of management
usually vested in the president of a corporation, and shall have such other
powers and duties as may be prescribed by the Board of Directors or the
By-Laws.

Section 7. Vice-President. If the president is unable or unavailable to
act, the vice-presidents, if any, in order of their rank as fixed by the Board
of Directors, or if not ranked, the vice-president designated by the Board of
Directors, shall perform all of the duties of the president, and when so acting
shall have all the powers of, and be subject to all the restrictions upon, the
president. The vice-president shall have such other powers and perform such
other duties as may from time to time be prescribed for them respectively by
the Board of Directors or by the By-Laws.

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<PAGE> 5
Section 8. Secretary. The secretary shall keep or cause to be kept, at the
principal office of the corporation or at such other place as the Board of
Directors may order, a book of minutes of all meetings of the directors and
stockholders, with the time and place of holding, whether regular or special,
and if special, how authorized, the notice thereof given, the names of persons
present at the director's meetings, the number of shares present or represented
at the stockholders meetings and the proceedings thereof.

The secretary shall keep, or cause to be kept, at the principal office or at
the office of the corporation's transfer agent, a share register, or a
duplicate share register, showing the names of the stockholders and their
addresses, the number and classes of shares held by each, the number and date
of certificates issued for the shares, and the number and date of cancellation
of every certificate surrendered for cancellation.

The secretary shall give, or cause to be given, notice of all meetings of
the stockholders and of the Board of Directors required by the By-Laws or by
any law to be given, and shall keep the seal of the corporation in safe
custody, and shall have such other powers and perform such other duties as may
be prescribed by the Board of Directors or the By-Laws.

The secretary or an assistant secretary shall have authority to impress the
seal on any instrument requiring it. The secretary or an assistant secretary
may also attest all instruments signed by the president or any vice-president.

Section 9. Treasurer. The treasurer shall keep and maintain, or cause to be
kept and maintained, adequate and correct accounts of the properties and the
business transactions of the corporation, including accounts of its assets,
liabilities, receipts, disbursements, gains, losses, capital, surplus, and
shares. Any surplus, including earned surplus, paid in surplus and surplus
arising from a reduction of capital, shall be classified according to the
source and shown in a separate account. The books of account shall at all
reasonable times be open to inspection by any director.

The treasurer shall deposit all monies and other valuables in the name and
to the credit of the corporation, with such depositories as may be designated
by the Board of Directors. He shall disburse the funds of the corporation as
may be ordered by the Board of Directors, shall render the president and
directors, whenever they request it, an account of all his transactions as
treasurer, and of the financial condition of the corporation, and shall have
such other powers and perform such other duties as may be prescribed by the
Board of Directors or the By-Laws.

Section 10. Assistant Secretaries and Assistant Treasurers. Assistant
secretaries and assistant treasurers shall perform such duties as shall be
assigned to them by the secretary

5
<PAGE> 6
or by the treasurer, respectively, or by the Board or by the president.

ARTICLE IV

Section 1. General. Whenever all of the stockholders shall meet in person
or by proxy, such meetings shall be valid for all purposes, and at such
meetings any corporate action may be taken that could be taken at a meeting
duly called and noticed. Whenever all of the directors meet, such meetings
shall be valid for all purposes, and at such meetings any corporation action
may be taken that could be taken at a meeting duly called and noticed.

Section 2. Notice of Meetings. Written notice of each annual meeting of the
stockholders shall be given to each stockholder entitled to vote, either
personally or by mail or other written means of communication, charges prepaid,
addressed to the stockholder at his address appearing on the books of the
corporation or given by him to the corporation for the purpose of notice. If a
stockholder gives no address, notice shall be deemed to have been given if sent
by mail or other means of written communication addressed to the place where
the principal office of the corporation is situated. All such notices shall be
sent to each stockholder entitled thereto, not less than ten (10) days before
each annual meeting. Such notices shall specify the place, the day, and the
hour of such meeting, and shall state such other matters, if any, as may be
expressly required by statute.

Except in special cases where other express provision is made by statute,
notice of special meetings of stockholders shall be given in the same manner as
for annual meetings of the stockholders. Notice of any special meetings shall
specify, in addition to the place, date and hour of such meeting, the general
nature of the business to be transacted.

The transactions or any meetings of stockholders, either annual or special,
however called and noticed, shall be as valid as though conducted at a meeting
duly held after regular call and notice, if a quorum be present either in
person or by proxy, and if, either before or after the meeting, each of the
persons entitled to vote, not present in person or by proxy, signs a written
waiver of notice, or a consent to the holding of such meeting, or the approval
of the minutes thereof. All such waivers, consents, or approvals shall be
filed with the corporate records or made a part of the minutes of the meeting.

Written notice of the time and place of special meetings of the Board of
Directors shall be delivered personally to each director, or sent to each
director by mail or by other form of written communication, charges prepaid,
addressed to him at his address as it is shown upon the records, or if it is
not so shown on such records or is not readily ascertainable, at the place
where the meetings of the directors are regularly held. In the case such
notice is mailed, telegraphed or telecopied, it shall be deposited

6
<PAGE> 7
in the United States mail or delivered at least forty-eight (48) hours prior to
the time of holding the meeting. In case such notice is personally delivered
as provided above, it shall be so delivered at least twenty-four (24) hours
prior to the time of holding of the meeting. Such mailing, telegraphing,
telecopying or personal delivery, as above provided, shall be due, legal and
personal notice to such director.

The transactions of any meeting of the Board of Directors, however called
and noticed, or whenever held, shall be as valid as though conducted at a
meeting duly held after regular call and notice, if a quorum be present, and if
either before or after the meeting, each of the directors not present sign a
written waiver of notice, or a consent to holding such meeting, or an approval
of the minutes thereof. All such waivers, consents, or approvals shall be
filed with the corporate records or made a part of the minutes of the meeting.

ARTICLE V
STOCK CERTIFICATES

Section 1. Form of Certificates. Each certificate for a share or shares of
the capital stock of the corporation shall be represented by certificates in
such form (consistent with the provisions of Section 158 of the Delaware
General Corporation Law) as shall be approved by the Board.

Section 2. Issuance. All certificates of stock shall be signed by the
president or a vice-president and the secretary or assistant secretary, or be
authenticated by facsimiles of the signatures of the president and the written
signature of the secretary or assistant secretary. Each certificate shall have
the seal of the corporation impressed thereon. The name of the owner of each
certificate and the number of shares represented by the certificate shall be
entered on its stub, and each certificate issued by the corporation shall be
receipted for by the person receiving it or by his duly authorized agent,
either on the stub of the certificate or on a separate receipt which shall be
kept by the secretary.

Section 3. Investment Legend. Each certificate of stock issued shall bear
the following legend:

"The shares represented by this certificate have not been
registered under the Securities Act of 1933. The shares
have been acquired for investment and may not be pledged
or hypothecated and may not be sold or transferred in the
absence of an effective registration statement for the shares
under the Securities Act of 1933 or an opinion of counsel of
the issuer that registration is not required under said Act."

7
<PAGE> 8
Section 4. Transfer. Certificates of stock shall be transferred by
assignment made by the owner, his attorney in fact or legal representative, and
by delivery of the certificate to the secretary of the corporation for
transfer. Each certificate surrendered for transfer shall be marked
"Cancelled" by the secretary and an incision on the certificate shall be made
through the names of the subscribing officers, and the cancelled certificate
shall be affixed to its stub. Transfers of shares of capital stock of the
corporation shall be made only on the books of the corporation by the holder
thereof or by the holder's duly authorized attorney, appointed by a
power-of-attorney duly executed and filed with the secretary of the corporation
and on surrender of the certificate or certificates representing such shares of
such capital stock, properly endorsed for transfer and upon payment of all
necessary transfer taxes. A person in whose name shares of capital stock shall
stand on the books of the corporation shall be deemed the owner thereof to
receive dividends to vote as such owner and for all other purposes as respects
the corporation. No transfer of shares of capital stock shall be valid as
against the corporation, its stockholders and creditors for any purpose except
to render the transferee liable for the debts of the corporation to the extent
provided by law, until such transfer shall have been entered on the books of
the corporation by an entry showing from and to whom transferred.

Section 5. Lost Certificates. Should the owner of any certificate of stock
make application to the corporation for the issuance of a duplicate certificate
by reason of the loss or destruction of his certificate, he shall accompany his
application with an affidavit setting froth the time, place and circumstances
of such loss or destruction. Should the Board of Directors be satisfied, from
the matters set forth in the affidavit, that the certificate has been lost or
destroyed, the Board of Directors may thereupon call upon the owner of the
certificate to file with the secretary of the corporation a bond or indemnity
in such amount, and with such surety or indemnitor as the board may determine,
indemnifying the corporation against any loss it may suffer by reason of the
issuance of a duplicate certificate or the refusal to recognize the certificate
that was lost or destroyed. In the event of the approval of such bond or other
indemnity by the Board of Directors, the board may thereupon authorize the
issuance of a duplicate certificate. The duplicate certificate will be marked
"Duplicate" and the stub of the certificate lost or destroyed shall indicate
the issuance of this duplicate.

Section 6. Inspection of Corporate Records and Receipt of Information by
Holders of Preferred Stock. All information provided to the directors of the
corporation shall be provided simultaneously to the holders of preferred stock
of the corporation, and the holders of the preferred stock shall have the same
rights of inspection of the corporation's books and records as are accorded to
the directors of the corporation under the Delaware General Corporation Law.

8
<PAGE> 9
Section 7. Further Issuance of Capital Stock. Daniel J. Mercer, by his
subscription to 100 shares of the corporation's common stock and as the holder
of all of the issued and outstanding shares of common stock and in his capacity
as an officer and director of the corporation, agrees that he shall not cause
or allow the corporation to issue any additional shares of capital stock
without the prior written consent of a majority of the holders of the preferred
stock, which consent such holders of preferred stock may withhold in their sole
and absolute discretion.

ARTICLE VI
MISCELLANEOUS

Section 1. Record Date and Closing of Stock Books. The Board of Directors
may adopt a record date which record date shall be not more than sixty days or
less than ten days prior to the date of any meeting of stockholders, or the
date fixed for the payment of any dividends or distributions, or for the
allotment of rights, or when a change or conversion or exchange of shares shall
go into effect, as the record date of the determination date for the
stockholders entitled to notice of and to vote at any such meeting, or entitled
to receive any such dividend or distribution, or any such allotment of rights,
or to exercise their rights in respect to any such change, conversion, or
exchange of shares. In such case, only stockholders of record on the date so
fixed shall be entitled to receive notice of and to vote at such meeting or to
receive such dividend, distribution, or allotment of rights, or to exercise his
rights, as the case may be, notwithstanding the transfer of shares on the books
of the corporation after the record date is fixed. The Board of Directors may
close the books of the corporation against transfers of shares during the
whole, or any part, of any such period.

Section 2. Checks, Drafts, Etc. All checks, drafts or other orders for the
payment of money, notes, or other evidences of indebtedness, issued in the name
of or payable to the corporation, shall be signed or endorsed by the treasurer
or such other person or persons and in such manner as, from time to time, shall
be determined by resolution of the Board of Directors.

Section 3. Contracts, Etc.; How Executed. The Board of Directors, except as
otherwise provided in the By-Laws, may authorize any officer or officers, or
agent or agents, to enter into any contract or execute any instrument in the
name of and on behalf of the corporation, and such authority may be general or
confined to specific instances; and, unless so authorized by the Board of
Directors, no officer, agent, or employee shall have any power or authority to
bind the corporation by any contract or engagement or to pledge its credit or
to render it liable for any purpose or to any amount.

Section 4. Representation of Shares of the Corporation. The president, or
the vice-president, or the secretary or assistant secretary of this
corporation, are authorized to vote, represent,

9
<PAGE> 10
and exercise on behalf of this corporation all rights incident to any and all
shares of any other corporation or corporations standing in the name of this
corporation. The authority granted to said officers to vote or represent, on
behalf of this corporation, any and all shares held by this corporation in any
other corporation or corporations, may be exercised either by such officers in
person or by any other person authorized so to do by proxy or by power of
attorney duly executed by said officers.

Section 5. Inspection of Corporate Records. The share register or duplicate
share register, the books of account, and the minutes of proceedings of the
stockholders and directors and of the executive and other committees of the
directors, shall be open to inspection upon the written demand of any
stockholder, at any reasonable time, and for a purpose reasonably related to
his interest as a stockholder. Such inspection may be made in person or by an
agent or attorney and shall include the right to make extracts. Demand for
inspection, other than at a stockholders meeting, shall be made in writing,
upon the president, secretary, assistant secretary or treasurer of the
corporation.

The corporation shall keep at its principal office for the transaction of
business the original or a copy of the By-Laws, as amended or otherwise altered
to date, which shall be open to inspection by the stockholders at all
reasonable times during office hours.

The corporation shall maintain such list of stockholders and provide access
thereto and copies thereof as are required by the Delaware General Corporation
Law.

Section 6. Indemnification. The corporation shall indemnify its officers,
directors, employees and agents to the extent permitted by the Delaware General
Corporation Law.

Section 7. Limitation on Actions. None of the following actions shall be
taken without compliance with the provisions of the Certificate of
Incorporation and the majority approval of the Board of Directors (including
approval by any Independent Director):

a. Sale of any substantial portion of the corporation's assets.

b. The paying of employees' bonuses.

c. Amendment of the Certificate of Incorporation or the By-laws.

d. Hiring or replacing of key personnel of the corporation.

10
<PAGE> 11
Section 8. Prohibition of Voting Trusts. No voting trusts shall be allowed,
nor any other similar legal combination among stockholders.

ARTICLE VII
INFORMALITIES

Section 1. Stockholders. Any action which under any provision of the
Delaware General Corporation Law may be taken at a meeting of the stockholders
may be taken without a meeting, if authorized by a writing signed by all of the
persons who would be entitled to vote upon such action at a meeting and filed
with the secretary of the corporation.

Section 2. Directors. Any action which under any provision of the Delaware
General Corporation Law may be taken by the Board of Directors at a meeting may
be taken without a meeting if authorized by a writing signed by all of the
persons who would have been entitled to vote at a meeting and filed with the
secretary of the corporation.

Section 3. Miscellaneous. The authorization, approval, or consent provided
in this Article may be expressed prior or subsequent to the particular action
authorized, approved or consented to. The provisions of this Article are
intended to permit informality in the conduct of the corporation's affairs and
informality in the approval of its actions so long as the stockholders, where
appropriate, or the Board of Directors, where appropriate, individually or
collectively, either before, at the time of, or any time subsequent to, any
particular action requiring their authorization, approval, or consent, can be
shown to have so authorized, approved or consented.

ARTICLE VIII
CONDUCT OF BUSINESS

For so long as Certificates (as defined in the Certificate of Incorporation)
are outstanding, the corporation shall conduct its affairs in accordance with
the following provisions:

a. the corporation shall furnish to the trustee acting on behalf of the
holders of Certificates copies of the form of each proposed amendment to these
By-Laws at least five business days prior to the proposed date of adoption of
any such proposed amendment;

b. the corporation shall establish an office through which its business
will be conducted separate and apart from the offices of any person or entity
owning, directly or indirectly, 10% or more of the outstanding common stock of
the corporation and will observe all customary formalities of independent
corporate existence;

11
<PAGE> 12
c. the corporation shall maintain separate corporate records and books of
account from those of any affiliates and the corporation shall not commingle
its funds or other funds with those of any such person or any such person's
subsidiaries or affiliates other than the corporation;

d. the corporation will hold appropriate meetings of its Board of Directors
and stockholders' or take actions by unanimous written consent if permitted by
applicable law, to authorize the corporation's corporate actions;

e. the corporation will at all times hold itself out to the public under
the corporation's own name, and as a separate and distinct entity from any
affiliates;

f. the corporation will not declare or pay any dividend or other
distribution with respect to its capital stock or make any payment on account
of the purchase, redemption or other acquisition or retirement of its capital
stock or any warrant, option or other right to acquire any such capital stock,
either directly or indirectly, pay or deliver or commit to pay or deliver any
monies or assets to any affiliate whether in cash or other property of the
corporation, if the effect thereof would be to leave the corporation
inadequately capitalized to conduct its business as then being conducted or
would cause the corporation to not have positive net worth;

g. the corporation will not engage in business transactions with any
affiliate unless it is approved by the Board of Directors (including approval
by any Independent Director) as a transaction with terms and conditions
available at the time to the corporation at least as favorable to the
corporation as for comparable transactions on an arm's-length basis with
unaffiliated persons and entities;

h. the corporation will not incur any indebtedness other than trade
payables incurred in the ordinary course of business or guarantee the
obligations of any affiliates or advance funds to, or accept funds from, any
affiliates for the payment of expenses; and

i. the corporation will not act as an agent of any affiliates in any
capacity.

To the extent such compliance involves questions of law, the corporation
shall be deemed in compliance with the requirements of any provision of this
Article VIII if it is acting in accordance with an opinion of counsel as to
such requirements.

12
<PAGE> 13
ARTICLE IX
AMENDMENTS

Subject to Article VIII, these By-Laws may be amended or repealed, or new
By-Laws may be adopted at any meeting of the Board of Directors by a resolution
adopted by the majority of the directors, which majority shall include the
Independent Director (as defined in the Certificate of Incorporation). The
corporation shall not amend these By-Laws without giving notice in writing to
Trustee not less than thirty (30) days nor more than ninety (90) days prior to
the date on which such amendment is to become effective and without first
obtaining the written consent of Trustee. Except as provided in Article VIII,
notice need not be given of any action in respect to these By-Laws previous to
such meeting if the proposed amendment, repeal, or adoption of new By-Laws is
in furtherance of the purposes and objectives of this corporation and is not
arbitrary or capricious.

13
<PAGE> 14
CERTIFICATE OF SECRETARY

1. That I am the duly elected and acting Secretary of NATIONAL TENANT FINANCE
CORPORATION, a Delaware corporation; and

2. That the foregoing By-Laws, comprising 14 pages, including this page,
constitute the By-Laws of said Corporation as adopted by a Unanimous Written
Consent in Lieu of Organizational Meeting duly executed by all of the members
of the Board of Directors, dated as of July __, 1994.

IN WITNESS WHEREOF, I have hereunto subscribed my name this __ day of August,
1994.

Daniel J. Mercer
Secretary

<PAGE> 1
EXHIBIT 4.1

_______________

TRUST AGREEMENT
_______________

between

NATIONAL TENANT FINANCE CORPORATION
as Depositor

and

UNITED STATES TRUST COMPANY OF NEW YORK
as Trustee

_____________________________

Dated as of_______ __, 199_
_____________________________

$_________
Mortgage Pass-Through Certificates

(___________________)
Series 199_-__

_________________________________________________________________

<PAGE> 2
CROSS REFERENCE SHEET

<TABLE>
<CAPTION>
TIA Section Trust Agreement Section
<S> <C>
310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . 8.07
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . 8.07
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . 8.06
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . *
(a)(5) . . . . . . . . . . . . . . . . . . . . . . . . . 8.07
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 8.07; 8.08; 11.08
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . *
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . *
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . 3.02
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . *
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . *
313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . 8.15
(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . *
(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . *
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . 8.15; 11.08
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . 8.15
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . *
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . *
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . 11.13
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . 11.13
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . *
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . *
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . 11.14
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . *
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . 8.01
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 7.03
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . 8.01
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . 8.01
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . *
316(a) last sentence . . . . . . . . . . . . . . . . . . . Definition of "Certificateholder"
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . 7.04
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . 7.02
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 7.05
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . *
317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . *
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . *
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 3.05
</TABLE>
1

<PAGE> 3
<TABLE>
<CAPTION>
TIA Section Trust Agreement Section
<S> <C>
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . 11.12
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . *
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . 11.12
- ----------------------
</TABLE>
* Intentionally deleted.
2

<PAGE> 4

TABLE OF CONTENTS

<TABLE>
<CAPTION>
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
<S> <C> <C>
Section 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.02. Incorporation by Reference of Trust Indenture Act. . . . . . . 11
Section 1.03. Acts of Holders. . . . . . . . . . . . . . . . . . . . . . . . 11

<CAPTION>
ARTICLE II
CONVEYANCE OF MORTGAGE LOAN[S]; TRUST PROPERTY
<S> <C> <C>
Section 2.01. Conveyance of Mortgage Loan[s] . . . . . . . . . . . . . . . . 12
Section 2.02. Acceptance by Trustee. . . . . . . . . . . . . . . . . . . . . 13
Section 2.03. Trust Property. . . . . . . . . . . . . . . . . . . . . . . . 14
Section 2.04. Limitation of Powers. . . . . . . . . . . . . . . . . . . . . 14

<CAPTION>
ARTICLE III
THE CERTIFICATES
<S> <C> <C>
Section 3.01. The Certificates. . . . . . . . . . . . . . . . . . . . . . . 14
Section 3.02. Registration of Transfer and Exchange of Certificates . . . . 17
Section 3.03. Mutilated, Destroyed, Lost or Stolen Certificates . . . . . . 19
Section 3.04. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . 19
Section 3.05. Appointment of Paying Agent . . . . . . . . . . . . . . . . . 19
Section 3.06. Certificates Issuable in the Form of a
Registered Global Certificate. . . . . . . . . . . . . . . . 19
Section 3.07. Temporary Securities. . . . . . . . . . . . . . . . . . . . . 21

<CAPTION>
ARTICLE IV
RECEIPT AND DISTRIBUTION OF INCOME
AND PROCEEDS FROM THE TRUST PROPERTY

<S> <C> <C>
Section 4.01. Calculation of Distributions. . . . . . . . . . . . . . . . . 22
Section 4.02. Receipt of Lease Payments; Collection of
Lease and Lease Guaranty Payments;
Collection of Indemnity Agreement
Payments; Collection of Mortgage
Loan Payments; Investment
Direction. . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section. 4.03. Establishment of Rental Payment
Account[s]; Deposits in Rental Payment Account[s] . . . . . 24
Section. 4.04. Permitted Withdrawals From the Rental Payment Account[s]. . . 24
Section. 4.05. Establishment of Certificate Account;
Deposits in Certificate Account. . . . . . . . . . . . . . . 25
Section. 4.06. Permitted Withdrawals From the Certificate Account. . . . . . . 26
Section. 4.07. Capitalized Debt Service Account[s]. . . . . . . . . . . . . . 27
Section. 4.08. Realization Upon Defaulted Mortgage Loan. . . . . . . . . . . 28
Section. 4.09. Trustee Compensation . . . . . . . . . . . . . . . . . . . . . 29

</TABLE>

<PAGE> 5
<TABLE>
<S> <C> <C>
Section 4.10. Rights of the Certificateholders . . . . . . . . . . . . . . . 29

<CAPTION>
ARTICLE V
PAYMENTS TO THE CERTIFICATEHOLDERS
<S> <C> <C>
Section 5.01. Distributions. . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 5.02. Statements to Certificateholders. . . . . . . . . . . . . . . 30
Section 5.03. Advances by Trustee. . . . . . . . . . . . . . . . . . . . . . 31

<CAPTION>
ARTICLE VI
THE DEPOSITOR

<S> <C> <C>
Section 6.01. Maintaining Corporate Existence of the
Depositor. . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 6.02. Limitation on Liability of the Depositor. . . . . . . . . . . 32

<CAPTION>
ARTICLE VII
DEFAULT

<S> <C> <C>
Section 7.01. Events of Default. . . . . . . . . . . . . . . . . . . . . . . 32
Section 7.02. Waiver of Defaults. . . . . . . . . . . . . . . . . . . . . . 33
Section 7.03. Notification to Certificateholders. . . . . . . . . . . . . . 33
Section 7.04. Rights of Certificateholders to Direct
Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 7.05. Rights of Certificateholders to Receive
Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 7.06. Remedies Cumulative. . . . . . . . . . . . . . . . . . . . . . 34
Section 7.07. Trustee Default. . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 7.08. Notice to Tenant[s] and [Kmart] . . . . . . . . . . . . . . . 34

<CAPTION>
ARTICLE VIII
CONCERNING THE TRUSTEE

<S> <C> <C>
Section 8.01. Duties of Trustee. . . . . . . . . . . . . . . . . . . . . . . 34
Section 8.02. Certain Matters Affecting Trustee. . . . . . . . . . . . . . . 36
Section 8.03. Trustee Not Liable for Certificates
or Mortgage Loan[s]. . . . . . . . . . . . . . . . . . . . . 37
Section 8.04. Trustee May Own Certificates. . . . . . . . . . . . . . . . . 37
Section 8.05. Trustee's Fee and Expenses. . . . . . . . . . . . . . . . . . 37
Section 8.06. Action by Co-Trustee. . . . . . . . . . . . . . . . . . . . . 38
Section 8.07. Eligibility Requirements for Trustee. . . . . . . . . . . . . 38
Section 8.08. Resignation and Removal of Trustee. . . . . . . . . . . . . . 39
Section 8.09. Successor Trustee. . . . . . . . . . . . . . . . . . . . . . . 40
Section 8.10. Merger or Consolidation of Trustee. . . . . . . . . . . . . . 40
Section 8.11. Resignation of Co-Trustee. . . . . . . . . . . . . . . . . . . 41
Section 8.12. Removal of Co-Trustee. . . . . . . . . . . . . . . . . . . . . 41
Section 8.13. Appointment of Successor to Co-Trustee. . . . . . . . . . . . 41
Section 8.14. Succession of Successor to Co-Trustee. . . . . . . . . . . . . 41
Section 8.15. Reports by the Trustee to Certificateholders. . . . . . . . . 42

<CAPTION>
ARTICLE IX
TERMINATION
<S> <C> <C>
Section 9.01. Termination. . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 9.02. Notice; Final Distribution. . . . . . . . . . . . . . . . . . 42
</TABLE>

<PAGE> 6

ARTICLE X
SUPPLEMENTS AND AMENDMENTS TO THIS
TRUST AGREEMENT AND OTHER DOCUMENTS;
ADDITIONAL AGREEMENTS OF TRUSTEE
<TABLE>
<S> <C> <C>
Section 10.01. Supplemental Trust Agreements Without Consent of Holders. . . 43
Section 10.02. Supplemental Agreements With Consent of Certificateholders. . . 44
Section 10.03. Effect of Supplemental Agreement. . . . . . . . . . . . . . . . 45
Section 10.04. Documents to Be Given to Trustee. . . . . . . . . . . . . . . . 46
Section 10.05. Notation on Certificates in Respect of Supplemental
Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 10.06. Granting of Easements . . . . . . . . . . . . . . . . . . . . . 46

<CAPTION>
ARTICLE XI
MISCELLANEOUS PROVISIONS
<S> <C> <C>
Section 11.01. Severability of Provisions. . . . . . . . . . . . . . . . . . 46
Section 11.02. Limitation on Rights of Certificateholders. . . . . . . . . . 47
Section 11.03. Solicitation of Certificateholders. . . . . . . . . . . . . . 47
Section 11.04. Recordation of Agreement. . . . . . . . . . . . . . . . . . . 48
Section 11.05. Duration of Agreement. . . . . . . . . . . . . . . . . . . . . 48
Section 11.06. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 11.07. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 11.08. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 11.09. Submission to Jurisdiction. . . . . . . . . . . . . . . . . . 49
Section 11.10. Gender; Number. . . . . . . . . . . . . . . . . . . . . . . . 50
Section 11.11. TIA Controls. . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 11.12. Certificate and Opinion as to Conditions Precedent . . . . . . 50
Section 11.13. Statements Required in Certificate or Opinion . . . . . . . 50
Section 11.14. Benefits of Trust Agreement. . . . . . . . . . . . . . . . . . 50

EXHIBIT A-1 MORTGAGE LOAN SCHEDULE

EXHIBIT A-2 CERTIFICATE SCHEDULE

EXHIBIT A-3 CONTENTS OF MORTGAGE FILE

EXHIBIT A-4 CAPITALIZED DEBT SERVICE ACCOUNT SCHEDULE

EXHIBIT B [FORM OF CERTIFICATE]

EXHIBIT C FORM OF TRUSTEE CERTIFICATION

EXHIBIT D LETTER OF REPRESENTATIONS
</TABLE>

iii

<PAGE> 7

TRUST AGREEMENT

THIS TRUST AGREEMENT, dated as of _______ __, 19__, is executed by and
among NATIONAL TENANT FINANCE CORPORATION, a Delaware corporation, as depositor
(together with its permitted successors, in such capacity, "Depositor"), and
UNITED STATES TRUST COMPANY OF NEW YORK, a New York banking corporation,
as trustee (together with its permitted successors and assigns, "Trustee").

In consideration of the premises and the mutual agreements hereinafter
set forth, the Depositor and the Trustee agree as follows:

PREFACE

Each Certificate evidences a beneficial ownership interest in the Trust
Property, the assets of which include, among other things, the Mortgage
Loan[s]. The Certificates are equally and ratably secured by and payable from
the proceeds of the Mortgage[s] and the Mortgage Note[s], respectively (as each
such term is defined herein).

Each Certificate is paid interest or principal and interest, as set
forth on the Debt Service schedule on such Certificate, on a semiannual basis
referred to herein as the Remittance Dates. Payments under the Mortgage
Note[s] are payable semiannually on the Due Dates.

ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01. Definitions. Whenever used herein, the following words
and phrases, unless the context otherwise requires, shall have the following
meanings:

"Additional Rent": [With respect to each Lease] has the meaning
assigned in Article 5 of [the] [such] Lease.

"Administrative Expenses": The ordinary and necessary expenses
incurred by the Trustee in the course of administering the affairs of the
Trust, excluding any Liquidation Expenses.

"Annual Rental": [With respect to each Lease] has the meaning assigned
in Article 4 of [the] [such] Lease.

"Assignment of Mortgage[s]": The Assignment of the Mortgage[s] dated
as of ____________________, 19__ between Depositor and Trustee, the Assignment
of Lease Assignment[s] dated as of ____________________, 19__, between
Depositor and Trustee, and any other notice of transfer or equivalent
instrument, in recordable form, sufficient under the laws of the
jurisdiction[s]

<PAGE> 8

where the Mortgaged Estate securing [each] [the] Mortgage Loan is located to
reflect of record the sale, conveyance, transfer and absolute assignment of the
Mortgage[s] to the Trustee.

"Available Distribution Amount": As to any Remittance Date, an amount
equal to the amount on deposit in the Certificate Account as of the close of
business on the Business Day immediately preceding the Remittance Date.

"Benefit Plan": An employee benefit plan as defined in Section 3(3) of
ERISA, including an employee welfare benefit plan or an employee pension
benefit plan, a plan described in Section 401(a) or Section 403(a) of the Code,
the trust under which is exempt from tax under Section 501(a) of the Code, an
individual retirement account under Section 408(a) of the Code or an individual
retirement annuity under Section 408(b) of the Code, and any entity whose
underlying assets include Benefit Plan assets by reason of a Benefit Plan's
investment in such entity.

"Borrower": [The] [A] Borrower identified in [the] [a] Loan Agreement.

"Business Day": Any day other than (i) a Saturday or Sunday, or (ii) a
day on which banking or savings and loan institutions in New York or
California, or the city in which the principal corporate trust offices of any
successor Trustee are located, are authorized or obligated by law or executive
order to be closed.

"Called Principal Percentage": With respect to any Mortgage Note, has
the meaning assigned to it in Section 2 of the related Loan Agreement.

["Capitalized Debt Service Account": [The] [Each] trust account
described in Section 4.07.]

["Capitalized Debt Service Reserve": Has the meaning assigned thereto
in Section 2 of [the] [each] Loan Agreement.]

"Certificate" or "Certificates": The Certificate or Certificates
evidencing a beneficial ownership interest in the Trust Property executed and
authenticated by the Trustee substantially in the form set forth in Exhibit B
hereto.

"Certificate Account": The trust account described in Section 4.05.

"Certificate Balance": With respect to all the Certificates, the
original principal amount of the Certificates less all payments and prepayments
of principal thereof, including without limitation any payments of principal
comprising Debt Service; and with respect to any Certificate, the original
principal amount of such Certificate less all payments and prepayments of
principal thereof, including without limitation any payments of principal
comprising Debt Service on such Certificate.

<PAGE> 9

"Certificateholder", "Certificateholders", "Holder" or "Holders": The
person or persons in whose name a Certificate is registered in the Certificate
Register, except that, solely for the purposes of any consent, waiver, request
or demand pursuant to this Trust Agreement, any Certificate registered in the
name of the Depositor, Kmart, a Tenant, a Borrower, any successor owner or
ground lessee of a Project, any successor tenant or subtenant of a Project, any
successor guarantor of the performance of a Tenant, or successor tenant or
subtenant, or any affiliate of any of the foregoing, shall be deemed not to be
outstanding and the Percentage Interest evidenced thereby shall not be taken
into account in determining whether the requisite amount of Percentage
Interests necessary to effect any such consent, waiver, request or demand has
been obtained.

"Certificate Owner": Any Person acquiring a beneficial interest in a
Registered Global Certificate, which ownership shall be reflected on the books
of the Depository or on those of a participant in such Depository. Solely for
the purposes of any consent, waiver, request or demand pursuant to this Trust
Agreement, any portion of a Registered Global Certificate that is beneficially
owned by the Depositor, Kmart, a Tenant, a Borrower, any successor owner or
ground lessee of a Project, any successor tenant or subtenant of a Project, any
successor guarantor of the performance of a Tenant or successor tenant or
subtenant, or any affiliate of any of the foregoing, shall be deemed not to be
outstanding and the Percentage Interest evidenced by such portion shall not be
taken into account in determining whether the requisite amount of Percentage
Interests necessary to effect any such consent, waiver, request or demand has
been obtained.

"Certificate Register": The register maintained pursuant to Section
3.02.

"Certificate Schedule": The Certificate Schedule attached hereto as
Exhibit A-2 setting forth the following information for each Certificate issued
as of the Closing Date: (i) the Certificate Number; (ii) the Certificate
Balance as of the Closing Date; and (iii) the Debt Service on such Certificate.

"Closing Costs": An amount equal to $_____________ which shall be
disbursed to the Underwriters on the Closing Date.

"Closing Date": _______ __, 199_.

"Code": The Internal Revenue Code of 1986, as amended.

"Condemnation Proceeds": Any awards in respect of, or settlements in
lieu of, condemnation proceedings affecting [the] [a] Mortgaged Estate.

"Consent and Agreement": [A] [The] Consent and Agreement among Kmart,
Depositor, [a] Borrower, [a] Tenant and Trustee relating to [a] [the] Lease,
[a] [the] Lease Guaranty, [a] [the] Note Put Agreement and certain other
related matters.

<PAGE> 10

"Corporate Trust Office": The office of the Trustee in the State of
California at which at any particular time its corporate trust business shall
be administered, which office at the date of execution of this instrument is
located at Suite 2700, 555 South Flower Street, Los Angeles, California 90071.

"Debt Service": The interest or interest and principal payable
semiannually on the Remittance Date as stated on a specific Certificate, as
adjusted from time to time as provided in Section 3.01(g) hereof.

"Depositor": National Tenant Finance Corporation, a Delaware
corporation, and its successors in interest.

"Depository": The depository of the Registered Global Certificate[s],
if any, representing the Certificates and any successor to such depository
appointed by the Depositor. Such depository initially shall be The Depository
Trust Company, a New York corporation.

"Determination Date": The Business Day immediately preceding a
Remittance Date.

"Due Date": [With respect to each Mortgage Note,] a Note Payment Date
as defined in the [related] Loan Agreement.

"Eligible Investments": One or more of the following:

(i) direct obligations of the United States of America;

(ii) obligations fully guaranteed, both as to principal
and interest, by the United States of America;

(iii) certificates of deposit issued by, or bankers'
acceptances of, or time deposits with, a bank or trust company organized under
the laws of the United States or any state thereof, having capital, surplus and
undivided profits aggregating at least $100,000,000 and whose long-term
certificates of deposit are, at the time of acquisition thereof, rated in the
highest rating category for such securities by S&P and Moody's; and

(iv) taxable government money-market portfolios restricted
to obligations with maturities of one year or less, issued or guaranteed by the
full faith and credit of the United States which, at the time of such
investment, are then rated in the highest rating category of S&P and Moody's
(the "highest rating category" as used in this definition shall mean (A) a
rating which would be assigned by S&P, as of the date first above written,
equivalent to or higher than "AAAm" or "AAAmG" with respect to money-market
securities and (B) a rating which would be assigned by Moody's as of the date
first above written, equivalent to or higher than "Am" with respect to
money-market securities);

<PAGE> 11

provided that any such obligations of the types described in clauses (i)
through (iv) above shall not have a maturity later than the earlier of 90 days
and the Due Date immediately following the acquisition thereof or, in the case
of the Certificate Account, the date when any funds being invested are to be
distributed to the Certificateholders; provided further, that any such
obligations of the types described in clauses (i) and (ii) above may be made
through a repurchase agreement in commercially reasonable form with a bank or
other financial institution (which may be the Trustee) the senior unsecured
debt of which is then assigned an A rating or better by S&P or Moody's, so long
as title to the underlying obligations shall pass to the Trustee and that such
underlying obligations shall be segregated in a custodial or trust account of
or for the benefit of the Trustee.

"ERISA": The Employee Retirement Income Security Act of 1974, as
amended.

"Event of Default": Any event of default described in Section 7.01.

"Exchange Act": The Securities Exchange Act of 1934, as amended.

"Extraordinary Expense Advances": All reasonable and necessary
"out-of-pocket" costs and expenses of the Trustee in enforcing the Mortgage
Note[s] and the Loan Documents following an Event of Default under Section 7.01
hereof (except for a Non-Monetary Tenant Default), and in compliance with the
obligations of the Trustee under Section 4.08.

"FDIC": Federal Deposit Insurance Corporation or any successor
organization.

"Indemnity Agreement": [With respect to each Mortgage Note,] has the
meaning assigned thereto in Section 1.1 of the [related] Loan Agreement.

"Insurance Proceeds": Proceeds paid by any insurer pursuant to any
insurance policy, including but not limited to title insurance, environmental
insurance and self-insurance proceeds paid by Kmart or any Tenant, covering all
or a portion of the Mortgaged Estate.

"Kmart": Kmart Corporation, a Michigan corporation, and its successors
and assigns.

"Lease": [With respect to each Mortgage Note,] has the meaning
assigned thereto in Section 1.1 of the [related] Loan Agreement.

"Lease Guaranty": [With respect to each Mortgage Note,] has the
meaning assigned thereto in Section 1.1 of the [related] Loan Agreement.

<PAGE> 12

"Lease Guaranty Termination": [With respect to any Mortgage Loan] a
Lease Guaranty Termination as defined in the [related] Note Put Agreement.

"Letter of Representations": A letter (in the form attached hereto as
Exhibit D) from the Depositor and the Trustee to, and accepted by, the
Depository, as such letter may be modified or supplemented, or any successor
letter thereto.

"Liquidated Mortgage Loan": [A] [The] Mortgage Loan after an Event of
Default under the [related] Loan Agreement when the Trustee has reasonably
determined that all amounts which it expects to recover from or on account of
such Mortgage Loan have been recovered.

"Liquidation Expenses": Expenses which are incurred by the Trustee in
connection with the liquidation of a defaulted Mortgage Loan, such expenses
including, without limitation, legal fees and expenses, any unreimbursed amount
expended by the Trustee pursuant to Section 4.08 (to the extent such amount is
reimbursable under the terms of Section 4.08) respecting such Mortgage Loan and
any related and unreimbursed expenditures for real estate property taxes or for
property restoration or preservation.

"Liquidation Proceeds": Cash (including Insurance Proceeds and
Condemnation Proceeds) received by the Trustee in connection with the
liquidation of [a] [the] defaulted Mortgage Loan, whether through the sale of
such defaulted Mortgage Loan, the sale of the Mortgaged Estate securing such
defaulted Mortgage Loan pursuant to foreclosure sale or otherwise, or revenues
from or the sale of the related Mortgaged Estate if such Mortgaged Estate is
acquired in satisfaction of such defaulted Mortgage Loan, other than amounts
required to be paid to the Borrower pursuant to law or the terms of the related
Mortgage Note.

"Loan Agreement": [With respect to each Mortgage Note,] the [related]
Loan Agreement between Depositor and [a] Borrower, pursuant to the terms and
conditions of which the [related] Mortgage Loan was made.

"Loan Documents": [With respect to each Mortgage Loan,] the [related]
Note Put Agreement, the related Loan Agreement, the related Mortgage and each
document in the Mortgage File [pertaining to such Mortgage Loan], and each
other document which constitutes a Loan Document pursuant to the terms and
provisions of [such] [the] Loan Agreement.

"Make-Whole Premium": [With respect to each Mortgage Note,] has the
meaning assigned to it in Section 2 of the [related] Loan Agreement. The
Trustee shall be provided with a certificate evidencing the calculation of such
amount by the Depositor.

"Moody's": Moody's Investors Service, Inc., a Delaware corporation,
its successors and assigns.

<PAGE> 13

"Mortgage": [With respect to each Mortgage Note,] has the meaning
assigned thereto in Section 1.2 of the [related] Loan Agreement.

"Mortgage File": The items referred to in Exhibit A-3 annexed hereto
pertaining to the Mortgage Loan[s].

"Mortgage Loan": The loan pursuant to [a] [the] Loan Agreement
together with all right, title and interest of Depositor relating thereto,
evidenced by the [related] Mortgage Note and secured by the [related] Mortgage,
which Mortgage Loan was sold, conveyed, transferred and absolutely assigned by
the Depositor to the Trustee and which is the subject of this Trust Agreement
and included in the Trust Property. [Each] [The] Mortgage Loan is identified
on the Mortgage Loan Schedule annexed hereto as Exhibit A-1.

"Mortgage Loan Schedule": The schedule attached hereto as Exhibit A-1
setting forth the following information for the Mortgage Loan[s]: (i) [each]
[the] Borrower's name; (ii) the Mortgaged Estate[s]; (iii) the maturity
date[s]; (iv) [each] [the] Mortgage Note rate; (v) the first Due Date; (vi) a
schedule setting forth the Mortgage Payments; and (vii) the original Principal
Balance of [each] [the] Mortgage Loan.

"Mortgage Note": [A] [The] promissory note, executed by [a] [the]
Borrower as obligor and having [a] [the] maturity date and Mortgage Note rate
specified in the Mortgage Loan Schedule, secured by [a] [the] Mortgage.

"Mortgage Payments": The scheduled payments set forth in Exhibit A-1
of interest or principal and interest on the Mortgage Loan[s], as adjusted
pursuant to the prepayment or other liquidation of such Mortgage Loan[s].

"Mortgaged Estate": [With respect to each Mortgage Note,] the real and
personal property securing [such] [the] Mortgage Note.

"Net Liquidation Proceeds": Liquidation Proceeds net of Liquidation
Expenses.

"Non-Monetary Tenant Default": [With respect to a Lease,] any default
under [such] [the] Lease by the [related] Tenant other than a default in the
payment of Annual Rental or Additional Rent.

"Note Put Agreement": [With respect to each Loan Agreement,] the Note
Put Agreement by and between Depositor, [and] the [related] Tenant, [and Kmart]
pursuant to the terms and conditions of which a Put of [such] [the] Mortgage
Note may be made on the occurrence of certain events specified therein.

"Officer's Certificate": A certificate signed by the Chairman of the
Board, the Chief Executive Officer, the President or a Vice President, the
Treasurer or the Secretary or one of the Assistant

<PAGE> 14

Treasurers or Assistant Secretaries or any other duly authorized officer of the
Depositor and delivered to the Trustee containing the information required by
Sections 11.12 and 11.13.

"Opinion of Counsel": An opinion in writing signed by legal counsel
who may be an employee of or counsel to the Depositor in form and substance
acceptable to the Trustee containing the information required by Sections 11.12
and 11.13.

["Option Agreement": An option granted by [a][the] Borrower to
[a][the] Tenant permitting such Tenant to acquire the [related] Project in the
event Borrower does not perform its obligations under the [related] Lease and
the [related] Construction Fund Disbursement Agreement.]

"Paying Agent": The Person designated as the Paying Agent pursuant to
Section 3.05.

"Percentage Interest": The percentage of the whole undivided
beneficial interest in the Trust Property held by a Holder, to be evidenced by
a Certificate which shall state the percentage interest therein.

"Permitted Encumbrances": The Permitted Encumbrances as defined in
[each] [the] Mortgage.

"Pledge Agreement": [With respect to each Mortgage Note,] has the
meaning assigned thereto in Section 1.2 of the [related] Loan Agreement.

"Principal Balance": The outstanding principal balance of [the] [a]
Mortgage Note as of any specified date.

"Principal Prepayment": Any payment or other recovery of principal on
[a] [the] Mortgage Note (other than monthly receipts of amounts referred to in
Section 4.02(a)), including any prepayment of principal pursuant to Section 3
of the [related] Loan Agreement, Insurance Proceeds and Condemnation Proceeds
to the extent required to be deposited in the Certificate Account, and
Liquidation Proceeds, which is received in advance of its scheduled Due Date.

"Project": [A] [The] facility comprised of a retail store [constructed
by [a] Borrower [and [a] Tenant]] for lease by [a] [such] Tenant on real
property [which will be [acquired by] [owned by] [a] [such] Borrower and] [upon
which such facility will be constructed on behalf of [such] Borrower] using the
proceeds of [a] [the] Mortgage Loan.

<PAGE> 15

"Purchase Price": [With respect to each Mortgage Note,] has the
meaning assigned thereto in Section 2.1 of the [related] Note Put Agreement.

"Put": The right to require purchase of [a] [the] Mortgage Note by [a]
[the] Tenant and Kmart pursuant to the [related] Note Put Agreement.

"Rating Agency": Any nationally recognized statistical rating agency,
or its successor, that rated the Certificates at the request of the Depositor
at the time of the initial issuance of the Certificates. If such agency or a
successor is no longer in existence, "Rating Agency" shall be such nationally
recognized statistical rating agency, or other comparable Person, designated by
the Depositor, notice of which designation shall be given to the Trustee.
References herein to the highest rating category of a Rating Agency shall mean
AAA or better in the case of S&P and Aaa or better in the case of Moody's and
in the case of any other Rating Agency shall mean a rating equivalent to such
ratings.

"Record Date": (i) With respect to any distribution, the close of
business on the fifteenth day preceding the related Remittance Date, except
with respect to a distribution pursuant to Section 3.01(f), in which case the
Record Date is the close of business on the fifteenth day prior to the
Remittance Date on which the related Mortgage Payment would, pursuant to the
terms hereof, have been distributable to the Certificateholders had such
Mortgage Payment been paid in full in a timely manner. (ii) With respect to
any direction, consent, waiver, or other action to be given or taken by
Certificateholders, the date established by the Trustee pursuant to Section
1.03(e) hereof.

"Registered Global Certificate": The Certificate, if any, issued to
the Depository in accordance with Article III and bearing the legend prescribed
in Section 3.06(a).

"Remittance Date": With respect to the Certificates, an interest or
principal and interest payment date of ________ 1, 19__, and the first Business
Day of each ________ and ____ thereafter until _____ 1, ____, or the payment of
the unpaid principal balance in full, or such other date when a distribution is
made pursuant to Section 3.01(c), 3.01(d), 3.01(e) or 3.01(f) hereof.

"Rental Payment Account": [The] [Each] trust account described in
Section 4.03.

"Responsible Officer": When used with respect to the Trustee, the
Chairman or Vice Chairman of the Board of Directors of the Trustee, the
Chairman or Vice Chairman of the Executive or Standing Committee of the Board
of Directors of the Trustee, the President, the Chairman of the Committee on
Trust Matters, any Vice President, any Assistant Vice President, the Secretary,
any Assistant Secretary, the Treasurer, any Assistant Treasurer, the Cashier,
any Assistant Cashier, any Trust Officer or Assistant Trust Officer, the
Controller and any Assistant Controller or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also, with

<PAGE> 16

respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.

"[Second Mortgage": A Mortgage, Security Agreement and Assignment of
Rents from [a] [the] Borrower to [a] [the] Tenant which grants a lien
subordinate to the [related] Mortgage on [a] [the] Project to secure such
Borrower's performance under the [related] Lease and under the [related]
Construction Fund Disbursement Agreement.]

"S & P": Standard & Poor's Ratings Group, a _______________
corporation, its successors and assigns.

"Tenant" [or "Tenants"]: [Kmart and] ___________, _____________ [or
____________,] [each of] which is a subsidiary of Kmart and which has entered
into [the] [a] Lease with [a] [the] Borrower to occupy a Project.

"Termination Premium": [With respect to each Mortgage Note,] has the
meaning assigned to it in Section 2 of the [related] Note Put Agreement.

"TIA": The Trust Indenture Act of 1939 as in effect on the date as of
which this Trust Agreement was first qualified under such Act; provided,
however, that in the event the Trust Indenture Act is amended after such date,
"TIA" means, to the extent required by such amendment, the Trust Indenture Act
of 1939 as so amended.

"Transfer Assurance": A Transfer Assurance required pursuant to
Section 3.02(c).

"Trust": The grantor trust created pursuant to this Trust Agreement.

"Trust Agreement": This Trust Agreement and all amendments hereof and
supplements hereto.

"Trustee": United States Trust Company of New York, and its permitted
successors hereunder.

"Trustee's Fee": The amount of the annual fee paid to the Trustee for
its Administrative Expenses, including the reasonable expenses of preparing any
tax returns as provided in Section 5.02, arising under this Trust Agreement,
equal to $_____, payable by the Tenant[s] pursuant to the Consent and
Agreement[s].

"Trust Property": The corpus of the Trust, to the extent described
herein, consisting of the Mortgage Loan[s], including all rights which secure
the obligation of the Borrower[s] thereunder, the Mortgage Note[s], all Loan
Documents, such assets as shall from time to time be identified as deposited
in the Certificate Account (including the investment income thereon), property
which secures the Mortgage Loan[s] and which has been acquired by

<PAGE> 17

foreclosure or deed in lieu of foreclosure (prior to its disposition) and
Insurance Proceeds, Condemnation Proceeds and any other amounts receivable
under the Mortgage Note[s] or the Loan Documents, and any funds advanced by the
Certificateholders to Trustee or otherwise held by Trustee in accordance with
the provisions hereof.

"Underwriters": The several underwriters named in the Underwriting
Agreement.

"Underwriting Agreement": The Underwriting Agreement dated ________
__, 19__, between Kmart, the Depositor and Sutro & Co. Incorporated [on behalf
of itself and the several underwriters named therein].

Section 1.02. Incorporation by Reference of Trust Indenture Act.
Whenever this Trust Agreement refers to a provision of the TIA, such provision
is incorporated by reference in and made a part of this Trust Agreement. The
following TIA terms used in this Trust Agreement have the following meanings:

"Commission" means the SEC.

"Indenture securities" means the Certificates.

"Indenture security holder" means a Certificateholder.

"Indenture to be qualified" means this Trust Agreement.

"Indenture trustee" or "institutional trustee" means the Trustee.

"Obligor" on the Indenture securities means Kmart.

All other TIA terms used in this Trust Agreement that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC rule
have the meanings assigned to them by such definitions.

Section 1.03. Acts of Holders.

(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Trust Agreement to be given or taken by
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or
by an agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, where it is hereby expressly
required, to the Depositor and to Kmart. Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of Certificateholders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any

<PAGE> 18

such agent shall be sufficient for any purpose of this Trust Agreement and
conclusive in favor of the Trustee and the Depositor, if made in the manner
provided in this Section 1.03.

(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Trustee deems
sufficient.

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

(e) If the Trustee shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Trustee
shall fix in advance a record date for the determination of Holders
entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act. Such request, demand, authorization,
direction, notice, consent, waiver or other Act may be given before or
after such record date, but only the Holders of record at the close of business
on such record date shall be deemed to be Holders for the purposes of
determining whether Holders of the requisite proportion of outstanding
Certificates have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other Act, and for that
purpose the outstanding Certificates shall be computed as of such record date;
provided that no such authorization, agreement or consent by the Holders on
such record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Trust Agreement not later than six months
after the record date.

ARTICLE II
CONVEYANCE OF MORTGAGE LOAN[S]; TRUST PROPERTY

Section 2.01. Conveyance of Mortgage Loan[s]. As grantor of the
Trust, the Depositor, concurrently with the execution and delivery hereof, does
hereby sell, transfer, set over, convey and absolutely assign to the Trustee
without recourse (except as provided herein) in trust intending to establish
the Trust, all right, title and interest of the Depositor in and to the
Mortgage Loan[s], including all interest, Make-Whole Premium, Termination
Premium and principal due or to become due from [each] [the] Borrower on or
with respect to [each] [the] Mortgage Loan.

<PAGE> 19

In connection with such sale, conveyance, transfer and absolute
assignment, the Depositor does hereby sell, transfer, convey and absolutely
assign and deliver to, and deposit with, the Trustee the Mortgage Note[s] and
all Loan Documents.

The ownership of the Trust Property is vested in the Trustee without
reservation of any right, title or interest whatsoever in the Depositor. The
Depositor intends that the sale, conveyance, transfer and absolute assignment
of the Depositor's right, title and interest in and to the Trust Property
pursuant to this Trust Agreement shall constitute a purchase and sale and not a
pledge of security for a loan. However, if for any reason such conveyance is
deemed not to be a sale, the Depositor intends that the rights and obligations
of the parties shall nevertheless be established pursuant to the terms of this
Trust Agreement and that the Depositor shall be deemed to have granted to the
Trustee a first priority security interest in all of the Depositor's right,
title and interest in, to and under the Mortgage Loan[s], all payments of
principal of or interest on the Mortgage Loan[s], all other payments made in
respect of the Mortgage Loan[s] (including, without limitation, any Make-Whole
Premium or Termination Premium), and all proceeds of any thereof, and any other
assets of the Trust, and that this Trust Agreement shall constitute a security
agreement under applicable law.

Section 2.02. Acceptance by Trustee. The Trustee acknowledges receipt
of the documents referred to in Section 2.01, subject to any exceptions noted
in a certificate of the Trustee delivered within 30 days after the Closing
Date, and declares that it holds and will hold such documents delivered to it
in trust for the use and benefit of all present and future Certificateholders.
The Trustee agrees, for the benefit of Certificateholders, to review within 30
days after the Closing Date each of the documents described in Section 2.01
delivered to it to ascertain that all required documents have been executed and
received, and that such documents relate to the Mortgage Loan[s] identified in
the Mortgage Loan Schedule, as supplemented, that have been sold, conveyed,
transferred and absolutely assigned to it. If the Trustee finds any document
or documents constituting a part of the documents described in Section 2.01 to
be missing, mutilated, damaged, defaced, incomplete, improperly dated, clearly
forged or otherwise physically altered in any material respect, the Trustee
shall promptly (and in any event within no more than five Business Days after
such discovery) so notify the Depositor. At the conclusion of such review, the
Trustee shall also notify the Depositor if, in examining such documents, or
through any other means, the Trustee had notice or knowledge (a) of any adverse
claim, lien or encumbrance against [any] [the] Mortgage Loan or [any] [the]
[related] Mortgaged Estate, (b) that [any] [the] Mortgage Note was overdue or
had been dishonored, (c) of evidence on the face of [any] [the] Mortgage Note
or Mortgage of any security interest or other right or interest therein, or (d)
of any defense against or claim to [any] [the] Mortgage Note by any party. The
Depositor shall correct such omission or other irregularity referred to above

<PAGE> 20

within 90 days from receipt of such notice from the Trustee. The Trustee shall
review the documents referred to in Section 2.01 only for the purpose set forth
above in this Section 2.02 and the Trustee shall be under no duty or obligation
to inspect, review or examine any such documents, instruments, certificates or
other papers to determine that they are genuine, enforceable or appropriate for
the represented purpose or that they have actually been recorded or that they
are other than what they purport to be on their face.

Within thirty (30) days of the Closing Date, the Trustee shall deliver
to the Depositor, Kmart and the Certificateholders the Trustee's Certification
substantially in the form attached hereto as Exhibit C.

Section 2.03. Trust Property. The Trustee acknowledges that it
holds the Trust Property conveyed pursuant to this Trust Agreement in trust for
the use and benefit of all present and future Certificateholders.

Section 2.04. Limitation of Powers. The Trust is constituted solely
for the purpose of making the investment in the Trust Property, and, except as
set forth herein, the Trustee is not authorized or empowered to acquire any
other investments or engage in any other activities.

ARTICLE III
THE CERTIFICATES

Section 3.01. The Certificates.

(a) Form and Terms. The Certificates and the Trustee's certificate
of authentication shall be substantially in the form attached hereto as Exhibit
B. Subject to the provisions of Section 3.06 hereof, the Certificates shall be
issuable as registered securities without coupons and shall be numbered,
lettered or otherwise distinguished from one another. The Certificates shall
be issued in denominations of $1,000 principal amount and any integral multiple
thereof and shall be dated the date of their authentication. Each Certificate
shall bear interest and have the other terms as are set forth in the
Certificate Schedule and in such Certificate. Each Certificate shall evidence
a beneficial ownership interest in the Trust Property and shall have no rights,
benefits or interest in respect of any other separate pass-through trust, if
any, or the trust property held in such other pass-through trust. All
Certificates shall be in all respects equally and ratably entitled to the
benefits of the Trust without preference, priority, or distinction on account
of actual time or times of authentication and delivery, all in accordance with
the terms and provisions of this Trust Agreement.

Certificates shall not be subject to optional prepayment except as
provided herein.

<PAGE> 21

On the Closing Date, Trustee shall issue the Certificates indicated on
the Certificate Schedule. The aggregate principal amount of the Certificates
to be issued hereunder shall not exceed $___________.

(b) Execution and Authentication. The Certificates shall be
executed on behalf of the Trustee by its Chairman of the Board, one of its Vice
Chairmen, its President or one of its Vice Presidents, under its corporate seal
reproduced thereon. The signature of any such officer on the Certificates may
be manual or facsimile.

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

No Certificate shall be entitled to any benefit under this Trust
Agreement or be valid or obligatory for any purpose unless there appears on
such Certificate a certificate of authentication substantially in the form
provided for in Exhibit "B" annexed thereto duly executed by the Trustee by
manual signature of an authorized officer, and such certificate of
authentication upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and made available
for delivery hereunder.

(c) Prepayment Distribution. In the event of a prepayment of [a]
[the] Mortgage Note pursuant to Section 3 of the [related] Loan Agreement (not
including a Put pursuant to the [related] Note Put Agreement), the Trustee
shall within 30 days following receipt of any amounts in connection with such
prepayment distribute the portion of such amounts that have been deposited into
the Certificate Account to the Certificateholders pro rata based upon their
respective Percentage Interests.

(d) Note Put Distribution. The Trustee shall, in the manner and to
the extent required by Section 313(c) of the TIA, notify the Certificateholders
of the occurrence of any Triggering Event (as defined in [a] [the] Note Put
Agreement) known to the Trustee within five (5) Business Days after obtaining
knowledge thereof.

(i) Upon the occurrence of a Triggering Event, the Trustee, as
provided in (ii) below or upon receipt, within 90 days of delivery of the
notice pursuant to Section 3.01(d), of the written direction to exercise the
Put by the Holders of Certificates evidencing Percentage Interests in the
aggregate of not less than 66-2/3%, shall (A) exercise the Put in accordance
with the terms and provisions of [such] [the] Note Put Agreement, including but
not limited to delivering the [related] Mortgage Note, endorsed as provided in
such Note Put Agreement, to the [related] Tenant [or Kmart, as the case may
be,] upon receipt of the Purchase Price from the [related] Tenant [or Kmart],
(B) designate

<PAGE> 22
the Purchase Date under [such] [the] Note Put Agreement, which Purchase Date
shall be not more than 35 Business Days after receipt of such direction, and
(C) within 30 days following the receipt of the Purchase Price distribute such
amount, less any unreimbursed reasonable costs and expenses incurred by the
Trustee in connection with the exercise of the Put, to the Certificateholders
pro rata based upon their respective Percentage Interests, whereupon this Trust
shall terminate with respect to such Mortgage Note and the [related] Loan
Documents. Upon execution and delivery of all documents reasonably necessary
to assign the related Loan Documents to the purchaser of such Mortgage Note,
the Trustee shall have no further obligations with respect to such Loan
Documents or such Mortgage Note. The payment of the Purchase Price to Trustee
as set forth herein and in the [related] Note Put Agreement and any other
amounts due under the terms of the Note Put Agreement shall satisfy in full
[the related] Tenant's and Kmart's obligations under the [related] Note Put
Agreement.

(ii) If the Triggering Event is a Lease Guaranty Termination, the
Trustee shall exercise the [related] Put and take the other steps specified in
(i) above unless, within 30 days after sending the notice of the occurrence of
the Triggering Event as provided in this Section 3.01(d), the Trustee receives
written direction from the Holders of Certificates evidencing Percentage
Interests in the aggregate of not less than 66-2/3% instructing the Trustee not
to exercise such Put.

(e) Liquidation Distribution. In the event of a liquidation of [a]
[the] Mortgage Note by foreclosure or otherwise as a consequence of an Event of
Default (not including a Put pursuant to the [related] Note Put Agreement), the
Trustee shall within 30 days following receipt of any Net Liquidation Proceeds
in connection with such liquidation distribute such amounts to the
Certificateholders pro rata based upon their respective Percentage Interests.
Once a Mortgage Loan has become a Liquidated Mortgage Loan and all Net
Liquidation Proceeds with respect to such Liquidated Mortgage Loan have been
distributed to the Certificateholders, this Trust shall terminate with respect
to such Liquidated Mortgage Loan and the [related] Loan Documents.

(f) Late Payment Distribution. In the event that, due to unpaid
Annual Rental, there are insufficient funds available on any Due Date to pay
the Mortgage Payments on a Mortgage Note and subsequent to such Due Date such
Annual Rental or any Additional Rent with respect thereto is paid, the Trustee
shall, within 10 Business Days of receipt of such late Annual Rental or
Additional Rent, distribute to the Certificateholders such unpaid portion of
such Mortgage Payments together with interest on such overdue amount at the
Overdue Rate (as defined in such Mortgage Note) to the extent received.

(g) Adjustment of Debt Service. In the event of (i) an optional
prepayment of all or any part of a Mortgage Note, (ii) an acceleration of the
maturity date of a Mortgage Note by reason of

<PAGE> 23

an Event of Default, (iii) a Borrower becoming obligated to prepay a Mortgage
Note pursuant to Section 3.3 of the [related] Loan Agreement, (iv) a reduction
of Mortgage Payments due to the condemnation of a part of the [related] Project
resulting in a reduction in Annual Rental, or (v) the sale of a Mortgage Note
pursuant to a Note Put Agreement, the Debt Service shall be reduced to equal
the aggregate Mortgage Payments on the remaining outstanding Mortgage Notes,
after giving effect to any reduction in such Mortgage Payments by reason of an
optional partial prepayment or a condemnation described in clause (iv) and
excluding from "remaining outstanding Mortgage Notes," for this purpose, any
Mortgage Note which is sold pursuant to the Note Put Agreement, which is
prepaid in full, the maturity date of which has been accelerated, or which the
Borrower is obligated to prepay in full pursuant to Section 3.3 of the related
Loan Agreement.

(h) Notice of Distribution. Notice of a distribution pursuant to
Section 3.01(c), (d) or (e) shall be given by sending such notice, by
first-class mail, postage prepaid, not less than 10 days prior to the date
fixed for such distribution. Notice of such distribution pursuant to any other
provision hereof shall be given as soon as reasonably practicable following
notice of the facts giving rise to such distribution by the Trustee. All
notices of any such distribution shall be mailed to the Certificateholder at
the address shown on the Certificate Register. The reasonable costs of such
notices incurred by the Trustee shall be deducted from the amount of any such
distribution.

(i) Rights of Holders to Payments. The rights of the
Certificateholders to receive payments with respect to the Trust Property in
respect of the Certificates, and all ownership interests of the
Certificateholders in such payments, shall be as set forth in this Trust
Agreement.

Section 3.02. Registration of Transfer and Exchange of Certificates.

(a) The Trustee shall cause to be kept at its Corporate Trust
Office or at the office of its designated agent, a Certificate Register in
which, subject to such reasonable regulations as it may prescribe, the Trustee
shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. The Trustee shall be the
Certificate Registrar. If the Trustee is not the Certificate Registrar, the
Depositor shall furnish to the Trustee on or before each Remittance Date and at
such other times as the Trustee may request in writing a list in such form and
as of such date as the Trustee may reasonably require of the names and
addresses of Certificateholders, which list may be conclusively relied upon by
the Trustee.

(b) Upon surrender for registration of transfer of any Certificate
at the Corporate Trust Office or at the office of any designated agent of the
Trustee maintained for such purpose, the Trustee shall execute, authenticate
and deliver, in the name of the

<PAGE> 24
designated transferee or transferees, a new Certificate of a like tenor and
dated the date of such execution and authentication by the Trustee.

(c) No transfer of a Certificate or of a beneficial interest in a
Registered Global Certificate shall be made unless the Trustee;

(i) shall have received a Transfer Assurance consisting of
either (A) a representation from the transferee of such Certificate or
of such beneficial interest in a Registered Global Certificate to the
effect that such transferee is not a Benefit Plan, nor a person
acting on behalf of or purchasing for the benefit of any such Benefit
Plan, which representation letter shall not be an expense of the
Trustee, the Depository or the Depositor, or (B) in the case of any
such Certificate presented for registration, or of any such beneficial
interest in a Registered Global Certificate proposed to be registered
on the books of the Depository or on those of a participant in such
Depository, in the name of a Benefit Plan, or a trustee of any such
Benefit Plan, an opinion of counsel reasonably satisfactory to the
Trustee and Depositor to the effect that the purchase or holding of
such Certificate or such beneficial interest will not result in the
assets of the Trust being deemed to be "plan assets" subject to the
prohibited transaction provisions of ERISA or the Code, or that the
purchase or holding of such Certificate or such beneficial interest
qualifies as an exempt prohibited transaction under the provisions of
ERISA or the Code, and will not subject the Trustee or the Depositor
to any obligation in addition to those undertaken in this Trust
Agreement, which opinion of counsel shall not be an expense of the
Trustee, the Depository or the Depositor; or

(ii) shall authorize such transfer after receiving a request
therefor from the proposed transferee; provided that the Trustee shall
not give such authorization if the Percentage Interest to be owned by
such proposed transferee when added to the Percentage Interests owned
by any Certificateholders or Beneficial Owners who had previously
provided an opinion of counsel pursuant to Section 3.02(c)(i)(B) or
received an authorization pursuant to this Section 3.02(c)(ii) would
exceed 15%, and provided further that any such authorization by the
Trustee shall not be considered a representation that an investment by
any such transferee is an appropriate or permitted investment by any
such transferee, and provided further that the Trustee shall have no
obligation to inquire with respect to, or to determine, whether a
Benefit Plan has attempted to become a Beneficial Owner without
providing an opinion of counsel pursuant to Section 3.02(c)(i)(B) or
obtaining an authorization from the Trustee pursuant to this Section
3.02(c)(ii).

(d) In the absence of an opinion of counsel as provided in Section
3.02(c)(i)(B) or an authorization by the Trustee as provided in Section
3.02(c)(ii), the representation as described in Section 3.02(c)(i)(A) shall be
deemed to have been made to the Trustee by a transferee's or Beneficial Owner's
acceptance of a Certificate or beneficial interest therein. In the event that
such representation is violated, or any attempt is made to transfer a
Certificate or a beneficial interest therein to a Benefit Plan, or a person
acting on behalf of or purchasing for the benefit of any such Benefit Plan,
without an opinion of counsel as provided in Section 3.02(c)(i)(B) or an
authorization of the Trustee as provided in Section 3.02(c)(ii), such attempted
transfer shall be void and of no effect.

(e) At the option of the Certificateholder, a Certificate may be
exchanged for another Certificate or Certificates of a like tenor, upon
surrender of the Certificate to be exchanged at the Corporate Trust Office or
at the office of any designated agent of the Trustee maintained for such
purpose. Whenever a Certificate is so surrendered for exchange, the Trustee
shall execute, authenticate and deliver a new Certificate which the
Certificateholder making the exchange is entitled to receive. Every
Certificate presented or surrendered for transfer or exchange shall (if so
required by the Trustee) be duly endorsed by, or be accompanied by a written
instrument of transfer in a form reasonably satisfactory to the Trustee duly
executed by, the Holder thereof or his attorney duly authorized in writing.

(f) No service charge shall be made to the Holder for any transfer
or exchange of the Certificate, but the Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of the Certificate.

(g) All Certificates surrendered for transfer and exchange shall be
destroyed by the Trustee.

<PAGE> 25

Section 3.03. Mutilated, Destroyed, Lost or Stolen Certificates. If
(i) any mutilated Certificate is surrendered to the Trustee or the Trustee
receives evidence to its reasonable satisfaction of the destruction, loss or
theft of any Certificate, and (ii) there is delivered to the Trustee such
reasonable security or indemnity as may be required by it to save it harmless,
then, in the absence of notice to the Trustee that such Certificate has been
acquired by a bona fide purchaser, the Trustee shall execute, authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of like tenor. Upon the issuance of any
new Certificate under this Section, the Trustee may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses connected therewith. Any
replacement Certificate issued pursuant to this Section shall constitute
complete and indefeasible evidence of ownership of the undivided interest of
the Certificateholder in the Trust Property, as if originally issued, whether
or not the mutilated, destroyed, lost or stolen Certificate shall be found at
any time.

Section 3.04. Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer, the Trustee may treat the Person in
whose name any Certificate is registered in the Certificate Register as the
owner of such Certificate and the undivided interest in the Trust Property
evidenced thereby for the purpose of receiving remittances pursuant to Section
5.01 and for all other purposes whatsoever, and the Trustee shall not be
affected by notice to the contrary.

Section 3.05. Appointment of Paying Agent. The Trustee shall
initially serve as Paying Agent for the purposes of making distributions to
Certificateholders pursuant to Section 5.01. The Trustee shall require each
Paying Agent, other than the Trustee, to agree in writing that such Paying
Agent shall hold in trust for the benefit of the Certificateholders or the
Trustee all assets held by the Paying Agent for the payment of principal of, or
interest on, the Certificates, and shall notify the Trustee of any default in
making such payments.

Section 3.06. Certificates Issuable in the Form of a Registered
Global Certificate.

(a) The Trustee shall, in accordance with this Article, execute,
authenticate and deliver, Registered Global Certificates which, in the
aggregate, (i) shall represent, and shall be denominated in an initial
principal amount equal to, the original aggregate principal amount of the
Certificates issued hereunder, (ii) shall be registered in the name of the
Depository or its nominee, and (iii) shall bear a legend substantially to the
following effect: "Unless this Registered Global Certificate is presented by
an authorized representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Trustee or its agent for registration of transfer,
exchange or payment, and any Registered Global Certificate issued is registered
in the name of

<PAGE> 26

Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein."

(b) Notwithstanding any other provision of this Section or of
Section 3.02, the Registered Global Certificates may be transferred, in whole
but not in part and in the manner provided in Section 3.02, by the Depository
to a nominee of such Depository or by a nominee of such Depository to such
Depository or another nominee of such Depository or by such Depository or any
such nominee to a successor Depository selected or approved by the Depositor
upon notice to the Trustee or to a nominee of such successor Depository.

(c) The Depository shall be a clearing agency registered under the
Exchange Act and any other applicable statute or regulation.

(d) If (i) (A) the Depositor at any time advises the Trustee in
writing that the Depository is no longer willing or able to properly discharge
its responsibilities, or (B) the Depository at any time shall no longer be
eligible under subsection (c) above, and the Depositor is unable to appoint a
qualified successor within 90 days after the Depositor receives such notice or
becomes aware of such condition, as the case may be, or (ii) the Depositor at
any time, but only with the consent of Kmart, determines that the Certificates
shall no longer be represented by Registered Global Certificates and that the
provisions of this Section shall no longer apply to such Certificates, then
this Section shall no longer be applicable to the Certificates. In such event,
(x) the Trustee shall notify all Certificate Owners, through the Depository, of
the occurrence of any such event and of the availability of Certificates in
definitive registered form and (y) upon surrender of the Registered Global
Certificates to the Trustee, accompanied by reregistration instructions from
the Depository, the Trustee shall execute, authenticate and deliver
Certificates in definitive registered form without coupons, in authorized
denominations, and in an aggregate Percentage Interest equal to the Percentage
Interest evidenced by the Registered Global Certificates then outstanding in
exchange for such Registered Global Certificates. Upon the exchange of the
Registered Global Certificates for such Certificates in definitive registered
form without coupons in authorized denominations, such Registered Global
Certificates shall be canceled by the Trustee. If such exchange occurs as a
result of the events described in (i) above, all costs of the preparation,
execution, authentication and delivery of such Certificates shall be paid [pro
rata] from the Rental Payment Account[s]. If such exchange occurs at the
request of the Depositor pursuant to (ii) above, the Depositor shall pay all
such costs. Such Certificates in definitive registered form issued in

<PAGE> 27

exchange for the Registered Global Certificate pursuant to this subsection (d)
shall be registered in the names and in authorized denominations set forth in
the registration instructions. The Trustee shall deliver such Certificates to
the Persons in whose names such Certificates are so registered.

(e) As long as the Certificates are represented by the Registered
Global Certificates, all distributions in respect of such Certificates shall be
made by wire transfer of immediately available funds on the date such
distributions are due in accordance with the Letter of Representations, and the
Depositor shall or shall cause the Trustee to provide to the Depository any
notices referred to in the Letter of Representations in accordance with the
Letter of Representations.

(f) Unless and until Certificates in definitive registered form are
issued pursuant to paragraph (d) above, on the Record Date prior to each
Remittance Date, the Trustee will request from the Depository a securities
position listing setting forth the names of all participants in such Depository
reflected on the Depository's books as holding interests in the Registered
Global Certificates on such Record Date. The Trustee shall mail to each such
Depository participant the statements described in Section 5.02.

Section 3.07. Temporary Securities. Pending the preparation of
definitive Certificates, the Trustee may execute and authenticate and make
available for delivery, temporary Certificates which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Certificates in lieu
of which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such temporary
Certificates may determine, as conclusively evidenced by their execution of
such temporary Certificates. The Depositor shall bear the cost of preparation
of any temporary Certificates.

If temporary Certificates are issued, the Depositor will cause
definitive Certificates to be prepared without unreasonable delay. After the
preparation of definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the temporary
Certificates at the office or agency of the Trustee designated for such purpose
pursuant to Section 3.02 hereof, without charge to the Holder. Upon surrender
for cancellation of any one or more temporary Certificates, the Trustee shall
execute and authenticate and make available for delivery in exchange therefor a
like principal amount of definitive Certificates of authorized denominations.
Until so exchanged, the temporary Certificates shall in all respects be
entitled to the same benefits under this Trust Agreement as definitive
Certificates. Once so exchanged, the temporary Certificates shall be cancelled
by the Trustee.

<PAGE> 28

ARTICLE IV
RECEIPT AND DISTRIBUTION OF INCOME
AND PROCEEDS FROM THE TRUST PROPERTY

Section 4.01. Calculation of Distributions. The Trustee shall
calculate the Available Distribution Amount, make distributions on each
Remittance Date as set forth in Section 5.01 and have full power and authority
to do any and all things which it may deem necessary or desirable in connection
with such duties.

Section 4.02. Receipt of Lease Payments; Collection of Lease and Lease
Guaranty Payments; Collection of Indemnity Agreement Payments; Collection of
Mortgage Loan Payments; Investment Direction.

(a) Pursuant to the Consent and Agreement[s], [each] Tenant under
[the] [each] Lease will pay all Annual Rental and Additional Rent (except for
Real Estate Taxes (as defined in the related Lease) and amounts payable
directly to a third party pursuant to such Lease, which shall be payable in
accordance with such Lease) payable by [each] Tenant under [the] [each] Lease
directly to the Trustee. All such Annual Rental and Additional Rent received
by Trustee shall be deposited by the Trustee in the Rental Payment Account as
described in Section 4.03 hereof, invested in Eligible Investments in
accordance with Section 4.02(d) of this Trust Agreement, and applied in
accordance with Section 4.04 hereof; provided that, subsequent to the Trustee
becoming aware of the occurrence of an Event of Default pursuant to Section
7.01 hereof (except for a Non-Monetary Tenant Default), and during the time
such Event of Default continues without being cured, or waived, all Annual
Rental and Additional Rent from the [related] Lease received by Trustee shall
be deemed received pursuant to the Assignment of Leases and Rents and shall be
deposited by the Trustee in the Certificate Account as described in Section
4.05 hereof, shall be invested in accordance with Section 4.02(d) hereof, and
shall be applied in accordance with Section 4.06 hereof.

(b) In the event the Trustee does not receive any monthly
installment of Annual Rental on the date set forth in [the] [each] Lease,
taking into account any grace period provided for therein, the Trustee is
hereby directed to and the Trustee shall notify the [related] Borrower (as
landlord), the [related] Tenant [and Kmart] in writing regarding [the] [such]
Tenant's failure to make such timely payment. In the event the Trustee does
not receive the monthly installment of Annual Rental within the greater of
[five] Business Days of giving such written notice or any applicable grace
period under [the] [such] Lease and [the [related] Lease Guaranty], the Trustee,
at the written direction of the Holders of Certificates of Percentage Interests
aggregating not less than 66-2/3%, shall use its best efforts to enforce the
provisions of [the] [such] Lease [and [the] [such] Lease Guaranty] by exercising
all of the remedies available to it at law and in equity, including, but not
limited to, the remedies available under [the] [such] Lease [and [the] [such]
Lease Guaranty], provided that

<PAGE> 29

the Trustee shall give notice of intent to terminate or take action to
terminate [the] [such] Lease only at the written direction of Holders of
Certificates of Percentage Interests aggregating not less than 66-2/3% to take
such action.

(c) Continuously from the date hereof until the principal and
interest on, the Mortgage Loan[s] are paid in full, the Trustee will use
reasonable best efforts to collect all payments due under the Mortgage Loan[s]
when the same shall become due and payable. The Trustee shall also review any
official receipts from any taxing authority provided to it pursuant to Section
1.08(c) of the Mortgage[s] to monitor payment of Impositions (as defined in the
Mortgage[s]). [The Trustee also shall use its best efforts to collect any
amount that becomes due pursuant to [the] [an] Indemnity Agreement. Any
amounts collected by the Trustee pursuant to [the] [an] Indemnity Agreement
shall be deposited in the [related] Rental Payment Account, provided that
during any period when the proviso of Section 4.02(a) applies to the [related]
Annual Rental and Additional Rent, any amounts received under the [related]
Indemnity Agreement shall be deposited in the Certificate Account and applied
in accordance with Section 4.06 hereof.]

(d)(i) Funds in [the] [each] Rental Payment Account and [the] [each]
Capitalized Debt Service Account shall be invested in Eligible Investments [at
the written direction of the Borrower [on whose behalf such accounts have been
established]]. Funds in the Certificate Account shall be invested by the
Trustee in Eligible Investments described in subparagraph (i), (ii) or (iv) of
the definition thereof (or in the further proviso at the end of such
definition). All such investments shall mature on or prior to the next
succeeding Determination Date and in no event shall be invested in obligations
maturing later than 90 days from the investment date. The risk of investment
loss with respect to funds in [the] [each] Rental Payment Account and [the]
[each] Capitalized Debt Service Account shall be borne by the Borrower [on
whose behalf such accounts have been established]. The risk of investment loss
with respect to funds in the Certificate Account shall be borne by the
Certificateholders. On or after the Due Date and prior to the next succeeding
Determination Date, the Trustee shall be prohibited from selling or
transferring Eligible Investments prior to maturity unless and until a default
shall have occurred under [a] [the] Mortgage Note. In the event the Trustee
shall not have received at least twenty-four hours' written notice as to any
investment direction from [the] [a] Borrower, upon the maturity of an existing
investment, the Trustee shall be authorized to invest maturing amounts in
Eligible Investments described in subparagraph (iv) of the definition thereof
(or in the further proviso at the end of such definition) until further
directed in writing as to investments of such amounts. Investment earnings and
losses on any Eligible Investment shall be deposited to or charged to the
account in which the funds used for any such Eligible Investment were
deposited. The Trustee shall have no responsibility for any loss on any
Eligible Investments.

<PAGE> 30

(ii) If an Event of Default occurs under [a] [the] Mortgage Note or
Loan Documents [with respect to a Mortgage Loan], the Borrower [of such
Mortgage Loan] shall be prohibited from directing investments as contemplated
above and the Trustee shall invest in Eligible Investments described in
subparagraph (i), (ii) or (iv) of the definition thereof (or in the further
proviso at the end of such definition).

Section 4.03. Establishment of Rental Payment Account[s]; Deposits in
Rental Payment Account[s]. The Depositor (on behalf of [the] [each] Borrower)
hereby establishes [the] [a separate] Rental Payment Account with the Trustee.
[Such] [Each such] account shall be maintained as a fund separate and distinct
from other accounts [(including other Rental Payment Accounts)] created under
this Trust Agreement. Prior to an Event of Default with respect to such
Borrower's Mortgage Loan pursuant to Section 7.01 hereof (except for a
Non-Monetary Tenant Default), [the] [such] Rental Payment Account shall remain
the property of the Borrower [on whose behalf such Rental Payment Account was
established], subject to the rights of the Trustee under Section 4.04 of this
Trust Agreement and under [the] [such Borrower's] Pledge Agreement.

The Trustee shall cause to be deposited in [the] [such] Rental Payment
Account and retained therein:

(a) All payments (including Annual Rental and Additional Rent)
received pursuant to the terms of the [related] Lease [and Lease Guaranty]
other than Condemnation Proceeds and Insurance Proceeds and pursuant to the
terms of the [related] Indemnity Agreement, subject to the proviso of Section
4.02(a) hereof;

(b) Subject to the provisions of the [related] Lease, all Insurance
Proceeds or Condemnation Proceeds received pursuant to Section 17 or Section 18
of [the] [such] Lease in excess of the amounts required to make the mandatory
prepayment of the [related] Mortgage Notes pursuant to Section 3.3 of the
[related] Loan Agreement; and

The foregoing requirements for deposit in the Rental Payment Account[s] shall
be exclusive.

Section 4.04. Permitted Withdrawals From the Rental Payment
Account[s]. The Trustee shall cause the withdrawal of funds from [the] [a]
Rental Payment Account for the following purposes and in the following order
of priority:

(a) Upon the occurrence of an Event of Default [with respect to a
Borrower's Mortgage Loan] pursuant to Section 7.01 hereof (except for a
Non-Monetary Tenant Default), to transfer to the Certificate Account all
amounts in the Rental Payment Account

<PAGE> 31

[related to such Mortgage Loan] and to apply such amounts pursuant to the
provisions of Section 4.06 hereof;

(b) to transfer to the Certificate Account (i) on each Due Date an
amount equal to the Mortgage Payments due and unpaid on the [related
Borrower's] Mortgage Loan as of such Due Date and (ii) on the next Business Day
after receipt any amounts distributable to the Certificateholders under Section
3.01(f).

(c) to pay the Trustee for any amounts due pursuant to Section
3.06(d), for any unreimbursed Extraordinary Expense Advances required by [the
related] Borrower's default pursuant to the [related] Mortgage Note or the
[related] Loan Documents and for [such Borrower's ratable portion of] due and
unpaid Trustee's Fees, and to reimburse Trustee for any expenses, costs and
liabilities for which it is entitled to reimbursement hereunder or under the
[related] Mortgage Note or the Loan Documents [related to such Borrower's
Mortgage Loan]; prior to an Event of Default [with respect to such Borrower's
Mortgage Loan] the Trustee's right to reimburse itself pursuant to this clause
(c) with respect to [the] [such Borrower's] Mortgage Loan is limited to
reimbursement for amounts due pursuant to Section 3.06(d); subsequent to an
Event of Default [with respect to such Borrower's Mortgage Loan] pursuant to
Section 7.01 (except for a Non-Monetary Tenant Default), the Trustee shall have
a prior lien on all moneys in [the] [such Borrower's] Rental Payment Account
for payment or reimbursement of Extraordinary Expense Advances [related to such
Mortgage Loan], [such Borrower's ratable portion of] due and unpaid Trustee's
Fees, and other amounts owed it and payable by [such] Borrower under any
provision of the [related] Mortgage Note or the [related] Loan Documents,
provided, however, that so long as [(i) no default exists under the [related]
Lease Guaranty, taking into account any grace period provided for therein, or
(ii)] no direction has been given by Certificateholders owning Percentage
Interests of at least 66-2/3% to exercise rights or remedies under such
Mortgage Notes or Loan Documents, the payments pursuant to Section 4.04(a) and
(b) above shall be made by Trustee free and clear of such lien; and

(d) to disburse to [the related] Borrower any amounts remaining in
the Rental Payment Account promptly following the second scheduled Remittance
Date after the Closing Date, and on each anniversary thereafter to such
Remittance Date, after paying or providing for the payment or withdrawal of
amounts described in clauses (a), (b) and (c) above.

Section 4.05. Establishment of Certificate Account; Deposits in
Certificate Account. With respect to the Mortgage Loan[s], the Trustee shall
cause to be segregated and held all funds collected and received pursuant to
the Mortgage Loan[s] separate and apart from any of its own funds and general
assets and shall cause to be established and maintained a Certificate Account
in the form of a trust account titled "Mortgage Pass-Through Certificates
(_____________________________) Series 199_, Certificate Account" in trust for
the benefit of the Certificateholders.

<PAGE> 32
8

The Trustee shall cause to be deposited in the Certificate Account upon
receipt, and retained therein:

(a) All scheduled payments due on account of principal and interest
on the Mortgage Loan[s], and all Principal Prepayments and interest related
thereto collected;

(b) All payments on account of Make-Whole Premium or Termination
Premium on the Mortgage Loan[s];

(d) Subject to the provisions of the [related] Lease, (i) all
Insurance Proceeds received pursuant to Section 17 of [the] [such] Lease not
to exceed the amounts required to make the mandatory prepayment of the
[related] Mortgage Note pursuant to Section 3.3 of the [related] Loan
Agreement, and [(ii) any other Insurance Proceeds;]

(e) Subject to the provisions of the [related] Lease, all
Condemnation Proceeds pursuant to Sections 18(d) and 18(g) of [the] [such]
Lease not to exceed the amounts required to make the mandatory prepayment of
the [related] Mortgage Note pursuant to Section 3.3 of the [related] Loan
Agreement;

(f) All proceeds paid to Trustee by a Tenant [or Kmart] following an
exercise of [the] [a] Put pursuant to [the][a] Note Put Agreement;

(g) All earnings (or losses) on funds held in the Certificate Account
derived from Eligible Investments; and

(h) All amounts required to be deposited therein under Sections
4.02(a), [4.02(c),] 4.04(a), [and] 4.04(b) [and 4.07].

The foregoing requirements for deposit in the Certificate Account shall be
exclusive.

Section 4.06. Permitted Withdrawals From the Certificate Account. The
Trustee shall, from time to time, cause the withdrawal of funds from the
Certificate Account for the following purposes and in the following priority:

(a) to make payments to the Certificateholders in the amounts and in
the manner provided for in Section 5.01;

(b) subsequent to an Event of Default [with respect to such
Borrower's Mortgage Loan] pursuant to Section 7.01 hereof (except for a
Non-Monetary Tenant Default), to pay the Trustee for any unreimbursed
Extraordinary Expense Advances required by [the related] Borrower's default
pursuant to the [related] Mortgage Note or the [related] Loan Documents and
for [such Borrower's ratable portion of] due and unpaid Trustee's Fees, and to
reimburse Trustee for any expenses, costs and liabilities for which it is
entitled to

<PAGE> 33

reimbursement hereunder or under the Loan Documents [related to such Borrower's
Mortgage Loan]; and, in such event, the Trustee shall have a prior lien for
itself on all moneys in the Certificate Account for payment or reimbursement of
Extraordinary Expense Advances [related to such Mortgage Loan], [such
Borrower's ratable portion of] due and unpaid Trustee's Fees, and other amounts
owed it and payable by [such] Borrower under any provision of the [related]
Mortgage Note or the [related] Loan Documents, provided, however, that so long
as [(i) no default exists under the [related] Lease Guaranty, taking into
account any grace period provided for therein, or (ii)] no direction has been
given by Certificateholders owning Percentage Interests of at least 66-2/3% to
exercise rights or remedies under such Mortgage Note or Loan Documents, the
payments pursuant to Section 4.06(a) above shall be made by Trustee free and
clear of such lien; and

[Section 4.07. Capitalized Debt Service Account[s]. The Depositor (on
behalf of each Borrower listed on Exhibit A-4 hereto) hereby establishes from
the proceeds of the [related] Mortgage Loan [the] [a separate] Capitalized Debt
Service Account with the Trustee. [This] [Each such] account shall be
maintained as a fund separate and distinct from other accounts [(including
other Capitalized Debt Service Accounts)] created under this Trust Agreement.
[The] [Such] Capitalized Debt Service Account shall remain the property of the
Borrower [on whose behalf such Capitalized Debt Service Account was
established,] subject to the rights of the Trustee under the terms of this
Trust Agreement and the pledge thereof by [such] Borrower pursuant to the
Pledge Agreement to secure [the] [such Borrower's] Mortgage Loan; provided
that, subsequent to the Trustee becoming aware of the occurrence of an Event of
Default [with respect to such Borrower's Mortgage Loan] pursuant to Section
7.01 hereof (except for a Non-Monetary Tenant Default), all amounts in the
[related] Capitalized Debt Service Account shall be transferred to the
Certificate Account and shall be applied in accordance with Section 4.06
hereof. The Trustee shall cause to be deposited into [the] [such] Capitalized
Debt Service Account (i) the amount of the Capitalized Debt Service Reserve
received on the Closing Date [with respect to such Mortgage Loan] and (ii) all
amounts received on earnings on or income from (or losses due to) any
investments or reinvestments of [the] [such] Capitalized Debt Service Reserve
in Eligible Investments.

The Trustee shall cause the transfer of funds from [the] [each]
Capitalized Debt Service Account to the Certificate Account on the dates and in
the amounts set forth in the attached Exhibit A-4. Upon the payment of all of
the amounts set forth in Exhibit A-4 [with respect to the Capitalized Debt
Service Account established on behalf of a Borrower], and provided that no
default or Event of Default shall have occurred and be continuing (except for a
Non-Monetary Tenant Default) under any [related] Mortgage Note or Loan
Documents, Trustee shall disburse to the [related]

<PAGE> 34

Tenant without requisition any amounts remaining in [the] [such] Capitalized
Debt Service Account.]

Section 4.08. Realization Upon Defaulted Mortgage Loan.

(a) If an Event of Default with respect to a Mortgage Loan has
occurred and is continuing and if Certificateholders holding Percentage
Interests aggregating not less than 66-2/3% direct, the Trustee, after
receiving indemnity for its reasonable costs, expenses and liabilities with
respect thereto to its reasonable satisfaction from the Certificateholders in
accordance with Section 8.02 (iii), shall use its best efforts to foreclose
upon or otherwise comparably convert the ownership of the Mortgaged Estate
securing such Mortgage Loan; shall manage, conserve and protect such Mortgaged
Estate for the purposes of its disposition and sale; and shall dispose of such
Mortgaged Estate as promptly as is reasonably possible. Upon sale or other
conveyance of all or any part of such Mortgaged Estate by the Trustee, the
Trust shall have no further right, title or interest in the Mortgaged Estate,
or portion thereof, so sold or conveyed. [Notwithstanding anything herein to
the contrary, a default under one Loan Agreement or related Loan Documents
shall not constitute a default under any other Loan Agreement or Loan
Documents.]

(b) Notwithstanding the foregoing, if the Trustee has actual
knowledge or reasonably believes that all or any part of a Mortgaged Estate is
affected by hazardous or toxic wastes or substances, the Trustee need not
cause the Trust to acquire title to such Mortgaged Estate in a foreclosure or
similar proceeding. In connection with such activities, the Trustee shall
follow such practices and procedures as it shall deem necessary or advisable,
as shall be normal and usual in trustee activities by leading national banking
associations, and, in particular, the Trustee may request such certificates of
appropriate public officials and agencies, if any, a history of such Mortgaged
Estate and its uses, other evidence reasonably satisfactory to the Trustee
showing that such Mortgaged Estate conforms to existing environmental laws,
regulations and rules, and that no conditions exist in, on or beneath the
surface of such Mortgaged Estate that are or might become hazardous materials,
and including but not limited to an environmental report or reports from a
company reasonably satisfactory to Trustee, showing the current state of
storage, disposal or release of any oil, fuels, gases, chemicals, trash,
garbage or other solid wastes or hazardous materials which report or reports
shall be based upon complete and thorough on-site inspections of such Mortgaged
Estate, including but not limited to investigations of the soil, surface water
and groundwater, to confirm the presence or absence of any hazardous materials
on or beneath the surface of such Mortgaged Estate or adjacent lands. Any
expenses incurred by Trustee in connection with obtaining any such certificates
or reports, if not paid by the Borrower, shall be Extraordinary Expense
Advances.

<PAGE> 35

(c) The activities set forth in Section 4.08(a) are also subject to
the proviso that the Trustee may, but shall not be required to, expend its own
funds in connection with any foreclosure or towards the restoration of a
Mortgaged Estate if it shall determine that (i) such restoration or foreclosure
will increase the Net Liquidation Proceeds of the related Mortgage Loan to
Certificateholders after reimbursement for such expenses and (ii) such expenses
will be recoverable either through Liquidation Proceeds or revenues from such
Mortgaged Estate.

Section 4.09. Trustee Compensation. The Trustee's Fee shall be paid
pursuant to the terms of the Consent and Agreement[s]. The Trustee, as
compensation for its activities hereunder (other than those covered by the
Trustee's Fee), shall be entitled to receive amounts representing reimbursement
for Extraordinary Expense Advances and reimbursement for certain expenses, as
specified by Sections 3.01(d), 3.01(h), 3.06(d), 4.04(c) and 4.06(b).

Section 4.10. Rights of the Certificateholders. The Trustee shall
afford the Certificateholders, upon reasonable notice and during normal
business hours, access to all records maintained by the Trustee in respect of
its rights and obligations hereunder and access to officers of the Trustee
responsible for such obligations. Upon request, the Trustee shall furnish the
Certificateholders with its most recent publicly available financial
statements.

ARTICLE V
PAYMENTS TO THE CERTIFICATEHOLDERS

Section 5.01. Distributions.

(a) The Trustee shall cause to be distributed, from funds in the
Certificate Account, the following amounts:

(i) on each Remittance Date, to each Certificateholder an
amount equal to the Debt Service due on the Certificate or Certificates held
by such Certificateholder; provided, however, that the foregoing shall not
apply to amounts deposited in the Certificate Account under Section 4.02(a),
4.02(c), 4.04(a) or 4.07 if the maturity of the related Mortgage Loan has been
accelerated pursuant to the terms of the related Loan Documents. Any amounts
referred to in the proviso contained in the preceding sentence, together with
the interest earned thereon, shall, after such acceleration, be held in the
Certificate Account until such time as they constitute Liquidation Proceeds,
at which time the Net Liquidation Proceeds attributable thereto shall be
disposed of as provided in sections 3.01(e) and 5.01(a)(ii); and

(ii) on the date provided for distributions pursuant to Section
3.01(c), (d), (e) or (f), to each Certificateholder an amount equal to the
amount payable on the Certificate or Certificates held by such
Certificateholder pursuant to Section 3.01(c), (d), (e) or (f), as the case
may be; and

<PAGE> 36

(iii) concurrently with the termination of the Trust pursuant
to Section 9.01 hereunder, to each Certificateholder an amount equal to the
product of (a) all amounts remaining in the Certificate Account after giving
effect to the distributions provided for in clauses (i) and (ii) hereof, and
(b) the Percentage Interest of such Certificateholder.

(b) All distributions made to Certificateholders on each Remittance
Date shall be made to the Certificateholders of record on the Record Date
(other than as provided in this Trust Agreement or in the form of Certificate
respecting the final distribution), (i) by wire transfer in immediately
available funds to the account of such Holder at a bank or other financial or
depository institution having appropriate facilities therefor, if such Holder
has so notified the Trustee in writing at least 10 Business Days prior to such
Remittance Date and such Holders hold Certificates in the aggregate principal
amount of $1,000,000 or more or (ii) for all other Holders of Certificates, by
check mailed to the address of the Person entitled thereto as it appears on the
Certificate Register. Notwithstanding any of the provisions of this subsection
(b) to the contrary, so long as all of the outstanding Certificates are held by
the Depository, all distributions in respect of such Certificates shall be made
by wire transfer in immediately available funds in accordance with the Letter
of Representations. All distributions in respect of the Certificates shall be
made without presentation or surrender, except that the final distribution in
accordance with Section 9.02 will be made only upon presentation and surrender
of the Certificates at the Corporate Trust Office or such other agency of the
Trustee specified in the final distribution notice to Certificateholders. If
on any Determination Date, the Trustee reasonably determines that [the] [no]
Mortgage Loan is [not] outstanding and there are no other funds or assets in
the Trust Property other than the funds in the Certificate Account, the Trustee
shall send the final distribution notice to each Certificateholder and make
provision for the final distribution in accordance with Section 9.02.

Section 5.02. Statements to Certificateholders. Not later than each
Remittance Date, Trustee will cause to be sent to each Certificateholder a
statement setting forth the following information with respect to each
Certificate (which information may be aggregated for all Certificates held by
the same Holder), after giving effect to the distributions to be made pursuant
to Section 5.01 on or as of such Remittance Date:

(i) the portion of such distribution allocable to principal
on the Mortgage Note[s];

(ii) the portion of such distribution allocable to interest on
the Mortgage Note[s];

(iii) the amount of any Extraordinary Expense Advance by the
Trustee pursuant to Section 5.03; and

<PAGE> 37

(iv) whether [the] [a] Mortgage Loan is delinquent.

In addition, not more than 90 days after the end of each calendar year
or by such earlier time as may be required under the Code, the Trustee will
furnish a report to each holder of a Certificate at any time during such
calendar year, an annual statement of interest paid on the Mortgage Note[s] in
accordance with the requirements of applicable federal income tax law.

The Trustee shall cause to be prepared and shall file any and all tax
returns, information statements or other filings required to be delivered to
(a) any governmental taxing authorities or (b) the Certificateholders pursuant
to any applicable law with respect to the Trust Property and the transactions
contemplated hereby. The costs of any such filings, including the costs of any
accounting firm or other organization retained to assist in the preparation of
any such filings, shall be considered an ordinary cost and expense of the
Trustee included within the Trustee's Fee and not subject to reimbursement by
the Depositor, any Borrower or otherwise.

Section 5.03. Advances by Trustee. The Trustee may from time to time
following an Event of Default make such Extraordinary Expense Advances as
Trustee in its sole discretion deems advisable, provided, however, that it
shall not be obligated to make any such advances unless it is satisfied as to
the availability of reimbursement, pursuant to the terms hereof or from the
Certificateholders.

ARTICLE VI
THE DEPOSITOR

Section 6.01. Maintaining Corporate Existence of the Depositor. The
Depositor will keep in full effect its existence, rights and franchises as a
corporation, and will obtain and preserve its qualification to do business as a
foreign corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this Trust
Agreement, the Certificates or the Mortgage Loan[s] and to perform its duties
under this Trust Agreement.

The Depositor will not, on or after the date of execution of this Trust
Agreement (i) engage in any business or activities other than those set forth
in Article III of the Certificate of Incorporation of the Depositor, (ii) incur
any indebtedness other than trade payables incurred in the ordinary course of
business, or (iii) amend, or propose to its shareholders for their consent any
amendment of, its Certificate of Incorporation or Bylaws without giving notice
thereof in writing not less than 30 days nor more than 90 days prior to the
date on which such amendment is to become effective to Trustee and without
first obtaining the written consent of Trustee.

<PAGE> 38

Section 6.02. Limitation on Liability of the Depositor. Neither the
Depositor nor any of the directors, officers, employees or agents of the
Depositor shall be under any liability to the Trustee or the Certificateholders
for any action taken or for refraining from the taking of any action in good
faith pursuant to this Trust Agreement, or for errors in judgment; provided,
however, that this provision shall not protect the Depositor or any such person
against any liability which would otherwise be imposed by reason of any willful
misfeasance, bad faith or negligence in the performance of its duties or by
reason of negligent disregard of obligations and duties hereunder. The
Depositor and any director, officer, employee or agent of the Depositor may
rely in good faith on any document of any kind prima facie properly executed
and submitted by any Person respecting any matters arising hereunder.

The Depositor shall not be under any obligation to appear in, prosecute
or defend any legal action which is not incidental to its duties pursuant to
this Trust Agreement and which in its opinion may involve it in any expense or
liability; provided, however, that the Depositor may in its discretion
undertake any such action which it may deem necessary or desirable with respect
to this Trust Agreement and the rights and duties of the parties hereto and the
interests of the Certificateholders hereunder.

ARTICLE VII
DEFAULT

Section 7.01. Events of Default. The occurrence of any event
constituting an event of default as defined in [any] [the] Mortgage Note or any
Loan Document shall constitute an Event of Default under this Trust Agreement.
If an Event of Default shall occur and be continuing, then, and in each and
every such case, so long as the Event of Default shall not have been remedied
or waived, the Trustee, at the written direction of the Holders of Certificates
of Percentage Interests aggregating not less than 66-2/3%, shall exercise any
rights and remedies that it may have pursuant to [such] Mortgage Note or any
[related] Loan Document, as modified by the provisions of this Trust Agreement,
or at law or equity, including injunctive relief and specific performance,
provided that, if, as a result of the occurrence of an Event of Default, the
Trustee acquires any property other than cash, whether pursuant to foreclosure
or otherwise, the Trustee shall sell such property as promptly as is reasonably
possible. [A failure to pay with respect to any Mortgage Note or a default
under any Loan Document will not constitute a default under any unrelated
Mortgage Note or under any unrelated Loan Documents and will not give rise to
any right of the Trustee to exercise any remedies with respect to such
unrelated Mortgage Note or unrelated Loan Documents.] The Trustee will have no
obligation to take any action or institute, conduct or defend any litigation
under this Trust Agreement at the request, order or direction of any of the
Certificateholders, unless such Certificateholders have offered to the Trustee
reasonable indemnity pursuant to Section 8.02(iii) against the

<PAGE> 39

costs, expenses and liabilities which the Trustee may incur. The Trustee shall
apply the proceeds recovered in the enforcement of the rights and remedies
under this Trust Agreement in accordance with the terms of this Trust
Agreement.

Section 7.02. Waiver of Defaults. The Trustee, at the written
direction of Holders of Certificates of Percentage Interests aggregating not
less than 66-2/3%, shall waive any default hereunder or under any Mortgage Note
or Loan Document and the consequences of any such default, except that a
default in the making of any required distribution on the Certificates may
only be waived by the affected Certificateholders. The Trustee shall have no
authority to exercise the right of waiver if, as a result thereof, this Trust
would fail to be characterized as a trust for federal income tax purposes. The
Trustee may rely upon an Opinion of Counsel as set forth in Section 8.02 if it
reasonably believes that such an act may cause the Trust to fail to be
characterized as a trust for federal income tax purposes. Upon any such waiver
of a past default, such default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been remedied for every purpose of
this Trust Agreement. No such waiver shall extend to any subsequent Event of
Default or impair any right consequent thereon except to the extent expressly
so waived.

Section 7.03. Notification to Certificateholders. The Trustee shall,
in the manner and to the extent required by Section 313(c) of the TIA, notify
the Certificateholders, the [related] Tenant and Kmart of any Event of Default
known to the Trustee within the later of 90 days from the occurrence thereof or
30 days after obtaining knowledge thereof, unless such Event of Default has
been cured or waived before the giving of such notice. Except in the case of a
default in the payment of principal of, or interest on, the Mortgage Note[s],
the Trustee may withhold such notice if and so long as its board of directors,
the executive committee of the board of directors or a committee of its
directors and/or responsible officers in good faith determine that the
withholding of such notice is in the interests of the Certificateholders.

Section 7.04. Rights of Certificateholders to Direct Proceedings.
Anything in this Trust Agreement to the contrary notwithstanding, the Holders
of Certificates of Percentage Interests aggregating not less than 66-2/3% shall
have the right, at any time during the continuance of an Event of Default, by
an instrument or instruments in writing executed and delivered to the Trustee,
to direct the time, place and method of conducting all proceedings to be taken
in connection with the enforcement of the terms and conditions of the Loan
Documents; provided, however that such direction shall not be otherwise than in
accordance with the provisions of law and this Trust Agreement and provided
that such Holders shall have provided to the Trustee the reasonable indemnity
pursuant to Section 8.02 (iii) against the costs, expenses and liabilities
which the Trustee may incur in connection with such proceedings.

<PAGE> 40

Section 7.05. Rights of Certificateholders to Receive Payment.
Notwithstanding any other provision in this Trust Agreement, the right of any
Certificateholder to receive distributions pursuant to Section 5.01, on or
after the respective Remittance Dates set forth herein or in the Certificates,
or to bring suit for the enforcement of any such distribution on or after such
respective dates shall not be impaired or affected without the consent of such
Certificateholder.

Section 7.06. Remedies Cumulative. No remedy given hereunder to the
Trustee or to any of the Certificateholders shall be exclusive of any other
remedy or remedies, and each such remedy shall be cumulative and in addition to
every other remedy given hereunder or now or hereafter given by statute, law,
equity or otherwise.

Section 7.07. Trustee Default. In the event of any breach by the
Trustee of its obligations pursuant to this Trust Agreement, the
Certificateholders and the Depositor shall be entitled to exercise all rights
and remedies to which they may be entitled at law or in equity.

Section 7.08. Notice to Tenant[s] [and Kmart]. The Trustee shall
promptly notify the [related] Tenant [and Kmart] of the exercise of any
remedies under this Trust Agreement, under [any] [the] Mortgage Note or under
any Loan Document. Failure to give such notice or notice under Section 7.03
hereof shall not impair or limit the Trustee's right to pursue any such
remedies or any other right or remedy to which it may be entitled.

ARTICLE VIII
CONCERNING THE TRUSTEE

Section 8.01. Duties of Trustee. [With respect to each Mortgage Note]
the Trustee, prior to the occurrence of an Event of Default [related to such
Mortgage Note] and after the curing or waiver of all Events of Default [related
to such Mortgage Note] which may have occurred, undertakes to perform such
duties and only such duties as are specifically set forth in this Trust
Agreement. In case an Event of Default has occurred [related to such Mortgage
Note] (which has not been cured or waived), the Trustee shall exercise such of
the rights and powers vested in it by this Trust Agreement, and use the same
degree of care and skill in their exercise as a prudent man would exercise or
use under the circumstances in the conduct of such man's own affairs. No
permissive rights of the Trustee shall be construed as a mandatory duty of the
Trustee. If the Trustee becomes aware of the occurrence of any event which,
with the giving of notice and, if applicable, the passage of time without cure,
would constitute an event of default as defined in any Loan Document, the
Trustee, if it is an appropriate party (or an assignee of an appropriate party)
to give such notice, is authorized and directed to give such notice in
accordance with such Loan Document.

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the requirements of this Trust Agreement and if they are deemed to be
deficient, Trustee shall request cure of any such deficiency within a
reasonable period of time for such cure. If such deficiency is not cured to
the satisfaction of Trustee, the Trustee may treat the requirement pursuant to
which such instrument is furnished as not having been satisfied.

No provision of this Trust Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own misconduct; provided, however, that:

(i) Prior to the occurrence of an Event of Default, and after
the curing or waiver of all such Events of Default which may have occurred, the
duties and obligations of the Trustee shall be determined solely by the express
provisions of this Trust Agreement, the Trustee shall not be liable except for
the performance of such duties and obligations as are specifically set forth
in this Trust Agreement and, in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon any certificates
or opinions furnished to the Trustee and conforming to the requirements of this
Trust Agreement;

(ii) The Trustee shall not be personally liable for an error
of judgment made in good faith by a Responsible Officer or Responsible Officers
of the Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;

(iii) The Trustee shall not be personally liable with respect
to any action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of holders of Certificates evidencing Percentage
Interests aggregating not less than 66-2/3% as to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this Trust
Agreement; and

(iv) The Trustee shall have no authority to perform any act
which, if consummated, would cause the entity created hereunder to fail to be
characterized as a trust for federal income tax purposes. The Trustee may rely
upon an Opinion of Counsel, as set forth in Section 8.02, if it reasonably
believes that such an act may cause the Trust to fail to be characterized as a
trust for federal income tax purposes. Nothing in this Section 8.01(iv) is
intended to prevent the Trustee from exercising any right or remedy to which it
is entitled hereunder or under any Loan Document.

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repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.

Section 8.02. Certain Matters Affecting Trustee. Except as otherwise
provided in Section 8.01:

(i) The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate, certificate
of auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond or other paper or document
reasonably believed by it to be genuine and to have been signed or presented
by the proper party or parties;

(ii) The Trustee may consult with counsel, and any Opinion of
Counsel shall be full and complete authorization and protection in respect of
any action taken or suffered or omitted by it hereunder in good faith and in
accordance with such Opinion of Counsel, provided that any cost incurred by the
Trustee shall be reimbursable only to the extent provided in Sections 3.01(d),
3.06(d), 4.04(c), 4.06(b) and 4.09 hereof;

(iii) The Trustee shall be under no obligation to exercise any
of the trusts or powers vested in it by this Trust Agreement or to
institute, conduct or defend any litigation hereunder or in relation hereto
at the request, order or direction of any of the Certificateholders, pursuant
to the provisions of this Trust Agreement, unless such Certificateholders
shall have offered to the Trustee reasonable indemnity against the costs,
expenses and liabilities which may be incurred therein or thereby; the right
of the Trustee to perform any discretionary act enumerated in this Trust
Agreement shall not be construed as a duty; and the Trustee shall not be
answerable for other than negligence or willful misconduct in performance of
such act. Nothing contained herein shall, however, relieve the Trustee of the
obligation, upon the occurrence of an Event of Default (which has not been
cured or waived), to exercise such of the rights and powers vested in it by
this Trust Agreement, and to use the same degree of care and skill in their
exercise as a prudent man would exercise or use under the circumstances in the
conduct of such man's own affairs;

(iv) The Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and reasonably believed by it to
be authorized or within the discretion or rights or powers conferred upon it by
this Trust Agreement;

(v) Except with respect to notice of deficient or missing
documents described in Section 2.02, prior to the occurrence of an Event of
Default hereunder and after the curing or waiver of all Events of Default
which may have occurred, the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,

<PAGE> 43

approval, bond or other paper or document, unless requested in writing so to do
by Holders of Certificates evidencing Percentage Interests aggregating not less
than 66-2/3%; provided, however, that if the payment within a reasonable time
to the Trustee of the costs, expenses or liabilities likely to be incurred by
it in the making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the terms
of this Trust Agreement, the Trustee may require reasonable indemnity against
such expense or liability as a condition to such proceeding. The reasonable
expense of every such investigation shall be paid by the Certificateholder
requesting the investigation; and

(vi) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys.

Section 8.03. Trustee Not Liable for Certificates or Mortgage Loan[s].
The recitals contained herein and in the Certificates shall be taken as the
statements of the Depositor and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations or warranties as to the
validity or sufficiency of this Trust Agreement or of the Certificates (except
that the Certificates shall be duly and validly executed and authenticated by
the Trustee and this Trust Agreement shall be duly and validly executed by the
Trustee) or of the Mortgage Loan[s] or related documents (other than the
representations made in Section 2.02 hereof). The Trustee shall not be
accountable for the use or application by the Depositor of any of the
Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to or at the direction of the Depositor with
respect to the Mortgage Loan[s].

Section 8.04. Trustee May Own Certificates. The Trustee in its
corporate or any other capacity may become the owner or pledgee of Certificates
with the same rights it would have if it were not Trustee.

Section 8.05. Trustee's Fee and Expenses. The Trustee shall be
entitled to reasonable compensation (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust) for all services rendered by it in the execution of the trust hereby
created and in the exercise and performance of any of the powers and duties
hereunder of the Trustee, and the Trustee shall be reimbursed for all
reasonable expenses, disbursements and advances incurred or made by the Trustee
in accordance with any of the provisions of this Trust Agreement (including the
reasonable compensation and the expenses and disbursements of its counsel and
of all persons not regularly in its employ), but solely from the Trustee's Fee
and amounts available as provided in Section 3.01(d) and Section 3.01(h) and in
the Rental Payment Account[s] and Certificate Account for reimbursement of
expenses as set forth in Section 3.06(d) and of Extraordinary Expense Advances
as provided in Sections 4.04(c),

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4.06(b) and 4.09. Notwithstanding the above, no such expense, disbursement or
advance shall be reimbursable as may arise from Trustee's negligence or bad
faith.

Section 8.06. Action by Co-Trustee. At any time or times, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Property may at the time be located or in which any action of the
Trustee may be required to be performed or taken, the Trustee, by an instrument
in writing signed by it, may appoint one or more Persons ("Co-Trustee") to act
as a separate trustee or co-trustee, acting jointly with the Trustee, of all or
any part of such Trust Property, to the full extent that local law makes it
necessary for such separate trustee or separate trustees or co-trustee acting
jointly with the Trustee to act. The Co-Trustee shall act as and be such upon
the following terms and conditions:

(a) Subject to the provisions of Section 8.14, all rights, powers,
duties and obligations conferred or imposed upon the Trustee shall be conferred
or imposed solely upon and solely exercised and performed by the Trustee except
as expressly provided otherwise in this Trust Agreement and except to the
extent that under any law or any jurisdiction in which any particular act or
acts are to be performed, the Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties and
obligations shall be exercised and performed by the Co-Trustee;

(b) No power granted by this Trust Agreement to, or which this Trust
Agreement provides may be exercised by, the Co-Trustee shall be exercised by
the Co-Trustee except jointly with, or with the consent in writing of, the
Trustee, anything contained to the contrary notwithstanding; and

(c) The Co-Trustee may at any time by an instrument in writing,
constitute the Trustee or its successor in trust hereunder its agent or
attorney-in-fact, with full power and authority, to the extent which may be
permitted by law, to do any and all acts and things and exercise any and all
discretion which it is authorized or permitted to do or exercise, for and in
its behalf and in its name.

Section 8.07. Eligibility Requirements for Trustee. The Trust shall
at all times have a Trustee which shall be a corporation eligible to act as
trustee under Section 310(a) of the TIA and shall be a corporation organized
and doing business under the laws of a state or the United States of America,
authorized under such laws to exercise corporate trust powers, having (or, in
the case of a corporation included in a bank holding company system, the
related bank holding company shall have) a combined capital and surplus of at
least $50,000,000 in the case of United States Trust Company of New York, and of
at least $100,000,000 in the case of any successor trustee and subject to
supervision or examination by federal or state authority. If such corporation

<PAGE> 45

publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. In case at any time the Trustee shall
cease to be eligible in accordance with the provisions of this Section, the
Trustee shall resign immediately in the manner and with the effect specified in
Section 8.08.

Section 8.08. Resignation and Removal of Trustee. The Trustee may at
any time resign and be discharged from the trusts hereby created by giving
written notice thereof to the Depositor and the Certificateholders. Upon
receiving such notice of resignation, the Depositor or the Certificateholders
evidencing Percentage Interests aggregating not less than 66-2/3% shall
promptly appoint a successor trustee by written instrument, in duplicate, one
copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor trustee. If no successor trustee shall have been so
appointed and have accepted appointment within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee.

If at any time any of the following events occur:

(a) the Trustee fails to comply with the requirements of Section 310
of the Trust Indenture Act after written request for such compliance by any
Certificateholder who has been a bona fide Certificateholder for at least six
months; or

(b) the Trustee ceases to be eligible in accordance with the
provisions of Section 8.07 and fails to resign after written request therefor
by the Depositor or by any such bona fide Certificateholder; or

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

then, in any such case, (i) the Depositor may remove the Trustee and appoint a
successor trustee by written instrument, in triplicate, one copy of which
instrument shall be delivered to the Trustee so removed, one copy to Depositor
and one copy to the successor trustee, or (ii) subject to the provisions of
Section 7.04, any Certificateholder who has been a bona fide Certificateholder
for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor trustee. Such court may thereupon,
after such notice, if any, as it may deem proper and prescribe, remove the
Trustee and appoint a successor trustee.

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The Certificateholders evidencing Percentage Interests aggregating not
less than 66-2/3% may at any time remove the Trustee and appoint a successor
trustee by written instrument or instruments, in triplicate, signed by such
Holders or their attorneys-in-fact duly authorized, one complete set of which
instruments shall be delivered to the Trustee so removed, one complete set to
Depositor and one complete set to the successor so appointed.

Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall
become effective only upon acceptance of appointment by the successor trustee
as provided in Section 8.09.

Section 8.09. Successor Trustee. Any successor trustee appointed as
provided in Section 8.07 or 8.08 shall execute, acknowledge and deliver to the
Certificateholders and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee shall
become effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the same effect as if originally
named as trustee herein. The predecessor trustee shall deliver to the
successor trustee the Mortgage Note[s], the Loan Documents, the Mortgage File
and any other documents and statements held by it hereunder, and the Depositor
and the predecessor trustee shall execute and deliver such instruments and do
such other things as may reasonably be required for more fully and certainly
vesting and confirming in the successor trustee all such rights, powers, duties
and obligations.

No successor trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 8.07.

Upon acceptance of appointment by a successor trustee as provided in
this Section, the Depositor shall mail notice of the succession of such trustee
hereunder to all Holders of Certificates at their addresses as shown in the
Certificate Register. If the Depositor fails to mail such notice within 10
days after acceptance of appointment by the successor trustee, the successor
trustee shall cause such notice to be mailed at the expense of the Depositor.

Section 8.10. Merger or Consolidation of Trustee. Any corporation
into which the Trustee may be merged or converted or with which it may be
consolidated or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to the business of the Trustee, shall be the successor of the
Trustee hereunder, provided such corporation shall be eligible under the
provisions of Section 8.07, without the execution or filing of any paper or any
further

<PAGE> 47

act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding.

Section 8.11. Resignation of Co-Trustee. The Co-Trustee or any of its
successors may resign, and may be discharged of the trusts created by this
Trust Agreement by giving written notice thereof to the Certificateholders and
to the Trustee.

Such resignation shall take effect immediately upon the acceptance of
appointment by a Person succeeding to the office of the Co- Trustee appointed
by the Trustee.

Section 8.12. Removal of Co-Trustee. The Co-Trustee or any of its
successors may be removed at any time by the Trustee or the Holders of
Certificates evidencing Percentage Interests aggregating not less than 66-2/3%,
by delivery of a notice of such removal to the Co- Trustee, to the Depositor,
and to the Trustee, signed by such holders, and such removal shall be effective
upon the date specified in such notice, and the Co-Trustee's duties and
obligations hereunder shall thereupon cease, except as specified in Section
8.14.

Section 8.13. Appointment of Successor to Co-Trustee. If at any time
the Co-Trustee or any of its successors shall die, resign or be removed or
otherwise become incapable of acting, or if for any reason the office of
Co-Trustee shall become vacant, a successor to the Co-Trustee shall forthwith
be appointed by the Trustee.

Section 8.14. Succession of Successor to Co-Trustee. Any Person
appointed as a successor to the Co-Trustee shall execute, acknowledge and
deliver to the Certificateholders, its predecessor, to the Trustee and to the
Depositor, an instrument accepting such appointment hereunder, and thereupon
such Person without any further act, deed or conveyance shall become vested
with all estates, properties, rights, powers, duties and trusts of its
predecessor in the trusts hereunder with like effect as if originally named as
Co-Trustee herein; but nevertheless, on the written request of the Depositor or
Holders of Certificates evidencing Percentage Interests aggregating not less
than 66- 2/3% or of the Trustee or of the new Co-Trustee, the predecessor shall
execute and deliver an instrument transferring to the new Co-Trustee, upon the
trusts expressed in this Trust Agreement, all the estates, properties, rights,
powers and trusts granted to it by this Trust Agreement and shall duly assign,
transfer, deliver and pay over to the new Co-Trustee any property and money
subject to the lien of this Trust Agreement held by such predecessor. Should
any instrument in writing from the Depositor or from Holders of Certificates
evidencing Percentage Interests aggregating not less than 66-2/3% or from the
Trustee be required by any person who becomes the Co-Trustee for more fully and
certainly vesting in and confirming to such Co-Trustee such estates,
properties, rights, powers and trusts, then, on request, any and all such
instruments

<PAGE> 48

in writing shall be made, executed, acknowledged and delivered by the Depositor
and/or the Trustee.

Any Co-Trustee which has resigned or been removed shall nevertheless
retain all rights of indemnity granted hereunder.

Section 8.15. Reports by the Trustee to Certificate-holders.

(a) On or before each March 31 of each calendar year commencing 199_,
the Trustee shall transmit to Certificateholders such reports concerning the
Trustee and its actions under this Trust Agreement as may be required pursuant
to the TIA and at the times and in the manner provided pursuant thereto.

(b) A copy of each report shall, at the time of such transmission to
Certificateholders, be filed by the Trustee with any stock exchange upon which
the Certificates are listed, with the Securities and Exchange Commission, with
Kmart and with the Depositor. The Depositor shall notify the Trustee when the
Certificates are listed on any stock exchange, in accordance with Section
313(c) of the TIA.

ARTICLE IX
TERMINATION

Section 9.01. Termination. The respective obligations and
responsibilities of the Depositor and the Trustee under this Trust Agreement
shall, so long as such termination does not result in the imposition of a tax
on the Trust Property, terminate upon the final payment, prepayment in full or
other liquidation of the Mortgage Note[s] including the disposition of all
property acquired upon foreclosure or deed in lieu of foreclosure of [the]
[any] Mortgage Loan and the remittance of all funds due hereunder; provided,
however, that in no event shall the Trust continue beyond the expiration of 21
years from the death of the last survivor of the descendants of Joseph P.
Kennedy, the late ambassador of the United States to the Court of St. James,
living on the date hereof.

Section 9.02. Notice; Final Distribution.

(a) Notice of any termination pursuant to Section 9.01, specifying the
Remittance Date after which all Certificateholders shall surrender their
Certificates to the Trustee for payment and cancellation, shall be given
promptly by the Trustee by letter to Certificateholders mailed no later than 15
days prior to such final distribution specifying (i) the Remittance Date upon
which final payment on the Certificates will be made and following which the
Certificateholders shall present and surrender their Certificates at the
Corporate Trust Office or the office of any designated agent of the Trustee
therein designated, (ii) the amount of any such final payment, and (iii) that
payments will be made only upon presentation and surrender of the Certificates
at the office or

<PAGE> 49

agency of the Trustee therein specified. After giving such notice, the Trustee
shall not register the transfer or exchange of any Certificates. On the
Remittance Date upon presentation and surrender of the Certificates, the
Trustee shall cause to be distributed to Certificateholders an amount equal to
the amount distributable on such Remittance Date.

(b) If all of the Certificateholders shall not surrender their
Certificates for cancellation within three months after the time specified in
the above-mentioned written notice, the Trustee shall give a second written
notice to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If
within three months after the second notice all the Certificates shall not have
been surrendered for cancellation, the Trustee may take appropriate steps, or
may appoint an agent to take appropriate and reasonable steps, to contact the
remaining Certificateholders concerning surrender of their Certificates, and
the cost thereof shall be paid out of the funds and other assets which remain
in the Trust.

ARTICLE X
SUPPLEMENTS AND AMENDMENTS TO THIS
TRUST AGREEMENT AND OTHER DOCUMENTS;
ADDITIONAL AGREEMENTS OF TRUSTEE

Section 10.01. Supplemental Trust Agreements Without Consent of
Holders. The Depositor and the Trustee, at any time and from time to time,
with the consent of Kmart (which shall not be unreasonably withheld or delayed
and which shall not be required with respect to (g) below) but without the
consent of Certificateholders, may enter into one or more trust agreements
supplemental hereto for one or more of the following purposes:

(a) to evidence the succession of another Person to the Depositor, or
successive successions, and the assumption by the successor of the covenants,
agreements and obligations of the Depositor herein;

(b) to add any covenants, restrictions, conditions or provisions with
respect to the Depositor as the Trustee shall consider to be for the protection
of the Certificateholders;

(c) to surrender any rights or power conferred herein upon the
Depositor herein or to add to the rights of the Certificateholders;

(d) to correct or amplify the description of any property at any time
that constitutes Trust Property or better to assure, convey and confirm unto
the Trustee any such property to be included in any such Trust Property, or to
acknowledge any change relating to title to the

<PAGE> 50

Mortgaged Estate which does not materially adversely affect the rights of the
Certificateholders;

(e) to evidence and provide for the acceptance and appointment
hereunder of a successor trustee and to add to or change any of the provisions
hereof as may be necessary to provide for or facilitate the administration of
the Trust by more than one trustee pursuant to Section 8.14;

(f) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to make
any other provisions with respect to matters or questions arising under this
Trust Agreement, provided that such action pursuant to this Section 10.01(f)
shall not materially adversely affect the Certificateholders; or

(g) to modify, eliminate or add to the provisions of this Trust
Agreement to the extent necessary to continue the qualification of this Trust
Agreement under the TIA;

provided that no such supplemental agreement shall cause the Trust to fail to
be characterized as a trust for federal income tax purposes.

The Trustee is hereby authorized to join in the execution of any such
supplemental agreement, to make any further appropriate agreements and
stipulations which may be contained therein and to accept the conveyance,
transfer, assignment, mortgage or pledge of any property thereunder, but the
Trustee shall not be obligated to enter into any such supplemental agreement
which adversely affects the Trustee's own rights, duties or immunities under
this Trust Agreement or otherwise, whether in its official or individual
capacity.

Section 10.02. Supplemental Agreements With Consent of
Certificateholders. With the consent of the Holders of Certificates evidencing
Percentage Interests of not less than 66-2/3%, the Depositor and the Trustee
may, from time to time and at any time, enter into an agreement or agreements
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Trust Agreement or of
any agreements supplemental hereto or of modifying in any manner the rights of
the Certificateholders; provided, however, that no such supplemental agreement
shall cause the Trust to fail to be characterized as a trust for federal income
tax purposes; and provided further that except as expressly permitted under the
terms of this Trust Agreement, without the consent of each Certificateholder
affected thereby and, with respect to (b) and (unless there is a monetary
default under the [related] Lease) (c) below, Kmart, no such amendment of or
supplement to this Trust Agreement or modification of the terms of, or consent
under, any thereof, shall

<PAGE> 51

(a) modify any of the provisions of Section 7.03 or this Section
10.02, or the definition of "Certificateholder" as set forth in Article I
hereof;

(b) modify the definition of "Percentage Interest" as set forth in
Article I hereof or reduce the Percentage Interests, the consent of the Holders
of Certificates of which is required for any such supplement to this Trust
Agreement, or the consent of the Holders of Certificates of which is required
for any waiver provided for in this Trust Agreement;

(c) reduce the amount or extend the time of payment of any amount
owing or payable under the Mortgage Note[s] or distributions to be made on any
Certificate pursuant to Article V;

(d) impair the right of any Certificateholder to commence legal
proceedings to enforce a right to receive payment hereunder; or

(e) create or permit the creation of any lien on the Trust Property or
any part thereof [(other than the Second Mortgage and the Option Agreement)],
or deprive any Certificateholder of the benefit of this Trust Agreement,
whether by disposition of such Trust Property or otherwise.

Upon the request of the Depositor and upon the filing with the Trustee
of evidence of the consent of the Certificateholders and Kmart, if applicable,
required under this Section, the Trustee shall join with the Depositor in the
execution of such supplemental agreement unless such supplemental agreement
affects the Trustee's own rights, duties or immunities under this Trust
Agreement or otherwise, in which case the Trustee may in its discretion, but
shall not be obligated to, enter into such supplemental agreement.

It shall not be necessary for the consent of the Certificateholders
under this Section to approve the particular form of any proposed supplemental
agreement, and it shall be sufficient if such consent shall approve the
substance thereof. Kmart shall be entitled to receive a copy of the form of
proposed supplemental agreement.

Promptly after the execution by the Depositor and the Trustee of any
supplemental agreement pursuant to the provisions of this Section, the Trustee
shall mail a notice thereof by first-class mail to the Certificateholders at
their addresses as they shall appear in the Certificate Register, setting forth
in general terms the substance of such supplemental agreement. Any failure of
the Trustee to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such supplemental agreement.

Section 10.03. Effect of Supplemental Agreement. Upon the execution
of any supplemental agreement pursuant to the provisions hereof, this Trust
Agreement shall be and be deemed to be modified

<PAGE> 52

and amended in accordance therewith and the respective rights, limitations of
rights, obligations, duties and immunities under this Trust Agreement of the
Trustee, the Depositor and the Certificateholders shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental agreement shall be and be deemed to be part of the terms and
conditions of this Trust Agreement for any and all purposes. The Trustee shall
deliver to Kmart a true and correct copy of the final form of supplemental
agreement as executed by the Depositor and the Trustee.

Section 10.04. Documents to Be Given to Trustee. The Trustee, subject
to the provisions of Sections 8.02, may receive an Officer's Certificate and an
Opinion of Counsel as conclusive evidence that any such supplemental agreement
complies with the applicable provisions of this Trust Agreement.

Section 10.05. Notation on Certificates in Respect of Supplemental
Agreements. Certificates authenticated and delivered after the execution of
any supplemental agreement pursuant to the provisions of this Article may bear
a notation in form approved by the Trustee as to any matter provided for by
such supplemental agreement. If the Depositor or the Trustee shall so
determine, new Certificates so modified as to conform, in the opinion of the
Depositor and the Trustee, to any modification of this Trust Agreement
contained in any such supplemental agreement may be prepared, executed and
authenticated by the Trustee and delivered in exchange for the outstanding
Certificates.

Section 10.06. Granting of Easements. The Trustee, at the direction
of [a] [the] Tenant and the [related] Borrower, may grant, release, modify or
amend easements, licenses, rights-of-way, dedications and other rights or
privileges in the nature of easements with respect to the [related] Mortgaged
Estate, which the Trustee determines do not materially adversely affect the
security of the Trust Property. The Trustee shall, upon request of [such]
Tenant, certify that the rights or privileges so granted or released are no
longer part of the Trust Property for purposes of this Trust Agreement.

ARTICLE XI
MISCELLANEOUS PROVISIONS

Section 11.01. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Trust Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Trust Agreement and shall in no way affect the
validity or enforceability of the other provisions of this Trust Agreement.

<PAGE> 53

Section 11.02. Limitation on Rights of Certificateholders. The death
or incapacity of any Certificateholder shall not operate to terminate this
Trust Agreement or the Trust Property, nor entitle such Certificateholder's
legal representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust Property,
nor otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them.

No Certificateholder shall have any right to vote (except as expressly
provided herein) or in any manner otherwise control the operation and
management of the Trust Property, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of the Certificates,
be construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third person by reason of any action taken by the parties
to this Trust Agreement pursuant to any provision hereof.

No Certificateholder shall have any right by virtue of any provision of
this Trust Agreement to institute any suit, action or proceeding in equity or
at law upon or under or with respect to this Trust Agreement, unless such
Holder previously shall have given to the Trustee a written notice of the
occurrence of an Event of Default and of the continuance thereof, as
hereinbefore provided, and unless also the Holders of Certificates evidencing
in the aggregate Percentage Interests of not less than 66-2/3% shall have made
written request upon the Trustee to institute such action, suit or proceeding
in its own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee, for 60 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding; it being
understood and intended, and being expressly covenanted by each
Certificateholder with every other Certificateholder and the Trustee, that no
one or more Holders of Certificates shall have any right in any manner whatever
by virtue of any provision of this Trust Agreement to affect, disturb or
prejudice the rights of the Holders of any other of such Certificates, or to
obtain or seek to obtain priority over or preference to any other such Holder,
or to enforce any right under this Trust Agreement, except in the manner herein
provided and for the common benefit of Certificateholders. For the protection
and enforcement of the provisions of this Section, each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.

Section 11.03. Solicitation of Certificateholders. The Trustee will
not solicit, request or negotiate for or with respect to any direction or
proposed waiver or amendment of any of the provisions of this Trust Agreement
or the Certificates, unless each Holder of the Certificates (irrespective of
the amount of

<PAGE> 54

Certificates then owned by it) shall be informed thereof by the Trustee and
shall be afforded the opportunity of considering the same and shall be supplied
by the Trustee with sufficient information to enable it to make an informed
decision with respect thereto. Executed or true and correct copies of any
waiver effected pursuant to the provisions of this Section shall be delivered
by the Trustee to Kmart and each Holder of outstanding Certificates forthwith
following the date on which the same shall have been executed and delivered by
the Holder or Holders of the requisite percentage of outstanding Certificates.
Neither the Depositor nor the Trustee nor any Affiliate thereof will, directly
or indirectly, pay or cause to be paid any remuneration, whether by way of
supplemental or additional interest, fee or otherwise, to any
Certificateholders as consideration for or as an inducement to the entering
into by any Certificateholders of any waiver or amendment of any of the terms
and provisions of this Trust Agreement unless such remuneration is
concurrently paid, on the same terms, ratably to all Certificateholders.

Under any provisions of this Trust Agreement that relate to consent,
waiver, direction, request or demand of or by Certificateholders, each and
every Certificateholder shall be entitled to give or make any such consent,
waiver, direction, request or demand without request or demand for such action
by the Trustee.

In the event any such direction or similar action is so received by the
Trustee under any provision hereof from the Certificateholders of requisite
Percentage Interests, the Trustee shall follow the direction of such
Certificateholders.

Section 11.04. Recordation of Agreement. To the extent required by
applicable law, this Trust Agreement is subject to recordation in appropriate
public offices for real property records in the county or other comparable
jurisdiction in which [the] [each] Mortgaged Estate is situated, and in any
other appropriate public recording office or elsewhere, such recordation to be
effected by the Trustee accompanied by an Opinion of Counsel to the effect that
such recordation materially and beneficially affects the interests of the
Certificateholders or is necessary in connection with the [related] Mortgage
Loan.

Section 11.05. Duration of Agreement. This Trust Agreement shall
continue in existence and effect until terminated as herein provided.

SECTION 11.06. GOVERNING LAW. THIS TRUST AGREEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO
THE CHOICE OF LAW PRINCIPLES THEREOF AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

Section 11.07. Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to

<PAGE> 55

have been duly given if personally delivered at or mailed by first class or
registered mail, postage prepaid, to (i) in the case of the Depositor, National
Tenant Finance Corporation, 40 North Central Avenue, Suite 2700, Phoenix,
Arizona 85004-4441, Attention: Norman C. Storey, and (ii) in the case of the
Trustee, United States Trust Company of New York c/o U.S. Trust Company of
California, N.A., Suite 2700, 555 South Flower Street, Los Angeles California
90071 Attention: Corporate Trust Division, or such other addresses as such
Persons may hereafter designate. Any notice required or permitted to be mailed
to a Certificateholder shall be given by registered mail, postage prepaid, or
by express delivery service, at the address of such Certificateholder as shown
in the Certificate Register. A copy of each notice of an Event of Default and
all other notices or communications hereunder, including the text of any
proposed or final amendment or supplement to this Trust Agreement, given by or
to the Certificateholders, the Trustee or the Depositor shall be
contemporaneously transmitted to Kmart, 3100 West Big Beaver Road, Troy,
Michigan 48084, Attention: Vice President-Real Estate, or to such other
address as Kmart may have designated by written notice to the Trustee. The
provisions of the foregoing sentence are for the express benefit of Kmart,
shall be enforceable by it, and may not be modified or eliminated without its
consent.

Section 11.08. Counterparts. For the purpose of facilitating the
recordation of this Trust Agreement as herein provided and for other purposes,
this Trust Agreement may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an original, but
all of which together shall constitute one and the same instrument.

Section 11.09. Submission to Jurisdiction. Each party hereto hereby
consents to the jurisdiction of any state or federal court located within the
County of New York, State of New York and irrevocably agrees that all actions
or proceedings relating to this Trust Agreement may be litigated in such courts
and each such party waives any objection which it may have based on improper
venue or forum non conveniens to the conduct of any proceeding in any such
court, waives personal service of any and all process upon it and consents that
all such service or process be made by registered or certified mail (return
receipt requested) or messengered to it at its address set forth in Section
11.08 or to its Agent referred to below at such Agent's address set forth below
and that service so made shall be deemed to be completed in accordance with
Section 11.08. Each party hereto hereby appoints the Prentice Hall Corporation
System, Inc., with an office on the date hereof at 15 Columbus Circle, New
York, New York 11023 as its Agent for the purpose of accepting service of any
process within the State of New York and shall execute any confirmation thereof
requested by the other party hereto. Nothing in this Section shall affect the
right of any party hereto to serve legal process in any other manner permitted
by law to bring any action or proceeding in the courts of any jurisdiction
against the other party or to enforce a judgment obtained in the courts of any
other jurisdiction.

<PAGE> 56

Section 11.10. Gender; Number. All pronouns and any variations
thereof shall be deemed to refer to the masculine, feminine, neuter, singular
or plural, as the context shall require.

Section 11.11. TIA Controls. If any provision of this Trust Agreement
limits, qualifies or conflicts with the duties imposed by operation of Section
318(c) of the TIA, the imposed duties shall control.

Section 11.12. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Depositor to the Trustee to take any
action under this Trust Agreement, the Depositor shall furnish to the Trustee:

(a) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Trust Agreement
relating to the proposed action have been complied with; and

(b) an Opinion of Counsel stating that, in the opinion of such
counsel all such conditions precedent have been complied with.

Section 11.13. Statements Required in Certificate or Opinion. Each
Officers' Certificate and Opinion of Counsel with respect to compliance with a
covenant or condition provided for in this Trust Agreement shall include:

(a) a statement that each Person making such Officers' Certificate or
Opinion of Counsel has read such covenant or condition;

(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
Officers' Certificate or Opinion of Counsel are based;

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

(d) a statement that, in the opinion of such Person, such covenant or
condition has been complied with; provided, however, that with respect to
matters of fact, an Opinion of Counsel may rely on an Officers' Certificate or
certificates of public officials.

Section 11.14. Benefits of Trust Agreement. Nothing in this Trust
Agreement or in the Certificates, express or implied, shall give to any Person,
other than the parties hereto and their successors hereunder, and the
Certificateholders, any benefit or

<PAGE> 57

any legal or equitable right, remedy or claim under this Trust Agreement.

IN WITNESS WHEREOF, the Depositor and the Trustee have caused their
names to be signed hereto by their respective officers thereunto duly
authorized as of the day and year first above written.

NATIONAL TENANT FINANCE CORPORATION,
a Delaware corporation

By_____________________________
Name___________________________
Title__________________________

UNITED STATES TRUST COMPANY OF
NEW YORK, a New York banking
corporation

By_____________________________
Name___________________________
Title__________________________

<PAGE> 58

STATE OF_____________________ ]
] ss.
CITY OF______________________ ]

On the___ day of _________, 199_ before me, a Notary Public in and for
said State, personally appeared ______________, known to me (or proved to me on
the basis of satisfactory evidence) to be the person who executed the within
instrument as ___________ on behalf of NATIONAL TENANT FINANCE CORPORATION, a
Delaware corporation, and acknowledged to me that such Corporation executed the
within instrument pursuant to its Bylaws or a resolution of its Board of
Directors.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year first above written.

[NOTARIAL SEAL]
_________________________________
Notary Public

My Commission Expires:
______________________

STATE OF_____________________ ]
] ss.
CITY OF______________________ ]

On the of _________, 199_ before me, a Notary Public in and for said
State, personally appeared ______________, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person who executed the
within instrument as to be a ______________ on behalf of UNITED STATES TRUST
COMPANY OF NEW YORK, a New York banking corporation, and acknowledged to me
that such association executed the within instrument pursuant to its Bylaws or
a resolution of its Board of Directors.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year first above written.

[NOTARIAL SEAL]
_________________________________
Notary Public

My Commission Expires:
______________________

<PAGE> 59

EXHIBIT A-1
MORTGAGE LOAN SCHEDULE

(i) Borrower Name -

(ii) Mortgaged Estate - See Exhibit A
attached hereto

(iii) Maturity Date - _____ __, 20__

(iv) Rate - ____%

(v) First Due Date - ________ __, 199_

(vi) Mortgage Payments - See Exhibit B
attached hereto

(vii) Original Principal
Balance of Mortgage
Loan - $_______________

<PAGE> 60

EXHIBIT A-2
CERTIFICATE SCHEDULE

<PAGE> 61

EXHIBIT A-3
CONTENTS OF MORTGAGE FILE

With respect to the Mortgage Loan, the Mortgage File shall include each
of the following items:

<PAGE> 62

EXHIBIT A-4
CAPITALIZED DEBT SERVICE ACCOUNT SCHEDULE

(i) Borrower Name -

(ii) Tenant Name -

(iii) Payments:

Date Amount

<PAGE> 63

EXHIBIT B
[FORM OF CERTIFICATE]

[Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or its
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]

_____% MORTGAGE PASS-THROUGH CERTIFICATE

(____________________________)
SERIES 199_

Trust Agreement Dated as of Original Principal Amount:
_______ __, 199_ $_________
Cusip No. ____________ Original Issuance Date:
_______________, 199_

Number R-_ Maturity Date:
______________, ____

This Certificate does not represent an obligation of or interest in
National Tenant Finance Corporation, a Delaware corporation, Kmart Corporation,
any subsidiary of Kmart Corporation, or the Trustee referred to below or any of
their respective affiliates. Neither this Certificate nor the underlying
Mortgage Loan[s] referred to below are guaranteed or insured. To the extent
not defined herein, the capitalized terms used herein have the meanings set
forth in the Trust Agreement referred to below.

This certifies that _______________________ (the "Holder") is the
registered owner of an undivided ___% beneficial interest in the Trust
Property, subject to the terms and conditions of the Trust Agreement. The
Trust Property includes [the] mortgage loan[s] ("Mortgage Loan[s]") made to the
Borrower[s] identified in the Loan Agreement[s] ([individually a] "Borrower" [,
collectively "Borrowers"]). The Mortgage Loan[s], the Mortgage Note[s]
relating thereto, the Loan Documents relating thereto and certain other
property (collectively, "Trust Property") have been transferred as of the date
hereof from National Tenant Finance Corporation ("Depositor," which term
includes any successor entity under the Trust Agreement referred to below) to
the Trustee (as defined below) in trust for the benefit of Certificateholders.
The Trust

<PAGE> 64

Property was conveyed to the Trustee pursuant to a Trust Agreement ("Trust
Agreement"), dated as of the date hereof, by and among Depositor, as Depositor,
and United States Trust Company of New York ("Trustee"), as Trustee, a summary
of certain of the pertinent provisions of which is set forth herein.

This Certificate is one of a duly authorized issue of Certificates
("Certificates"), designated as "Mortgage Pass-Through Certificates
(______________________) Series 199_", and is issued under and is subject to
the terms, provisions and conditions of the Trust Agreement. The Holder of
this Certificate by acceptance hereof assents to the Trust Agreement and agrees
to be bound thereby.

This Certificate evidences a ___% Percentage Interest for purposes of
the Trust Agreement. For purposes of calculations under the Trust Agreement,
this Certificate represents an original principal amount as set forth at the
head of this Certificate, and is scheduled to bear interest from the date of
issuance on the unpaid principal balance hereof at the rate of _____% per annum
(computed on the basis of a 360-day year comprised of 12 consecutive 30-day
months) payable on each Remittance Date, and is scheduled to bear interest at
the rate of _____% per annum (computed on the same basis) on any overdue
principal or (to the extent permitted by applicable law) interest under the
Mortgage Note[s]. Distributions on any regularly scheduled Remittance Date
will include interest on the outstanding Mortgage Note[s] from and including
the first day of the sixth month immediately preceding such Remittance Date (or
from and including the Closing Date with respect to the first Remittance Date)
through the end of the calendar month immediately preceding such Remittance
Date. Additional distributions may be made with respect to this Certificate as
a result of the prepayment, purchase or acceleration of the Mortgage Note[s] as
set forth in the Trust Agreement.

THIS CERTIFICATE AND ANY OTHER CERTIFICATES ISSUED PURSUANT TO THE
TRUST AGREEMENT ARE EQUALLY AND RATABLY SECURED BY THE TRUST PROPERTY.

Distributions on this Certificate will be made by the Trustee to the
Person entitled thereto, without the presentation or surrender of this
Certificate or the making of any notation hereon. Except as otherwise provided
in the Trust Agreement and notwithstanding the preceding sentence, the final
distribution on this Certificate will be made after notice mailed by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency of the Trustee specified
in such notice.

On each Remittance Date, the Trustee will cause to be distributed to
the Holder from funds in the Certificate Account an amount equal to the
aggregate scheduled Debt Service, to the extent available, on this Certificate
for such Remittance Date. The Debt Service on this Certificate is set forth on
the Debt Service Schedule attached hereto and made a part hereof by this
reference. The Debt Service is subject to adjustment as a consequence of
prepayment, purchase or acceleration of the Mortgage Note[s] and as a
consequence of adjustment to the Annual Rental due under the

B-2

<PAGE> 65

Leases [each of] which secures [the] [a] Mortgage Note and constitutes part of
the Trust Property.

The Trustee will cause to be kept at its Corporate Trust Office, or at
the office of its designated agent, a Certificate Register in which, subject to
such reasonable regulations as it may prescribe in compliance with the Trust
Agreement, the Trustee will provide for the registration of Certificates and of
transfers and exchanges of Certificates. Upon surrender for registration of
transfer of any Certificate at any office or agency of the Trustee maintained
for such purpose, the Trustee will, subject to the limitations set forth in the
Trust Agreement, execute, authenticate and deliver, in the name of the
designated transferee or transferees, a Certificate or Certificates of a like
tenor and aggregate Percentage Interest and dated the date of such execution
and authentication by the Trustee.

No service charge will be made to the Holder for any transfer or
exchange of any Certificate, but the Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of any Certificate. Prior to due
presentation of a Certificate for registration of transfer, the Trustee may
treat the person in whose name any Certificate is registered as the owner of
such Certificate and the undivided interest in the Trust Property evidenced
thereby for the purpose of receiving distributions pursuant to the Trust
Agreement and for all other purposes whatsoever, and the Trustee will not be
affected by any notice to the contrary.

The Trust Agreement may be amended from time to time by the Depositor
and the Trustee with the consent of Kmart but without the consent of the
Certificateholders in certain circumstances specified in the Trust Agreement.
The Trust Agreement may, under certain other circumstances specified in the
Trust Agreement, be supplemented from time to time by the Depositor and the
Trustee with the consent of the Holders of Certificates evidencing in the
aggregate not less than 66-2/3% of the Percentage Interest of the Certificates
issued and outstanding for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of the Trust Agreement or of
modifying in any manner the rights of the Certificateholders; provided that no
such amendment may (i) modify the provision of the Trust Agreement that
concerns notifying Certificateholders of the occurrence of an Event of Default,
modify the provision of the Trust Agreement concerning approving supplements to
the Trust Agreement that require the approval of Certificateholders, or modify
the definition of "Certificateholder" in the Trust Agreement, (ii) modify the
definition of "Percentage Interest" in the Trust Agreement or reduce the
Percentage Interests, the consent of the Holders of Certificates of which is
required for any such supplement to the Trust Agreement, or the consent of the
Holders of Certificates of which is required for any waiver provided for in the
Trust Agreement; (iii) reduce the amount or extend the time of payment of

B-3

<PAGE> 66

any amount owing or payable under the Mortgage Note[s] or distributions to be
made on any Certificate; (iv) impair the right of any Certificateholder to
commence legal proceedings to enforce a right to receive payment hereunder or
under the Trust Agreement; or (v) create or permit the creation of any lien on
the Trust Property or any part thereof, or deprive any Certificateholder of the
benefit of the Trust Agreement, whether by disposition of such Trust Property
or otherwise, without the consent of each affected Certificateholder and, with
respect to (ii) and (unless there is a monetary default under the related
Lease) (iii), Kmart.

The respective obligations and responsibilities of the Depositor and
the Trustee under the Trust Agreement will terminate upon the final payment,
prepayment in full or other liquidation of the Mortgage Loan[s] and the
distribution of all funds in the Trust, including the disposition of all
property acquired upon foreclosure or deed in lieu of foreclosure of [the]
[any] Mortgage Loan and the remittance of all funds due thereunder; provided,
however, that in no event shall the Trust continue beyond the expiration of 21
years from the death of the last survivor of the descendants of Joseph P.
Kennedy, the late ambassador of the United States to the Court of St. James,
living on the date hereof.

IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed by one of its authorized officers.

Dated: _______ __, 199_ UNITED STATES TRUST COMPANY OF
NEW YORK, solely as Trustee under the
Trust Agreement dated as of
_______ __, 199_ with National
Tenant Finance Corporation and
not in its individual capacity

By_____________________________
Authorized Officer

[FORM OF CERTIFICATE OF AUTHENTICATION]

This is one of the Certificates defined in the Trust Agreement dated as
of ______ __, 199_ with National Tenant Finance Corporation.

Dated: _______ __, 199_ UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee

By________________________________
Authorized Officer

B-4
<PAGE> 67

EXHIBIT C
FORM OF TRUSTEE CERTIFICATION

_______ __, 199_

National Tenant Finance Corporation
40 North Central Avenue
Suite 2700
Phoenix, Arizona 85004-4441

Re: Trust Agreement ("Trust Agreement") dated as of _______ __, 199_
by and between National Tenant Finance Corporation, as Depositor,
and United States Trust Company of New York, as Trustee, Mortgage
Pass-Through Certificates (____________________) Series 199_
Gentlemen:

In accordance with Section 2.02 of the Trust Agreement, the
undersigned, as Trustee, hereby certifies that, as to the Mortgage Loan[s]
listed in the Mortgage Loan[s] Schedule it has reviewed [the] [each] Mortgage
File and [the] [each] Mortgage Loan Schedule and has determined that:

(i) All documents in each Mortgage File required to be delivered to
the Trustee pursuant to Section 2.01 of the Trust Agreement are in its
possession; and

(ii) Such documents have been reviewed by it and such documents do not
contain any omissions, defects or irregularities within the meaning of Sections
2.01 or 2.02 of the Trust Agreement.

The Trustee further certifies that, as to the Mortgage Loan[s], the
Trustee holds the Mortgage Note[s] without notice or knowledge (a) of any
adverse claims, liens or encumbrances, (b) that the Mortgage Note[s] [was]
[were] overdue or [has] [have] been dishonored, (c) of evidence on the face of
the Mortgage Note[s] or the Mortgage of any security interest or other right or
interest therein, or (d) of any defense against or claim to the Mortgage
Note[s] by any other party.

The Trustee has made no independent examination of any documents
contained in the Mortgage File[s] beyond the review specifically required in
the Trust Agreement. The Trustee makes no representations or warranties as to
the validity, legality, sufficiency, enforceability or genuineness of any of
the documents contained in the Mortgage File[s] (other than the statements made
herein) or the collectibility, insurability, effectiveness or suitability of
the Mortgage Loan[s].

<PAGE> 68

Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the Trust Agreement.

UNITED STATES TRUST COMPANY OF
NEW YORK

By_______________________________
Name_____________________________
Title____________________________

<PAGE> 1
EXHIBIT 4.2

_______________

PASS-THROUGH TRUST AGREEMENT
_______________

between

NATIONAL TENANT FINANCE CORPORATION
as Depositor

and

UNITED STATES TRUST COMPANY OF NEW YORK
as Trustee

_____________________________

Dated as of ________ __, 199_
_____________________________

$_________
Mortgage Pass-Through Certificates

(___________________)
Series 199_-__

_________________________________________________________________
<PAGE> 2
CROSS REFERENCE SHEET

<TABLE>
<CAPTION>
TIA Section Trust Agreement Section
- ----------- -----------------------
<S> <C>
310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . 8.07
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . 8.07
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . 8.06
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . *
(a)(5) . . . . . . . . . . . . . . . . . . . . . . . . . 8.07
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 8.07; 8.08; 11.07
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . *
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . *
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . 3.02
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . *
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . *
313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . 8.15
(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . *
(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . *
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . 8.15; 11.07
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . 8.15
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . *
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . *
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . 11.12
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . 11.12
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . *
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . *
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . 11.13
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . *
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . 8.01
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 7.03
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . 8.01
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . 8.01
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . *
316(a) last sentence . . . . . . . . . . . . . . . . . . . Definition of "Certificateholder"
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . 7.04
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . 7.02
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 7.05
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . *
317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . *
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . *
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 3.05
</TABLE>

<PAGE> 3

<TABLE>
<CAPTION>
TIA Section Trust Agreement Section
- ----------- -----------------------
<S> <C>
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . 11.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . *
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . 11.11
- ----------------------
</TABLE>
* Intentionally deleted.

<PAGE> 4
TABLE OF CONTENTS

Page
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE

<TABLE>
<S> <C> <C> <C>
Section 1.01. Definitions . . . . . . . . . . . . . . . . . . 1
Section 1.02. Incorporation by Reference of
Trust Indenture Act. . . . . . . . . . . . . 11
Section 1.03. Acts of Holders. . . . . . . . . . . . . . . . 12

<CAPTION>
ARTICLE II
CONVEYANCE OF MORTGAGE LOAN[S]; TRUST PROPERTY

<S> <C> <C> <C>
Section 2.01. Conveyance of Mortgage Note[s]. . . . . . . . . 13
Section 2.02. Acceptance by Pass-Through Trustee. . . . . . . 13
Section 2.03. Trust Property. . . . . . . . . . . . . . . . . 14
Section 2.04. Limitation of Powers. . . . . . . . . . . . . . 14

<CAPTION>
ARTICLE III
THE CERTIFICATES

<S> <C> <C> <C>
Section 3.01. The Certificates. . . . . . . . . . . . . . . . 14
Section 3.02. Registration of Transfer and Exchange
of Certificates. . . . . . . . . . . . . . . 17
Section 3.03. Mutilated, Destroyed, Lost or Stolen
Certificates. . . . . . . . . . . . . . . . . 19
Section 3.04. Persons Deemed Owners. . . . . . . . . . . . . 19
Section 3.05. Appointment of Paying Agent. . . . . . . . . . 19
Section 3.06. Certificates Issuable in the Form
of a Registered Global Certificate. . . . . 19
Section 3.07. Temporary Securities. . . . . . . . . . . . . . 21

<CAPTION>
ARTICLE IV
RECEIPT AND DISTRIBUTION OF INCOME
AND PROCEEDS FROM THE TRUST PROPERTY

<S> <C> <C> <C>
Section 4.01. Calculation of Distributions. . . . . . . . . . 22
Section 4.02. Collection of Mortgage Note Payments;
Investment. . . . . . . . . . . . . . . . . . 22
Section 4.03. Establishment of Certificate Account;
Deposits in Certificate Account. . . . . . . . 22
Section 4.04. Permitted Withdrawals From the Certificate
Account. . . . . . . . . . . . . . . . . . . 23
Section 4.05. Action Concerning Defaulted Mortgage Loan. . . 24
Section 4.06. Trustee Compensation . . . . . . . . . . . . . 24
Section 4.07. Rights of the Certificateholders . . . . . . . 24

ARTICLE V
PAYMENTS TO THE CERTIFICATEHOLDERS

<S> <C> <C> <C>
Section 5.01. Distributions. . . . . . . . . . . . . . . . . 25
Section 5.02. Statements to Certificateholders . . . . . . . . 26
Section 5.03. Advances by Pass-Through Trustee . . . . . . . 26
</TABLE>

i
<PAGE> 5
ARTICLE VI
THE DEPOSITOR

<TABLE>
<S> <C> <C> <C>
Section 6.01. Maintaining Corporate Existence of the
Depositor. . . . . . . . . . . . . . . . . . 27
Section 6.02. Limitation on Liability of the Depositor. . . . 27

<CAPTION>
ARTICLE VII
DEFAULT

<S> <C> <C> <C>
Section 7.01. Events of Default. . . . . . . . . . . . . . . 28
Section 7.02. Waiver of Defaults. . . . . . . . . . . . . . . 29
Section 7.03. Notification to Certificateholders. . . . . . . 29
Section 7.04. Rights of Certificateholders to Direct
Proceedings . . . . . . . . . . . . . . . . . 29
Section 7.05. Rights of Certificateholders to
Receive Payment . . . . . . . . . . . . . . . 30
Section 7.06. Remedies Cumulative . . . . . . . . . . . . . . 30
Section 7.07. Pass-Through Trustee Default. . . . . . . . . . 30
Section 7.08. Notice to Tenant[s] and Kmart. . . . . . . . . 31

<CAPTION>
ARTICLE VIII
CONCERNING THE PASS-THROUGH TRUSTEE
AND THE COLLATERAL TRUSTEE

<S> <C> <C> <C>
Section 8.01. Duties of Pass-Through Trustee. . . . . . . . . 31
Section 8.02. Certain Matters Affecting Pass-Through
Trustee. . . . . . . . . . . . . . . . . . . 32
Section 8.03. Pass-Through Trustee Not Liable for
Certificates or Mortgage Note[s]. . . . . . . 34
Section 8.04. Pass-Through Trustee May Own Certificates. . . 34
Section 8.05. Pass-Through Trustee's Fee and Expenses. . . . 34
Section 8.06. Action by Co-Trustee. . . . . . . . . . . . . . 35
Section 8.07. Eligibility Requirements for Pass-Through
Trustee. . . . . . . . . . . . . . . . . . . 36
Section 8.08. Resignation and Removal of Pass-Through
Trustee and Collateral Trustee. . . . . . . . 36
Section 8.09. Successor Pass-Through Trustee. . . . . . . . . 38
Section 8.10. Merger or Consolidation of Pass-Through
Trustee. . . . . . . . . . . . . . . . . . . 38
Section 8.11. Resignation of Co-Trustee. . . . . . . . . . . 38
Section 8.12. Removal of Co-Trustee. . . . . . . . . . . . . 39
Section 8.13. Appointment of Successor to Co-Trustee. . . . . 39
Section 8.14. Succession of Successor to Co-Trustee. . . . . 39
Section 8.15. Reports by the Pass-Through Trustee to
Certificateholders. . . . . . . . . . . . . . 39
Section 8.16 Co-Trustee of the Collateral Trust . . . . . . 40

<CAPTION>
ARTICLE IX
TERMINATION

<S> <C> <C> <C>
Section 9.01. Termination. . . . . . . . . . . . . . . . . . 40
Section 9.02. Notice; Final Distribution . . . . . . . . . . . 40
</TABLE>

ii
<PAGE> 6
ARTICLE X
SUPPLEMENTS AND AMENDMENTS TO THIS
PASS-THROUGH TRUST AGREEMENT AND OTHER DOCUMENTS;
ADDITIONAL AGREEMENTS OF TRUSTEE

<TABLE>
<S> <C> <C> <C>
Section 10.01. Supplemental Pass-Through Trust Agreements
Without Consent of Holders. . . . . . . . . . 41
Section 10.02. Supplemental Agreements With Consent of
Certificateholders. . . . . . . . . . . . . . 42
Section 10.03. Effect of Supplemental Agreement. . . . . . . . 44
Section 10.04. Documents to Be Given to Trustee. . . . . . . . 44
Section 10.05. Notation on Certificates in Respect of
Supplemental Agreements. . . . . . . . . . . 44
Section 10.06. Supplements to Collateral Trust Agreement . . . 45

<CAPTION>
ARTICLE XI
MISCELLANEOUS PROVISIONS

<S> <C> <C> <C>
Section 11.01. Severability of Provisions. . . . . . . . . . . 45
Section 11.02. Limitation on Rights of Certificateholders. . . 45
Section 11.03. Solicitation of Certificateholders. . . . . . . 46
Section 11.04. Recordation of Agreement. . . . . . . . . . . . 47
Section 11.05. Duration of Agreement. . . . . . . . . . . . . 47
Section 11.06. Governing Law. . . . . . . . . . . . . . . . . 47
Section 11.07. Notices. . . . . . . . . . . . . . . . . . . . 47
Section 11.08. Counterparts. . . . . . . . . . . . . . . . . . 48
Section 11.09. Submission to Jurisdiction. . . . . . . . . . . 48
Section 11.10. Gender; Number. . . . . . . . . . . . . . . . . 48
Section 11.11. TIA Controls. . . . . . . . . . . . . . . . . . 48
Section 11.12. Certificate and Opinion as to Conditions
Precedent . . . . . . . . . . . . . . . . . . 48
Section 11.13. Statements Required in Certificate
or Opinion . . . . . . . . . . . . . . . . . 49
Section 11.14. Benefits of Pass-Through Trust Agreement. . . . 49
</TABLE>

EXHIBIT A-1 MORTGAGE NOTE SCHEDULE

EXHIBIT A-2 CERTIFICATE SCHEDULE

EXHIBIT A-3 CONTENTS OF MORTGAGE FILE

EXHIBIT B [FORM OF CERTIFICATE]

iii
<PAGE> 7

__________________

PASS-THROUGH TRUST AGREEMENT

SERIES _____
__________________

THIS PASS-THROUGH TRUST AGREEMENT, SERIES ____, dated as of __________,
19__, is executed by and among NATIONAL TENANT FINANCE CORPORATION, a Delaware
corporation, as depositor (together with its permitted successors, in such
capacity, "Depositor"), and UNITED STATES TRUST COMPANY OF NEW YORK, a New York
banking corporation organized under the laws of the United States of America,
as trustee (together with its permitted successors and assigns, "Pass-Through
Trustee").

In consideration of the premises and the mutual agreements hereinafter set
forth, the Depositor and the Pass-Through Trustee agree as follows:

PREFACE

Each Certificate evidences a beneficial ownership interest in the
Pass-Through Trust Property, the assets of which include, among other things,
the Mortgage Note[s]. The Certificates are equally and ratably secured by and
payable from the proceeds of the Mortgage Note[s], and [the] [each] Mortgage
Note is ratably secured by the related Mortgage (as each such term is defined
herein).

Each Certificate is paid interest or principal and interest, as set forth
on the Debt Service schedule on such Certificate, on a semiannual basis
referred to herein as the Remittance Dates. Payments under the Mortgage Note[s]
are payable semiannually on the Due Dates.

ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01. Definitions. Whenever used herein, the following words and
phrases, unless the context otherwise requires, shall have the following
meanings:

"Additional Rent": [With respect to each Lease] has the meaning assigned
in Article 5 of [the] [such] Lease.

"Administrative Expenses": The ordinary and necessary expenses incurred by
the Trustee in the course of administering the affairs of the Pass-Through
Trust.

"Annual Rental": [With respect to each Lease] has the meaning assigned in
Article 4 of [the] [such] Lease.

"Available Distribution Amount": As to any Remittance Date, an amount
equal to the amount on deposit in the Certificate Account

<PAGE> 8

as of the close of business on the Business Day immediately preceding the
Remittance Date.

"Borrower": [The] [A] Borrower identified in [the] [a] Loan Agreement.

"Business Day": Any day other than (i) a Saturday or Sunday, or (ii) a
day on which banking or savings and loan institutions in New York or
California, or the city in which the principal corporate trust offices of any
successor Pass-Through Trustee are located, are authorized or obligated by law
or executive order to be closed.

"Called Principal Percentage": With respect to any Mortgage Note, has the
meaning assigned to it in Section 2 of the related Loan Agreement.

"Certificate" or "Certificates": The Certificate or Certificates
evidencing a beneficial ownership interest in the Pass-Through Trust Property
executed and authenticated by the Pass-Through Trustee substantially in the
form set forth in Exhibit B hereto.

"Certificate Account": The trust account described in Section 4.03.

"Certificate Balance": With respect to all the Certificates, the original
principal amount of the Certificates less all payments and prepayments of
principal thereof, including without limitation any payments of principal
comprising Debt Service; and with respect to any Certificate, the original
principal amount of such Certificate less all payments and prepayments of
principal thereof, including without limitation any payments of principal
comprising Debt Service on such Certificate.

2
<PAGE> 9

foregoing, shall be deemed not to be outstanding and the Percentage Interest
evidenced thereby shall not be taken into account in determining the amount of
Percentage Interests voted with respect to any such consent, waiver, request or
demand.

"Certificate Owner": Any Person acquiring a beneficial interest in a
Registered Global Certificate, which ownership shall be reflected on the books
of the Depository or on those of a participant in such Depository. Solely for
the purposes of any consent, waiver, request or demand pursuant to this
Pass-Through Trust Agreement, any portion of a Registered Global Certificate
that is beneficially owned by the Depositor, [Kmart], a Tenant, a Borrower, any
successor owner or ground lessee of a Project, any successor tenant or
subtenant of a Project, any successor guarantor of the performance of a Tenant
or successor tenant or subtenant, or any affiliate of any of the foregoing,
shall be deemed not to be outstanding and the Percentage Interest evidenced by
such portion shall not be taken into account in determining whether the
requisite amount of Percentage Interests necessary to effect any such consent,
waiver, request or demand has been obtained.

"Certificate Register": The register maintained pursuant to Section 3.02.

"Closing Costs": An amount equal to $_____________ which shall be
disbursed to the Underwriters on the Closing Date.

"Closing Date": _______ __, 199_.

"Code": The Internal Revenue Code of 1986, as amended.

"Collateral Trust": The Trust created pursuant to the Collateral Trust
Agreement.

"Collateral Trust Agreement": The Collateral Trust Agreement dated the
date hereof between the Collateral Trustee and the Depositor, together with all
amendments thereof and supplements thereto.

"Collateral Trust Property": The corpus of the Collateral Trust, to the
extent described in the Collateral Trust Agreement, consisting of all Loan
Documents, property which secures the Mortgage Loan[s] and which has been
acquired by foreclosure or deed in lieu of foreclosure (prior to its
disposition) and Insurance Proceeds, Condemnation Proceeds and any other
amounts receivable under the Loan Documents, and any funds advanced by the
Certificateholders to the Collateral Trustee or otherwise held by

3
<PAGE> 10

the Collateral Trustee in accordance with the provisions of the Collateral
Trust Agreement.

"Collateral Trustee": United States Trust Company of New York, and
its permitted successors under the Collateral Trust Agreement.

"Condemnation Proceeds": Any awards in respect of, or settlements in lieu
of, condemnation proceedings affecting [the] [a] Mortgaged Estate.

"Consent and Agreement": [A] [The] Consent and Agreement among Kmart,
Depositor, [a] Borrower, [a] Tenant and the Collateral Trustee relating to [a]
[the] Lease, [[a] [the] Lease Guaranty,] [a] [the] Note Put Agreement and
certain other related matters.

"Corporate Trust Office": The office of the Pass-Through Trustee in the
State of California at which at any particular time its corporate trust
business shall be administered, which office at the date of execution of this
instrument is located at Suite 2700, 555 South Flower Street, Los Angeles,
California 90071.

"Depositor": National Tenant Finance Corporation, a Delaware corporation,
and its successors in interest.

"Depository": The depository of the Registered Global Certificate[s], if
any, representing the Certificates and any successor to such depository
appointed by the Depositor. Such depository initially shall be The Depository
Trust Company, a New York corporation.

"Determination Date": The Business Day immediately preceding a Remittance
Date.

"Due Date": [With respect to each Mortgage Note,] a Note Payment Date as
defined in the [related] Loan Agreement.

"Eligible Investments": One or more of the following:

(i) direct obligations of the United States of America;

(ii) obligations fully guaranteed, both as to principal and
interest, by the United States of America;

(iii) certificates of deposit issued by, or bankers' acceptances
of, or time deposits with, a bank or trust company organized under the laws of
the United States or any state thereof, having capital, surplus and undivided
profits aggregating at least $100,000,000 and whose long-term certificates of
deposit are, at

<PAGE> 11

the time of acquisition thereof, rated in the highest rating category for such
securities by S&P and Moody's; and

(iv) taxable government money-market portfolios restricted to
obligations with maturities of one year or less, issued or guaranteed by the
full faith and credit of the United States which, at the time of such
investment, are then rated in the highest rating category of S&P and Moody's
(the "highest rating category" as used in this definition shall mean (A) a
rating which would be assigned by S&P, as of the date first above written,
equivalent to or higher than "AAAm" or "AAAmG" with respect to money-market
securities and (B) a rating which would be assigned by Moody's as of the date
first above written, equivalent to or higher than "Am" with respect to
money-market securities);

provided that any such obligations of the types described in clauses (i)
through (iv) above shall not have a maturity later than the earlier of 90 days
and the date the funds being invested are to be distributed to the
Certificateholders; provided further, that any such obligations of the types
described in clauses (i) and (ii) above may be made through a repurchase
agreement in commercially reasonable form with a bank or other financial
institution (which may be the Pass-Through Trustee or the Collateral Trustee)
the senior unsecured debt of which is then assigned an A rating or better by
S&P or Moody's, so long as title to the underlying obligations shall pass to
the Pass-Through Trustee and that such underlying obligations shall be
segregated in a custodial or trust account of or for the benefit of the
Pass-Through Trustee.

"ERISA": The Employee Retirement Income Security Act of 1974, as amended.

"Event of Default": Any event of default described in Section 7.01.

"Exchange Act": The Securities Exchange Act of 1934, as amended.

"Extraordinary Expense Advances": All reasonable and necessary
"out-of-pocket" costs and expenses of the Pass-Through Trustee or the
Collateral Trustee in enforcing the Mortgage Note[s] and the Loan Documents
following an Event of Default under Section 7.01 hereof (except for a
Non-Monetary Tenant Default), and in compliance with the obligations of the
Collateral Trustee under Section 4.07 of the Collateral Trust Agreement.

"FDIC": Federal Deposit Insurance Corporation or any successor
organization.

<PAGE> 12

"Kmart": Kmart Corporation, a Michigan corporation, and its successors and
assigns.

"Lease": [With respect to each Mortgage Note,] has the meaning assigned
thereto in Section 1.1 of the [related] Loan Agreement.

["Lease Guaranty": [With respect to each Mortgage Note,] has the meaning
assigned thereto in Section 1.1 of the [related] Loan Agreement.]

["Lease Guaranty Termination": [With respect to any Mortgage Loan] a Lease
Guaranty Termination as defined in the [related] Note Put Agreement.]

"Letter of Representations": A letter (in the form attached hereto as
Exhibit C) from the Depositor and the Pass-Through Trustee to, and accepted by,
the Depository, as such letter may be modified or supplemented, or any
successor letter thereto.

"Liquidated Mortgage Loan": [A] [The] Mortgage Loan after an Event of
Default under the [related] Loan Agreement when the Collateral Trustee has
reasonably determined that all amounts which it expects to recover from or on
account of such Mortgage Loan have been recovered.

"Liquidation Expenses": Expenses which are incurred by the Collateral
Trustee in connection with the liquidation of a defaulted Mortgage Loan, such
expenses including, without limitation, legal fees and expenses, any
unreimbursed amount expended by the Collateral Trustee pursuant to Section 4.07
of the Collateral Trust Agreement (to the extent such amount is reimbursable
under the terms of such Section 4.07) respecting such Mortgage Loan and any
related and unreimbursed expenditures for real estate property taxes or for
property restoration or preservation.

"Liquidation Proceeds": Cash (including Insurance Proceeds and Condemnation
Proceeds) received by the Collateral Trustee in connection with the liquidation
of [a] [the] defaulted Mortgage Loan, whether through the sale of such
defaulted Mortgage Loan, the sale of the Mortgaged Estate securing such
defaulted Mortgage Loan pursuant to foreclosure sale or otherwise, or revenues
from or the sale of the related Mortgaged Estate if such Mortgaged Estate is
acquired in satisfaction of such defaulted Mortgage Loan, other than amounts
required to be paid to the Borrower pursuant to law or the terms of the related
Mortgage Note.

"Loan Agreement": [With respect to each Mortgage Note,] the [related] Loan
Agreement between Depositor and [a] Borrower, pursuant to the terms and
conditions of which the [related] Mortgage Loan was made.

<PAGE> 13

"Loan Documents": [With respect to each Mortgage Loan,] the [related] Note
Put Agreement, the [related] Loan Agreement, the [related] Mortgage and each
document in the Mortgage File [pertaining to such Mortgage Loan], and each
other document which constitutes a Loan Document pursuant to the terms and
provisions of [such] [the] Loan Agreement.

"Make-Whole Premium": [With respect to each Mortgage Note,] has the meaning
assigned to it in Section 2 of the [related] Loan Agreement. The Pass-Through
Trustee shall be provided with a certificate evidencing the calculation of such
amount by the Depositor.

"Moody's": Moody's Investors Service, Inc., a Delaware corporation, its
successors and assigns.

"Mortgage": [With respect to each Mortgage Note,] has the meaning assigned
thereto in Section 1.2 of the [related] Loan Agreement.

"Mortgage File": The items referred to in Exhibit A-3 annexed hereto
pertaining to the Mortgage Loan[s].

"Mortgage Loan": The loan pursuant to [a] [the] Loan Agreement together
with all right, title and interest of Depositor relating thereto, secured by the
[related] Mortgage, and evidenced by the [related] Mortgage Note and [another]
[other] mortgage note[s] issued in connection with such Loan Agreement with [a]
different maturit[y][ies], which [is][are] held by [another] [other]
pass-through trustee[s] pursuant to [another] [other] pass-through trust
agreement[s] dated the date hereof.

"Mortgage Note": [A] [The] promissory note, executed by [a] [the] Borrower
as obligor and having [a] [the] maturity date and Mortgage Note rate specified
in the Mortgage Note Schedule, secured by [a] [the] Mortgage, which Mortgage
Note was sold, conveyed, transferred and absolutely assigned by the Depositor
to the Pass-Through Trustee and which is the subject of this Pass-Through Trust
Agreement and included in the Pass-Through Trust Property.

"Mortgage Note Payments": The scheduled payments set forth in Exhibit A-1
of interest or principal and interest on the Mortgage Note[s].

"Mortgage Note Schedule": The schedule attached hereto as Exhibit A-1
setting forth the following information for the Mortgage Note[s]: (i) [each]
[the] Borrower's name; (ii) the Mortgaged Estate[s]; (iii) the maturity
date[s]; (iv) [each] [the] Mortgage Note rate; (v) the first Due Date; (vi) a
schedule setting forth the Mortgage Note Payments; and (vii) the original
Principal Balance of [each] [such] Mortgage Note.

"Mortgaged Estate": [With respect to each Mortgage Note,] the real and
personal property securing [such] [the] Mortgage Note.

<PAGE> 14

"Net Liquidation Proceeds": Liquidation Proceeds net of Liquidation
Expenses.

"Non-Monetary Tenant Default": [With respect to a Lease,] any default under
[such] [the] Lease by the [related] Tenant other than a default in the payment
of Annual Rental or Additional Rent.

"Note Put Agreement": [With respect to each Loan Agreement,] the Note Put
Agreement by and between Depositor, [and] the [related] Tenant, [and Kmart]
pursuant to the terms and conditions of which a Put of [such] [the] Mortgage
Note may be made on the occurrence of certain events specified therein.

"Officer's Certificate": A certificate signed by the Chairman of the Board,
the Chief Executive Officer, the President or a Vice President, the Treasurer
or the Secretary or one of the Assistant Treasurers or Assistant Secretaries or
any other duly authorized officer of the Depositor and delivered to the
Pass-Through Trustee containing the information required by Sections 11.12 and
11.13.

"Opinion of Counsel": An opinion in writing signed by legal counsel who may
be an employee of or counsel to the Depositor in form and substance acceptable
to the Pass-Through Trustee containing the information required by Sections
11.12 and 11.13.

["Option Agreement": An option granted by [a][the] Borrower to [a][the]
Tenant permitting such Tenant to acquire the [related] Project in the event
Borrower does not perform its obligations under the [related] Lease and the
[related] Construction Fund Disbursement Agreement.]

"Pass-Through Trust": The grantor trust created pursuant to this
Pass-Through Trust Agreement.

"Pass-Through Trust Agreement": This Trust Agreement and all amendments
hereof and supplements hereto.

"Pass-Through Trustee": United States Trust Company of New York, and its
permitted successors and assigns hereunder.

"Pass-Through Trustee's Fee": The amount of the annual fee paid to the
Pass-Through Trustee for its Administrative Expenses, including the reasonable
expenses of preparing any tax returns as provided in Section 5.02, arising
under this Pass-Through Trust Agreement, equal to $_____, payable by the
Tenant[s] pursuant to the Consent and Agreement[s].

"Pass-Through Trust Property": The corpus of the Pass-Through Trust, to the
extent described herein, consisting of the Mortgage Note[s], all rights of the
holder of such Mortgage Note[s] under the Collateral Trust Agreement or
otherwise, such assets as shall from time to time be identified as deposited in
the Certificate Account (including the investment income thereon), and any
funds

<PAGE> 15

advanced by the Certificateholders to the Pass-Through Trustee in accordance
with the provisions hereof.

"Paying Agent": The Person designated as the Paying Agent pursuant to
Section 3.05.

"Percentage Interest": The percentage of the whole undivided beneficial
interest in the Pass-Through Trust Property held by a Holder, to be evidenced
by a Certificate which shall state the percentage interest therein.

"Permitted Encumbrances": The Permitted Encumbrances as defined in [each]
[the] Mortgage.

"Pledge Agreement": [With respect to each Mortgage Note,] has the meaning
assigned thereto in Section 1.2 of the [related] Loan Agreement.

"Principal Balance": The outstanding principal balance of [the] [a]
Mortgage Note as of any specified date.

"Principal Prepayment": Any payment or other recovery of principal on [a]
[the] Mortgage Note, including any prepayment of principal pursuant to Section
3 of the [related] Loan Agreement, Insurance Proceeds and Condemnation Proceeds
to the extent required to be deposited in the Certificate Account and
Liquidation Proceeds, which is received in advance of its scheduled Due Date.

"Project": [A] [The] facility comprised of a retail store [constructed by
[a] Borrower [and [a] Tenant]] for lease by [a] [such] Tenant on real property
[which will be [acquired by] [owned by] [a] [such] Borrower and] [upon which
such facility will be constructed on behalf of [such] Borrower] using the
proceeds of [a] [the] Mortgage Loan.

"Purchase Price": [With respect to each Mortgage Note,] has the meaning
assigned thereto in Section 2.1 of the [related] Note Put Agreement.

"Put": The right to require purchase of [a] [the] Mortgage Note by [a]
[the] Tenant [and Kmart] pursuant to the [related] Note Put Agreement.

9
<PAGE> 16

by the Depositor, notice of which designation shall be given to the Pass-Through
Trustee. References herein to the highest rating category of a Rating Agency
shall mean AAA or better in the case of S&P and Aaa or better in the case of
Moody's and in the case of any other Rating Agency shall mean a rating
equivalent to such ratings.

"Record Date": (i) With respect to any distribution the close of business
on the fifteenth day preceding the related Remittance Date, except with respect
to a distribution pursuant to Section 3.01(f), in which case the Record Date is
the close of business on the fifteenth day prior to the Remittance Date on
which the related Mortgage Note Payment would, pursuant to the terms hereof,
have been distributable to the Certificateholders had such Mortgage Note
Payment been paid in full in a timely manner. (ii) With respect to any
direction, consent, waiver or other action to be given or taken by
Certificateholders, the date established by the Pass-Through Trustee pursuant
to Section 1.03(e) hereof.

"Registered Global Certificate": The Certificate, if any, issued to
the Depository in accordance with Article III and bearing the legend prescribed
in Section 3.06(a).

"Responsible Officer": When used with respect to the Pass-Through
Trustee, the Chairman or Vice Chairman of the Board of Directors of the
Pass-Through Trustee, the Chairman or Vice Chairman of the Executive or
Standing Committee of the Board of Directors of the Pass-Through Trustee, the
President, the Chairman of the Committee on Trust Matters, any Vice President,
any Assistant Vice President, the Secretary, any Assistant Secretary, the
Treasurer, any Assistant Treasurer, the Cashier, any Assistant Cashier, any
Trust Officer or Assistant Trust Officer, the Controller and any Assistant
Controller or any other officer of the Pass-Through Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also, with respect to a particular matter, any other officer to
whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.

["Second Mortgage": A Mortgage, Security Agreement and Assignment of
Rents from [a] [the] Borrower to [a] [the] Tenant which grants a lien
subordinate to the [related] Mortgage on [a] [the] Project to secure such
Borrower's performance under the [related] Lease and under the [related]
Construction Fund Disbursement Agreement.]

"S & P": Standard & Poor's Ratings Group, a __________ corporation,
its successors and assigns.

10
<PAGE> 17

"Termination Premium": [With respect to each Mortgage Note,] has the
meaning assigned to it in Section 2 of the [related] Note Put Agreement.

"TIA": The Trust Indenture Act of 1939 as in effect on the date as of
which this Pass-Through Trust Agreement was first qualified under such Act;
provided, however, that in the event the Trust Indenture Act is amended after
such date, "TIA" means, to the extent required by such amendment, the Trust
Indenture Act of 1939 as so amended.

"Transfer Assurance": A Transfer Assurance required pursuant to
Section 3.02(c).

"Treasury Regulations": The Treasury Regulations, including proposed,
temporary and final regulations promulgated under the provisions of the Code.

"Underwriters": The several underwriters named in the Underwriting
Agreement.

Section 1.02. Incorporation by Reference of Trust Indenture Act.
Whenever this Pass-Through Trust Agreement refers to a provision of the TIA,
such provision is incorporated by reference in and made a part of this Trust
Agreement. The following TIA terms used in this Pass-Through Trust Agreement
have the following meanings:

"Commission" means the SEC.

"Indenture securities" means the Certificates.

"Indenture security holder" means a Certificateholder.

"Indenture to be qualified" means this Pass-Through Trust Agreement.

"Indenture trustee" or "institutional trustee" means the Pass-Through
Trustee.

"Obligor" on the Indenture securities means Kmart.

All other TIA terms used in this Pass-Through Trust Agreement that are
defined by the TIA, defined by TIA reference to another

<PAGE> 18

statute or defined by SEC rule have the meanings assigned to them by
such definitions.

Section 1.03. Acts of Holders.

(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Pass-Through Trust Agreement to be
given or taken by Certificateholders may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such
Certificateholders in person or by an agent duly appointed in writing; and,
except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Pass-Through
Trustee and, where it is hereby expressly required, to the Depositor and to
Kmart. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of
Certificateholders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Pass-Through Trust Agreement and conclusive
in favor of the Pass-Through Trustee and the Depositor, if made in the manner
provided in this Section 1.03.

(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Pass-Through
Trustee deems sufficient.

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

(e) If the Pass-Through Trustee shall solicit from the Holders any
request, demand, authorization, direction, notice, consent, waiver or
other Act, the Pass-Through Trustee shall fix in advance a record date for the
determination of Holders entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other Act. Such request, demand,
authorization, direction, notice, consent, waiver or other Act may be given
before or after such record date, but only the Holders of record at the close
of business on such record date shall be deemed to be Holders for the purposes
of determining whether Holders of the requisite proportion of outstanding
Certificates have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent,

<PAGE> 19
waiver or other Act, and for that purpose the outstanding Certificates
shall be computed as of such record date; provided that no such authorization,
agreement or consent by the Holders on such record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this
Pass-Through Trust Agreement not later than six months after the record date.

ARTICLE II
CONVEYANCE OF MORTGAGE LOAN[S]; TRUST PROPERTY

Section 2.01. Conveyance of Mortgage Note[s]. As grantor of the
Pass-Through Trust, the Depositor, concurrently with the execution and delivery
hereof, does hereby sell, transfer, set over, convey and absolutely assign to
the Pass-Through Trustee without recourse (except as provided herein) in trust
intending to establish the Pass-Through Trust, all right, title and interest of
the Depositor in and to the Mortgage Note[s], including all interest,
Make-Whole Premium, Termination Premium and principal due or to become due from
[each] [the] Borrower on or with respect to [each] [the] Mortgage Note.

The ownership of the Pass-Through Trust Property is vested in the
Pass-Through Trustee without reservation of any right, title or interest
whatsoever in the Depositor. The Depositor intends that the sale, conveyance,
transfer and absolute assignment of the Depositor's right, title and interest
in and to the Mortgage Note[s] pursuant to this Pass-Through Trust Agreement
shall constitute a purchase and sale and not a pledge of security for a loan.
However, if for any reason such conveyance is deemed not to be a sale, the
Depositor intends that the rights and obligations of the parties shall
nevertheless be established pursuant to the terms of this Pass-Through Trust
Agreement and that the Depositor shall be deemed to have granted to the
Pass-Through Trustee a first priority security interest in all of the
Depositor's right, title and interest in, to and under the Mortgage Note[s],
all payments of principal of or interest on the Mortgage Note[s], all other
payments made in respect of the Mortgage Note[s] (including, without
limitation, any Make-Whole Premium or Termination Premium), and all proceeds of
any thereof, and any other assets of the Pass-Through Trust, and that this
Pass-Through Trust Agreement shall constitute a security agreement under
applicable law.

Section 2.02. Acceptance by Pass-Through Trustee. The Pass-Through
Trustee acknowledges receipt of the Mortgage Notes[s] and declares that it
holds and will hold such Mortgage Note[s] and any other documents constituting
a part of the Pass-Through Trust Property delivered to it in trust for the use
and benefit of all present and future Certificateholders.

The Pass-Through Trustee hereby represents that it holds [each][the]
Mortgage Note without notice or knowledge (a) of any adverse claims, liens or
encumbrances with respect to [such][the] Mortgage Note, (b) that [such][the]
Mortgage Note is overdue or has

<PAGE> 20

been dishonored, (c) of evidence on the face of [such][the] Mortgage
Note of any security interest or other right or interest therein by any other
party, or (d) of any defense against or claim to [such][the] Mortgage Note by
any other party.

Upon receipt thereof, the Pass-Through Trustee shall deliver to the
Certificateholders the Collateral Trustee's Certification delivered pursuant
Section 2.02 of the Collateral Trust Agreement.

Section 2.03. Trust Property. The Pass-Through Trustee acknowledges
that it holds the Pass-Through Trust Property conveyed pursuant to this
Pass-Through Trust Agreement in trust for the use and benefit of all present
and future Certificateholders.

Section 2.04. Limitation of Powers. The Pass-Through Trust is
constituted solely for the purpose of making the investment in the Pass-Through
Trust Property, and, except as set forth herein, the Pass-Through Trustee is
not authorized or empowered to acquire any other investments or engage in any
other activities.

ARTICLE III
THE CERTIFICATES

Section 3.01. The Certificates.

(a) Form and Terms. The Certificates and the Pass-Through Trustee's
certificate of authentication shall be substantially in the form attached
hereto as Exhibit B. Subject to the provisions of Section 3.06 hereof, the
Certificates shall be issuable as registered securities without coupons and
shall be numbered, lettered or otherwise distinguished from one another. The
Certificates shall be issued in denominations of $1,000 principal amount and
any integral multiple thereof and shall be dated the date of their
authentication. Each Certificate shall bear interest and have the other terms
as are set forth in the Certificate Schedule and in such Certificate. Each
Certificate shall evidence a beneficial ownership interest in the Pass-Through
Trust Property and shall have no rights, benefits or interest in respect of any
other separate pass-through trust, if any, or the trust property held in such
other pass-through trust. All Certificates shall be in all respects equally and
ratably entitled to the benefits of the Pass-Through Trust without preference,
priority, or distinction on account of actual time or times of authentication
and delivery, all in accordance with the terms and provisions of this
Pass-Through Trust Agreement.

Certificates shall not be subject to optional prepayment except as
provided herein.

On the Closing Date, the Pass-Through Trustee shall issue the
Certificates indicated on the Certificate Schedule. The aggregate principal
amount of the Certificates to be issued hereunder shall not exceed
$___________.

14
<PAGE> 21

(b) Execution and Authentication. The Certificates shall be executed
on behalf of the Pass-Through Trustee by its Chairman of the Board, one of its
Vice Chairmen, its President or one of its Vice Presidents, under its corporate
seal reproduced thereon. The signature of any such officer on the Certificates
may be manual or facsimile.

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

No Certificate shall be entitled to any benefit under this Pass-Through
Trust Agreement or be valid or obligatory for any purpose unless there appears
on such Certificate a certificate of authentication substantially in the form
provided for in Exhibit "B" annexed thereto duly executed by the Pass-Through
Trustee by manual signature of an authorized officer, and such certificate of
authentication upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and made available
for delivery hereunder.

(c) Prepayment Distribution. In the event of a prepayment of [a]
[the] Mortgage Note pursuant to Section 3 of the [related] Loan Agreement (not
including a Put pursuant to the [related] Note Put Agreement), the Pass-Through
Trustee shall within 30 days following receipt of any amounts in connection
with such prepayment distribute such amounts to the Certificateholders pro rata
based upon their respective Percentage Interests.

(d) Note Put Distribution. The Pass-Through Trustee shall, in the
manner and to the extent required by Section 313(c) of the TIA, notify the
Certificateholders of the occurrence of any Triggering Event (as defined in [a]
[the] Note Put Agreement) known to the Pass-Through Trustee within five (5)
Business Days after obtaining knowledge thereof.

(i) Upon the occurrence of a Triggering Event (other than a Lease
Guaranty Termination), the Pass-Through Trustee, at the written direction of
any Certificateholders received by the Pass-Through Trustee within 90 days of
delivery of the notice pursuant to Section 3.01(d), shall vote a percentage of
the Principal Balance of the [related] Mortgage Note corresponding to the
Percentage Interests owned by such Certificateholders in favor of directing the
Collateral Trustee to (A) exercise the Put in accordance with the terms and
provisions of [such] [the] Note Put Agreement, and (B) designate the Purchase
Date under and as defined in [such] [the] Note Put Agreement, which Purchase
Date shall be not more than 35 Business Days after receipt of such direction.

<PAGE> 22

(ii) If the Triggering Event is a Lease Guaranty Termination, the
Pass-Through Trustee shall vote in favor of directing the Collateral Trustee
not to exercise such Put a percentage of the Principal Balance of the [related]
Mortgage Note corresponding to the Percentage Interests owned by
Certificateholders that have given the Pass-Through Trustee written direction,
within 30 days after the date the Pass-Through Trustee sent the notice of the
occurrence of the Triggering Event as provided in this Section 3.01(d), to vote
to direct the Collateral Trustee not to exercise such Put.

(iii) In the event the Collateral Trustee puts [the] [a] Mortgage
Note, the Pass-Through Trustee will, upon request by the Collateral Trustee,
deliver such Mortgage Note, endorsed as provided in the [related] Note Put
Agreement, to the Collateral Trustee for the purpose of delivering such
Mortgage Note to the [related] Tenant or Kmart, as the case may be, in
connection with such Put. Within 29 days following receipt of the Purchase
Price, the Pass-Through Trustee shall distribute such amount, less any
unreimbursed reasonable costs and expenses incurred by the Pass-Through Trustee
in connection with the exercise of the Put, to the Certificateholders pro rata
based upon their respective Percentage Interests, whereupon this Pass-Through
Trust shall terminate with respect to such Mortgage Note.

(e) Liquidation Distribution. In the event of a liquidation of [a]
[the] Mortgage Note by foreclosure or otherwise as a consequence of an Event of
Default (not including a Put pursuant to the [related] Note Put Agreement), the
Pass-Through Trustee shall within 29 days following receipt of any Net
Liquidation Proceeds in connection with such liquidation distribute such
amounts to the Certificateholders pro rata based upon their respective
Percentage Interests. Once a Mortgage Loan has become a Liquidated Mortgage
Loan and all Net Liquidation Proceeds with respect to the related Mortgage Note
have been distributed to the Certificateholders, this Pass-Through Trust shall
terminate with respect to such Mortgage Note.

(f) Late Payment Distribution. In the event that, due to unpaid
Annual Rental, there are insufficient funds available on any Due Date to pay
the Mortgage Note Payments on a Mortgage Note and subsequent to such Due Date
such Annual Rental or any Additional Rent with respect thereto is paid to the
Collateral Trustee, then, within 9 Business Days of receipt by the Pass-Through
Trustee from the Collateral Trustee of such overdue Mortgage Note Payments and,
to the extent available, interest at the Overdue Rate (as defined in such
Mortgage Note) or such overdue amount, the Pass-Through Trustee shall
distribute such amounts to the Certificateholders.

(g) Adjustment of Debt Service. In the event of (i) an optional
prepayment of all or any part of a Mortgage Note, (ii) an acceleration of the
maturity date of a Mortgage Note by reason of an Event of Default, (iii) a
Borrower becoming obligated to prepay a Mortgage Note pursuant to Section 3.3
of the [related] Loan

<PAGE> 23

Agreement, (iv) a reduction of Mortgage Payments due to the condemnation of a
part of the [related] Project resulting in a reduction in Annual Rental or (v)
the sale of a Mortgage Note pursuant to a Note Put Agreement, the Debt Service
shall be reduced to equal the aggregate Mortgage Note Payments on the remaining
outstanding Mortgage Notes, after giving effect to any reduction in such
Mortgage Note Payments by reason of an optional partial prepayment or a
condemnation described in clause (iv) and excluding from "remaining outstanding
Mortgage Notes," for this purpose, any Mortgage Note which is sold pursuant to
the Note Put Agreement, which is prepaid in full, the maturity date of which
has been accelerated, or which the Borrower is obligated to prepay in full
pursuant to Section 3.3 of the related Loan Agreement.

(h) Notice of Distribution. Notice of a distribution pursuant to
Section 3.01(c), (d) and (e) shall be given by sending such notice, by
first-class mail, postage prepaid, not less than 10 days prior to the date
fixed for such distribution. Notice of such distribution pursuant to any other
provision hereof shall be given as soon as reasonably practicable following
notice of the facts giving rise to such distribution by the Pass-Through
Trustee. All notices of such distribution shall be mailed to the
Certificateholder of each Certificate to be prepaid in whole or in part at the
address shown on the Certificate Register. Neither the failure of any
Certificateholder to receive a notice mailed nor any defect in any notice so
mailed shall affect the validity of the proceedings for such distribution. The
reasonable costs of such notices incurred by the Pass-Through Trustee shall be
deducted from the amount of any such distribution.

(i) Rights of Holders to Payments. The rights of the
Certificateholders to receive payments with respect to the Pass-Through Trust
Property in respect of the Certificates, and all ownership interests of the
Certificateholders in such payments, shall be as set forth in this
Pass-Through Trust Agreement.

Section 3.02. Registration of Transfer and Exchange of Certificates.

(a) The Pass-Through Trustee shall cause to be kept at its Corporate
Trust Office or at the office of its designated agent, a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the
Pass-Through Trustee shall provide for the registration of Certificates and of
transfers and exchanges of Certificates as herein provided. The Pass-Through
Trustee shall be the Certificate Registrar. If the Pass-Through Trustee is not
the Certificate Registrar, the Depositor shall furnish to the Pass-Through
Trustee on or before each Remittance Date and at such other times as the
Pass-Through Trustee may request in writing a list in such form and as of such
date as the Pass-Through Trustee may reasonably require of the names and
addresses of Certificateholders, which list may be conclusively relied upon by
the Pass-Through Trustee.

<PAGE> 24

(b) Upon surrender for registration of transfer of any Certificate at
the Corporate Trust Office or at the office of any designated agent of the
Pass-Through Trustee maintained for such purpose, the Pass-Through Trustee
shall execute, authenticate and deliver, in the name of the designated
transferee or transferees, a new Certificate of a like tenor and dated the date
of such execution and authentication by the Pass-Through Trustee.

(c) No transfer of a Certificate or of a beneficial interest in a
Registered Global Certificate shall be made unless the Pass-Through Trustee:

(i) shall have received a Transfer Assurance consisting of
either (A) a representation from the transferee of such Certificate or
of such beneficial interest in a Registered Global Certificate to the
effect that such transferee is not a Benefit Plan, nor a person
acting on behalf of or purchasing for the benefit of any such Benefit
Plan, which representation letter shall not be an expense of the
Pass-Through Trustee, the Depository or the Depositor, or (B) in the
case of any such Certificate presented for registration, or of any
such beneficial interest in a Registered Global Certificate proposed
to be registered on the books of the Depository, or on those of a
participant in such Depository, in the name of a Benefit Plan, or a
trustee of any such Benefit Plan, an opinion of counsel reasonably
satisfactory to the Pass-Through Trustee and Depositor to the effect
that the purchase or holding of such Certificate or such beneficial
interest will not result in the assets of the Pass-Through Trust being
deemed to be "plan assets" subject to the prohibited transaction
provisions of ERISA or the Code, or that the purchase or holding of
such Certificate or such beneficial interest qualifies as an exempt
prohibited transaction under the provisions of ERISA or the Code, and
will not subject the Pass-Through Trustee or the Depositor to any
obligation in addition to those undertaken in this Pass-Through Trust
Agreement, which opinion of counsel shall not be an expense of the
Pass-Through Trustee, the Depository or the Depositor; or

(ii) shall authorize such transfer after receiving a request
therefor from the proposed transferee; provided that the Pass-Through
Trustee shall not give such authorization if the Percentage Interest
to be owned by such proposed transferee when added to the Percentage
Interests owned by any Certificateholders or Beneficial Owners who had
previously provided an opinion of counsel pursuant to Section
3.02(c)(i)(B) or received an authorization pursuant to this Section
3.02(c)(ii) would exceed 15%, and provided further that any such
authorization by the Pass-Through Trustee shall not be considered a
representation that an investment by any such transferee is an
appropriate or permitted investment by any such transferee, and
provided further that the Pass-Through Trustee shall have no
obligation to inquire with respect to, or to determine, whether a
Benefit Plan has attempted to become a Beneficial Owner without
providing an opinion of counsel pursuant to Section 3.02(c)(i)(B) or
obtaining an authorization from the Pass-Through Trustee pursuant to
this Section 3.02(c)(ii).

(d) In the absence of an opinion of counsel as provided in Section
3.02 (c)(i)(B) or an authorization by the Pass-Through Trustee as provided in
Section 3.02(c)(ii), the representation as described in Section 3.02(c)(i)(A)
shall be deemed to have been made to the Pass-Through Trustee by a transferee's
or Beneficial Owner's acceptance of a Certificate or beneficial interest
therein. In the event that such representation is violated, or any attempt is
made to transfer a Certificate or a beneficial interest therein to a Benefit
Plan, or a person acting on behalf of or purchasing for the benefit of any such
Benefit Plan, without an opinion of counsel as provided in Section
3.02(c)(i)(B) or an authorization of the Pass-Through Trustee as provided in
Section 3.02(c)(ii), such attempted transfer shall be void and of no effect.

(e) At the option of the Certificateholder, a Certificate may be
exchanged for another Certificate or Certificates of a like tenor, upon
surrender of the Certificate to be exchanged at the Corporate Trust Office or
at the office of any designated agent of the Pass-Through Trustee maintained
for such purpose. Whenever a Certificate is so surrendered for exchange, the
Pass-Through Trustee shall execute, authenticate and deliver a new Certificate
which the Certificateholder making the exchange is entitled to receive. Every
Certificate presented or surrendered for transfer or exchange shall (if so
required by the Pass-Through Trustee) be duly endorsed by, or be accompanied by
a written instrument of transfer in a form reasonably satisfactory to the
Pass-Through Trustee duly executed by, the Holder thereof or his attorney duly
authorized in writing.

(f) No service charge shall be made to the Holder for any transfer or
exchange of the Certificate, but the Pass-Through

<PAGE> 25

Trustee may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer or
exchange of the Certificate.

(f) All Certificates surrendered for transfer and exchange shall be
destroyed by the Pass-Through Trustee.

Section 3.03. Mutilated, Destroyed, Lost or Stolen Certificates. If
(i) any mutilated Certificate is surrendered to the Pass-Through Trustee or the
Pass-Through Trustee receives evidence to its reasonable satisfaction of the
destruction, loss or theft of any Certificate, and (ii) there is delivered to
the Pass-Through Trustee such reasonable security or indemnity as may be
required by it to save it harmless, then, in the absence of notice to the
Pass-Through Trustee that such Certificate has been acquired by a bona fide
purchaser, the Pass-Through Trustee shall execute, and authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of like tenor. Upon the issuance of any
new Certificate under this Section, the Pass-Through Trustee may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses connected therewith.
Any replacement Certificate issued pursuant to this Section shall constitute
complete and indefeasible evidence of ownership of the undivided interest of
the Certificateholder in the Pass-Through Trust Property, as if originally
issued, whether or not the mutilated, destroyed, lost or stolen Certificate
shall be found at any time.

Section 3.04. Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer, the Pass-Through Trustee may treat
the Person in whose name any Certificate is registered in the Certificate
Register as the owner of such Certificate and the undivided interest in the
Pass-Through Trust Property evidenced thereby for the purpose of receiving
remittances pursuant to Section 5.01 and for all other purposes whatsoever, and
the Pass-Through Trustee shall not be affected by notice to the contrary.

Section 3.05. Appointment of Paying Agent. The Pass-Through Trustee
shall initially serve as Paying Agent for the purposes of making distributions
to Certificateholders pursuant to Section 5.01. The Pass-Through Trustee shall
require each Paying Agent, other than the Pass- Through Trustee, to agree in
writing that such Paying Agent shall hold in trust for the benefit of the
Certificateholders or the Pass-Through Trustee all assets held by the Paying
Agent for the payment of principal of, or interest on, the Certificates, and
shall notify the Pass-Through Trustee of any default in making such payments.

Section 3.06. Certificates Issuable in the Form of a Registered Global
Certificate. (a) The Pass-Through Trustee shall, in accordance with this
Article, execute, authenticate and deliver, Registered Global Certificates
which, in the aggregate,

<PAGE> 26

(i) shall represent, and shall be denominated in an initial principal
amount equal to, the original aggregate principal amount of the Certificates
issued hereunder, (ii) shall be registered in the name of the Depository or its
nominee, and (iii) shall bear a legend substantially to the following effect:
"Unless this Registered Global Certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation ("DTC"),
to the Pass-Through Trustee or its agent for registration of transfer, exchange
or payment, and any Registered Global Certificate issued is registered in the
name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein."

(b) Notwithstanding any other provision of this Section or of
Section 3.02, the Registered Global Certificates may be transferred, in whole
but not in part and in the manner provided in Section 3.02, by the Depository
to a nominee of such Depository or by a nominee of such Depository to such
Depository or another nominee of such Depository or by such Depository or any
such nominee to a successor Depository selected or approved by the Depositor
upon notice to the Pass-Through Trustee or to a nominee of such successor
Depository.

(c) The Depository shall be a clearing agency registered under the
Exchange Act and any other applicable statute or regulation.

(d) If (i) (A) the Depositor at any time advises the Pass-Through
Trustee in writing that the Depository is no longer willing or able to properly
discharge its responsibilities, or (B) the Depository at any time shall no
longer be eligible under subsection (c) above, and the Depositor is unable to
appoint a qualified successor within 90 days after the Depositor receives such
notice or becomes aware of such condition, as the case may be, or (ii) the
Depositor at any time, but only with the consent of Kmart, determines that the
Certificates shall no longer be represented by Registered Global Certificates
and that the provisions of this Section shall no longer apply to such
Certificates, then this Section shall no longer be applicable to the
Certificates. In such event, (x) the Pass-Through Trustee shall notify all
Certificate Owners, through the Depository, of the occurrence of any such event
and of the availability of Certificates in definitive registered form and (y)
upon surrender of the Registered Global Certificates to the Pass-Through
Trustee, accompanied by reregistration instructions from the Depository, the
Pass-Through Trustee shall execute, authenticate and deliver Certificates in
definitive registered form without coupons, in authorized denominations, and in
an aggregate Percentage Interest equal to the Percentage Interest evidenced by
the Registered Global Certificates then outstanding in exchange for such
Registered

<PAGE> 27

Global Certificates. Upon the exchange of the Registered Global
Certificates for such Certificates in definitive registered form without
coupons in authorized denominations, such Registered Global Certificates shall
be canceled by the Pass-Through Trustee. If such exchange occurs as a result
of the events described in (i) above, all costs of the preparation, execution,
authentication and delivery of such Certificates shall be paid [pro rata] from
the Rental Payment Accounts as defined in and pursuant to the Collateral Trust
Agreement. If such exchange occurs at the request of the Depositor pursuant to
(ii) above, the Depositor shall pay all such costs. Such Certificates in
definitive registered form issued in exchange for the Registered Global
Certificate pursuant to this subsection (d) shall be registered in the names
and in authorized denominations set forth in the registration instructions.
The Pass-Through Trustee shall deliver such Certificates to the Persons in
whose names such Certificates are so registered.

(e) As long as the Certificates are represented by the Registered
Global Certificates, all distributions in respect of such Certificates shall be
made by wire transfer in immediately available funds on the date such
distributions are due in accordance with the Letter of Representations, and the
Depositor shall or shall cause the Pass-Through Trustee to provide to the
Depository any notices referred to in the Letter of Representations in
accordance with the Letter of Representations.

(f) Unless and until Certificates in definitive registered form are
issued pursuant to paragraph (d) above, on the Record Date prior to each
Remittance Date, the Pass-Through Trustee will request from the Depository a
securities position listing setting forth the names of all participants in
such Depository reflected on the Depository's books as holding interests in the
Registered Global Certificates on such Record Date. The Pass-Through Trustee
shall mail to each such Depository participant the statements described in
Section 5.02.

Section 3.07. Temporary Securities. Pending the preparation of
definitive Certificates, the Pass-Through Trustee may execute and authenticate
and make available for delivery, temporary Certificates which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive
Certificates in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such temporary Certificates may determine, as conclusively evidenced
by their execution of such temporary Certificates. The Depositor shall bear
the cost of preparation of any temporary Certificates as prepared.

<PAGE> 28

surrender of the temporary Certificates at the office or agency of the
Pass-Through Trustee designated for such purpose pursuant to Section 3.02
hereof, without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Certificates, the Pass-Through Trustee shall execute and
authenticate and make available for delivery in exchange therefor a like
principal amount of definitive Certificates of authorized denominations. Until
so exchanged, the temporary Certificates shall in all respects be entitled to
the same benefits under this Trust Agreement as definitive Certificates. Once
so exchanged, the Temporary Certificates shall be cancelled by the Pass-Through
Trustee.

ARTICLE IV
RECEIPT AND DISTRIBUTION OF INCOME
AND PROCEEDS FROM THE TRUST PROPERTY

Section 4.01. Calculation of Distributions. The Pass-Through Trustee
shall calculate the Available Distribution Amount, make distributions on each
Remittance Date as set forth in Section 5.01 and have full power and authority
to do any and all things which it may deem necessary or desirable in connection
with such duties.

Section 4.02. Collection of Mortgage Note Payments; Investment.

(a) Continuously from the date hereof until the principal and
interest on the Mortgage Note[s] are paid in full or the Mortgage Note[s] are
otherwise liquidated or disposed of, the Pass-Through Trustee shall, in
accordance with the provisions of this Pass- Through Trust Agreement, use
reasonable best efforts to collect all payments due under the Mortgage Note[s]
when the same shall become due and payable and shall, in connection therewith,
cooperate with the Collateral Trustee.

(b) Funds in the Certificate Account shall be invested by the
Pass-Through Trustee in Eligible Investments described in subparagraph (i),
(ii) or (iv) of the definition thereof (or in the further proviso at the end of
such definition). All such investments shall mature on or prior to the next
succeeding Determination Date and in no event shall be invested in obligations
maturing later than ninety days from the investment date. The risk of
investment loss with respect to funds in the Certificate Account shall be borne
by the Certificateholders. On or after the Due Date and prior to the next
succeeding Determination Date, the Pass-Through Trustee shall be prohibited
from selling or transferring Eligible Investments prior to maturity unless and
until a default shall have occurred under [a] [the] Mortgage Note. The
Pass-Through Trustee shall have no responsibility for any loss on any Eligible
Investments.

Section 4.03. Establishment of Certificate Account; Deposits in
Certificate Account. With respect to the Mortgage Note[s], the Pass-Through
Trustee shall cause to be segregated and held all

<PAGE> 29

funds collected and received pursuant to the Mortgage Note[s] separate
and apart from any of its own funds and general assets and shall cause to be
established and maintained a Certificate Account in the form of a trust account
titled "Mortgage Pass-Through Certificates (_____________________________)
Series ___ 199_, Certificate Account" in trust for the benefit of the
Certificateholders.

The Pass-Through Trustee shall cause to be deposited in the Certificate
Account upon receipt from the Collateral Trustee, and retained therein:

(a) All scheduled payments due on account of principal and interest
on the Mortgage Loan[s], and all Principal Prepayments and interest related
thereto collected;

(b) All payments on account of Make-Whole Premium or Termination
Premium on the Mortgage Note[s];

(c) All other amounts received from the Collateral Trustee pursuant
to Section 4.05 of the Collateral Trust Agreement; and

(d) All earnings (or losses) on funds held in the Certificate Account
derived from Eligible Investments.

The foregoing requirements for deposit in the Certificate Account shall be
exclusive.

Section 4.04. Permitted Withdrawals From the Certificate Account. The
Pass-Through Trustee shall, from time to time, cause the withdrawal of funds
from the Certificate Account for the following purposes and in the following
priority:

(a) to make payments to the Certificateholders in the amounts and in
the manner provided for in Section 5.01;

(b) subsequent to an Event of Default [with respect to such
Borrower's Mortgage Loan] pursuant to Section 7.01 hereof (except for a Non-
Monetary Tenant Default), to pay the Pass-Through Trustee for any unreimbursed
Extraordinary Expense Advances required by [the related] Borrower's default
pursuant to the [related] Mortgage Note or the [related] Loan Documents and for
[such Borrower's ratable portion of] due and unpaid Pass-Through Trustee's
Fees, and to reimburse Pass-Through Trustee for any expenses, costs and
liabilities for which it is entitled to reimbursement hereunder or under the
Loan Documents [related to such Borrower's Mortgage Loan]; and, in such event,
the Pass-Through Trustee shall have a prior lien for itself on all moneys in
the Certificate Account for payment or reimbursement of Extraordinary Expense
Advances [related to such Mortgage Loan], [such Borrower's ratable portion of]
due and unpaid Pass-Through Trustee's Fees and other amounts owed it and
payable by [such] Borrower under any provision of the [related] Mortgage Note
or the

<PAGE> 30

[related] Loan Documents, provided, however, that so long as (i) no
default exists under the [related] Lease Guaranty, taking into account any
grace period provided for therein, or (ii) no direction has been given by
Certificateholders owning Percentage Interests of at least 66-2/3% to exercise
rights or remedies under such Mortgage Note or Loan Documents, the payments
pursuant to Section 4.04(a) above shall be made by Pass-Through Trustee free
and clear of such lien; and

(c) to make any payments to clear and terminate the Certificate
Account upon the termination of this Pass-Through Trust Agreement.

Section 4.05. Action Concerning Defaulted Mortgage Loan. If an Event
of Default with respect to a Mortgage Loan has occurred and is continuing, and
if any Certificateholders direct, and if the Pass-Through Trustee and the
Collateral Trustee have received indemnity for their respective reasonable
costs, expenses and liabilities with respect thereto to the reasonable
satisfaction of both of them from the Certificateholders in accordance with
Section 8.02 (iii) hereof and in accordance with the Collateral Trust
Agreement, the Pass-Through Trustee shall vote a percentage of the outstanding
principal balance of the [related] Mortgage Note corresponding to the
Percentage Interests owned by such Certificateholders in favor of directing the
Collateral Trustee to use its best efforts to foreclose upon or otherwise
comparably convert the ownership of the Mortgaged Estate securing such Mortgage
Loan; to manage, conserve and protect such Mortgaged Estate for the purposes of
its disposition and sale; and to dispose of such Mortgaged Estate as promptly
as is reasonably possible. Upon sale or other conveyance of all or any part of
a Mortgage Note by the Pass-Through Trustee, the Pass-Through Trust shall have
no further right, title or interest, in the Mortgage Note, or portion thereof,
so sold or conveyed. Upon sale or other conveyance of all or any part of the
Mortgaged Estate by the Collateral Trustee, the Pass-Through Trust shall have
no right, title or interest in the Mortgaged Estate, or portion thereof, so
sold or conveyed. [Notwithstanding anything herein to the contrary, a default
under one Loan Agreement or related Loan Documents shall not constitute a
default under any other Loan Agreement or other Loan Document.]

Section 4.06. Trustee Compensation. The Pass-Through Trustee's Fee
shall be paid pursuant to the terms of the Consent and Agreement[s]. The
Pass-Through Trustee, as compensation for its activities hereunder (other than
those covered by the Pass-Through Trustee's Fee), shall be entitled to receive
amounts representing reimbursement for Extraordinary Expense Advances and
reimbursement for certain expenses, as specified by Sections 3.01(d), 3.01(h),
3.06(d) and 4.04(b) hereof and Sections 4.03(c) and 4.05(d) of the Collateral
Trust Agreement.

Section 4.07. Rights of the Certificateholders. The Pass-Through
Trustee shall afford the Certificateholders, upon reasonable notice and during
normal business hours, access to all

<PAGE> 31

records maintained by the Pass-Through Trustee in respect of its rights
and obligations hereunder and access to officers of the Pass-Through Trustee
responsible for such obligations. Upon request, the Pass-Through Trustee shall
furnish the Certificateholders with its most recent publicly available
financial statements.

ARTICLE V
PAYMENTS TO THE CERTIFICATEHOLDERS

Section 5.01. Distributions.

(a) The Pass-Through Trustee shall cause to be distributed, from
funds in the Certificate Account, the following amounts:

(i) on each Remittance Date, to each Certificateholder an
amount equal to the Debt Service due on the Certificate or Certificates held
by such Certificateholder; and

(ii) on the date provided for distribution of Certificates
pursuant to Section 3.01(c), (d), (e) or (f), to each Certificateholder an
amount equal to the amount payable on the Certificate or Certificates held by
such Certificateholder pursuant to Section 3.01(c), (d), (e) or (f), as the
case may be; and

(iii) concurrently with the termination of the Pass-Through
Trust pursuant to Section 9.01 hereunder, to each Certificateholder an
amount equal to the product of (a) all amounts remaining in the Certificate
Account after giving effect to the distributions provided for in clauses (i)
and (ii) hereof, and (b) the Percentage Interest of such Certificateholder.

(b) All distributions made to Certificateholders on each Remittance
Date shall be made to the Certificateholders of record on the Record Date
(other than as provided in this Pass-Through Trust Agreement or in the form of
Certificate respecting the final distribution), (i) by wire transfer in
immediately available funds to the account of such Holder at a bank or other
financial or depository institution having appropriate facilities therefor, if
such Holder has so notified the Pass-Through Trustee in writing at least 10
Business Days prior to such Remittance Date and such Holders hold Certificates
in the aggregate principal amount of $1,000,000 or more or (ii) for all other
Holders of Certificates, by check mailed to the address of the Person entitled
thereto as it appears on the Certificate Register. Notwithstanding any of the
provisions of this subsection (b) to the contrary, so long as all of the
outstanding Certificates are held by the Depository, all distributions in
respect of such Certificates shall be made by wire transfer in immediately
available funds in accordance with the Letter of Representations. All
distributions in respect of the Certificates shall be made without presentation
or surrender, except that the final distribution in accordance with Section
9.02

<PAGE> 32

will be made only upon presentation and surrender of the Certificates at
the Corporate Trust Office or such other agency of the Pass-Through Trustee
specified in the final distribution notice to Certificateholders. If on any
Determination Date, the Pass-Through Trustee reasonably determines that [the]
[no] Mortgage Loan is [not] outstanding and there are no other funds or assets
in the Trust Property other than the funds in the Certificate Account, the
Pass-Through Trustee shall send the final distribution notice to each
Certificateholder and make provision for the final distribution in accordance
with Section 9.02.

Section 5.02. Statements to Certificateholders. Not later than each
Remittance Date, Pass-Through Trustee will cause to be sent to each
Certificateholder a statement setting forth the following information with
respect to each Certificate (which information may be aggregated for all
Certificates held by the same Holder), after giving effect to the distributions
to be made pursuant to Section 5.01 on or as of such Remittance Date:

(i) the portion of such distribution allocable to principal of the
Mortgage Note[s];

(ii) the portion of such distribution allocable to interest on the
Mortgage Note[s];

(iii) the amount of any Extraordinary Expense Advance by the
Pass-Through Trustee or the Collateral Trustee pursuant to Section 5.03 hereof
or Section 5.01 of the Collateral Trust Agreement, respectively; and

(iv) whether [the] [a] Mortgage Note is delinquent.

In addition, not more than 90 days after the end of each calendar year or by
such earlier time as may be required under the Code, the Pass- Through Trustee
will furnish a report to each holder of a Certificate at any time during such
calendar year, an annual statement of interest paid on the Mortgage Note[s] in
accordance with the requirements of applicable federal income tax law.

The Pass-Through Trustee shall cause to be prepared and shall file any and
all tax returns, information statements or other filings required to be
delivered to (a) any governmental taxing authorities or (b) the
Certificateholders pursuant to any applicable law with respect to the
Pass-Through Trust Property and the transactions contemplated hereby. The
costs of any such filings, including the costs of any accounting firm or other
organization retained to assist in the preparation of any such filings, shall
be considered an ordinary cost and expense of the Pass-Through Trustee included
within the Pass-Through Trustee's Fee and not subject to reimbursement by the
Depositor, any Borrower or otherwise.

Section 5.03. Advances by Pass-Through Trustee. The Pass-Through Trustee
may from time to time following an Event of Default

<PAGE> 33

make such Extraordinary Expense Advances as Pass-Through Trustee in its
sole discretion deems advisable, provided, however, that it shall not be
obligated to make any such advances unless it is satisfied as to the
availability of reimbursement pursuant to the terms hereof or of the Collateral
Trust Agreement or from the Certificateholders.

ARTICLE VI
THE DEPOSITOR

Section 6.01. Maintaining Corporate Existence of the Depositor. The
Depositor will keep in full effect its existence, rights and franchises as a
corporation, and will obtain and preserve its qualification to do business as a
foreign corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this
Pass-Through Trust Agreement, the Certificates or the Mortgage Note[s] and to
perform its duties under this Pass-Through Trust Agreement.

The Depositor will not, on or after the date of execution of this
Pass-Through Trust Agreement (i) engage in any business or activities other
than those set forth in Article III of the Certificate of Incorporation of the
Depositor (ii) incur any indebtedness other than trade payables incurred in the
ordinary course of business, or (iii) amend, or propose to its shareholders for
their consent any amendment of, its Certificate of Incorporation or Bylaws
without giving notice thereof in writing not less than 30 days nor more than 90
days prior to the date on which such amendment is to become effective to
Pass-Through Trustee and without first obtaining the written consent of
Pass-Through Trustee.

Section 6.02. Limitation on Liability of the Depositor. Neither the
Depositor nor any of the directors, officers, employees or agents of the
Depositor shall be under any liability to the Pass-Through Trustee or the
Certificateholders for any action taken or for refraining from the taking of
any action in good faith pursuant to this Pass-Through Trust Agreement, or for
errors in judgment; provided, however, that this provision shall not protect
the Depositor or any such person against any liability which would otherwise be
imposed by reason of any willful misfeasance, bad faith or negligence in the
performance of its duties or by reason of negligent disregard of obligations
and duties hereunder. The Depositor and any director, officer, employee or
agent of the Depositor may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder.

The Depositor shall not be under any obligation to appear in, prosecute or
defend any legal action which is not incidental to its duties pursuant to this
Pass-Through Trust Agreement and which in its opinion may involve it in any
expense or liability; provided, however, that the Depositor may in its
discretion undertake any such action which it may deem necessary or desirable
with respect

<PAGE> 34

to this Pass-Through Trust Agreement and the rights and duties of
the parties hereto and the interests of the Certificateholders hereunder.

ARTICLE VII
DEFAULT

Section 7.01. Events of Default. The occurrence of any event
constituting an event of default as defined in the Collateral Trust Agreement,
any Loan Document or [the] [any] Mortgage Note shall constitute an Event of
Default under this Pass-Through Trust Agreement. If an Event of Default shall
occur and be continuing, then, and in each and every such case, so long as the
Event of Default shall not have been remedied or waived, the Pass-Through
Trustee, at the written direction of any Holders of Certificates, shall vote a
percentage of the Principal Balance of such Mortgage Note[s] corresponding to
the Percentage Interests owned by such Holders in favor of directing the
Collateral Trustee to exercise any rights and remedies that it may have pursuant
to such Mortgage Note[s] or any [related] Loan Document, as modified by the
provisions of the Collateral Trust Agreement, or at law or equity, including
injunctive relief and specific performance, provided that if as a result of the
occurrence of an Event of Default, the Pass-Through Trustee acquires any
property other than cash, whether pursuant to foreclosure or otherwise, the
Pass-Through Trustee shall sell such property as promptly as reasonably
possible. [Failure to pay with respect to any Mortgage Note or a default under
any Loan Document will not constitute a default under any unrelated Mortgage
Notes or under any unrelated Loan Documents and will not give rise to any right
of the Collateral Trustee or the Pass-Through Trustee (i) to exercise any
remedies with respect to such unrelated Mortgage Notes, or such unrelated Loan
Documents or (ii) to vote any such unrelated Mortgage Notes in favor of
exercising any such remedies.] If an Event of Default with respect to a
Mortgage Loan shall give rise to a right to terminate the [related] Lease, at
the written direction of any Holders of Certificates, the Pass-Through Trustee
shall vote a percentage of the Principal Balance of such Mortgage Note
corresponding to the Percentage Interests owned by such Holders in favor of
directing the Collateral Trustee to give notice of intent to terminate or take
action to terminate such Lease. The Pass-Through Trustee will have no
obligation to take any action or institute, conduct or defend any litigation
under this Pass-Through Trust Agreement at the request, order or direction of
any of the Certificateholders, unless such Certificateholders have offered to
the Pass-Through Trustee reasonable indemnity pursuant to Section 8.02(iii)
against the costs, expenses and liabilities which the Pass-Through Trustee may
incur. The Pass-Through Trustee shall apply the proceeds recovered in the
enforcement of the rights and remedies under this Pass-Through Trust Agreement
in accordance with the terms of this Pass-Through Trust Agreement.

<PAGE> 35

Section 7.02. Waiver of Defaults. The Pass-Through Trustee, at the
written direction of any Holders of Certificates, shall vote a percentage of
the Principal Balance of such Mortgage Note[s] corresponding to the Percentage
Interests owned by such Holders in favor of directing the Collateral Trustee to
waive any default under any Mortgage Note or any Loan Document and the
consequences of any such default (any such waiver by the Collateral Trustee
shall constitute a waiver of the default under Section 7.01 hereof), except
that the Pass-Through Trustee shall waive a default in the making of any
required distribution on such Mortgage Note[s] only if directed to do so by all
Certificateholders affected by such default. A default in the making of any
required distribution on the Certificates may only be waived by the affected
Certificateholders. The Pass-Through Trustee shall have no authority to
exercise the right of waiver if, as a result thereof, the Pass-Through Trust
would fail to be characterized as a trust for federal income tax purposes or
the Collateral Trust would become taxable as an association within the meaning
of Treasury Regulation Section 301.7701-2. The Pass-Through Trustee may rely
upon an Opinion of Counsel as set forth in Section 8.02 if it reasonably
believes that such an act may cause the Pass-Through Trust to fail to be
characterized as a trust for federal income tax purposes or may cause the
Collateral Trust to become taxable as an association within the meaning of
Treasury Regulation Section 301.7701-2. Upon any such waiver of a past
default, such default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been remedied for every purpose of this
Pass-Through Trust Agreement. No such waiver shall extend to any subsequent
Event of Default or impair any right consequent thereon except to the extent
expressly so waived.

Section 7.03. Notification to Certificateholders. The Pass-Through Trustee
shall, in the manner and to the extent required by Section 313(c) of the TIA,
notify the Certificateholders, the [related] Tenant and Kmart of any Event of
Default known to the Pass-Through Trustee within the later of 90 days from the
occurrence thereof or 30 days after obtaining knowledge thereof, unless such
Event of Default has been cured or waived before the giving of such notice.
Except in the case of a default in the payment of principal of, or interest on,
the Mortgage Note[s], the Pass-Through Trustee may withhold such notice if and
so long as its board of directors, the executive committee of the board of
directors or a committee of its directors and/or responsible officers in good
faith determine that the withholding of such notice is in the interests of the
Certificateholders.

Section 7.04. Rights of Certificateholders to Direct Proceedings.

(a) Anything in this Pass-Through Trust Agreement to the contrary
notwithstanding, the Holders of Certificates of Percentage Interests
aggregating not less than 66-2/3% shall have the right, at any time during the
continuance of an Event of Default, by an instrument or instruments in writing
executed and

<PAGE> 36

delivered to the Pass-Through Trustee, to direct the time, place
and method of conducting all proceedings to be taken in connection with the
enforcement of the terms and conditions of this Pass-Through Trust Agreement;
provided, however that such direction shall not be otherwise than in accordance
with the provisions of law and this Pass-Through Trust Agreement and provided
that such Holders shall have provided to the Pass-Through Trustee the
reasonable indemnity pursuant to Section 8.02 (iii) against the costs, expenses
and liabilities which the Pass-Through Trustee may incur in connection with
such proceedings.

(b) Anything in this Pass-Through Trust Agreement to the contrary
notwithstanding, any Holders of Certificates shall have the right, at any time
during the continuance of an event of default under the Collateral Trust
Agreement, by an instrument or instruments in writing executed and delivered to
the Pass-Through Trustee, to cause the Pass-Through Trustee to vote a percentage
of the Principal Balance of the affected Mortgage Note[s] corresponding to the
Percentage Interests owned by such Holders to direct the time, place and method
of conducting all proceedings to be taken in connection with the enforcement of
the terms and conditions of the Loan Documents; provided, however that such
direction shall not be otherwise than in accordance with the provisions of law
and such Loan Documents; and provided that such Holders shall have provided to
the Collateral Trustee and to the Pass-Through Trustee the reasonable indemnity
pursuant to Section 8.02 (iii) hereof and Section 8.02 (iii) of the Collateral
Trust Agreement against the costs, expenses and liabilities which the Collateral
Trustee or the Pass-Through Trustee may incur in connection with such
proceedings.

Section 7.05. Rights of Certificateholders to Receive Payment.
Notwithstanding any other provision in this Pass-Through Trust Agreement, the
right of any Certificateholder to receive distributions pursuant to Section
5.01, on or after the respective Remittance Dates set forth herein or in the
Certificates, or to bring suit for the enforcement of any such distribution on
or after such respective dates shall not be impaired or affected without the
consent of such Certificateholder.

Section 7.06. Remedies Cumulative. No remedy given hereunder to the
Pass-Through Trustee or to any of the Certificateholders shall be exclusive of
any other remedy or remedies, and each such remedy shall be cumulative and in
addition to every other remedy given hereunder or now or hereafter given by
statute, law, equity or otherwise.

Section 7.07. Pass-Through Trustee Default. In the event of any breach by
the Pass-Through Trustee of its obligations pursuant to this Pass-Through Trust
Agreement, the Certificateholders and the Depositor shall be entitled to
exercise all rights and remedies to which they may be entitled at law or in
equity.

<PAGE> 37

Section 7.08. Notice to Tenant[s] [and Kmart]. The Pass-Through Trustee
shall promptly notify the [related] Tenant [and Kmart] of the exercise of any
remedies under this Pass-Through Trust Agreement, under [any] [the] Mortgage
Note or under any Loan Document or of any vote directing the Collateral Trustee
to exercise any remedies pursuant to the Collateral Trust Agreement. Failure
to give such notice or notice under Section 7.03 hereof shall not impair or
limit the Pass-Through Trustee's or the Collateral Trustee's right to pursue
any such remedies or any other right or remedy to which it may be entitled.

ARTICLE VIII
CONCERNING THE PASS-THROUGH TRUSTEE
AND THE COLLATERAL TRUSTEE

Section 8.01. Duties of Pass-Through Trustee. [With respect to each
Mortgage Note] the Pass-Through Trustee, prior to the occurrence of an Event of
Default [related to such Mortgage Note] and after the curing or waiver of all
Events of Default [related to such Mortgage Note] which may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in this Pass-Through Trust Agreement. In case an Event of Default has
occurred [related to such Mortgage Note] (which has not been cured or waived),
the Pass-Through Trustee shall exercise such of the rights and powers vested in
it by this Pass-Through Trust Agreement, and use the same degree of care and
skill in their exercise as a prudent man would exercise or use under the
circumstances in the conduct of such man's own affairs. No permissive rights
of the Pass-Through Trustee shall be construed as a mandatory duty of the
Pass-Through Trustee.

The Pass-Through Trustee, upon receipt of any resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Pass-Through Trustee which are specifically
required to be furnished pursuant to any provision of this Pass- Through Trust
Agreement, shall examine them to determine whether they conform to the
requirements of this Pass-Through Trust Agreement and if they are deemed to be
deficient, Pass-Through Trustee shall request cure of any such deficiency
within a reasonable period of time for such cure. If such deficiency is not
cured to the satisfaction of Pass-Through Trustee, the Pass-Through Trustee may
treat the requirement pursuant to which such instrument is furnished as not
having been satisfied.

No provision of this Pass-Through Trust Agreement shall be construed to
relieve the Pass-Through Trustee from liability for its own negligent action,
its own negligent failure to act or its own misconduct; provided, however,
that:

(i) Prior to the occurrence of an Event of Default, and after
the curing or waiver of all such Events of Default which may have occurred, the
duties and obligations of the Pass-Through Trustee shall be determined solely
by the express provisions of

<PAGE> 38

this Pass-Through Trust Agreement, the Pass-Through Trustee shall not be
liable except for the performance of such duties and obligations as are
specifically set forth in this Pass-Through Trust Agreement and, in the absence
of bad faith on the part of the Pass-Through Trustee, the Pass-Through Trustee
may conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or opinions furnished to
the Pass-Through Trustee and conforming to the requirements of this Pass-Through
Trust Agreement;

(ii) The Pass-Through Trustee shall not be personally liable
for an error of judgment made in good faith by a Responsible Officer or
Responsible Officers of the Pass-Through Trustee, unless it shall be proved
that the Pass-Through Trustee was negligent in ascertaining the pertinent facts;

(iii) The Pass-Through Trustee shall not be personally liable
with respect to any action taken, suffered or omitted to be taken by it in good
faith in accordance with the direction of holders of Certificates evidencing
Percentage Interests aggregating not less than 66-2/3% or such lesser
percentage as is specifically set forth herein with respect to the exercise of
specific powers hereunder as to the time, method and place of conducting any
proceeding for any remedy available to the Pass-Through Trustee, or exercising
any trust or power conferred upon the Pass-Through Trustee, under this
Pass-Through Trust Agreement; and

(iv) The Pass-Through Trustee shall have no authority to
perform any act which, if consummated, would cause the entity created
hereunder to fail to be characterized as a trust for federal income tax
purposes or the Collateral Trust to become taxable as an association within
the meaning of Treasury Regulation Section 301.7701-2. The Pass-Through
Trustee may rely upon an Opinion of Counsel, as set forth in Section 8.02, if
it reasonably believes that such an act may cause the Pass-Through Trust to
fail to be characterized as a trust for federal income tax purposes or the
Collateral Trust to become taxable as an association within the meaning of
Treasury Regulation Section 301.7701-2. Nothing in this Section 8.01(iv) is
intended to prevent the Pass-Through Trustee from exercising any right or
remedy to which it is entitled hereunder or under any Loan Documents.

The Pass-Through Trustee shall not be required to expend or risk its own
funds or otherwise incur financial liability in the performance of any of its
duties hereunder, or in the exercise of any rights or powers, if there are
reasonable grounds for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.

Section 8.02. Certain Matters Affecting Pass-Through Trustee. Except as
otherwise provided in Section 8.01:

<PAGE> 39
(i) The Pass-Through Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution, Officers' Certificate,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other
paper or document reasonably believed by it to be genuine and to have been
signed or presented by the proper party or parties;

(ii) The Pass-Through Trustee may consult with counsel, and any
Opinion of Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in good
faith and in accordance with such Opinion of Counsel, provided that any cost
incurred by the Pass-Through Trustee shall be reimbursable only to the extent
provided in Sections 3.01(d), 3.01(h), 3.06(d), 4.04(b) and 4.06 hereof and in
Sections 4.03(c) and 4.05(d) of the Collateral Trust Agreement;

(iii) The Pass-Through Trustee shall be under no obligation to
exercise any of the trusts or powers vested in it by this Pass-Through Trust
Agreement or to institute, conduct or defend any litigation hereunder or in
relation hereto at the request, order or direction of any of the
Certificateholders, pursuant to the provisions of this Pass-Through Trust
Agreement, unless such Certificateholders shall have offered to the
Pass-Through Trustee reasonable indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby; the right of the
Pass-Through Trustee to perform any discretionary act enumerated in this
Pass-Through Trust Agreement shall not be construed as a duty; and the
Pass-Through Trustee shall not be answerable for other than negligence or
willful misconduct in performance of such act. Nothing contained herein shall,
however, relieve the Pass-Through Trustee of the obligation, upon the
occurrence of an Event of Default (which has not been cured or waived), to
exercise such of the rights and powers vested in it by this Pass-Through Trust
Agreement, and to use the same degree of care and skill in their exercise as
a prudent man would exercise or use under the circumstances in the conduct of
such man's own affairs;

(iv) The Pass-Through Trustee shall not be personally liable
for any action taken, suffered or omitted by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or powers
conferred upon it by this Pass-Through Trust Agreement;

(v) (a) Prior to the occurrence of an Event of Default
hereunder and after the curing or waiver of all Events of Default which may
have occurred, the Pass-Through Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond or other paper or document, unless requested in writing so to
do by Holders of Certificates evidencing Percentage Interests aggregating not
less than 66-2/3%; provided, however, that if the payment within a

<PAGE> 40

reasonable time to the Pass-Through Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation is,
in the opinion of the Pass-Through Trustee, not reasonably assured to the
Pass-Through Trustee by the security afforded to it by the terms of this
Pass-Through Trust Agreement, the Pass-Through Trustee may require reasonable
indemnity against such expense or liability as a condition to such proceeding;

(b) If requested in writing by any Holders of Certificates, the
Pass-Through Trustee shall vote a percentage of the outstanding principal
balance of the Mortgage Note[s] corresponding to the Percentage Interests owned
by such Holders to make an investigation as set forth in Section 8.02(v) of the
Collateral Trust Agreement;

(c) The reasonable expense of every such investigation shall be paid by
the Certificateholder[s] requesting the investigation; and

(vi) The Pass-Through Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys.

Section 8.03. Pass-Through Trustee Not Liable for Certificates or Mortgage
Note[s]. The recitals contained herein and in the Certificates shall be taken
as the statements of the Depositor, and the Pass-Through Trustee assumes no
responsibility for their correctness. The Pass-Through Trustee makes no
representations or warranties as to the validity or sufficiency of this
Pass-Through Trust Agreement, of the Collateral Trust Agreement or of the
Certificates (except that the Certificates shall be duly and validly executed
and authenticated by the Pass-Through Trustee and this Pass-Through Trust
Agreement shall be duly and validly executed by the Pass-Through Trustee) or of
the Mortgage Note[s] (other than the representations made in Section 2.02
hereof) or related documents. The Pass-Through Trustee shall not be
accountable for the use or application by the Depositor of any of the
Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to or at the direction of the Depositor with
respect to the Mortgage Note[s].

Section 8.04. Pass-Through Trustee May Own Certificates. The Pass-Through
Trustee in its corporate or any other capacity may become the owner or pledgee
of Certificates with the same rights it would have if it were not the
Pass-Through Trustee.

Section 8.05. Pass-Through Trustee's Fee and Expenses. The Pass-Through
Trustee shall be entitled to reasonable compensation (which shall not be
limited by any provision of law in regard to the compensation of a trustee of
an express trust) for all services rendered by it in the execution of the trust
hereby created and in the exercise and performance of any of the powers and
duties hereunder of the Pass-Through Trustee, and the Pass-Through Trustee

<PAGE> 41

shall be reimbursed for all reasonable expenses, disbursements and
advances incurred or made by the Pass-Through Trustee in accordance with any
of the provisions of this Pass-Through Trust Agreement (including the
reasonable compensation and the expenses and disbursements of its counsel and
of all persons not regularly in its employ), but solely from the Pass-Through
Trustee's Fee and amounts available as provided in Section 3.01(d) and Section
3.01(h) and in the Rental Payment Account[s], as provided in the Collateral
Trust Agreement, and in the Certificate Account as provided herein for
reimbursement of expenses as set forth in Section 3.06(d) and Extraordinary
Expense Advances as provided in Sections 4.04(b) and 4.05 hereof and Sections
4.03(c) and 4.05(d) of the Collateral Trust Agreement. Notwithstanding the
above, no such expense, disbursement or advance shall be reimbursable as may
arise from Pass-Through Trustee's negligence or bad faith.

Section 8.06. Action by Co-Trustee. At any time or times, for the purpose
of meeting any legal requirements of any jurisdiction in which any part of the
Pass-Through Trust Property may at the time be located or in which any action
of the Pass-Through Trustee may be required to be performed or taken, the
Pass-Through Trustee, by an instrument in writing signed by it, may appoint one
or more Persons ("Co-Trustee") to act as a separate trustee or co-trustee,
acting jointly with the Pass-Through Trustee, of all or any part of such
Pass-Through Trust Property, to the full extent that local law makes it
necessary for such separate trustee or separate trustees or co-trustee acting
jointly with the Pass- Through Trustee to act. The Co-Trustee shall act as and
be such upon the following terms and conditions:

(a) Subject to the provisions of Section 8.14, all rights, powers,
duties and obligations conferred or imposed upon the Pass-Through Trustee
shall be conferred or imposed solely upon and solely exercised and performed
by the Pass-Through Trustee except as expressly provided otherwise in this
Pass-Through Trust Agreement and except to the extent that under any law or any
jurisdiction in which any particular act or acts are to be performed, the
Pass-Through Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations shall be
exercised and performed by the Co-Trustee;

(b) No power granted by this Pass-Through Trust Agreement to, or
which this Pass-Through Trust Agreement provides may be exercised by, the
Co-Trustee shall be exercised by the Co-Trustee except jointly with, or with
the consent in writing of, the Pass-Through Trustee, anything contained to the
contrary notwithstanding; and

(c) The Co-Trustee may at any time by an instrument in writing,
constitute the Pass-Through Trustee or its successor in trust hereunder its
agent or attorney-in-fact, with full power and authority, to the extent which
may be permitted by law, to do any and all acts and things and exercise any
and all discretion which

<PAGE> 42

it is authorized or permitted to do or exercise, for and in its behalf and in
its name.

Section 8.07. Eligibility Requirements for Pass-Through Trustee. The
Pass-Through Trust shall at all times have a Pass-Through Trustee which shall
be a corporation eligible to act as trustee under Section 310(a) of the TIA and
shall be a corporation organized and doing business under the laws of a state
or the United States of America, authorized under such laws to exercise
corporate trust powers, having (or, in the case of a corporation included in a
bank holding company system, the related bank holding company shall have) a
combined capital and surplus of at least $50,000,000 in the case of United
States Trust Company of New York, and of at least $100,000,000 in the case
of any successor trustee and subject to supervision or examination by federal
or state authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising
or examining authority, then for the purposes of this Section the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. In case at any time the Pass-Through Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Pass-Through
Trustee shall resign immediately in the manner and with the effect specified in
Section 8.08.

Section 8.08. Resignation and Removal of Pass-Through Trustee and
Collateral Trustee.

(a) The Pass-Through Trustee may at any time resign and be
discharged from the trusts hereby created by giving written notice thereof to
the Depositor and the Certificateholders. Upon receiving such notice of
resignation, the Depositor or the Certificateholders evidencing Percentage
Interests aggregating not less than 66-2/3% shall promptly appoint a successor
trustee by written instrument, in duplicate, one copy of which instrument
shall be delivered to the resigning Pass-Through Trustee and one copy to the
successor trustee. If no successor trustee shall have been so appointed and
have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Pass- Through Trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee.

If at any time any of the following events occur:

(i) the Pass-Through Trustee fails to comply with the
requirements of Section 310 of the Trust Indenture Act after written request
for such compliance by any Certificateholder who has been a bona fide
Certificateholder for at least six months; or

(ii) the Pass-Through Trustee ceases to be eligible in
accordance with the provisions of Section 8.07 and fails to resign after
written request therefor by the Depositor or by any such bona fide
Certificateholder; or

<PAGE> 43

(iii) the Pass-Through Trustee becomes incapable of acting, or
shall be adjudged a bankrupt or insolvent, or a receiver of the Pass-Through
Trustee or of its property shall be appointed, or any public officer shall
take charge or control of the Pass-Through Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation;

then, in any such case, (x) the Depositor may remove the Pass-Through Trustee
and appoint a successor trustee by written instrument, in duplicate, one copy
of which instrument shall be delivered to the Pass-Through Trustee so removed
and one copy to the successor trustee, or (y) subject to the provisions of
Section 7.04, any Certificateholder who has been a bona fide Certificateholder
for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of the
Pass-Through Trustee and the appointment of a successor trustee. Such court
may thereupon, after such notice, if any, as it may deem proper and prescribe,
remove the Pass-Through Trustee and appoint a successor trustee.

The Certificateholders evidencing Percentage Interests aggregating not less
than 66-2/3% may at any time remove the Pass-Through Trustee and appoint a
successor trustee by written instrument or instruments, in triplicate, signed
by such Holders or their attorneys-in-fact duly authorized, one complete set of
which instruments shall be delivered to the Pass-Through Trustee so removed,
one complete set to the Depositor and one complete set to the successor so
appointed.

Any resignation or removal of the Pass-Through Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall
become effective only upon acceptance of appointment by the successor trustee
as provided in Section 8.09.

(b) In the event the Collateral Trustee resigns pursuant to Section
8.08 of the Collateral Trust Agreement, the Pass-Through Trustee, upon receiving
instructions from any Certificateholders, concerning the appointment of a
successor collateral trustee, shall vote a percentage of the Principal Balance
of the Mortgage Note[s] corresponding to the Percentage Interests owned by
such Certificateholders to appoint such designated successor collateral trustee
and take such other actions as are appropriate under such Section 8.08 to
appoint such successor collateral trustee.

Upon receiving instructions from any Certificateholders to do so, the
Pass-Through Trustee shall seek to remove the Collateral Trustee and appoint a
successor collateral trustee, by voting a percentage of the Principal Balance
of the Mortgage Note[s] corresponding to the Percentage Interests owned by such
Certificateholders in favor of removing the Collateral Trustee and appointing
the successor designated by such Certificateholders and by taking such other
actions as are consistent with Section 8.08 of the Collateral Trust Agreement.

<PAGE> 44

Section 8.09. Successor Pass-Through Trustee. Any successor trustee
appointed as provided in Section 8.07 or 8.08 shall execute, acknowledge and
deliver to the Certificateholders and to its predecessor trustee an instrument
accepting such appointment hereunder, and thereupon the resignation or removal
of the predecessor trustee shall become effective and such successor trustee
shall become effective and such successor trustee, without any further act,
deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor hereunder, with the same effect as if
originally named as trustee herein. The predecessor trustee shall deliver to
the successor trustee the Mortgage Note[s] and any other documents and
statements held by it hereunder, and the Depositor and the predecessor trustee
shall execute and deliver such instruments and do such other things as may
reasonably be required for more fully and certainly vesting and confirming in
the successor trustee all such rights, powers, duties and obligations.

No successor trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 8.07.

Section 8.10. Merger or Consolidation of Pass-Through Trustee. Any
corporation into which the Pass-Through Trustee may be merged or converted or
with which it may be consolidated or any corporation resulting from any merger,
conversion or consolidation to which the Pass-Through Trustee shall be a
party, or any corporation succeeding to the business of the Pass-Through
Trustee, shall be the successor of the Pass-Through Trustee hereunder, provided
such corporation shall be eligible under the provisions of Section 8.07,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding.

Section 8.11. Resignation of Co-Trustee. The Co-Trustee or any of its
successors may resign, and may be discharged of the trusts created by this
Pass-Through Trust Agreement by giving written notice thereof to the
Certificateholders and to the Pass-Through Trustee.

Such resignation shall take effect immediately upon the acceptance of
appointment by a Person succeeding to the office of the Co-Trustee appointed by
the Pass-Through Trustee.

<PAGE> 45

Section 8.12. Removal of Co-Trustee. The Co-Trustee or any of its
successors may be removed at any time by the Pass-Through Trustee or the
Holders of Certificates evidencing Percentage Interests aggregating not less
than 66-2/3%, by delivery of a notice of such removal to the Co-Trustee, to the
Depositor, and to the Pass-Through Trustee, signed by such Holders, and such
removal shall be effective upon the date specified in such notice, and the
Co-Trustee's duties and obligations hereunder shall thereupon cease, except as
specified in Section 8.14.

Section 8.14. Succession of Successor to Co-Trustee. Any Person
appointed as a successor to the Co-Trustee shall execute, acknowledge and
deliver to the Certificateholders, its predecessor, to the Pass-Through Trustee
and to the Depositor, an instrument accepting such appointment hereunder, and
thereupon such Person without any further act, deed or conveyance shall become
vested with all estates, properties, rights, powers, duties and trusts of its
predecessor in the trusts hereunder with like effect as if originally named as
Co-Trustee herein; but nevertheless, on the written request of the Depositor or
Holders of Certificates evidencing Percentage Interests aggregating not less
than 66-2/3% or of the Pass-Through Trustee or of the new Co-Trustee, the
predecessor shall execute and deliver an instrument transferring to the new
Co-Trustee, upon the trusts expressed in this Pass-Through Trust Agreement, all
the estates, properties, rights, powers and trusts granted to it by this
Pass-Through Trust Agreement and shall duly assign, transfer, deliver and pay
over to the new Co-Trustee any property and money subject to the lien of this
Pass-Through Trust Agreement held by such predecessor. Should any instrument
in writing from the Depositor or from Holders of Certificates evidencing
Percentage Interests aggregating not less than 66-2/3% or from the Pass-Through
Trustee be required by any person who becomes the Co-Trustee for more fully and
certainly vesting in and confirming to such Co-Trustee such estates,
properties, rights, powers and trusts, then, on request, any and all such
instruments in writing shall be made, executed, acknowledged and delivered by
the Depositor and/or the Pass-Through Trustee.

Any Co-Trustee which has resigned or been removed shall nevertheless
retain all rights of indemnity granted hereunder.

Section 8.15. Reports by the Pass-Through Trustee to Certificateholders.

(a) On or before each March 31 of each calendar year commencing 199_,
the Pass-Through Trustee shall transmit to Certificateholders such reports
concerning the Pass-Through Trustee

<PAGE> 46

and its actions under this Pass-Through Trust Agreement as may be
required pursuant to the TIA and at the times and in the manner provided
pursuant thereto.

(b) A copy of each report shall, at the time of such transmission to
Certificateholders, be filed by the Pass-Through Trustee with any stock
exchange upon which the Certificates are listed, with the Securities and
Exchange Commission, with Kmart and with the Depositor. The Depositor shall
notify the Pass-Through Trustee when the Certificates are listed on any stock
exchange, in accordance with Section 313(c) of the TIA.

Section 8.16. Co-Trustee of the Collateral Trust

(a) Upon receiving instructions from any Certificateholders to do so,
the Pass-Through Trustee shall seek to remove the co-trustee of the Collateral
Trust by voting a percentage of the Principal Balance of the Mortgage Note[s]
corresponding to the Percentage Interests owned by such Certificateholders in
favor of removing such co-trustee and by taking such other actions as are
consistent with Section 8.12 of the Collateral Trust Agreement.

(b) Upon written request to do so from any Certificateholders, the
Pass-Through Trustee shall vote a percentage of the Principal Balance of the
Mortgage Note[s] corresponding to the Percentage Interests owned by such
Certificateholders to make the request specified in Section 8.14 of the
Collateral Trust Agreement and take such other actions to implement such
request as are consistent with such Section 8.14.

ARTICLE IX
TERMINATION

Section 9.01. Termination. The respective obligations and
responsibilities of the Depositor and the Pass-Through Trustee under this
Pass-Through Trust Agreement shall, so long as such termination does not result
in the imposition of a tax on the Pass-Through Trust Property, terminate upon
the final payment, prepayment in full or other liquidation of the Mortgage
Note[s] and the remittance of all funds due hereunder; provided, however, that
in no event shall the Trust continue beyond the expiration of 21 years from the
death of the last survivor of the descendants of Joseph P. Kennedy, the late
ambassador of the United States to the Court of St. James, living on the date
hereof.

Section 9.02. Notice; Final Distribution.

(a) Notice of any termination pursuant to Section 9.01, specifying
the Remittance Date after which all Certificateholders shall surrender their
Certificates to the Pass-Through Trustee for payment and cancellation, shall be
given promptly by the Pass-Through Trustee by letter to Certificateholders
mailed no later than 15 days prior to such final distribution specifying (i)
the

<PAGE> 47
Remittance Date upon which final payment on the Certificates will be made
and following which the Certificateholders shall present and surrender their
Certificates at the Corporate Trust Office or the office of any designated
agent of the Pass-Through Trustee therein designated, (ii) the amount of any
such final payment, and (iii) that payments will be made only upon presentation
and surrender of the Certificates at the office or agency of the Pass-Through
Trustee therein specified. After giving such notice, the Pass-Through Trustee
shall not register the transfer or exchange of any Certificates. On the
Remittance Date upon presentation and surrender of the Certificates, the
Pass-Through Trustee shall cause to be distributed to Certificateholders an
amount equal to the amount distributable on such Remittance Date.

(b) If all of the Certificateholders shall not surrender their
Certificates for cancellation within three months after the time specified in
the above-mentioned written notice, the Pass-Through Trustee shall give a
second written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within three months after the second notice all the Certificates
shall not have been surrendered for cancellation, the Pass-Through Trustee may
take appropriate steps, or may appoint an agent to take appropriate and
reasonable steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of the
funds and other assets which remain in the Pass-Through Trust.

ARTICLE X
SUPPLEMENTS AND AMENDMENTS TO THIS
PASS-THROUGH TRUST AGREEMENT AND OTHER DOCUMENTS;
ADDITIONAL AGREEMENTS OF TRUSTEE

Section 10.01. Supplemental Pass-Through Trust Agreements Without
Consent of Holders. The Depositor and the Pass-Through Trustee, at any time
and from time to time, with the consent of Kmart (which shall not be
unreasonably withheld or delayed and which shall not be required with respect
to (g) below) but without the consent of Certificateholders, may enter into one
or more trust agreements supplemental hereto for one or more of the following
purposes:

(a) to evidence the succession of another Person to the Depositor, or
successive successions, and the assumption by the successor of the covenants,
agreements and obligations of the Depositor herein;

(b) to add any covenants, restrictions, conditions or provisions with
respect to the Depositor as the Pass-Through Trustee shall consider to be for
the protection of the Certificateholders;

<PAGE> 48

(c) to surrender any rights or power conferred herein upon the
Depositor herein or to add to the rights of the Certificateholders;

(d) to correct or amplify the description of any property at any time
that constitutes Pass-Through Trust Property or better to assure, convey and
confirm unto the Pass-Through Trustee any such property to be included in any
such Pass-Through Trust Property, or to acknowledge any change relating to
title to the Mortgaged Estate which does not materially adversely affect the
rights of the Certificateholders;

(e) to evidence and provide for the acceptance and appointment
hereunder of a successor trustee and to add to or change any of the provisions
hereof as may be necessary to provide for or facilitate the administration of
the Pass-Through Trust by more than one trustee pursuant to Section 8.14;

(f) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to make
any other provisions with respect to matters or questions arising under this
Pass-Through Trust Agreement, provided that such action pursuant to this
Section 10.01(f) shall not materially adversely affect the Certificateholders;
or

(g) to modify, eliminate or add to the provisions of this Pass-Through
Trust Agreement to the extent necessary to continue the qualification of this
Pass-Through Trust Agreement under the TIA;

provided that no such supplemental agreement shall cause the Pass-Through Trust
to fail to be characterized as a trust for federal income tax purposes or the
Collateral Trust to become taxable as an association within the meaning of
Treasury Regulation Section 301.7701-2.

The Pass-Through Trustee is hereby authorized to join in the execution
of any such supplemental agreement, to make any further appropriate agreements
and stipulations which may be contained therein and to accept the conveyance,
transfer, assignment, mortgage or pledge of any property thereunder, but the
Pass-Through Trustee shall not be obligated to enter into any such supplemental
agreement which adversely affects the Pass-Through Trustee's own rights, duties
or immunities under this Pass-Through Trust Agreement or otherwise, whether in
its official or individual capacity.

<PAGE> 49

time and at any time, enter into an agreement or agreements supplemental
hereto for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Pass-Through Trust Agreement or of any
agreements supplemental hereto or of modifying in any manner the rights of the
Certificateholders; provided, however, that no such supplemental agreement shall
cause the Pass-Through Trust to fail to be characterized as a trust for federal
income tax purposes or the Collateral Trust to become taxable as an association
within the meaning of Treasury Regulation Section 301.7701-2; and provided
further that, except as expressly permitted under the terms of this Pass-Through
Trust Agreement, without the consent of each Certificateholder affected thereby
and, with respect to (b) and (unless there is a monetary default under the
[related] Lease) (c) below, Kmart, no such amendment of or supplement to
this Pass-Through Trust Agreement or modification of the terms of, or consent
under, any thereof, shall

(a) modify any of the provisions of Section 7.03 or this Section
10.02, or the definition of "Certificateholder" as set forth in Article I
hereof;

(b) modify the definition of "Percentage Interest" as set forth in
Article I hereof or reduce the Percentage Interests, the consent of the Holders
of Certificates of which is required for any such supplement to this
Pass-Through Trust Agreement, or the consent of the Holders of Certificates of
which is required for any waiver provided for in this Pass-Through Trust
Agreement;

(c) reduce the amount or extend the time of payment of any amount
owing or payable under the Mortgage Note[s] or distributions to be made on any
Certificate pursuant to Article V;

(d) impair the right of any Certificateholder to commence legal
proceedings to enforce a right to receive payment hereunder; or

(e) create or permit the creation of any lien on the Pass-Through
Trust Property or any part thereof, or deprive any Certificateholder of the
benefit of this Pass-Through Trust Agreement, whether by disposition of such
Pass-Through Trust Property or otherwise.

Upon the request of the Depositor and upon the filing with the
Pass-Through Trustee of evidence of the consent of the Certificateholders and
Kmart, if applicable, required under this Section, the Pass-Through Trustee
shall join with the Depositor in the execution of such supplemental agreement
unless such supplemental agreement affects the Pass-Through Trustee's own
rights, duties or immunities under this Pass-Through Trust Agreement or
otherwise, in which case the Pass-Through Trustee may in its discretion, but
shall not be obligated to, enter into such supplemental agreement.

<PAGE> 50

Promptly after the execution by the Depositor and the Pass-Through
Trustee of any supplemental agreement pursuant to the provisions of this
Section, the Pass-Through Trustee shall mail a notice thereof by first-class
mail to the Certificateholders at their addresses as they shall appear in the
Certificate Register, setting forth in general terms the substance of such
supplemental agreement. Any failure of the Pass-Through Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental agreement.

Section 10.03. Effect of Supplemental Agreement. Upon the execution
of any supplemental agreement pursuant to the provisions hereof, this
Pass-Through Trust Agreement shall be and be deemed to be modified and amended
in accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Pass-Through Trust Agreement of
the Pass-Through Trustee, the Depositor and the Certificateholders shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental agreement shall be and be deemed to be part of the
terms and conditions of this Pass-Through Trust Agreement for any and all
purposes. The Pass-Through Trustee shall deliver to Kmart a true and correct
copy of the final form of supplemental agreement as executed by the Depositor
and the Pass-Through Trustee.

Section 10.04. Documents to Be Given to Trustee. The Pass-Through
Trustee, subject to the provisions of Sections 8.02, may receive an Officer's
Certificate and an Opinion of Counsel as conclusive evidence that any such
supplemental agreement complies with the applicable provisions of this
Pass-Through Trust Agreement.

Section 10.05. Notation on Certificates in Respect of Supplemental
Agreements. Certificates authenticated and delivered after the execution of
any supplemental agreement pursuant to the provisions of this Article may bear
a notation in form approved by the Pass-Through Trustee as to any matter
provided for by such supplemental agreement. If the Depositor or the
Pass-Through Trustee shall so determine, new Certificates so modified as to
conform, in the opinion of the Depositor and the Pass-Through Trustee, to any
modification of this Pass-Through Trust Agreement contained in any such
supplemental agreement may be prepared, executed and authenticated by the
Pass-Through Trustee and delivered in exchange for the outstanding
Certificates.

<PAGE> 51

Section 10.06. Supplements to Collateral Trust Agreement. If the
Pass-Through Trustee, as holder of the Mortgage Note[s], receives a request for
a consent to any supplement to the Collateral Trust Agreement pursuant to
Article 10 thereof, the Pass-Through Trustee shall forthwith notify the
Certificateholders of such request and shall ask for instructions from the
Certificateholders with respect to such request. The Pass-Through Trustee
shall vote in favor of such supplement the percentage of the outstanding
principal balance of the Mortgage Note[s] corresponding to the Percentage
Interests owned by the Certificateholders who instruct the Pass-Through Trustee
that they are in favor of such supplement.

ARTICLE XI
MISCELLANEOUS PROVISIONS

Section 11.01. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Pass-Through Trust Agreement
shall be for any reason whatsoever held invalid, then such covenants,
agreements, provisions or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of this Pass-Through Trust Agreement
and shall in no way affect the validity or enforceability of the other
provisions of this Pass-Through Trust Agreement.

Section 11.02. Limitation on Rights of Certificateholders. The death
or incapacity of any Certificateholder shall not operate to terminate this
Pass-Through Trust Agreement or the Pass-Through Trust Property, nor entitle
such Certificateholder's legal representatives or heirs to claim an accounting
or to take any action or proceeding in any court for a partition or winding up
of the Pass-Through Trust Property, nor otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.

No Certificateholder shall have any right to vote (except as expressly
provided herein) or in any manner otherwise control the operation and
management of the Pass-Through Trust Property, or the obligations of the
parties hereto, nor shall anything herein set forth, or contained in the terms
of the Certificates, be construed so as to constitute the Certificateholders
from time to time as partners or members of an association; nor shall any
Certificateholder be under any liability to any third person by reason of any
action taken by the parties to this Pass-Through Trust Agreement pursuant to
any provision hereof.

No Certificateholder shall have any right by virtue of any provision of
this Pass-Through Trust Agreement to institute any suit, action or proceeding
in equity or at law upon or under or with respect to this Pass-Through Trust
Agreement, unless such Holder previously shall have given to the Pass-Through
Trustee a written notice of the occurrence of an Event of Default and of the
continuance thereof, as hereinbefore provided, and unless also the Holders of
Certificates evidencing in the aggregate Percentage

<PAGE> 52

Interests of not less than 66-2/3% shall have made written request upon
the Pass-Through Trustee to institute such action, suit or proceeding in its own
name as Pass-Through Trustee hereunder and shall have offered to the
Pass-Through Trustee such reasonable indemnity as it may require against the
costs, expenses and liabilities to be incurred therein or thereby, and the
Pass-Through Trustee, for 60 days after its receipt of such notice, request and
offer of indemnity, shall have neglected or refused to institute any such
action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Pass-Through Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue of any
provision of this Pass-Through Trust Agreement to affect, disturb or prejudice
the rights of the Holders of any other of such Certificates, or to obtain or
seek to obtain priority over or preference to any other such Holder, or to
enforce any right under this Pass-Through Trust Agreement, except in the manner
herein provided and for the common benefit of Certificateholders. For the
protection and enforcement of the provisions of this Section, each and every
Certificateholder and the Pass-Through Trustee shall be entitled to such relief
as can be given either at law or in equity.

Section 11.03. Solicitation of Certificateholders. The Pass-Through
Trustee will not solicit, request or negotiate for or with respect to any
direction or proposed waiver or amendment of any of the provisions of this
Pass-Through Trust Agreement or the Certificates, unless each Holder of the
Certificates (irrespective of the amount of Certificates then owned by it)
shall be informed thereof by the Pass-Through Trustee and shall be afforded the
opportunity of considering the same and shall be supplied by the Pass-Through
Trustee with sufficient information to enable it to make an informed decision
with respect thereto. Executed or true and correct copies of any waiver
effected pursuant to the provisions of this Section shall be delivered by the
Pass-Through Trustee to Kmart and each Holder of outstanding Certificates
forthwith following the date on which the same shall have been executed and
delivered by the Holder or Holders of the requisite percentage of outstanding
Certificates. Neither the Depositor nor the Pass-Through Trustee nor any
Affiliate thereof will, directly or indirectly, pay or cause to be paid any
remuneration, whether by way of supplemental or additional interest, fee or
otherwise, to any Certificateholders as consideration for or as an inducement
to the entering into by any Certificateholders of any waiver or amendment of
any of the terms and provisions of this Pass-Through Trust Agreement unless
such remuneration is concurrently paid, on the same terms, ratably to all
Certificateholders.

Under any provisions of this Pass-Through Trust Agreement that relate
to consent, waiver, direction, request or demand of or by Certificateholders,
each and every Certificateholder shall be entitled to give or make any such
consent, waiver, direction, request or demand without request or demand for
such action by the Pass-Through Trustee.

<PAGE> 53

In the event any such direction or similar action is so received by the
Pass-Through Trustee under any provision hereof from the Certificateholders of
requisite Percentage Interests, the Pass-Through Trustee shall follow the
direction of such Certificateholders.

Section 11.04. Recordation of Agreement. To the extent required by
applicable law, this Pass-Through Trust Agreement is subject to recordation in
appropriate public offices for real property records in the county or other
comparable jurisdiction in which [the] [each] Mortgaged Estate is situated, and
in any other appropriate public recording office or elsewhere, such recordation
to be effected by the Pass-Through Trustee accompanied by an Opinion of Counsel
to the effect that such recordation materially and beneficially affects the
interests of the Certificateholders or is necessary in connection with the
[related] Mortgage Loan.

Section 11.05. Duration of Agreement. This Pass-Through Trust
Agreement shall continue in existence and effect until terminated as herein
provided.

SECTION 11.06. GOVERNING LAW. THIS PASS-THROUGH TRUST AGREEMENT SHALL
BE CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO THE CHOICE OF LAW PRINCIPLES THEREOF AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.

Section 11.07. Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at or mailed by first class or registered mail, postage
prepaid, to (i) in the case of the Depositor, National Tenant Finance
Corporation, 40 North Central Avenue, Suite 2700, Phoenix, Arizona 85004-4441,
Attention: Norman C. Storey, and (ii) in the case of the Pass-Through Trustee,
United States Trust Company of New York, c/o U.S. Trust Company of California,
N.A., Suite 2700, 555 South Flower Street, Los Angeles California 90071
Attention: Corporate Trust Division, or such other addresses as such Persons
may hereafter designate. Any notice required or permitted to be mailed to a
Certificateholder shall be given by registered mail, postage prepaid, or by
express delivery service, at the address of such Certificateholder as shown in
the Certificate Register. A copy of each notice of an Event of Default and
all other notices or communications hereunder, including the text of any
proposed or final amendment or supplement to this Pass-Through Trust Agreement,
given by or to the Certificateholders, the Pass-Through Trustee or the
Depositor shall be contemporaneously transmitted to Kmart, 3100 West Big Beaver
Road, Troy, Michigan 48084, Attention: Vice President-Real Estate, or to such
other address as Kmart may have designated by written notice to the Pass-
Through Trustee. The provisions of the foregoing sentence are for the express
benefit of Kmart, shall be enforceable by it, and may not be modified or
eliminated without its consent.

<PAGE> 54

Section 11.08. Counterparts. For the purpose of facilitating the
recordation of this Pass-Through Trust Agreement as herein provided and for
other purposes, this Pass-Through Trust Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, but all of which together shall constitute one and
the same instrument.

Section 11.09. Submission to Jurisdiction. Each party hereto hereby
consents to the jurisdiction of any state or federal court located within the
County of New York, State of New York and irrevocably agrees that all actions
or proceedings relating to this Pass-Through Trust Agreement may be litigated
in such courts and each such party waives any objection which it may have based
on improper venue or forum non conveniens to the conduct of any proceeding in
any such court, waives personal service of any and all process upon it and
consents that all such service or process be made by registered or certified
mail (return receipt requested) or messengered to it at its address set forth
in Section 11.07 or to its Agent referred to below at such Agent's address set
forth below and that service so made shall be deemed to be completed in
accordance with Section 11.07. Each party hereto hereby appoints the Prentice
Hall Corporation System, Inc., with an office on the date hereof at 15 Columbus
Circle, New York, New York 11023 as its Agent for the purpose of accepting
service of any process within the State of New York and shall execute any
confirmation thereof requested by the other party hereto. Nothing in this
Section shall affect the right of any party hereto to serve legal process in
any other manner permitted by law to bring any action or proceeding in the
courts of any jurisdiction against the other party or to enforce a judgment
obtained in the courts of any other jurisdiction.

Section 11.10. Gender; Number. All pronouns and any variations thereof
shall be deemed to refer to the masculine, feminine, neuter, singular or
plural, as the context shall require.

Section 11.11. TIA Controls. If any provision of this Pass-Through Trust
Agreement limits, qualifies or conflicts with the duties imposed by operation
of Section 318(c) of the TIA, the imposed duties shall control.

Section 11.12. Certificate and Opinion as to Conditions Precedent. Upon
any request or application by the Depositor to the Pass-Through Trustee to take
any action under this Pass-Through Trust Agreement, the Depositor shall furnish
to the Pass-Through Trustee:

(a) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Pass-Through
Trust Agreement relating to the proposed action have been complied with; and

(b) an Opinion of Counsel stating that, in the opinion of such
counsel all such conditions precedent have been complied with.

<PAGE> 55

(a) a statement that each Person making such Officers' Certificate or
Opinion of Counsel has read such covenant or condition;

(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such Officers'
Certificate or Opinion of Counsel are based;

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

Section 11.14. Benefits of Pass-Through Trust Agreement. Nothing in this
Pass-Through Trust Agreement or in the Certificates, express or implied, shall
give to any Person, other than the parties hereto and their successors
hereunder, and the Certificateholders, any benefit or any legal or equitable
right, remedy or claim under this Pass-Through Trust Agreement.

IN WITNESS WHEREOF, the Depositor and the Pass-Through Trustee have caused
their names to be signed hereto by their respective officers thereunto duly
authorized as of the day and year first above written.

NATIONAL TENANT FINANCE CORPORATION,
a Delaware corporation

By_____________________________
Name___________________________
Title__________________________

UNITED STATES TRUST COMPANY OF NEW YORK,
a New York banking corporation

By_____________________________
Name___________________________
Title__________________________

<PAGE> 56

STATE OF _______________ ]
] ss.
CITY OF ________________ ]

On the ____ day of _________, 199_ before me, a Notary Public in
and for said State, personally appeared ______________, known to me (or proved
to me on the basis of satisfactory evidence) to be the person who executed the
within instrument as ___________ on behalf of NATIONAL TENANT FINANCE
CORPORATION, a Delaware corporation, and acknowledged to me that such
Corporation executed the within instrument pursuant to its Bylaws or a
resolution of its Board of Directors.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year first above written.

[NOTARIAL SEAL] _______________________________
Notary Public

My Commission Expires:

______________________

STATE OF _______________ ]
] ss.
CITY OF ________________ ]

On the ____ day of _________, 199_ before me, a Notary Public in
and for said State, personally appeared ______________, personally known to me
(or proved to me on the basis of satisfactory evidence) to be the person who
executed the within instrument as to be a ______________ on behalf of UNITED
STATES TRUST COMPANY OF NEW YORK a New York banking corporation, and
acknowledged to me that such association executed the within instrument
pursuant to its Bylaws or a resolution of its Board of Directors.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year first above written.

[NOTARIAL SEAL] _______________________________
Notary Public

My Commission Expires:

______________________

<PAGE> 57
EXHIBIT A-1
MORTGAGE NOTE SCHEDULE

(i) Borrower Name -

(ii) Mortgaged Estate - See Exhibit A
attached hereto

(iii) Maturity Date - _____ __, 20__

(iv) Rate - ____%

(v) First Due Date - ________ __, 199_

(vi) Mortgage Payments - See Exhibit B
attached hereto

(vii) Original Principal
Balance of Mortgage
Note - $_______________

<PAGE> 58
EXHIBIT A-2
CERTIFICATE SCHEDULE

<PAGE> 59
EXHIBIT A-3
CONTENTS OF MORTGAGE FILE

With respect to the Mortgage Loan, the Mortgage File shall
include each of the following items:

<PAGE> 60
EXHIBIT B
[FORM OF CERTIFICATE]

[Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Pass-Through
Trustee or its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]

_____% MORTGAGE PASS-THROUGH CERTIFICATE

(____________________________)
SERIES 199_

Pass-Through Trust Agreement Original Principal Amount:
Series ____ $_________
Dated as of Original Issuance Date:
_______ __, 199_ _______________, 199_

Cusip No. ___________ Maturity Date:
Number R-_ ___________, ____

This Certificate does not represent an obligation of or interest
in National Tenant Finance Corporation, a Delaware corporation, Kmart
Corporation, any subsidiary of Kmart Corporation, the Collateral Trustee or the
Pass-Through Trustee referred to below or any of their respective affiliates.
Neither this Certificate nor the underlying Mortgage Note[s] referred to below
are guaranteed or insured. To the extent not defined herein, the capitalized
terms used herein have the meanings set forth in the Pass-Through Trust
Agreement referred to below.

This certifies that _______________________ (the "Holder") is the
registered owner of an undivided ___% beneficial interest in the Pass-Through
Trust Property, subject to the terms and conditions of the Pass-Through Trust
Agreement. The Pass-Through Trust Property includes [the] mortgage note[s]
("Mortgage Note[s]") issued by the Borrower[s] identified in the Loan
Agreement[s] ([individually a] "Borrower" [, collectively "Borrowers"]). The
Mortgage Note[s], and certain other property (collectively, "Pass-Through Trust
Property") have been transferred as of the date hereof from National Tenant
Finance Corporation ("Depositor," which term includes any successor
entity under the Pass-Through Trust Agreement referred to below) to the
Pass-Through Trustee (as

<PAGE> 61

defined below) in trust for the benefit of Certificateholders. The
Pass-Through Trust Property was conveyed to the Pass-Through Trustee pursuant to
a Pass-Through Trust Agreement ("Pass-Through Trust Agreement"), dated as of the
date hereof, by and among Depositor, as Depositor, and United States Trust
Company of New York ("Pass-Through Trustee"), as Pass-Through Trustee, a summary
of certain of the pertinent provisions of which is set forth herein.
Simultaneously with the transfer of the Pass-Through Trust Property by Depositor
to the Pass-Through Trustee, the Depositor has transferred to United States
Trust Company of New York, as collateral trustee under that Collateral Trust
Agreement dated as of the date hereof, by and among Depositor and such
collateral trustee, in trust for the benefit of the Pass-Through Trustee, as
holder of the Mortgage Note[s], all right, title and interest of the Depositor
in and to the Loan Agreement[s] pursuant to which the Mortgage Note[s] [were]
[was] issued, the related Mortgage[s], all other related Loan Documents and
certain other property.

This Certificate is one of a duly authorized issue of Certificates
("Certificates"), designated as "Mortgage Pass-Through Certificates
(______________________) Series 199_", and is issued under and is subject to
the terms, provisions and conditions of the Pass-Through Trust Agreement. The
Holder of this Certificate by acceptance hereof assents to the Pass-Through
Trust Agreement and agrees to be bound thereby.

This Certificate evidences a ___% Percentage Interest for purposes of
the Pass-Through Trust Agreement. For purposes of calculations under the
Pass-Through Trust Agreement, this Certificate represents an original principal
amount as set forth at the head of this Certificate, and is scheduled to bear
interest from the date of issuance on the unpaid principal balance hereof at
the rate of _____% per annum (computed on the basis of a 360-day year comprised
of 12 consecutive 30-day months) payable on each Remittance Date, and is
scheduled to bear interest at the rate of _____% per annum (computed on the
same basis) on any overdue principal or (to the extent permitted by applicable
law) interest under the Mortgage Note[s]. Distributions on any regularly
scheduled Remittance Date will include interest on the outstanding Mortgage
Note[s] from and including the first day of the sixth month immediately
preceding such Remittance Date (or from and including the Closing Date with
respect to the first Remittance Date) through the end of the calendar month
immediately preceding such Remittance Date. Additional distributions may be
made with respect to this Certificate as a result of the prepayment, purchase
or acceleration of the Mortgage Note[s] as set forth in the Pass-Through Trust
Agreement.

THIS CERTIFICATE AND ANY OTHER CERTIFICATES ISSUED PURSUANT TO
THE PASS-THROUGH TRUST AGREEMENT ARE EQUALLY AND RATABLY SECURED BY THE
PASS-THROUGH TRUST PROPERTY.

Distributions on this Certificate will be made by the Pass-Through
Trustee to the Person entitled thereto, without the presentation or surrender
of this Certificate or the making of any notation hereon. Except as otherwise
provided in the Pass-Through Trust Agreement and notwithstanding the preceding
sentence, the

B-2
<PAGE> 62

final distribution on this Certificate will be made after notice
mailed by the Pass-Through Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or
agency of the Pass-Through Trustee specified in such notice.

On each Remittance Date, the Pass-Through Trustee will cause to be
distributed to the Holder from funds in the Certificate Account an amount equal
to the aggregate scheduled Debt Service, to the extent available, on this
Certificate for such Remittance Date. The Debt Service on this Certificate is
set forth on the Debt Service Schedule attached hereto and made a part hereof
by this reference. The Debt Service is subject to adjustment as a consequence
of prepayment, purchase or acceleration of the Mortgage Note[s] and as a
consequence of adjustment to the Annual Rental due under the Lease[s] [each of]
which secures [the] [a] Mortgage Note.

The Pass-Through Trustee will cause to be kept at its Corporate Trust
Office, or at the office of its designated agent, a Certificate Register in
which, subject to such reasonable regulations as it may prescribe in compliance
with the Pass-Through Trust Agreement, the Pass-Through Trustee will provide
for the registration of Certificates and of transfers and exchanges of
Certificates. Upon surrender for registration of transfer of any Certificate
at any office or agency of the Pass-Through Trustee maintained for such
purpose, the Pass-Through Trustee will, subject to the limitations set forth in
the Pass-Through Trust Agreement, execute, authenticate and deliver, in the
name of the designated transferee or transferees, a Certificate or Certificates
of a like tenor and aggregate Percentage Interest and dated the date of such
execution and authentication by the Pass-Through Trustee.

No service charge will be made to the Holder for any transfer or
exchange of any Certificate, but the Pass-Through Trustee may require payment
of a sum sufficient to cover any tax or governmental charge that may be imposed
in connection with any transfer or exchange of any Certificate. Prior to due
presentation of a Certificate for registration of transfer, the Pass-Through
Trustee may treat the person in whose name any Certificate is registered as the
owner of such Certificate and the undivided interest in the Pass-Through Trust
Property evidenced thereby for the purpose of receiving distributions pursuant
to the Pass-Through Trust Agreement and for all other purposes whatsoever, and
the Pass-Through Trustee will not be affected by any notice to the contrary.

The Pass-Through Trust Agreement may be amended from time to time by
the Depositor and the Pass-Through Trustee with the consent of Kmart but
without the consent of the Certificateholders in certain circumstances
specified in the Pass-Through Trust Agreement. The Pass-Through Trust
Agreement may, under certain other circumstances specified in the Trust
Agreement, be amended from time to time by the Depositor and the Pass-Through
Trustee with the consent of the Holders of Certificates evidencing in the

B-3

<PAGE> 63

aggregate not less than 66-2/3% of the Percentage Interest of the Certificates
issued and outstanding for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of the Pass-Through Trust
Agreement or of modifying in any manner the rights of the Certificateholders;
provided that no such amendment may (i) modify the provision of the
Pass-Through Trust Agreement that concerns notifying Certificateholders of the
occurrence of an Event of Default, modify the provision of the Pass-Through
Trust Agreement concerning approving supplements to the Pass-Through Trust
Agreement that require the approval of Certificateholders, or modify the
definition of "Certificateholder" in the Pass-Through Trust Agreement, (ii)
modify the definition of "Percentage Interest" in the Trust Agreement or reduce
the Percentage Interests, the consent of the Holders of Certificates of which
is required for any such supplement to the Pass-Through Trust Agreement, or the
consent of the Holders of Certificates of which is required for any waiver
provided for in the Pass-Through Trust Agreement; (iii) reduce the amount or
extend the time of payment of any amount owing or payable under the Mortgage
Note[s] or distributions to be made on any Certificate, or impair the right of
any Certificateholder to commence legal proceedings to enforce a right to
receive payment hereunder or under the Pass-Through Trust Agreement; or (iv)
create or permit the creation of any lien on the Trust Property or any part
thereof, or deprive any Certificateholder of the benefit of the Pass-Through
Trust Agreement, whether by disposition of such Trust Property or otherwise,
without the consent of each affected Certificateholder and, with respect to
(ii) and (unless there is a monetary default under the related Lease)
(iii), Kmart.

The respective obligations and responsibilities of the Depositor and
the Pass-Through Trustee under the Pass-Through Trust Agreement will terminate
upon the final payment, prepayment in full or other liquidation of the Mortgage
Note[s] and the remittance of all funds due under the Pass-Through Trust
Agreement; provided, however, that in no event shall the Pass-Through Trust
continue beyond the expiration of 21 years from the death of the last survivor
of the descendants of Joseph P. Kennedy, the late ambassador of the United
States to the Court of St. James, living on the date hereof.

B-4

<PAGE> 64

IN WITNESS WHEREOF, the Pass-Through Trustee has caused this Certificate
to be duly executed by one of its authorized officers.

Dated: _______ __, 199_ UNITED STATES TRUST COMPANY OF
NEW YORK, solely as
Pass-Through Trustee under
the Pass-Through Trust
Agreement Series _____ dated
as of _______ __, 1994 with
National Tenant Finance
Corporation and not in its
individual capacity.

By_____________________________
Authorized Officer

B-5
<PAGE> 65

[FORM OF CERTIFICATE OF AUTHENTICATION]

This is one of the Certificates defined in the Pass-Through Trust
Agreement Series _____ dated as of _________ __, 199_ with National Tenant
Finance Corporation.

Dated: __________ __, 199_ UNITED STATES TRUST COMPANY OF
NEW YORK, as Pass-Through Trustee

By_____________________________
Authorized Officer

B-6

<PAGE> 1
EXHIBIT 4.3

_______________

COLLATERAL TRUST AGREEMENT
_______________

between

NATIONAL TENANT FINANCE CORPORATION
as Depositor

and

UNITED STATES TRUST COMPANY OF NEW YORK
as Trustee

_____________________________

Dated as of , 199_
_____________________________

$_________
Mortgage Pass-Through Certificates

(___________________)
Series 199_-__
and
Series 199_-__

_________________________________________________________________
<PAGE> 2

<TABLE>
<CAPTION>
TABLE OF CONTENTS

ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE

<S> <C> <C>
Section 1.01. Definitions . . . . . . . . . . . . . . . . . 1

<CAPTION>
ARTICLE II
CONVEYANCE OF TRUST PROPERTY

<S> <C> <C>
Section 2.01. Conveyance of Trust Property. . . . . . . . . 10
Section 2.02. Acceptance by Trustee. . . . . . . . . . . . . 11
Section 2.03. Trust Property. . . . . . . . . . . . . . . . 12
Section 2.04. Limitation of Powers. . . . . . . . . . . . . 12

<CAPTION>
ARTICLE III
THE MORTGAGE NOTES

<S> <C> <C>
Section 3.01. Prepayment . . . . . . . . . . . . . . . . . . 12
Section 3.02. Note Put . . . . . . . . . . . . . . . . . . . 12
Section 3.03. Liquidation . . . . . . . . . . . . . . . . . 13
Section 3.04. Late Payment Distribution . . . . . . . . . .

<CAPTION>
ARTICLE IV
RECEIPT AND DISTRIBUTION OF INCOME
AND PROCEEDS FROM THE TRUST PROPERTY

<S> <C> <C>
Section 4.01. Receipt of Lease Payments; Collection
of Lease and Lease Guaranty Payments;
Collection of Mortgage Loan Payments;
Collection of Indemnity Agreement
Payments; Investment Direction . . . . . . . . 14
Section 4.02. Establishment of Rental Payment Account[s];
Deposits in Rental Payment Account[s]. . . . . 16
Section 4.03. Permitted Withdrawals From the Rental Payment
Account[s] . . . . . . . . . . . . . . . . . . 16
Section 4.04. Establishment of Mortgage Note Account[s];
Deposits in Mortgage Note Account[s]. . . . . 18
Section 4.05. Permitted Withdrawals From the Mortgage Note
Account[s] . . . . . . . . . . . . . . . . . . 18
Section 4.06. Capitalized Debt Service Account[s]. . . . . . 20
Section 4.07. Realization Upon Defaulted Mortgage Loan . . . 20
Section 4.08. Trustee Compensation . . . . . . . . . . . . . 22
Section 4.09. Rights of the Pass-Through Trustees. . . . . . 22

<CAPTION>
ARTICLE V
ADVANCES BY TRUSTEE

<S> <C> <C>
Section 5.01. Advances by Trustee. . . . . . . . . . . . . . 22

<CAPTION>
ARTICLE VI
THE DEPOSITOR

<S> <C> <C>
Section 6.01. Maintaining Corporate Existence of the
Depositor. . . . . . . . . . . . . . . . . . . 22
Section 6.02. Limitation on Liability of the Depositor . . . 23
</TABLE>

i
<PAGE> 3

ARTICLE VII
DEFAULT
<S> <C> <C>
Section 7.01. Events of Default. . . . . . . . . . . . . . . 23
Section 7.02. Waiver of Defaults. . . . . . . . . . . . . . 24
Section 7.03. Notification to Pass-Through Trustees. . . . . 24
Section 7.04. Rights of Pass-Through Trustees to Direct
Proceedings. . . . . . . . . . . . . . . . . . 24
Section 7.05. Remedies Cumulative. . . . . . . . . . . . . . 25
Section 7.06. Trustee Default. . . . . . . . . . . . . . . . 25
Section 7.07. Notice to Tenant[s] [and Kmart]. . . . . . . . 25

<CAPTION>
ARTICLE VIII
CONCERNING THE TRUSTEE

<S> <C> <C>
Section 8.01. Duties of Trustee. . . . . . . . . . . . . . . 25
Section 8.02. Certain Matters Affecting Trustee. . . . . . . 27
Section 8.03. Trustee Not Liable for Certificates or Mortgage
Loan[s]. . . . . . . . . . . . . . . . . . . 28
Section 8.04. Trustee May Own Certificates. . . . . . . . . 28
Section 8.05. Trustee's Fee and Expenses. . . . . . . . . . 28
Section 8.06. Action by Co-Trustee. . . . . . . . . . . . . 29
Section 8.07. Eligibility Requirements for Trustee. . . . . 29
Section 8.08. Resignation and Removal of Trustee. . . . . . 30
Section 8.09. Successor Trustee. . . . . . . . . . . . . . . 31
Section 8.10. Merger or Consolidation of Trustee. . . . . . 31
Section 8.11. Resignation of Co-Trustee. . . . . . . . . . . 31
Section 8.12. Removal of Co-Trustee. . . . . . . . . . . . . 31
Section 8.13. Appointment of Successor to Co-Trustee. . . . 32
Section 8.14. Succession of Successor to Co-Trustee. . . . . 32

<CAPTION>
ARTICLE IX
TERMINATION
<S> <C> <C>
Section 9.01. Termination. . . . . . . . . . . . . . . . . . 32

<CAPTION>
ARTICLE X
SUPPLEMENTS AND AMENDMENTS TO THIS
TRUST AGREEMENT AND OTHER DOCUMENTS;
ADDITIONAL AGREEMENTS OF TRUSTEE

<S> <C> <C>
Section 10.01. Supplemental Trust Agreement Without Consent
of Pass-Through Trustees. . . . . . . . . . . 33
Section 10.02. Supplemental Agreements With Consent of Pass-
Through Trustees. . . . . . . . . . . . . . . 34
Section 10.03. Effect of Supplemental Agreement. . . . . . . 35
Section 10.04. Documents to Be Given to Trustee. . . . . . . 36
Section 10.05. Granting of Easements . . . . . . . . . . . . 36

<CAPTION>
ARTICLE XI
MISCELLANEOUS PROVISIONS

<S> <C> <C>
Section 11.01. Severability of Provisions. . . . . . . . . . 36
Section 11.02. Recordation of Agreement. . . . . . . . . . . 36

</TABLE>
ii
<PAGE> 4

<TABLE>
<S> <C> <C>
Section 11.03. Duration of Agreement . . . . . . . . . . . . 36
Section 11.04. Governing Law . . . . . . . . . . . . . . . . 36
Section 11.05. Notices. . . . . . . . . . . . . . . . . . . 36
Section 11.06. Counterparts. . . . . . . . . . . . . . . . . 37
Section 11.07. Submission to Jurisdiction. . . . . . . . . . 37
Section 11.08. Gender; Number. . . . . . . . . . . . . . . . 38
Section 11.09. Certificate and Opinion as to Conditions
Precedent . . . . . . . . . . . . . . . . . . 38
Section 11.10. Statements Required in Certificate or Opinion 38
Section 11.11. Benefits of Trust Agreement. . . . . . . . . 38

EXHIBIT A-1 MORTGAGE NOTE SCHEDULE

EXHIBIT A-3 CONTENTS OF MORTGAGE FILE

EXHIBIT A-4 CAPITALIZED DEBT SERVICE ACCOUNT SCHEDULE

EXHIBIT C FORM OF TRUSTEE CERTIFICATION

</TABLE>

iii
<PAGE> 5

___________________

COLLATERAL TRUST AGREEMENT
___________________

THIS COLLATERAL TRUST AGREEMENT, dated as of _______ __, 19__, is
executed by and among NATIONAL TENANT FINANCE CORPORATION, a Delaware
corporation, as depositor (together with its permitted successors, in such
capacity, "Depositor"), and UNITED STATES TRUST COMPANY OF NEW YORK a New York,
banking corporation as trustee (together with its permitted successors and
assigns, "Trustee").

In consideration of the premises and the mutual agreements hereinafter
set forth, the Depositor and the Trustee agree as follows:

ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01. Definitions. Whenever used herein, the following words
and phrases, unless the context otherwise requires, shall have the following
meanings:

"Additional Rent": [With respect to each Lease] has the meaning
assigned in Article 5 of [the] [such] Lease.

"Administrative Expenses": The ordinary and necessary expenses
incurred by the Trustee in the course of administering the affairs of the
Trust, excluding any Liquidation Expenses.

"Annual Rental": [With respect to each Lease,] has the meaning
assigned in Article 4 of [the][such] Lease.

"Assignment of Mortgage[s]": The Assignment of the Mortgage[s] dated
as of _______ __, 19__ between Depositor and Trustee, the Assignment of Lease
Assignment[s] dated as of ______ __, 19__, between Depositor and Trustee, and
any other notice of transfer or equivalent instrument, in recordable form,
sufficient under the laws of the jurisdiction[s] where the Mortgaged Estate
securing [each] [the] Mortgage Loan is located to reflect of record the sale,
conveyance, transfer and absolute assignment of the Mortgage[s] to the Trustee.

"Borrower" [The][A] Borrower identified in [the][a] Loan Agreement.

"Business Day": Any day other than (i) a Saturday or Sunday, or (ii)
a day on which banking or savings and loan institutions in New York or
California, or the city in which the principal corporate trust offices of any
successor Trustee are located, are authorized or obligated by law or executive
order to be closed.

<PAGE> 6
"Called Principal Percentage": With respect to any Mortgage Note, has
the meaning assigned to it in Section 2 of the related Loan Agreement.

[Capitalized Debt Service Account": [The] [Each] trust account
described in Section 4.06.]

["Capitalized Debt Service Reserve": Has the meaning assigned thereto
in Section 2 of [the] [each] Loan Agreement.]

"Certificate" or "Certificates": The Certificate or Certificates
evidencing a beneficial ownership interest in a Pass-Through Trust Property
executed and authenticated by a Pass-Through Trustee.

"Certificate Account": The trust account described in Section 4.03 of
each Pass-Through Trust Agreement.

"Certificateholder," "Certificateholders," "Holder" or "Holders": The
person or persons in whose name a Certificate is registered in a Certificate
Register, except that, solely for the purposes of voting Certificates to direct
a Pass-Through Trustee with respect to any consent, waiver, request or demand
pursuant to this Trust Agreement or pursuant to any Pass-Through Trust
Agreement, any Certificate registered in the name of the Depositor, [Kmart,] a
Tenant, a Borrower, any successor owner or ground lessee of a Project, any
successor tenant or subtenant of a Project, any successor guarantor of the
performance of a Tenant or successor tenant, or any affiliate of any of the
foregoing, shall be deemed not to be outstanding.

"Certificate Register": A register maintained pursuant to Section
3.02 of each Pass-Through Trust Agreement.

"Closing Costs": An amount equal to $_____________ which shall be
disbursed to the Underwriters on the Closing Date.

"Closing Date": _______ __, 199_.

"Code": The Internal Revenue Code of 1986, as amended.

"Condemnation Proceeds": Any awards in respect of, or settlements in
lieu of, condemnation proceedings affecting [the] [a] Mortgaged Estate.

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"Consent and Agreement": [A] [The] Consent and Agreement among
[Kmart,] Depositor, [a] Borrower, [a] Tenant and Trustee relating to [a] [the]
Lease, [[a] [the] Lease Guaranty,] [a] [the] Note Put Agreement and certain
other related matters.

"Depositor": National Tenant Finance Corporation, a Delaware
corporation and its successors in interest.

"Determination Date": The last Business Day immediately preceding a
Remittance Date.

"Due Date": [With respect to each Mortgage Note,] a Note Payment Date
as defined in the [related] Loan Agreement.

"Eligible Investments": One or more of the following:

(i) direct obligations of the United States of America;

(ii) obligations fully guaranteed, both as to principal
and interest, by the United States of America;

provided that any such obligations of the types described in clauses (i)
through (iv) above shall not have a maturity later than

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<PAGE> 8
the earlier of 90 days and the Due Date immediately following the acquisition
thereof; provided further, that any such obligations of the types described in
clauses (i) and (ii) above may be made through a repurchase agreement in
commercially reasonable form with a bank or other financial institution (which
may be the Trustee or any Pass-Through Trustee) the senior unsecured debt of
which is then assigned an A rating or better by S&P or Moody's, so long as
title to the underlying obligations shall pass to the Trustee and that such
underlying obligations shall be segregated in a custodial or trust account of
or for the benefit of the Trustee.

"ERISA": The Employee Retirement Income Security Act of 1974, as
amended.

"Event of Default": Any event of default described in Section 7.01.

"Exchange Act": The Securities Exchange Act of 1934, as amended.

"Extraordinary Expense Advances": All reasonable and necessary
"out-of-pocket" costs and expenses of the Trustee or any Pass-Through Trustee
in enforcing the Mortgage Notes and the Loan Documents following an Event of
Default under Section 7.01(c) hereof (except for a Non-Monetary Tenant
Default), and in compliance with the obligations of the Trustee under Section
4.07.

"FDIC": Federal Deposit Insurance Corporation or any successor
organization.

["Indemnity Agreement": [With respect to each Mortgage Note,] has the
meaning assigned thereto in Section 1.1 of the [related] Loan Agreement.]

"Kmart": Kmart Corporation, a Michigan corporation, and its
successors and assigns.

"Lease": [With respect to each Mortgage Note,] has the meaning
assigned thereto in Section 1.1 of the [related] Loan Agreement.

["Lease Guaranty": [With respect to each Mortgage Note,] has the
meaning assigned thereto in Section 1.1 of the [related] Loan Agreement.]

"Liquidated Mortgage Loan": [A] [The] Mortgage Loan after an Event of
Default under the [related] Loan Agreement when the Trustee has reasonably
determined that all amounts which it expects

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<PAGE> 9
to recover from or on account of such Mortgage Loan have been recovered.

"Liquidation Expenses": Expenses which are incurred by the Trustee in
connection with the liquidation of a defaulted Mortgage Loan, such expenses
including, without limitation, legal fees and expenses, any unreimbursed amount
expended by the Trustee pursuant to Section 4.07 (to the extent such amount is
reimbursable under the terms of Section 4.07) respecting such Mortgage Loan and
any related and unreimbursed expenditures for real estate property taxes or for
property restoration or preservation.

"Loan Documents": [With respect to each Mortgage Loan,] the [related]
Note Put Agreement, the [related] Loan Agreement, the [related] Mortgage and
each document in the Mortgage File [pertaining to such Mortgage Loan], and each
other document which constitutes a Loan Document pursuant to the terms and
provisions of [such] [the] Loan Agreement.

"Moody's": Moody's Investors Service, Inc., a Delaware corporation,
its successors and assigns.

"Mortgage": [With respect to each Mortgage Note,] has the meaning
assigned thereto in Section 1.2 of the [related] Loan Agreement.

"Mortgage File": The items referred to in Exhibit A-3 annexed hereto
pertaining to the Mortgage Loan[s].

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<PAGE> 10
"Mortgage Note": A promissory note, executed by [a] [the] Borrower as
obligor and having [a] [the] maturity date and Mortgage Note rate specified in
the Mortgage Note Schedule, secured by [a] [the] Mortgage, which Mortgage Note
was sold, conveyed, transferred and absolutely assigned by the Depositor to a
Pass-Through Trustee and which is the subject of the related Pass-Through Trust
Agreement and included in the related Pass-Through Trust Property.

"Mortgage Note Account": [The] [Each] trust account described in
Section 4.04.

"Mortgage Note Payments": The scheduled payments set forth in Exhibit
A-1 of interest or principal and interest on the Mortgage Notes.

"Mortgage Note Schedule": The schedule attached hereto as Exhibit A-1
setting forth the following information for the Mortgage Notes: (i) [each]
[the] Borrower's name; (ii) the Mortgaged Estate[s]; (iii) the maturity dates;
(iv) each Mortgage Note rate; (v) the first Due Date; (vi) a schedule setting
forth the Mortgage Note Payments; and (vii) the original Principal Balance of
each Mortgage Note.

"Mortgaged Estate": [With respect to each Mortgage Note,] the real
and personal property securing [such] [the] Mortgage Note[s].

"Net Liquidation Proceeds": Liquidation Proceeds net of Liquidation
Expenses.

"Non-Monetary Tenant Default": [With respect to a Lease,] any default
under [such] [the] Lease by the [related] Tenant other than a default in the
payment of Annual Rental or Additional Rent.

"Note Put Agreement": [With respect to each Loan Agreement,] the Note
Put Agreement by and between Depositor, [and] the [related] Tenant, [and Kmart]
pursuant to the terms and conditions of which a put of [such] [the] Mortgage
Notes may be made on the occurrence of certain events specified therein.

"Officer's Certificate": A certificate signed by the Chairman of the
Board, the Chief Executive Officer, the President or a Vice President, the
Treasurer or the Secretary or one of the Assistant Treasurers or Assistant
Secretaries or any other duly authorized officer of the Depositor and delivered
to the Trustee containing the information required by Sections 11.09 and 11.10.

[Option Agreement": An option granted by [a][the] Borrower to
[a][the] Tenant permitting such Tenant to acquire the [related] Project in the
event Borrower does not perform its obligations under the [related] Lease and
the [related] Construction Fund Disbursement Agreement.]

"Opinion of Counsel": An opinion in writing signed by legal counsel
who may be an employee of or counsel to the Depositor in

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<PAGE> 11

form and substance acceptable to the Trustee containing the information
required by Sections 11.09 and 11.10.

"Pass-Through Trust": A grantor trust created pursuant to a
Pass-Through Trust Agreement.

"Pass-Through Trust Administrative Expenses": The ordinary and
necessary expenses incurred in the course of administering the affairs of a
Pass-Through Trust.

"Pass-Through Trust Agreement": A Pass-Through Trust Agreement dated
the date hereof between the Pass-Through Trustee and the Depositor, together
with all amendments thereof and supplements thereto.

"Pass-Through Trust Property": With respect to each Pass-Through
Trust, the corpus of such Pass-Through Trust, to the extent described therein,
consisting of the Mortgage Note[s] held by such Pass-Through Trust, such assets
as shall from time to time be identified as deposited in the Certificate
Account (including the investment income thereon) of such Pass-Through Trust,
and any funds advanced by the Certificateholders of a Pass-Through Trust to the
related Pass-Through Trustee or otherwise held by such Pass-Through Trustee in
accordance with the provisions of the related Pass-Through Trust Agreement.

"Pass-Through Trustee": With respect to each Pass-Through Trust
Agreement, the U.S. Trust Company of California, N.A., and its permitted
successors and assigns thereunder.

"Pass-Through Trustee's Fees": The amount of annual fee paid to each
Pass-Through Trustee for its ordinary fees and expenses arising under a
Pass-Through Trust Agreement, equal to $________.

"Percentage Interest": [With respect to the Mortgage Notes issued
under a Loan Agreement] the sum of the percentages of the aggregate outstanding
principal balance of [such] [the] Mortgage Notes which is voted by the
Pass-Through Trustees with respect to any matter. The percentage of such
Mortgage Notes voted by a Pass-Through Trustee shall be determined by dividing
(i) the product of (a) the outstanding principal balance of such Mortgage Notes
held by such Pass-Through Trustee, times (b) the Percentage Interests (as
defined in such Pass-Through Trust Agreement) represented by the
Certificateholders of such Pass-Through Trust which have directed such
Pass-Through Trustee to vote on any particular matter or 100% if the
Pass-Through Trustee is voting in its own discretion, by (ii) the aggregate
outstanding principal balance of such Mortgage Notes.

"Permitted Encumbrances": The Permitted Encumbrances as defined in
[each] [the] Mortgage.

"Person": Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, limited liability

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<PAGE> 12
company, unincorporated organization or government or any agency or political
subdivision thereof.

"Pledge Agreement": [With respect to each Mortgage Note,] has the
meaning assigned thereto in Section 1.2 of the [related] Loan Agreement.

"Principal Balance": The outstanding principal balance of a Mortgage
Note as of any specified date.

"Principal Prepayment": Any payment or other recovery of principal on
a Mortgage Note (other than monthly receipt of amounts referred to in Section
4.01(a)), including any prepayment of principal pursuant to Section 3 of the
[related] Loan Agreement, Insurance Proceeds and Condemnation Proceeds to the
extent required to be deposited in the Certificate Accounts, and Liquidation
Proceeds, which is received in advance of its scheduled Due Date.

"Project": [A] [The] facility comprised of a retail store
[constructed by [a] Borrower [and [a] Tenant]] for lease by [a] [such] Tenant
on real property [which will be [acquired by] [owned by] [a] [such] Borrower
and] [upon which such facility will be constructed on behalf of [such]
Borrower] using the proceeds of [a] [the] Mortgage Loan.

"Purchase Price": [With respect to each Mortgage Note,] has the
meaning assigned thereto in Section 2.1 of the [related] Note Put Agreement.

"Put": The right to require purchase of a Mortgage Note by [a] [the]
Tenant and Kmart pursuant to the [related] Note Put Agreement.

"Record Date": The close of business on the fifteenth day preceding
the related Remittance Date, except with respect to a distribution pursuant to
Section 3.01(f) of a Pass-Through Trust Agreement, in which case the Record
Date is the close of business on the fifteenth day prior to the Remittance Date
on which the related Mortgage Note Payment would, pursuant to the terms of the
related Pass-Through Trust Agreement, have been distributable to the related
Certificateholders had such Mortgage Note Payment been paid in full in a timely
manner.

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<PAGE> 13

"Redemption Price": [With respect to each Mortgage Note,] has the
meaning assigned thereto in Section 1.2 of the [related] Loan Agreement.

"Remittance Date": With respect to the Certificates, an interest or a
principal and interest payment date of ________ 1, 19__, and the first Business
Day of each ________ and ____ thereafter until _____ 1, ____, or the payment of
the unpaid principal balance in full, or such other date when a distribution is
made pursuant to Section 3.01(c), 3.01(d), 3.01(e) or 3.01(f) of a Pass-Through
Trust Agreement.

"Rental Payment Account": [The] [Each] trust account described in
Section 4.02.

"S & P": Standard & Poor's Ratings Group, a _________________________
corporation, its successor and assigns.

"Termination Premium": [With respect to each Mortgage Note,] has the
meaning assigned to it in Section 2 of the [related] Note Put Agreement.

"Tenant" or "Tenants": [Kmart and] ___________, _____________ or
[____________,] [each of] which is a subsidiary of Kmart and which has entered
into [the] [a] Lease with [a] [the] Borrower to occupy a Project.

"Treasury Regulations": The Treasury Regulations, including proposed,
temporary and final regulations promulgated under the provisions of the Code.

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<PAGE> 14
"Trust": The trust created pursuant to this Trust Agreement.

"Trust Agreement": This Trust Agreement and all amendments hereof and
supplements hereto.

"Trustee": United States Trust Company of New York, and its permitted
successors hereunder.

"Trustee's Fee": The amount of the annual fee paid to the Trustee for
its Administrative Expenses, equal to $_____, payable by the Tenant[s] pursuant
to the Consent and Agreement[s].

"Trust Property": The corpus of the Trust, to the extent described
herein, consisting of all Loan Documents, property which secures the Mortgage
Loan[s] and which has been acquired by foreclosure or deed in lieu of
foreclosure (prior to its disposition) and Insurance Proceeds, Condemnation
Proceeds and any other amounts receivable under the Loan Documents, and any
funds advanced by the Certificateholders to Trustee or otherwise held by
Trustee in accordance with the provisions hereof.

"Underwriters": The several underwriters named in the Underwriting
Agreement.

ARTICLE II
CONVEYANCE OF TRUST PROPERTY

Section 2.01. Conveyance of Trust Property. As grantor of the Trust
and the Pass-Through Trusts, the Depositor, concurrently with the execution and
delivery hereof, does hereby sell, transfer, set over, convey and absolutely
assign to the Trustee for the benefit of the Pass-Through Trustees as holders
of the Mortgage Notes without recourse (except as provided herein) in trust
intending to establish the Trust, all right, title and interest of the
Depositor in and to all Loan Documents.

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<PAGE> 15
and interest in, to and under the Trust Property, and that this Trust Agreement
shall constitute a security agreement under applicable law. The Trustee is
holding the Trust Property on behalf of and for the benefit of the Pass-Through
Trustees as holders of the Mortgage Notes. Any funds the Trustee collects
hereunder, except such amounts as are to be paid to the Trustee as provided
herein, are collected and held on behalf of and for the benefit of the
Pass-Through Trustees as holders of the Mortgage Notes.

Section 2.02. Acceptance by Trustee. The Trustee acknowledges
receipt of the documents referred to in Section 2.01, subject to any exceptions
noted in a certificate of the Trustee delivered within 30 days after the
Closing Date, and declares that it holds and will hold such documents delivered
to it in trust for the use and benefit of all present and future holders of the
Mortgage Notes. The Trustee agrees, for the benefit of the Pass-Through
Trustees as holders of the Mortgage Notes, to review within 30 days after the
Closing Date each of the documents described in Section 2.01 delivered to it to
ascertain that all required documents have been executed and received, and that
such documents relate to the Mortgage Notes identified in the Mortgage Note
Schedule, as supplemented, that have been sold, conveyed, transferred and
absolutely assigned to the Pass-Through Trustees. If the Trustee finds any
document or documents constituting a part of the documents described in Section
2.01 to be missing, mutilated, damaged, defaced, incomplete, improperly dated,
clearly forged or otherwise physically altered in any material respect, the
Trustee shall promptly (and in any event within no more than five Business Days
after such discovery) so notify the Depositor. At the conclusion of such
review, the Trustee shall also notify the Depositor if, in examining such
documents, or through any other means, the Trustee had notice or knowledge (a)
of any adverse claim, lien or encumbrance against [any] [the] Mortgage Loan or
[any] [the] related Mortgaged Estate, (b) that any Mortgage Note was overdue or
had been dishonored, (c) of evidence on the face of any Mortgage Note or
Mortgage of any security interest or other right or interest therein, or (d) of
any defense against or claim to any Mortgage Note by any party. The Depositor
shall correct such omission or other irregularity referred to above within 90
days from receipt of such notice from the Trustee. The Trustee shall review
the documents referred to in Section 2.01 only for the purpose set forth above
in this Section 2.02 and the Trustee shall be under no duty or obligation to
inspect, review or examine any such documents, instruments, certificates or
other papers to determine that they are genuine, enforceable or appropriate for
the represented purpose or that they have actually been recorded or that they
are other than what they purport to be on their face.

Within thirty (30) days of the Closing Date, the Trustee shall deliver
to the Depositor, Kmart and the Pass-Through Trustees the Trustee's
Certification substantially in the form attached hereto as Exhibit C.

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<PAGE> 16
Section 2.03. Trust Property. The Trustee acknowledges that it holds
the Trust Property conveyed pursuant to this Trust Agreement in trust for the
use and benefit of all present and future holders of the Mortgage Notes.

Section 2.04. Limitation of Powers. The Trust is constituted solely
for the purpose of holding the Trust Property for the benefit of the
Pass-Through Trustees as holders of the Mortgage Notes, and, except as set
forth herein, the Trustee is not authorized or empowered to acquire any other
investments or engage in any other activities.

ARTICLE III
THE MORTGAGE NOTES

Section 3.01. Prepayment. In the event of a prepayment of a Mortgage
Note pursuant to Section 3 of the Loan Agreement, upon receipt by Trustee of
the amount of such prepayment, Trustee shall deposit such amount in the
[related] Mortgage Note Account and shall on the next Business Day following
such receipt pay such sum to the Pass-Through Trustee holding such Mortgage
Note for deposit into the Certificate Account of the related Pass-Through
Trust. Any Condemnation Proceeds or Insurance Proceeds received by the Trustee
pursuant to Section 3.3 of the Loan Agreement shall be allocated to each
[related] Mortgage Note based upon a fraction, calculated as of immediately
prior to the Prepayment Date, the numerator of which shall be the outstanding
principal balance of such Mortgage Note plus accrued interest thereon plus the
Make-Whole Premium related thereto and the denominator of which shall be the
aggregate outstanding principal balance of all [related] Mortgage Notes, plus
the aggregate accrued interest thereon plus the aggregate Make-Whole Premiums
related thereto. For purposes of this Section, the term "Prepayment Date"
shall mean the effective date of the termination of the [related] Lease or of
the abatement of the Annual Rental of such Lease, as applicable.

Section 3.02. Note Put. The Trustee shall notify the Pass-Through
Trustees of the occurrence of any Triggering Event (as defined in [a] [the]
Note Put Agreement) known to the Trustee within two (2) Business Days after
obtaining knowledge thereof.

(a) Upon the occurrence of a Triggering Event, the
Trustee, as provided in (b) below or upon the written direction of the
Pass-Through Trustees voting Percentage Interests in the aggregate of not less
than 66-2/3% of the related Mortgage Notes, shall (i) obtain the Mortgage Notes
from the Pass-Through Trustees, (ii) exercise the Put in accordance with the
terms and provisions of [such] [the] Note Put Agreement, (iii) designate the
Purchase Date under and as defined in [such] [the] Note Put Agreement (which
Purchase Date shall be not more than 35 Business Days after receipt of such
direction) and, upon receipt of the Purchase Price from [the related] Tenant or
Kmart, deposit such amount into the [related] Mortgage Note Account, and (iv)
on the next Business Day following

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<PAGE> 17
such receipt, pay into the Certificate Account of each Pass-Through Trustee the
Purchase Price received by the Trustee for the [related] Mortgage Note held by
such Pass-Through Trust, less any reasonable costs and expenses incurred by the
Trustee or the Pass-Through Trustees in connection with the exercise of the Put
that have not otherwise been reimbursed. The payment of the Purchase Price to
the Collateral Trustee as set forth herein and in the [related] Note Put
Agreement shall satisfy in full [the related] Tenant's and Kmart's obligations
under the [related] Note Put Agreement. Upon payment of the Purchase Price,
the Trustee shall transfer all Loan Documents [related to the purchased
Mortgage Notes] to the purchaser of such Mortgage Notes, and this Trust shall
thereby terminate as to such Loan Documents. Upon execution and delivery of
all documents reasonably necessary to assign the related Loan Documents to the
purchaser of the Mortgage Notes, the Trustee shall have no further obligations
with respect to such Loan Documents or such Mortgage Notes.

(b) If the Triggering Event is a Lease Guaranty
Termination, the Trustee shall exercise the [related] Put and take the other
steps specified in (a) above unless the Trustee receives written direction from
the Pass-Through Trustees voting Percentage Interests in the aggregate of not
less than 66-2/3% of the related Mortgage Notes instructing the Trustee not to
exercise such Put.

Section 3.03. Liquidation. In the event of a liquidation of a
Mortgage Loan by foreclosure or otherwise as a consequence of an Event of
Default (not including a Put pursuant to the [related] Note Put Agreement), the
Trustee shall, following receipt of any Net Liquidation Proceeds, deposit such
amounts in the [related] Mortgage Note Account and shall on the next Business
Day following such receipt distribute a portion of such amount to each
Pass-Through Trustee holding a [related] Mortgage Note or rights with respect
thereto. Any amounts received in connection with such a liquidation shall be
allocated to each [related] Mortgage Note based upon a fraction, calculated as
of immediately prior to the receipt by the Trustee of such amounts, the
numerator of which shall be the Purchase Price of such Mortgage Note and the
denominator of which shall be the aggregate Purchase Prices of such Mortgage
Note and all [related] Mortgage Notes. Once a Mortgage Loan has become a
Liquidated Mortgage Loan and all Net Liquidation Proceeds with respect to such
Liquidated Mortgage Loan have been distributed to the Pass-Through Trustees,
this Trust shall terminate with respect to such Liquidated Mortgage Loan and
the [related] Loan Documents.

Section 3.04 Late Payment Distribution. In the event that, due to
unpaid Annual Rental, there are insufficient funds on any Due Date to pay the
Mortgage Note Payments on a Mortgage Note and subsequent to such Due Date such
Annual Rental or any Additional Rent with respect thereto is paid, the Trustee
shall on the next Business Day following such receipt transfer to the
Certificate Account of the Pass-Through Trustee holding such Mortgage Note
such unpaid portion of such Mortgage Note Payments together with

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<PAGE> 18
interest on such overdue amount at the Overdue Rate (as defined in such
Mortgage Note) to the extent received.

ARTICLE IV
RECEIPT AND DISTRIBUTION OF INCOME
AND PROCEEDS FROM THE TRUST PROPERTY

Section 4.01. Receipt of Lease Payments; Collection of Lease and
Lease Guaranty Payments; Collection of Mortgage Loan Payments; Collection of
Indemnity Agreement Payments; Investment Direction.

(a) Pursuant to the Consent and Agreement[s], [each]
Tenant under [the] [each] Lease will pay all Annual Rental and Additional Rent
(except for Real Estate Taxes (as defined in the related Lease) and amounts
payable directly to a third party pursuant to such Lease, which shall be
payable in accordance with such Lease) payable by [each] Tenant under [the]
[each] Lease directly to the Trustee. All such Annual Rental and Additional
Rent received by Trustee shall be deposited by the Trustee in the Rental
Payment Account as described in Section 4.02 hereof, invested in Eligible
Investments in accordance with Section 4.01(d) of this Trust Agreement, and
applied in accordance with Section 4.03 hereof; provided that, subsequent to
the Trustee becoming aware of the occurrence of an Event of Default pursuant to
Section 7.01 hereof (except for a Non-Monetary Tenant Default), and during the
time such Event of Default continues without being cured or waived, all Annual
Rental and Additional Rent [from the related Lease] received by Trustee shall
be deemed received pursuant to the Assignment of Leases and Rents and shall
be deposited by the Trustee in the Mortgage Note Account as described in
Section 4.04 hereof, shall be invested in accordance with Section 4.01(d)
hereof, and shall be applied in accordance with Section 4.05 hereof.

(b) In the event the Trustee does not receive any monthly
installment of Annual Rental on the date set forth in [the] [each] Lease,
taking into account any grace period provided for therein, the Trustee is
hereby directed to and the Trustee, shall notify the [related] Borrower (as
landlord), the [related] Tenant [and Kmart] in writing regarding [the] [such]
Tenant's failure to make such timely payment. In the event the Trustee does
not receive the monthly installment of Annual Rental within [five] Business
Days of giving such written notice, the Trustee, at the written direction of
the Pass-Through Trustees voting Percentage Interests aggregating not less than
66-2/3% of the related Mortgage Notes, shall use its best efforts to enforce
the provisions of [the] [such] Lease [and [the related] Lease Guaranty] by
exercising all of the remedies available to it at law and in equity, including,
but not limited to, the remedies available under [the] [such] Lease [and [the]
[such] Lease Guaranty,] provided that the Trustee shall give notice of intent to
terminate or take action to terminate [the] [such] Lease only at the written
direction of the Pass-Through Trustees voting Percentage Interests aggregating
not

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less than 66-2/3% of the related Mortgage Notes to take such action. No later
than two Business Days prior to any Due Date, the Trustee shall advise each
Pass-Through Trustee if there are insufficient funds in the Rental Payment
Account[s] and Mortgage Note Account[s] to pay the Mortgage Note Payments due
on such Due Date.

(c) Continuously from the date hereof until the principal
of, and interest on, the Mortgage Loan[s] are paid in full, the Trustee will
use reasonable best efforts to collect all payments due under the Mortgage
Loan[s] when the same shall become due and payable. The Trustee shall also
review any official receipts from any taxing authority provided to it pursuant
to Section 1.08(c) of the Mortgage[s] to monitor payment of Impositions (as
defined in the Mortgage[s]). [The Trustee also shall use its best efforts to
collect any amount that becomes due pursuant to [the] [an] Indemnity Agreement.
Any amounts collected by the Trustee pursuant to [the] [an] Indemnity Agreement
shall be deposited in the [related] Rental Payment Account, provided that
during any period when the proviso of Section 4.01 applies to the [related]
Annual Rental and Additional Rent, any amounts received under the [related]
Indemnity Agreement shall be deposited in the Mortgage Note Account and applied
in accordance with Section 4.05 hereof.]

(d)(i) Funds in [the] [each] Rental Payment Account and [the]
[each] Capitalized Debt Service Account shall be invested in Eligible
Investments at the written direction of the Borrower [on whose behalf such
accounts have been established]. Funds in the Mortgage Note Account shall be
invested by the Trustee in Eligible Investments described in subparagraph (i),
(ii) or (iv) of the definition thereof (or in the further proviso at the end of
such definition). All such investments shall mature on or prior to the next
succeeding Determination Date and in no event shall be invested in obligations
maturing later than 90 days from the investment date. The risk of investment
loss with respect to funds in [the] [each] Rental Payment Account and [the]
[each] Capitalized Debt Service Account shall be borne by the Borrower [on
whose behalf such accounts have been established]. The risk of investment loss
with respect to funds in the Mortgage Note Account shall be borne by the
Pass-Through Trustees as holders of the Mortgage Notes. On or after the Due
Date and prior to the next succeeding Determination Date, the Trustee shall be
prohibited from selling or transferring Eligible Investments prior to maturity
unless and until a default shall have occurred under [a] [the] Mortgage Note.
In the event the Trustee shall not have received at least twenty-four hours'
written notice as to any investment direction from [the] [a] Borrower upon the
maturity of an existing investment, the Trustee shall be authorized to invest
maturing amounts in Eligible Investments described in subparagraph (iv) of the
definition thereof (or in the further proviso at the end of such definition)
until further directed in writing as to investments of such amounts.
Investment earnings and losses on any Eligible Investment shall be deposited to
or charged to the account in which the funds used for any such Eligible
Investment were deposited. The Trustee shall have no responsibility for any
loss on any Eligible Investments.

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(ii) If an Event of Default occurs under the Mortgage Notes
or the Loan Documents [with respect to a Mortgage Loan], the Borrower [of such
Mortgage Loan] shall be prohibited from directing investments as contemplated
above and the Trustee shall invest in Eligible Investments described in
subparagraph (i), (ii) or (iv) of the definition thereof (or in the further
proviso at the end of such definition) until such Event of Default is cured.

Section 4.02. Establishment of Rental Payment Account[s]; Deposits in
Rental Payment Account[s]. The Depositor (on behalf of [the] [each] Borrower)
hereby establishes [the] [a separate] Rental Payment Account with the Trustee.
[This] [Each such] account shall be maintained as a fund separate and distinct
from other accounts [(including other Rental Payment Accounts)] created under
this Trust Agreement. Prior to an Event of Default with respect to such
Borrower's Mortgage Loan pursuant to Section 7.01 hereof (except for a
Non-Monetary Tenant Default), [the] [each such] Rental Payment Account shall
remain the property of the Borrower [on whose behalf such Rental Payment
Account was established], subject to the rights of the Trustee under Section
4.03 of this Trust Agreement and under [the] [such Borrower's] Pledge
Agreement.

The Trustee shall cause to be deposited in [the] [such] Rental Payment
Account and retained therein:

(a) All payments (including Annual Rental and Additional
Rent) received pursuant to the terms of the [related] Lease [and Lease
Guaranty,] (other than Insurance Proceeds and Condemnation Proceeds) and
pursuant to the terms of the [related] Indemnity Agreement, subject to the
proviso in Section 4.01(a);

(b) Subject to the provisions of the [related] Lease, all
Insurance Proceeds received pursuant to Section 17 of [the] [such] Lease in
excess of the amounts required to make the mandatory prepayment of the
[related] Mortgage Notes pursuant to Section 3.3 of the [related] Loan
Agreement;

(c) Subject to the provisions of the [related] Lease, all
Condemnation Proceeds received pursuant to Section 18(g) of [the] [such] Lease
in excess of the amounts required to make the mandatory prepayment of the
[related] Mortgage Notes pursuant to Section 3.3 of the [related] Loan
Agreement; and

(d) All earnings (or losses) on funds held in [the]
[such] Rental Payment Account derived from Eligible Investments.

The foregoing requirements for deposit in the Rental Payment Account[s] shall
be exclusive.

Section 4.03. Permitted Withdrawals From the Rental Payment
Account[s]. The Trustee shall cause the withdrawal of funds from [the] [a]
Rental Payment Account for the following purposes and in the following order of
priority:

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(a) upon the occurrence of an Event of Default [with
respect to a Borrower's Mortgage Loan] pursuant to Section 7.01 hereof (except
for a Non-Monetary Tenant Default), to transfer to the Mortgage Note Account
[related to such Mortgage Loan] all amounts in the Rental Payment Account
[related to such Mortgage Loan] and to apply such amounts pursuant to the
provisions of Section 4.05 hereof;

(b) to transfer to the Certificate Account of each
Pass-Through Trust (i) on each Due Date an amount equal to the Mortgage Note
Payment due and unpaid as of such Due Date on the related Mortgage Note held by
such Pass-Through Trustee and (ii) on the next Business Day after receipt of
any amounts distributable under Section 3.04.

(c) to pay the Trustee and any Pass-Through Trustee for
any amounts due pursuant to Section 3.06(d) of each Pass-Through Trust
Agreement, for any unreimbursed Extraordinary Expense Advances required by [the
related] Borrower's default pursuant to the [related] Mortgage Notes or the
[related] Loan Documents, and for [such Borrower's ratable portion of] due and
unpaid Trustee's Fees and Pass-Through Trustee's Fees, and to reimburse Trustee
and any Pass-Through Trustee for any expenses, costs and liabilities for which
they are entitled to reimbursement hereunder or under the [related] Mortgage
Notes or the Loan Documents [related to such Borrower's Mortgage Loan]; prior
to an Event of Default [with respect to such Borrower's Mortgage Loan] the
Trustee's right to reimburse itself or a Pass-Through Trustee pursuant to this
clause (c) with respect to [the] [such Borrower's] Mortgage Loan is limited to
reimbursement for amounts due pursuant to Section 3.06(d) of each Pass-Through
Trust Agreement; subsequent to an Event of Default [with respect to such
Borrower's Mortgage Loan] pursuant to Section 7.01 hereof (except for a
Non-Monetary Tenant Default), the Trustee shall have a prior lien for itself
and on behalf of the Pass-Through Trustees, pari passu, on all moneys in [the]
[such Borrower's] Rental Payment Account for payment or reimbursement of
Extraordinary Expense Advances [related to such Mortgage Loan], [such
Borrower's ratable portion of] due and unpaid Trustee's Fees and Pass-Through
Trustee's Fees, and other amounts owed it or a Pass-Through Trustee and payable
by [such] Borrower under any provision of the [related] Mortgage Notes or the
[related] Loan Documents, provided, however, that so long as [(i) no default
exists under the [related] Lease Guaranty, taking into account any grace period
provided for therein, or (ii)] no direction has been given by the Pass-Through
Trustees pursuant to Section 7.01 hereof and reflecting direction given to the
Pass-Through Trustees by Certificateholders owning at least 66-2/3% of the
outstanding principal balance of the Certificates to exercise rights or
remedies under such Mortgage Notes or Loan Documents, the payments pursuant to
Section 4.03(a) and (b) above shall be made by Trustee free and clear of such
lien;

(d) to disburse to [the related] Borrower any amounts
remaining in the Rental Payment Account promptly following

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the second scheduled Remittance Date after the Closing Date, and on each
anniversary thereafter of such Remittance Date, after paying or providing for
the payment or withdrawal of amounts described in clauses (a), (b) and (c)
above.

Section 4.04. Establishment of Mortgage Note Account[s]; Deposits in
Mortgage Note Account[s]. The Trustee shall establish [the] [a separate]
Mortgage Note Account [for each Mortgage Loan]. [This] [Each such] account
shall be maintained as a fund separate and distinct from other accounts
[(including other Mortgage Note Accounts)] created under this Trust Agreement.

The Trustee shall cause to be deposited in [the] [such] Mortgage Note
Account (upon receipt by the Trustee unless otherwise specified herein) and
retained therein:

(a) All amounts received pursuant to Sections 3.01 and
3.02 hereof [with respect to the related Mortgage Loan].

(b) Net Liquidation Proceeds;

(c) Subject to the provisions of the [related] Lease, all
Insurance Proceeds received pursuant to Section 17 of [the] [such] Lease not to
exceed the amounts required to make the mandatory prepayment of the [related]
Mortgage Notes pursuant to Section 3.3 of the [related] Loan Agreement;

(d) Subject to the provisions of the [related] Lease, all
Condemnation Proceeds pursuant to Sections 18(d) and 18(g) of [the] [such]
Lease not to exceed the amounts required to make the mandatory prepayment of
the [related] Mortgage Notes pursuant to Section 3.3 of the [related] Loan
Agreement;

(e) All earnings (or losses) on funds held in [the]
[such] Mortgage Note Account derived from Eligible Investments; and

(f) All amounts required to be deposited therein under
Sections 4.01(a), [4.01(c),] [and] 4.03(a), [and 4.06.]

The foregoing requirements for deposit in the Mortgage Note Account[s] shall be
exclusive.

Section 4.05. Permitted Withdrawals From the Mortgage Note
Account[s]. The Trustee shall cause the withdrawal of funds from [the] [a]
Mortgage Note Account for the following purposes and in the following order of
priority (the transfers specified in (b) and (c) shall be made the next
Business Day after receipt of such amounts by the Trustee):

(a) to transfer to the Certificate Account of each
Pass-Through Trust (i) on each Due Date an amount equal to the Mortgage Note
Payment due and unpaid as of such Due Date on the related Mortgage Note held by
such Pass-Through Trustee and (ii) on the next Business Day after receipt of
any amounts in respect of overdue Mortgage Note Payments; provided, however,
that the

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<PAGE> 23
foregoing shall not apply to amounts deposited in the Mortgage Note Account
under Section 4.01(a), [4.01(c),] [or] 4.03(a) [or 4.06] if the
maturity of the related Mortgage Loan has been accelerated pursuant to the
terms of the related Loan Documents. Any amounts referred to in the proviso
contained in the preceding sentence, together with the interest earned thereon,
shall, after such acceleration, be held in the Mortgage Note Account until such
time as they constitute Liquidation Proceeds, at which time the Net Liquidation
Proceeds attributable thereto shall be disposed of as provided in Section
4.05(c)(i);

(b) to transfer to the Certificate Account of each
Pass-Through Trust the amounts required pursuant to Section 3.01 and 3.02
hereof;

(c) to transfer to the Certificate Account of each
Pass-Through Trust as holder of a related Mortgage note, such Mortgage Note's
ratable portion of:

(i) any [related] Net Liquidation
Proceeds,

(ii) any [related] Insurance Proceeds in
[the] [such] Mortgage Note Account, subject to the provisions of the [related]
Lease, and

(iii) any [related] Condemnation Proceeds
in [the] [such] Mortgage Note Account, subject to the provisions of the
[related Lease].

(d) to pay the Trustee and any Pass-Through Trustee for
any unreimbursed Extraordinary Expense Advances required by [the related]
Borrower's default pursuant to the [related] Mortgage Notes or the [related]
Loan Documents and for [such Borrower's ratable portion of] due and unpaid
Trustee's Fees and Pass-Through Trustee's Fees, and to reimburse Trustee and
any Pass-Through Trustee for any expenses, costs and liabilities for which they
are entitled to reimbursement hereunder or under the [related] Mortgage Notes
or the Loan Documents [related to such Borrower's Mortgage Loan]; subsequent to
an Event of Default [with respect to such Borrower's Mortgage Loan] pursuant to
Section 7.01 (except for a Non-Monetary Tenant Default), the Trustee shall have
a prior lien for itself and on behalf of the Pass-Through Trustees, pari passu,
on all moneys in the Mortgage Note Account [with respect to such Mortgage Loan]
for payment or reimbursement of Extraordinary Expense Advances [related to such
Mortgage Loan], [such Borrower's ratable portion of] due and unpaid Trustee's
Fees and Pass-Through Trustee's Fees, and other amounts owed it or a
Pass-Through Trustee and payable by [such] Borrower under any provision of the
[related] Mortgage Notes or the [related] Loan Documents, provided, however,
that so long as (i) no default exists under the [related] Lease Guaranty,
taking into account any grace period provided for therein, or (ii) no direction
has been given by the Pass-Through Trustees pursuant to Section 7.01 hereof and
reflecting direction given to the Pass-Through Trustees by Certificateholders
owning at

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<PAGE> 24
least 66-2/3% of the outstanding principal balance of the Certificates to
exercise rights or remedies under such Mortgage Notes or Loan Documents, the
payments pursuant to Section 4.05(a) and (b) above shall be made by Trustee
free and clear of such lien;

(e) to transfer to the Certificate Account of each
Pass-Through Trustee as holder of a related Mortgage Note, such Mortgage Note's
ratable portion of any balance in such Mortgage Note Account upon the
termination of this Trust Agreement.

[Section 4.06. Capitalized Debt Service Account[s]. The Depositor
(on behalf of each Borrower listed in Exhibit A-4 hereto) hereby
establishes from the proceeds of the related Mortgage Loan [the] [a separate]
Capitalized Debt Service Account with the Trustee. [This] [Each such] account
shall be maintained as a fund separate and distinct from other accounts
[(including other Capitalized Debt Service Accounts)] created under this Trust
Agreement. [The] [Each such] Capitalized Debt Service Account shall remain the
property of the Borrower [on whose behalf such Capitalized Debt Service Account
was established,] subject to the rights of the Trustee under the terms of this
Trust Agreement and the pledge thereof by [such] Borrower pursuant to the
Pledge Agreement to secure [the] [such Borrower's] Mortgage Loan; provided
that, subsequent to the Trustee becoming aware of the occurrence of an Event of
Default [with respect to such Borrower's Mortgage Loan] pursuant to Section
7.01 hereof (except a Non-Monetary Tenant Default), all amounts in the
[related] Capitalized Debt Service Account shall be transferred to the Mortgage
Note Account [related to such Mortgage Loan] and shall be applied in accordance
with Section 4.05 hereof. The Trustee shall cause to be deposited into [the]
[each such] Capitalized Debt Service Account (i) the amount of the Capitalized
Debt Service Reserve received on the Closing Date [with respect to such
Mortgage Loan] and (ii) all amounts received on earnings on or income from (or
losses due from) any investments or reinvestments of [the] [such] Capitalized
Debt Service Reserve in Eligible Investments.

The Trustee shall cause the transfer of funds from [the] [each]
Capitalized Debt Service Account to the Certificate Account of a Pass-Through
Trustee on the dates and in the amounts set forth in the attached Exhibit A-4.
Upon the payment of all of the amounts set forth in Exhibit A-4 [with respect
to the Capitalized Debt Service Account established on behalf of a Borrower],
and provided that no default or Event of Default shall have occurred and be
continuing (except for a Non-Monetary Tenant Default) under any [related]
Mortgage Notes or Loan Documents, Trustee shall disburse to the [related]
Tenant without requisition any amounts remaining in [the] [such] Capitalized
Debt Service Account.]

Section 4.07. Realization Upon Defaulted Mortgage Loan.

(a) If an Event of Default with respect to a Mortgage
Loan has occurred and is continuing and if the Pass-Through Trustees vote
Percentage Interests aggregating not less than 66-2/3% of the related Mortgage
Notes to do so, the Trustee, after

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<PAGE> 25
the Trustee and each Pass-Through Trustee has received indemnity for their
reasonable costs, expenses and liabilities with respect thereto to their
reasonable satisfaction from the Certificateholders in accordance with Section
8.02 (iii) hereof and in accordance with each Pass-Through Trust Agreement,
shall use its best efforts to foreclose upon or otherwise comparably convert
the ownership of such Mortgaged Estate; shall manage, conserve and protect such
Mortgaged Estate for the purposes of its disposition and sale; and shall
dispose of such Mortgaged Estate as promptly as is reasonably possible. Upon
sale or other conveyance of all or any part of such Mortgaged Estate by the
Trustee, the Trust and the Pass-Through Trusts shall have no further right,
title or interest in the Mortgaged Estate, or portion thereof, so sold or
conveyed. Notwithstanding anything herein to the contrary, a default under one
Loan Agreement or the related Loan Documents shall not constitute a default
under any other Loan Agreement or other Loan Documents.

(b) Notwithstanding the foregoing, if the Trustee has
actual knowledge or reasonably believes that all or any part of a Mortgaged
Estate is affected by hazardous or toxic wastes or substances, the Trustee need
not cause the Trust to acquire title to such Mortgaged Estate in a foreclosure
or similar proceeding. In connection with such activities, the Trustee shall
follow such practices and procedures as it shall deem necessary or advisable,
as shall be normal and usual in trustee activities by leading national banking
associations, and, in particular, the Trustee may request such certificates of
appropriate public officials and agencies, if any, a history of such Mortgaged
Estate and its uses, other evidence reasonably satisfactory to the Trustee
showing that such Mortgaged Estate conforms to existing environmental laws,
regulations and rules, and that no conditions exist in, on or beneath the
surface of such Mortgaged Estate that are or might become hazardous materials,
and including but not limited to an environmental report or reports from a
company reasonably satisfactory to Trustee, showing the current state of
storage, disposal or release of any oil, fuels, gases, chemicals, trash,
garbage or other solid wastes or hazardous materials which report or reports
shall be based upon complete and thorough on-site inspections of such Mortgaged
Estate, including but not limited to investigations of the soil, surface water
and groundwater, to confirm the presence or absence of any hazardous materials
on or beneath the surface of such Mortgaged Estate or adjacent lands. Any
expenses incurred by Trustee in connection with obtaining any such certificates
or reports, if not paid by the Borrower, shall be Extraordinary Expense
Advances.

(c) The activities set forth in Section 4.07(a) are also
subject to the proviso that the Trustee may, but shall not be required to
expend its own funds in connection with any foreclosure or towards the
restoration of a Mortgaged Estate if it shall determine that (i) such
restoration or foreclosure will increase the Net Liquidation Proceeds of the
related Mortgage Loan to holders of the related Mortgage Notes after
reimbursement for such

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<PAGE> 26
expenses and (ii) such expenses will be recoverable either through Liquidation
Proceeds or revenues from such Mortgaged Estate.

Section 4.08. Trustee Compensation. The Trustee's Fee shall be paid
pursuant to the terms of the Consent and Agreement[s]. The Trustee, as
compensation for its activities hereunder (other than those covered by the
Trustee's Fee), shall be entitled to receive amounts representing reimbursement
for Extraordinary Expense Advances and reimbursement for certain expenses, as
specified by Sections 3.02, 4.03(c) and 4.05(d).

Section 4.09. Rights of the Pass-Through Trustees. The Trustee shall
afford the Pass-Through Trustees, upon reasonable notice and during normal
business hours, access to all records maintained by the Trustee in respect of
its rights and obligations hereunder and access to officers of the Trustee
responsible for such obligations. Upon request, the Trustee shall furnish the
Pass-Through Trustees with its most recent publicly available financial
statements.

ARTICLE V
ADVANCES BY TRUSTEE

Section 5.01. Advances by Trustee. The Trustee may from time to time
following an Event of Default make such Extraordinary Expense Advances with
respect to the related Mortgage Loan as the Trustee in its sole discretion
deems advisable, provided, however, that it shall not be obligated to make any
such advances unless it is satisfied as to the availability of reimbursement
pursuant to the terms hereof or from the Certificateholders.

ARTICLE VI
THE DEPOSITOR

Section 6.01. Maintaining Corporate Existence of the Depositor. The
Depositor will keep in full effect its existence, rights and franchises as a
corporation, and will obtain and preserve its qualification to do business as a
foreign corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this Trust
Agreement, the Certificates or the Mortgage Notes and to perform its duties
under this Trust Agreement.

The Depositor will not, on or after the date of execution of this Trust
Agreement (i) engage in any business or activities other than those
set forth in Article III of the Certificate of Incorporation of the Depositor,
(ii) incur any indebtedness other than trade payables incurred in the ordinary
course of business, or (iii) amend, or propose to its shareholders for their
consent any amendment of, its Certificate of Incorporation or Bylaws without
giving notice thereof in writing not less than 30 days nor more than 90 days
prior to the date on

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<PAGE> 27
which such amendment is to become effective to Trustee and without first
obtaining the written consent of Trustee.

The Depositor shall not be under any obligation to appear in,
prosecute or defend any legal action which is not incidental to its duties
pursuant to this Trust Agreement and which in its opinion may involve it in any
expense or liability; provided, however, that the Depositor may in its
discretion undertake any such action which it may deem necessary or desirable
with respect to this Trust Agreement and the rights and duties of the parties
hereto and the interests hereunder of the Pass-Through Trustees and the
Certificateholders.

ARTICLE VII
DEFAULT

Section 7.01. Events of Default. The occurrence of any event
constituting an event of default as defined in any Loan Document or any
Mortgage Note shall constitute an Event of Default under this Trust Agreement.
If an Event of Default shall occur and be continuing, then, and in each and
every such case, so long as the Event of Default shall not have been remedied
or waived, the Trustee, at the written direction of the Pass-Through Trustees
voting Percentage Interests aggregating not less than 66-2/3% of the related
Mortgage Notes, shall exercise any rights and remedies that it may have
pursuant to such Mortgage Notes or any [related] Loan Document, as modified by
the provisions of this Trust Agreement, or at law or in equity, including
injunctive relief and specific performance, provided that if as a result of the
occurrence of an Event of Default, the Trustee acquires any property other than
cash, whether pursuant to foreclosure or otherwise, the Trustee shall sell such
property as promptly as is reasonably possible. [A failure to pay with respect
to any Mortgage Note or a default under any Loan Document will not constitute a
default under any unrelated Mortgage Note or under any unrelated Loan Documents
and will not give rise to any right of the Trustee to exercise any remedies
with respect to such unrelated Mortgage Note or unrelated Loan Documents.] The
Trustee will have

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<PAGE> 28
no obligation to take any action or institute, conduct or defend any litigation
under this Trust Agreement at the request, order or direction of the
Pass-Through Trustees unless Holders of Certificates representing not less than
66-2/3% of the Certificate Balance of all Certificates have offered to the
Trustee reasonable indemnity pursuant to Section 8.02(iii) against the costs,
expenses and liabilities which the Trustee may incur. The Trustee shall apply
the proceeds recovered in the enforcement of the rights and remedies under this
Trust Agreement in accordance with the terms of this Trust Agreement.

Section 7.02. Waiver of Defaults. The Trustee, at the written
direction of the Pass-Through Trustees voting Percentage Interests aggregating
not less than 66-2/3% of the related Mortgage Notes, shall waive any default
hereunder or under any Mortgage Note or Loan Document and the consequences of
any such default, except that a default in the making of any required payment
on the Mortgage Notes may only be waived by the affected Pass-Through Trustees.
The Trustee shall have no authority to exercise the right of waiver if, as a
result thereof, this Trust would become taxable as an association within the
meaning of Treasury Regulation Section 301.7701-2 or a Pass-Through Trust would
fail to be characterized as a trust for federal income tax purposes. The
Trustee may rely upon an Opinion of Counsel as set forth in Section 8.02 if it
reasonably believes that such an act may cause the Trust to become taxable as
an association within the meaning of Treasury Regulation Section 301.7701-2 or
cause or a Pass-Through Trust to fail to be characterized as a trust for
federal income tax purposes. Upon any such waiver of a past default, such
default shall cease to exist, and any Event of Default arising therefrom shall
be deemed to have been remedied for every purpose of this Trust Agreement. No
such waiver shall extend to any subsequent Event of Default or impair any right
consequent thereon except to the extent expressly so waived.

Section 7.03. Notification to Pass-Through Trustees. The Trustee
shall notify the Pass-Through Trustees of any Event of Default known to the
Trustee within five (5) Business Days after obtaining knowledge thereof, unless
such Event of Default has been cured or waived before the giving of such
notice.

Section 7.04. Rights of Pass-Through Trustees to Direct Proceedings.
Anything in this Trust Agreement to the contrary notwithstanding, the
Pass-Through Trustees voting Percentage Interests aggregating not less than
66-2/3% of the [affected] Mortgage Notes shall have the right, at any time
during the continuance of an Event of Default, by an instrument or instruments
in writing executed and delivered to the Trustee, to direct the time, place and
method of conducting all proceedings to be taken in connection with the
enforcement of the terms and conditions of the Loan Documents; provided
that such direction shall not be otherwise than in accordance with the
provisions of law and the Loan Documents and provided that Holders of
Certificates representing not less than 66-2/3% of the Certificate Balance of

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<PAGE> 29
all Certificates shall have provided to the Trustee reasonable indemnity
pursuant to Section 8.02 (iii) against the costs, expenses and liabilities
which the Trustee may incur in connection with such proceedings.

Section 7.05. Remedies Cumulative. No remedy given hereunder to the
Trustee or to the Pass-Through Trustees shall be exclusive of any other remedy
or remedies, and each such remedy shall be cumulative and in addition to every
other remedy given hereunder or now or hereafter given by statute, law, equity
or otherwise.

Section 7.06. Trustee Default. In the event of any breach by the
Trustee of its obligations pursuant to this Trust Agreement, the
Certificateholders and the Depositor shall be entitled to exercise all rights
and remedies to which they may be entitled at law or in equity.

Section 7.07. Notice to Tenant[s] [and Kmart]. The Trustee shall
promptly notify the [related] [Tenant and] Kmart of the exercise of any
remedies under this Trust Agreement under any Mortgage Note or under any Loan
Document. Failure to give such notice shall not impair or limit the Trustee's
right to pursue any such remedies or any other right or remedy to which it may
be entitled.

ARTICLE VIII
CONCERNING THE TRUSTEE

Section 8.01. Duties of Trustee. The Trustee, prior to the
occurrence of an Event of Default and after the curing of all Events of
Default which may have occurred, undertakes to perform such duties and only
such duties as are specifically set forth in this Trust Agreement. In case an
Event of Default has occurred (which has not been cured or waived), the Trustee
shall exercise such of the rights and powers vested in it by this Trust
Agreement, and use the same degree of care and skill in their exercise as a
prudent man would exercise or use under the circumstances in the conduct of
such man's own affairs. No permissive rights of the Trustee shall be construed
as a mandatory duty of the Trustee. If the Trustee becomes aware of the
occurrence of any event which, with the giving of notice and, if applicable,
the passage of time without cure, would constitute an event of default as
defined in any Loan Document, the Trustee, if it is an appropriate party (or
an assignee of an appropriate party) to give such notice, is authorized and
directed to give such notice in accordance with such Loan Document.

The Trustee, upon receipt of any resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Trust Agreement, shall examine them to determine whether they
conform to the requirements of this Trust Agreement and if they are deemed to
be deficient, Trustee shall request cure of any such deficiency within a
reasonable period of time for such cure. If such deficiency is not cured to
the satisfaction of Trustee, the Trustee may treat the requirement pursuant to
which such instrument is furnished as not having been satisfied.

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<PAGE> 30
No provision of this Trust Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own misconduct; provided, however, that:

(i) Prior to the occurrence of an Event of Default, and
after the curing or waiver of all such Events of Default which may have
occurred, the duties and obligations of the Trustee shall be determined solely
by the express provisions of this Trust Agreement, the Trustee shall not be
liable except for the performance of such duties and obligations as are
specifically set forth in this Trust Agreement, and, in the absence of bad
faith on the part of the Trustee, the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Trustee and conforming to
the requirements of this Trust Agreement;

(ii) The Trustee shall not be personally liable for an
error of judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts;

(iii) The Trustee shall not be personally liable with
respect to any action taken, suffered or omitted to be taken by it in good
faith in accordance with the direction of Pass-Through Trustees voting
Percentage Interests aggregating not less than 66-2/3% of the [affected]
Mortgage Notes as to the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Trust Agreement; and

(iv) The Trustee shall have no authority to perform any
act which, if consummated, would cause the entity created hereunder to become
taxable as an association within the meaning of Treasury Regulation Section
301.7701-2 or would cause the entity created under any Pass-Through Trust
Agreement to fail to be characterized as a trust for federal income tax
purposes. The Trustee may rely upon an Opinion of Counsel, as set forth in
Section 8.02, if it reasonably believes that such an act may cause the Trust to
become taxable as an association within the meaning of Treasury Regulation
Section 301.7701-2 or would cause a Pass-Through Trust to fail to be
characterized as a trust for federal income tax purposes. Nothing in this
Section 8.01(iv) is intended to prevent the Trustee from exercising any right
or remedy to which it is entitled hereunder or under any Loan Document.

The Trustee shall not be required to expend or risk its own funds
or otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any rights or powers, if there is reasonable
grounds for believing that the repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it.

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<PAGE> 31
Section 8.02. Certain Matters Affecting Trustee. Except as otherwise
provided in Section 8.01:

(i) The Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution, Officers' Certificate,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other
paper or document reasonably believed by it to be genuine and to have been
signed or presented by the proper party or parties;

(ii) The Trustee may consult with counsel, and any
Opinion of Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in good
faith and in accordance with such Opinion of Counsel, provided that any cost
incurred by the Trustee shall be reimbursable only to the extent provided in
Sections 3.02, 4.03(c), 4.05(d) and 4.08 hereof;

(iii) The Trustee shall be under no obligation to exercise
any of the trusts or powers vested in it by this Trust Agreement or to
institute, conduct or defend any litigation hereunder or in relation hereto at
the request, order or direction of any of the Pass-Through Trustees pursuant to
the provisions of this Trust Agreement, unless Certificateholders representing
not less than 66-2/3% of the Certificate Balance of all Certificates shall have
offered to the Trustee reasonable indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby; the right of the Trustee
to perform any discretionary act enumerated in this Trust Agreement shall not
be construed as a duty; and the Trustee shall not be answerable for other than
negligence or willful misconduct in performance of such act. Nothing contained
herein shall, however, relieve the Trustee of the obligation, upon the
occurrence of an Event of Default (which has not been cured or waived), to
exercise such of the rights and powers vested in it by this Trust Agreement,
and to use the same degree of care and skill in their exercise as a prudent man
would exercise or use under the circumstances in the conduct of such man's own
affairs;

(iv) The Trustee shall not be personally liable for any
action taken, suffered or omitted by it in good faith and reasonably believed
by it to be authorized or within the discretion or rights or powers conferred
upon it by this Trust Agreement;

(v) Except with respect to notice of deficient or
missing documents described in Section 2.02, prior to the occurrence of an
Event of Default hereunder and after the curing or waiver of all Events of
Default which may have occurred, the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond or other paper or document, unless requested in writing so to do
by Pass-Through Trustees voting Percentage

27
<PAGE> 32
Interests aggregating not less than 66-2/3% of the [affected] Mortgage Notes;
provided, however, that if the payment within a reasonable time to the Trustee
of the costs, expenses or liabilities likely to be incurred by it in the making
of such investigation is, in the opinion of the Trustee, not reasonably assured
to the Trustee by the security afforded to it by the terms of this Trust
Agreement, the Trustee may require reasonable indemnity against such expense or
liability as a condition to such proceeding. The reasonable expense of every
such investigation shall be paid by the Certificateholders of the Pass-Through
Trusts requesting the investigation; and

(vi) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys.

Section 8.03. Trustee Not Liable for Certificates or Mortgage
Loan[s]. The recitals contained herein, in the Pass-Through Trust Agreements
and in the Certificates shall be taken as the statements of the Depositor and
the Trustee assumes no responsibility for their correctness. The Trustee makes
no representations or warranties as to the validity or sufficiency of this
Trust Agreement (except that this Trust Agreement shall be duly and validly
executed by the Trustee), the Pass-Through Trust Agreements, the Certificates,
the Mortgage Loan[s] or related documents (other than pursuant to Section 2.02
hereof). The Trustee shall not be accountable for the use or application by
the Depositor of any of the Certificates or of the proceeds of such
Certificates, or for the use or application of any funds paid to or at the
direction of the Depositor with respect to the Mortgage Loan[s].

Section 8.05. Trustee's Fee and Expenses. The Trustee shall be
entitled to reasonable compensation (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust) for all services rendered by it in the execution of the trust hereby
created and in the exercise and performance of any of the powers and duties
hereunder of the Trustee, and the Trustee shall be reimbursed for all
reasonable expenses, disbursements and advances incurred or made by the Trustee
in accordance with any of the provisions of this Trust Agreement (including the
reasonable compensation and the expenses and disbursements of its counsel and
of all persons not regularly in its employ), but solely from the Trustee's Fee
and amounts available as provided in Section 3.02 and in the Rental Payment
Account(s) and Mortgage Note Accounts as provided herein. Notwithstanding the
above, no such expense, disbursement or advance shall be reimbursable as may
arise from Trustee's negligence or bad faith.

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<PAGE> 33
Section 8.06. Action by Co-Trustee. At any time or times, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Property may at the time be located or in which any action of the
Trustee may be required to be performed or taken, the Trustee, by an instrument
in writing signed by it, may appoint one or more Persons ("Co-Trustee") to act
as a separate trustee or co-trustee, acting jointly with the Trustee, of all
or any part of such Trust Property, to the full extent that local law makes it
necessary for such separate trustee or separate trustees or co-trustee acting
jointly with the Trustee to act. The Co-Trustee shall act as and be such upon
the following terms and conditions:

(a) Subject to the provisions of Section 8.14, all
rights, powers, duties and obligations conferred or imposed upon the Trustee
shall be conferred or imposed solely upon and solely exercised and performed by
the Trustee except as expressly provided otherwise in this Trust Agreement and
except to the extent that under any law or any jurisdiction in which any
particular act or acts are to be performed, the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations shall be exercised and performed by the Co-Trustee;

(b) No power granted by this Trust Agreement to, or which
this Trust Agreement provides may be exercised by, the Co-Trustee shall be
exercised by the Co-Trustee except jointly with, or with the consent in writing
of, the Trustee, anything contained to the contrary notwithstanding; and

(c) The Co-Trustee may at any time by an instrument in
writing, constitute the Trustee or its successor in trust hereunder its agent
or attorney-in-fact, with full power and authority, to the extent which may be
permitted by law, to do any and all acts and things and exercise any and all
discretion which it is authorized or permitted to do or exercise, for and in
its behalf and in its name.

Section 8.07. Eligibility Requirements for Trustee. The Trust shall
at all times have a Trustee which shall be a corporation organized and doing
business under the laws of a state or the United States of America, authorized
under such laws to exercise corporate trust powers, having (or, in the case of
a corporation included in a bank holding company system, the related bank
holding company shall have) a combined capital and surplus of at least
$50,000,000 in the case of United States Trust Company of New York, and of at
least $100,000,000 in the case of any successor trustee and subject to
supervision or examination by federal or state authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of

29
<PAGE> 34
condition so published. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section 8.08.

Section 8.08. Resignation and Removal of Trustee. The Trustee may at
any time resign and be discharged from the trusts hereby created by giving
written notice thereof to the Depositor and the Pass-Through Trustees for
distribution to the Certificateholders. Upon receiving such notice of
resignation, the Depositor or the Pass-Through Trustees voting Percentage
Interests aggregating not less than 66-2/3% of the Mortgage Notes shall
promptly appoint a successor trustee by written instrument, in duplicate, one
copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor trustee. If no successor trustee shall have been so
appointed and have accepted appointment within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee.

If at any time any of the following events occur:

(a) the Trustee ceases to be eligible in accordance with the
provisions of Section 8.07 and fails to resign after written request therefor
by the Depositor or by a Pass-Through Trustee at the direction of any
Certificateholder who has been a bona fide Certificateholder for at least six
months; or

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

then, in any such case, the Depositor or the Pass-Through Trustees may remove
the Trustee and appoint a successor trustee by written instrument, in
triplicate, one copy of which instrument shall be delivered to the Trustee so
removed one copy to Depositor, and one copy to the successor trustee.

The Pass-Through Trustees voting Percentage Interests aggregating not
less than 66-2/3% of the Mortgage Notes may at any time remove the Trustee and
appoint a successor trustee by written instrument or instruments, in
triplicate, signed by such Pass-Through Trustees, one complete set of which
instruments shall be delivered to the Trustee so removed, one complete set to
Depositor and one complete set to the successor so appointed.

30
<PAGE> 35
Section 8.09. Successor Trustee. Any successor trustee appointed as
provided in Section 8.07 or 8.08 shall execute, acknowledge and deliver to the
Pass-Through Trustees, to the Certificateholders and to its predecessor trustee
an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor trustee shall become effective and
such successor trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor hereunder, with
the same effect as if originally named as trustee herein. The predecessor
trustee shall deliver to the successor trustee the Loan Documents, the Mortgage
File and any other documents and statements held by it hereunder, and the
Depositor and the predecessor trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for more
fully and certainly vesting and confirming in the successor trustee all such
rights, powers, duties and obligations.

No successor trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 8.07.

Upon acceptance of appointment by a successor trustee as provided in
this Section, the Depositor shall mail notice of the succession of such trustee
hereunder to all Holders of Certificates at their addresses as shown in the
Certificate Registers. If the Depositor fails to mail such notice within 10
days after acceptance of appointment by the successor trustee, the successor
trustee shall cause such notice to be mailed at the expense of the Depositor.

Section 8.11. Resignation of Co-Trustee. The Co-Trustee or any of
its successors may resign, and may be discharged of the trusts created by this
Trust Agreement by giving written notice thereof to the Pass-Through Trustees
and to the Trustee.

Such resignation shall take effect immediately upon the acceptance of
appointment by a Person succeeding to the office of the Co-Trustee appointed
by the Trustee.

Section 8.12. Removal of Co-Trustee. The Co-Trustee or any of its
successors may be removed at any time by the Trustee or the Pass-Through
Trustees voting Percentage Interests aggregating not

31
<PAGE> 36
less than 66-2/3% of the Mortgage Notes, by delivery of a notice of such
removal to the Co-Trustee, to the Depositor, and to the Trustee, signed by such
Pass-Through Trustees, and such removal shall be effective upon the date
specified in such notice, and the Co-Trustee's duties and obligations hereunder
shall thereupon cease, except as specified in Section 8.14.

Section 8.14. Succession of Successor to Co-Trustee. Any Person
appointed as a successor to the Co-Trustee shall execute, acknowledge and
deliver to the Pass-Through Trustees, its predecessor, to the Trustee and to
the Depositor, an instrument accepting such appointment hereunder, and
thereupon such Person without any further act, deed or conveyance shall become
vested with all estates, properties, rights, powers, duties and trusts of its
predecessor in the trusts hereunder with like effect as if originally named as
Co-Trustee herein; but nevertheless, on the written request of the Depositor or
Pass-Through Trustees voting Percentage Interests aggregating not less than
66-2/3% of the Mortgage Notes or of the Trustee or of the new Co-Trustee, the
predecessor shall execute and deliver an instrument transferring to the new
Co-Trustee, upon the trusts expressed in this Trust Agreement, all the estates,
properties, rights, powers and trusts granted to it by this Trust Agreement and
shall duly assign, transfer, deliver and pay over to the new Co-Trustee any
property and money subject to the lien of this Trust Agreement held by such
predecessor. Should any instrument in writing from the Depositor or from the
Pass-Through Trustees voting Percentage Interests aggregating not less than
66-2/3% of the Mortgage Notes or from the Trustee be required by any person who
becomes the Co-Trustee for more fully and certainly vesting in and confirming
to such Co-Trustee such estates, properties, rights, powers and trusts, then,
on request, any and all such instruments in writing shall be made, executed,
acknowledged and delivered by the Depositor and/or the Trustee.

Any Co-Trustee which has resigned or been removed shall nevertheless
retain all rights of indemnity granted hereunder.

ARTICLE IX
TERMINATION

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<PAGE> 37
Loan[s] including the disposition of all property acquired upon foreclosure or
deed in lieu of foreclosure of [the] [any] Mortgage Loan and the remittance of
all funds due hereunder; provided, however, that in no event shall the Trust
continue beyond the expiration of 21 years from the death of the last survivor
of the descendants of Joseph P. Kennedy, the late ambassador of the United
States to the Court of St. James, living on the date hereof. Upon final
payment on the Mortgage Notes, the Trustee shall obtain from the Pass-Through
Trustees the Mortgage Notes for cancellation.

ARTICLE X
SUPPLEMENTS AND AMENDMENTS TO THIS
TRUST AGREEMENT AND OTHER DOCUMENTS;
ADDITIONAL AGREEMENTS OF TRUSTEE

Section 10.01. Supplemental Trust Agreement Without Consent of
Pass-Through Trustees. The Depositor and the Trustee, at any time and from
time to time, with the consent of Kmart (which shall not be unreasonably
withheld or delayed) but without the consent of the Pass-Through Trustees or
Certificateholders, may enter into one or more trust agreements supplemental
hereto for one or more of the following purposes:

(a) to evidence the succession of another Person to the
Depositor, or successive successions, and the assumption by the
successor of the covenants, agreements and obligations of the
Depositor herein;

(b) to add any covenants, restrictions, conditions or
provisions with respect to the Depositor as the Trustee shall consider
to be for the protection of the Pass-Through Trustees and the
Certificateholders;

(c) to surrender any rights or power conferred herein upon
the Depositor herein or to add to the rights of the Pass-Through
Trustees for the benefit of the Certificateholders;

(d) to correct or amplify the description of any property at
any time that constitutes Trust Property or better to assure, convey
and confirm unto the Trustee any such property to be included in any
such Trust Property, or to acknowledge any change relating to title to
the Mortgaged Estate which does not materially adversely affect the
rights of the Certificateholders;

(e) to evidence and provide for the acceptance and
appointment hereunder of a successor trustee and to add to or change
any of the provisions hereof as may be necessary to provide for
or facilitate the administration of the Trust by more than one
trustee pursuant to Section 8.14; or

(f) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other

33
<PAGE> 38
provision herein, or to make any other provisions with respect to
matters or questions arising under this Trust Agreement, provided that
such action pursuant to this Section 10.01(f) shall not materially
adversely affect the Pass-Through Trustees or the Certificateholders;

provided that no such supplemental agreement shall cause the Trust to become
taxable as an association within the meaning of Treasury Regulation Section
301.7701-2 or cause a Pass-Through Trust to fail to be characterized as a trust
for federal income tax purposes.

Section 10.02. Supplemental Agreements With Consent of Pass-Through
Trustees. With the consent of the Pass-Through Trustees voting Percentage
Interests of not less than 66-2/3% of the Mortgage Notes, the Depositor and the
Trustee may, from time to time and at any time, enter into an agreement or
agreements supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Trust
Agreement or of any agreements supplemental hereto or of modifying in any
manner the rights of the Pass-Through Trustees and the Certificateholders;
provided, however, that no such supplemental agreement shall cause the Trust to
become taxable as an association within the meaning of Treasury Regulation
Section 301.7701-2 or cause a Pass-Through Trust to fail to be characterized as
a trust for federal income tax purposes; and provided further that, except as
expressly permitted under the terms of this Trust Agreement, without the
consent of each Certificateholder affected thereby and, with respect to (b) and
(unless there is a monetary default under the [related] Lease) (c) below,
Kmart, no such amendment of or supplement to this Trust Agreement or
modification of the terms of, or consent under, any thereof, shall

(a) modify any of the provisions of Section 7.03 or this
Section 10.02, or the definition of "Pass-Through Trust," "Pass-
Through Trustee," or "Certificateholder" as set forth in Article I
hereof;

(b) modify the definition of "Percentage Interest" as set
forth in Article I hereof or reduce the Percentage Interest vote that
is required for any such supplement to this Trust Agreement, or the
consent required from the Pass-Through Trustees for any waiver
provided for in this Trust Agreement;

34
<PAGE> 39
(c) reduce the amount or extend the time of payment of any
amount owing or payable under the Mortgage Notes;

(d) impair the right of any Pass-Through Trustee or
Certificateholder to commence legal proceedings to enforce a right to
receive payment on a Mortgage Note; or

(e) create or permit the creation of any lien on the Trust
Property or any part thereof [(other than the Second Mortgage and the
Option Agreement)], or deprive any Certificateholder of the benefit of
this Trust Agreement, whether by disposition of such Trust Property or
otherwise.

Upon the request of the Depositor and upon the filing with the Trustee
of evidence of the vote of the Pass-Through Trustees, and the consent of the
Certificateholders and Kmart, if applicable, required under this Section, the
Trustee shall join with the Depositor in the execution of such supplemental
agreement unless such supplemental agreement affects the Trustee's own rights,
duties or immunities under this Trust Agreement or otherwise, in which case the
Trustee may in its discretion, but shall not be obligated to, enter into such
supplemental agreement.

It shall not be necessary for the vote of the Pass-Through Trustees
under this Section to approve the particular form of any proposed supplemental
agreement, and it shall be sufficient if such consent shall approve the
substance thereof. Kmart shall be entitled to receive a copy of the form of
proposed supplemental agreement.

Promptly after the execution by the Depositor and the Trustee of any
supplemental agreement pursuant to the provisions of this Section, the Trustee
shall deliver a notice to the Pass-Through Trustees for distribution to the
Certificateholders, which notice shall set forth in general terms the substance
of such supplemental agreement. Any failure of the Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental agreement.

Section 10.03. Effect of Supplemental Agreement. Upon the execution
of any supplemental agreement pursuant to the provisions hereof, this Trust
Agreement shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations, duties
and immunities under this Trust Agreement of the Trustee, the Depositor, the
Pass-Through Trustees and the Certificateholders shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental agreement shall be and be deemed to be part of the terms and
conditions of this Trust Agreement for any and all purposes. The Trustee shall
deliver to Kmart a true and correct copy of the final form of supplemental
agreement as executed by the Depositor and the Trustee.

35
<PAGE> 40
Section 10.04. Documents to Be Given to Trustee. The Trustee,
subject to the provisions of Sections 8.02, may receive an Officer's
Certificate and an Opinion of Counsel as conclusive evidence that any such
supplemental agreement complies with the applicable provisions of this Trust
Agreement.

Section 10.05. Granting of Easements. The Trustee, at the direction
of [the] [a] Tenant and the [related] Borrower, may grant, release, modify or
amend easements, licenses, rights-of-way, dedications and other rights or
privileges in the nature of easements with respect to the [related] Mortgaged
Estate, which the Trustee determines do not materially adversely affect the
security of the Trust Property. The Trustee shall, upon request of [such]
Tenant, certify that the rights or privileges so granted or released are no
longer part of the Trust Property for purposes of this Trust Agreement.

ARTICLE XI
MISCELLANEOUS PROVISIONS

Section 11.02. Recordation of Agreement. To the extent required by
applicable law, this Trust Agreement is subject to recordation in appropriate
public offices for real property records in the county or other comparable
jurisdiction in which [the] [each] Mortgaged Estate is situated, and in any
other appropriate public recording office or elsewhere, such recordation to be
effected by the Trustee accompanied by an Opinion of Counsel to the effect that
such recordation materially and beneficially affects the interests of the
Pass-Through Trusts and Certificateholders or is necessary in connection with
the [related] Mortgage Loan.

Section 11.03. Duration of Agreement. This Trust Agreement shall
continue in existence and effect until terminated as herein provided.

SECTION 11.04. GOVERNING LAW. THIS TRUST AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO THE CHOICE OF LAW PRINCIPLES THEREOF AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.

Section 11.05. Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to

36
<PAGE> 41
have been duly given if personally delivered at or mailed by first class or
registered mail, postage prepaid, to (i) in the case of the Depositor,
National Tenant Finance Corporation, 40 North Central Avenue, Suite 2700,
Phoenix, Arizona 85004-4441, Attention: Norman C. Storey, and (ii) in the case
of the Trustee or a Pass-Through Trustee, United States Trust Company of New
York, c/o U.S. Trust Company of California, N.A., Suite 2700, 555 South Flower
Street, Los Angeles California 90071 Attention: Corporate Trust Division, or
such other addresses as such Persons may hereafter designate. Any notice
required or permitted to be mailed to a Certificateholder shall be given by
registered mail, postage prepaid, or by express delivery service, at the
address of such Certificateholder as shown in the related Certificate Register.
A copy of each notice of an Event of Default and all other notices or
communications hereunder, including the text of any proposed or final amendment
or supplement to this Trust Agreement, given by or to the Certificateholders,
the Trustee or the Depositor shall be contemporaneously transmitted to Kmart,
3100 West Big Beaver Road, Troy, Michigan 48084, Attention: Vice President -
Real Estate, or to such other address as Kmart may have designated by written
notice to the Trustee. The provisions of the foregoing sentence are for the
express benefit of Kmart, shall be enforceable by it, and may not be modified
or eliminated without its consent.

Section 11.06. Counterparts. For the purpose of facilitating the
recordation of this Trust Agreement as herein provided and for other purposes,
this Trust Agreement may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an original, but
all of which together shall constitute one and the same instrument.

Section 11.07. Submission to Jurisdiction. Each party hereto hereby
consents to the jurisdiction of any state or federal court located within the
County of New York, State of New York and irrevocably agrees that all actions
or proceedings relating to this Trust Agreement may be litigated in such courts
and each such party waives any objection which it may have based on improper
venue or forum non conveniens to the conduct of any proceeding in any such
court, waives personal service of any and all process upon it and consents that
all such service or process be made by registered or certified mail (return
receipt requested) or messengered to it at its address set forth in Section
11.08 or to its Agent referred to below at such Agent's address set forth below
and that service so made shall be deemed to be completed in accordance with
Section 11.08. Each party hereto hereby appoints the Prentice Hall Corporation
System, Inc., with an office on the date hereof at 15 Columbus Circle, New
York, New York 11023 as its Agent for the purpose of accepting service of any
process within the State of New York and shall execute any confirmation thereof
requested by the other party hereto. Nothing in this Section shall affect the
right of any party hereto to serve legal process in any other manner permitted
by law to bring any action or proceeding in the courts of any jurisdiction
against the other party or to enforce a judgment obtained in the courts of any
other jurisdiction.

37
<PAGE> 42
Section 11.08. Gender; Number. All pronouns and any variations
thereof shall be deemed to refer to the masculine, feminine, neuter, singular
or plural, as the context shall require.

Section 11.09. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Depositor to the Trustee to take any
action under this Trust Agreement, the Depositor shall furnish to the Trustee:

(b) an Opinion of Counsel stating that, in the opinion of such
counsel all such conditions precedent have been complied with.

Section 11.10. Statements Required in Certificate or Opinion. Each
Officers' Certificate and Opinion of Counsel with respect to compliance with a
covenant or condition provided for in this Trust Agreement shall include:

(a) a statement that each Person making such Officers' Certificate
or Opinion of Counsel has read such covenant or condition;

(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such Officers' Certificate or Opinion of Counsel are based;

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

(d) a statement that, in the opinion of such Person, such covenant
or condition has been complied with; provided, however, that with respect to
matters of fact, an Opinion of Counsel may rely on an Officers' Certificate or
certificates of public officials.

Section 11.11. Benefits of Trust Agreement. Nothing in this Trust
Agreement express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, the Pass-Through Trustees and the
Certificateholders, any benefit or any legal or equitable right, remedy or
claim under this Trust Agreement.

38
<PAGE> 43
IN WITNESS WHEREOF, the Depositor and the Trustee have caused their
names to be signed hereto by their respective officers thereunto duly
authorized as of the day and year first above written.

NATIONAL TENANT FINANCE CORPORATION, a
Delaware corporation

By_______________________________
Name_____________________________
Title____________________________

UNITED STATES TRUST COMPANY OF NEW YORK, a
New York banking corporation

By_______________________________
Name_____________________________
Title____________________________

39
<PAGE> 44
STATE OF _______________ ]
] ss.
CITY OF ________________ ]

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year first above written.

[NOTARIAL SEAL]
_______________________________
Notary Public

My Commission Expires:

______________________

STATE OF _______________ ]
] ss.
CITY OF ________________ ]

On the ____ day of _________, 199_ before me, a Notary Public in
and for said State, personally appeared ______________, personally known to me
(or proved to me on the basis of satisfactory evidence) to be the person who
executed the within instrument as to be a ______________ on behalf of UNITED
STATES TRUST COMPANY OF NEW YORK, a New York banking corporation, and
acknowledged to me that such association executed the within instrument
pursuant to its Bylaws or a resolution of its Board of Directors.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year first above written.

[NOTARIAL SEAL]
_______________________________
Notary Public

My Commission Expires:

______________________

<PAGE> 45
EXHIBIT A-1
MORTGAGE NOTE SCHEDULE

<TABLE>
<S> <C> <C> <C>
(i) Borrower Name -

(ii) Mortgaged Estate - See Exhibit A attached
hereto

(iii) Maturity Date - _____ __, 20__

(iv) Rate - ____%

(v) First Due Date - ________ __, 199_

(vi) Mortgage Payments - See Exhibit B attached
hereto

(vii) Original Principal
Balance of Mortgage
Note - $_______________
</TABLE>

<PAGE> 46
EXHIBIT A-3
CONTENTS OF MORTGAGE FILE

With respect to the Mortgage Loan, the Mortgage File shall
include each of the following items:

<PAGE> 47
EXHIBIT A-4
CAPITALIZED DEBT SERVICE ACCOUNT SCHEDULE

<TABLE>
<S> <C> <C> <C>
(i) Borrower Name -

(ii) Tenant Name -

(iii) Payments:

Date Amount
---- ------

$
</TABLE>

<PAGE> 48
EXHIBIT C
FORM OF TRUSTEE CERTIFICATION

_______ __, 199_

National Tenant Finance Corporation
40 North Central Avenue
Suite 2700
Phoenix, Arizona 85004-4441

Re: Collateral Trust Agreement ("Trust Agreement") dated as of
_______ __, 1994 by and between National Tenant Finance
Corporation, as Depositor, and United States Trust Company
of New York as Trustee, Mortgage Pass-Through Certificates
(____________________) Series 199_-_ and Series 199_-_

Gentlemen:

In accordance with Section 2.02 of the Trust Agreement, the
undersigned, as Trustee, hereby certifies that, as to the Mortgage Notes listed
in the Mortgage Note Schedule, it has reviewed the related Loan Documents and
the Mortgage Note Schedule and has determined that:

(i) All Loan Documents required to be delivered to the Trustee
pursuant to Section 2.01 of the Trust Agreement are in its possession;
and

(ii) Such documents have been reviewed by it and such documents
do not contain any omissions, defects or irregularities within the
meaning of Sections 2.01 or 2.02 of the Trust Agreement.

The Trustee further certifies that, as to the Mortgage Loan[s], the
Trustee has no notice or knowledge (a) of any claims, liens or encumbrances on
the Mortgage Notes adverse to the Pass-Through Trustees, (b) that the Mortgage
Notes were overdue or have been dishonored, (c) of evidence on the face of the
Mortgage of any security interest or other right or interest therein or in the
Mortgage Notes, or (d) of any defense against or claim to the Mortgage Notes by
any other party.

The Trustee has made no independent examination of any Loan Documents
beyond the review specifically required in the Trust Agreement. The Trustee
makes no representations or warranties as to the validity, legality,
sufficiency, enforceability or genuineness of any of the Loan Documents
(other than the statements made herein) or the collectibility, insurability,
effectiveness or suitability of the Mortgage Loan[s].

C-1
<PAGE> 49
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Trust Agreement.

UNITED STATES TRUST COMPANY OF
NEW YORK

By_____________________________
Name___________________________
Title__________________________

C-2

<PAGE> 1
EXHIBIT 4.14

4/22/94
NOTE PUT AGREEMENT

THIS NOTE PUT AGREEMENT ("Agreement") is made as of the ___ day of
_______, 19__, by and [among] [between] KMART CORPORATION [("Kmart")]
["Tenant"], a Michigan corporation, [__________________ ("Tenant"), a _______
corporation,] and NATIONAL TENANT FINANCE CORPORATION ("Lender"), a Delaware
corporation, each of which confirms and agrees as follows:

SECTION 1: RECITALS

1.1 Loan. Pursuant to the Loan Agreement ("Loan Agreement") dated as
of even date herewith, between Lender and _________ _________("Borrower"), a
___________ limited [partnership] [liability company], Lender has agreed to
make Borrower the Loan, to be evidenced by the Note[s]. The proceeds of the
Loan will be used pursuant to the Loan Agreement to finance the acquisition,
construction or development of the Demised Premises. As a material inducement
to Lender to make the Loan, Tenant, as the Tenant of the Demised Premises
pursuant to the Lease, [and Kmart, as the Guarantor of the Lease pursuant to the
Lease Guaranty Agreement, have each] [has] agreed to enter into this Agreement.

1.2 Terms; Governing Document. All capitalized terms used herein,
unless otherwise expressly provided, shall have the meaning set forth in the
Loan Agreement. In the event of any conflict between the terms and provisions
of this Agreement and the Loan Agreement, the terms and conditions of this
Agreement shall govern and prevail.

SECTION 2: PURCHASE OF NOTE

2.1 Certain Additional Definitions. For purposes of this Section 2,
the following terms shall have the following meanings:

"Business Day" means any day other than (i) Saturday or Sunday,
or (ii) a day on which banks in New York are required by law to be closed or
are customarily closed.

"Called Principal" means the unpaid principal balance of the
Note[s] to be paid as part of the Purchase Price upon exercise of the Put.

"Called Principal Percentage" means the percentage shown on
Exhibit "A" for each corresponding year during the term hereof as designated on
such Exhibit.

"Certificate Balance" shall have the meaning assigned to it in
the Trust Agreement.

"Certificates" shall have the meaning assigned to it in Section
3.2.

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"Completion Date" means the second anniversary of the date of
the Note or Notes with respect to which the Put is exercised.

"Completion of Construction" shall have the meaning assigned to
it in Section 8.1 of the Loan Agreement.

"Consent and Agreement" means the Consent and Agreement dated as
of even date herewith among [Kmart,] Lender, Borrower, Tenant and Trustee
relating to the Lease, [Lease Guaranty,] this Agreement and certain other
related matters.

"Demised Premises" shall have the meaning assigned to it in the
Lease pursuant to which the Tenant is a Tenant.

"Discounted Prepayment Value" means, with respect to any amount
of Called Principal, the amount obtained by (i) discounting all Remaining
Scheduled Payments with respect to such Called Principal from their respective
scheduled due dates to the Purchase Date with respect to such Called Principal,
in accordance with generally accepted financial practice and at a discount
factor (applied on a semiannual basis) equal to the Reinvestment Yield and (ii)
adding together such discounted Remaining Scheduled Payments.

"Facility" means the Demised Premises.

"Failure of Completion" means Completion of Construction of the
Facility does not occur on or before the Completion Date.

["Indemnity Agreement" means the Indemnity Agreement dated as of
even date herewith by and between Kmart and Lender, executed by Kmart to induce
Lender to accept the Lease Guaranty in the form offered by Kmart.]

["Investment Grade Status" shall have the meaning assigned to it
in the Lease Guaranty.]

["Kmart Purchase Date" means the Business Day first occurring
fifteen (15) Business Days after Lender or the Trustee gives the Tenant
Default Notice to Kmart and Tenant.]

"Lease" means the Lease executed by Tenant described in Exhibit
1.1C to the Loan Agreement.

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["Lease Guaranty" means that certain Lease Guaranty Agreement,
described in Exhibit 1.1C to the Loan Agreement, executed by Kmart which
guarantees the payment and performance of the Tenant under the Lease.]

["Lease Guaranty Termination" means the occurrence of a
Termination Event pursuant to the terms of the Lease Guaranty with respect to
which a Termination Notice is given by Kmart or Tenant pursuant to Section
5(b) of the Lease Guaranty. ]

"Lease[/Lease Guaranty] Default" means: [(i)] with respect to
the Lease [and Lease Guaranty] described in Exhibit 1.1C to the Loan Agreement,
the failure of (x) the Tenant under the Lease to pay when due any Annual Rental
or Additional Rent as defined in the Lease due under such Lease for a period of
[ten (10)] [thirty (30)] days after notice to the Tenant of such default [and
(y) Kmart to pay any such Annual Rental or Additional Rent pursuant to the
terms of an existing related Lease Guaranty, if any, within thirty (30) days
after notice to Kmart of the Tenant's initial failure to do so; provided that,
the notices required pursuant to clause (x) and clause (y) may be given
concurrently, and,] provided [further] that, no notice referred to in the
foregoing clause [(x) or clause (y)] shall be required in the event that
Landlord or Trustee shall be stayed or prohibited by operation of law or
otherwise from the giving of such notice[, and, (ii) with respect to the
Indemnity Agreement, the occurrence of an Event of Default (as defined therein)
which continues beyond the expiration of any applicable cure period].

"Lender" means National Tenant Finance Corporation, a Delaware
corporation, and any of its successors and assigns.

"Make-Whole Premium" means, with respect to any amount of Called
Principal, an amount equal to the sum of (x) the positive excess, if any, as of
the Purchase Date of the Discounted Prepayment Value of the Called Principal
over such Called Principal and (y) an amount equal to the product of the
Called Principal multiplied by the Called Principal Percentage.

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"Maturity Date" means ___________, 20__.

"Note" or "Notes" means the Note or Notes issued pursuant to the
Loan Agreement and designated as Note Number _______ [and ________] and any
replacement therefor pursuant to the Loan Agreement.

"Purchase Date" means Tenant Purchase Date [or Kmart Purchase
Date, as applicable].

"Pass-Through Trustees" shall have the meaning assigned to it in
the Loan Agreement.

"Purchase Price" means the sum of the unpaid principal
balance of the Note or Notes, accrued interest thereon to the relevant
Purchase Date plus [(i) if the Triggering Event is a Lease [/Lease Guaranty]
Default or a Failure of Completion,] the Make-Whole Premium [ ,or, (ii) if the
Triggering Event is a Lease Guaranty Termination, the lesser of the
Termination Premium or the Make-Whole Premium]. In the event the unpaid
principal balance of the Note or Notes, accrued interest thereon to the
applicable Purchase Date or Make-Whole Premium are released, discharged,
impaired or modified in the manner contemplated by Section 3.2(vii), the
Purchase Price shall be calculated without giving effect to any such release,
discharge, impairment or modification.

"Purchaser shall have the meaning assigned to it in Section
2.2(d).

"Put" means exercise of the right of Lender or the Trustee to
require the Tenant to purchase the Note or Notes pursuant to Section 2.2 of
this Agreement [,and, in the event of the Tenant's failure to do so, to require
Kmart to purchase the Note or Notes pursuant to Section 2.2 of this Agreement].

"Put Notice" means the notice given by the Lender or the
Trustee pursuant to Section 2.2(c) of its election to exercise the Put.

"Reinvestment Yield" means with respect to the Called Principal,
the sum of (x) the yield to maturity implied by the following: (i) the yields
reported as of 10:00 a.m. (New York City time) on the third Business Day
preceding the Purchase Date with respect to such Called Principal, on the
display designated as "Page 678" on the Telerate Service (or such other display
as may replace Page 678 on the Telerate Service) for actively traded U.S.
Treasury securities having a maturity equal (as near as practicable) to the
Remaining Average Life of the Called Principal being paid or prepaid as of such
Purchase Date, or (ii) if such yields shall not be reported as of such time or
the yields reported as of such time shall not be ascertainable, the Treasury
Constant Maturity Series yields reported, for the latest day for which such
yields shall have been so reported as of the third Business Day preceding the
Purchase Date with respect to such Called Principal, in Federal Reserve
Statistical Release H.15 (519) (or any comparable successor publication) for
actively traded U.S. Treasury securities having a constant maturity equal (as
near as practicable) to the Remaining Average Life of the Called Principal
being paid or prepaid as of such Purchase Date, and (y) fifty (50) basis
points. Such implied yield shall be determined, if necessary, by (a)
converting U.S. Treasury bill quotations to bond-equivalent yields in
accordance with accepted financial practice and (b) interpolating linearly
between reported yields.

"Remaining Average Life" means, with respect to Called Principal
of [the] [a] Note, the number of years (calculated

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to the nearest one-twelfth year) obtained by dividing (i) such Called Principal
into (ii) the sum of the products obtained by multiplying (a) each Remaining
Scheduled Payment of such Called Principal (but not of the interest thereon) by
(b) the number of years (calculated to the nearest one-twelfth year) which will
elapse between the Purchase Date with respect to such Called Principal and the
scheduled due date of such Remaining Scheduled Payment.

"Remaining Scheduled Payments" means, with respect to Called
Principal, all payments of such Called Principal and interest thereon that
would be due on or after the Purchase Date with respect to such Called
Principal if no payment of such Called Principal were made prior to __________,
____, its expressed maturity date.

["Tenant Default Notice" means the notice given by Lender or the
trustee to Kmart and Tenant in the event Tenant fails to purchase the Note on
the teanant Purchase Date.]

"Termination Notice" shall have the meaning assigned in Section
5(b) of the Lease Guaranty.

"Tenant Purchase Date" means the Business Day first occurring
fifteen (15) Business Days after Lender or the Trustee gives the Put Notice to
[Kmart and] Tenant.

["Termination Premium" means the greater of (A) the difference
between the unpaid principal balance of the Note or Notes and the Certificate
Balance with respect to the Certificates, or, (B) the Amount equal to (i) the
product of the unpaid principal balance of the Note or Notes multiplied by the
following factors: (v) prior to the first anniversary of the date of the Note
or Notes __, (w) on or after the first anniversary of the Note of the Note
or Notes but before the second anniversary thereof __, (x) on or after the
second anniverary of the date of the Note or Notes but before the third
anniversary thereof __, (y) on or after the third anniversary of the date of
the Note or Notes but before the fourth anniversary thereof __, or, (z) on or
after the fourth anniversary of the date of the Note or Notes but before the
Maturity Date __; less (ii) the unpaid principal balance of the Note or Notes.]

"Triggering Event" means (i) a Lease [/Lease Guaranty] Default,
[or] (ii) a Failure of Completion [, or (iii) a Lease Guaranty Termination].

"Trust Agreement" shall have the meaning assigned to it in
the Loan Agreement.

"Trustee" shall have the meaning assigned in Section 3.2.

2.2 Purchase of Note Following a Triggering Event.

(a) If a Triggering Event occurs, Trustee will have the right
to require Tenant to purchase the Note or Notes in whole but not in part on
the Tenant Purchase Date at the Purchase Price [and, in the event of the
Tenant's failure to do so, the right to require Kmart to purchase the Note or
Notes in whole but not in part on the Kmart Purchase Date at the Purchase
Price].

(b) If a Triggering Event occurs without a purchase of the Note
or Notes pursuant to Section 2.2(a), and subsequent to such Triggering Event
another Triggering Event occurs, Lender will again have the rights, and Tenant
[and Kmart] again will have the obligations, set forth in this Section 2.2.
[Kmart's and] Tenant's obligations shall continue pursuant to this Agreement so
long as the Note or Notes remain[s] outstanding.

(c) In the event Trustee elects to exercise the Put, Lender or
Trustee shall do so by causing a notice to be mailed to Kmart and Tenant ("Put
Notice"), which Put Notice shall state (i) the occurrence of a Triggering
Event, (ii) the Tenant Purchase Date, (iii) the estimated Purchase Price, (iv)
the manner in which the Purchase Price has been determined, and (v) that Lender
elects to have Tenant purchase the Note or Notes on the Tenant Purchase Date
[or, in the event of Tenant's failure to do so, to have Kmart purchase the Note
on the Kmart Purchase Date.] Upon receipt of the Put Notice, Tenant shall
purchase the Note or Notes in accordance

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with the provisions of this Agreement on the Tenant Purchase Date [and, in the
event the Tenant fails to purchase the Note or Notes as required by this
Agreement, upon receipt of the Tenant Default Notice Kmart shall purchase the
Note or Notes on the Kmart Purchase Date in accordance with the provisions of
this Agreement.] Tenant [or Kmart] shall not be excused from any obligation
either may have under this Agreement by reason of any notice required hereunder
not being timely given or being defective, provided, however, [Kmart's and]
Tenant's time for performance shall be extended by a period equal to any
period of delay in receiving such notice or caused by the correction of such
notice, if defective.

(d) In connection with the purchase of the Note or Notes
pursuant to this Section 2.2, (i) Lender or [the Series A Pass-Through Trustee
or the Series B Pass-Through] Trustee, as appropriate, shall, on or before the
Tenant Purchase Date, duly endorse the Note or Notes in blank without recourse
or assign the Note or Notes in blank without recourse and assign in blank
without recourse all right, title and interest of Lender under the Loan
Documents; and (ii) Tenant shall on or before 2:00 p.m. (New York City time)
on the Tenant Purchase Date, [or, in the event of Tenant's failure to do so,
Kmart shall, on or before 2:00 p.m. (New York City time) on the Kmart Purchase
Date,] pay the Purchase Price to Trustee, by wire transfer of immediately
available funds in lawful currency of the United States of America at
___________, ABA #__________ for credit to Account Number __________ (Mortgage
Pass-Through Certificates (___________________________) Series ____). The
Trustee shall hold the Note or Notes until payment in full of the Purchase
Price to the Trustee and shall then and thereupon surrender the Note or Notes,
the Loan Documents and the assignments thereof to [whichever of] Tenant [or
Kmart is the purchaser] ("Purchaser") and has paid such Purchase Price. In
addition, Trustee [and the Pass-Through Trustees] shall execute and deliver to
the Tenant, on or before the Tenant Purchase Date, [or to Kmart, if Kmart is the
Purchaser, on or before the Kmart Purchase Date], such other documents as may be
reasonably required by the Purchaser and/or the Title Company in order to
permit the Title Company to ensure valid transfer of the interest of the
Trustee [and the Pass-Through Trustees] in the Note and/or the Loan Documents
to the Purchaser as required herein.

SECTION 3. SUCCESSORS AND ASSIGNS

3.1 General. This Agreement shall be binding upon [Kmart,] Tenant
and [their] [its] respective successors and assigns; provided that [Kmart and]
Tenant shall not delegate any of [their] [its] respective obligations hereunder
without the prior written consent of Trustee; and, provided further that, no
delegation of any of such obligations hereunder shall relieve [Kmart or] Tenant
thereof, and the party so delegating such obligation shall remain primarily and
originally liable thereon. Each successive holder or holders of the Note[s]
shall have all rights and privileges of [the Pass-Through] Trustee[s] hereunder.

3.2 Consent to Assignment. [Kmart and] Tenant [each] hereby
acknowledges and consents to the sale, conveyance, transfer

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and absolute assignment by Lender of all of its right, title and
interest under this Agreement, [in the Note or Notes] and any and all
Loan Documents to _________________________________ ("Trustee") as Trustee,
pursuant to the [Collateral] Trust Agreement [with respect to this Agreement
and the other Loan Documents] under which the Trustee holds the foregoing for
the benefit of the Pass-through Trustees (as defined below) as holders of the
Notes. [Kmart and] Tenant [each] hereby acknowledges and consents to the sale,
conveyance, transfer and absolute assignment by Lender of all of its right,
title and interest in the Notes to the Pass-Through Trustees pursuant to the
Series A Pass-Through Trust Agreement [and the Series B Pass-Through Trust
Agreement] under which the Mortgage Pass-Through Certificates
(___________________________________________) Series ____ [and Series ___]
("Certificates") will be issued. Upon such sale, conveyance, transfer and
absolute assignment to Trustee [and to the Pass-through Trustees], Trustee
shall be deemed to be Lender hereunder and shall succeed to all rights and
obligations of Lender hereunder. Trustee shall have the sole right to exercise
all rights, privileges and remedies (either in its own name[,] or in the name
of the Lender for the use and benefit of Trustee [or in the name of or for and
on behalf of the Pass-Through Trustees for the use and benefit of such
Pass-Through Trustees.]) which by the terms of this Agreement or by applicable
law are permitted or provided to be exercised by the Lender. [Kmart and] Tenant
[each] further acknowledges and agrees that each successive holder or holders of
the Note or Notes, including but not limited to Lender, accepts transfer of the
Note or Notes in reliance upon [Kmart's and] Tenant's representations,
warranties, covenants, agreements and other obligations hereunder. In order to
further induce any such successive holder or holders of the Note or Notes,
including but not limited to, Lender, to accept such assignment and its
obligations under this Agreement, [Kmart and] Tenant [each] hereby makes the
following representations, warranties, covenants and agreements:

(i) [neither Kmart nor] Tenant has [no] [any] right, including
any claim, counterclaim, right of setoff or deduction or other defense of any
kind (including but not limited to any defenses available to a surety or
guarantor) to withhold performance of its obligations hereunder (collectively,
"Put Defenses"),

(ii) in the event [Kmart or] Tenant becomes aware of any Put
Defenses, [Kmart and] Tenant [each] hereby waives and agrees not to assert the
same against the Trustee, [the Pass-Through Trustees] or any other holder of
the Note[s], provided that nothing herein shall (i) prevent Tenant or Kmart
from asserting, as a Put Defense, that a Triggering event has not occurred, or
that a Trustee has failed to comply with the requirements hereof or of a Trust
Agreement in connection with the exercise of its right hereunder, or that a
Trustee has otherwise violated the provisions hereof or of a Trust Agreement to
the extent such violation constitutes a Put Defense, or (ii) prevent Tenant or
Kmart from contesting a Trustee's computation of the Purchase Price;

(iii) upon consummation of the sale, conveyance, transfer and
absolute assignment to Trustee [and to the Pass-Through Trustees], [Kmart and]
Tenant [each] waives any right to challenge the status of [the Pass-Through]
Trustee[s] as [a] bonafide purchaser[s] of the Note[s] for value and holder[s]
in due course [or to challenge the status of Trustee as holder of the
Collateral (as defined in the Collateral Trust Agreement), including this
Agreement, in trust for the benefit of the Pass-Through Trustees as holders of
the Notes];

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(iv) the Trustee[, the Pass-Through Trustees] and each holder of
the Note or Notes are and shall be third-party beneficiaries of this Agreement;

(v) upon consummation of the sale, conveyance, transfer and
absolute assignment to Trustee [and the Pass-Through Trustees], Trustee and its
successors and assigns shall be deemed to be the Lender hereunder, and shall
succeed to all rights of Lender hereunder;

(vi) [Kmart and] Tenant [each] hereby acknowledges and agrees
that any and all rights hereunder granted to Trustee may be exercised and
enforced by Trustee, including pursuant to legal process (and that any such
exercise and enforcement by Trustee shall have the same force and effect as
the exercise and enforcement by Lender); and

(vii) no release or discharge of Borrower from any liability of
Borrower pursuant to [the] [a] Note, nor any impairment or modification of any
such liability, in any bankruptcy or insolvency proceeding filed by or against
Borrower nor the waiver by Lender of or the existence of any default by
Borrower under any of the Loan Documents shall diminish or excuse [Kmart or]
Tenant's obligation to pay the Purchase Price pursuant to this Agreement with
respect to an exercise of the Put.

SECTION 4. [KMART'S] [TENANT'S] REPRESENTATIONS AND WARRANTIES.

4.1 [Kmart's] [Tenant's] Representations and Warranties. [Kmart]
[Tenant] represents and warrants that (i) it is a corporation duly organized,
validly existing and in good standing under the laws of the State of Michigan
and is duly qualified and in good standing as a foreign corporation authorized
to do business in the state in which the Demised Premises are located, (ii) it
has full power, authority and legal right to execute and deliver, and to
perform and observe the provisions of the [Lease Guaranty,] [the Indemnity
Agreement,] the Consent and Agreement, this Agreement and any other document
relating to the Loan or the Lease executed by [Kmart] [Tenant], (iii) there has
been no material adverse change in the business or condition, financial or
otherwise, of [Kmart] [Tenant] since the date of [Kmart's] [Tenant's] last
audited financial report, (iv) there are no actions, proceedings or
investigations pending or threatened against or affecting [Kmart] [Tenant] (or
any basis therefor known to [Kmart] [Tenant] before any court, arbitrator,
administrative agency or other governmental authority, which if adversely
decided would materially and adversely affect the financial condition or
operations of [Kmart] [Tenant], or its ability to carry out any of the terms,
covenants and conditions of the Lease, [the Lease Guaranty, the Indemnity
Agreement], the Consent and Agreement, this Agreement or any other document
relating to the Loan or the Lease (executed by [Kmart or] Tenant), (v) the
execution and delivery by [Kmart] [Tenant] of the Lease [Guaranty,] the Consent
and Agreement, this Agreement, or any of the other documents relating to the
Loan or the Lease (executed by [Kmart or] Tenant) have been duly authorized by
all necessary corporate action and each is enforceable in accordance with its
terms, (vi) neither the execution and delivery of the Lease

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[Guaranty], the Consent and Agreement, this Agreement or any other
document relating to the Loan or the Lease (executed by [Kmart or] Tenant), nor
compliance with the terms and provisions thereof, conflicts or will conflict
with or result in a breach of any of the terms, conditions or provisions of the
Certificate of Incorporation or Bylaws of [Kmart] [Tenant], or of any law,
rule, regulation, order, writ, injunction, judgment or decree of any court,
arbitration or administering agency or governmental authority, or of any
agreement or other instrument to which [Kmart] [Tenant] is a party or by which
it or its assets is bound or subject, or constitutes or will constitute a
default thereunder, and (vii) [Kmart] [Tenant] is not in default under any
judgment, order, decree, rule or regulation of any court, arbitrator,
administrative agency or other governmental authority to which it may be
subject.

4.2 [Tenant's Representations and Warranties. The Tenant
represents and warrants that (i) it is a corporation duly organized, validly
existing and in good standing under the laws of the State of ____________ and
is duly qualified and in good standing as a foreign corporation authorized to
do business in the state in which the Demised Premises are located, (ii) it has
full power, authority and legal right to execute and deliver, and to perform
and observe the provisions of the Lease, the Consent and Agreement, this
Agreement or any other document relating to the Loan or the Lease (executed by
Tenant) (iii) there has been no material adverse change in the business or
condition, financial or otherwise, of the Tenant since the date of Tenant's
last audited financial report, (iv) there are no actions, proceedings or
investigations pending or threatened against or affecting the Tenant (or any
basis therefor actually known to the Tenant) before any court, arbitrator,
administrative agency or other governmental authority, which if adversely
decided would materially and adversely affect the financial condition or
operations of the Tenant, or its ability to carry out any of the terms,
covenants and conditions of the Lease, the Consent and Agreement, this
Agreement or any other document relating to the Loan or the Lease (executed by
Tenant), (v) the execution and delivery by the Tenant of the Lease, the
Consent and Agreement, this Agreement or any other document relating to the
Loan or the Lease (executed by Tenant) have been duly authorized by all
necessary corporate action and each is enforceable in accordance with its
terms, (vi) neither the execution and delivery of the Lease, the Consent and
Agreement, this Agreement or any other document relating to the Loan or the
Lease (executed by Tenant) nor compliance with the terms and provisions
thereof, conflicts or will conflict with or result in a breach of any of the
terms, conditions or provisions of the Certificate of Incorporation or By-Laws
of the Tenant, or of any law, order, writ, injunction or decree of any court
or governmental authority, or of any agreement or other instrument to which the
Tenant is a party or by which it is bound, or constitutes or will constitute a
default thereunder, and (vii) the Tenant is not in default under any
judgment, order, decree, rule or regulation of any court, arbitrator,
administrative agency or other governmental authority to which it may be
subject.] [Intentionally Omitted.]

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SECTION 5. GENERAL

5.1 Counterparts. This Agreement may be executed in counterparts by
the parties but all such counterparts together shall constitute one and the
same document.

5.2 Notices. All notices, requests, demands or other communications
pursuant to this Agreement shall be in writing and shall be deemed to be
properly served on receipt thereof if personally delivered, sent by certified
or registered mail (postage prepaid, return receipt requested) addressed, in
the case of [Kmart] [Tenant], to Kmart, 3100 West Big Beaver Road, Troy,
Michigan 48084-3163, Attention: Senior Vice President, Real Estate Department;
[in the case of Tenant, to Tenant, _____________________________,
Attention:______________;] in the case of Lender, to National Tenant Finance
Corporation, 40 N. Central Avenue, Suite 2700, Phoenix, Arizona 85004
Attention: Norman C. Storey; in the case of Trustee, which shall receive
copies of all communications hereunder, to United States Trust Company of New
York, c/o U.S. Trust Company of California, N.A., Suite 2700, 555 South Flower
Street, Los Angeles, California 90071, Attention: Corporate Trust Division; or
to such other address as any party may designate in writing. The date of
notice shall be the date of receipt of notice or the date of attempted delivery
of the notice by the overnight courier service or the U.S. Postal Service to
the addressee or its agent at the address specified.

5.3 Section Headings. Section headings are not to be considered a
part of this Agreement and are included solely for convenience of reference and
are not intended to be full or accurate descriptions of the contents thereof.

5.4 Applicable Law. This Agreement shall be construed and enforced
under the laws of the State of New York without giving effect to the choice of
law principles thereof.

5.5 Severability. Should any provision of this Agreement for any
reason be declared unenforceable by a court of competent jurisdiction
(sustained on appeal, if any), such unenforceability shall not affect the
enforceability of any other provision hereof or thereof, all of which shall
remain in force and effect as if this Agreement had been executed with the
unenforceable provisions thereof eliminated and it is hereby declared the
intention of the parties hereto that they would have executed the remaining
provision of this Agreement without including therein any such part, parts or
portion which may for any reason be hereafter declared unenforceable, provided
that, if any provision of this Agreement shall be unenforceable by reason of a
final judgment of a court of competent jurisdiction based on a court's ruling
(sustained on appeal, if any) that such provision is unenforceable because of
the excessive degree of magnitude of the obligation imposed thereby on any
party, that unenforceable obligation shall be reduced in magnitude or degree by
the minimum degree or magnitude necessary in order to permit the provision to
be enforceable by Lender. In the event the provisions of the immediately
preceding sentence apply, the parties shall make

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appropriate adjustment to the provisions of this Agreement to give effect to
the benefits intended to be conferred upon the parties hereby.

5.6 Waiver. No delay or omission by Lender or Trustee in exercising
any right hereunder shall impair any right of such party under this Agreement
or be construed as such party's waiver of or acquiescence in any breach. No
such delay or omission by a party shall be construed as a variation or waiver
of any of the terms, conditions or provisions of this Agreement. No purported
waiver of any right of a party hereunder shall be effective unless it is
written and signed by an authorized representative of a such party. No waiver
by a party of any breach shall constitute a waiver of any other prior or
subsequent breach or of the same breach after notice to a party demanding
strict performance. A party shall not be estopped to take or from taking any
action with respect to any breach because of any delay by a party in giving
notice of such breach or exercising any remedy based thereon.

5.7 Submission to Jurisdiction. Lender, Trustee, [Kmart] and Tenant
each hereby consents to the jurisdiction of any state or federal court located
within the County of New York, State of New York and irrevocably agrees that
all actions or proceedings relating to this Agreement may be litigated in such
courts and [Kmart and] Tenant each waives any objection which it may have based
on improper venue or forum nonconveniens to the conduct of any proceeding in
any such court, waives personal service of any and all process upon it, and
consents that all such service or process be made by registered or certified
mail (return receipt requested) or messengered to it at its address set forth
in Section 5.2 or to its Agent referred to below at such Agent's address set
forth below, and, that service so made shall be deemed to be completed in
accordance with Section 5.2. [Kmart and] Tenant [each] hereby appoints CT
Corporation System, Inc. with an office on the date hereof at
_____________________________ as its Agent for the purpose of accepting service
of any process within the State of New York. Upon Lender's or Trustee's
request [Kmart and] Tenant shall each take any action reasonably necessary to
confirm such appointment of Agent. Nothing contained in this Section shall
affect the right of Lender to serve legal process in any other manner permitted
by law, to bring any action or proceeding in the courts of any jurisdiction
against Kmart, or to enforce a judgment obtained in the courts of any other
jurisdiction.

5.8 Amendments. This Agreement may be amended or modified only
with the written consent of all parties hereto or, if applicable, their
successors and assigns.

5.9 Expenses. [Kmart and] Tenant shall pay or cause to be paid and
save the Lender and Trustee harmless against liability for the payment of
reasonable out-of-pocket expenses, including counsel fees and disbursements,
incurred or paid by the Lender or Trustee in connection with (i) any
amendments, waivers or consents pursuant

11
<PAGE> 12
to the provisions hereof and thereof; or (ii) the enforcement of this
Agreement.

5.10 Further Assurances. Lender, in favor of Tenant [or Kmart],
shall, after the execution of this Agreement, at the request of Tenant [or
Kmart], execute, acknowledge and deliver such other documents or instruments and
take any other or further acts as may be reasonably required to evidence or
confirm the transaction contemplated hereby or as may otherwise be necessary to
carry out or to fulfill Lender's covenants and obligations hereunder.

IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the date first above set forth.

[KMART CORPORATION,
a Michigan corporation

By:
--------------------------------

Its:
---------------------------

(KMART)]

------------------------------------,
a corporation
------------------

By:
--------------------------------
Its:
---------------------------,

(TENANT)

NATIONAL TENANT FINANCE CORPORATION,
a Delaware corporation

By:
-------------------------------
Its:
--------------------------,

(LENDER)

12
<PAGE> 13
EXHIBIT A

CALLED PRINCIPAL PERCENTAGE FOR EACH CORRESPONDING YEAR
DURING THE TERM OF THE NOTE PUT AGREEMENT

<PAGE> 1
EXHIBIT 5.1

July 25, 1994

Sutro & Co. Incorporated
555 South Flower Street, 46th Floor
Los Angeles, CA 90071

Kmart Corporation
3100 West Big Beaver Road
Troy, Michigan 48040

National Tenant Finance Corporation
40 North Central Avenue, Suite 2700
Phoenix, Arizona 85004

RE: KMART CORPORATION MORTGAGE PASS-THROUGH
CERTIFICATES REGISTRATION STATEMENT ON FORM S-3

Ladies and Gentlemen:

We have acted as special counsel in connection with the
preparation of a registration statement on Form S-3 ("Registration Statement")
relating to the issuance and sale of Mortgage Pass-Through Certificates
issuable in Series (collectively, "Certificates"). The Certificates will be
issued pursuant to one or more Trust Agreements ("Trust Agreements") or
Pass-Through Trust Agreements ("Pass-Through Trust Agreements") each between
National Tenant Finance Corporation ("Depositor"), a to be formed Delaware
corporation, and United States Trust Company of New York, as trustee
("Trustee"). The Registration Statement is filed with the Securities and
Exchange Commission under the Securities Act of 1933, as amended.

We have examined the filed copy of the specimen Trust
Agreement and of the specimen Pass-Through Trust Agreement, each of which is
filed as an exhibit to the Registration Statement, the form of Certificate
included in the Trust Agreement, the form of Certificate included in the
Pass-Through Trust Agreement, the Prospectus contained in the Registration
Statement ("Prospectus"),

<PAGE> 2
July 25, 1994
Page 2

and such other records, documents and statutes as we have deemed necessary for
purposes of this opinion.

Based on the foregoing, we are of the opinion that:

1. Assuming due authorization of a Trust Agreement or a
Pass-Through Trust Agreement, as applicable, by the Trustee and the Depositor
and execution and delivery thereof by the Trustee and the Depositor, such Trust
Agreement or Pass-Through Trust Agreement will constitute a valid and legally
binding instrument of the Trustee, enforceable against the Trustee in
accordance with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency or other laws relating to or affecting creditors' rights
generally or by general equity principles.

2. Assuming due authorization by the Trustee of the
Certificates issued pursuant to a Trust Agreement or a Pass-Through Trust
Agreement, the Certificates, when duly executed and authenticated by the
Trustee pursuant to such Trust Agreement or Pass-Through Trust Agreement and
delivered to and paid for by the purchasers thereof, will constitute the valid
and legally binding obligations of the Trustee pursuant to such Trust Agreement
or Pass-Through Trust Agreement and entitled to the benefits of such Trust
Agreement or Pass-Through Trust Agreement except as enforcement thereof may be
limited by bankruptcy, insolvency or other laws relating to or affecting
creditor's rights generally or by general equity principles.

We hereby consent to the use of our name in the Prospectus
under the caption "LEGAL OPINIONS" and to the filing of this opinion as an
exhibit to the Registration Statement.

Respectfully submitted,

/s/ SQUIRE, SANDERS & DEMPSEY
SQUIRE, SANDERS & DEMPSEY

<PAGE> 1
EXHIBIT 8.1

July 25, 1994

Kmart Corporation
3100 West Big Beaver Road
Troy, Michigan 48084

National Tenant Finance Corporation
40 North Central Avenue, Suite 2700
Phoenix, Arizona 85004

Re: Kmart Corporation
$250,000,000 Mortgage Pass-Through Certificates

Ladies and Gentlemen:

We have acted as special tax counsel in connection with the
preparation of a Registration Statement on Form S-3 ("Registration Statement")
filed by Kmart Corporation, a Michigan corporation ("Kmart") with the
Securities and Exchange Commission under the Securities Act of 1933, as amended
(the "Act"), relating to the issuance and sale of Mortgage Pass-Through
Certificates issuable in series (collectively "Certificates"). The
Certificates will represent fractional undivided beneficial interests in
certain trusts which in turn will hold certain mortgage notes issued in
connection with the financing by independent real estate developers of
construction and/or acquisition of retail stores or warehouse facilities for
use by Kmart or its subsidiaries, all as more fully described in the Prospectus
included in the Registration Statement ("Prospectus").

We have examined the Prospectus, as well as forms of Trust Agreement,
Pass-Through Trust Agreement, Collateral Trust Agreement, Certificates, Loan
Agreement, Mortgage Note, and Note Put Agreement, all as included as exhibits
to the Registration Statement, together with such other documents as we deemed
relevant.

Based on the foregoing, we are of the opinion that the statements and
legal conclusions contained in the Prospectus under the heading "Certain
Federal Income Tax Consequences" are correct, and the discussion thereunder
does not omit any considerations that are material to purchasers or holders of
Certificates with respect to the matters covered.

Based on the foregoing, and assuming the following: (1) a Trust or
Pass-Through Trust as applicable, is established pursuant to a Trust Agreement
or Pass-Through Trust Agreement, respectively, as described in the Prospectus,
(2) such Trust or Pass-Through Trust acquires Mortgage Notes as described in
the Prospectus, (3) Certificates representing fractional undivided beneficial
interests in such Trust or Pass-Through Trust are issued as described in the
Prospectus, (4) any Collateral Trust is established pursuant to a Collateral
Trust Agreement as described in the Prospectus, and (5) there is no change in
applicable law between the date hereof and the date such Trust or Pass-Through
Trust is established, then we are also of the opinion that such Trust or
Pass-Through Trust will be classified for federal income tax purposes as a
grantor trust and that such Trust or Pass-Through Trust and any Collateral
Trust will not be classified as an association taxable as a corporation.

We express no other opinion as to any other tax consequences regarding
the Certificates.

<PAGE> 2
July 25, 1994
Page 2

The opinion stated above and the discussion in the Prospectus under the
heading "Certain Federal Income Tax Consequences" is based on the facts,
assumptions, and representations set forth in the Prospectus and other
documents referenced above, as well as on the Internal Revenue Code of 1986, as
amended, Treasury Regulations thereunder, and administrative and judicial
interpretations of such Code and Regulations, all as they exist as of the date
hereof. No assurance can be given that any of the foregoing authorities will
not be revoked, modified, or otherwise revised hereafter, nor that any such
changes if made would not adversely affect our opinions. We disclaim any
undertaking or other responsibility on our part to advise you of any changes in
any of such authorities occurring after the date hereof.

We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. We also consent to the references to Squire, Sanders &
Dempsey under the headings "Certain Federal Income Tax Consequences" and "Legal
Matters".

Respectfully submitted,

/s/ SQUIRE, SANDERS & DEMPSEY
SQUIRE, SANDERS & DEMPSEY

<PAGE> 1
KMART CORPORATION AND SUBSIDIARY COMPANIES
EXHIBIT 12 - INFORMATION ON RATIO OF EARNINGS
TO FIXED CHARGES COMPUTATION
Restated to exclude discontinued operations

<TABLE>
<CAPTION>
Fiscal Year Ended 52 Weeks Ended
----------------------------------------- -------------------------------
January 29, January 27, January 26, April 28, April 27,
(Millions) 1992 1993 1994 1993 1994
----------- ------------ ----------- --------- ---------
<S> <C> <C> <C> <C> <C>
Pre-tax income from continuing
operations (1) $1,189 $1,327 $(550) $1,250 $(605)

Equity income of unconsolidated affiliated
retail companies that exceeds distributions (26) (12) (20) (7) (46)

Fixed charges per below 582 664 763 690 766
Less interest capitalized during the period (10) (14) (11) (15) (12)
------ ------ ----- ------ -----
Earnings from continuing operations 1,735 1,965 182 1,918 103
====== ====== ===== ====== =====
Fixed Charges:
Interest expense 398 442 490 468 493
Rent expense - portion of operating rentals
representative of the interest factor 172 206 260 206 259

Other 12 16 13 16 14
------ ------ ----- ------ -----
582 664 763 690 766
====== ====== ===== ====== =====
Ratio of earnings to fixed charges (2) 3.0 3.0 N/A 2.8 N/A
====== ====== ===== ====== =====
</TABLE>

(1) Pre-tax income from continuing operations for 1993 includes a pre-tax
provision of $1,348 million for store restructuring and other charges.

(2) The deficiency of income from continuing retail operations versus fixed
charges was $581 million for the fiscal year ended January 26, 1994. The
deficiency of income from continuing retail operations versus fixed charges was
$663 million for the 52 weeks ended April 27, 1994.

<PAGE> 1
EXHIBIT 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Amendment No. 1 to the Registration Statement on
Form S-3 of our report dated March 15, 1994, which appears on Annex V page
V-21 of Kmart Corporation's definitive Proxy Statement dated April 28, 1994,
which is incorporated by reference in Kmart Corporation's Annual Report on Form
10-K for the year ended January 26, 1994. We also consent to the incorporation
by reference of our report on the Financial Statement Schedules, which appears
on page 11 of such Annual Report on Form 10-K. We also consent to the
reference to us under the heading "Experts" in such Prospectus.

/s/ PRICE WATERHOUSE
Price Waterhouse

Detroit, Michigan 48243
July 21, 1994

<PAGE> 1
Exhibit 25.1

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM T-1

STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE

CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT OT SECTION 305 (B) (2)______

UNITED STATES TRUST COMPANY OF NEW YORK
(Exact name of trustee as specified in its charter)

New York 13-5459866
(Jurisdiction of incorporation (I.R.S Employer
if not a U. S. national bank) identification No.)

114 West 47th Street
New York, New York 10036
(Address of principal (Zip Code)
executive offices)

KMART CORPORATION

(Exact name of obligors as specified in its charter)

MICHIGAN 38-0729500
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) identification No.)

<PAGE> 2
EXHIBIT 25.1

3100 West Big Beaver Road
Troy, MI 48084

(Address of principal executive offices)

$250,000,000
Mortgage Pass-Through Certificates
(Issuable in Series)

(Title of indenture securities)
<PAGE> 3
GENERAL

1. General Information

Furnish the following information as to the trustee:

(a) Name and address of each examining or supervising authority to
which it is subject.

Federal Reserve Bank of New York (2nd District), New York, New
York (Board of Governors of the Federal Reserve System).
Federal Deposit Insurance Corporation, Washington, D.C.
New York State Banking Department, Albany, New York

(b) Whether it is authorized to exercise corporate trust powers.

The trustee is authorized to exercise corporate trust
powers.

2. Affiliations with the Obligor

If the obligor is an affiliate of the trustee, describe each such
affiliation.

None.

3. Voting Securities of the Trustee

Not applicable

4. Trusteeships under Other Indentures

Not applicable

5. Interlocking Directorates and Similar Relationships with the Obligor or
Underwriters

Not applicable
<PAGE> 4
6. Voting Securities of the Trustee Owned by the Obligor or its Officials

Not applicable

7. Voting Securities of the Trustee Owned by Underwriters or their
Officials

Not applicable

8. Securities of the Obligor Owned or Held by the Trustee

Not applicable

9. Securities of Underwriters Owned or Held by the Trustee

Not applicable

10. Ownership or Holdings by the Trustee of Voting Securities of Certain
Affiliates or Security Holders of the Obligor

Not applicable

11. Ownership or Holdings by the Trustee of any Securities of a Person
Owning 50 Percent or More of the Voting Securities of the Obligor

Not applicable

12. Indebtedness of the Obligor to the Trustee

Not applicable

13. Defaults by the Obligor

Not applicable

14. Affiliations with the Underwriters

Not applicable

<PAGE> 5
15. Foreign Trustee

Not applicable

16. List of Exhibits

T-1.1 -- "Chapter 204, Laws of 1853, An Act to Incorporate the
United States Trust Company of New York, as Amended",
is incorporated by reference to Exhibit T-1.1 to Form
T-1 filed on September 20, 1991 with the Securities and
Exchange Commission (the "Commission") pursuant to the
Trust Indenture Act of 1939. as amended by the Trust
Indenture Reform Act of 1990 (Registration
No. 2221291).

T-1.2 -- The trustee was organized by a special act of the New
York Legislature in 1853 prior to the time that the New
York Banking Law was revised to require a Certificate
of authority to commence business. Accordingly, under
New York Banking Law, the Charter (Exhibit T-1.1)
constitutes an equivalent of a certificate of authority
to commence business.

T-1.3 -- The authorization of the trustee to exercise corporate
trust powers is contained in the Charter
(Exhibit T-1.1).

T-1.4 -- The By-laws of the United States Trust Company of New
York, as amended to date, are incorporated by reference
to Exhibit T-1.4 to Form T-1 filed on September 20,
1991 with the Commission pursuant to the Trust
Indenture Act of 1939, as amended by the Trust
Indenture Reform Act of 1990 (Registration
No. 2221291).

T-1.6 -- The consent of the trustee required by Section 321(b)
of the Trust Indenture Act of 1939, as amended by the
Trust Indenture Reform Act of 1990.

T-1.7 -- A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
<PAGE> 6
NOTE

As of July 12, 1994, the trustee had 9,376,032 shares of Common Stock
outstanding, all of which are owned by its parent company, U.S. Trust
Corporation. The term "trustee" in Item 2, refers to each of United States
Trust Company of New York, and its parent company, U.S. Trust Corporation.

In answering Item 2 in this statement of eligibility as to matters peculiarly
within the knowledge of the obligor or its directors, the trustee has relied
upon information furnished to it by the obligor and will rely on information to
be furnished by the obligor and the trustee disclaims responsibility for the
accuracy or completeness of such information.

Pursuant to the requirements of the Trust Indenture of Act of 1939, as amended
by the Trust Indenture Reform Act of 1990, the trustee, United States Trust
Company of New York, a banking corporation organized and existing under the
laws of the State of New York, has duly caused this statement of eligibility
and qualification to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Los Angeles, and State of California, on the
13th day of July 1994.

UNITED STATES TRUST COMPANY OF
NEW YORK, Trustee

By: /s/ Margaret S. Swindall
Margaret S. Swindall
Authorized Officer

<PAGE> 7
Exhibit T-1.6

The consent of the trustee required by Section 321 (b)
of the Act.

United States Trust Company of New York
114 West 47th Street
New York
NY 10036

March 19, 1992

Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549

Gentlemen:

Pursuant to the provisions of Section 321 (b) of the Trust Indenture Act of
1939, as amended by the Trust Indenture Reform Act of 1990, and subject to the
limitations set forth therein, United States Trust Company of New York ("U. S.
Trust") hereby consents that reports of examinations of U. S. Trust by Federal,
State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon request therefor.

Very truly yours,

UNITED STATES TRUST COMPANY
OF NEW YORK

By: /s/ G.F. GANEY
Gerard F. Ganey
Senior Vice President

CCC/pg
(rev.TMc 031992)

<PAGE> 8
EXHIBIT T-1.7

Consolidated Report of Condition of
United States Trust Company of New York
and Foreign and Domestic Subsidiaries, a member of the Federal Reserve System,
at the close of business December 31, 1993, published in accordance with a call
made by the Federal Reserve Bank of this District pursuant to the provisions of
the Federal Reserve Act.

<TABLE>
<CAPTION>
Dollars Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depository institutions:
a. Noninterest bearing balances and currency and coin: $ 176,527
b. Interest bearing balances: 50,000
Securities: 833,859
Federal funds sold and securities purchased under agreements to
resell in domestic offices of the bank and of its Edge and
Agreement subsidiaries, and in IBF's: 1,753
a. Federal funds sold: 205,000
b. Securities purchased under agreements to resell: 32,000
Loans and lease financing receivables:
a. Loans and leases, net of unearned income: 1,271,077
b. LESS: Allowance for loan and lease losses: 11,928
c. Loans and leases, net of unearned income,
allowance and reserve: 1,259,149
Premises and fixed assets (including capitalized leases): 98,896
Other real estate owned: 11,543
Investments in unconsolidated subsidiaries and associated companies: 725
Intangible assets: 856
Other assets: 256,699
-----------
TOTAL ASSETS: $ 2,925,254
===========
LIABILITIES
Deposits:
a. In domestic offices: $ 2,345,177
(1) Non interest bearing: 1,228,335
(2) Interest bearing: 1,116,842
b. In foreign offices, Edge and Agreement
subsidiaries, and IBF's: 5,617
(1) Interest bearing: 5,617
Federal funds purchased and securities sold under agreements to repurchase
in domestic offices of the bank and of its Edge and Agreement subsidiaries,
and in IBF's:
a. Federal funds purchased: 211,921
b. Securities sold under agreements to repurchase: 15,016
Demand notes issued to the U.S. Treasury: 33,824
Other Borrowed Money 10
Mortgage indebtedness and obligations under capitalized leases: 2,429
Subordinated notes and debentures: 12,453
Other liabilities: 118,457
-----------
TOTAL LIABILITIES: $ 2,744,904
===========
EQUITY CAPITAL
Common Stock: $ 14,995
Surplus: 41,500
Undivided profits and capital reserves: 123,855
-----------
TOTAL EQUITY CAPITAL: $ 180,350
===========

TOTAL LIABILITY AND EQUITY CAPITAL: $ 2,925,254
===========
</TABLE>

<PAGE> 9
I, Richard E. Brinkman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this report of condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.

RICHARD E. BRINKMANN, SVP, Comptroller
January 31, 1994

We, the undersigned trustees, attest the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.

H. MARSHALL SCHWARZ |
FREDERICK S. WONHAM | Trustees
DONALD M. ROBERTS |