Exhibit 10.1

AMENDMENT NO. 2 TO 364-DAY CREDIT AGREEMENT

           AMENDMENT dated as of March 29, 2004 to the 364-Day Credit Agreement
dated as of March 31, 2003 (as heretofore amended, the "Credit Agreement") among
TEXTRON INC. (the "Borrower"), the BANKS party thereto (the "Banks") and
JPMORGAN CHASE BANK, as Administrative Agent (the "Administrative Agent").

W I T N E S S E T H :

           WHEREAS, the parties hereto desire to amend the Credit Agreement as
set forth herein;

           NOW, THEREFORE, the parties hereto agree as follows:

           Section 1. Defined Terms; References. Unless otherwise specifically
defined herein, each term used herein that is defined in the Credit Agreement
has the meaning assigned to such term in the Credit Agreement. Each reference to
"hereof", "hereunder", "herein" and "hereby" and each other similar reference
and each reference to "this Agreement" and each other similar reference
contained in the Credit Agreement shall, after this Amendment becomes effective,
refer to the Credit Agreement as amended hereby.

           Section 2. Amendments.

           (a)     The definition of "Termination Date" in Section 1.01 of the
Credit Agreement is amended by changing the date specified therein from "March
29, 2004" to "March 28, 2005".

           (b)     The definition of "Total Commitment" in Section 1.01 of the
Credit Agreement is amended by changing the dollar amount specified therein from
"$500,000,000" to "$250,000,000".

           (c)     The phrase "Final Maturity Date" in clause (ii) of the
proviso to Section 2.15(c)(iii) is changed to "first anniversary of the
Termination Date", and Section 7.12 of the Credit Agreement is amended to add
after "Event of Default" on the third line thereof "or if any Letters of Credit
are outstanding after the Termination Date".

           (d)     Sections 4.03, 4.04 and 4.05 of the Credit Agreement are
amended by changing each reference to the date "December 28, 2002" to
"January 3, 2004".

           Section 3. Changes in Commitments. With effect from and including the
Amendment Effective Date, (i) each Person listed on the signature pages hereof
which is not a party to the Credit Agreement (each, a "New Bank") shall become a
Bank party to the Credit Agreement and (ii) the Commitment of each Bank shall be
the amount set forth opposite the name of such Bank on the signature pages
hereto. On the Amendment Effective Date, any Bank whose Commitment is changed to
zero (each, an "Exiting Bank", and each New Bank or Bank other than an Exiting
Bank, a "Continuing Bank") shall cease to be a Bank party to the Credit
Agreement, and all accrued fees and other amounts payable under the Credit
Agreement for the account of each Exiting Bank shall be due and payable on such
date; provided that the provisions of Sections 8.04, 10.01(b), 10.02 and 10.03
of the Credit Agreement shall continue to inure to the benefit of each Exiting
Bank after the Amendment Effective Date.

           Section 4. Changes in Pricing Schedule. The Pricing Schedule attached
to the Credit Agreement (the "Existing Pricing Schedule") is deleted and
replaced by the Pricing Schedule attached to this Amendment (the "New Pricing
Schedule"). The New Pricing Schedule shall apply to interest and fees accruing
under the Credit Agreement on and after the date hereof. The Existing Pricing
Schedule shall continue to apply to interest and fees accruing under the Credit
Agreement prior to the date hereof.

           Section 5. Representations of Borrower. The Borrower represents and
warrants that (i) the representations and warranties of the Borrower set forth
in Article 4 of the Credit Agreement will be true on and as of the Amendment
Effective Date and (ii) no Event of Default will have occurred and be continuing
on such date.

           Section 6 Effect of Amendments. Except as expressly set forth herein,
the amendments contained herein shall not constitute a waiver or amendment of
any term or condition of the Credit Agreement, and all such terms and conditions
shall remain in full force and effect and are hereby ratified and confirmed in
all respects. For avoidance of doubt, after giving effect to Sections 2 and 3 of
this Amendment, the Final Maturity Date for all Banks shall be the Termination
Date specified in Section 2(a) hereof, subject to the subsequent exercise by the
Company of its right to extend the Final Maturity Date pursuant to Section
2.01(e) of the Credit Agreement.

           Section 7. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.

           Section 8. Counterparts. This Amendment may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.

           Section 9. Effectiveness. This Amendment shall become effective as of
the date hereof (the "Amendment Effective Date"), subject to satisfaction of the
following conditions:

> >            (a)     the Administrative Agent shall have received from each of
> > the Borrower and the Continuing Banks (which must also comprise the Required
> > Banks) a counterpart hereof signed by such party or facsimile or other
> > written confirmation (in form satisfactory to the Administrative Agent) that
> > such party has signed a counterpart hereof;
> > 
> >            (b)     the Administrative Agent shall have received an opinion
> > of Andrew C. Spacone, Esq., Senior Associate General Counsel of the Borrower
> > dated as of the Amendment Effective Date, in form and substance satisfactory
> > to the Administrative Agent; and
> > 
> >            (c)     the Administrative Agent shall have received from the
> > Borrower (i) fees for the account of the Banks in the amount heretofore
> > mutually agreed upon and (ii) all other amounts due and payable to the
> > Administrative Agent.

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

 

> TEXTRON INC.

 

By:

/s/ Mary F. Lovejoy

   

Name:

Mary F. Lovejoy

   

Title:

Vice President and Treasurer

 

 

Commitments 

$24,960,000

JPMORGAN CHASE BANK

 

By:

/s/ Randolph Cates

   

Name:

Randolph Cates

   

Title:

Vice President

Commitments

$22,785,000

BANK OF AMERICA, N.A.

 

By:

/s/ John W. Pocalyko

   

Name:

John W. Pocalyko

   

Title:

Managing Director

Commitments

$22,785,000

CITIBANK, NA

 

By:

/s/ Diane Pockaj

   

Name:

Diane L. Pockaj

   

Title:

Director

Commitments 

$22,785,000

DEUTSCHE BANK AG NEW YORK
     BRANCH

 

By:

/s/ David G. Dickinson, Jr.

   

Name:

David G. Dickinson, Jr.

   

Title:

Director

By:

/s/ William W. McGinty

   

Name:

William W. McGinty

   

Title:

Director

Commitments

$22,785,000

UBS LOAN FINANCE LLC

 

By:

/s/ Doris Mesa

   

Name:

Doris Mesa

   

Title:

Associate Director

By:

/s/ Joselin Fernandes

   

Name:

Joselin Fernandes

   

Title:

Associate Director
Banking Products Services,
US

Commitments

$13,500,000

BARCLAYS CAPITAL

 

By:

/s/ John Giannone

   

Name:

John Giannone

   

Title:

Director

Commitments

$13,500,000

BNP PARIBAS

 

By:

/s/ Richard Pace

   

Name:

Richard Pace

   

Title:

Managing Director

By:

/s/ Nanette Saudon

   

Name:

Nanette Saudon

   

Title:

Vice President

Commitments

$13,500,000

CREDIT SUISSE FIRST BOSTON

 

By:

/s/ Jay Chall

   

Name:

Jay Chall

   

Title:

Director

By:

/s/ Cassandra Droogan

   

Name:

Cassandra Droogan

   

Title:

Associate

Commitments 

$13,500,000

HSBC BANK USA

 

By:

/s/ Christopher M. Samms

   

Name:

Christopher M. Samms

   

Title:

Officer # 9426

Commitments

$13,500,000

WACHOVIA BANK, NA

 

By:

/s/ Donald E. Sellers, Jr.

   

Name:

Donald E. Sellers, Jr

   

Title:

Director

Commitments 

$8,300,000

HARRIS NESBITT FINANCING, INC.

 

By:

/s/ Pam Schwartz

   

Name:

Pamela Schwartz

   

Title:

Vice President

Commitments

$8,300,000

BANK OF TOKYO-MITSUBISHI TRUST       COMPANY

 

By:

/s/ C. Giordano

   

Name:

C. Giordano

   

Title:

VP & Team Leader

Commitments

$8,300,000

BANK ONE, NA

 

By:

/s/ Grover A. Fitch

   

Name:

Grover A. Fitch

   

Title:

Managing Director

Commitments 

$8,300,000

MELLON BANK, N.A.

 

By:

/s/ J. Wade Bell

   

Name:

J. Wade Bell

   

Title:

Vice President

Commitments

$8,300,000

ROYAL BANK OF CANADA

 

By:

/s/ Scott Umbs

   

Name:

Scott Umbs

   

Title:

Authorized Signatory

Commitments

$8,300,000

SOCIETE GENERALE

 

By:

/s/ Carol Radice

   

Name:

Carol Radice

   

Title:

Vice President
Corporate Banking, Societe
     Generale

Commitments

$8,300,000

SUNTRUST BANK

 

By:

/s/ Michael S. Murphey

   

Name:

Michael S. Murphey

   

Title:

Director

Commitments 

$8,300,000

THE BANK OF NOVA SCOTIA

 

By:

/s/ Todd S. Meller

   

Name:

Todd S. Meller

   

Title:

Managing Director

 

 

PRICING SCHEDULE

           Each of "Facility Fee Rate", "Eurocurrency Margin" and "Letter of
Credit Fee Rate" means, for any date, the rate set forth below in the row
opposite such term and under the column corresponding to the "Pricing Level" at
such date and (in the case of Eurocurrency Margins) in the row corresponding to
the "Utilization" at such date; provided that the Eurocurrency Margin and the
Letter of Credit Fee Rate for any day on or after the Termination Date will be
the applicable rate set forth below plus 15 basis points:

 

Level I

Level II

Level III

Level IV

Level V

Level VI

Facility Fee Rate

0.05%

0.06%

0.07%

0.10%

0.125%

0.15%

Eurocurrency Margin
Utilization ≤ 50%
Utilization > 50%

0.175%
0.275%

0.19%
0.29%

0.28%
0.38%

0.35%
0.45%

0.50%
0.60%

0.60%
0.70%

Letter of Credit Fee Rate

0.275%

0.29%

0.38%

0.45%

0.60%

0.70%

           For purposes of this Schedule, the following terms have the following
meanings, subject to the concluding paragraph of this Schedule:

           "Level I Pricing" applies at any date if, at such date, the Company's
long-term debt is rated (i) A+ or higher by S&P or (ii) A1 or higher by Moody's.

           "Level II Pricing" applies at any date if, at such date, (i) (A) the
Company's long-term debt is rated A or higher by S&P or (B) A2 or higher by
Moody's and (ii) Level I Pricing does not apply.

           "Level III Pricing" applies at any date if, at such date, (i) (A) the
Company's long-term debt is rated A- or higher by S&P or (B) A3 or better by
Moody's and (ii) neither Level I Pricing nor Level II Pricing applies.

           "Level IV Pricing" applies at any date, if at such date, (i) (A) the
Company's long-term debt is rated BBB+ or higher by S&P or (B) Baa1 or higher by
Moody's and (ii) none of Level I Pricing, Level II Pricing and Level III Pricing
applies.

           "Level V Pricing" applies at any date if, at such date, (i) (A) the
Company's long-term debt is rated BBB or higher by S&P or (B) Baa2 or higher by
Moody's and (ii) none of Level I Pricing, Level II Pricing, Level III and Level
IV Pricing applies.

           "Level VI Pricing" applies at any date if, at such date, no other
Pricing Level applies.

           "Moody's" means Moody's Investors Service, Inc.

           "Pricing Level" refers to the determination of which of Level I,
Level II, Level III, Level IV, Level V or Level VI applies at any date.

           "S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc.

           "Utilization" means, at any date, the percentage equivalent of a
fraction (i) the numerator of which is the Total Outstanding Amount at such date
and (ii) the denominator of which is the Total Commitment at such date. If for
any reason any Loans remain outstanding after termination of the Total
Commitment, Utilization shall be deemed to be 100%.

           The credit ratings to be utilized for purposes of this Schedule are
those assigned to the senior unsecured long-term debt securities of the Company
without third-party enhancement, and any rating assigned to any other debt
security of the Company shall be disregarded. The rating in effect at any date
is that in effect at the close of business of such date.

           If the Company is split-rated and the ratings differential is one
level, the higher of the two ratings will apply (e.g. A+/A2 results in Level I
Pricing and A-/Baa1 results in Level III Pricing). If the Company is split-rated
and the ratings differential is two levels or more, the average of the two
ratings (or the higher of two intermediate ratings) shall be used (e.g. A+/Baa1
results in Level II Pricing and A/BBB results in Level III Pricing).