FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C.  20549

   (Mark One)

   [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934

                For the quarterly period ended November 14, 1996

   []   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934

         For the transition period from ______________to_______________

                         Commission file number 1-12604

                             THE MARCUS CORPORATION          
             (Exact name of registrant as specified in its charter)

          WISCONSIN                                            39-1139844    
   (State or other jurisdiction of                         (I.R.S. Employer  
   incorporation or organization)                         Identification No.)

        250 EAST WISCONSIN AVENUE - MILWAUKEE, WISCONSIN           53202     
          (Address of principal executive offices)               (Zip code)

        Registrant's telephone number, including area code (414) 272-6020

   Indicate by check mark whether the registrant (1) has filed all reports
   required to be filed by Sections 12, 13 or 15(d) of the Securities
   Exchange Act of 1934, during the preceding 12 months (or for such shorter
   period that the registrant was required to file such reports), and (2) has
   been subject to filing requirements for the past 90 days.
   Yes     X        No         

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

   Indicate the number of shares outstanding of each of the issuer's classes
   of common stock, as of the latest practicable date.

   COMMON STOCK OUTSTANDING AT DECEMBER 16, 1996 - 10,577,074
   CLASS B COMMON STOCK OUTSTANDING AT DECEMBER 16, 1996 - 8,856,405

   
<PAGE>
                             THE MARCUS CORPORATION

                                      INDEX



                                                                    Page 
                                                                    No. 


    PART I - FINANCIAL INFORMATION

         Item 1.   Consolidated Financial Statements:

                   Balance Sheets
                   (November 14, 1996 and May 30, 1996) . . . . .      3

                   Statements of Earnings
                   (Twelve and twenty-four weeks ended November
                   14, 1996 and November 9, 1995) . . . . . . . .      5
                   Statements of Cash Flows
                   (Twenty-four weeks ended November 14, 1996 and 
                   November 9, 1995)  . . . . . . . . . . . . . .      6
                   Condensed Notes to Financial Statements  . . .      7
 

           Item 2.     Management's Discussion and Analysis of
                       Financial Condition and Results of
                       Operations . . . . . . . . . . . . . . . .      8




    PART II - OTHER INFORMATION

         Item 4.   Submission of Matters to a Vote of Security
                   Holders  . . . . . . . . . . . . . . . . . . .     12


         Item 6.   Exhibits and Reports on Form 8-K . . . . . . .     13

         Signatures . . . . . . . . . . . . . . . . . . . . . . .     14

   
<PAGE>

                         PART I - FINANCIAL INFORMATION


    Item 1.  Financial Statements

    THE MARCUS CORPORATION
    Consolidated Balance Sheets
                                                     (in thousands)
                                              (Unaudited)       (Audited)
                                              November 14,       May 30,
    ASSETS                                        1996            1996     
    Current Assets:
      Cash and cash equivalents                   $  40,167      $   15,466
      Accounts and notes receivable                   8,438           8,780

      Receivables from joint ventures                   454           4,890
      Other current assets                            3,555           2,463
                                                    -------         -------
        Total current assets                         52,614          31,599
                                                    -------         -------

    Property and equipment:
      Land and improvements                          66,066          60,177
      Buildings and improvements                    370,181         329,458

      Leasehold improvements                          5,198           5,688
      Furniture, fixtures and equipment             148,176         137,305
      Construction in progress                       21,837          22,336
                                                    -------         -------
        Total property and equipment                611,458         554,964
      Less accumulated depreciation and
        amortization                                153,648         143,401
                                                    -------         -------
        Net property and equipment                  457,810         411,563
                                                    -------         -------
    Other assets:
      Investments in joint ventures                   1,484           1,295
      Other                                          13,158          10,858
                                                    -------         -------
        Total other assets                           14,642          12,153
                                                    -------         -------
    TOTAL ASSETS                                   $525,066        $455,315
                                                    =======        =======


    See accompanying notes to consolidated financial statements
   
<PAGE>
     
    THE MARCUS CORPORATION
    Consolidated Balance Sheets
                                               (unaudited)      (audited)
                                               November 14,      May 30,
    LIABILITIES AND SHAREHOLDERS' EQUITY          1996             1996    
    Current liabilities:
      Notes payable                            $   5,173        $   5,555
      Accounts payable                            14,583           15,646
      Income taxes                                 4,103            1,393
      Taxes other than income taxes               10,202            8,323
      Accrued compensation                         2,343            1,380
      Other accrued liabilities                    8,349            9,352
      Current maturities on long-term debt        11,480            9,069
                                                --------         --------
        Total current liabilities                 56,233           50,718
                                                --------         --------
    Long-term debt                               170,546          127,135

    Deferred income taxes                         20,186           20,027

    Deferred compensation and other                9,835            6,187

    Shareholders' equity:
      Preferred Stock, $1 par; authorized
        1,000,000 shares; none issued
      Common Stock, $1 par; authorized
        30,000,000 shares; issued 11,530,262
        shares at November 14, 1996,
        11,529,962 shares at May 30, 1996         11,530           11,530

      Class B Common Stock, $1 par;
        authorized 20,000,000 shares; issued
        and outstanding 8,856,305 shares at
        November 14, 1996, 8,856,605 shares
        at May 30, 1996                            8,856            8,857
      Capital in excess of par                    38,894           38,832
      Retained earnings                          212,639          195,643
                                                 -------          -------
                                                 271,919          254,862

      Less cost of Common Stock in treasury
        (712,921 shares at November 14, 1996
        and 718,352 shares at May 30, 1996)        3,653            3,614
                                                --------         --------
        Total shareholders' equity               268,266          251,248
                                                --------         --------
    TOTAL LIABILITIES AND SHAREHOLDERS'
      EQUITY                                    $525,066         $455,315
                                                ========         ========


    See accompanying notes to consolidated financial statements

   
<PAGE>
   
<TABLE>

    THE MARCUS CORPORATION
    Consolidated Statements of Earnings (Unaudited)

   <CAPTION>
                                        (in thousands, except per share and share data)
                                          November 14, 1996          November 9, 1995
                                         12 Weeks    24 Weeks     12 Weeks      24 Weeks

    <S>                                 <C>         <C>           <C>           <C>
    Revenues:
      Rooms and telephone               $ 36,597    $ 77,150      $ 33,614      $ 70,626
      Food and beverage                   11,252      22,547        10,657        22,523
      Theatre operations                  11,878      32,364        10,033        28,890
      Other income                         5,101      10,591         3,657         9,490
                                         -------     -------       -------       -------
    Total revenues                        64,828     142,652        57,961       131,529
                                         -------     -------       -------       -------
    Costs and expenses:
      Rooms and telephone                 13,081      26,381        11,780        23,794
      Food and beverage                    7,902      15,824         7,614        15,920
      Theatre operations                   7,727      20,152         6,077        17,324
      Advertising and marketing            5,212       9,106         3,550         6,874
      Administrative                       5,520      12,128         5,705        13,064
      Depreciation and amortization        6,528      12,868         5,599        11,474
      Rent                                   500       1,306           509         1,528
      Property taxes                       2,494       5,090         2,097         4,300
      Other operating expenses             2,377       4,892         3,265         6,059
                                         -------     -------       -------       -------
    Total costs and expenses              51,341     107,747        46,196       100,337
                                         -------     -------       -------       -------
    Operating income                      13,487      34,905        11,765        31,192

    Other income (expense):
      Investment income                      294         437           956         1,320
      Interest expense                    (2,489)     (4,668)       (2,124)       (4,235)
      Gain on disposition of property
        and equipment                         15          19           691        25,298
                                         -------    --------      --------      --------
                                          (2,180)     (4,212)         (477)       22,383
                                         -------    --------      --------      --------
    Earnings before income taxes          11,307      30,693        11,288        53,575
    Income taxes                           4,525      12,283         4,697        21,674
                                         -------    --------      --------      --------
    Net earnings                         $ 6,782    $ 18,410       $ 6,591      $ 31,901
                                         =======    ========      ========      ========
    Net earnings per share:*
      Earnings excluding gain on
        restaurant sale                    $0.34       $0.93         $0.33         $0.86
      After-tax gain on restaurant
        sale                                  --          --            --         $0.75
                                            ----        ----          ----          ----
      Net earnings per share               $0.34       $0.93         $0.33         $1.61
                                            ====        ====          ====          ====
    Weighted Average Shares
      Outstanding*                                19,843,000                  19,762,500

   * All per share and weighted average shares outstanding data has been
     adjusted to reflect the 50% stock dividend distributed on November 14,
     1995.
   </TABLE>


   See accompanying notes to consolidated financial statements

   
<PAGE>

    THE MARCUS CORPORATION
    Consolidated Statements of Cash Flows (Unaudited)

                                                      (in thousands)
                                                      24 Weeks Ended
                                               November 14,     November 9,
                                                   1996            1995
    OPERATING ACTIVITIES:                                      
    Net earnings                                  $ 18,410        $ 31,901
      Adjustments to reconcile net earnings
        to net cash provided by operating
        activities:
          Earnings on investments in joint
              ventures, net of distributions          (189)           (213)
          Gain on disposition of property
              and equipment                            (19)        (25,298)
          Depreciation and amortization             12,868          11,474
          Deferred income taxes                        159             793
          Deferred compensation and other            3,648             473
          Changes in assets and liabilities:
              Accounts and notes receivable            342          (3,208)
          Other current assets                      (1,092)          1,205
          Accounts payable                          (1,063)         (9,843)
          Income taxes                               2,710           6,273
          Taxes other than income taxes              1,879           1,351
          Accrued compensation                         963           1,256
          Other accrued liabilities                 (1,003)            (47)
                                                   -------        --------
    Total adjustments                               19,203         (15,784)
                                                   -------        --------
    Net cash provided by operating
      activities                                    37,613          16,117

    INVESTING ACTIVITIES:
    Capital expenditures                           (60,155)        (36,709)
    Net proceeds from disposals of property,
      equipment and other assets                     1,059          49,530
    Purchase of interest in joint ventures,
      net of cash acquired                              --            (329)
    (Increase) decrease in other assets             (2,300)          1,925
    Cash received from joint ventures                4,436             275
                                                   -------         -------
    Net cash provided by (used in) investing
      activities                                   (56,960)         14,692
                                                   -------         -------
    FINANCING ACTIVITIES:
    Debt transactions:
      Net proceeds from issuance of notes
        payable and long-term debt                  97,875              --
      Principal payments on notes payable
        and long-term debt                         (52,435)        (21,136)
    Equity transactions:
      Treasury stock transactions, except
        for stock options                             (117)           (104)
      Exercise of stock options                        140             247
      Dividends paid                                (1,415)         (5,010)
                                                   -------         -------
    Net cash provided by (used in) financing
      activities                                    44,048         (26,003)
                                                   -------         -------
    Net increase (decrease) in cash and cash
      equivalents                                   24,701           4,806
    Cash and cash equivalents at beginning
      of year                                       15,466           8,798
                                                    ------         -------
    Cash and cash equivalents at end of
      period                                       $40,167         $13,604
                                                    ======          ======

    See accompanying notes to consolidated financial statements

   
<PAGE>
                             THE MARCUS CORPORATION
                 CONDENSED NOTES TO FINANCIAL STATEMENTS FOR THE
                       TWELVE AND TWENTY-FOUR WEEKS ENDED
                                NOVEMBER 14, 1996
                                   (Unaudited)


   A.   Refer to the Company's audited financial statements (including
        footnotes) for the year ended May 30, 1996, contained in the
        Company's Form 10-K Annual Report for such year, for a description of
        the Company's accounting policies.

   B.   The consolidated financial statements for the twelve and twenty-four
        weeks ended November 14, 1996 and November 9, 1995, have been
        prepared by the Company without audit.  In the opinion of management,
        all adjustments consisting only of normal recurring accruals
        necessary to present fairly the unaudited interim financial
        information at November 14, 1996, and for all periods presented have
        been made.

   C.   Pursuant to an asset purchase agreement dated April 12, 1995, the
        Company completed the sale of its 18 existing Applebee's Neighborhood
        Grill & Bar restaurants (Applebee's), two Applebee's under
        construction, five Applebee's under development and its development
        rights for Applebee's to Apple South, Inc. (the Purchaser).  On June
        5, 1995, the Company entered into a management agreement with the
        Purchaser, whereby the Purchaser commenced to immediately manage,
        operate and assume all of the Company's existing operating and
        development responsibilities related to the Company's Applebee's
        restaurant operations.  The Purchaser received all profits of the
        restaurants between June 5, 1995 and June 30, 1995, as reimbursement
        for its management service.  On June 30, 1995, proceeds from the sale
        of approximately $48.3 million were received by the Company in cash.

   D.   The Company's Board of Directors declared a three-for-two stock
        split, effected in the form of a 50% stock dividend, distributed on
        November 14, 1995, to all holders of Common Stock and Class B Common
        Stock.  All per share and weighted average shares outstanding data
        prior to November 14, 1995, have been adjusted to reflect this
        dividend.

   E.   Certain items in the accompanying fiscal 1996 financial statements
        have been reclassified to conform to the fiscal 1997 presentation.

   
<PAGE>

   Item 2.   Management's Discussion and Analysis of Results of Operations
             and Financial Condition

   Special Note Regarding Forward-Looking Statements

             Certain matters discussed in this Management's Discussion and
   Analysis of Results of Operations and Financial Condition are "forward-
   looking statements" intended to qualify for the safe harbors from
   liability established by the Private Securities Litigation Reform Act of
   1995.  These forward-looking statements can generally be identified as
   such because the context of the statement will include words such as the
   Company "believes," "anticipates," "expects" or words of similar import. 
   Similarly, statements that describe the Company's future plans, objectives
   or goals are also forward-looking statements.  Such forward looking
   statements are subject to certain risks, assumptions and uncertainties
   which are described in close proximity to such statements and which could
   cause actual results to differ materially from those currently
   anticipated.  Shareholders, potential investors and other readers are
   urged to consider these risks, assumptions and uncertainties carefully in
   evaluating the forward-looking statements and are cautioned not to place
   undue reliance on such forward-looking statements.  The forward-looking
   statements made herein are only made as of the date of this Form 10-Q and
   the Company undertakes no obligation to publicly update such forward-
   looking statements to reflect subsequent events or circumstances.

   RESULTS OF OPERATIONS

   General

             The Company reports its results of operations on a 52-or 53-week
   fiscal year which ends on the last Thursday in May.  Each fiscal year is
   divided into three 12-week quarters and a final quarter consisting of 16
   or 17 weeks.  The final quarter of fiscal 1997 will consist of 17 weeks
   for the Company's motel and hotels/resorts divisions, while the Company
   and its other remaining divisions will report a 16-week fourth quarter. 
   Fiscal 1996 was a 53-week fiscal year for the Company and its theatre
   division, while the Company's remaining divisions reported a 52-week year
   in fiscal 1996.

             Revenues for the second quarter of fiscal 1997 ended November
   14, 1996, totaled $64.8 million, an increase of $6.8 million, or 11.8%,
   from revenues of $58.0 million for the second quarter of fiscal 1996.  For
   the first half of fiscal 1997, revenues were $142.6 million, an increase
   of $11.1 million, or 8.5%, from revenues of $131.5 million in the first
   half of fiscal 1996.  All four operating segments contributed to the
   increase in revenues for the fiscal 1997 second quarter.

             Net earnings for the second quarter of fiscal 1997 were $6.8
   million, or $.34 per share, up 2.9% and 3.0%, respectively, from net
   earnings of $6.6 million, or $.33 per share, for the same quarter in the
   prior year.  For the first half of fiscal 1997, net earnings were $18.4
   million, or $.93 per share.  This represented a 7.7% and 8.1% increase,
   respectively, over comparable earnings of $17.1 million, or $.86 per
   share, for the first half of fiscal 1996.  Including the after-tax gain of
   $14.8 million, or $.75 per share, resulting from the Company's sale of its
   Applebee's restaurants and related rights in June 1995, net earnings for
   fiscal 1996's first half were $31.9 million, or $1.61 per share.

             Operating income (earnings before other income/expense and
   income taxes) totaled $13.5 million in the second quarter of fiscal 1997,
   an increase of $1.7 million, or 14.6%, compared to the prior year same
   period.  For the first half of fiscal 1997, operating income was $34.9
   million, an increase of $3.7 million, or 11.9%, over operating income of
   $31.2 million for the first half of fiscal 1996.  Comparisons of net
   earnings between fiscal 1997 and 1996 second quarters were adversely
   affected by the absence in fiscal 1997 of $700,000 of gains on disposition
   of property and equipment otherwise recognized in fiscal 1996.  In
   addition, the Company realized reduced investment income in the fiscal
   1997 second quarter compared to the fiscal 1996 second quarter when the
   Company was still investing the proceeds from the sale of its Applebee's
   restaurants and increased interest expense in fiscal 1997 associated with
   the Company's higher long-term debt levels compared to the same period
   last year, pursuant to the Company's strategy to "lock-in" favorable long-
   term interest rates.

   Motels

             Total revenues for the second quarter of fiscal 1997 for the
   motel division were $30.4 million, an increase of $2.6 million, or 9.3%,
   compared to $27.8 million in the same period in fiscal 1996.  Total
   revenues for the first half of fiscal 1997 for the motel division were
   $64.4 million, an increase of $6.0 million, or 10.3%, compared to $58.4
   million in the first half of fiscal 1996.  The motel division's operating
   income for the fiscal 1997 second quarter totaled $8.8 million, a decrease
   of $100,000, or 1.3%, from the $8.9 million earned by the division in the
   same period of fiscal 1996.  The motel division's operating income for the
   first half of fiscal 1997 totaled $21.8 million, an increase of $1.1
   million, or 5.5%, over the $20.7 million earned by the division in the
   same period of fiscal 1996.

             Compared to the end of the second quarter of fiscal 1996, there
   were 11 new Company-owned or operated and five new franchised Budgetel
   Inns in operation at the end of the fiscal 1997 second quarter.  The
   Company's newly opened motels contributed additional revenues of $1.9
   million to the division's fiscal 1997 second quarter revenues.  The
   Company's comparative occupancy rates were slightly lower early in the
   second quarter of fiscal 1997, but strengthened later in the quarter.  The
   Company believes that a temporary decline in demand, combined with 
   increasing industry segment room supply, contributed to the decline.  
   Increased average daily room rates at the Company's continuing motels 
   during the second quarter of fiscal 1997 compared to the same period last
   year partially offset the lower occupancy rates.  Start-up expenses 
   associated with new motels and increased advertising costs contributed to
   the slight decline in operating income despite increased revenues.

             At the end of the fiscal 1997 second quarter, the Company owned
   or operated 98 Budgetel Inns and franchised an additional 35 Inns,
   bringing the total number of Budgetel Inns in operation to 133.  In
   addition, there are currently 16 Company-owned or franchised Budgetel Inns
   under construction, all of which are scheduled to open before the end of
   fiscal 1997 or shortly thereafter.  The Company also owns and operates
   three Woodfield Suites all-suite motels and plans to open a fourth
   location in Cincinnati, Ohio during the third quarter of fiscal 1997 and a
   fifth location in Madison, Wisconsin in early fiscal 1998.  During the
   second quarter of fiscal 1997, the Company announced its goal of
   increasing the number of Woodfield Suites in operation to 40 to 50
   properties within the next five years.  The Company expects the increase
   to be achieved through new company-owned units, acquisitions and the
   introduction of a franchise program.

   Theatres

             The theatre division's fiscal 1997 second quarter revenues were
   $11.9 million, an increase of $1.8 million, or 18.5%, over revenues of
   $10.1 million in the same period in fiscal 1996.  Operating income for the
   second quarter in fiscal 1997 totaled $882,000, a decrease of $900,000, or
   50.8%, from operating income of $1.8 million in the same period last year. 
   The theatre division's fiscal 1997 first half revenues were $32.5 million,
   an increase of $3.5 million, or 12.1%, over revenues of $29.0 million in
   the first half of fiscal 1996.  Operating income for the first half of
   fiscal 1997 was $5.8 million, a decrease of $1.2 million, or 16.6%, from
   $7.0 million of operating income in the first half of fiscal 1996. 
   Consistent with the seasonality of the motion picture exhibition industry,
   the second quarter of the Company's fiscal year is typically the slowest
   period for its theatre division.

             Theatre division operating income declined due to higher pre-
   opening and start-up costs, especially for advertising and training,
   coupled with weak film product in late August, September and October.  The
   higher start-up costs were the result of the first quarter opening of two
   new theatre complexes, the acquisition of three theatres and the
   introduction of the division's new family entertainment center.  The
   Company added 47 new screens in the first quarter of fiscal 1997 and none
   in the second quarter, ending the second quarter with a total of 266
   screens compared to 204 at the end of the same period last year.  The
   Company opened it's largest complex, a 20-screen ultraplex in Addison,
   Illinois, on the first day of the third quarter of fiscal 1997.  In
   addition, the Company currently has 13 additional screens under
   construction at existing theatres.

             Total box office receipts for the fiscal 1997 first half were
   $22.0 million, an increase of $1.7 million, or 8.2%, over $20.3 million in
   the same period last year.  The increase in box office receipts for the
   first half of fiscal 1997 compared to the same period in the prior year
   was entirely due to the additional new screens, together with a 4.5%
   increase in first-run theatre average ticket prices and a 5.8% increase in
   concession revenues per person.  Without the additional screens, theatre
   attendance would have decreased for the first half and second quarter
   largely as a result of the less attractive film offerings during the
   period.  The impact of the 1996 Summer Olympics significantly affected
   attendance late in the first quarter and the effect carried over into the
   second quarter as well.  Motion picture film distributors anticipated
   lower theatre attendance during the Olympics and featured their best films
   during the late spring and early summer to avoid competing with the
   Olympics.  This strategy meant that less attractive films were distributed
   in late summer and early fall, with the result being a lack of quality
   carryovers into the Company's fiscal second quarter, which began in mid-
   August.  Theatre attendance is largely dependent upon the audience appeal
   of available films, a factor over which the Company has limited control.

   Hotels and Resorts

             Total revenues from the hotels and resorts division during the
   second quarter of fiscal 1997 increased by $1.6 million, or 11.4%, to
   $16.0 million, compared to $14.4 million in the previous year's comparable
   period.  Operating income increased by $1.7 million, or 93.5%, to $3.5
   million in the fiscal 1997 second quarter, compared to $1.8 million in the
   second quarter of fiscal 1996.  Total revenues from the hotels and resorts
   division during the first half of fiscal 1997 totaled $32.5 million, an
   increase of $1.7 million, or 5.6%, over total first half revenues of $30.7
   million in fiscal 1996.  Operating income increased by $1.9 million in the
   first half of fiscal 1997, or 36.6%, to $7.2 million, compared to $5.3
   million in the prior year's first half.

             Higher average room rates at the Company's hotels contributed to
   the increases in the fiscal 1997 periods compared to the prior year's
   periods.  The division's fiscal 1997 second quarter and first half results
   also benefitted from reduced charges for pre-opening costs for the
   Milwaukee Hilton (formerly the Marc Plaza) and increased management fees
   from properties managed but not owned by the hotels and resorts division.

   Restaurants

             Restaurant division revenues totaled $6.3 million for the second
   quarter of fiscal 1997, an increase of $700,000, or 12.6%, over fiscal
   1996 second quarter revenues of $5.6 million.  The division's operating
   income for the fiscal 1997 second quarter totaled $673,000, an increase of
   $542,000, or 413.7%, over operating income of $131,000 in the second
   quarter of fiscal 1996.  Restaurant division revenues totaled $13.1
   million for the first half of fiscal 1997, an increase of $100,000, or
   0.9%, over first half fiscal 1996 revenues of $13.0 million. Excluding
   $1.1 million of revenues from subsequently sold or closed restaurants from
   fiscal 1996 revenues, first half fiscal 1997 revenues increased 9.9% over
   the prior year.  The division's operating income for the first half of
   fiscal 1997 totaled $1.3 million, an increase of $940,000, or 241.6%, over
   fiscal 1996 first half operating income of $389,000.

             The increases in revenues and operating income for both the
   second quarter and first half of fiscal 1997, compared to the same prior
   periods, were primarily the result of recent successful KFC product
   introductions and increased sales from KFC's home delivery program,
   combined with reduced administrative costs related to the disposition of
   Applebee's and other restaurant properties last year.  Same store KFC
   revenues for the second quarter of fiscal 1997 compared to the prior
   year's second quarter were up 8.3%, with guest counts at same store KFC's
   up 3.0% and average guest check amounts up 5.2%.  The Company has plans to
   convert and open its first 2-in-1 KFC/Taco Bell restaurant in the fourth
   quarter of fiscal 1997.  

   FINANCIAL CONDITION

             The Company's lodging, movie theatre and restaurant businesses
   each generate significant and consistent daily amounts of cash because
   each segment's revenue is derived predominantly from consumer cash
   purchases.  The Company believes that these consistent and predictable
   cash sources, together with the availability to the Company of $80 million
   of unused credit lines at the end of the second quarter, should be
   adequate to support the ongoing operational liquidity needs of the
   Company's businesses.

             Net cash provided by operating activities increased by $21.5
   million during the first half of fiscal 1997 to $37.6 million, compared to
   $16.1 million in the prior year's first half.  The increase over the same
   period last year was primarily the result of approximately $10 million of
   income taxes incurred on the gain on the sale of restaurants in fiscal
   1996, combined with increased net earnings before the restaurant gain. 
   Timing differences in receipts of accounts and notes receivable and
   payment of accounts payable contributed to the increase in net cash
   provided by operating activities as well.

             Net cash used in investing activities in the fiscal 1997 first
   half totaled $60.0 million, compared to the positive cash flow of $14.7
   million in the fiscal 1996 first half which resulted from receiving $48.3
   million in net cash proceeds from the June 1995 sale of its Applebee's
   restaurants and related rights.  Capital expenditures to support the
   Company's continuing expansion program totaled $60.1 million in the first
   half of fiscal 1997 compared to $36.7 million in the prior year's first
   half.

             Cash provided by financing activities in the fiscal 1997 first
   half totaled $44.0 million, compared to cash used in financing activities
   of $26.0 million in the first half of fiscal 1996.  During the fiscal 1997
   first half, the Company received $97.9 million of net proceeds from the
   issuance of notes payable and long-term debt, compared to none in the
   first half of fiscal 1996.  The lack of proceeds in fiscal 1996 was due to
   the Company's use of cash proceeds from its Applebee's sale to fund
   expansion during that time period.  Included in the fiscal 1997 proceeds
   was $85 million in principal amount of senior unsecured long-term notes
   issued in a private placement to six institutional lenders.  The Company
   has the ability to issue up to $115 million of additional senior notes
   under the private placement program over the next thirty months.  The
   Company used a portion of the proceeds from the senior notes to pay off
   existing debt, resulting in total principal payments on notes payable and
   long-term debt of $52.4 million in the first half of fiscal 1997, compared
   to only $21.1 million in the same period last year.  The Company expects
   to use the remaining proceeds to help fund the Company's ongoing expansion
   plans.

             In addition to the changes in debt transactions noted above, net
   cash provided by financing activities also increased due to dividend
   payments of only $1.4 million in the first half of fiscal 1997 compared to
   $5.0 million in the first half of fiscal 1996.  The reduction in dividend
   payments for the period was the result of a one-time timing difference
   between the Company's quarterly dividend payments in fiscal 1997 compared
   to an annual dividend payment made in fiscal 1996.  Total fiscal 1997
   dividend payments are expected to exceed fiscal 1996 dividend payments.   

             The actual timing and extent of the implementation of the
   Company's current expansion plans will depend in large part on continuing
   favorable industry and general economic conditions, the competitive
   environment, evolving customer needs and trends and the availability of
   attractive opportunities.  It is likely that the Company's current
   expansion goals will continue to evolve and change in response to these
   and other factors.


   
<PAGE>

 
                          PART II - OTHER INFORMATION


   Item 4.   Submission of Matters to a Vote of Security Holders

        The Company's 1996 annual meeting of shareholders was held on
   Thursday, September 26, 1996 ("Annual Meeting").  At the Annual Meeting,
   the following matters were voted on in person or by proxy, and approved by
   the Company's shareholders:

        1.   The shareholders voted to elect Ben Marcus, Stephen H. Marcus,
             Diane Marcus Gershowitz, George R. Slater, Lee Sherman Dreyfus,
             John L. Murray, Daniel F. McKeithan, Jr., Allan H. Selig and
             Timothy E. Hoeksema to the Company's Board of Directors for one-
             year terms to expire at the Company's 1997 annual meeting of
             shareholders and until their successors are duly qualified and
             elected.

        As of the August 9, 1996 record date for the Annual Meeting ("Record
   Date"), 10,816,145 shares of Common Stock and 8,856,405 shares of Class B
   Common Stock were outstanding and eligible to vote, with the Common Stock
   entitled to one vote per share and the Class B Common Stock entitled to
   ten votes per share.  Following are the final votes on the matters
   presented for shareholder approval at the Annual Meeting:

   Election of Directors

                                       For                    Withheld
                                         Percentage               Percentage
    Name                        Votes        (1)          Votes       (1)

    Lee Sherman Dreyfus       89,858,718     99.98%       17,632       0.02%
    Diane Marcus Gershowitz   89,862,807     99.98%       13,543       0.02%
    Timothy E. Hoeksema       89,861,864     99.98%       14,486       0.02%
    Stephen H. Marcus         89,862,888     99.99%       13,462       0.01%

    Daniel F. McKeithan,
      Jr.                     89,862,914     99.99%       13,436       0.01%
    John L. Murray            89,858,830     99.98%       17,520       0.02%
    Bruce J. Olson            89,863,230     99.99%       13,120       0.01%
    Allan H. Selig            89,855,182     99.98%       21,168       0.02%
    George R. Slater          89,858,830     99.98%       17,520       0.02%

   ____________
   (1)  Based on a total of 89,876,350 votes represented by shares of Common
        Stock and Class B Common Stock actually voted in person or by proxy
        at the Annual Meeting.

   No other matters were brought before the Annual Meeting for a shareholder
   vote.



   Item 6.   Exhibits and Reports on Form 8-K

             a.   Exhibits

                  Exhibit 4.1.   The Marcus Corporation Note Purchase
                                 Agreement, dated October 25, 1996.

                  Exhibit 27.    Financial Data Schedule


             b.   Reports on Form 8-K

                  None.


   
<PAGE>


                                   SIGNATURES


             Pursuant to the requirements of the Securities Exchange Act of
   1934, the Registrant has duly caused this report to be signed on its
   behalf by the undersigned thereunto duly authorized.



                             THE MARCUS CORPORATION

                                  (Registrant)



   DATE:  December 23, 1996      By:  \s\ Stephen H. Marcus                  
                                      Stephen H. Marcus,
                                      Chairman of the Board, President and
                                      Chief Executive Officer



   DATE:  December 23, 1996      By:  \s\ Douglas A. Neis                    
                                      Douglas A. Neis
                                      Chief Financial Officer and Treasurer

   
<PAGE>
                             THE MARCUS CORPORATION
                                    FORM 10-Q
                                     FOR THE
                       24 - WEEKS ENDED NOVEMBER 14, 1996


                                  EXHIBIT INDEX


   Exhibit             Description

     4.1               The Marcus Corporation Note Purchase Agreement, dated
                       October 25, 1996.

     27                Financial Data Schedule






                             The Marcus Corporation
                                   $60,000,000
          7.41% Series A Senior Notes, Tranche A, due October 15, 2008

                                       and

                                   $25,000,000
          7.51% Series A Senior Notes, Tranche B, due October 15, 2011


                                 ______________

                             Note Purchase Agreement

                                  _____________


                          Dated as of October 25, 1996

   
<PAGE>
                                Table of Contents
                          (Not a part of the Agreement)


   Section                           Heading                           Page  

   Section 1.   Authorization of Notes   . . . . . . . . . . . . . . . . 6

   Section 2.   Sale and Purchase of Notes   . . . . . . . . . . . . . . 6

      Section 2.1.  Series A Notes . . . . . . . . . . . . . . . . . . . 6
      Section 2.2.  Additional Series of Notes . . . . . . . . . . . . . 7

   Section 3.   Closing  . . . . . . . . . . . . . . . . . . . . . . . . 8

   Section 4.   Conditions to Closing  . . . . . . . . . . . . . . . . . 8

      Section 4.1.  Representations and Warranties . . . . . . . . . . . 8
      Section 4.2.  Performance; No Default. . . . . . . . . . . . . . . 8
      Section 4.3.  Compliance Certificates  . . . . . . . . . . . . . . 9
      Section 4.4.  Opinions of Counsel  . . . . . . . . . . . . . . . . 9
      Section 4.5.  Purchase Permitted By Applicable Law, etc  . . . . . 9
      Section 4.6.  Sale of Other Notes  . . . . . . . . . . . . . . . . 9
      Section 4.7.  Payment of Special Counsel Fees. . . . . . . . . . . 9
      Section 4.8.  Private Placement Number . . . . . . . . . . . . . . 9
      Section 4.9.  Changes in Corporate Structure . . . . . . . . . .  10
      Section 4.10. Proceedings and Documents  . . . . . . . . . . . .  10
      Section 4.11. Conditions to Issuance of Additional Notes . . . .  10

   Section 5.   Representations and Warranties of the Company  . . . .  10

      Section 5.1.  Organization; Power and Authority  . . . . . . . .  10
      Section 5.2.  Authorization, etc . . . . . . . . . . . . . . . .  11
      Section 5.3.  Disclosure . . . . . . . . . . . . . . . . . . . .  11
      Section 5.4.  Organization and Ownership of Shares of Restricted
                    Subsidiaries; Affiliates and Investments
 . . . . .  11
      Section 5.5.  Financial Statements . . . . . . . . . . . . . . .  12
      Section 5.6.  Compliance with Laws, Other Instruments, etc . . .  12
      Section 5.7.  Governmental Authorizations, etc . . . . . . . . .  12
      Section 5.8.  Litigation; Observance of Agreements, Statutes and
                    Orders . . . . . . . . . . . . . . . . . . . . . .  12
      Section 5.9.  Taxes  . . . . . . . . . . . . . . . . . . . . . .  13
      Section 5.10. Title to Property; Leases  . . . . . . . . . . . .  13
      Section 5.11. Licenses, Permits, etc . . . . . . . . . . . . . .  13
      Section 5.12. Compliance with ERISA  . . . . . . . . . . . . . .  14
      Section 5.13.  Private Offering by the Company . . . . . . . . .  15
      Section 5.14. Use of Proceeds; Margin Regulations  . . . . . . .  15
      Section 5.15. Existing Debt; Future Liens  . . . . . . . . . . .  15
      Section 5.16. Foreign Assets Control Regulations, etc  . . . . .  15
      Section 5.17. Status under Certain Statutes  . . . . . . . . . .  16
      Section 5.18. Environmental Matters  . . . . . . . . . . . . . .  16

   Section 6.   Representations of the Purchaser   . . . . . . . . . .  16

      Section 6.1.  Purchase for Investment  . . . . . . . . . . . . .  16
      Section 6.2.  Source of Funds  . . . . . . . . . . . . . . . . .  17

   Section 7.   Information as to Company  . . . . . . . . . . . . . .  18

      Section 7.1.  Financial and Business Information . . . . . . . .  18
      Section 7.2.  Officer's Certificate  . . . . . . . . . . . . . .  21
      Section 7.3.  Inspection . . . . . . . . . . . . . . . . . . . .  21

   Section 8.   Prepayment of the Series A Notes   . . . . . . . . . .  22

      Section 8.1.  Required Prepayments . . . . . . . . . . . . . . .  22
      Section 8.2.  Optional Prepayments with Make-Whole Amount  . . .  22
      Section 8.3.  Allocation of Partial Prepayments  . . . . . . . .  23
      Section 8.4.  Maturity; Surrender, etc . . . . . . . . . . . . .  23
      Section 8.5.  Purchase of Notes  . . . . . . . . . . . . . . . .  23
      Section 8.6.  Make-Whole Amount for Series A Notes . . . . . . .  23

   Section 9.   Affirmative Covenants  . . . . . . . . . . . . . . . .  25

      Section 9.1.  Compliance with Law  . . . . . . . . . . . . . . .  25
      Section 9.2.  Insurance  . . . . . . . . . . . . . . . . . . . .  25
      Section 9.3.  Maintenance of Properties  . . . . . . . . . . . .  25
      Section 9.4.  Payment of Taxes and Claims  . . . . . . . . . . .  26
      Section 9.5.  Corporate Existence, etc . . . . . . . . . . . . . 26\

   Section 10.  Negative Covenants   . . . . . . . . . . . . . . . . .  26

      Section 10.1. Transactions with Affiliates . . . . . . . . . . .  26
      Section 10.2. Consolidated Operating Cash Flow . . . . . . . . .  26
      Section 10.3. Limitations on Debt  . . . . . . . . . . . . . . .  26
      Section 10.4. Limitations on Priority Debt . . . . . . . . . . .  27
      Section 10.5. Limitation on Liens  . . . . . . . . . . . . . . .  27
      Section 10.6. Sales of Assets  . . . . . . . . . . . . . . . . .  29
      Section 10.7. Merger, Consolidation and Sale of Stock  . . . . .  30
      Section 10.8. Designation of Restricted and Unrestricted Subsidiaries30
      Section 10.9. Nature of Business . . . . . . . . . . . . . . . .  31

   Section 11.  Events of Default  . . . . . . . . . . . . . . . . . .  31

   Section 12.  Remedies on Default, etc   . . . . . . . . . . . . . .  33

      Section 12.1. Acceleration . . . . . . . . . . . . . . . . . . .  33
      Section 12.2. Other Remedies . . . . . . . . . . . . . . . . . .  34
      Section 12.3. Rescission . . . . . . . . . . . . . . . . . . . .  34
      Section 12.4. No Waivers or Election of Remedies, Expenses, etc   34

   Section 13.  Registration; Exchange; Substitution of Notes  . . . .  35

      Section 13.1. Registration of Notes  . . . . . . . . . . . . . .  35
      Section 13.2. Transfer and Exchange of Notes . . . . . . . . . .  35
      Section 13.3. Replacement of Notes . . . . . . . . . . . . . . .  35

   Section 14.  Payments on Notes  . . . . . . . . . . . . . . . . . .  36

      Section 14.1. Place of Payment . . . . . . . . . . . . . . . . .  36
      Section 14.2. Home Office Payment  . . . . . . . . . . . . . . .  36

   Section 15.  Expenses, Etc  . . . . . . . . . . . . . . . . . . . .  36

      Section 15.1. Transaction Expenses . . . . . . . . . . . . . . .  36
      Section 15.2. Survival . . . . . . . . . . . . . . . . . . . . .  37

   Section 16.  Survival of Representations and Warranties;
                Entire Agreement   . . . . . . . . . . . . . . . . . .  37

   Section 17.  Amendment and Waiver   . . . . . . . . . . . . . . . .  37

      Section 17.1. (a)  Requirements  . . . . . . . . . . . . . . . .  37
      Section 17.2. Solicitation of Holders of Notes . . . . . . . . .  38
      Section 17.3. Binding Effect, etc  . . . . . . . . . . . . . . .  38
      Section 17.4. Notes Held by Company, etc . . . . . . . . . . . .  39

   Section 18.  Notices  . . . . . . . . . . . . . . . . . . . . . . .  39

   Section 19.  Reproduction of Documents  . . . . . . . . . . . . . .  39

   Section 20.  Confidential Information   . . . . . . . . . . . . . .  40

   Section 21.  Substitution of Purchaser  . . . . . . . . . . . . . .  41

   Section 22.  Miscellaneous  . . . . . . . . . . . . . . . . . . . .  41

      Section 22.1. Successors and Assigns . . . . . . . . . . . . . .  41
      Section 22.2. Payments Due on Non-Business Days  . . . . . . . .  41
      Section 22.3. Severability . . . . . . . . . . . . . . . . . . .  41
      Section 22.4. Construction . . . . . . . . . . . . . . . . . . .  41
      Section 22.5. Counterparts . . . . . . . . . . . . . . . . . . .  42
      Section 22.6. Governing Law  . . . . . . . . . . . . . . . . . .  42

   Signature         . . . . . . . . . . . . . . . . . . . . . . . . .  43


   Schedule A       -    Information Relating To Purchasers

   Schedule B       -    Defined Terms

   Schedule 5.4     -    Subsidiaries, Affiliates and Directors and Senior
                         Officers of the Company

   Schedule 5.5     -    Financial Statements

   Schedule 5.11    -    Patents, etc.

   Schedule 5.15    -    Existing Debt

   Schedule 10.5    -    Existing Liens

   Exhibit 1        -    Form of 7.41% Series A Senior Note, Tranche A, due
                         October 15, 2008

   Exhibit 2        -    Form of 7.51% Series A Senior Note, Tranche B, due
                         October 15, 2011

   Exhibit 4.4(a)   -    Form of Opinion of Special Counsel for the Company

   Exhibit 4.4(b)   -    Form of Opinion of Special Counsel for the
                         Purchasers

   Exhibit S        -    Form of Supplement to Note Purchase Agreement



                             The Marcus Corporation
                      250 East Wisconsin Avenue, Suite 1700
                           Milwaukee, Wisconsin  53202

          7.41% Series A Senior Notes, Tranche A, due October 15, 2008
                                       and
          7.51% Series A Senior Notes, Tranche B, due October 15, 2011

                                                             October 25, 1996

   To each of the Purchasers listed in
     the attached Schedule A:

   Ladies and Gentlemen:

   The Marcus Corporation, a Wisconsin corporation (the "Company"), agrees
   with you as follows:

   Section 1.    Authorization of Notes;.

        The Company will authorize the issue and sale of (i) $60,000,000
   aggregate principal amount of its 7.41% Series A Senior Notes, Tranche A,
   due October 15, 2008 (the "Tranche A Notes") and (ii) $25,000,000
   aggregate principal amount of its 7.51% Series A Senior Notes, Tranche B,
   due October 15, 2011 (the "Tranche B Notes", and together with the Tranche
   A Notes, the "Series A Notes").  The Series A Notes together with each
   Series of Additional Notes which may from time to time be issued pursuant
   to the provisions of Section 2.2 are collectively referred to as the
   "Notes" (such term shall also include any such notes issued in
   substitution therefor pursuant to Section 13 of this Agreement or the
   Other Agreements (as hereinafter defined)).  The Tranche A Notes and the
   Tranche B Notes shall be substantially in the forms set out in Exhibits 1
   and 2, respectively, with such changes therefrom, if any, as may be
   approved by you and the Company.  Certain capitalized terms used in this
   Agreement are defined in Schedule B; references to a "Schedule" or an
   "Exhibit" are, unless otherwise specified, to a Schedule or an Exhibit
   attached to this Agreement.

   Section 2.    Sale and Purchase of Notes;.

     Section 2.1.  Series A Notes;.  Subject to the terms and conditions of
   this Agreement, the Company will issue and sell to you and you will
   purchase from the Company, at the Closing provided for in Section 3,
   Series A Notes of the Tranche and in the principal amount specified
   opposite your name in Schedule A at the purchase price of 100% of the
   principal amount thereof.  Contemporaneously with entering into this
   Agreement, the Company is entering into separate Note Purchase Agreements
   (the "Other Agreements," and together with this Agreement, the
   "Agreements") identical with this Agreement with each of the other
   purchasers named in Schedule A (the "Other Purchasers"), providing for the
   sale at such Closing to each of the Other Purchasers of Series A Notes of
   the Tranche and in the principal amount specified opposite its name in
   Schedule A.  Your obligation hereunder, and the obligations of the Other
   Purchasers under the Other Agreements and the obligations of the
   Additional Purchasers under the Supplements, are several and not joint
   obligations, and you shall have no obligation  under any Other Agreement
   or any Supplement and no liability to any Person for the performance or
   nonperformance by any Other Purchaser or Additional Purchaser thereunder.

     Section 2.2.  Additional Series of Notes;.  The Company may, from time
   to time, in its sole discretion but subject to the terms hereof, issue and
   sell one or more additional Series of its unsecured promissory notes under
   the provisions of the Agreements pursuant to a supplement (a "Supplement
   ") substantially in the form of Exhibit S.  Each additional Series of
   Notes (the "Additional Notes ") issued pursuant to a Supplement shall be
   subject to the following terms and conditions:

        (i)   each Series of Additional Notes, when so issued, shall be
   differentiated from all previous series by sequential alphabetical
   designation inscribed thereon;

       (ii)  Additional Notes of the same Series may consist of more than one
   different and separate tranches and may differ with respect to outstanding
   principal amounts, maturity dates, interest rates and premiums, if any,
   and price and terms of redemption or payment prior to maturity, but all
   such different and separate tranches of the same Series shall vote as a
   single class and constitute one Series;  

      (iii)  each Series of Additional Notes shall be dated the date of
   issue, bear interest at such rate or rates, mature on such date or dates,
   be subject to such mandatory and optional prepayment on the dates and at
   the premiums, if any, have such additional or different conditions
   precedent to closing, such representations and warranties and such
   additional covenants as shall be specified in the Supplement under which
   such Additional Notes are issued, provided, that any such additional
   covenants shall inure to the benefit of all holders of Notes so long as
   any Additional Notes issued pursuant to such Supplement remain
   outstanding;

       (iv)  each Series of Additional Notes issued under the Agreements
   shall be in substantially the form of Exhibit 1 to Exhibit S hereto with
   such variations, omissions and insertions as are necessary or permitted
   hereunder;

        (v)  the minimum principal amount of any Note issued under a
   Supplement shall be $500,000, except as may be necessary to evidence the
   outstanding amount of any Note originally issued in a denomination of
   $500,000 or more; 

       (vi)  all Additional Notes shall constitute Senior Debt of the Company
   and shall rank pari passu with all other outstanding Notes; and

      (vii)  no Additional Notes shall be issued hereunder if at the time of
   issuance thereof and after giving effect to the application of the
   proceeds thereof, any Default or Event of Default shall have occurred and
   be continuing.

   Section 3.    Closing;.

        The sale and purchase of the Series A Notes to be purchased by you
   and the Other Purchasers shall occur at the offices of Chapman and Cutler,
   111 West Monroe Street, Chicago, Illinois 60603, at 11:00 a.m. Chicago
   time, at a closing (the "Closing") on October 25, 1996 or on such other
   Business Day thereafter on or prior to October 31, 1996 as may be agreed
   upon by the Company and you and the Other Purchasers.  At the Closing the
   Company will deliver to you the Notes to be purchased by you in the form
   of a single Note (or such greater number of Notes in denominations of at
   least $500,000 as you may request) dated the date of the Closing and
   registered in your name (or in the name of your nominee), against delivery
   by you to the Company or its order of immediately available funds in the
   amount of the purchase price therefor by wire transfer of immediately
   available funds for the benefit of the Company to the account of its
   Wholly-Owned Subsidiary, First American Finance Corporation, Account No.
   55025-1015 at Bank One Milwaukee, N.A., Milwaukee, Wisconsin (ABA
   #075-000019).  If at the Closing the Company shall fail to tender such
   Notes to you as provided above in this Section 3, or any of the conditions
   specified in Section 4 shall not have been fulfilled to your satisfaction,
   you shall, at your election, be relieved of all further obligations under
   this Agreement, without thereby waiving any rights you may have by reason
   of such failure or such nonfulfillment.

   Section 4.    Conditions to Closing;.

        Your obligation to purchase and pay for the Notes to be sold to you
   at the Closing is subject to the fulfillment to your satisfaction, prior
   to or at the Closing, of the following conditions:

     Section 4.1.  Representations and Warranties;.  The representations and
   warranties of the Company in this Agreement shall be correct when made and
   at the time of the Closing.

     Section 4.2.  Performance; No Default.';  The Company shall have
   performed and complied with all agreements and conditions contained in
   this Agreement required to be performed or complied with by it prior to or
   at the Closing, and after giving effect to the issue and sale of the Notes
   (and the application of the proceeds thereof as contemplated by Schedule
   5.14), no Default or Event of Default shall have occurred and be
   continuing.   Neither the Company nor any Restricted Subsidiary shall have
   entered into any transaction since the date of the Memorandum that would
   have been prohibited by the covenants contained in Section 10 hereof had
   such covenants applied since such date.

     Section 4.3.  Compliance Certificates;.

        (a)  Officer's Certificate.  The Company shall have delivered to you
   an Officer's Certificate, dated the date of the Closing, certifying that
   the conditions specified in Sections 4.1, 4.2 and 4.9 have been fulfilled.

        (b)  Secretary's Certificate.  The Company shall have delivered to
   you a certificate certifying as to the resolutions attached thereto and
   other corporate proceedings relating to the authorization, execution and
   delivery of the Notes and the Agreements.

     Section 4.4.  Opinions of Counsel;.  You shall have received opinions
   in form and substance satisfactory to you, dated the date of the Closing
   (a) from Robin J. Irwin, Esq., counsel for the Company, covering the
   matters set forth in Exhibit 4.4(a) and covering such other matters
   incident to the transactions contemplated hereby as you or your counsel
   may reasonably request (and the Company hereby instructs its counsel to
   deliver such opinion to you) and (b) from Chapman and Cutler, your special
   counsel in connection with such transactions, substantially in the form
   set forth in Exhibit 4.4(b) and covering such other matters incident to
   such transactions as you may reasonably request.

     Section 4.5.  Purchase Permitted By Applicable Law, etc';.  On the date
   of the Closing your purchase of Notes shall (a) be permitted by the laws
   and regulations of each jurisdiction to which you are subject, without
   recourse to provisions (such as Section 1405(a)(8) of the New York
   Insurance Law) permitting limited investments by insurance companies
   without restriction as to the character of the particular investment, (b)
   not violate any applicable law or regulation (including, without
   limitation, Regulation G, T or X of the Board of Governors of the Federal
   Reserve System) and (c) not subject you to any tax, penalty or liability
   under or pursuant to any applicable law or regulation, which law or
   regulation was not in effect on the date hereof.  If requested by you, you
   shall have received an Officer's Certificate certifying as to such matters
   of fact as you may reasonably specify to enable you to determine whether
   such purchase is so permitted.

     Section 4.6.  Sale of Other Notes;.  Contemporaneously with the
   Closing, the Company shall sell to the Other Purchasers, and the Other
   Purchasers shall purchase, the Notes to be purchased by them at the
   Closing as specified in Schedule A.

     Section 4.7.  Payment of Special Counsel Fees.;  Without limiting the
   provisions of Section 15.1, the Company shall have paid on or before the
   Closing the fees, charges and disbursements of your special counsel
   referred to in Section 4.4 to the extent reflected in a statement of such
   counsel rendered to the Company at least one Business Day prior to the
   Closing.

     Section 4.8.  Private Placement Number;.  A Private Placement Number
   issued by Standard & Poor's CUSIP Service Bureau (in cooperation with the
   Securities Valuation Office of the National Association of Insurance
   Commissioners) shall have been obtained for the Tranche A Notes and the
   Tranche B Notes.

     Section 4.9.  Changes in Corporate Structure;.  The Company shall not
   have changed its jurisdiction of incorporation or been a party to any
   merger or consolidation and shall not have succeeded to all or any
   substantial part of the liabilities of any other entity, at any time
   following the date of the most recent financial statements referred to in
   Schedule 5.5.

    Section 4.10.  Proceedings and Documents;.  All corporate and other
   proceedings in connection with the transactions contemplated by this
   Agreement and all documents and instruments incident to such transactions
   shall be satisfactory to you and your special counsel, and you and your
   special counsel shall have received all such counterpart originals or
   certified or other copies of such documents as you or they may reasonably
   request.

    Section 4.11.  Conditions to Issuance of Additional Notes;.  The
   obligations of the Additional Purchasers to purchase such Additional Notes
   shall be subject to the following conditions precedent, in addition to the
   conditions specified in the Supplement pursuant to which such Additional
   Notes may be issued:

        (a)  Compliance Certificate.  A duly authorized Senior Financial
   Officer shall execute and deliver to each Additional Purchaser an
   Officer's Certificate dated the date of issue of such Series of Additional
   Notes stating that such officer has reviewed the provisions of the
   Agreements (including any Supplements thereto) and setting forth the
   information and computations (in sufficient detail) required in order to
   establish whether the Company is in compliance with the requirements of
   Section 10.3 on such date.

        (b)  Execution and Delivery of Supplement.  The Company and each such
   Additional Purchaser shall execute and deliver a Supplement substantially
   in the form of Exhibit S hereto.

        (c)  Representations of Additional Purchasers.  Each Additional
   Purchaser shall have confirmed in the Supplement that the representations
   set forth in Section 6 are true with respect to such Additional Purchaser
   on and as of the date of issue of the Additional Notes.

   Section 5.    Representations and Warranties of the Company;.

        The Company represents and warrants to you that:

     Section 5.1.  Organization; Power and Authority';.  The Company is a
   corporation duly organized, validly existing and in good standing under
   the laws of its jurisdiction of incorporation, and is duly qualified as a
   foreign corporation and is in good standing in each jurisdiction in which
   such qualification is required by law, other than those jurisdictions as
   to which the failure to be so qualified or in good standing could not,
   individually or in the aggregate, reasonably be expected to have a
   Material Adverse Effect.  The Company has the corporate power and
   authority to own or hold under lease the properties it purports to own or
   hold under lease, to transact the business it transacts and proposes to
   transact, to execute and deliver this Agreement and the Other Agreements
   and the Series A Notes and to perform the provisions hereof and thereof.

     Section 5.2.  Authorization, etc;.  This Agreement, the Other
   Agreements and the Series A Notes have been duly authorized by all
   necessary corporate action on the part of the Company, and this Agreement
   constitutes, and upon execution and delivery thereof each Note will
   constitute, a legal, valid and binding obligation of the Company
   enforceable against the Company in accordance with its terms, except as
   such enforceability may be limited by (i) applicable bankruptcy,
   insolvency, reorganization, moratorium or other similar laws affecting the
   enforcement of creditors' rights generally and (ii) general principles of
   equity (regardless of whether such enforceability is considered in a
   proceeding in equity or at law).

     Section 5.3.  Disclosure;.  The Company, through its agent, BA
   Securities, Inc., has delivered to you and each Other Purchaser a copy of
   a Private Placement Memorandum, dated September, 1996 (the "Memorandum"),
   relating to the transactions contemplated hereby.  The Memorandum fairly
   describes, in all material respects, the general nature of the business
   and principal properties of the Company and its Restricted Subsidiaries. 
   This Agreement, the Memorandum, the documents, certificates or other
   writings delivered to you by or on behalf of the Company in connection
   with the transactions contemplated hereby and the financial statements
   listed in Schedule 5.5, taken as a whole, do not contain any untrue
   statement of a material fact or omit to state any material fact necessary
   to make the statements therein not misleading in light of the
   circumstances under which they were made.  Since May 30, 1996, there has
   been no change  in  the  financial  condition, operations, business,
   properties or prospects of the Company or any Restricted Subsidiary except
   changes that individually or in the aggregate could not reasonably be
   expected to have a Material Adverse Effect.  There is no fact known to the
   Company that could reasonably be expected to have a Material Adverse
   Effect that has not been set forth herein or in the Memorandum or in the
   other documents, certificates and other writings delivered to you by or on
   behalf of the Company specifically for use in connection with the
   transactions contemplated hereby.

     Section 5.4.  Organization and Ownership of Shares of Restricted
   Subsidiaries; Affiliates and Investments';.  (a) Schedule 5.4 contains
   (except as noted therein) complete and correct lists (i) of the Company's
   Restricted and Unrestricted Subsidiaries, and showing, as to each
   Subsidiary, the correct name thereof, the jurisdiction of its
   organization, and the percentage of shares of each class of its capital
   stock or similar equity interests outstanding owned by the Company and
   each other Subsidiary, (ii) of the Company's Affiliates, other than
   Unrestricted Subsidiaries, (iii) of the Company's directors and senior
   officers and (iv) the Investments existing at the Closing, other than
   Investments in Subsidiaries and Affiliates.

        (b)  All of the outstanding shares of capital stock or similar equity
   interests of each Subsidiary shown in Schedule 5.4 as being owned by the
   Company and its Subsidiaries have been validly issued, are fully paid and
   nonassessable and are owned by the Company or another Subsidiary free and
   clear of any Lien (except as otherwise disclosed in Schedule 5.4).

        (c)  Each Subsidiary identified in Schedule 5.4 is a corporation or
   other legal entity duly organized, validly existing and in good standing
   under the laws of its jurisdiction of organization, and is duly qualified
   as a foreign corporation or other legal entity and is in good standing in
   each jurisdiction in which such qualification is required by law, other
   than those jurisdictions as to which the failure to be so qualified or in
   good standing could not, individually or in the aggregate, reasonably be
   expected to have a Material Adverse Effect.  Each such Subsidiary has the
   corporate or other power and authority to own or hold under lease the
   properties it purports to own or hold under lease and to transact the
   business it transacts and proposes to transact.

        (d)  No Subsidiary is a party to, or otherwise subject to, any legal
   restriction or any agreement (other than customary limitations imposed by
   corporate law statutes) restricting the ability of such Subsidiary to pay
   dividends out of profits or make any other similar distributions of
   profits to the Company or any of its Subsidiaries that owns outstanding
   shares of capital stock or similar equity interests of such Subsidiary.

     Section 5.5.  Financial Statements;.  The Company has delivered to each
   Purchaser copies of the financial statements of the Company and its
   Subsidiaries listed on Schedule 5.5. All of said financial statements
   (including in each case the related schedules and notes) fairly present in
   all material respects the consolidated financial position of the Company
   and its Subsidiaries as of the respective dates specified in such
   financial statements and the consolidated results of their operations and
   cash flows for the respective periods so specified and have been prepared
   in accordance with GAAP consistently applied throughout the periods
   involved except as set forth in the notes thereto (subject, in the case of
   any interim financial statements, to normal year-end adjustments).

     Section 5.6.  Compliance with Laws, Other Instruments, etc;.  The
   execution, delivery and performance by the Company of this Agreement and
   the Series A Notes will not (a) contravene, result in any breach of, or
   constitute a default under, or result in the creation of any Lien in
   respect of any property of the Company or any Restricted Subsidiary under,
   any indenture, mortgage, deed of trust, loan, purchase or credit
   agreement, lease, corporate charter or by-laws, or any other agreement or
   instrument to which the Company or any Restricted Subsidiary is bound or
   by which the Company or any Restricted Subsidiary or any of their
   respective properties may be bound or affected, (b) conflict with or
   result in a breach of any of the terms, conditions or provisions of any
   order, judgment, decree, or ruling of any court, arbitrator or
   Governmental Authority applicable to the Company or any Restricted
   Subsidiary or (c) violate any provision of any statute or other rule or
   regulation of any Governmental Authority applicable to the Company or any
   Restricted Subsidiary.

     Section 5.7.  Governmental Authorizations, etc;.  No consent, approval
   or authorization of, or registration, filing or declaration with, any
   Governmental Authority is required in connection with the execution,
   delivery or performance by the Company of this Agreement or the Series A
   Notes.

     Section 5.8.  Litigation; Observance of Agreements, Statutes and
   Orders';.  (a) There are no actions, suits or proceedings pending or, to
   the knowledge of the Company, threatened against or affecting the Company
   or any Restricted Subsidiary or any property of the Company or any
   Restricted Subsidiary in any court or before any arbitrator of any kind or
   before or by any Governmental Authority that, individually or in the
   aggregate, could reasonably be expected to have a Material Adverse Effect.

        (b)  Neither the Company nor any Restricted Subsidiary is in default
   under any term of any agreement or instrument to which it is a party or by
   which it is bound, or any order, judgment, decree or ruling of any court,
   arbitrator or Governmental Authority or is in violation of any applicable
   law, ordinance, rule or regulation (including without limitation
   Environmental Laws) of any Governmental Authority, which default or
   violation, individually or in the aggregate, could reasonably be expected
   to have a Material Adverse Effect.

     Section 5.9.  Taxes;.  The Company and its Subsidiaries have filed all
   tax returns that are required to have been filed in any jurisdiction, and
   have paid all taxes shown to be due and payable on such returns and all
   other taxes and assessments levied upon them or their properties, assets,
   income or franchises, to the extent such taxes and assessments have become
   due and payable and before they have become delinquent, except for any
   taxes and assessments (a) the amount of which is not individually or in
   the aggregate Material or (b) the amount, applicability or validity of
   which is currently being contested in good faith by appropriate
   proceedings and with respect to which the Company or a Subsidiary, as the
   case may be, has established adequate reserves in accordance with GAAP. 
   The Company knows of no basis for any other tax or assessment that could
   reasonably be expected to have a Material Adverse Effect.  The charges,
   accruals and reserves on the books of the Company and its Subsidiaries in
   respect of Federal, state or other taxes for all fiscal periods are
   adequate.  The Federal income tax liabilities of the Company and its
   Subsidiaries have been determined by the Internal Revenue Service and paid
   for all fiscal years up to and including the fiscal year ended May 31,
   1991.

    Section 5.10.  Title to Property; Leases';.  The Company and its
   Restricted Subsidiaries have good and sufficient title to their respective
   properties that individually or in the aggregate are Material, including
   all such properties reflected in the most recent audited balance sheet
   referred to in Section 5.5 or purported to have been acquired by the
   Company or any Restricted Subsidiary after said date (except as sold or
   otherwise disposed of in the ordinary course of business), in each case
   free and clear of Liens prohibited by this Agreement.  All leases that
   individually or in the aggregate are Material are valid and subsisting and
   are in full force and effect in all material respects.

    Section 5.11.  Licenses, Permits, etc;.  Except as disclosed in Schedule
   5.11,

        (a)  the Company and its Restricted Subsidiaries own or possess all
   licenses, permits, franchises, authorizations, patents, copyrights,
   service marks, trademarks and trade names, or rights thereto, that
   individually or in the aggregate are Material, without known conflict with
   the rights of others;

        (b)  to the best knowledge of the Company, no product of the Company
   infringes in any Material respect any license, permit, franchise,
   authorization, patent, copyright, service mark, trademark, trade name or
   other right owned by any other Person; and

        (c)  to the best knowledge of the Company, there is no Material
   violation by any Person of any right of the Company or any of its
   Restricted Subsidiaries with respect to any patent, copyright, service
   mark, trademark, trade name or other right owned or used by the Company or
   any of its Restricted Subsidiaries.

    Section 5.12.  Compliance with ERISA;.  (a) The Company and each ERISA
   Affiliate have operated and administered each Plan in compliance with all
   applicable laws except for such instances of noncompliance as have not
   resulted in and could not reasonably be expected to result in a Material
   Adverse Effect.  Neither the Company nor any ERISA Affiliate has incurred
   any liability pursuant to Title I or IV of ERISA or the penalty or excise
   tax provisions of the Code relating to employee benefit plans (as defined
   in Section 3 of ERISA), and no event, transaction or condition has
   occurred or exists that could reasonably be expected to result in the
   incurrence of any such liability by the Company or any ERISA Affiliate, or
   in the imposition of any Lien on any of the rights, properties or assets
   of the Company or any ERISA Affiliate, in either case pursuant to Title I
   or IV of ERISA or to such penalty or excise tax provisions or to Section
   401(a)(29) or 412 of the Code, other than such liabilities or Liens as
   would not be individually or in the aggregate Material.

        (b)  The present value of the aggregate benefit liabilities under
   each of the Plans (other than Multiemployer Plans), determined as of the
   end of such Plan's most recently ended plan year on the basis of the
   actuarial assumptions specified for funding purposes in such Plan's most
   recent actuarial valuation report, did not exceed the aggregate current
   value of the assets of such Plan allocable to such benefit liabilities. 
   The  terms "benefit  liabilities" has the meaning specified in section
   4001 of ERISA and the terms "current value" and "present value" have the
   meaning specified in section 3 of ERISA.

        (c)  The Company and its ERISA Affiliates have not incurred
   withdrawal liabilities (and are not subject to contingent withdrawal
   liabilities) under section 4201 or 4204 of ERISA in respect of
   Multiemployer Plans that individually or in the aggregate are Material.

        (d)  The expected post-retirement benefit obligation (determined as
   of the last day of the Company's most recently ended fiscal year in
   accordance with Financial Accounting Standards Board Statement No. 106,
   without regard to liabilities attributable to continuation coverage
   mandated by section 4980B of the Code) of the Company and its Restricted
   Subsidiaries is not Material.

        (e)  The execution and delivery of this Agreement and the issuance
   and sale of the Notes hereunder will not involve any transaction that is
   subject to the prohibitions of section 406 of ERISA or in connection with
   which a tax could be imposed pursuant to section 4975(c)(1)(A)-(D) of the
   Code.  The representation by the Company in the first sentence of this
   Section 5.12(e) is made in reliance upon and subject to the accuracy of
   your representation in Section 6.2 as to the sources of the funds used to
   pay the purchase price of the Notes to be purchased by you.

    Section 5.13.   Private Offering by the Company;.  Neither the Company
   nor anyone acting on its behalf has offered the Series A Notes or any
   similar securities for sale to, or solicited any offer to buy any of the
   same from, or otherwise approached or negotiated in respect thereof with,
   any Person other than you, the Other Purchasers and not more than 70 other
   Institutional Investors, each of which has been offered the Series A Notes
   at a private sale for investment.  Neither the Company nor anyone acting
   on its behalf has taken, or will take, any action that would subject the
   issuance or sale of the Series A Notes to the registration requirements of
   Section 5 of the Securities Act.

    Section 5.14.  Use of Proceeds; Margin Regulations';.  The Company will
   apply the proceeds of the sale of the Series A Notes to repay outstanding
   indebtedness and for general corporate purposes. No part of the proceeds
   from the sale of the Series A Notes hereunder will be used, directly or
   indirectly, for the purpose of buying or carrying any margin stock within
   the meaning of Regulation G of the Board of Governors of the Federal
   Reserve System (12 CFR 207), or for the purpose of buying or carrying or
   trading in any securities under such circumstances as to involve the
   Company in a violation of Regulation X of said Board (12 CFR 224) or to
   involve any broker or dealer in a violation of Regulation T of said Board
   (12 CFR 220).  As used in this Section, the terms "margin stock" and
   "purpose of buying or carrying" shall have the meanings assigned to them
   in said Regulation G.

    Section 5.15.  Existing Debt; Future Liens';.  (a) Except as described
   therein, Schedule 5.15 sets forth a complete and correct list of all
   outstanding Debt of the Company and its Restricted Subsidiaries as of
   August 22, 1996, since which date there has been no Material change in the
   amounts, interest rates, sinking funds, installment payments or maturities
   of the Debt of the Company or its Restricted Subsidiaries.  Neither the
   Company nor any Restricted Subsidiary is in default and no waiver of
   default is currently in effect, in the payment of any principal or
   interest on any Debt of the Company or such Restricted Subsidiary and no
   event or condition exists with respect to any Debt of the Company or any
   Restricted Subsidiary that would permit (or that with notice or the lapse
   of time, or both, would permit) one or more Persons to cause such Debt to
   become due and payable before its stated maturity or before its regularly
   scheduled dates of payment.

        (b)  Neither the Company nor any Restricted Subsidiary has agreed or
   consented to cause or permit in the future (upon the happening of a
   contingency or otherwise) any of its property, whether now owned or
   hereafter acquired, to be subject to a Lien not permitted by Section 10.5.

    Section 5.16.  Foreign Assets Control Regulations, etc;.  Neither the
   sale of the Series A Notes by the Company hereunder nor its use of the
   proceeds thereof will violate the Trading with the Enemy Act, as amended,
   or any of the foreign assets control regulations of the United States
   Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any
   enabling legislation or executive order relating thereto.

    Section 5.17.  Status under Certain Statutes;.  Neither the Company nor
   any Restricted Subsidiary is an "investment company" registered or
   required to be registered under the Investment Company Act of 1940, as
   amended, or is subject to regulation under the Public Utility Holding
   Company Act of 1935, as amended, the ICC Termination Act of 1995 or the
   Federal Power Act, as amended.

    Section 5.18.  Environmental Matters;.  Neither the Company nor any
   Restricted Subsidiary has knowledge of any claim or has received any
   notice of any claim, and no proceeding has been instituted raising any
   claim against the Company or any of its Restricted Subsidiaries or any of
   their respective real properties now or formerly owned, leased or operated
   by any of them or other assets, alleging any damage to the environment or
   violation of any Environmental Laws, except, in each case, such as could
   not reasonably be expected to result in a Material Adverse Effect.  Except
   as otherwise disclosed to you in writing:

        (a)  neither the Company nor any Restricted Subsidiary has knowledge
   of any facts which would give rise to any claim, public or private, of
   violation of Environmental Laws or damage to the environment emanating
   from, occurring on or in any way related to real properties now or
   formerly owned, leased or operated by any of them or to other assets or
   their use, except, in each case, such as could not reasonably be expected
   to result in a Material Adverse Effect;

        (b)  neither the Company nor any of its Restricted Subsidiaries has
   stored any Hazardous Materials on real properties now or formerly owned,
   leased or operated by any of them and or has disposed of any Hazardous
   Materials in a manner contrary to any Environmental Laws in each case in
   any manner that could reasonably be expected to result in a Material
   Adverse Effect; and

        (c)  all buildings on all real properties now owned, leased or
   operated by the Company or any of its Restricted Subsidiaries are in
   compliance with applicable Environmental Laws, except where failure to
   comply could not reasonably be expected to result in a Material Adverse
   Effect.

   Section 6.    Representations of the Purchaser;.

     Section 6.1.  Purchase for Investment;.  You represent that you are
   purchasing the Series A Notes for your own account or for one or more
   separate accounts maintained by you or for the account of one or more
   pension or trust funds and not with a view to the distribution thereof,
   provided that the disposition of your or their property shall at all times
   be within your or their control.  You understand that the Series A Notes
   have not been registered under the Securities Act and may be resold only
   if registered pursuant to the provisions of the Securities Act or if an
   exemption from registration is available, except under circumstances where
   neither such registration nor such an exemption is required by law, and
   that the Company is not required to register the Series A Notes.
 .c2.Section 6.2.  Source of Funds;.  You represent that at least one of the
   following statements is an accurate representation as to each source of
   funds (a "Source") to be used by you to pay the purchase price of the
   Series A Notes to be purchased by you hereunder:

        (a)  if you are an insurance company, the Source is an "insurance
   company general account" within the meaning of Department of Labor
   Prohibited Transaction Exemption 95-60 (issued July 12, 1995) and there is
   no "employee benefit plan" (within the meaning of Section 3(3) of ERISA or
   Section 4975(e)(1) of the Code), treating as a single plan, all plans
   maintained by the same employer or employee organization, with respect to
   which the amount of the general account reserves and liabilities for all
   contracts held by or on behalf of such plan, exceed ten percent (10%) of
   the total reserves and liabilities of such general account (exclusive of
   separate account liabilities) plus surplus, as set forth in the NAIC
   Annual Statement filed with your state of domicile; or

        (b)  the Source is either (i) an insurance company pooled separate
   account, within the meaning of Prohibited Transaction Exemption ("PTE")
   90-1 (issued January 29, 1990), or (ii) a bank collective investment fund,
   within the meaning of the PTE 91-38 (issued July 12, 1991) and, except as
   you have disclosed to the Company in writing pursuant to this paragraph
   (b), no employee benefit plan or group of plans maintained by the same
   employer or employee organization beneficially owns more than 10% of all
   assets allocated to such pooled separate account or collective investment
   fund; or

        (c)  the Source constitutes assets of an "investment fund" (within
   the meaning of Part V of the QPAM Exemption) managed by a "qualified
   professional asset manager" or "QPAM" (within the meaning of Part V of the
   QPAM Exemption), no employee benefit plan's assets that are included in
   such investment fund, when combined with the assets of all other employee
   benefit plans established or maintained by the same employer or by an
   affiliate (within the meaning of Section V(c)(1) of the QPAM Exemption) of
   such employer or by the same employee organization and managed by such
   QPAM, exceed 20% of the total client assets managed by such QPAM, the
   conditions of Part l(c) and (g)  of the QPAM Exemption are satisfied,
   neither the QPAM nor a person controlling or controlled by the QPAM
   (applying the definition of "control" in Section V(e) of the QPAM
   Exemption) owns a 5% or more interest in the Company and (i) the identity
   of such QPAM and (ii) the names of all employee benefit plans whose assets
   are included in such investment fund have been disclosed to the Company in
   writing pursuant to this paragraph (c); or

        (d)  the Source is a governmental plan; or

        (e)  the Source is one or more employee benefit plans, or a separate
   account or trust fund comprised of one or more employee benefit plans,
   each of which has been identified to the Company in writing pursuant to
   this paragraph (e); or

        (f)  the Source does not include assets of any employee benefit plan,
   other than a plan exempt from the coverage of ERISA.

        The Company shall deliver a certificate on the date of the Closing,
   with respect to you and the Other Purchasers, on the date of the issuance
   of any Additional Notes, with respect to any Additional Purchasers and on
   or prior to the date of any transfer of any Notes, with respect to any
   subsequent holder of such Notes, which certificate shall either state that
   (i) it is neither a "party in interest" (as defined in Title I, Section
   3(14) of ERISA) nor a "disqualified person" (as defined in Section
   4975(e)(2) of the Code), with respect to any plan identified pursuant to
   paragraphs (b) or (e) above, or (ii) with respect to any plan, identified
   pursuant to paragraph (c) above, neither it nor any "affiliate" (as
   defined in Section V(c) of the QPAM Exemption) has at this time, and
   during the immediately preceding one year has exercised the authority to
   appoint or terminate said QPAM as manager of the assets of any plan
   identified in writing pursuant to paragraph (c) above or to negotiate the
   terms of said QPAM's management agreement on behalf of any such identified
   plans.

        As used in this Section 6.2, the terms "employee benefit plan",
   "governmental plan", "party in interest" and "separate account" shall have
   the respective meanings assigned to such terms in Section 3 of ERISA.

   Section 7.    Information as to Company;.

     Section 7.1.  Financial and Business Information;.  The Company shall
   deliver to each holder of Notes that is an Institutional Investor:

        (a)  Quarterly Statements - within 60 days after the end of each
   quarterly fiscal period in each fiscal year of the Company (other than the
   last quarterly fiscal period of each such fiscal year), duplicate copies
   of:

        (i)  a consolidated balance sheet of the Company and its Subsidiaries
   as at the end of such quarter, and

       (ii)  consolidated statements of income, changes in shareholders'
   equity and cash flows of the Company and its Subsidiaries for such quarter
   and (in the case of the second and third quarters) for the portion of the
   fiscal year ending with such quarter, setting forth in each case in
   comparative form the figures for the corresponding periods in the previous
   fiscal year, all in reasonable detail, prepared in accordance with GAAP
   applicable to quarterly financial statements generally, and certified by a
   Senior Financial Officer as fairly presenting, in all material respects,
   the financial position of the companies being reported on and their
   results of operations and cash flows, subject to changes resulting from
   year-end adjustments, provided that delivery within the time period
   specified above of copies of the Company's Quarterly Report on Form 10-Q
   prepared in compliance with the requirements therefor and filed with the
   Securities and Exchange Commission shall be deemed to satisfy the
   requirements of this Section 7.1 (a);

        (b)  Annual Statements - within 105 days after the end of each fiscal
   year of the Company, duplicate copies of,

        (i)  a consolidated balance sheet of the Company and its
   Subsidiaries, as at the end of such year, and

       (ii)  consolidated statements of income, changes in shareholders'
   equity and cash flows of the Company and its Subsidiaries, for such year,
   setting forth in each case in comparative form the figures for the
   previous fiscal year, all in reasonable detail, prepared in accordance
   with GAAP, and accompanied by an opinion thereon of independent certified
   public accountants of recognized national standing, which opinion shall
   state that such financial statements present fairly, in all material
   respects, the financial position of the companies being reported upon and
   their results of operations and cash flows and have been prepared in
   conformity with GAAP, and that the examination of such accountants in
   connection with such financial statements has been made in accordance with
   generally accepted auditing standards, and that such audit provides a
   reasonable basis for such opinion in the circumstances, provided that the
   delivery within the time period specified above of the Company's Annual
   Report on Form 10-K for such fiscal year (together with the Company's
   annual report to shareholders, if any, prepared pursuant to Rule 14a-3
   under the Exchange Act) prepared in accordance with the requirements
   therefor and filed with the Securities and Exchange Commission shall be
   deemed to satisfy the requirements of this Section 7.1(b);

        (c)  SEC and Other Reports - promptly upon their becoming available,
   one copy of (i) each financial statement, report, notice or proxy
   statement sent by the Company or any Restricted Subsidiary to public
   securities holders generally, and (ii) each regular or periodic report,
   each registration statement (without exhibits except as expressly
   requested by such holder), and each prospectus and all amendments thereto
   filed by the Company or any Restricted Subsidiary with the Securities and
   Exchange Commission and of all press releases and other statements made
   available generally by the Company or any Restricted Subsidiary to the
   public concerning developments that are Material;

        (d)  Notice of Default or Event of Default - promptly, and in any
   event within five days after a Responsible Officer becoming aware of the
   existence of any Default or Event of Default or that any Person has given
   any notice or taken any action with respect to a claimed default hereunder
   or that any Person has given any notice or taken any action with respect
   to a claimed default of the type referred to in Section 11(f), a written
   notice specifying the nature and period of existence thereof and what
   action the Company is taking or proposes to take with respect thereto;

        (e)  ERISA Matters - promptly, and in any event within five days
   after a Responsible Officer becoming aware of any of the following, a
   written notice setting forth the nature thereof and the action, if any,
   that the Company or an ERISA Affiliate proposes to take with respect
   thereto:

        (i)  with respect to any Plan, any reportable event, as defined in
   section 4043(b) of ERISA and the regulations thereunder, for which notice
   thereof has not been waived pursuant to such regulations as in effect on
   the date hereof; or

       (ii)  the taking by the PBGC of steps to institute, or the threatening
   by the PBGC of the institution of, proceedings under section 4042 of ERISA
   for the termination of, or the appointment of a trustee to administer, any
   Plan, or the receipt by the Company or any ERISA Affiliate of a notice
   from a Multiemployer Plan that such action has been taken by the PBGC with
   respect to such Multiemployer Plan; or

      (iii)  any event, transaction or condition that could result in the
   incurrence of any liability by the Company or any ERISA Affiliate pursuant
   to Title I or IV of ERISA or the penalty or excise tax provisions of the
   Code relating to employee benefit plans, or in the imposition of any Lien
   on any of the rights, properties or assets of the Company or any ERISA
   Affiliate pursuant to Title I or IV of ERISA or such penalty or excise tax
   provisions, if such liability or Lien, taken together with any other such
   liabilities or Liens then existing, could reasonably be expected to have a
   Material Adverse Effect;

        (f)  Notices from Governmental Authority - promptly, and in any event
   within 30 days of receipt thereof, copies of any notice to the Company or
   any Restricted Subsidiary from any Federal or state Governmental Authority
   relating to any order, ruling, statute or other law or regulation that
   could reasonably be expected to have a Material Adverse Effect; 

       (g)   Supplements  - promptly and in any event within 10 Business Days
   after the execution and delivery of any Supplement, a copy thereof; and

        (h)  Requested Information - with reasonable promptness, such other
   data and information relating to the business, operations, affairs,
   financial condition, assets or properties of the Company or any of its
   Subsidiaries or relating to the ability of the Company to perform its
   obligations hereunder and under the Notes as from time to time may be
   reasonably requested by any such holder of Notes.

        Notwithstanding the foregoing, in the event that one or more
   Unrestricted Subsidiaries shall either (i) own more than 10% of the total
   consolidated assets of the Company and its Subsidiaries, or (ii) account
   for more than 10% of the consolidated gross revenues of the Company and
   its Subsidiaries, determined in each case in accordance with GAAP, then,
   within the respective periods provided in Sections 7.1(a) and (b), above,
   the Company shall deliver to each holder of Notes that is an Institutional
   Investor, financial statements of the character and for the dates and
   periods as in said Sections 7.1(a) and (b) covering the group of
   Unrestricted Subsidiaries (on a consolidated basis), together with a
   consolidating statement reflecting eliminations or adjustments required to
   reconcile the financial statements of such group of Unrestricted
   Subsidiaries to the financial statements delivered pursuant to Sections
   7.1(a) and (b).  

     Section 7.2.  Officer's Certificate;.  Each set of financial statements
   delivered to a holder of Notes pursuant to Section 7.1(a) or Section
   7.1(b) hereof shall be accompanied by a certificate of a Senior Financial
   Officer setting forth:

        (a)  Covenant Compliance - the information (including detailed
   calculations) required in order to establish whether the Company was in
   compliance with the requirements of Section 10.2 through Section 10.8
   hereof, inclusive, during the quarterly or annual period covered by the
   statements then being furnished (including with respect to each such
   Section, where applicable, the calculations of the maximum or minimum
   amount, ratio or percentage, as the case may be, permissible under the
   terms of such Sections, and the calculation of the amount, ratio or
   percentage then in existence); and

        (b)  Event of Default - a statement that such officer has reviewed
   the relevant terms hereof and has made, or caused to be made, under his or
   her supervision, a review of the transactions and conditions of the
   Company and its Restricted Subsidiaries from the beginning of the
   quarterly or annual period covered by the statements then being furnished
   to the date of the certificate and that such review shall not have
   disclosed the existence during such period of any condition or event that
   constitutes a Default or an Event of Default or, if any such condition or
   event existed or exists (including, without limitation, any such event or
   condition resulting from the failure of the Company or any Restricted
   Subsidiary to comply with any Environmental Law), specifying the nature
   and period of existence thereof and what action the Company shall have
   taken or proposes to take with respect thereto.

     Section 7.3.  Inspection;.  The Company shall permit the
   representatives of each holder of Notes that is an Institutional Investor:

        (a)  No Default - if no Default or Event of Default then exists, at
   the expense of such holder and upon reasonable prior notice to the
   Company, to visit the principal executive office of the Company, to
   discuss the affairs, finances and accounts of the Company and its
   Restricted Subsidiaries with the Company's officers, and (with the consent
   of the Company, which consent will not be unreasonably withheld) its
   independent public accountants, and (with the consent of the Company,
   which consent will not be unreasonably withheld) to visit the other
   offices and properties of the Company and each Restricted Subsidiary, all
   at such reasonable times and as often as may be reasonably requested in
   writing; and

        (b)  Default - if a Default or Event of Default then exists, at the
   expense of the Company, to visit and inspect any of the offices or
   properties of the Company or any Restricted Subsidiary, to examine all
   their respective books of account, records, reports and other papers, to
   make copies and extracts therefrom, and to discuss their respective
   affairs, finances and accounts with their respective officers and
   independent public accountants (and by this provision the Company
   authorizes said accountants to discuss the affairs, finances and accounts
   of the Company and its Restricted Subsidiaries), all at such times and as
   often as may be requested.

   Section 8.    Prepayment of the Series A Notes;.

     Section 8.1.  Required Prepayments;.  (a) Tranche A Notes.  On October
   15, 2000 and on each October 15 thereafter to and including October 15,
   2007, the Company will prepay $6,666,666 principal amount (or such lesser
   principal amount as shall then be outstanding) of the Tranche A Notes at
   par and without payment of the Make-Whole Amount or any premium.  The
   entire remaining principal amount of the Tranche A Notes shall become due
   and payable on October 15, 2008.  For purposes of this Section 8.1(a), any
   prepayment of less than all of the outstanding Tranche A Notes pursuant to
   Section 8.2 shall be deemed to be applied first to the amount of principal
   scheduled to be repaid on October 15, 2008, and then to the remaining
   scheduled principal payments, if any, in inverse chronological order.

        (b)  Tranche B Notes.  On October 15, 2001 and on each October 15
   thereafter to and including October 15, 2010, the Company will prepay
   $2,272,727 principal amount (or such lesser principal amount as shall then
   be outstanding) of the Tranche B Notes at par and without payment of the
   Make-Whole Amount or any premium.  The entire remaining principal amount
   of the Tranche B Notes shall become due and payable on October 15, 2011. 
   For purposes of this Section 8.1(b), any prepayment of less than all of
   the outstanding Tranche B Notes pursuant to Section 8.2 shall be deemed to
   be applied first to the amount of principal scheduled to be repaid on
   October 15, 2011, and then to the remaining scheduled principal payments,
   if any, in inverse chronological order.

        (c)  Application of Partial Redemption.  In the event of any purchase
   or other acquisition permitted by Section 8.5 of less than all of the
   Notes of any Series, or any tranche of Notes within a Series (a "Partial
   Redemption"), the amount of the payment required at maturity for such
   Series of Notes, or the applicable tranche of Notes within such Series, as
   the case may be, and each regularly scheduled prepayment required to be
   made pursuant to this Section 8.1 or any Supplement for such Series of
   Notes, or the applicable tranche of Notes within such Series, as the case
   may be, shall be reduced in the proportion that the principal amount of
   such Partial Redemption bears to the unpaid principal amount of the Notes
   of such Series, or the applicable tranche of Notes within such Series, as
   the case may be, immediately prior to such Partial Redemption (after
   giving effect to any regularly scheduled prepayment made on such Series of
   Notes, or the applicable tranche of Notes within such Series, as the case
   may be, pursuant to this Section 8.1 or any Supplement on the date of such
   Partial Redemption).

     Section 8.2.  Optional Prepayments with Make-Whole Amount;.  The
   Company may, at its option, upon notice as provided below, prepay at any
   time all, or from time to time any part of (but if in part then in a
   minimum principal amount of $500,000), the outstanding Notes of any Series
   on any interest payment date for the Notes of such Series at 100% of the
   principal amount so prepaid, and accrued interest thereon to the date of
   prepayment, plus the Make-Whole Amount determined for the prepayment date
   with respect to such principal amount of each Note of the applicable
   Series then outstanding.  The Company will give each holder of Notes of
   the Series to be prepaid written notice of each optional prepayment under
   this Section 8.2 not less than 30 days and not more than 60 days prior to
   the date fixed for such prepayment.  Each such notice shall specify such
   date, the aggregate principal amount of the Notes and each Series of Notes
   to be prepaid on such date, the principal amount of each Note held by such
   holder to be prepaid (determined in accordance with Section 8.3), and the
   interest to be paid on the prepayment date with respect to such principal
   amount being prepaid, and shall be accompanied by a certificate of a
   Senior Financial Officer as to the estimated Make-Whole Amount due in
   connection with such prepayment (calculated as if the date of such notice
   were the date of the prepayment), setting forth the details of such
   computation.  Two Business Days prior to such prepayment, the Company
   shall deliver to each holder of Notes of the Series to be prepaid a
   certificate of a Senior Financial Officer specifying the calculation of
   such Make-Whole Amount as of the specified prepayment date.

     Section 8.3.  Allocation of Partial Prepayments;.  In the case of each
   partial prepayment of the Notes pursuant to the provisions of Section 8.2,
   the principal amount of the Notes of the Series to be prepaid shall be
   allocated among all of the Notes of such Series at the time outstanding in
   proportion, as nearly as practicable, to the respective unpaid principal
   amounts thereof.  In the case of each required prepayment of the Series A
   Notes pursuant to Section 8.1, the principal amount of the Tranche to be
   prepaid shall be allocated among all of the Notes of such Tranche at the
   time outstanding in proportion, as nearly as practicable, to the
   respective unpaid principal amounts thereof.  All regularly scheduled
   partial prepayments made with respect to any Additional Series of Notes
   pursuant to any Supplement shall be allocated as therein provided.

     Section 8.4.  Maturity; Surrender, etc';.  In the case of each
   prepayment of Notes pursuant to this Section 8, the principal amount of
   each Note to be prepaid shall mature and become due and payable on the
   date fixed for such prepayment, together with interest on such principal
   amount accrued to such date and the applicable Make-Whole Amount, if any. 
   From and after such date, unless the Company shall fail to pay such
   principal amount when so due and payable, together with the interest and
   Make-Whole Amount, if any, as aforesaid, interest on such principal amount
   shall cease to accrue.  Any Note paid or prepaid in full shall be
   surrendered to the Company and cancelled and shall not be reissued, and no
   Note shall be issued in lieu of any prepaid principal amount of any Note.

     Section 8.5.  Purchase of Notes;.  The Company will not and will not
   permit any Restricted Subsidiary or any Affiliate to purchase, redeem,
   prepay or otherwise acquire, directly or indirectly, any of the
   outstanding Notes except upon the payment or prepayment of the Notes in
   accordance with the terms of the Agreements (including any Supplement
   thereto) and the Notes.  The Company will promptly cancel all Notes
   acquired by it or any Restricted Subsidiary or any Affiliate pursuant to
   any payment, prepayment or purchase of Notes pursuant to any provision of
   the Agreements and no Notes may be issued in substitution or exchange for
   any such Notes.

     Section 8.6.  Make-Whole Amount for Series A Notes;.  The term
   "Make-Whole Amount" means, with respect to any Series A Note of any
   Tranche, an amount equal to the excess, if any, of the Discounted Value of
   the Remaining Scheduled Payments with respect to the Called Principal of
   such Series A Note of such Tranche over the amount of such Called
   Principal, provided that the Make-Whole Amount may in no event be less
   than zero.  For the purposes of determining the Make-Whole Amount, the
   following terms have the following meanings:

        "Called Principal" means, with respect to any Series A Note of any
   Tranche, the principal of such Series A Note of such Tranche that is to be
   prepaid pursuant to Section 8.2 or has become or is declared to be
   immediately due and payable pursuant to Section 12.1, as the context
   requires.

        "Discounted Value" means, with respect to the Called Principal of any
   Series A Note of any Tranche, the amount obtained by discounting all
   Remaining Scheduled Payments with respect to such Called Principal from
   their respective scheduled due dates to the Settlement Date with respect
   to such Called Principal, in accordance with accepted financial practice
   and at a discount factor (applied on the same periodic basis as that on
   which interest on the Series A Note of such Tranche is payable) equal to
   the Reinvestment Yield with respect to such Called Principal.

        "Reinvestment Yield" means, with respect to the Called Principal of
   any Series A Note of any Tranche, 0.50% over the yield to maturity implied
   by (i) the yields reported, as of 10:00 A.M. (New York City time) on the
   second Business Day preceding the Settlement Date with respect to such
   Called Principal, on the display designated as "Page 500" on the Telerate
   Access Service (or such other display as may replace Page 500 on Telerate
   Access Service) for actively traded U.S. Treasury securities having a
   maturity equal to the Remaining Average Life of such Called Principal as
   of such Settlement Date, or (ii) if such yields are not 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 been so reported as of the second Business Day
   preceding the Settlement 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 to the Remaining Average Life of such Called
   Principal as of such Settlement Date.  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 (1) the actively traded U.S.
   Treasury security with the duration closest to and greater than the
   Remaining Average Life and (2) the actively traded U.S. Treasury security
   with the duration closest to and less than the Remaining Average Life.

        "Remaining Average Life" means, with respect to any Called Principal,
   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) the principal component of each Remaining
   Scheduled Payment with respect to such Called Principal by (b) the number
   of years (calculated to the nearest one-twelfth year) that will elapse
   between the Settlement Date with respect to such Called Principal and the
   scheduled due date of such Remaining Scheduled Payment.

        "Remaining Scheduled Payments" means, with respect to the Called
   Principal of any Series A Note of any Tranche, all payments of such Called
   Principal and interest thereon that would be due after the Settlement Date
   with respect to such Called Principal if no payment of such Called
   Principal were made prior to its scheduled due date, provided that if such
   Settlement Date is not a date on which interest payments are due to be
   made under the terms of the Series A Note of such Tranche, then the amount
   of the next succeeding scheduled interest payment will be reduced by the
   amount of interest accrued to such Settlement Date and required to be paid
   on such Settlement Date pursuant to Section 8.2 or 12.1.

        "Settlement Date" means, with respect to the Called Principal of any
   Series A Note of any Tranche, the date on which such Called Principal is
   to be prepaid pursuant to Section 8.2 or has become or is declared to be
   immediately due and payable pursuant to Section 12.1, as the context
   requires.

   Section 9.    Affirmative Covenants;.

        The Company covenants that so long as any of the Notes are
   outstanding:

     Section 9.1.  Compliance with Law;.  The Company will, and will cause
   each of its Restricted Subsidiaries to, comply with all laws, ordinances
   or governmental rules or regulations to which each of them is subject,
   including, without limitation, Environmental Laws, and will obtain and
   maintain in effect all licenses, certificates, permits, franchises and
   other governmental authorizations necessary to the ownership of their
   respective properties or to the conduct of their respective businesses, in
   each case to the extent necessary to ensure that non-compliance with such
   laws, ordinances or governmental rules or regulations or failures to
   obtain or maintain in effect such licenses, certificates, permits,
   franchises and other governmental authorizations could not, individually
   or in the aggregate, reasonably be expected to have a Material Adverse
   Effect.

     Section 9.2.  Insurance;.  The Company will, and will cause each of its
   Restricted Subsidiaries to, maintain, with financially sound and reputable
   insurers, insurance with respect to their respective properties and
   businesses against such casualties and contingencies, of such types, on
   such terms and in such amounts (including deductibles, co-insurance and
   self-insurance, if adequate reserves are maintained with respect thereto)
   as is customary in the case of entities of established reputations engaged
   in the same or a similar business and similarly situated.

     Section 9.3.  Maintenance of Properties;.  The Company will, and will
   cause each of its Restricted Subsidiaries to, maintain and keep, or cause
   to be maintained and kept, their respective properties in good repair,
   working order and condition (other than ordinary wear and tear), so that
   the business carried on in connection therewith may be properly conducted
   at all times, provided that this Section shall not prevent the Company or
   any Restricted Subsidiary from discontinuing the operation and the
   maintenance of any of its properties if such discontinuance is desirable
   in the conduct of its business and the Company has concluded that such
   discontinuance could not, individually or in the aggregate, reasonably be
   expected to have a Material Adverse Effect.

     Section 9.4.  Payment of Taxes and Claims;.  The Company will, and will
   cause each of its Subsidiaries to, file all tax returns required to be
   filed in any jurisdiction and to pay and discharge all taxes shown to be
   due and payable on such returns and all other taxes, assessments,
   governmental charges, or levies imposed on them or any of their
   properties, assets, income or franchises, to the extent such taxes and
   assessments have become due and payable and before they have become
   delinquent and all claims for which sums have become due and payable that
   have or might become a Lien on properties or assets of the Company or any
   Subsidiary, provided that neither the Company nor any Subsidiary need pay
   any such tax or assessment or claims if (i) the amount, applicability or
   validity thereof is contested by the Company or such Restricted Subsidiary
   on a timely basis in good faith and in appropriate proceedings, and the
   Company or a Subsidiary has established adequate reserves therefor in
   accordance with GAAP on the books of the Company or such Subsidiary or
   (ii) the nonpayment of all such taxes and assessments in the aggregate
   could not reasonably be expected to have a Material Adverse Effect.

     Section 9.5.  Corporate Existence, etc;.  The Company will at all times
   preserve and keep in full force and effect its corporate existence. 
   Subject to Section 10.7, the Company will at all times preserve and keep
   in full force and effect the corporate existence of each of its Restricted
   Subsidiaries (unless merged into the Company or a Wholly-Owned Restricted
   Subsidiary) and all rights and franchises of the Company and its
   Restricted Subsidiaries unless, in the good faith judgment of the Company,
   the termination of or failure to preserve and keep in full force and
   effect such corporate existence, right or franchise could not,
   individually or in the aggregate, have a Material Adverse Effect.

   Section 10.   Negative Covenants;.

        The Company covenants that so long as any of the Notes are
   outstanding:

    Section 10.1.  Transactions with Affiliates;.  The Company will not and
   will not permit any Restricted Subsidiary to enter into directly or
   indirectly any transaction or Material group of related transactions
   (including without limitation the purchase, lease, sale or exchange of
   properties of any kind or the rendering of any service) with any
   Affiliate, except in the ordinary course and pursuant to the reasonable
   requirements of the Company's or such Restricted Subsidiary's business and
   upon fair and reasonable terms no less favorable to the Company or such
   Restricted Subsidiary than would be obtainable in a comparable
   arm's-length transaction with a Person not an Affiliate.

    Section 10.2.  Consolidated Operating Cash Flow;.  The Company will not
   permit the Consolidated Operating Cash Flow Ratio for each period of four
   consecutive fiscal quarters (determined as of the last day of each fiscal
   quarter) to be less than 2.50 to 1.00.

    Section 10.3.  Limitations on Debt;.  The Company will not at any time
   permit Consolidated Debt to exceed 65% of Consolidated Total
   Capitalization.

    Section 10.4.  Limitations on Priority Debt;.  The Company will not, and
   will not permit any Restricted Subsidiary to, create, assume or incur or
   in any manner be or become liable in respect of any Priority Debt, unless
   at the time of issuance thereof and after giving effect thereto and to the
   application of the proceeds thereof, Priority Debt shall not exceed 20% of
   Consolidated Total Capitalization.

        Any corporation which becomes a Restricted Subsidiary after the date
   of this Agreement shall, for all purposes of this Section 10.4, be deemed
   to have created, assumed or incurred, at the time it becomes a Restricted
   Subsidiary, all Priority Debt of such corporation existing immediately
   after it becomes a Restricted Subsidiary.  

    Section 10.5.  Limitation on Liens;.  The Company will not, and will not
   permit any of its Restricted Subsidiaries to, directly or indirectly
   create, incur, assume or permit to exist (upon the happening of a
   contingency or otherwise) any Lien on or with respect to any property or
   asset (including, without limitation, any document or instrument in
   respect of goods or accounts receivable) of the Company or any such
   Restricted Subsidiary, whether now owned or held or hereafter acquired, or
   any income or profits therefrom, or assign or otherwise convey any right
   to receive income or profits, except:

        (a)  Liens for property taxes and assessments or governmental charges
   or levies and Liens securing claims or demands of mechanics and
   materialmen, provided payment thereof is not at the time required by
   Section 9.4; 

        (b)  Liens incidental to the normal conduct of business of the
   Company or any Restricted Subsidiary or to secure claims for labor,
   materials or supplies in respect of obligations not overdue or in
   connection with the ownership of its property (including Liens in
   connection with worker's compensation, unemployment insurance and other
   like laws, warehousemen's and attorney's liens and statutory landlords'
   liens) which are not incurred in connection with the incurrence of Debt or
   the borrowing of money and which do not in the aggregate Materially impair
   the use of such property in the operation of the business of the Company
   and its Restricted Subsidiaries, taken as a whole, or the value of such
   property for the purpose of such business;

        (c)  Liens created by or resulting from any litigation or legal
   proceeding which is currently being contested in good faith by appropriate
   proceedings or which result from a final, nonappealable judgment which is
   satisfied, or whose satisfaction is assured by the posting of a bond or
   other collateral, within 60 days after such judgment becomes final and
   nonappealable;

        (d)  Liens of carriers, warehousemen, mechanics and materialmen, and
   other like Liens, in existence less than 60 days (or in the case of any
   Lien with respect to which the underlying claim shall currently be
   contested by the Company or such Restricted Subsidiary in good faith by
   appropriate proceedings, the period of time during which such Lien is
   being contested) from the date of creation thereof in respect of
   obligations not overdue or deposits to obtain the release of such Liens;

        (e)  Liens securing Debt of a Restricted Subsidiary to the Company or
   to another Restricted Subsidiary;

        (f)  Liens existing as of the date of Closing and reflected in
   Schedule 10.5; 

        (g)  minor survey exceptions or minor encumbrances, easements or
   reservations, or rights of others for rights-of-way, utilities and other
   similar purposes, or zoning or other restrictions as to the use of real
   properties, which are necessary for the conduct of the activities of the
   Company and its Restricted Subsidiaries or which customarily exist on real
   properties of corporations engaged in similar activities and similarly
   situated and which do not in any event Materially detract from the value
   of such real property;

        (h)  leases or subleases granted to any Person by the Company or any
   Restricted Subsidiary, as lessor or sublessor, on any property owned or
   leased by the Company or any Restricted Subsidiary, provided that in each
   case such lease or sublease shall not Materially detract from the value of
   the property leased or subleased; 

        (i)  Liens incurred after the date of Closing and existing on 
   property  of any business entity at the time of acquisition of such
   business entity by the Company or a Restricted Subsidiary, so long as such
   Liens were not incurred, extended or renewed in contemplation of the
   acquisition of such business entity, provided that (i) the Lien shall
   attach solely to the property of the business entity so acquired, (ii) at
   the time of acquisition of such business entity, the aggregate amount
   remaining unpaid on all Debt secured by Liens on the property of such
   business entity, whether or not assumed by the Company or a Restricted
   Subsidiary, shall not exceed an amount equal to the lesser of the total
   purchase price or fair market value at the time of acquisition of such
   business entity (as determined in good faith by the Board of Directors of
   the Company or any Restricted Subsidiary, as the case may be), and (iii)
   the aggregate principal amount of all Debt secured by such Liens shall be
   permitted by the limitations set forth in Sections 10.3 and 10.4;

        (j)  Liens incurred after the date of Closing given to secure the
   payment of the purchase price incurred in connection with the acquisition
   or construction of property (other than accounts receivable or inventory)
   useful and intended to be used in carrying on the business of the Company
   or a Restricted Subsidiary, including Liens existing on such property at
   the time of acquisition or construction thereof, or Liens incurred within
   180 days of such acquisition or the completion of such construction,
   provided that (i) the Lien shall attach solely to the property acquired,
   purchased or constructed, (ii) at the time of acquisition or construction
   of such property, the aggregate amount remaining unpaid on all Debt
   secured by Liens on such property, whether or not assumed by the Company
   or a Restricted Subsidiary, shall not exceed an amount equal to the lesser
   of the total purchase price or fair market value at the time of
   acquisition or construction of such property (as determined in good faith
   by the Board of Directors of the Company or any Restricted Subsidiary, as
   the case may be), and (iii) the aggregate principal amount of all Debt
   secured by such Liens shall be permitted by the limitations set forth in
   Sections 10.3 and 10.4; 

        (k)  any extensions, renewals or replacements of any Lien permitted
   by the preceding subparagraphs (a) through (j) inclusive, of this Section
   10.5, provided that (i) no additional property shall be encumbered by such
   Liens, (ii) the unpaid principal amount of the Debt secured thereby shall
   not be increased on or after the date of any extension, renewal or
   replacement, (iii) the weighted average life to maturity of the Debt
   secured by such Liens shall not be reduced, and (iv) at such time and
   immediately after giving effect thereto, no Default or Event of Default
   shall have occurred and be continuing; and

        (l)  in addition to the Liens permitted by the preceding
   subparagraphs (a) through (k), inclusive, of this Section 10.5, Liens
   securing Priority Debt of the Company or any Restricted Subsidiary,
   provided that such Priority Debt shall be permitted by the applicable
   limitations set forth in Sections 10.3 and 10.4.

    Section 10.6.  Sales of Assets;.  The Company will not, and will not
   permit any Restricted Subsidiary to, sell, lease or otherwise dispose of
   any substantial part (as defined below) of the assets of the Company and
   its Restricted Subsidiaries; provided, however, that the Company or any
   Restricted Subsidiary may sell, lease or otherwise dispose of assets
   constituting a substantial part of the assets of the Company and its
   Restricted Subsidiaries if, at such time and after giving effect thereto,
   no Default or Event of Default shall have occurred and be continuing and
   an amount equal to the net proceeds received from such sale, lease or
   other disposition shall be used:

        (1)  within 180 days of such sale, lease or disposition, to acquire
   property, plant and equipment used or useful in carrying on the business
   of the Company and its Restricted Subsidiaries (or the Company or any
   Restricted Subsidiary shall be unconditionally committed to acquire such
   property) and having a value at least equal to the value of such assets
   sold, leased or otherwise disposed of; or

        (2)  to prepay or retire Senior Debt of the Company and/or its
   Restricted Subsidiaries, in which case the Notes will be prepaid, ratably
   in accordance with the unpaid principal amount of such Senior Debt, in
   compliance with Section 8.2.

        As used in this Section 10.6, a sale, lease or other disposition of
   assets shall be deemed to be a "substantial part" of the assets of the
   Company and its Restricted Subsidiaries if the book value of such assets,
   when added to the book value of all other assets sold, leased or otherwise
   disposed of by the Company and its Restricted Subsidiaries (other than in
   transactions in the ordinary course of business and Excluded Sale and
   Leaseback Transaction) during any fiscal year of the Company, exceeds 10%
   of the book value of Consolidated Total Assets, determined as of the end
   of the fiscal year immediately preceding such sale, lease or other
   disposition.

    Section 10.7.  Merger, Consolidation and Sale of Stock;.  (a)  The
   Company will not, and will not permit any Restricted Subsidiary to,
   consolidate with or be a party to a merger with any other corporation;
   provided, however, that:

        (1)  any Restricted Subsidiary may merge or consolidate with or into
   the Company or any Wholly-Owned Restricted Subsidiary, so long as in any
   merger or consolidation involving the Company, the Company shall be the
   surviving or continuing corporation; and

        (2)  the Company may consolidate or merge with any other corporation
   if (i) either (x) the Company shall be the surviving or continuing
   corporation, or (y) if the surviving or continuing entity is other than
   the Company, (A) such entity is organized under the laws of the United
   States or any jurisdiction thereof, (B) such entity expressly assumes, by
   written agreement satisfactory in scope and form to the holders of more
   than 50% in aggregate principal amount of the outstanding Notes, all
   obligations of the Company under the Notes and this Agreement and the
   Other Agreements, and (C) such entity shall cause to be delivered to each
   holder of Notes an opinion of independent counsel to the effect that all
   agreements or instruments effecting such assumption are enforceable in
   accordance with their terms and comply with the provisions of this Section
   10.7 and otherwise satisfactory in scope and form to the holders of more
   than 50% in aggregate principal amount of the outstanding Notes, and (ii)
   at the time of such consolidation or merger and after giving effect
   thereto, no Default or Event of Default shall have occurred and be
   continuing.

        (b)  The Company will not permit any Restricted Subsidiary to issue
   or sell any shares of stock of any class (including as "stock" for the
   purposes of this Section 10.7(b), any warrants, rights or options to
   purchase or otherwise acquire stock or other securities exchangeable for
   or convertible into stock) of such Restricted Subsidiary to any Person
   other than the Company or a Restricted Subsidiary, except for the purpose
   of qualifying directors, or except in satisfaction of the validly
   pre-existing preemptive rights of minority shareholders in connection with
   the simultaneous issuance of stock to the Company and/or a Restricted
   Subsidiary whereby the Company and/or such Restricted Subsidiary maintain
   their same proportionate interest in such Restricted Subsidiary.

        (c)  The Company will not sell, transfer or otherwise dispose of any
   shares of stock of any Restricted Subsidiary (except to qualify
   directors), and will not permit any Restricted Subsidiary to sell,
   transfer or otherwise dispose of (except to the Company or a Wholly-Owned
   Restricted Subsidiary) any shares of stock of any other Restricted
   Subsidiary, unless such sale or other disposition does not involve a
   substantial part (as defined in Section 10.6) of the assets of the Company
   and its Restricted Subsidiaries.  

    Section 10.8.  Designation of Restricted and Unrestricted Subsidiaries;. 
   (a)  The Board of Directors of the Company may designate any Unrestricted
   Subsidiary as a Restricted Subsidiary and may designate any Restricted
   Subsidiary as an Unrestricted Subsidiary, provided that (i) at such time
   and immediately after giving effect thereto (x) the Company would be
   permitted to incur at least $1.00 of additional Priority Debt under the
   limitations of Section 10.4, and (y) no Default or Event of Default shall
   have occurred and be continuing, and (ii) the designation of such
   Subsidiary as Restricted or Unrestricted shall not be changed pursuant to
   this Section 10.8 on more than two occasions.  The Company shall, within
   10 days after the designation of any Subsidiary as Restricted or
   Unrestricted, give written notice of such action to each holder of a Note.

        (b)  The Company acknowledges and agrees that if, after the date
   hereof, any Person becomes a Restricted Subsidiary, all Debt, leases and
   other obligations and all Liens and Investments of such Person existing as
   of the date such Person becomes a Restricted Subsidiary shall be deemed,
   for all purposes of this Agreement, to have been incurred, entered into,
   made or created at the same time such Person so becomes a Restricted
   Subsidiary.

    Section 10.9.  Nature of Business;.  Neither the Company nor any
   Restricted Subsidiary will engage in any business if, as a result, the
   general nature of the business, taken on a consolidated basis, which would
   then be engaged in by the Company and its Restricted Subsidiaries would be
   substantially changed from the general nature of the business engaged in
   by the Company and its Restricted Subsidiaries on the date of this
   Agreement.

   Section 11.   Events of Default;.

        An "Event of Default" shall exist if any of the following conditions
   or events shall occur and be continuing:

        (a)  the Company defaults in the payment of any principal or
   Make-Whole Amount, if any, on any Note for more than one Business Day
   after the same becomes due and payable, whether at maturity or at a date
   fixed for prepayment or by declaration or otherwise, or the Company makes
   the payment of any principal or Make-Whole Amount, if any, on the Notes on
   the Business Day immediately following the Business Day in which such
   payment is due and payable on more than five occasions; or 

        (b)  the Company defaults in the payment of any interest on any Note
   for more than five Business Days after the same becomes due and payable;
   or

        (c)  the Company defaults in the performance of or compliance with
   any term contained in Section 10; or

        (d)  the Company defaults in the performance of or compliance with
   any term contained herein or in any Supplement (other than those referred
   to in paragraphs (a), (b) and (c) of this Section 11) and such default is
   not remedied within 30 days after the earlier of (i) a Responsible Officer
   obtaining actual knowledge of such default and (ii) the Company receiving
   written notice of such default from any holder of a Note (any such written
   notice to be identified as a "notice of default" and to refer specifically
   to this paragraph (d) of Section 11); or

        (e)  any representation or warranty made in writing by or on behalf
   of the Company or by any officer of the Company in this Agreement or any
   Supplement or in any writing furnished in connection with the transactions
   contemplated hereby or thereby proves to have been false or incorrect in
   any material respect on the date as of which made; or

        (f)  (i) the Company or any Restricted Subsidiary is in default in
   the performance of or compliance with any term of any evidence of any Debt
   in an aggregate outstanding principal amount of at least $10,000,000 or of
   any mortgage, indenture or other agreement relating thereto or any other
   condition exists, and as a consequence of such default or condition such
   Debt has become, or has been declared, due and payable before its stated
   maturity or before its regularly scheduled dates of payment, or (ii) as a
   consequence of the occurrence or continuation of any event or condition
   (other than the passage of time or the right of the holder of Debt to
   convert such Debt into equity interests), (x) the Company or any
   Restricted Subsidiary has become obligated to purchase or repay Debt
   before its regular maturity or before its regularly scheduled dates of
   payment in an aggregate outstanding principal amount of at least
   $10,000,000, or (y) one or more Persons have the right to require the
   Company or any Restricted Subsidiary so to purchase or repay such Debt; or

        (g)  the Company or any of its Material Subsidiaries (i) is generally
   not paying, or admits in writing its inability to pay, its debts as they
   become due, (ii) files, or consents by answer or otherwise to the filing
   against it of, a petition for relief or reorganization or arrangement or
   any other petition in bankruptcy, for liquidation or to take advantage of
   any bankruptcy, insolvency, reorganization, moratorium or other similar
   law of any jurisdiction, (iii) makes an assignment for the benefit of its
   creditors, (iv) consents to the appointment of a custodian, receiver,
   trustee or other officer with similar powers with respect to it or with
   respect to any substantial part of its property, (v) is adjudicated as
   insolvent or to be liquidated, or (vi) takes corporate action for the
   purpose of any of the foregoing; or

        (h)  a court or governmental authority of competent jurisdiction
   enters an order appointing, without consent by the Company or any of its
   Material Subsidiaries, a custodian, receiver, trustee or other officer
   with similar powers with respect to it or with respect to any substantial
   part of its property, or constituting an order for relief or approving a
   petition for relief or reorganization or any other petition in bankruptcy
   or for liquidation or to take advantage of any bankruptcy or insolvency
   law of any jurisdiction, or ordering the dissolution, winding-up or
   liquidation of the Company or any of its Material Subsidiaries, or any
   such petition shall be filed against the Company or any of its Material
   Subsidiaries and such petition shall not be dismissed within 60 days; or

        (i)  a final judgment or judgments for the payment of money
   aggregating in excess of $10,000,000 are rendered against one or more of
   the Company and its Restricted Subsidiaries and which judgments are not,
   within 60 days after entry thereof, bonded, discharged or stayed pending
   appeal, or are not discharged within 60 days after the expiration of such
   stay; or

        (j)  if (i) any Plan shall fail to satisfy the minimum funding
   standards of ERISA or the Code for any plan year or part thereof or a
   waiver of such standards or extension of any amortization period is sought
   or granted under section 412 of the Code, (ii) a notice of intent to
   terminate any Plan shall have been or is reasonably expected to be filed
   with the PBGC or the PBGC shall have instituted proceedings under ERISA
   section 4042 to terminate or appoint a trustee to administer any Plan or
   the PBGC shall have notified the Company or any ERISA Affiliate that a
   Plan may become a subject of any such proceedings, (iii) the aggregate
   "amount of unfunded benefit liabilities" (within the meaning of section
   4001(a)(18) of ERISA) under all Plans, determined in accordance with Title
   IV of ERISA, shall exceed $10,000,000, (iv) the Company or any ERISA
   Affiliate shall have incurred or is reasonably expected to incur any
   liability pursuant to Title I or IV of ERISA or the penalty or excise tax
   provisions of the Code relating to employee benefit plans, (v) the Company
   or any ERISA Affiliate withdraws from any Multiemployer Plan, or (vi) the
   Company or any Restricted Subsidiary establishes or amends any employee
   welfare benefit plan that provides post-employment welfare benefits in a
   manner that would increase the liability of the Company or any Restricted
   Subsidiary thereunder; and any such event or events described in clauses
   (i) through (vi) above, either individually or together with any other
   such event or events, could reasonably be expected to have a Material
   Adverse Effect.

   As used in Section 11(j), the terms "employee benefit plan" and "employee
   welfare benefit plan" shall have the respective meanings assigned to such
   terms in Section 3 of ERISA.

   Section 12.   Remedies on Default, etc;.

    Section 12.1.  Acceleration;.  (a) If an Event of Default with respect
   to the Company described in paragraph (g) or (h) of Section 11 (other than
   an Event of Default described in clause (i) of paragraph (g) or described
   in clause (vi) of paragraph (g) by virtue of the fact that such clause
   encompasses clause (i) of paragraph (g)) has occurred, all the Notes of
   every Series then outstanding shall automatically become immediately due
   and payable.

        (b)  If any other Event of Default has occurred and is continuing,
   any holder or holders of at least 25% in aggregate principal amount of the
   Notes of any Series at the time outstanding may at any time at its or
   their option, by notice or notices to the Company, declare all the Notes
   of such Series then outstanding to be immediately due and payable.

        (c)  If any Event of Default described in paragraph (a) or (b) of
   Section 11 has occurred and is continuing with respect to any Series of
   Notes, any holder or holders of Notes of such Series at the time
   outstanding affected by such Event of Default may at any time, at its or
   their option, by notice or notices to the Company, declare all the Notes
   of such Series held by it or them to be immediately due and payable.

        Upon any Note becoming due and payable under this Section 12.1,
   whether automatically or by declaration, such Note will forthwith mature
   and the entire unpaid principal amount of such Note, plus (x) all accrued
   and unpaid interest thereon and (y) the Make-Whole Amount determined in
   respect of such principal amount (to the full extent permitted by
   applicable law), shall all be immediately due and payable, in each and
   every case without presentment, demand, protest or further notice, all of
   which are hereby waived.  The Company acknowledges, and the parties hereto
   agree, that each holder of a Note has the right to maintain its investment
   in the Notes free from repayment by the Company (except as herein
   specifically provided for), and that the provision for payment of a
   Make-Whole Amount by the Company in the event that the Notes are prepaid
   or are accelerated as a result of an Event of Default, is intended to
   provide compensation for the deprivation of such right under such
   circumstances.

    Section 12.2.  Other Remedies;.  If any Default or Event of Default has
   occurred and is continuing, and irrespective of whether any Notes have
   become or have been declared immediately due and payable under Section
   12.1, the holder of any Note at the time outstanding may proceed to
   protect and enforce the rights of such holder by an action at law, suit in
   equity or other appropriate proceeding, whether for the specific
   performance of any agreement contained herein or in any Note, or for an
   injunction against a violation of any of the terms hereof or thereof, or
   in aid of the exercise of any power granted hereby or thereby or by law or
   otherwise.

    Section 12.3.  Rescission;.  At any time after any Notes of any Series
   have been declared due and payable pursuant to clause (b) or (c) of
   Section 12.1, the holders of not less than 76% in aggregate principal
   amount of the Notes of such Series then outstanding, by written notice to
   the Company, may rescind and annul any such declaration and its
   consequences if (a) the Company has paid all overdue interest on the Notes
   of such Series, all principal of and Make-Whole Amount, if any, on any
   Notes of such Series that are due and payable and are unpaid other than by
   reason of such declaration, and all interest on such overdue principal and
   Make-Whole Amount, if any, and (to the extent permitted by applicable law)
   any overdue interest in respect of the Notes of such Series, at the
   Default Rate, (b) all Events of Default and Defaults, other than
   non-payment of amounts that have become due solely by reason of such
   declaration, have been cured or have been waived pursuant to Section 17,
   and (c) no judgment or decree has been entered for the payment of any
   monies due pursuant hereto or to any Note.  No rescission and annulment
   under this Section 12.3 will extend to or affect any subsequent Event of
   Default or Default or impair any right consequent thereon.

    Section 12.4.  No Waivers or Election of Remedies, Expenses, etc;.  No
   course of dealing and no delay on the part of any holder of any Note in
   exercising any right, power or remedy shall operate as a waiver thereof or
   otherwise prejudice such holder's rights, powers or remedies.  No right,
   power or remedy conferred by this Agreement or by any Note upon any holder
   thereof shall be exclusive of any other right, power or remedy referred to
   herein or therein or now or hereafter available at law, in equity, by
   statute or otherwise.  Without limiting the obligations of the Company
   under Section 15, the Company will pay to the holder of each Note on
   demand such further amount as shall be sufficient to cover all costs and
   expenses of such holder incurred in any enforcement or collection under
   this Section 12, including, without limitation, reasonable attorneys'
   fees, expenses and disbursements.

   Section 13.   Registration; Exchange; Substitution of Notes';.

    Section 13.1.  Registration of Notes;.  The Company shall keep at its
   principal executive office a register for the registration and
   registration of transfers of Notes.  The name and address of each holder
   of one or more Notes, each transfer thereof and the name and address of
   each transferee of one or more Notes shall be registered in such register. 
   Prior to due presentment for registration of transfer, the Person in whose
   name any Note shall be registered shall be deemed and treated as the owner
   and holder thereof for all purposes hereof, and the Company shall not be
   affected by any notice or knowledge to the contrary.  The Company shall
   give to any holder of a Note that is an Institutional Investor promptly
   upon request therefor, a complete and correct copy of the names and
   addresses of all registered holders of Notes.

    Section 13.2.  Transfer and Exchange of Notes;.  Upon surrender of any
   Note at the principal executive office of the Company for registration of
   transfer or exchange (and in the case of a surrender for registration of
   transfer, duly endorsed or accompanied by a written instrument of transfer
   duly executed by the registered holder of such Note or its attorney duly
   authorized in writing and accompanied by the address for notices of each
   transferee of such Note or part thereof), the Company shall execute and
   deliver, at the Company's expense (except as provided below), one or more
   new Notes (as requested by the holder thereof) of an identical Series in
   exchange therefor, in an aggregate principal amount equal to the unpaid
   principal amount of the surrendered Note.  Each such new Note shall be
   payable to such Person as such holder may request and shall be
   substantially in the form of the Note of such Series originally issued
   hereunder or pursuant to any Supplement. Each such new Note shall be dated
   and bear interest from the date to which interest shall have been paid on
   the surrendered Note or dated the date of the surrendered Note if no
   interest shall have been paid thereon.  The Company may require payment of
   a sum sufficient to cover any stamp tax or governmental charge imposed in
   respect of any such transfer of Notes.  Notes shall not be transferred in
   denominations of less than $500,000, provided that if necessary to enable
   the registration of transfer by a holder of its entire holding of Notes,
   one Note may be in a denomination of less than $500,000.  Any transferee,
   by its acceptance of a Note registered in its name (or the name of its
   nominee), shall be deemed to have made the representation set forth in
   Section 6.2, provided that such holder may (in reliance upon information
   provided by the Company, which shall not be unreasonably withheld) make a
   representation to the effect that the purchase by such holder of any Note
   will not constitute a non-exempt prohibited transaction under Section
   406(a) of ERISA.  

    Section 13.3.  Replacement of Notes;.  Upon receipt by the Company of
   evidence reasonably satisfactory to it of the ownership of and the loss,
   theft, destruction or mutilation of any Note (which evidence shall be, in
   the case of an Institutional Investor, notice from such Institutional
   Investor of such ownership and such loss, theft, destruction or
   mutilation), and

        (a)  in the case of loss, theft or destruction, of indemnity
   reasonably satisfactory to it (provided that if the holder of such Note
   is, or is a nominee for, an original Purchaser or another holder of a Note
   with a minimum net worth of at least $10,000,000, such Person's own
   unsecured agreement of indemnity shall be deemed to be satisfactory), or

        (b)  in the case of mutilation, upon surrender and cancellation
   thereof, the Company at its own expense shall execute and deliver, in lieu
   thereof, a new Note of an identical Series, dated and bearing interest
   from the date to which interest shall have been paid on such lost, stolen,
   destroyed or mutilated Note or dated the date of such lost, stolen,
   destroyed or mutilated Note if no interest shall have been paid thereon.

   Section 14.   Payments on Notes;.

    Section 14.1.  Place of Payment;.  Subject to Section 14.2, payments of
   principal, Make-Whole Amount, if any, and interest becoming due and
   payable on the Notes shall be made in Chicago, Illinois at the principal
   office of Bank of America Illinois in such jurisdiction.  The Company may
   at any time,  by notice to each holder of a Note, change the place of
   payment of the Notes so long as such place of payment shall be either the
   principal office of the Company in such jurisdiction or the principal
   office of a bank or trust company in such jurisdiction.

    Section 14.2.  Home Office Payment;.  So long as you or your nominee
   shall be the holder of any Note, and notwithstanding anything contained in
   Section 14.1 or in such Note to the contrary, the Company will pay all
   sums becoming due on such Note for principal, Make-Whole Amount, if any,
   and interest by the method and at the address specified for such purpose
   below your name in Schedule A hereto or Schedule A attached to any
   Supplement, or by such other method or at such other address as you shall
   have from time to time specified to the Company in writing for such
   purpose, without the presentation or surrender of such Note or the making
   of any notation thereon, except that upon written request of the Company
   made concurrently with or reasonably promptly after payment or prepayment
   in full of any Note, you shall surrender such Note for cancellation,
   reasonably promptly after any such request, to the Company at its
   principal executive office or at the place of payment most recently
   designated by the Company pursuant to Section 14.1.  Prior to any sale or
   other disposition of any Note held by you or your nominee you will, at
   your election, either endorse thereon the amount of principal paid thereon
   and the last date to which interest has been paid thereon or surrender
   such Note to the Company in exchange for a new Note or Notes pursuant to
   Section 13.2.  The Company will afford the benefits of this Section 14.2
   to any Institutional Investor that is the direct or indirect transferee of
   any Note.

   Section 15.   Expenses, Etc;.

    Section 15.1.  Transaction Expenses;.  Whether or not the transactions
   contemplated hereby are consummated, the Company will pay all costs and
   expenses (including reasonable attorneys' fees of a special counsel and,
   if reasonably required, local or other counsel) incurred by you and each
   Other Purchaser and each other holder of a Note in connection with such
   transactions and in connection with any amendments, waivers or consents
   under or in respect of this Agreement or the Notes (whether or not such
   amendment, waiver or consent becomes effective), including, without
   limitation: (a) the costs and expenses incurred in enforcing or defending
   (or determining whether or how to enforce or defend) any rights under this
   Agreement or the Notes or in responding to any subpoena or other legal
   process or informal investigative demand issued in connection with this
   Agreement or the Notes, or by reason of being a holder of any Note, and
   (b) the costs and expenses, including financial advisors' fees, incurred
   in connection with the insolvency or bankruptcy of the Company or any
   Material Subsidiary or in connection with any work-out or restructuring of
   the transactions contemplated hereby and by the Notes.  The Company will
   pay, and will save you and each other holder of a Note harmless from, all
   claims in respect of any fees, costs or expenses, if any, of brokers and
   finders (other than those retained by you).

    Section 15.2.  Survival;.  The obligations of the Company under this
   Section 15 will survive the payment or transfer of any Note, the
   enforcement, amendment or waiver of any provision of this Agreement, any
   Supplement or the Notes, and the termination of this Agreement or any
   Supplement.

   Section 16.   Survival of Representations and Warranties; Entire
   Agreement';.

        All representations and warranties contained herein or in any
   Supplement shall survive the execution and delivery of this Agreement,
   such Supplement and the Notes, the purchase or transfer by you or any
   Additional Purchaser of any Note or portion thereof or interest therein
   and the payment of any Note, and may be relied upon by any subsequent
   holder of a Note, regardless of any investigation made at any time by or
   on behalf of you or any Additional Purchaser or any other holder of a
   Note.  All statements contained in any certificate or other instrument
   delivered by or on behalf of the Company pursuant to this Agreement or any
   Supplement shall be deemed representations and warranties of the Company
   under this Agreement.  Subject to the preceding sentence, this Agreement
   (including every Supplement) and the Notes embody the entire agreement and
   understanding between you, the Other Purchasers and the Additional
   Purchasers and the Company and supersede all prior agreements and
   understandings relating to the subject matter hereof.

   Section 17.   Amendment and Waiver;.

    Section 17.1.  (a)  Requirements;.  This Agreement (including any
   Supplement hereto) and the Notes may be amended, and the observance of any
   term hereof or of the Notes may be waived (either retroactively or
   prospectively), with (and only with) the written consent of the Company
   and the holders of Notes holding more than 50% in aggregate principal
   amount of the Notes of each Series affected thereby, except that (a) no
   amendment or waiver of any of the provisions of Section 1, 2, 3, 4, 5, 6
   or 21 hereof, or any defined term (as it is used therein), will be
   effective as to you unless consented to by you in writing, and (b) no such
   amendment or waiver may, without the written consent of the holder of each
   Note of any Series at the time outstanding affected thereby, (i) subject
   to the provisions of Section 12 relating to acceleration or rescission,
   change the amount or time of any prepayment or payment of principal of, or
   reduce the rate or change the time of payment or method of computation of
   interest or of the Make-Whole Amount on, the Notes of such Series, (ii)
   change the percentage of the principal amount of the Notes the holders of
   which are required to consent to any such amendment or waiver, or (iii)
   amend any of Sections 8, 11(a), 11(b), 12, 17 or 20.  For purposes of this
   Section 17.1, any amendment to Section 11 which gives the holders of Notes
   of any Series greater rights than the holders of Notes of any other Series
   with respect to any Default or Event of Default shall require the consent
   of more than 50% in aggregate principal amount of the Notes of each
   Series.

        (b)  Supplements.  Notwithstanding anything to the contrary contained
   herein, the Company may enter into any Supplement providing for the
   issuance of one or more Series of Additional Notes consistent with
   Sections 2.2 and 4.11 hereof without obtaining the consent of any holder
   of any other Series of Notes.

    Section 17.2.  Solicitation of Holders of Notes;.

        (a)  Solicitation.  The Company will provide each holder of the Notes
   (irrespective of the amount of Notes then owned by it) with sufficient
   information, sufficiently far in advance of the date a decision is
   required, to enable such holder to make an informed and considered
   decision with respect to any proposed amendment, waiver or consent in
   respect of any of the provisions hereof or of the Notes.  The Company will
   deliver executed or true and correct copies of each amendment, waiver or
   consent effected pursuant to the provisions of this Section 17 to each
   holder of outstanding Notes promptly following the date on which it is
   executed and delivered by, or receives the consent or approval of, the
   requisite holders of Notes.

        (b)  Payment.  The Company will not directly or indirectly pay or
   cause to be paid any remuneration, whether by way of supplemental or
   additional interest, fee or otherwise, or grant any security, to any
   holder of Notes as consideration for or as an inducement to the entering
   into by any holder of Notes of any waiver or amendment of any of the terms
   and provisions hereof unless such remuneration is concurrently paid, or
   security is concurrently granted, on the same terms, ratably to each
   holder of Notes then outstanding even if such holder did not consent to
   such waiver or amendment.

    Section 17.3.  Binding Effect, etc;.  Any amendment or waiver consented
   to as provided in this Section 17 applies equally to all holders of Notes
   and is binding upon them and upon each future holder of any Note and upon
   the Company without regard to whether such Note has been marked to
   indicate such amendment or waiver.  No such amendment or waiver will
   extend to or affect any obligation, covenant, agreement, Default or Event
   of Default not expressly amended or waived or impair any right consequent
   thereon.  No course of dealing between the Company and the holder of any
   Note nor any delay in exercising any rights hereunder or under any Note
   shall operate as a waiver of any rights of any holder of such Note.  As
   used herein, the term "this Agreement" and references thereto shall mean
   this Agreement as it may from time to time be amended or supplemented.

    Section 17.4.  Notes Held by Company, etc;.  Solely for the purpose of
   determining whether the holders of the requisite percentage of the
   aggregate principal amount of Notes then outstanding approved or consented
   to any amendment, waiver or consent to be given under this Agreement or
   the Notes, or have directed the taking of any action provided herein or in
   the Notes to be taken upon the direction of the holders of a specified
   percentage of the aggregate principal amount of Notes then outstanding,
   Notes directly or indirectly owned by the Company, any Restricted
   Subsidiary or any of its Affiliates shall be deemed not to be outstanding.

   Section 18.   Notices;.

        All notices and communications provided for hereunder shall be in
   writing and sent (a) by telefacsimile if the sender on the same day sends
   a confirming copy of such notice by a recognized overnight delivery
   service (charges prepaid), or (b) by registered or certified mail with
   return receipt requested (postage prepaid), or (c) by a recognized
   overnight delivery service (with charges prepaid).  Any such notice must
   be sent:

        (i)  if to you or your nominee, to you or it at the address specified
   for such communications in Schedule A, or at such other address as you or
   it shall have specified to the Company in writing,

       (ii)  if to any other holder of any Note, to such holder at such
   address as such other holder shall have specified to the Company in
   writing, or

      (iii)  if to the Company, to the Company at its address set forth at
   the beginning hereof to the attention of Chief Financial Officer, or at
   such other address as the Company shall have specified to the holder of
   each Note in writing.

   Notices under this Section 18 will be deemed given only when actually
   received.

   Section 19.   Reproduction of Documents;.

        This Agreement and all documents relating thereto, including, without
   limitation, (a) consents, waivers and modifications that may hereafter be
   executed, (b) documents received by any holder of Notes at the time such
   Notes were issued (except the Notes themselves), and (c) financial
   statements, certificates and other information previously or hereafter
   furnished to any holder of Notes, may be reproduced by such holder by any
   photographic, photostatic, microfilm, microcard, miniature photographic or
   other similar process and such holder may destroy any original document so
   reproduced.  The Company agrees and stipulates that, to the extent
   permitted by applicable law, any such reproduction shall be admissible in
   evidence as the original itself in any judicial or administrative
   proceeding (whether or not the original is in existence and whether or not
   such reproduction was made by you in the regular course of business) and
   any enlargement, facsimile or further reproduction of such reproduction
   shall likewise be admissible in evidence.  This Section 19 shall not
   prohibit the Company or any other holder of Notes from contesting any such
   reproduction to the same extent that it could contest the original, or
   from introducing evidence to demonstrate the inaccuracy of any such
   reproduction.

   Section 20.   Confidential Information;.

        For the purposes of this Section 20, "Confidential Information" means
   information delivered to you by or on behalf of the Company or any
   Restricted Subsidiary in connection with the transactions contemplated by
   or otherwise pursuant to this Agreement that is proprietary in nature and
   that was clearly marked or labeled or otherwise adequately identified when
   received by you as being confidential information of the Company or such
   Restricted Subsidiary, provided that such term does not include
   information that (a) was publicly known or otherwise known to you prior to
   the time of such disclosure, (b) subsequently becomes publicly known
   through no act or omission by you or any Person acting on your behalf, (c)
   otherwise becomes known to you other than through disclosure by the
   Company or any Restricted Subsidiary or (d) constitutes financial
   statements delivered to you under Section 7.1 that are otherwise publicly
   available.  You will maintain the confidentiality of such Confidential
   Information in accordance with procedures adopted by you in good faith to
   protect confidential information of third parties delivered to you,
   provided that you may deliver or disclose Confidential Information to (i)
   your directors, trustees, officers, employees, agents, attorneys and
   affiliates (to the extent such disclosure reasonably relates to the
   administration of the investment represented by your Notes), (ii) your
   financial advisors and other professional advisors who agree to hold
   confidential the Confidential Information substantially in accordance with
   the terms of this Section 20, (iii) any other holder of any Note, (iv) any
   Institutional Investor to which you sell or offer to sell such Note or any
   part thereof or any participation therein (if such Person has agreed in
   writing prior to its receipt of such Confidential Information to be bound
   by the provisions of this Section 20), (v) any Person from which you offer
   to purchase any security of the Company (if such Person has agreed in
   writing prior to its receipt of such Confidential Information to be bound
   by the provisions of this Section 20), (vi) any federal or state
   regulatory authority having jurisdiction over you, (vii) the National
   Association of Insurance Commissioners or any similar organization, or any
   nationally recognized rating agency that requires access to information
   about your investment portfolio or (viii) any other Person to which such
   delivery or disclosure may be necessary or appropriate (w) to effect
   compliance with any law, rule, regulation or order applicable to you, (x)
   in response to any subpoena or other legal process, (y) in connection with
   any litigation to which you are a party or (z) if an Event of Default has
   occurred and is continuing, to the extent you may reasonably determine
   such delivery and disclosure to be necessary or appropriate in the
   enforcement or for the protection of the rights and remedies under your
   Notes and this Agreement.  Each holder of a Note, by its acceptance of a
   Note, will be deemed to have agreed to be bound by and to be entitled to
   the benefits of this Section 20 as though it were a party to this
   Agreement.  On reasonable request by the Company in connection with the
   delivery to any holder of a Note of information required to be delivered
   to such holder under this Agreement or requested by such holder (other
   than a holder that is a party to this Agreement or its nominee), such
   holder will enter into an agreement with the Company embodying the
   provisions of this Section 20.

   Section 21.   Substitution of Purchaser;.

        You shall have the right to substitute any one of your Affiliates as
   the purchaser of the Notes that you have agreed to purchase hereunder, by
   written notice to the Company, which notice shall be signed by both you
   and such Affiliate, shall contain such Affiliate's agreement to be bound
   by this Agreement and shall contain a confirmation by such Affiliate of
   the accuracy with respect to it of the representations set forth in
   Section 6.  Upon receipt of such notice, wherever the word "you" is used
   in this Agreement (other than in this Section 21), such word shall be
   deemed to refer to such Affiliate in lieu of you.  In the event that such
   Affiliate is so substituted as a purchaser hereunder and such Affiliate
   thereafter transfers to you all of the Notes then held by such Affiliate,
   upon receipt by the Company of notice of such transfer, wherever the word
   "you" is used in this Agreement (other than in this Section 21), such word
   shall no longer be deemed to refer to such Affiliate, but shall refer to
   you, and you shall have all the rights of an original holder of the Notes
   under this Agreement.

   Section 22.   Miscellaneous;.

    Section 22.1.  Successors and Assigns;.  All covenants and other
   agreements contained in this Agreement (including all covenants and other
   agreements contained in any Supplement) by or on behalf of any of the
   parties hereto bind and inure to the benefit of their respective
   successors and assigns (including, without limitation, any subsequent
   holder of a Note) whether so expressed or not.

    Section 22.2.  Payments Due on Non-Business Days;.  Anything in this
   Agreement or the Notes to the contrary notwithstanding, any payment of
   principal of or Make-Whole Amount or interest on any Note that is due on a
   date other than a Business Day shall be made on the next succeeding
   Business Day without including the additional days elapsed in the
   computation of the interest payable on such next succeeding Business Day.

    Section 22.3.  Severability;.  Any provision of this Agreement that is
   prohibited or unenforceable in any jurisdiction shall, as to such
   jurisdiction, be ineffective to the extent of such prohibition or
   unenforceability without invalidating the remaining provisions hereof, and
   any such prohibition or unenforceability in any jurisdiction shall (to the
   full extent permitted by law) not invalidate or render unenforceable such
   provision in any other jurisdiction.

    Section 22.4.  Construction;.  Each covenant contained herein shall be
   construed (absent express provision to the contrary) as being independent
   of each other covenant contained herein, so that compliance with any one
   covenant shall not (absent such an express contrary provision) be deemed
   to excuse compliance with any other covenant.  Where any provision herein
   refers to action to be taken by any Person, or which such Person is
   prohibited from taking, such provision shall be applicable whether such
   action is taken directly or indirectly by such Person.

        Where the character or amount of any asset or liability or item of
   income or expense is required to be determined or any consolidation or
   other accounting computation is required to be made for the purposes of
   this Agreement, the same shall be done in accordance with GAAP, to the
   extent applicable, except where such principles are inconsistent with the
   express requirements of this Agreement.

    Section 22.5.  Counterparts;.  This Agreement may be executed in any
   number of counterparts, each of which shall be an original but all of
   which together shall constitute one instrument.  Each counterpart may
   consist of a number of copies hereof, each signed by less than all, but
   together signed by all, of the parties hereto.

    Section 22.6.  Governing Law;.  This Agreement shall be construed and
   enforced in accordance with, and the rights of the parties shall be
   governed by, the law of the State of Illinois excluding choice-of-law
   principles of the law of such State that would require the application of
   the laws of a jurisdiction other than such State.


                            *     *     *     *     *


        If you are in agreement with the foregoing, please sign the form of
   agreement on the accompanying counterpart of this Agreement and return it
   to the Company, whereupon the foregoing shall become a binding agreement
   between you and the Company.

   Signature;
   Very truly yours,

   The Marcus Corporation



   By
        Its President


The foregoing is hereby agreed
to as of the date thereof.

[Add Purchaser Signature Blocks]


<PAGE>
   Information Relating to Purchasers


                                           Principal        Principal
                                           Amount of        Amount of
    Name and Address                       Tranche A Notes  Tranche B Notes
    of Purchaser                           to Be Purchased  to Be Purchased

   Massachusetts Mutual Life 
     Insurance Company                         $2,500,000         $2,500,000
   1295 State Street
   Springfield, Massachusetts  01111
   Attention:  Securities Investment Division
   (1)  All payments on or in respect of the Notes to be by bank wire
        transfer of Federal or other immediately available funds (identifying
        each payment as "The Marcus Corporation, 7.41% Series A Senior Notes
        Tranche A, due October 15, 2008, PPN 56633# AA 1 or 7.51% Series A
        Senior Notes, Tranche B, due October 15, 2011, PPN 56633# AB 9,
        principal or interest" to:
   Chase Manhattan Bank, N.A.
   4 Chase MetroTech Center
   New York, New York  10081
   (ABA #021000021)
        for credit to: MassMutual IFM Non-Traditional Account No. 910-2509073
        Re:  Description of security, principal and interest split
        with telephone advice of payment to the Securities Custody and
        Collection Department of Massachusetts Mutual Life Insurance Company
        at (413) 744-3878
   (2)  All notices and communications to be addressed as first provided
        above, except notices with respect to payments, to be addressed
        Attention:  Securities Custody and Collection Department, F 381.
   (3)  Register Notes in the name of:

   Massachusetts Mutual Life Insurance Company
   (4)  Taxpayer I.D. No. 04-1590850

   
<PAGE>


                                            Principal Amount  Principal Amount
                                            of                of
    Name and Address                        Tranche A Notes   Tranche B Notes
    of Purchaser                            to Be Purchased   to Be Purchased

   Massachusetts Mutual Life 
     Insurance Company                         $9,250,000         $9,250,000
   1295 State Street
   Springfield, Massachusetts  01111
   Attention:  Securities Investment Division
   (1)  All payments on or in respect of the Notes to be by bank wire
        transfer of Federal or other immediately available funds (identifying
        each payment as "The Marcus Corporation, 7.41% Series A Senior Notes
        Tranche A, due October 15, 2008, PPN 56633# AA 1 or 7.51% Series A
        Senior Notes, Tranche B, due October 15, 2011, PPN 56633# AB 9,
        principal or interest" to:
   Citibank, N.A.
   111 Wall Street
   New York, New York  10043
   (ABA #021000089)
        for credit to: MassMutual Long Term Pool Account No. 4067-3488
        Re:  Description of security, principal and interest split
        with telephone advice of payment to the Securities Custody and
        Collection Department of Massachusetts Mutual Life Insurance Company
        at (413) 744-3878
   (2)  All notices and communications to be addressed as first provided
        above, except notices with respect to payments, to be addressed
        Attention:  Securities Custody and Collection Department, F 381.
   (3)  Register Notes in the name of:
        Massachusetts Mutual Life Insurance Company
   (4)  Taxpayer I.D. No. 04-1590850


   
<PAGE>

                                            Principal Amount  Principal Amount
                                            of                of
    Name and Address                        Tranche A Notes   Tranche B Notes
    of Purchaser                            to Be Purchased   to Be Purchased

   CM Life Insurance Company
   c/o Massachusetts Mutual Life
   Insurance Company                           $750,000           $750,000
   1295 State Street
   Springfield, Massachusetts  01111
   Attention:  Securities Investment Division
   (1)  All payments on or in respect of the Notes to be by bank wire
        transfer of Federal or other immediately available funds (identifying
        each payment as "The Marcus Corporation, 7.41% Series A Senior Notes
        Tranche A, due October 15, 2008, PPN 56633# AA 1 or 7.51% Series A
        Senior Notes, Tranche B, due October 15, 2011, PPN 56633# AB 9,
        principal or interest" to:
   Citibank, N.A.
   111 Wall Street
   New York, New York  10043
   (ABA #021000089)

   For Segment 43-Universal Life
   Account No. 4068-6561
        Re:  Description of security, principal and interest split
        with telephone advice of payment to the Securities Custody and
        Collection Department of Massachusetts Mutual Life Insurance Company
        at (413) 744-3878
   (2)  All notices and communications to be addressed as first provided
        above, except notices with respect to payments, to be addressed
        Attention:  Securities Custody and Collection Department, F 381.
   (3)  Register Notes in the name of:
        CM Life Insurance Company
   (4)  Taxpayer I.D. No. 06-1041383

   
<PAGE>


                                            Principal Amount  Principal Amount
                                            of                of
    Name and Address                        Tranche A Notes   Tranche B Notes
    of Purchaser                            to Be Purchased   to Be Purchased

   Nationwide Life Insurance Company
   One Nationwide Plaza (I-33-07)              $10,000,000        $10,000,000
   Columbus, Ohio  43215-2220
   (1)  All payments on or in respect of the Notes to be by bank wire
        transfer of Federal or other immediately available funds (identifying
        each payment as "The Marcus Corporation, 7.41% Series A Senior Notes
        Tranche A, due October 15, 2008, PPN 56633# AA 1 or 7.51% Series A
        Senior Notes, Tranche B, due October 15, 2011, PPN 56633# AB 9,
        principal or interest") to:

   The Bank of New York
   (ABA #021-000-018)
   BNF:  IOC566
   F/A/O Nationwide Life Insurance Company
   Attn:  P & I Department
   PPN# _______________
   Security Description:  ___________________
     (2)  All notices of payment on or in respect of the Notes and written
        confirmation of each such payment to:

   Nationwide Life Insurance Company
   c/o The Bank of New York
   P. O. Box 19266
   Attention:  P & I Department
   Newark, NJ  07195

   With a copy to:

   Nationwide Life Insurance Company
   Attn:  Investment Accounting
   One Nationwide Plaza (I-32-05)
   Columbus, Ohio  43215-2220
   (3)  All other communications to be addressed as first provided above to:
   Attention:  Corporate Fixed-Income Securities
   (4)  Taxpayer I.D. Number:  31-4156830

   
<PAGE>


                                            Principal Amount  Principal Amount
                                            of                of
    Name and Address                        Tranche A Notes   Tranche B Notes
    of Purchaser                            to Be Purchased   to Be Purchased


   Connecticut General Life
     Insurance Company                        $3,000,000          $-0-
   CIG & Co.                                   3,000,000
   c/o CIGNA Investments, Inc.                 3,000,000
   900 Cottage Grove Road                      3,000,000
                                              ----------
   Hartford, Connecticut  06152-2307         $12,000,000
   Attention:  Private Securities Division - S-307
   Operations Group
   Fax:  860-726-7203
   (1)  All payments on or in respect of the Notes to be by bank wire
        transfer of Federal or other immediately available funds (identifying
        each payment as "The Marcus Corporation, 7.41% Series A Senior Notes
        Tranche A, due October 15, 2008, PPN 56633# AA 1, principal or
        interest") to:

   Chase NYC/CTR/
   BNF=CIGNA Private Placements/
   AC=9009001802
   ABA #021000021
     (2)  All notices of payment on or in respect of the Notes and written
        confirmation of each such payment to:

   CIG & Co.
   c/o CIGNA Investments, Inc.
   Attention:  Securities Processing S-309
   900 Cottage Grove Road
   Hartford, CT  06152-2309

   With a copy to:

   Chase Manhattan Bank, N.A.
   Private Placement Servicing
   P. O. Box 1508
   Bowling Green Station
   New York, New York  10081
   Attention:  CIGNA Private Placements
   Fax:  860-726-7203
   (3)  All other communications to be addressed as first provided above.
   (4)  The original note should be registered in the name of CIG & Co. 
   (5)  Taxpayer I.D. Number:  13-3574027


   
<PAGE>

                                            Principal Amount  Principal Amount
                                            of                of
    Name and Address                        Tranche A Notes   Tranche B Notes
    of Purchaser                            to Be Purchased   to Be Purchased

   Life Insurance Company
     of North America                          $3,000,000         $-0- 
   CIG & Co.
   c/o CIGNA Investments, Inc.
   900 Cottage Grove Road
   Hartford, Connecticut  06152-2307
   Attention:  Private Securities Division - S-307
   Operations Group
   Fax:  860-726-7203
   (1)  All payments on or in respect of the Notes to be by bank wire
        transfer of Federal or other immediately available funds (identifying
        each payment as "The Marcus Corporation, 7.41% Series A Senior Notes
        Tranche A, due October 15, 2008, PPN 56633# AA 1, principal or
        interest") to:

   Chase NYC/CTR/
   BNF=CIGNA Private Placements/
   AC=9009001802
   ABA #021000021
     (2)  All notices of payment on or in respect of the Notes and written
        confirmation of each such payment to:

   CIG & Co.
   c/o CIGNA Investments, Inc.
   Attention:  Securities Processing S-309
   900 Cottage Grove Road
   Hartford, CT  06152-2309

   With a copy to:

   Chase Manhattan Bank, N.A.
   Private Placement Servicing
   P. O. Box 1508
   Bowling Green Station
   New York, New York  10081
   Attention:  CIGNA Private Placements
   Fax:  212-552-3107/1005
   (3)  All other communications to be addressed as first provided above.
   (4)  The original note should be registered in the name of CIG & Co. 
   (5)  Taxpayer I.D. Number:  13-3574027


   
<PAGE>


                                            Principal Amount  Principal Amount
                                            of                of
    Name and Address                        Tranche A Notes   Tranche B Notes
    of Purchaser                            to Be Purchased   to Be Purchased

   Northern Life Insurance Company             $5,000,000         $-0- 
   c/o Reliastar Investment Research, Inc.
   100 Washington Square
   Suite 800
   Minneapolis, Minnesota  55401-2147
   Ref:  Theodore R. Hoxmeier
   (1)  All payments on or in respect of the Notes to be by bank wire
        transfer of Federal or other immediately available funds (identifying
        each payment as "The Marcus Corporation, 7.41% Series A Senior Notes
        Tranche A, due October 15, 2008, PPN 56633# AA 1, principal or
        interest") to:

   First National Bank N.A./Mpls
   601 2nd Ave. S.
   Acct. #1602-3237-6105
   Bank ABA #091000022
   Attn:  Securities Accounting
   Ref:  Issuer, Cusip, Coupon & Maturity
     (2)  All notices of payments and written confirmations of such wire
        transfers:

   Reliastar Investment Research, Inc.
   100 Washington Avenue South
   Suite 800
   Minneapolis, Minnesota  55401-2147
   Ref:  Theodore R. Hoxmeier
   Phone:  (612) 372-5254
   Fax:  (612) 372-5368
   (3)  All other communications to be addressed as first provided above in
        (2).
   (4)  Taxpayer I.D. No. 41-1295933

   
<PAGE>

                                            Principal Amount  Principal Amount
                                            of                of
    Name and Address                        Tranche A Notes   Tranche B Notes
    of Purchaser                            to Be Purchased   to Be Purchased

   ReliaStar Life Insurance Company            $3,000,000         $-0- 
   c/o Reliastar Investment Research, Inc.
   100 Washington Avenue South
   Suite 800
   Minneapolis, Minnesota  55401-2147
   Ref:  Theodore R. Hoxmeier
   (1)  All payments on or in respect of the Notes to be by bank wire
        transfer of Federal or other immediately available funds (identifying
        each payment as "The Marcus Corporation, 7.41% Series A Senior Notes
        Tranche A, due October 15, 2008, PPN 56633# AA 1, principal or
        interest") to:

   First National Bank N.A./Mpls
   601 2nd Ave. S.
   Acct. #1102-4001-4461
   Bank ABA #091000022
   Attn:  Securities Accounting
   Ref:  Issuer, Cusip, Coupon & Maturity
     (2)  All notices of payments and written confirmations of such wire
        transfers:

   Reliastar Investment Research, Inc.
   100 Washington Avenue South
   Suite 800
   Minneapolis, Minnesota  55401-2147
   Ref:  Theodore R. Hoxmeier
   Phone:  (612) 372-5254
   Fax:  (612) 372-5368
   (3)  All other communications to be addressed as first provided above in
        (2).
   (4)  Taxpayer I.D. No. 41-0451140

   
<PAGE>


                                            Principal Amount  Principal Amount
                                            of                of
    Name and Address                        Tranche A Notes   Tranche B Notes
    of Purchaser                            to Be Purchased   to Be Purchased

   ReliaStar Bankers Security Life
     Insurance Company                         $2,000,000         $-0- 
   c/o Reliastar Investment Research, Inc.
   100 Washington Avenue South
   Suite 800
   Minneapolis, Minnesota  55401-2121
   Ref:  Theodore R. Hoxmeier
   (1)  All payments on or in respect of the Notes to be by bank wire
        transfer of Federal or other immediately available funds (identifying
        each payment as "The Marcus Corporation, 7.41% Series A Senior Notes
        Tranche A, due October 15, 2008, PPN 56633# AA 1, principal or
        interest") to:

   Chase Manhattan
   New York, NY
   A/C #544755102
   F/C #1960 Dept. 571 NonStandard Securities
   Bank ABA #021000021
   Ref:  Issue Name, PPN and P&I Breakdown
     (2)  All notices of payments and written confirmations of such wire
        transfers:

   Reliastar Investment Research, Inc.
   100 Washington Avenue South
   Suite 800
   Minneapolis, Minnesota  55401-2147
   Ref:  Theodore R. Hoxmeier
   Phone:  (612) 372-5254
   Fax:  (612) 372-5368
   (3)  All other communications to be addressed as first provided above in
        (2).
   (4)  Register Note in Name of:
   SIGLER & CO.
   (5)  Taxpayer I.D. No. 53-0242530

   
<PAGE>


                                            Principal Amount  Principal Amount
                                            of                of
    Name and Address                        Tranche A Notes   Tranche B Notes
    of Purchaser                            to Be Purchased   to Be Purchased

   Aid Association for Lutherans               $10,000,000        $-0- 
   432l North Ballard Road
   Appleton, Wisconsin  54919
   Attention:  Investment Department
   (1)  All payments on or in respect of the Notes to be by bank wire
        transfer of Federal or other immediately available funds (identifying
        each payment as "The Marcus Corporation, 7.41% Series A Senior Notes
        Tranche A, due October 15, 2008, PPN 56633# AA 1, principal or
        interest") to:
   Citibank, NYC/CUST.
   ABA #021-000-089
   DDA #36112805
   Attn:  John Colavito
   Ref Account #846647
   Aid Association for Lutherans Custody Account
   security description
   CUSIP (if available)
   maturity date
   payable date
   principal and interest breakdown
   interest rate if variable rate
        with sufficient information to identify the source and application of
        such funds.
     (2)  All notices on or in respect to the Notes and written confirmation of
        each such payment to be addressed as first provided above and to:
   Income Collection and Disbursement
   Ref Account #846647
   Aid Association for Lutherans Custody Account
   Citicorp Services Inc.
   1410 N. Westshore Blvd.
   4th Floor
   Tampa, FL 33607
   (3)  All other communications to be addressed as first provided above.
   (4)  Taxpayer I.D. No. 39-0123480


   
<PAGE>


                                            Principal Amount  Principal Amount
                                            of                of
    Name and Address                        Tranche A Notes   Tranche B Notes
    of Purchaser                            to Be Purchased   to Be Purchased

   Security First Life Insurance Company       $2,500,000         $2,500,000
   c/o London Life Insurance Company
   255 Dufferin Avenue
   London, Ontario
   N6A 4K1
   Attention:  Manager U.S. Fixed Income
   (Private Placements)
   Securities Department
   (1)  All payments on or in respect of the Notes to be by bank wire
        transfer of Federal or other immediately available funds (identifying
        each payment as "The Marcus Corporation, 7.41% Series A Senior Notes
        Tranche A, due October 15, 2008, PPN 56633# AA 1 or 7.51% Series A
        Senior Notes, Tranche B, due October 15, 2011, PPN 56633# AB 9,
        principal or interest") to:

   Bank of New York
        1 Wall Street
        New York, New York  10286
        F/A/O Security First Group Corporate Bond
     Account
        Account #328175
        ABA #021000018
     (2)  All notices of payments and written confirmations of such wire
        transfers as first provided above.
   (3)  All other communications to be addressed as described in (2) above.
   (4)  Register Note in Name of:
   Security First Life Insurance Company.
   (5)  Taxpayer I.D. No. 540696644


   
<PAGE>
   Defined Terms

   As used herein, the following terms have the respective meanings set forth
   below or set forth in the Section hereof following such term:

   "Additional Notes" is defined in Section 2.2.

   "Additional Purchasers" means purchasers of Additional Notes.

   "Affiliate" means, at any time, and with respect to any Person, (a) any
   other Person that at such time directly or indirectly through one or more
   intermediaries Controls, or is Controlled by, or is under common Control
   with, such first Person, and (b) any other Person beneficially owning or
   holding, directly or indirectly, 10% or more of any class of voting or
   equity interests of such first Person or any other Person of which such
   first Person beneficially own or hold, in the aggregate, directly or
   indirectly, 10% or more of any class of voting or equity interests.  As
   used in this definition, "Control" means the possession, directly or
   indirectly, of the power to direct or cause the direction of the
   management and policies of a Person, whether through the ownership of
   voting securities, by contract or otherwise.  Unless the context otherwise
   clearly requires, any reference to an "Affiliate" is a reference to an
   Affiliate of the Company.  For all purposes of this Agreement, Restricted
   Subsidiaries shall not be deemed to be Affiliates of the Company or any
   other Restricted Subsidiary.

   "Business Day" means (a) for the purposes of Section 8.6 only, any day
   other than a Saturday, a Sunday or a day on which commercial banks in New
   York City are required or authorized to be closed, and (b) for the
   purposes of any other provision of this Agreement, any day other than a
   Saturday, a Sunday or a day on which commercial banks in Chicago, Illinois
   or Milwaukee, Wisconsin are required or authorized to be closed.

   "Capital Lease" means, at any time, a lease with respect to which the
   lessee is required concurrently to recognize the acquisition of an asset
   and the incurrence of a liability in accordance with GAAP.

   "Capital Lease Obligation" means, with respect to any Person and a Capital
   Lease, the amount of the obligation of such Person, as the lessee under
   the Capital Lease, which would appear as a liability on a balance sheet of
   such Person in accordance with GAAP.  

   "Closing" is defined in Section 3.

   "Code" means the Internal Revenue Code of 1986, as amended from time to
   time, and the rules and regulations promulgated thereunder from time to
   time.

   "Company" means The Marcus Corporation, a Wisconsin corporation.

   "Confidential Information" is defined in Section 20.

   "Consolidated Debt" means, as of the date of any determination thereof,
   all Debt of the Company and its Restricted Subsidiaries, determined on a
   consolidated basis in accordance with GAAP.

   "Consolidated Net Worth" means, as of the date of any determination
   thereof, Stockholders' Equity less the total amount of all Restricted
   Investments in excess of 20% of Stockholders' Equity as of such date of
   determination.

   "Consolidated Net Income" means, with reference to any period, the net
   income (or loss) of the Company and its Restricted Subsidiaries for such
   period (taken as a cumulative whole), as determined in accordance with
   GAAP, after eliminating all offsetting debits and credits between the
   Company and its Restricted Subsidiaries and all other items required to be
   eliminated in the course of the preparation of consolidated financial
   statements of the Company and its Restricted Subsidiaries in accordance
   with GAAP.

   "Consolidated Operating Cash Flow" means, in respect of any period, the
   sum of (a) Consolidated Net Income for such period, and (b) the amount of
   all Net Interest Charges, Operating Lease Rentals, depreciation,
   amortization, income taxes, deferred items and other non-cash expenses of
   the Company and its Restricted Subsidiaries for such period, but only to
   the extent deducted in the determination of Consolidated Net Income for
   such period.

   "Consolidated Operating Cash Flow Ratio" means, with respect to any
   period, the ratio of Consolidated Operating Cash Flow to Fixed Charges for
   such period.   

   "Consolidated Total Assets" means, as of the date of any determination
   thereof, the total amount of all assets of the Company and its Restricted
   Subsidiaries, determined on a consolidated basis in accordance with GAAP.

   "Consolidated Total Capitalization" means, as of the date of any
   determination thereof, the sum of (i) Consolidated Debt, plus (ii)
   Consolidated Net Worth.

   "Debt" means, with respect to any Person, without duplication,

   (a)its liabilities for borrowed money;

   (b)its liabilities for the deferred purchase price of property acquired by
   such Person (excluding accounts payable arising in the ordinary course of
   business but including, without limitation, all liabilities created or
   arising under any conditional sale or other title retention agreement with
   respect to any such property);

   (c)its Capital Lease Obligations; and

   (d)all liabilities for borrowed money secured by any Lien with respect to
   any property owned by such Person (whether or not it has assumed or
   otherwise become liable for such liabilities).
   Debt of any Person shall include all obligations of such Person of the
   character described in clauses (a) through (d) to the extent such Person
   remains legally liable in respect thereof notwithstanding that any such
   obligation is deemed to be extinguished under GAAP.  Unless otherwise
   specifically provided for herein, Debt of any Person shall not include any
   Guaranty by such Person of obligations of any other Person.

   "Default" means an event or condition the occurrence or existence of which
   would, with the lapse of time or the giving of notice or both, become an
   Event of Default.

   "Default Rate" means that rate of interest that is the greater of (i) 2%
   per annum above the rate of interest stated in clause (a) of the first
   paragraph of the Notes or (ii) 2% per annum over the rate of interest
   publicly announced by Bank of America Illinois in Chicago, Illinois as its
   "base" or "prime" rate.

   "Environmental Laws" means any and all Federal, state, local, and foreign
   statutes, laws, regulations, ordinances, rules, judgments, orders,
   decrees, permits, concessions, grants, franchises, licenses, agreements or
   governmental restrictions relating to pollution and the protection of the
   environment or the release of any materials into the environment,
   including but not limited to those related to hazardous substances or
   wastes, air emissions and discharges to waste or public systems.

   "ERISA" means the Employee Retirement Income Security Act of 1974, as
   amended from time to time, and the rules and regulations promulgated
   thereunder from time to time in effect.

   "ERISA Affiliate" means any trade or business (whether or not
   incorporated) that is treated as a single employer together with the
   Company under section 414 of the Code.

   "Event of Default" is defined in Section 11.

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

   "Excluded Sale and Leaseback Transaction" shall mean any sale or transfer
   of property owned by the Company or any Restricted Subsidiary to any
   Person within 180 days following the acquisition or construction of such
   property by the Company or any Restricted Subsidiary if the Company or a
   Restricted Subsidiary shall concurrently with such sale or transfer lease
   such property, as lessee.

   "Fixed Charges" means, with respect to any period, the sum of (i) all
   Operating Lease Rentals payable during such period by the Company and its
   Restricted Subsidiaries, plus (ii) Net Interest Charges during such period
   of the Company and its Restricted Subsidiaries.  

   "GAAP" means generally accepted accounting principles as in effect from
   time to time in the United States of America.

   "Governmental Authority" means

   (a)the government of

   (i)the United States of America or any State or other political
   subdivision thereof, or

   (ii)any jurisdiction in which the Company or any Restricted Subsidiary
   conducts all or any part of its business, or which asserts jurisdiction
   over any properties of the Company or any Restricted Subsidiary, or

   (b)any entity exercising executive, legislative, judicial, regulatory or
   administrative functions of, or pertaining to, any such government.

   "Guaranty" means, with respect to any Person, any obligation (except the
   endorsement in the ordinary course of business of negotiable instruments
   for deposit or collection) of such Person guaranteeing or in effect
   guaranteeing any indebtedness, dividend or other obligation of any other
   Person in any manner, whether directly or indirectly, including (without
   limitation) obligations incurred through an agreement, contingent or
   otherwise, by such Person:

   (a)to purchase such indebtedness or obligation or any property
   constituting security therefor;

   (b)to advance or supply funds (i) for the purchase or payment of such
   indebtedness or obligation, or (ii) to maintain any working capital or
   other balance sheet condition or any income statement condition of any
   other Person or otherwise to advance or make available funds for the
   purchase or payment of such indebtedness or obligation;

   (c)to lease properties or to purchase properties or services primarily for
   the purpose of assuring the owner of such indebtedness or obligation of
   the ability of any other Person to make payment of the indebtedness or
   obligation; or

   (d)otherwise to assure the owner of such indebtedness or obligation
   against loss in respect thereof.

   In any computation of the indebtedness or other liabilities of the obligor
   under any Guaranty, the indebtedness or other obligations that are the
   subject of such Guaranty shall be assumed to be direct obligations of such
   obligor.

   "Hazardous Material" means any and all pollutants, toxic or hazardous
   wastes or any other substances that might pose a hazard to health or
   safety, the removal of which may be required or the generation,
   manufacture, refining, production, processing, treatment, storage,
   handling, transportation, transfer, use, disposal, release, discharge,
   spillage, seepage, or filtration of which is or shall be restricted,
   prohibited or penalized by any applicable law (including, without
   limitation, asbestos, urea formaldehyde foam insulation and
   polychlorinated biphenyls).

   "holder" means, with respect to any Note, the Person in whose name such
   Note is registered in the register maintained by the Company pursuant to
   Section 13.1.

   "Institutional Investor" means (a) any original purchaser of a Note, (b)
   any holder of a Note or Notes holding more than $2,000,000 of the
   aggregate principal amount of the Notes then outstanding, and (c) any
   bank, trust company, savings and loan association or other financial
   institution, any pension plan, any investment company, any insurance
   company, any broker or dealer, or any other similar financial institution
   or entity, regardless of legal form.

   "Interest Charges" means, with respect to any period, the sum (without
   duplication) of (a) all interest in respect of all Debt of the Company and
   its Restricted Subsidiaries (including the interest component of rentals
   on Capital Leases) deducted in determining Consolidated Net Income for
   such period, together with all interest capitalized or deferred during
   such period and not deducted in determining Consolidated Net Income for
   such period, plus (b) all debt discount and expense amortized or required
   to be amortized in the determination of Consolidated Net Income for such
   period.

   "Investments" shall mean all investments, in cash or by delivery of
   property made, directly or indirectly in any Person, whether by
   acquisition of shares of capital stock, indebtedness or other obligations
   or securities or by loan, advance, capital contribution or otherwise;
   provided, however, that "Investments" shall not mean or include routine
   investments in property or assets to be used or consumed in the ordinary
   course of business.

   "Lien" means, with respect to any Person, any mortgage, lien, pledge,
   charge, security interest or other encumbrance, or any interest or title
   of any vendor, lessor, lender or other secured party to or of such Person
   under any conditional sale or other title retention agreement or Capital
   Lease, upon or with respect to any property or asset of such Person
   (including in the case of stock, stockholder agreements, voting trust
   agreements and all similar arrangements).

   "Make-Whole Amount" shall have the meaning (i) set forth in Section 8.6
   with respect to the Series A Notes, and (ii) set forth in the applicable
   Supplement with respect to any other Series of Notes.

   "Material" means material in relation to the business, operations,
   affairs, financial condition, assets, properties, or prospects of the
   Company and its Restricted Subsidiaries taken as a whole.

   "Material Adverse Effect" means a material adverse effect on (a) the
   business, operations, affairs, financial condition, assets or properties
   of the Company and its Restricted Subsidiaries, taken as a whole, or (b)
   the ability of the Company to perform its obligations under this Agreement
   and the Notes, or (c) the validity or enforceability of this Agreement or
   the Notes.

   "Material Subsidiary" means any Restricted Subsidiary which, either
   individually or together with one or more Restricted Subsidiaries, (i)
   accounts for more than 5% of Consolidated Total Assets, or (ii) accounts
   for more than 5% of Consolidated gross revenues of the Company and its
   Restricted Subsidiaries.  

   "Memorandum" is defined in Section 5.3.

   "Multiemployer Plan" means any Plan that is a "multiemployer plan" (as
   such term is defined in section 4001(a)(3) of ERISA).

   "Net Interest Charges" means, with respect to any period, the difference
   between (but not below zero) (i) all Interest Charges during such period
   of the Company and its Restricted Subsidiaries, minus (ii) all interest
   income during such period of the Company and its Restricted Subsidiaries. 

   "Notes" is defined in Section 1.

   "Officer's Certificate" means a certificate of a Senior Financial Officer
   or of any other officer of the Company whose responsibilities extend to
   the subject matter of such certificate.

   "Operating Lease Rentals" means, with respect to any period, the sum of
   the minimum amount of rental and other obligations required to be paid
   during such period by the Company or any Restricted Subsidiary as lessee
   under all leases of real or personal property (other than Capital Leases),
   excluding any amounts required to be paid by the lessee (whether or not
   therein designated as rental or additional rental) (a) which are on
   account of maintenance and repairs, insurance, taxes, assessments, water
   rates and similar charges, or (b) which are based on profits, revenues or
   sales realized by the lessee from the leased property or otherwise based
   on the performance of the lessee.

   "Other Agreements" is defined in Section 2.

   "Other Purchasers" is defined in Section 2.

   "PBGC" means the Pension Benefit Guaranty Corporation referred to and
   defined in ERISA or any successor thereto.

   "Person" means an individual, partnership, corporation, limited liability
   company, association, trust, unincorporated organization, or a government
   or agency or political subdivision thereof.

   "Plan" means an "employee benefit plan" (as defined in section 3(3) of
   ERISA) that is or, within the preceding five years, has been established
   or maintained, or to which contributions are or, within the preceding five
   years, have been made or required to be made, by the Company or any ERISA
   Affiliate or with respect to which the Company or any ERISA Affiliate may
   have any liability.

   "Priority Debt" means (without duplication), as of the date of any
   determination thereof, (i) all Debt of Restricted Subsidiaries (other than
   Debt owing to the Company or another Restricted Subsidiary), (ii) any
   Guaranty of Debt of the Company by any Material Subsidiary and (iii) all
   Debt secured by Liens permitted by subparagraph (l) of Section 10.5.
   "property" or "properties" means, unless otherwise specifically limited,
   real or personal property of any kind, tangible or intangible, choate or
   inchoate.

   "QPAM Exemption" means Prohibited Transaction Class Exemption 84-14 issued
   by the United States Department of Labor.

   "Responsible Officer" means any Senior Financial Officer and any other
   officer of the Company with responsibility for the administration of the
   relevant portion of this agreement.

   "Restricted Investments" means all Investments, other than the following:

   (a)Investments by the Company and its Restricted Subsidiaries in and to
   Restricted Subsidiaries, including any Investment in a corporation which,
   after giving effect to such Investment, will become a Restricted
   Subsidiary;

   (b)Investments in commercial paper maturing in 270 days or less from the
   date of issuance which, at the time of acquisition by the Company or any
   Restricted Subsidiary, are accorded one of the highest two ratings by
   Standard & Poor's Rating Group, a division of McGraw-Hill, Inc. or by
   Moody's Investors Services, Inc. or other nationally recognized credit
   rating agency of similar standing;

   (c)Investments in direct obligations of the United States of America or
   any agency or instrumentality of the United States of America, the payment
   or guarantee of which constitutes a full faith and credit obligation of
   the United States of America, in either case, maturing within one year
   from the date of acquisition thereof; 

   (d)Investments in certificates of deposit or bankers acceptances maturing
   within one year from the date of issuance thereof, issued by Bank of
   America or any other bank or trust company organized under the laws of the
   United States or any state thereof, whose long-term certificates of
   deposit are, at the time of acquisition thereof by the Company or a
   Restricted Subsidiary, accorded one of the highest two ratings by Standard
   & Poor's Rating Group, a division of McGraw-Hill, Inc. or by Moody's
   Investors Services, Inc. or other nationally recognized credit rating
   agency of similar standing;

   (e)Investments in tax-exempt obligations maturing within one year from the
   date of issuance which, at the time of acquisition by the Company or any
   Restricted Subsidiary, are accorded one of the highest two ratings by
   Standard & Poor's Rating Group, a division of McGraw-Hill, Inc. or by
   Moody's Investors Services, Inc. or other nationally recognized credit
   rating agency of similar standing;

   (f)Investments resulting from receivables arising from the sale of goods
   and services in the ordinary course of business of the Company and its
   Restricted Subsidiaries;

   (g)Investments by the Company and its Restricted Subsidiaries in property,
   plant and equipment of the Company and its Restricted Subsidiaries to be
   used in the ordinary course of business;

   (h)Investments in money market instrument programs which are classified as
   current assets of the Company or any Restricted Subsidiary in accordance
   with GAAP; 

   (i)Investments in repurchase agreements; and

   (j)Investments of the Company and its Restricted Subsidiaries existing as
   of the date of Closing and described on Schedule 5.4.
   In valuing any Investments for the purpose of applying the limitations set
   forth in this Agreement, such Investments shall be taken at the original
   cost thereof, without allowance for any subsequent write-offs or
   appreciation or depreciation therein, but less any amount repaid or
   recovered on account of capital or principal.

   "Restricted Subsidiary" means any Subsidiary which (i) at least a majority
   of the voting securities of such Subsidiary are owned by the Company
   and/or one or more Wholly-Owned Restricted Subsidiaries, (ii) is organized
   under the laws of the United States or any State thereof, (iii) conducts
   substantially all of its business and has substantially all of its assets
   within the United States, Canada or Mexico, and (iv) the Company has
   designated as a Restricted Subsidiary on Schedule 5.4 or by written notice
   given to the holders of all Notes in accordance with Section 10.8.

   "Securities Act" means the Securities Act of 1933, as amended from time to
   time.

   "Senior Debt" means, as of the date of any determination thereof, all
   Consolidated Debt, other than Subordinated Debt.

   "Senior Financial Officer" means the chief financial officer, principal
   accounting officer, treasurer or comptroller of the Company.

   "Series A Notes" is defined in Section 1.

   "Series B Notes" is defined in Section 1.

   "Stockholders' Equity" means, as of the date of any determination thereof,
   the total amount of shareholders' equity of the Company and its Restricted
   Subsidiaries (after eliminating all minority interests, if any),
   determined on a consolidated basis in accordance with GAAP.

   "Subordinated Debt" means, as of the date of any determination thereof,
   all unsecured Debt of the Company which shall contain or have applicable
   thereto subordination provisions providing for the subordination thereof
   to other Debt of the Company (including, without limitation, the Notes).
   "Subsidiary" means, as to any Person, any corporation, association or
   other business entity in which such Person or one or more of its
   Subsidiaries or such Person and one or more of its Subsidiaries owns
   sufficient equity or voting interests to enable it or them (as a group)
   ordinarily, in the absence of contingencies, to elect a majority of the
   directors (or Persons performing similar functions) of such entity, and
   any partnership or joint venture if more than a 50% interest in the
   profits or capital thereof is owned by such Person or one or more of its
   Subsidiaries or such Person and one or more of its Subsidiaries (unless
   such partnership can and does ordinarily take major business actions
   without the prior approval of such Person or one or more of its
   Subsidiaries).  Unless the context otherwise clearly requires, any
   reference to a "Subsidiary" is a reference to a Subsidiary of the Company.

   "Supplement" is defined in Section 2.2.

   "Unrestricted Subsidiary" means any Subsidiary which is not a Restricted
   Subsidiary.

   "Wholly-Owned Restricted Subsidiary" means, at any time, any Restricted
   Subsidiary one hundred percent (100%) of all of the equity interests
   (except directors' qualifying shares) and voting interests of which are
   owned by any one or more of the Company and the Company's other
   Wholly-Owned Restricted Subsidiaries at such time.

   
<PAGE>
   Subsidiaries, Affiliates, Directors and 
   Senior Officers, and Investments
   1.            Restricted Subsidiaries

        The Company owns 100% of the stock of the following corporations:

    Name                                         State of Incorporation
    Marcus Theatres Corporation                  Wisconsin
    Marcus Restaurants, Inc.                     Wisconsin
    B & G Realty, Inc.                           Wisconsin
    First American Finance Corporation           Wisconsin
    Marc Plaza Corporation                       Wisconsin
    Pfister Corporation                          Wisconsin
    Marcus Geneva, Inc.                          Wisconsin
    Marcus Hotels, Inc.                          Wisconsin
    Budgetel Inns, Inc.                          Wisconsin

        Marcus Theatres Corporation owns 100% of the stock of the following
   corporations:

    Name                                         State of Incorporation
    Appleton Theatres Corporation                Wisconsin
    Centre Theatres Corporation                  Wisconsin
    LaCrosse Amusement Company                   Wisconsin
    Lake-Vue Drive-In Corp.                      Wisconsin
    Marcus Cinemas, Inc.                         Wisconsin
    Marcus Productions, Inc.                     Wisconsin
    M&S Amusement, Inc.                          Wisconsin
    Pilgrim Theatre Corporation                  Wisconsin
    Southtown Corporation                        Wisconsin
    Starlight-24 Corporation                     Wisconsin
    Stephen Amusement Corporation                Wisconsin
    Tower 41-Corporation                         Wisconsin
    Vending Corporation                          Wisconsin
    41-Bowl, Inc.                                Wisconsin
    Marcus Amusement Co., Inc.                   Wisconsin

        Budgetel Inns, Inc. owns 100% of the stock of the following
   corporations:

    Name                                         State of Incorporation
    Budgetel Partners, Inc.                      Wisconsin
    Guest House Inn-Appleton, Inc.               Wisconsin
    Guest House Inn of Manitowoc, Inc.           Wisconsin
    Marc's Budgetel of Nebraska, Inc.            Nebraska
    Budgetel Franchises International, Inc.      Wisconsin
    Woodfield Refreshments of Colorado, Inc.     Colorado
        Marcus Restaurants, Inc. owns 100% of the stock of the following
   corporations, except it owns 50% of 642, Inc.:

    Name                                         State of Incorporation
    Marc's Carryout Corporation                  Wisconsin
    Tops, Inc.                                   Illinois
    B&G Leasing Corporation                      Wisconsin
    Captains-Juneau, Inc.                        Wisconsin
    Captains-Mayfair, Inc.                       Wisconsin
    Captains-Wausau, Inc.                        Wisconsin
    Captains-Kenosha, Inc.                       Wisconsin
    Colony Inns Southgate Corporation            Wisconsin
    Marc's Steak House, Inc.                     Wisconsin
    642, Inc.                                    Wisconsin
    Red Garter-Manitowoc, Inc.                   Wisconsin
    Captains-Appleton, Inc.                      Wisconsin
    Specialty Products Corporation of Wisconsin  Wisconsin
    Glendale Refreshments, Inc.                  Wisconsin
    Grand Avenue Refreshments, Inc.              Wisconsin
        Marcus Restaurants, Inc. has an option to purchase the remaining 50%
   of the stock of 642, Inc. for $5.

        Colony Inns Southgate Corporation owns 80% of the stock of Colony
   Inns Refreshments, Inc., a Wisconsin corporation, and has an option to
   purchase the remaining 20% for $5.

        Marcus Hotels, Inc. owns 100% of the stock of Marcus Northstar, Inc.,
   a Minnesota corporation.

   2.            Unrestricted Subsidiaries

   None
   3.            Affiliates of the Company

    Entity Name                                 Property Location
    Arlington Budgetel Partnership              Arlington, TX
    Huntsville University Partnership           Huntsville, AL
    Nashville Budgetel Partnership              Nashville, TN
    Montgomery Budgetel Partnership             Montgomery, AL
    Fort Lauderdale Budgetel Partnership        Ft. Lauderdale, FL
    Milwaukee South Budgetel Partnership        Oak Creek, WI
    Orlando Budgetel Inn Partnership            Orlando, FL
    Albuquerque Budgetel Inn Partnership        Albuquerque, NM
    Cleveland Budgetel Inn Partnership          Cleveland Airport, OH
    El Paso Budgetel Inn Partnership            El Paso, TX
    Columbus Budgetel Inn Partnership           Columbus, OH
    Springdale Budgetel Inn Partnership         Springdale, AR
    Marc's/Forest City Partnership              Mayfield Heights, OH
    LMC Associates - Rockside Partnership       Independence, OH
    Willowbrook Motel Limited Partnership       Willowbrook, IL
    BN/MC Associates - Cook Partnership         Glenview, IL
    Hoffman Northwest Limited Partnership       Hoffman Estates, IL
    Marc/Antell Partnership                     Roseville, MI
    Marcus-Guastello Partnership                Warren, MI
    Beck/Marcus Associates-Miami Airport        Miami Springs, FL
    Partnership
    Cutler Ridge Associates Partnership         Cutler Ridge, FL

   4.            Directors and Senior Officers of the Company
   Directors
   George R. Slater
   Retired Chairman and Chief Executive Officer, Banc One Wisconsin
   Corporation
   Lee Sherman Dreyfus
   President, Lee Sherman Dreyfus, Inc. and former Governor of the State of
   Wisconsin
   Daniel F. McKeithan, Jr.
   President, Tamarack Petroleum Company, Inc.
   Diane Marcus Gershowitz
   Real estate management and investments
   Timothy E. Hoeksema
   President, Midwest Express Airlines, Inc.
   Allen H. (Bud) Selig
   President and Chief Executive Officer, Milwaukee Brewers Baseball Club
   Stephen H. Marcus
   Chairman of the Board, President and Chief Executive Officer of the
   Company
   Bruce J. Olson
   Group Vice President of the Company

   Senior Officers
   Stephen H. Marcus
   Chairman of the Board, President and Chief Executive Officer of the
   Company
   Bruce J. Olson
   Group Vice President of the Company
   Lee A. Berthelsen
   President and Chief Operating Officer, Marcus Hotels and Resorts
   H. Fred Delmenhorst
   Vice President-Human Resources
   David T. Lucas
   President, Budgetel Inns
   Thomas F. Kissinger
   General Counsel and Secretary
   Douglas A. Neis
   Chief Financial Officer, Treasurer and Controller


   5.                             Investments

                                                # of Shares or 
                                              Units of Investment     Amount

   Grand Avenue Corporation                          150           150,000.00
   North Milwaukee State Bank Capital Debentures   1,000            10,000.00
   Exec Motel                                        100                79.66
   Venture Capital Fund                                             43,847.94
   Future Value Venture                           40,005            45,000.00
   Milwaukee Innovation                              150            15,000.00
   Wisconsin Community Capital                        30            15,000.00
   Time Inc.                                           1               103.13
   Warner Communications Inc.                          1                45.88
   Steeltech                                         160                 0.00
   Leisure Concepts, Inc.                              1                20.38
   United Artists Communications                       1                38.50
   Cineplex Odeon Corp.                                1                30.00
   Orion Pictures Corp.                                1                30.13
   MGM/UA Communications Co.                           1                22.00
   Gulf & Western Inc.                                 1                90.13
   Harcourt General Corp. (General Cinema)             1                52.50
   Walt Disney Corp.                                   1                76.75
   Coca-Cola Company                                   2                57.00
   Cannon Group, Inc.                                  1                20.13
   Tri-Star Pictures Inc.                              1                26.63
   Vestron, Inc.                                       1                21.50
   DeLaurentis Entertainment                           1                26.25
   New Line Cinema Corp.                               1                22.53
   New World Pictures LTD                              1                28.38
   AMC Entertainment Inc.                              1                25.75
   Gander Mountain, Inc.                           1,894            12,263.65
   Frisch's Restaurants                                5               195.63
   Carmike Cinema                                      1                11.75
   Rally's                                             1                25.50
   Morgans Foods                                       1                 1.88
   JB's Restaurants                                    1                 8.00
   Apple South Inc.                                    1                29.00
   Brinker International Inc.                          1                59.13
   Regal Cinemas, Inc.                                 1                11.84
   Cinemaster Luxury Theaters Inc.                     1                 6.13
   Sholodge                                       78,000         1,033,500.00
                           Total                        
   $1,325,777.68


   Financial Statements
   The audited consolidated balance sheets of the Company and its
   Subsidiaries as of the fiscal years ended in May in each of the years 1992
   to 1996, both inclusive, and the consolidated statements of income and
   shareholders' equity and cash flows for the fiscal years ended on said
   dates and the Securities and Exchange Commission Form 10-Q for the fiscal
   quarter ended August 22, 1996 and Securities and Exchange Commission Form
   10-K for the fiscal year ended May 30, 1996.  

   Patents, etc.


   None

   Existing Debt

    Bank                             Balance                      Interest
                                                                  Rate
    B&G Realty
    Management Enterprises                  98,065                9.0000%
    Bankers Trust                        2,000,000  TENR + .25    3.7500%
    PNC Bank                             1,554,189                8.7700%
    Firstar                              2,300,000                6.3091%
    First Bank-Milwaukee                 2,016,345  LIBOR + 1.7   7.2300%
    Marcus Corporation
    NBD                                 13,500,000                5.8300%
    Bank One                            20,000,000  LIBOR + 1     6.6100%
    Bank One (Line of Credit)            3,000,000  LIBOR + 1     6.4200%
                                         1,700,000  LIBOR + 1     6.4400%
                                         1,500,000  LIBOR + 1     6.6000%
                                         1,300,000  LIBOR + 1     6.5900%
                                         2,500,000  LIBOR + 1     8.2500%
    Bank of America (Line of Credit)     5,000,000                6.1875%
                                         2,500,000                6.2500%
                                         5,000,000                6.1875%
                                         7,000,000                6.3750%
                                         5,500,000                6.3125%
                                         5,000,000                6.4688%
    Sun Trust                           23,437,500  LIBOR + .75   6.2500%
    NML                                 25,082,094                10.2200%
    Theatre Div
    First Bank Milwaukee                   225,000                8.2500%
    Hotel Div
    First Financial                        406,324                7.6300%
    Budgetel Div
    Bank One                             1,312,500  LIBOR + 1.5   7.3750%
    First Bank-Milwaukee                 1,560,280  PRIME - .25   8.0000%
                                         1,749,152  PRIME + .25   8.5000%
                                         2,326,880  PRIME + .25   8.5000%
    Corus Bank-Chicago                   1,548,580                7.6200%
                                       -----------
    Total Existing Debt               $139,116,909
                                      ============


   Existing Liens

    Bank                          Balance        Property
    B&G Realty
    Management Enterprises        98,065         Military Big Boy, Green Bay,
                                                   WI
    Bankers Trust                 2,000,000      Canton, MI
    PNC Bank                      1,554,189      Savannah, GA
    Firstar                       2,300,000      West Point Big Boy/Budgetel,
                                                   Brookfield, WI
    First Bank-Milwaukee          2,016,345      West Point Theatre/KFC,
                                                   Brookfield, WI
    Theatre Div - Marcus
    Corporation
    First Bank Milwaukee          225,000        Skyway, Milwaukee, WI
    Hotel Div - Marcus
    Corporation
    First Financial               406,324        Milwaukee Hilton
    Budgetel Div - Marcus
    Corporation
    Bank One                      1,312,500      Montgomery, AL

    First Bank-Milwaukee          1,560,280      Milwaukee South (Oak Creek),
                                  1,749,152        WI
                                  2,326,880      Albuquerque, NM
                                                 Cleveland-Airport, OH

    Corus Bank-Chicago                1,548,580  Roseville, MI
                                  -------------
    Total Debt Secured by Liens   $17,097,315
                                  ===========

   Note:  The Debt listed above is secured by all real and personal property
   situated at the location set forth opposite such Debt.


   [Form of Tranche A Note]
   The Marcus Corporation
   7.41% Series A Senior Note, Tranche A, due October 15, 2008
   No. [_________][Date]
   $[____________]PPN 56633# AA 1

   For Value Received, the undersigned, The Marcus Corporation (herein called
   the "Company"), a corporation organized and existing under the laws of the
   State of Wisconsin, hereby promises to pay to [________________], or
   registered assigns, the principal sum of [________________] Dollars on
   October 15, 2008, with interest (computed on the basis of a 360-day year
   of twelve 30-day months) (a) on the unpaid balance thereof at the rate of
   7.41% per annum from the date hereof, payable semiannually, on the
   fifteenth day of April and October in each year, commencing on the first
   of such dates after the date hereof, until the principal hereof shall have
   become due and payable, and (b) to the extent permitted by law on any
   overdue payment (including any overdue prepayment) of principal, any
   overdue payment of interest and any overdue payment of any Make-Whole
   Amount (as defined in the Note Purchase Agreements referred to below),
   payable semiannually as aforesaid (or, at the option of the registered
   holder hereof, on demand), at a rate per annum from time to time equal to
   the greater of (i) 9.41% or (ii) 2% over the rate of interest publicly
   announced by Bank of America Illinois from time to time in Chicago,
   Illinois as its "base" or "prime" rate.


   Payments of principal of, interest on and any Make-Whole Amount with
   respect to this Note are to be made in lawful money of the United States
   of America at Bank of America Illinois, in Chicago, Illinois, or at such
   other place as the Company shall have designated by written notice to the
   holder of this Note as provided in the Note Purchase Agreements referred
   to below.

   This Note is one of a series of 7.41% Series A Senior Notes, Tranche A
   (the "Tranche A Notes") issued or to be issued together with the 7.51%
   Series A Senior Notes, Tranche B (the "Tranche B Notes" and together with
   the Tranche A Notes, the "Series A Notes") pursuant to separate Note
   Purchase Agreements, dated as of October 25, 1996 (as from time to time
   amended and supplemented, the "Note Purchase Agreements"), between the
   Company and the respective Purchasers named therein.  This Note and the
   holder hereof are entitled equally and ratably with the holders of all
   other Notes of all Series from time to time outstanding under the Note
   Purchase Agreements to all the benefits provided for thereby or referred
   to therein.  Each holder of this Note will be deemed, by its acceptance
   hereof, to have made the representation set forth in Section 6.2 of the
   Note Purchase Agreements, provided that such holder may (in reliance upon
   information provided by the Company, which shall not be unreasonably
   withheld) make a representation to the effect that the purchase by such
   holder of any Note will not constitute a non-exempt prohibited transaction
   under Section 406(a) of ERISA.  

   This Note is a registered Note and, as provided in the Note Purchase
   Agreements, upon surrender of this Note for registration of transfer, duly
   endorsed, or accompanied by a written instrument of transfer duly
   executed, by the registered holder hereof or such holder's attorney duly
   authorized in writing, a new Tranche A Note for a like principal amount
   will be issued to, and registered in the name of, the transferee.  Prior
   to due presentment for registration of transfer, the Company may treat the
   person in whose name this Note is registered as the owner hereof for the
   purpose of receiving payment and for all other purposes, and the Company
   will not be affected by any notice to the contrary.

   The Company will make required prepayments of principal on the dates and
   in the amounts specified in the Note Purchase Agreements. This Note is
   also subject to optional prepayment, in whole or from time to time in
   part, at the times and on the terms specified in the Note Purchase
   Agreements, but not otherwise.

   If an Event of Default, as defined in the Note Purchase Agreements, occurs
   and is continuing, the principal of this Note may be declared or otherwise
   become due and payable in the manner, at the price (including any
   applicable Make-Whole Amount) and with the effect provided in the Note
   Purchase Agreements.

   This Note shall be construed and enforced in accordance with, and the
   rights of the parties shall be governed by, the law of the State of
   Illinois excluding choice-of-law principles of the law of such State that
   would require the application of the laws of a jurisdiction other than
   such State.

   The Marcus Corporation



   By
        Its President


   
<PAGE>
   [Form of Tranche B Note]
   The Marcus Corporation
   7.51% Series A Senior Note, Tranche B, due October 15, 2011
   No. [_________][Date]
   $[____________]PPN 56633# AB 9

   For Value Received, the undersigned, The Marcus Corporation (herein called
   the "Company"), a corporation organized and existing under the laws of the
   State of Wisconsin, hereby promises to pay to [________________], or
   registered assigns, the principal sum of [________________] Dollars on
   October 15, 2011, with interest (computed on the basis of a 360-day year
   of twelve 30-day months) (a) on the unpaid balance thereof at the rate of
   7.51% per annum from the date hereof, payable semiannually, on the
   fifteenth day of April and October in each year, commencing on the first
   of such dates after the date hereof, until the principal hereof shall have
   become due and payable, and (b) to the extent permitted by law on any
   overdue payment (including any overdue prepayment) of principal, any
   overdue payment of interest and any overdue payment of any Make-Whole
   Amount (as defined in the Note Purchase Agreements referred to below),
   payable semiannually as aforesaid (or, at the option of the registered
   holder hereof, on demand), at a rate per annum from time to time equal to
   the greater of (i) 9.51% or (ii) 2% over the rate of interest publicly
   announced by Bank of America Illinois from time to time in Chicago,
   Illinois as its "base" or "prime" rate.

   Payments of principal of, interest on and any Make-Whole Amount with
   respect to this Note are to be made in lawful money of the United States
   of America at Bank of America Illinois, in Chicago, Illinois, or at such
   other place as the Company shall have designated by written notice to the
   holder of this Note as provided in the Note Purchase Agreements referred
   to below.

   This Note is one of a series of  7.51% Series A Senior Notes, Tranche B
   (the "Tranche B Notes") issued or to be issued together with the 7.41%
   Series A Senior Notes, Tranche A (the "Tranche A Notes" and together with
   the Tranche B Notes, the "Series A Notes") pursuant to separate Note
   Purchase Agreements, dated as of October 25, 1996 (as from time to time
   amended and supplemented, the "Note Purchase Agreements"), between the
   Company and the respective Purchasers named therein.  This Note and the
   holder hereof are entitled equally and ratably with the holders of all
   other Notes of all Series from time to time outstanding under the Note
   Purchase Agreements to all the benefits provided for thereby or referred
   to therein.  Each holder of this Note will be deemed, by its acceptance
   hereof, to have made the representation set forth in Section 6.2 of the
   Note Purchase Agreements, provided that such holder may (in reliance upon
   information provided by the Company, which shall not be unreasonably
   withheld) make a representation to the effect that the purchase by such
   holder of any Note will not constitute a non-exempt prohibited transaction
   under Section 406(a) of ERISA.  

   This Note is a registered Note and, as provided in the Note Purchase
   Agreements, upon surrender of this Note for registration of transfer, duly
   endorsed, or accompanied by a written instrument of transfer duly
   executed, by the registered holder hereof or such holder's attorney duly
   authorized in writing, a new Tranche B Note for a like principal amount
   will be issued to, and registered in the name of, the transferee.  Prior
   to due presentment for registration of transfer, the Company may treat the
   person in whose name this Note is registered as the owner hereof for the
   purpose of receiving payment and for all other purposes, and the Company
   will not be affected by any notice to the contrary.

   The Company will make required prepayments of principal on the dates and
   in the amounts specified in the Note Purchase Agreements. This Note is
   also subject to optional prepayment, in whole or from time to time in
   part, at the times and on the terms specified in the Note Purchase
   Agreements, but not otherwise.

   If an Event of Default, as defined in the Note Purchase Agreements, occurs
   and is continuing, the principal of this Note may be declared or otherwise
   become due and payable in the manner, at the price (including any
   applicable Make-Whole Amount) and with the effect provided in the Note
   Purchase Agreements.

   This Note shall be construed and enforced in accordance with, and the
   rights of the parties shall be governed by, the law of the State of
   Illinois excluding choice-of-law principles of the law of such State that
   would require the application of the laws of a jurisdiction other than
   such State.

   The Marcus Corporation



   By
        Its President


   
<PAGE>
   Form of Opinion of Special Counsel
   to the Company

   The closing opinion of Robin J. Irwin, Esq., counsel to the Company, which
   is called for by Section 4.4 of the Note Purchase Agreements, shall be
   dated the date of Closing and addressed to the Purchasers, shall be
   satisfactory in scope and form to each Purchaser and shall be to the
   effect that:
   1.The Company is a corporation, duly incorporated, validly existing and in
   good standing under the laws of the Wisconsin, has the corporate power and
   the corporate authority to execute and perform the Note Purchase
   Agreements and to issue the Notes and has the full corporate power and the
   corporate authority to conduct the activities in which it is now engaged
   and is duly licensed or qualified and is in good standing as a foreign
   corporation in each jurisdiction in which the character of the properties
   owned or leased by it or the nature of the business transacted by it makes
   such licensing or qualification necessary except in jurisdictions where
   the failure to be so qualified or licensed would not have a material
   adverse affect on the business of the Company.

   2.Each Subsidiary is a corporation duly organized, validly existing and in
   good standing under the laws of its jurisdiction of incorporation and is
   duly licensed or qualified and is in good standing in each jurisdiction in
   which the character of the properties owned or leased by it or the nature
   of the business transacted by it makes such licensing or qualification
   necessary except in jurisdictions where the failure to be so qualified or
   licensed would not have a material adverse affect on the business of such
   Subsidiary, and all of the issued and outstanding shares of capital stock
   of each such Subsidiary have been duly issued, are fully paid and
   non-assessable and are owned by the Company, by one or more Subsidiaries,
   or by the Company and one or more Subsidiaries.

   3.Each Note Purchase Agreement has been duly authorized by all necessary
   corporate action on the part of the Company, has been duly executed and
   delivered by the Company and constitutes the legal, valid and binding
   contract of the Company enforceable in accordance with its terms, subject
   to bankruptcy, insolvency, fraudulent conveyance and similar laws
   affecting creditors' rights generally, and general principles of equity
   (regardless of whether the application of such principles is considered in
   a proceeding in equity or at law).

   4.The Notes have been duly authorized by all necessary corporate action on
   the part of the Company, have been duly executed and delivered by the
   Company and constitute the legal, valid and binding obligations of the
   Company enforceable in accordance with their terms, subject to bankruptcy,
   insolvency, fraudulent conveyance and similar laws affecting creditors'
   rights generally, and general principles of equity (regardless of whether
   the application of such principles is considered in a proceeding in equity
   or at law).

   5.No approval, consent or withholding of objection on the part of, or
   filing, registration or qualification with, any governmental body, Federal
   or state, is necessary in connection with the execution and delivery of
   the Note Purchase Agreements or the Notes.

   6.The issuance and sale of the Notes and the execution, delivery and
   performance by the Company of the Note Purchase Agreements do not conflict
   with or result in any breach of any of the provisions of or constitute a
   default under or result in the creation or imposition of any Lien upon any
   of the property of the Company pursuant to the provisions of the Articles
   of Incorporation or By-laws of the Company or any agreement or other
   instrument known to such counsel to which the Company is a party or by
   which the Company may be bound.

   7.The issuance, sale and delivery of the Notes under the circumstances
   contemplated by the Note Purchase Agreements do not, under existing law,
   require the registration of the Notes under the Securities Act of 1933, as
   amended, or the qualification of an indenture under the Trust Indenture
   Act of 1939, as amended.

   8.Neither the issuance of the Notes nor the application of the proceeds of
   the sale of the Notes will violate or result in a violation of Section 7
   of the Securities Exchange Act of 1934, as amended, or any regulation
   issued pursuant thereto, including, without limitation, Regulation G, T or
   X of the Board of Governors of the Federal Reserve System.  

   9.There are no actions, suits or proceedings pending or, to the knowledge
   of such counsel after due inquiry, threatened against or affecting the
   Company or any Subsidiary in any court or before any governmental
   authority or arbitration board or tribunal which, if adversely determined,
   would have a materially adverse effect on the properties, business,
   prospects, profits or condition, (financial or otherwise) of the Company
   and its Restricted Subsidiaries or the ability of the Company to perform
   its obligations under the Note Purchase Agreements and the Notes or on the
   legality, validity or enforceability of the Company's obligations under
   the Note Purchase Agreements or the Notes.  To the knowledge of such
   counsel, neither the Company nor any Subsidiary is in default with respect
   to any court or governmental authority, or arbitration board or tribunal. 

   10.The Company is not an "investment company" or a company "controlled" by
   an "investment company", within the meaning of the Investment Company Act
   of 1940, as amended.  

   The opinion of Robin J. Irwin, Esq. shall cover such other matters
   relating to the sale of the Notes as each Purchaser may reasonably
   request.  With respect to matters of fact on which such opinion is based,
   such counsel shall be entitled to rely on appropriate certificates of
   public officials and other officers of the Company.

   
<PAGE>
   Form of Opinion of Special Counsel
   to the Purchasers

   The closing opinion of Chapman and Cutler, special counsel to the
   Purchasers, called for by Section 4.4 of the Note Purchase Agreements,
   shall be dated the date of Closing and addressed to each Purchaser, shall
   be satisfactory in form and substance to each Purchaser and shall be to
   the effect that:

   1.The Company is a corporation, validly existing and in good standing
   under the laws of the State of Wisconsin and has the corporate power and
   the corporate authority to execute and deliver the Note Purchase
   Agreements and to issue the Notes.

   2.Each Note Purchase Agreement has been duly authorized by all necessary
   corporate action on the part of the Company, has been duly executed and
   delivered by the Company and constitutes the legal, valid and binding
   contract of the Company enforceable in accordance with its terms, subject
   to bankruptcy, insolvency, fraudulent conveyance and similar laws
   affecting creditors' rights generally, and general principles of equity
   (regardless of whether the application of such principles is considered in
   a proceeding in equity or at law).

   3.The Notes have been duly authorized by all necessary corporate action on
   the part of the Company, and the Notes being delivered on the date hereof
   have been duly executed and delivered by the Company and constitute the
   legal, valid and binding obligations of the Company enforceable in
   accordance with their terms, subject to bankruptcy, insolvency, fraudulent
   conveyance and similar laws affecting creditors' rights generally, and
   general principles of equity (regardless of whether the application of
   such principles is considered in a proceeding in equity or at law).
   4.The issuance, sale and delivery of the Notes under the circumstances
   contemplated by the Note Purchase Agreements do not, under existing law,
   require the registration of the Notes under the Securities Act of 1933, as
   amended, or the qualification of an indenture under the Trust Indenture
   Act of 1939, as amended.

   The opinion of Chapman and Cutler shall also state that the opinion of
   Robin J. Irwin, Esq., counsel to the Company, is satisfactory in scope and
   form to Chapman and Cutler and that, in their opinion, the Purchasers are
   justified in relying thereon. 

   With respect to matters of fact upon which such opinion is based, Chapman
   and Cutler may rely on appropriate certificates of public officials and
   officers of the Company and upon representations of the Company and the
   Purchasers delivered in connection with the issuance and sale of the
   Notes.

   In rendering the opinion set forth in paragraph 1 above, Chapman and
   Cutler may rely, as to matters referred to in paragraph 1, solely upon an
   examination of the Articles of Incorporation certified by, and a
   certificate of good standing of the Company from, the Secretary of State
   of the State of Wisconsin, the By-laws of the Company and the general
   business corporation law of the State of Wisconsin.  The opinion of
   Chapman and Cutler is limited to the laws of the State of Illinois, the
   general business corporation law of the State of Wisconsin and the Federal
   laws of the United States.




   The Marcus Corporation






   Supplement to Note Purchase Agreement


   Dated as of ______________________






   Re:       $____________ _____% Series __ Senior Notes
   Due _____________________










   Supplement to Note Purchase Agreement

   Dated as of
   ____________________, 19__

   To the Purchaser named in
   Schedule A hereto which is
   a signatory of this Agreement
   Ladies and Gentlemen:

   This [Number] Supplement to Note Purchase Agreement (the "Supplement") is
   between The Marcus Corporation (the "Company") whose address is 250 East
   Wisconsin Avenue, Suite 1700, Milwaukee, Wisconsin  53202 and the
   institutional investors named on Schedule A attached hereto (the
   "Purchasers").

   Reference is hereby made to that certain Note Purchase Agreement dated as
   of October __, 1996 (the "Note Agreement") between the Company and the
   purchasers listed on Schedule A thereto.  All capitalized terms not
   otherwise defined herein shall have the same meaning as specified in the
   Note Agreement.  Reference is further made to Section 4.11 thereof which
   requires that, prior to the delivery of any Additional Notes, the Company
   and each Additional Purchaser shall execute and deliver a Supplement.
   The Company hereby agrees with you as follows:

   1.The Company has authorized the issue and sale of $__________ aggregate
   principal amount of its _____% Series ___ Senior Notes due _________, ____
   (the "Series ___ Notes").  The Series ___ Notes, together with the Series
   A Notes initially issued pursuant to the Note Agreement and each Series of
   Additional Notes which may from time to time be issued pursuant to the
   provisions of Section 2.2 of the Note Agreement, are collectively referred
   to as the "Notes" (such term shall also include any such notes issued in
   substitution therefor pursuant to Section 13 of the Note Agreement).  The
   Series ___ Notes shall be substantially in the form set out in Exhibit 1
   hereto with such changes therefrom, if any, as may be approved by you and
   the Company.  

   2.Subject to the terms and conditions hereof and as set forth in the Note
   Agreement and on the basis of the representations and warranties
   hereinafter set forth, the Company agrees to issue and sell to you, and
   you agree to purchase from the Company, Series __ Notes in the principal
   amount set forth opposite your name on Schedule A hereto at a price of
   100% of the principal amount thereof on the closing date hereafter
   mentioned.

   3.Delivery of the $__________ in aggregate principal amount of the Series
   __ Notes will be made at the offices of _________________________,
   _______________, _________, against payment therefor in Federal Reserve or
   other funds current and immediately available at the principal office of
   [Company Bank] in the amount of the purchase price at 11:00 A.M., [Bank
   City] time, on __________, _____ or such later date (not later than _____)
   as shall mutually be agreed upon by the Company and the Purchasers of the
   Series ____ Notes (the "Closing").

   4.[Here insert prepayment provisions (including any applicable premium
   upon default and acceleration), closing conditions and representations and
   warranties applicable to Series ___ Notes].

   5.The Purchaser represents and warrants that the representations and
   warranties set forth in Section 6 of the Note Agreement are true and
   correct on the date hereof with respect to the Series __ Notes.

   6.The Company and you agree to be bound by and comply with the terms and
   provisions of the Note Agreement as if you were an original signatory to
   the Note Agreement.

   The execution hereof shall constitute a contract between us for the uses
   and purposes hereinabove set forth, and this agreement may be executed in
   any number of counterparts, each executed counterpart constituting an
   original but all together only one agreement.

        The Marcus Corporation


        By
             Its
        Accepted as of __________, _____

        [Variation]

        By
             Its


   
<PAGE>
   Information Relating to Purchasers

                                                             Principal
    Name and Address of Purchaser                            Amount of
                                                             Series __ Notes
                                                             to Be Purchased
    [Name of Purchaser]                                      $


    (1)  All payments by wire transfer of
         immediately available funds to:




    with sufficient information to identify
    the source and application of such funds.
    (2)  All notices of payments and written
         confirmations of such wire
         transfers:




    (3)  All other communications:



   
<PAGE>
   [Form of Series __ Note]

   The Marcus Corporation
   ___% Series __ Senior Note due ______________
   No. [_________][Date]
   $[____________]PPN [____________]

   For Value Received, the undersigned, The Marcus Corporation (herein called
   the "Company"), a corporation organized and existing under the laws of the
   State of Wisconsin, hereby promises to pay to [________________], or
   registered assigns, the principal sum of [________________] Dollars on
   _______________, with interest (computed on the basis of a 360-day year of
   twelve 30-day months) (a) on the unpaid balance thereof at the rate of
   ____% per annum from the date hereof, payable semiannually, on the first
   day of ______ and ______ in each year, commencing on the first of such
   dates after the date hereof, until the principal hereof shall have become
   due and payable, and (b) to the extent permitted by law on any overdue
   payment (including any overdue prepayment) of principal, any overdue
   payment of interest and any overdue payment of any Make-Whole Amount (as
   defined in the Note Purchase Agreements referred to below), payable
   semiannually as aforesaid (or, at the option of the registered holder
   hereof, on demand), at a rate per annum from time to time equal to the
   greater of (i) [coupon + 2%]% or (ii) 2% over the rate of interest
   publicly announced by Bank of America Illinois from time to time in Bank
   of America Illinois as its "base" or "prime" rate.

   Payments of principal of, interest on and any Make-Whole Amount with
   respect to this Note are to be made in lawful money of the United States
   of America at Bank of America Illinois, in Chicago, Illinois, or at such
   other place as the Company shall have designated by written notice to the
   holder of this Note as provided in the Note Purchase Agreements referred
   to below.

   This Note is one of a series of ___ % Series __ Senior Notes (the "Series
   __ Notes") issued pursuant to a supplement to the separate Note Purchase
   Agreements dated as of October __, 1996 (as from time to time amended and
   supplemented, the "Note Purchase Agreements"), between the Company and the
   respective Purchasers named therein.  This Note and the holder hereof are
   entitled equally and ratably with the holders of all other Notes of all
   Series from time to time outstanding under the Note Purchase Agreements to
   all the benefits provided for thereby or referred to therein.  Each holder
   of this Note will be deemed, by its acceptance hereof, to have made the
   representation set forth in Section 6.2 of the Note Purchase Agreements,
   provided that such holder may (in reliance upon information provided by
   the Company, which shall not be unreasonably withheld) make a
   representation to the effect that the purchase by such holder of any Note
   will not constitute a non-exempt prohibited transaction under Section
   406(a) of ERISA.

   This Note is a registered Note and, as provided in the Note Purchase
   Agreements, upon surrender of this Note for registration of transfer, duly
   endorsed, or accompanied by a written instrument of transfer duly
   executed, by the registered holder hereof or such holder's attorney duly
   authorized in writing, a new Series __ Note for a like principal amount
   will be issued to, and registered in the name of, the transferee.  Prior
   to due presentment for registration of transfer, the Company may treat the
   person in whose name this Note is registered as the owner hereof for the
   purpose of receiving payment and for all other purposes, and the Company
   will not be affected by any notice to the contrary.

   The Company will make required prepayments of principal on the dates and
   in the amounts specified in the Note Purchase Agreements. This Note is
   also subject to optional prepayment, in whole or from time to time in
   part, at the times and on the terms specified in the Note Purchase
   Agreements, but not otherwise.

   If an Event of Default, as defined in the Note Purchase Agreements, occurs
   and is continuing, the principal of this Note may be declared or otherwise
   become due and payable in the manner, at the price (including any
   applicable Make-Whole Amount) and with the effect provided in the Note
   Purchase Agreements.

   This Note shall be construed and enforced in accordance with, and the
   rights of the parties shall be governed by, the law of the State of
   Illinois excluding choice-of-law principles of the law of such State that
   would require the application of the laws of a jurisdiction other than
   such State.

   The Marcus Corporation



   By
        [Title]




<TABLE> <S> <C>

<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MARCUS
CORPORATION'S FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
       
<S>                             <C>
<PERIOD-TYPE>                   6-MOS
<FISCAL-YEAR-END>                          MAY-29-1997
<PERIOD-START>                             MAY-31-1996
<PERIOD-END>                               NOV-14-1996
<CASH>                                          40,167
<SECURITIES>                                         0
<RECEIVABLES>                                    8,438
<ALLOWANCES>                                         0
<INVENTORY>                                          0
<CURRENT-ASSETS>                                52,614
<PP&E>                                         611,458
<DEPRECIATION>                                 153,648
<TOTAL-ASSETS>                                 525,066
<CURRENT-LIABILITIES>                           56,233
<BONDS>                                        170,546
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<COMMON>                                        20,386
<OTHER-SE>                                     247,880
<TOTAL-LIABILITY-AND-EQUITY>                   525,066
<SALES>                                        132,061
<TOTAL-REVENUES>                               142,652
<CGS>                                           62,357
<TOTAL-COSTS>                                  107,747
<OTHER-EXPENSES>                                     0
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                               4,668
<INCOME-PRETAX>                                 30,693
<INCOME-TAX>                                    12,283
<INCOME-CONTINUING>                             18,410
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                    18,410
<EPS-PRIMARY>                                      .93
<EPS-DILUTED>                                      .93
        

</TABLE>