GTECH HOLDINGS CORPORATION

                               GTECH CORPORATION

                                  $300,000,000



                7.75% Series A Guaranteed Senior Notes due 2004

                7.87% Series B Guaranteed Senior Notes due 2007






                          NOTE AND GUARANTEE AGREEMENT



                            Dated as of May 15, 1997
<PAGE>



                           GTECH HOLDINGS CORPORATION

                                GTECH CORPORATION

                                55 Technology Way
                       West Greenwich, Rhode Island 02817



                7.75% Series A Guaranteed Senior Notes due 2004

                7.87% Series B Guaranteed Senior Notes due 2007



                                                              As of May 15, 1997


TO THE PURCHASERS WHOSE NAMES
         APPEAR IN THE ACCEPTANCE
         FORM AT END HEREOF:

Ladies and Gentlemen:

                  GTECH CORPORATION, a Delaware corporation (the "Company"), and
GTECH  HOLDINGS  CORPORATION,  a  Delaware  corporation  (the  "Guarantor"  and,
together with the Company,  the  "Obligors"),  agree with each of the purchasers
whose names appear in the acceptance form at the end hereof (each, a "Purchaser"
and, collectively, the "Purchasers") as follows:


1. AUTHORIZATION OF NOTES

                  The Company will  authorize the issue and sale, in two series,
of $300,000,000  aggregate  principal amount of its guaranteed  senior notes, of
which  $150,000,000  aggregate  principal  amount  shall be its  7.75%  Series A
Guaranteed  Senior  Notes due 2004  (the  "Series  A  Notes")  and  $150,000,000
aggregate  principal amount shall be its 7.87% Series B Guaranteed  Senior Notes
due 2007 (the "Series B Notes").  As used herein,  the term "Notes" includes all
notes  originally  issued  pursuant to this  Agreement  and any notes  issued in
substitution  therefor pursuant to Section 14. The Series A Notes and the Series
B Notes shall be  substantially  in the respective forms set out in Exhibits 1-A
and 1-B,  with  such  changes  therefrom,  if any,  as may be  approved  by each
Purchaser 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.

                  Payment of the  principal of,  Make-Whole  Amount (if any) and
interest on the Notes and other amounts owing hereunder shall be unconditionally
guaranteed  by the  Guarantor as provided in Section 13 (and each Note will have
the guarantee  (the  "Guarantee"  and  collectively,  the  "Guarantees")  of the
Guarantor  endorsed  thereon  in the  form  set out in  Exhibit  1-C) and by the
Subsidiary Guarantors as provided in the Subsidiary Guarantees.

2.   SALE AND PURCHASE OF NOTES

                  Subject to the terms and  conditions  of this  Agreement,  the
Company will issue and sell to each  Purchaser and each  Purchaser will purchase
from the  Company,  at the  Closing  provided  for in  Section  3,  Notes of the
respective   series  and  in  the  principal  amount  specified   opposite  such
Purchaser's  name in Schedule A at the purchase  price of 100% of the  principal
amount thereof. The Purchasers'  obligations hereunder are several and not joint
obligations  and no  Purchaser  shall have any  liability  to any Person for the
performance  or  non-performance  of  any  obligation  by  any  other  Purchaser
hereunder.

3.   CLOSING

                  The sale and  purchase  of the Notes to be  purchased  by each
Purchaser  shall occur at the offices of Milbank,  Tweed,  Hadley & McCloy,  One
Chase  Manhattan  Plaza,  New York, New York 10005, at 10:00 a.m., New York City
time, at a closing (the "Closing") on May 29, 1997 or on such other Business Day
thereafter on or prior to May 31, 1997 as may be agreed upon by the Obligors and
the  Purchasers.  At the Closing the Company will deliver to each  Purchaser the
Notes to be  purchased  by such  Purchaser in the form of a single Note for each
series to be purchased  by such  Purchaser  (or such greater  number of Notes in
denominations  of at least  $500,000 and integral  multiples of $5,000 in excess
thereof  as such  Purchaser  may  request)  dated  the date of the  Closing  and
registered  in  such  Purchaser's  name  (or in the  name  of  such  Purchaser's
nominee), with the Guarantee of the Guarantor endorsed thereon, against delivery
by such Purchaser 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 account of the Company to account number  004-269486 at
RI Hospital  Trust National  Bank,  ABA Number  011-500-337,  One Hospital Trust
Plaza, Providence,  Rhode Island 02903. If at the Closing the Company shall fail
to tender such Notes to any  Purchaser  as provided  above in this Section 3, or
any of the  conditions  specified in Section 4 shall not have been  fulfilled to
such  Purchaser's  satisfaction,  such  Purchaser  shall,  at  such  Purchaser's
election,  be relieved of all further obligations under this Agreement,  without
thereby  waiving any rights such Purchaser may have by reason of such failure or
such nonfulfillment.

4.     CONDITIONS TO CLOSING

                  Each Purchaser's  obligation to purchase and pay for the Notes
to be sold to such  Purchaser  at the Closing is subject to the  fulfillment  to
such  Purchaser's  satisfaction,  prior to or at the Closing,  of the  following
conditions:

5.     Representations and Warranties

                  The  representations  and  warranties  of the Obligors in this
Agreement shall be correct when made and at the time of the Closing.

6.       Performance; No Default

                  Each  Obligor  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 Section 5.14) no Default or Event of Default shall have occurred
and be continuing.

7.      Compliance Certificates


                  8.       Officer's   Certificate.   Each  Obligor  shall  have
delivered  to such  Purchaser 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.


                  9. Secretary's  Certificate.  Each Obligor and each Subsidiary
Guarantor shall have delivered to such Purchaser a certificate  certifying as to
the resolutions attached thereto and other corporate proceedings relating to the
authorization,  execution  and  delivery  of  this  Agreement,  the  Notes,  the
Guarantees and the Subsidiary Guarantees, as applicable.

10.      Opinions of Counsel

                  Such  Purchaser  shall  have  received  opinions  in form  and
substance satisfactory to such Purchaser, dated the date of the Closing (a) from
in-house  counsel for the  Obligors,  covering  the matters set forth in Exhibit
4.4(a) and covering such other matters incident to the transactions contemplated
hereby as such Purchaser or the Purchasers'  counsel may reasonably  request and
(b) from  Milbank,  Tweed,  Hadley & McCloy,  the  Purchasers'  special New York
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 such Purchaser may reasonably request.

11.      Purchase Permitted By Applicable Law, etc.

                  On the date of the Closing such Purchaser's  purchase of Notes
shall (i) be permitted by the laws and regulations of each jurisdiction to which
such  Purchaser  is 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,  (ii) 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 (iii) not subject such Purchaser 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 such Purchaser,
such Purchaser shall have received an Officer's  Certificate  from the Guarantor
certifying as to such matters of fact as such Purchaser may  reasonably  specify
to enable such Purchaser to determine whether such purchase is so permitted.

12.      Sale of Other Notes

                  Contemporaneously  with the Closing the Company  shall sell to
each other  Purchaser and each other  Purchaser  shall  purchase the Notes to be
purchased by it at the Closing as specified in Schedule A.

13.      Payment of Special Counsel Fees

                  Without  limiting the provisions of Section 16.1, the Obligors
shall have paid on or before the Closing the fees,  charges and disbursements of
the  Purchasers'  special  counsel  referred  to in  Section  4.4 to the  extent
reflected in a statement  of such counsel  rendered to the Obligors at least one
Business Day prior to the Closing.

14.      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
each series of the Notes.

15.      Changes in Corporate Structure

                  Except as specified in Schedule  4.9,  neither  Obligor  shall
have changed its  jurisdiction of incorporation or been a party to any merger or
consolidation  or shall 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.

16.      Rating

                  The Notes of each  series  shall have  received a  preliminary
rating of at least BBB+ from Duff & Phelps Credit Rating Co.

17.      Subsidiary Guarantees

                  Such Purchaser shall have received a true and complete copy of
a Subsidiary  Guarantee duly executed and delivered by each Subsidiary Guarantor
identified  on Schedule  5.4, each such  Subsidiary  Guarantee  shall be in full
force  and  effect,  and  the  representations  and  warranties  of the  related
Subsidiary  Guarantor in each such  Subsidiary  Guarantee  shall be correct when
made and at the time of the Closing.

18.      Proceedings and Documents

                  All corporate  and other  proceedings  in connection  with the
transactions  contemplated  by this Agreement and the Subsidiary  Guarantees and
all  documents  and  instruments   incident  to  such   transactions   shall  be
satisfactory to such Purchaser and the  Purchasers'  special  counsel,  and such
Purchaser  and such special  counsel  shall have  received all such  counterpart
originals or certified  or other copies of such  documents as such  Purchaser or
such special counsel may reasonably request.

19.      REPRESENTATIONS AND WARRANTIES OF THE OBLIGORS.

                  The Company and the Guarantor jointly and severally  represent
and warrant to each Purchaser that:

20.      Organization; Power and Authority

                  Each Obligor 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
would not,  individually  or in the aggregate,  reasonably be expected to have a
Material  Adverse Effect.  Each Obligor 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  Notes (in the case of the  Company)  and this
Agreement and the Guarantees (in the case of the Guarantor),  and to perform the
provisions hereof and thereof.

21.      Authorization, etc.

                  This Agreement and the 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, and this Agreement and the Guarantees have
been  duly  authorized  by all  necessary  corporate  action  on the part of the
Guarantor,  and this  Agreement  constitutes  and,  upon  execution and delivery
thereof,  each Guarantee will constitute,  a legal, valid and binding obligation
of the Guarantor enforceable against the Guarantor in accordance with its terms,
except,  in each case, 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).

22.      Disclosure

                  The Obligors,  through their agent, Credit Suisse First Boston
Corporation,  have  delivered  to each  Purchaser  a copy of a Direct  Placement
Memorandum,  dated April 1997 (the  "Memorandum"),  relating to the transactions
contemplated  hereby.  Except as disclosed in Schedule 5.3, this Agreement,  the
Memorandum, the documents, certificates or other writings identified in Schedule
5.3 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.  Except as  disclosed  in the
Memorandum  or as  expressly  described  in  Schedule  5.3,  or in  one  of  the
documents,  certificates  or  other  writings  identified  therein,  or  in  the
financial  statements listed in Schedule 5.5, since February 22, 1997, there has
been no change in the financial condition, operations, business or properties of
either Obligor or any  Subsidiary  except  changes that  individually  or in the
aggregate would not reasonably be expected to have a Material Adverse Effect.


23.      Organization and Ownership of Shares of Subsidiaries

                  (a) Schedule  5.4 is (except as noted  therein) a complete and
correct list of the Guarantor's  Subsidiaries,  showing,  as to each Subsidiary,
the correct name thereof,  the jurisdiction of its organization,  the percentage
of  shares  of each  class of its  capital  stock or  similar  equity  interests
outstanding  owned by the Guarantor and each other  Subsidiary  and whether such
Subsidiary will be on the date of the Closing a Subsidiary Guarantor.

                  (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
Guarantor  and its  Subsidiaries  have been validly  issued,  are fully paid and
nonassessable  and are owned by the  Guarantor  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 would 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.

24.      Financial Statements

                  The Obligors have  delivered to each  Purchaser  copies of the
financial  statements  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 Guarantor and its
Subsidiaries  as of the  respective  dates  specified  in such  Schedule 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).

25.      Compliance with Laws, Other Instruments, etc.

                  The  execution,  delivery and  performance  by the Obligors of
this Agreement and the Notes (in the case of the Company) and the Guarantees (in
the case of the Guarantor) will not (i) 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 either Obligor or any 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 either  Obligor or any
Subsidiary is bound or by which either Obligor or any Subsidiary or any of their
respective properties may be bound or affected,  (ii) 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 either  Obligor or any  Subsidiary  or (iii)  violate  any  provision  of any
statute or other rule or regulation of any Governmental  Authority applicable to
either Obligor or any Subsidiary.

26.      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 either Obligor of this Agreement
or the Notes (in the case of the Company) or the  Guarantees (in the case of the
Guarantor).

27.      Litigation; Observance of Agreements, Statutes and Orders

                  (a) Except as disclosed in Part I of Schedule  5.8,  there are
no actions, suits or proceedings pending or, to the knowledge of either Obligor,
threatened against or affecting either Obligor or any Subsidiary or any property
of either Obligor or any Subsidiary in any court or before any arbitrator of any
kind or before or by any  Governmental  Authority  that,  individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect.

                  (b) Except as disclosed in Part II of Schedule 5.8, neither of
the Obligors nor any 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.

28.      Taxes

                  The  Obligors  and each  Subsidiary  have filed all income 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  payable by them,  to the extent  such  taxes and  assessments  have
become due and payable and before  they have become  delinquent,  except for any
taxes and  assessments  (i) the  amount of which is not  individually  or in the
aggregate  Material  or (ii) the amount,  applicability  or validity of which is
currently  being  contested in good faith by  appropriate  proceedings  and with
respect  to which  the  Guarantor  or a  Subsidiary,  as the  case  may be,  has
established  adequate  reserves in accordance  with GAAP. The Federal income tax
liabilities  of the Obligors and each  Subsidiary  have been  determined  by the
Internal  Revenue  Service and paid for all fiscal years up to and including the
fiscal year ended February 24, 1996.

29.      Title to Property; Leases

                  The  Obligors  and each  Subsidiary  have good and  sufficient
title to their  respective  Material  properties,  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 either Obligor or any  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,
except  for  those  defects  in title  and Liens  that,  individually  or in the
aggregate,  would not have a Material  Adverse Effect.  All Material leases that
either  Obligor or any  Subsidiary  is party to as lessee are (as  against  such
Obligor or Subsidiary and, to the best knowledge of the Obligors, as against the
lessor  thereunder) valid and subsisting and are in full force and effect in all
material respects.

30.      Licenses, Permits, etc

                  Except as  disclosed in Schedule  5.11,  the Obligors and each
Subsidiary  own or possess all licenses,  permits,  franchises,  authorizations,
patents,  copyrights,  service  marks,  trademarks  and trade  names,  or rights
thereto,  that are Material,  without known  conflict with the rights of others,
except for those  conflicts that,  individually  or in the aggregate,  would not
have a Material Adverse Effect.

31.      Compliance with ERISA

                  (a) The Obligors 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 of the Obligors 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 would  reasonably  be  expected  to result in the
incurrence of any such liability by either Obligor or any ERISA Affiliate, or in
the imposition of any Lien on any of the rights,  properties or assets of either
Obligor 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 term "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  Obligors and each ERISA  Affiliate  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 postretirement benefit obligation (determined
as of the  last  day of the  Guarantor'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 Guarantor and its Subsidiaries is not Material.

                  (e) The  execution  and  delivery  of this  Agreement  and the
issuance  and sale of the Notes and  Guarantees  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 Obligors in the first
sentence of this  Section  5.12(e) is made in  reliance  upon and subject to the
accuracy of the Purchasers' representation in Section 6.2 as to, inter alia, the
sources  of the  funds to be used to pay the  purchase  price of the Notes to be
purchased by the Purchasers.

32.      Private Offering by the Obligors.

                  Neither the  Obligors  nor anyone  acting on their  behalf has
offered the Notes or the  Guarantees 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 the Purchasers and not
more than 45 other Institutional  Investors,  each of which has been offered the
Notes at a private sale for  investment.  Neither the Obligors nor anyone acting
on their  behalf has taken,  or will take,  any action  that would  subject  the
issuance or sale of the Notes or the Guarantees to the registration requirements
of Section 5 of the Securities Act.

33.      Use of Proceeds; Margin Regulations

                  The Company  will apply the  proceeds of the sale of the Notes
for the repayment of existing  Indebtedness and for general corporate  purposes.
No part of the  proceeds  from the  sale of the  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 either Obligor 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).  Margin stock
does not constitute more than 5% of the value of the consolidated  assets of the
Guarantor  and its  Subsidiaries  and the  Guarantor  does not have any  present
intention  that margin stock will  constitute  more than 5% of the value of such
assets. 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.

34.      Existing Indebtedness

                  Except as  described  therein,  Part A of  Schedule  5.15 sets
forth a  complete  and  correct  list  of all  outstanding  Indebtedness  of the
Guarantor and its  Subsidiaries as of February 22, 1997,  since which date there
has been no Material  change in the  amounts,  interest  rates,  sinking  funds,
instalment  payments or maturities of the  Indebtedness  of the Guarantor or its
Subsidiaries.  Neither of the Obligors nor any  Subsidiary  is in default and no
waiver of default is  currently  in effect,  in the payment of any  principal or
interest on any  Indebtedness  of either Obligor or such Subsidiary and no event
or condition  exists with respect to any  Indebtedness  of either Obligor or any
Subsidiary the  outstanding  principal  amount of which exceeds  $5,000,000 that
would permit (or that with notice or the lapse of time,  or both,  would permit)
one or more Persons to cause such  Indebtedness to become due and payable before
its stated maturity or before its regularly scheduled dates of payment.

35.      Foreign Assets Control Regulations, etc.

                  Neither  the sale of the Notes by the Company  hereunder  with
the benefit of the  Guarantees  of the  Guarantor  nor the  Company's 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.

36.      Status under Certain Statutes

                  Neither  of the  Obligors  nor any  Subsidiary  is  subject to
regulation  under the  Investment  Company Act of 1940,  as amended,  the Public
Utility Holding Company Act of 1935, as amended, the Interstate Commerce Act, as
amended, or the Federal Power Act, as amended.

37.      Ranking

                  All  liabilities  of the  Company  under  the Notes and of the
Guarantor  under the Guarantees  constitute  direct,  unconditional  and general
obligations  of such  Obligor and rank in right of payment  either pari passu or
senior to all other  Indebtedness of such Obligor,  except for such Indebtedness
which is preferred as a result of being  secured (but then only to the extent of
such security).

38.      Subsidiary Guarantees

                  The   representations   and  warranties  of  each   Subsidiary
Guarantor contained in the Subsidiary Guarantee of such Subsidiary Guarantor are
true and correct as of the date they are made.

39.      REPRESENTATIONS OF THE PURCHASER

40.      Purchase for Investment

                  Each  Purchaser  represents  that  such  Purchaser  (i)  is an
"accredited  investor"  within the meaning of Rule 501 under the  Securities Act
and (ii) is purchasing the Notes for its own account or for one or more separate
accounts  maintained  by it 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 such  Purchaser's or their property shall at all times be within
such  Purchaser's or their control.  Each Purchaser  understands  that the 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 neither Obligor
is required to register the Notes.

41.      Source of Funds

                  Each Purchaser  represents  that at least one of the following
statements is an accurate representation as to each source of funds (a "Source")
to be used by such  Purchaser  to pay the  purchase  price  of the  Notes  to be
purchased by such Purchaser hereunder:

                  (a) the Source is an "insurance  company general  account" (as
         the term is defined in PTE 95-60  (issued July 12, 1995)) in respect of
         which the reserves and liabilities (as defined by the annual  statement
         for life insurance  companies  approved by the National  Association of
         Insurance  Commissioners (the "NAIC Annual Statement")) for the general
         account  contract(s)  held by or on behalf of any employee benefit plan
         together  with the  amount  of the  reserves  and  liabilities  for the
         general account  contract(s) held by or on behalf of any other employee
         benefit plans maintained by the same employer (or affiliate  thereof as
         defined  in PTE  95-60)  or by the same  employee  organization  in the
         general account do not exceed 10% of the total reserves and liabilities
         of the general account (exclusive of separate account liabilities) plus
         surplus  as set  forth in the NAIC  Annual  Statement  filed  with such
         Purchaser's state of domicile; or

                  (b) the Source is a separate account that is maintained solely
         in connection with such Purchaser's fixed contractual obligations under
         which the amounts  payable,  or credited,  to any employee benefit plan
         (or its related  trust) that has any interest in such separate  account
         (or to any  participant  or  beneficiary  of such plan  (including  any
         annuitant))   are  not  affected  in  any  manner  by  the   investment
         performance of the separate account; or

                  (c) the  Source  is either  (i) an  insurance  company  pooled
         separate  account,  within the meaning of 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 disclosed by such
         Purchaser to the Company in writing  pursuant to this paragraph (c), 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

                  (d) 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 I(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 (d); or

                  (e)  the Source is a governmental plan; or

                  (f) 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 (f); or

                  (g) the Source  does not  include  assets that are or that are
         deemed under Department of Labor  regulations  issued under ERISA to be
         assets of any employee  benefit plan, other than a plan exempt from the
         coverage of ERISA.

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

                  Notwithstanding   the  foregoing,   if  any  Purchaser  is  an
insurance  company  organized  under the laws of a  jurisdiction  other than the
United States or any political  subdivision  thereof,  such Purchaser represents
that  either  (i) at  least  one  of the  foregoing  statements  is an  accurate
representation  as to  each  Source  to be used  by  such  Purchaser  to pay the
purchase price of the Notes to be purchased by such Purchaser  hereunder or (ii)
in any event,  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.

42.      INFORMATION AS TO THE OBLIGORS

43.      Financial and Business Information

                  The Obligors  shall deliver to each holder of Notes that is an
Institutional Investor:


                  44.  Quarterly  Statements  -- within 50 days after the end of
         each  quarterly  fiscal  period in each  fiscal  year of the  Guarantor
         (other than the last quarterly fiscal period of each such fiscal year),
         duplicate copies of,

                           0.0.0.1. a   consolidated   balance  sheet  of  the
                  Guarantor and its  Restricted  Subsidiaries  as at the end of
                  such quarter, and

                           0.0.0.2.  consolidated  statements of income, changes
                  in  shareholders'  equity and cash flows of the  Guarantor and
                  its Restricted 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  of  the  Guarantor  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  Guarantor'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) (so long as
         the  financial  statements  contained  in said  Report  conform  to the
         requirements  of  clauses  (i)  and  (ii)  above  including  as to  the
         companies being reported upon);


                 0.0.0.2.1 Annual  Statements  -- within  95 days  after the end
         of each fiscal year of the Guarantor, duplicate copies of,

                           0.0.0.3. a   consolidated   balance  sheet  of  the
                  Guarantor and its Restricted  Subsidiaries,  as at the end of
                  such year, and

                           0.0.0.4. consolidated  statements of income, changes
                  in  shareholders'  equity and cash flows of the Guarantor and
                  its Restricted 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 Guarantor's  Annual Report on Form 10-K for such
         fiscal  year   (together   with  the   Guarantor'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 (b) (so long as the financial
         statements  contained  in said Report  conform to the  requirements  of
         clauses  (i)  and  (ii)  above,  including  as to the  companies  being
         reported upon);


                  0.0.0.4.1 SEC and Other Reports-- promptly upon their becoming
         available, one copy of (i) each financial statement,  report, notice or
         proxy  statement  sent by either  Obligor or any  Subsidiary  to public
         securities holders generally, and (ii) each regular or periodic report,
         each registration  statement that shall have become effective  (without
         exhibits except as expressly requested by such holder and other than on
         Form S-8), and each final  prospectus  and amendments  thereto filed by
         either  Obligor or any  Subsidiary  with the  Securities  and  Exchange
         Commission;

                 0.0.0.4.2  Notice of Default  or Event of Default --  promptly,
         and in any event within five days after a  Responsible  Officer  having
         actual knowledge of the existence of any Default or Event of Default, a
         written notice  specifying  the nature and period of existence  thereof
         and what action the Obligors are taking or propose to take with respect
         thereto;


                0.0.0.4.3  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 Guarantor or the Company or an ERISA Affiliate
         proposes to take with respect thereto:

                           (i) with respect to any Pension 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 Pension Plan, or
                  the  receipt  by either  Obligor 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 either Obligor 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 either  Obligor 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,  would  reasonably  be  expected  to have a Material
                  Adverse Effect;

                  (f) Notices from  Governmental  Authority -- promptly,  and in
         any  event  within  30 days  after a  Responsible  Officer  has  actual
         knowledge of receipt thereof, copies of any notice to either Obligor or
         any  Subsidiary  from  any  Federal  or  state  Governmental  Authority
         relating to any contract,  proceeding,  order, ruling, statute or other
         law or regulation that would  reasonably be expected to have a Material
         Adverse Effect;

                  (g) Litigation,  etc. -- promptly,  and in any event within 30
         days after a Responsible  Officer having actual  knowledge  thereof,  a
         written  notice  of any legal or  arbitral  proceeding  (or any  order,
         decree or judgment  relating  thereto)  affecting either Obligor or any
         Subsidiary that would reasonably be expected to have a Material Adverse
         Effect; and

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



0.0.0.4.4. Officer's Certificate

                  Each set of  financial  statements  delivered  to a holder  of
Notes  pursuant  to  Section  (a) or  Section  (b)  shall  be  accompanied  by a
certificate of a Senior Financial Officer of the Guarantor setting forth:


                  0.0.0.4.5  Covenant  Compliance -- the information  (including
         detailed  calculations)  required  in order to  establish  whether  the
         Obligors were in compliance with the requirements of Sections  10.3(k),
         10.4(c),  10.5(e),  10.6,  10.7 and 10.8 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


                  0.0.0.4.6. 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 Guarantor and its 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  either
         Obligor  or any  Subsidiary  to  comply  with any  Environmental  Law),
         specifying  the nature and period of existence  thereof and what action
         the Obligors shall have taken or propose to take with respect thereto.

0.0.0.4.7         Inspection

                  The Obligors shall permit the  representatives  of each holder
of Notes that is an Institutional Investor:


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


                  0.0.0.4.9  Default -- if a Default  or Event of  Default  then
         exists, at the expense of the Obligors, to visit and inspect any of the
         offices or properties of the Guarantor,  the Company or any 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
         Obligors  authorize said  accountants to discuss the affairs,  finances
         and accounts of the Obligors and their Subsidiaries), all at such times
         and as often as may be requested.


0.0.0.4.10         PREPAYMENT OF THE NOTES



0.0.0.4.11       Maturity.

                  As provided therein, the entire unpaid principal amount of the
Series A Notes and Series B Notes  shall be due and  payable on May 15, 2004 and
May 15, 2007, respectively.



0.0.0.4.12        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,  the  Notes,  in an
amount  not less than 5% of the  aggregate  principal  amount of the Notes  then
outstanding in the case of a partial prepayment, at 100% of the principal amount
so prepaid, together with interest on such principal amount accrued to such date
and the applicable  Make-Whole  Amounts  determined for the prepayment date with
respect to such  principal  amount.  The Company  will give each holder of Notes
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 (which shall be a Business  Day),  the
aggregate  principal  amount  of the  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
Amounts 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 a  certificate  of a Senior  Financial  Officer
specifying  the  calculation  of such  Make-Whole  Amounts  as of the  specified
prepayment date.


0.0.0.4.13         Allocation of Partial Prepayments

                  In the  case of each  partial  prepayment  of the  Notes,  the
Company will prepay the same  percentage of the unpaid  principal  amount of the
Notes of each series and the principal  amount of the Notes of each 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 not theretofore called for prepayment.



0.0.0.4.14         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 canceled and shall not be reissued,  and no Note
shall be issued in lieu of any prepaid principal amount of any Note.



0.0.0.4.15         Purchase of Notes

                  Neither  Obligor  will  nor will  either  Obligor  permit  any
Affiliate  to  purchase,  redeem,  prepay  or  otherwise  acquire,  directly  or
indirectly,  any of the  outstanding  Notes  except  (a)  upon  the  payment  or
prepayment of the Notes in accordance  with the terms of this  Agreement and the
Notes  or (b)  pursuant  to an  offer  to  purchase  made by the  Company  or an
Affiliate pro rata to the holders of all Notes at the time  outstanding upon the
same terms and  conditions.  Any such  offer  shall  provide  each  holder  with
sufficient information to enable it to make an informed decision with respect to
such offer,  and shall remain open for at least 10 Business Days. If the holders
of more than 50% of the principal  amount of the Notes then  outstanding  accept
such offer, the Company shall promptly notify the remaining holders of such fact
and the  expiration  date for the  acceptance  by holders of Notes of such offer
shall be extended by the number of days  necessary  to give each such  remaining
holder at least 5 Business  Days from its  receipt of such notice to accept such
offer.  The Company will promptly cancel all Notes acquired by either Obligor or
any such  Affiliate  pursuant to any  payment,  prepayment  or purchase of Notes
pursuant  to any  provision  of this  Agreement  and no Notes  may be  issued in
substitution or exchange for any such Notes.

0.0.0.4.16         Make-Whole Amount

                  The term "Make-Whole  Amount" means, with respect to any Note,
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 Note 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  Note,  the
         principal of such Note 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 Note, 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 Notes is payable) equal to the Reinvestment  Yield with
         respect to such Called Principal.

                  "Reinvestment   Yield"  means,  with  respect  to  the  Called
         Principal of any Note,  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  678" on the
         Telerate  Access Service (or such other display as may replace Page 678
         on  Telerate  Access   Service)  for  actively  traded  U.S.   Treasury
         securities  having a maturity  equal to the remaining term of such Note
         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  (including  by  way  of  interpolation),   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
         U.S. 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 term of such Note 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 term of such Note and (2) the actively  traded U.S.  Treasury
         security with the duration  closest to and less than the remaining term
         of such Note.

                  "Remaining  Scheduled  Payments"  means,  with  respect to the
         Called Principal of any Note, 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  Notes,  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 Note,  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.

0.0.0.4.17         AFFIRMATIVE COVENANTS

                  The Company and the Guarantor  jointly and severally  covenant
that so long as any of the Notes are outstanding:

0.0.0.4.18         Compliance with Law

                  The Obligors will and will cause each of their 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 would not, individually or in the aggregate, have a
Material Adverse Effect.

0.0.0.4.19         Insurance

                  The  Obligors  will and will  cause  each of their  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.

0.0.0.4.20         Maintenance of Properties

                  The  Obligors  will and will  cause  each of their  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 either  Obligor 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 Guarantor  has  concluded  that
such discontinuance would not, individually or in the aggregate, have a Material
Adverse Effect.


0.0.0.4.21         Payment of Taxes

                  The Obligors will and will cause each of their Subsidiaries to
file  all  income  tax or  similar  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
payable by any of them, to the extent such taxes and assessments have become due
and payable and before they have become delinquent, provided that neither of the
Obligors  nor any  Subsidiary  need pay any such  tax or  assessment  if (i) the
amount,  applicability  or validity thereof is contested by such Obligor or such
Subsidiary on a timely basis in good faith and in appropriate  proceedings,  and
such Obligor or such Subsidiary has established  adequate  reserves  therefor in
accordance with GAAP on the books of such Obligor or such Subsidiary or (ii) the
nonpayment of all such taxes and  assessments in the aggregate  would not have a
Material Adverse Effect.


0.0.0.4.22         Corporate Existence, etc.

                  Subject to Sections  10.2 and 10.8,  the Obligors  will at all
times  preserve  and keep in full force and effect  their  respective  corporate
existences,  and the Obligors will at all times  preserve and keep in full force
and effect the corporate existence of each of their Restricted  Subsidiaries and
all rights and  franchises  of the  Obligors and their  Restricted  Subsidiaries
unless,  in the good faith  judgment of the  Guarantor,  the  termination  of or
failure to preserve and keep in full force and effect the corporate existence of
any  Restricted  Subsidiary  (other  than the  Company),  or any  such  right or
franchise would not,  individually or in the aggregate,  have a Material Adverse
Effect.

0.0.0.4.23         Ownership of the Company.

                  The Guarantor shall at all times own,  directly or indirectly,
100% of the capital stock of the Company free and clear of any Lien.


0.0.0.4.24         Ranking

                  Each Obligor will ensure that, at all times,  all  liabilities
of such Obligor under the Notes (in the case of the Company) and the  Guarantees
(in the case of the  Guarantor)  will rank in right of payment either pari passu
or senior to all other  Indebtedness  of such  Obligor  except for  Indebtedness
which is preferred as a result of being  secured (but then only to the extent of
such security).

0.0.0.4.25         Subsidiary Guarantors

                  (a) The Guarantor  will ensure that each  Subsidiary  that has
outstanding  a Guaranty with respect to any  Indebtedness  of the Company or the
Guarantor is a Subsidiary Guarantor.

                  (b) Upon  notice by the  Company to each  holder of a Note,  a
Subsidiary  Guarantor  shall  cease to be a  Subsidiary  Guarantor  and shall be
released from its obligations under its Subsidiary  Guarantee if such Subsidiary
Guarantor  shall  not  have   outstanding  any  Guaranty  with  respect  to  any
Indebtedness of the Company or the Guarantor.

0.0.0.4.26         NEGATIVE COVENANTS

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

0.0.0.4.27        Transactions with Affiliates

                  The  Guarantor  will not,  and will not permit any  Restricted
Subsidiary  to, enter into directly or indirectly  any Material  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 (other than the Guarantor or another  Restricted
Subsidiary),  except pursuant to the reasonable  requirements of the Guarantor's
or such Restricted  Subsidiary's  business and upon fair and reasonable terms no
less  favorable to the  Guarantor or such  Restricted  Subsidiary  than would be
obtainable  in a  comparable  arm's-length  transaction  with  a  Person  not an
Affiliate.

0.0.0.4.28         Merger, Consolidation, etc

                  The  Guarantor  will not,  and will not permit any  Restricted
Subsidiary to,  consolidate with or merge with any other  corporation or convey,
transfer or lease  substantially  all of its assets in a single  transaction  or
series of transactions to any Person unless:

                 0.0.0.4.29  in the case of the  Guarantor or the  Company,  the
         successor  formed by such  consolidation or the survivor of such merger
         or  the  Person  that  acquires  by   conveyance,   transfer  or  lease
         substantially  all of the assets of the  Guarantor or the Company as an
         entirety,  as the case may be, shall be a solvent corporation organized
         and existing  under the laws of the United  States or any State thereof
         (including  the  District of  Columbia),  and, if the  Guarantor or the
         Company, as the case may be, is not such corporation,  such corporation
         shall  have  executed  and  delivered  to each  holder of any Notes its
         assumption of the due and punctual  performance  and observance of each
         covenant and condition of (x) this Agreement and the Notes, in the case
         of the Company and (y) this Agreement and the  Guarantees,  in the case
         of the Guarantor;


                 0.0.0.4.30 in the case of any Restricted Subsidiary (other than
         the  Company),  the  successor  formed  by  such  consolidation  or the
         survivor  of such merger or the Person  that  acquires  by  conveyance,
         transfer or lease  substantially  all of the assets of such  Restricted
         Subsidiary  as an  entirety,  as the  case  may be,  shall  be (i) such
         Restricted Subsidiary,  either Obligor or another Restricted Subsidiary
         or (ii)  any  other  Person  so long as the  Disposition  of all of the
         assets  of  such  Restricted   Subsidiary  would  have  otherwise  been
         permitted  by  Section  10.8 (and is treated  as a  Disposition  of the
         assets of such Subsidiary for all purposes of Section 10.8); and


                 0.0.0.4.31 in any case, immediately after giving effect to such
         transaction, (i) no Default or Event of Default shall have occurred and
         be  continuing  and  (ii)  the  Guarantor  would  be  permitted  by the
         provisions  of  Section  10.6 to  incur at  least  $1.00 of  additional
         Indebtedness owing to a Person other than a Restricted Subsidiary.

No such conveyance,  transfer or lease of substantially all of the assets of the
Guarantor or the Company shall have the effect of releasing the Guarantor or the
Company, as the case may be, or any successor corporation that shall theretofore
have  become  such in the  manner  prescribed  in this  Section  10.2  from  its
liability  under (x) this Agreement or the Notes,  in the case of the Company or
(y) this Agreement or the Guarantees, in the case of the Guarantor.

0.0.0.4.32         Liens

                  The  Guarantor  will not,  and will not permit any  Restricted
Subsidiary  to, create,  assume,  incur or suffer to exist any Lien upon or with
respect to any property or assets,  whether now owned or hereafter acquired,  of
the Guarantor or any such  Subsidiary,  unless the Notes are secured equally and
ratably  with any and all other  obligations  secured by such Lien  pursuant  to
documentation  reasonably  satisfactory  to the Required  Holders  (including an
opinion of counsel as to the enforceability of such Lien reasonably satisfactory
to the Required Holders), excluding from the operation of this Section:

                  (a) Liens existing on the date hereof securing Indebtedness of
         the  Guarantor or any  Restricted  Subsidiary  outstanding  on the date
         hereof and specified in Part B of Schedule 5.15;

                  (b) Liens (including Liens securing Capital Lease Obligations)
         (i) existing on property at the time of the acquisition  thereof by the
         Guarantor or a  Restricted  Subsidiary  or (ii) to secure  Indebtedness
         incurred  in  connection  with  the  financing  of all or a part of the
         purchase  price or cost of  construction  of  property  acquired by the
         Guarantor or a Restricted  Subsidiary  after the date hereof,  provided
         that (x) in each case the aggregate  principal  amount of  Indebtedness
         secured by such Lien in respect of any such  property  shall not exceed
         the lesser of the cost and the fair market  value of such  property and
         no such  Lien  shall  extend  to or cover  any  other  property  of the
         Guarantor  or such  Subsidiary  and (y) in the case of clause (ii) such
         Lien shall be created contemporaneously with, or within 180 days after,
         the acquisition of such property;

                  (c) Liens on  property  of a Person  at the time  such  Person
         becomes  a  Restricted  Subsidiary,  or  such  Person  merges  into  or
         consolidates  with the Guarantor or any Restricted  Subsidiary (and not
         incurred  in  anticipation   thereof),   provided  that  the  aggregate
         principal amount of Indebtedness secured by such Lien in respect of any
         such  property  shall not exceed the fair market value of such property
         and no such Lien  shall  extend to or cover any other  property  of the
         Guarantor or such Subsidiary;

                  (d) Liens on property or assets of any  Restricted  Subsidiary
         securing  Indebtedness  owing by such Subsidiary to the Guarantor or to
         any Wholly-Owned Restricted Subsidiary;

                  (e)  Liens in favor of the  United  States  government  or the
         government of any State of the United States or any foreign government,
         or of any  political  subdivision  of any of the  foregoing,  to secure
         partial,  progress,  advance or other  payments by such  government  or
         political subdivision pursuant to any contract or statute;

                  (f) Liens incurred or deposits made to secure the  performance
         of tenders,  statutory  obligations,  surety bonds,  bids,  performance
         bonds and other similar  obligations,  and Liens (for sums not yet due)
         of carriers,  warehousemen,  mechanics and other similar Liens, in each
         case  incurred or made in the  ordinary  course of business  and not in
         connection with the incurrence of Indebtedness;

                  (g) Liens  incidental to the normal conduct of the business of
         the  Guarantor or any  Restricted  Subsidiary or the ownership of their
         properties and that are not incurred in connection  with the incurrence
         of Indebtedness and that do not in the aggregate  materially impair the
         use of such  property in the operation of the business of the Guarantor
         and its  Subsidiaries  taken as a whole,  or the value of such property
         for the purpose of such business;

                  (h) Liens created by or resulting from any litigation or legal
         proceeding that is effectively  stayed while the underlying  claims are
         being  contested  in good  faith by  appropriate  proceedings  and with
         respect  to which the  Guarantor  or such  Subsidiary  has  established
         adequate reserves on its books in accordance with GAAP;

                  (i)  any  extension,   renewal  or  replacement  of  any  Lien
         described  in  Subsections  (a)  through (h) above,  provided  that the
         principal  amount (or accreted value) of  Indebtedness  secured thereby
         immediately  before  giving  effect  to  such  extension,   renewal  or
         replacement is not increased and such Lien is not extended to any other
         property;

                  (j) Liens for taxes,  assessments or  governmental  charges or
         levies, either not yet due and payable or to the extent that nonpayment
         thereof is permitted by the proviso to Section 9.4; and

                  (k)  Liens   incurred  by  the  Guarantor  or  any  Restricted
         Subsidiary in addition to those  described in  Subsections  (a) through
         (j) above,  provided that, upon the incurrence  thereof and immediately
         after  giving  effect  thereto,  Priority  Debt shall not exceed 15% of
         Consolidated Assets.

0.0.0.4.33         Sale and Leaseback Transactions

                  The  Guarantor  will not,  and will not permit any  Restricted
Subsidiary to, enter into any Sale and Leaseback Transaction unless:

                  (a) such  Sale  and  Leaseback  Transaction  is  between  such
         Subsidiary  and  the  Guarantor,   between  such   Subsidiary  and  any
         Wholly-Owned  Restricted  Subsidiary,  or between the Guarantor and any
         Wholly-Owned Restricted Subsidiary;

                  (b) the proceeds  received by the Guarantor or such Subsidiary
         from such Sale and Leaseback Transaction are applied within 180 days of
         the  date  of  such   transaction  to  (x)  the  prepayment  of  Funded
         Indebtedness  (and any  associated  premium) of the  Guarantor  or such
         Subsidiary or (y) the acquisition of assets (other than current assets)
         to be used in the ordinary  course of business of the Guarantor or such
         Subsidiary, as the case may be; or

                  (c) at the time of  entering  into  such  Sale  and  Leaseback
         Transaction and immediately after giving effect thereto,  Priority Debt
         shall not exceed 15% of Consolidated Assets.

0.0.0.4.34         Subsidiary Indebtedness

                  The Guarantor will not permit any Restricted Subsidiary (other
than the Company) to create, assume, incur, guarantee or otherwise become liable
in respect of any Indebtedness, excluding from the operation of this Section:

                  (a)   Indebtedness   outstanding   on  the  date   hereof  and
         specified in Part C of Schedule 5.15;

                  (b)  Indebtedness  secured  by any Lien  permitted  by Section
         10.3(b) (or any  extension,  renewal or replacement  thereof  permitted
         by Section 10.3(i));

                  (c)   Indebtedness   owing   to  the   Guarantor   or  to  any
         Wholly-Owned Restricted Subsidiary;

                  (d)  Indebtedness  of a Person  outstanding  at the time  such
         Person  becomes a Restricted  Subsidiary  or such Person merges into or
         consolidates  with  any  Restricted  Subsidiary  (and not  incurred  in
         anticipation thereof); and

                  (e)  Indebtedness in addition to that described in Subsections
         (a) through (d) above,  provided that, upon the incurrence  thereof and
         immediately after giving effect thereto, Priority Debt shall not exceed
         15% of Consolidated Assets.

For  purposes  of  this  Section  10.5,  any  Indebtedness  of  an  Unrestricted
Subsidiary existing at the time such Unrestricted  Subsidiary is designated as a
Restricted Subsidiary shall be deemed to have been incurred at that time.

0.0.0.4.35         Indebtedness

                  The  Guarantor  will not,  and will not permit any  Restricted
Subsidiary to, create,  assume,  incur,  guarantee or otherwise become liable in
respect of any Indebtedness,  unless immediately after giving effect thereto and
to the concurrent retirement of any other Indebtedness the ratio of Consolidated
Indebtedness  to  Consolidated  EBDAIT does not exceed 3.5 to 1. For purposes of
this Section 10.6, any Indebtedness of a Person existing at the time such Person
becomes a Restricted  Subsidiary  shall be deemed to have been  incurred at that
time.

0.0.0.4.36         Shareholders' Equity

                  The  Guarantor  will  not  at  any  time  permit  Consolidated
Shareholders'  Equity to be less than the sum of (i)  $268,000,000  plus (ii) an
amount equal to 50% of Consolidated Net Income for each completed fiscal year of
the Guarantor  ending after the date hereof (but only if Consolidated Net Income
for such fiscal year is a positive number).

0.0.0.4.37         Disposition of Assets

                  The  Guarantor  will not,  and will not permit any  Restricted
Subsidiary  to,  directly or  indirectly,  sell,  lease,  transfer or  otherwise
dispose  of  (collectively  a  "Disposition")  any of its  properties  or assets
unless, after giving effect to such proposed Disposition, the aggregate net book
value of all assets  that were the  subject of a  Disposition  during the twelve
calendar months immediately preceding the date of such proposed Disposition (the
"Disposition  Date") does not exceed 15% of Consolidated Assets as at the end of
the  quarterly  fiscal period of the Guarantor  ended  immediately  prior to the
Disposition  Date. Any  Disposition of shares of stock of any Subsidiary  shall,
for purposes of this Section, be considered a sale of assets and be valued at an
amount that bears the same  proportion to the total assets of such Subsidiary as
the number of such shares  bears to the total  number of shares of stock of such
Subsidiary.  Notwithstanding the foregoing, the following Dispositions shall not
be taken into account under this Section 10.8:

                  (a)  any  Disposition  of  inventory,   equipment,   fixtures,
         supplies or materials  made in the ordinary  course of business at fair
         value;

                  (b) any  Disposition  to the  Guarantor  or to a  Wholly-Owned
         Restricted Subsidiary; and

                  (c) any  Disposition  the net  proceeds  of which are  applied
         within 180 days of the related Disposition Date to (x) the repayment of
         Funded  Indebtedness which by its terms is not subordinated in right of
         payment to the Notes (and any  associated  premium) of the Guarantor or
         such Restricted  Subsidiary  (including,  without limitation and at the
         sole option of the Company,  the Notes  pursuant to Section 8.2) or (y)
         the acquisition of assets (other than current assets) to be used in the
         ordinary  course  of  business  of the  Guarantor  or  such  Restricted
         Subsidiary.

                  For  purposes  of this  Section  10.8,  any  designation  of a
Restricted  Subsidiary  to an  Unrestricted  Subsidiary  shall be deemed to be a
Disposition of the assets of such Subsidiary at the time of such designation.

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

                  (a) default  shall be made in the payment of any  principal or
         Make-Whole  Amount,  if any, on any Note when the same  becomes due and
         payable,  whether at maturity or at a date fixed for  prepayment  or by
         declaration or otherwise; or

                  (b) default  shall be made in the  payment of any  interest on
         any Note for more than five  Business  Days after the same  becomes due
         and payable, or any Subsidiary Guarantor defaults in the payment of any
         amount due pursuant to its Subsidiary Guarantee; or

                  (c)      the  Guarantor  defaults  in  the  performance  of or
         compliance   with   any   term   contained   in    Section 7.1(d)    or
         Sections 10.2, 10.4, 10.5, 10.6, or 10.8; or

                  (d)  either  Obligor   defaults  in  the   performance  of  or
         compliance with any term contained herein (other than those referred to
         in paragraphs (a), (b) and (c) of this Section 11), and (provided that,
         with respect to any default  arising under  Section 10.1 or 10.7,  such
         Obligor  is  proceeding  diligently  and in good  faith to remedy  such
         default) such default is not remedied  within 30 days after the earlier
         of (i) a Responsible Officer obtaining actual knowledge of such default
         and (ii) an Obligor  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 either  Obligor or by any  officer of either  Obligor in this
         Agreement, in writing by or on behalf of any Subsidiary Guarantor or by
         any officer of any Subsidiary Guarantor in any Subsidiary Guarantee, 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) either  Obligor  is in  default in the  payment of any
         amounts due under or in the performance of or compliance with any other
         term of the Credit  Facility  beyond any period of grace  provided with
         respect thereto, or (ii) the Guarantor or any Restricted  Subsidiary is
         in  default  (as  principal  or as  guarantor  or other  surety) in the
         payment of any principal of or premium or make-whole amount or interest
         on any  Indebtedness  that is  outstanding  in an  aggregate  principal
         amount of at least $25,000,000 beyond any period of grace provided with
         respect thereto, or (iii) the Guarantor or any Restricted Subsidiary is
         in default in the  performance  of or  compliance  with any term of any
         evidence of any  Indebtedness  in an  aggregate  outstanding  principal
         amount of at least  $25,000,000 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  Indebtedness has become,
         or has been  declared,  due and payable  before its stated  maturity or
         before its regularly scheduled dates of payment; or

                  (g) the Guarantor,  the Company or any Significant  Subsidiary
         (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
         Guarantor or any Restricted Subsidiary, 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  Guarantor  or  any
         Restricted Subsidiary,  or any such petition shall be filed against the
         Guarantor or any  Restricted  Subsidiary 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 $25,000,000  are rendered  against one or more
         of the Guarantor 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 Pension  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 Pension  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  Pension  Plan or the PBGC  shall  have
         notified  either Obligor or any ERISA Affiliate that a Pension 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 Pension Plans, determined in accordance
         with Title IV of ERISA, shall exceed  $25,000,000,  (iv) either Obligor
         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) either  Obligor or any ERISA  Affiliate  withdraws from any
         Multiemployer   Plan,  or  (vi)  either   Obligor  or  any   Subsidiary
         establishes or amends any employee  welfare  benefit plan that provides
         post-employment  welfare  benefits in a manner that would  increase the
         liability of either Obligor or any 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,  would
         reasonably be expected to have a Material Adverse Effect; or

                  (k) any  Guarantee  shall cease to be in full force and effect
         or the Guarantor or any Person acting on behalf of the Guarantor  shall
         contest in any manner the validity, binding nature or enforceability of
         any Guarantee,  or any Subsidiary  Guarantee  shall cease to be in full
         force and  effect  (other  than  pursuant  to  Section  9.8(b))  or any
         Subsidiary  Guarantor  or any  Person  acting on behalf  thereof  shall
         contest in any manner the validity, binding nature or enforceability of
         any Subsidiary Guarantee.

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.

0.0.0.4.39         REMEDIES ON DEFAULT, ETC.

0.0.0.4.40         Acceleration

                  (a)  If an  Event  of  Default  with  respect  to  an  Obligor
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 then outstanding shall automatically
become immediately due and payable.

                  (b)  If  any  other  Event  of  Default  has  occurred  and is
continuing,  the Required Holders may at any time at their option,  by notice or
notices to the Company, declare all the Notes 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,  any holder or holders of Notes 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 held
by it or them to be immediately due and payable.

                  Upon any Notes  becoming  due and payable  under this  Section
12.1, whether automatically or by declaration,  such Notes will forthwith mature
and the entire unpaid principal  amount of such Notes,  plus (x) all accrued and
unpaid interest thereon and (y) the applicable  Make-Whole Amounts 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 Obligors  acknowledge,  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  Obligors  (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.

0.0.0.4.41         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.

0.0.0.4.42         Rescission

                  At any time after any Notes have been declared due and payable
pursuant to  paragraph  (b) or (c) of Section  12.1,  the Required  Holders,  by
written notice to the Company,  may rescind and annul any such  declaration  and
its  consequences  if (a) the  Obligors  have paid all  overdue  interest on the
Notes, all principal of and Make-Whole Amount, if any, on any Notes 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,  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 18, and (c)
no  judgment  or decree  has been  entered  for the  payment  of any  monies due
pursuant  hereto or to the Notes. 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.


0.0.0.4.43         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 Obligors under Section 16,
the Obligors  will pay to the holder of each Note on demand such further  amount
as shall be sufficient to cover all reasonable 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.

0.0.0.4.44         GUARANTEE, ETC.

0.0.0.4.45  Guarantee

                  The Guarantor hereby  guarantees to each holder of any Note or
Notes at any time  outstanding  (a) the prompt payment in full when due (whether
at stated maturity, by acceleration, by optional prepayment or otherwise) of the
principal  of and  Make-Whole  Amounts  (if  any)  and  interest  on  the  Notes
(including,  without limitation,  interest on any overdue principal,  Make-Whole
Amount and, to the extent permitted by applicable law, on any overdue  interest)
and all  other  amounts  from  time to time  owing  by the  Company  under  this
Agreement  and  under  the  Notes  (including,  without  limitation,  costs  and
expenses),  and (b) the prompt  performance and observance by the Company of all
covenants,  agreements  and  conditions on its part to be performed and observed
hereunder,  in each case  strictly in  accordance  with the terms  thereof (such
payments and other obligations being herein  collectively called the "Guaranteed
Obligations").  The Guarantor  hereby  further  agrees that if the Company shall
default in the payment or performance of any of the Guaranteed Obligations,  the
Guarantor  will (x)  promptly  pay or perform  the same,  without  any demand or
notice  whatsoever,  and that in the case of any extension of time of payment or
renewal of any of the Guaranteed Obligations,  the same will be promptly paid in
full when due  (whether  at  extended  maturity,  by  acceleration,  by optional
prepayment  or  otherwise)  in  accordance  with the terms of such  extension or
renewal  and (y) pay to the  holder  of any Note  such  amounts,  to the  extent
lawful,  as shall be  sufficient  to pay the  reasonable  costs and  expenses of
collection  or of otherwise  enforcing  any of such  holder's  rights under this
Agreement, including, without limitation, reasonable counsel fees.

                  All  obligations of the Guarantor  under this Section 13 shall
survive the transfer of any Note,  and any  obligations  of the Guarantor  under
this Section 13 with respect to which the  underlying  obligation of the Company
is expressly stated to survive payment of any Note shall also survive payment of
such Note.

0.0.0.4.46  Obligations Unconditional

                  (a)  The  obligations  of the  Guarantor  under  Section  13.1
constitute a present and continuing  guaranty of payment and not  collectibility
and are  absolute and  unconditional,  irrespective  of the value,  genuineness,
validity,  regularity or  enforceability of the obligations of the Company under
this  Agreement,  the Notes or any other  agreement  or  instrument  referred to
herein  or  therein,  or any  substitution,  release  or  exchange  of any other
guarantee  of or security  for any of the  Guaranteed  Obligations,  and, to the
fullest  extent   permitted  by  applicable  law,   irrespective  of  any  other
circumstance  whatsoever  which might otherwise  constitute a legal or equitable
discharge  or  defense  of a surety or  guarantor,  it being the  intent of this
Section 13.2 that the  obligations of the Guarantor  hereunder shall be absolute
and  unconditional,  under  any  and all  circumstances.  Without  limiting  the
generality of the foregoing, it is agreed that the occurrence of any one or more
of the  following  shall not  alter or impair  the  liability  of the  Guarantor
hereunder which shall remain absolute and unconditional as described above:

                  (1) any  amendment or  modification  of any  provision of this
         Agreement or any of the Notes or any  assignment  or transfer  thereof,
         including  without  limitation  the renewal or extension of the time of
         payment of any of the Notes or the  granting of time in respect of such
         payment thereof,  or of any furnishing or acceptance of security or any
         additional  guarantee  or any release of any  security or  guarantee so
         furnished or accepted for any of the Notes;

                  (2)  any  waiver,  consent,   extension,   granting  of  time,
         forbearance, indulgence or other action or inaction under or in respect
         of this Agreement or the Notes,  or any exercise or non-exercise of any
         right, remedy or power in respect hereof or thereof;

                  (3)      any     bankruptcy,     receivership,     insolvency,
         reorganization,  arrangement,  readjustment,  composition,  liquidation
         or  similar  proceedings  with  respect  to the  Company  or any  other
         Person or the properties or creditors of any of them;

                  (4) the  occurrence of any Default or Event of Default  under,
         or any invalidity or any unenforceability of, or any misrepresentation,
         irregularity or other defect in, this Agreement, the Notes or any other
         agreement;

                  (5)  any  transfer  of any  assets  to or  from  the  Company,
         including without  limitation any transfer or purported transfer to the
         Company from any Person, any invalidity, illegality of, or inability to
         enforce, any such transfer or purported transfer,  any consolidation or
         merger  of the  Company  with or into any  Person,  any  change  in the
         ownership of any shares of capital stock of the Company,  or any change
         whatsoever in the objects, capital structure,  constitution or business
         of the Company;

                  (6) any default,  failure or delay,  willful or otherwise,  on
         the part of the Company or any other  Person to perform or comply with,
         or the impossibility or illegality of performance by the Company or any
         other  Person  of, any term of this  Agreement,  the Notes or any other
         agreement;

                  (7) any suit or other  action  brought by, or any  judgment in
         favor of, any  beneficiaries  or creditors of, the Company or any other
         Person for any reason whatsoever, including without limitation any suit
         or action in any way attacking or involving any issue,  matter or thing
         in respect of this Agreement, the Notes or any other agreement;

                  (8)      any  lack  or  limitation  of  status  or  of  power,
         incapacity  or  disability  of the  Company  or any  trustee  or  agent
         thereof; or

                  (9)      any   other   thing,   event,   happening,    matter,
         circumstance  or  condition  whatsoever,  not in any way limited to the
         foregoing.

                  (b) The Guarantor  hereby  unconditionally  waives  diligence,
presentment,  demand of  payment,  protest and all  notices  whatsoever  and any
requirement that any holder of a Note exhaust any right, power or remedy against
the  Company  under  this  Agreement  or the  Notes or any  other  agreement  or
instrument  referred to herein or therein, or against any other Person under any
other guarantee of, or security for, any of the Guaranteed Obligations.

                  (c) In the event that the Guarantor  shall at any time pay any
amount on  account of the  Guaranteed  Obligations  or take any other  action in
performance of its obligations  hereunder,  the Guarantor shall not exercise any
subrogation  or other  rights  hereunder or the Notes and the  Guarantor  hereby
waives all rights it may have to exercise any such  subrogation or other rights,
and all other  remedies that it may have against the Company,  in respect of any
payment made hereunder  unless and until the Guaranteed  Obligations  shall have
been  indefeasibly paid in full. If any amount shall be paid to the Guarantor on
account of any such  subrogation  rights or other  remedy,  notwithstanding  the
waiver  thereof,  such amount  shall be received in trust for the benefit of the
holders of the Notes and shall  forthwith be paid to such holders to be credited
and applied upon the Guaranteed  Obligations,  whether matured or unmatured,  in
accordance  with the terms  hereof.  The Guarantor  agrees that its  obligations
under this  Section 13 shall be  automatically  reinstated  if and to the extent
that for any reason any payment  (including  payment in full) by or on behalf of
the Company is rescinded or must be otherwise  restored by any holder of a Note,
whether  as a result of any  proceedings  in  bankruptcy  or  reorganization  or
otherwise, all as though such amount had not been paid.

                  The guarantee in this Section 13 is a continuing guarantee and
shall apply to the Guaranteed  Obligations whenever arising. Each default in the
payment or performance of any of the Guaranteed Obligations shall give rise to a
separate claim and cause of action  hereunder,  and separate claims or suits may
be made and brought, as the case may be, hereunder as each such default occurs.

0.0.0.4.47  Guarantees Endorsed on the Notes

                  Each Note  shall  have  endorsed  thereon a  Guarantee  of the
Guarantor in the form of Exhibit 1-C.

0.0.0.4.48         REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES

0.0.0.4.49         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 neither Obligor shall 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.

0.0.0.4.50         Transfer and Exchange of Notes

                  (a)      No holder of a Note shall  transfer  such Note or any
portion thereof to a Competitor.

                  (b) Subject to clause (a),  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 (in a standard form)
duly  executed  by the  registered  holder  of such  Note or his  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 the same 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 Exhibit 1-A or 1-B,
as the case may be,  and shall  have the  Guarantee  of the  Guarantor  endorsed
thereon.  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 and integral  multiples of
$5,000 in excess thereof,  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.

0.0.0.4.51         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

                  0.0.0.4.52 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  in
         excess of the outstanding  principal amount of such Note, such Person's
         own   unsecured   agreement  of   indemnity   shall  be  deemed  to  be
         satisfactory), or

                  0.0.0.4.53        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 the same  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, and having the Guarantee of the Guarantor
endorsed thereon.

0.0.0.4.54         PAYMENTS ON NOTES

0.0.0.4.55         Place of Payment

                  Subject to Section  15.2,  payments of  principal,  Make-Whole
Amount, if any, and interest becoming due and payable on the Notes shall be made
in New York,  New York at the  principal  office of The Bank of New York 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.

0.0.0.4.56         Home Office Payment

                  So long as any  Purchaser  or any  nominee  of such  Purchaser
shall be the  holder of any Note,  and  notwithstanding  anything  contained  in
Section  15.1 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  such
Purchaser's name in Schedule A, or by such other method or at such other address
as such  Purchaser  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,  such  Purchaser  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 15.1. Prior to any sale or other  disposition
of any  Note  held by any  Purchaser  or any  nominee  of such  Purchaser,  such
Purchaser will, at its 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 14.2(b). The Company will afford the benefits of this Section 15.2 to
any Institutional Investor that is the direct or indirect transferee of any Note
purchased  by any  Purchaser  under  this  Agreement  and that has made the same
agreement  relating  to such Note as the  Purchasers  have made in this  Section
15.2.

0.0.0.4.57         EXPENSES, ETC

0.0.0.4.58         Transaction Expenses

                  Whether  or  not  the  transactions  contemplated  hereby  are
consummated,  the Obligors will pay all costs and expenses (including reasonable
attorneys' fees of a special counsel and, if reasonably required, local or other
counsel)  incurred  by the  Purchasers  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,  the Notes or any Subsidiary
Guarantee (whether or not such amendment,  waiver or consent becomes effective),
including,  without limitation: (a) the costs and expenses incurred in enforcing
or defending any rights against either Obligor or any Subsidiary Guarantor under
this Agreement,  the Notes or any Subsidiary Guarantee,  or in responding to any
subpoena  or other  legal  process or informal  investigative  demand  issued in
connection with this  Agreement,  the Notes or any Subsidiary  Guarantee,  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 Guarantor, the Company or any Subsidiary or in connection with
any work-out or restructuring of the transactions contemplated hereby and by the
Notes. The Obligors will pay, and will save each Purchaser 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 such  Purchaser  or
other holder).

0.0.0.4.59        Survival

                  The  obligations  of the  Obligors  under this Section 16 will
survive  the  payment or transfer of any Note,  the  enforcement,  amendment  or
waiver of any  provision  of this  Agreement,  any  Subsidiary  Guarantee or the
Notes, and the termination of this Agreement.

0.0.0.4.60         SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT

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

0.0.0.4.61         AMENDMENT AND WAIVER

0.0.0.4.62         Requirements

                  This  Agreement  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
Obligors and the Required Holders, except that (a) no amendment or waiver of any
of the  provisions of Section 1, 2, 3, 4, 5, 6 or 22, or any defined term (as it
is used therein),  will be effective as to any Purchaser  unless consented to by
such Purchaser in writing,  and (b) no such amendment or waiver may, without the
written  consent  of the  holder of each Note 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,  (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, 13, 18 or 21.

0.0.0.4.63         Solicitation of Holders of Notes


                  0.0.0.4.64 Solicitation. The Obligors 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 Obligors will deliver  executed or true
and correct copies of each amendment, waiver or consent effected pursuant to the
provisions  of this  Section 18 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.


                 0.0.0.4.65 Payment. Neither Obligor will 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.

                  (c) Consent in  Contemplation  of  Transfer.  Any consent made
pursuant  to this  Section 18 by a holder of Notes that has  transferred  or has
agreed to transfer its Notes to either Obligor,  any Subsidiary or any Affiliate
of either Obligor and has provided or has agreed to provide such written consent
as a condition to such  transfer  shall be void and of no force or effect except
solely as to such holder,  and any amendments  effected or waivers granted or to
be effected  or granted  that would not have been or would not be so effected or
granted but for such  consent  (and the  consents of all other  holders of Notes
that were acquired under the same or similar conditions) shall be void and of no
force or effect except solely as to such holder.


0.0.0.4.66         Binding Effect, etc.

                  Any  amendment  or waiver  consented  to as  provided  in this
Section 18 applies  equally to all holders of Notes and is binding upon them and
upon each  future  holder of any Note and upon the  Obligors  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 either Obligor 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.

0.0.0.4.67         Notes held by Obligor, 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 either Obligor or any
Affiliate of either Obligor shall be deemed not to be outstanding.


0.0.0.4.68         NOTICES

                  All notices and communications provided for hereunder shall be
in  writing  and sent (a) by  telecopy  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:

                  0.0.0.5.         if to  any  Purchaser  or its  nominee,  to
         such  Purchaser  or  nominee  at  the  address   specified  for  such
         communications  in  Schedule  A,  or at  such  other  address  as such
         Purchaser or nominee shall have specified to the Company in writing,

                  0.0.0.6.         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,

                  0.0.0.7.         if to the  Company,  to the  Company at its
         address  set forth at the  beginning  hereof to the  attention  of the
         Chief Financial  Officer,  with a copy to the General  Counsel,  or at
         such other address as the Company  shall have  specified to the holder
         of each Note in writing, or

                  0.0.0.8. if to the Guarantor, to the Guarantor at its address
         set  forth  at the  beginning  hereof  to the  attention  of the  Chief
         Financial Officer, with a copy to the General Counsel, or at such other
         address as the  Guarantor  shall have  specified  to the holder of each
         Note in writing.

Notices under this Section 19 will be deemed given only when actually received.

0.0.0.8.1         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 Purchaser at the Closing (except the
Notes  themselves),  and  (c)  financial  statements,   certificates  and  other
information  previously  or  hereafter  furnished  to  any  Purchaser,   may  be
reproduced  by  such  Purchaser  by any  photographic,  photostatic,  microfilm,
microcard,  miniature  photographic  or other similar process and such Purchaser
may  destroy  any  original  document  so  reproduced.  The  Obligors  agree and
stipulate 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 such  Purchaser  in the  regular
course of business) and any  enlargement,  facsimile or further  reproduction of
such  reproduction  shall  likewise be admissible  in evidence.  This Section 20
shall not prohibit an Obligor 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.

0.0.0.8.2         CONFIDENTIAL INFORMATION

                  For  the   purposes   of  this   Section   21,   "Confidential
Information"  means  information  delivered to any  Purchaser by or on behalf of
either   Obligor  or  any  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 such  Purchaser  as being  confidential  information  of such
Obligor or such Subsidiary, provided that such term does not include information
that (a) was publicly known or otherwise  known to such  Purchaser  prior to the
time of such disclosure,  (b) subsequently becomes publicly known through no act
or omission by such Purchaser or any Person acting on such  Purchaser's  behalf,
(c) otherwise  becomes known to such Purchaser other than through  disclosure by
an Obligor or any Subsidiary or (d) constitutes  financial  statements delivered
to such Purchaser under Section 7.1 that are otherwise publicly available.  Each
Purchaser will maintain the confidentiality of such Confidential  Information in
accordance  with  procedures  adopted by such Purchaser in good faith to protect
confidential information of third parties delivered to such Purchaser,  provided
that such Purchaser may deliver or disclose Confidential Information to (i) such
Purchaser's  directors,  officers and employees  (to the extent such  disclosure
reasonably relates to the  administration of the investment  represented by such
Purchaser's  Notes),  (ii)  such  Purchaser's  affiliates,   agents,  attorneys,
financial   advisors  and  other   professional   advisors  who  agree  to  hold
confidential the  Confidential  Information in accordance with the terms of this
Section 21, (iii) any other holder of any Note, (iv) any Institutional  Investor
to which such Purchaser sells or offers 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  21),  (v) any Person from which such  Purchaser  offers to purchase any
security  of an Obligor  (if such  Person  has  agreed in  writing  prior to its
receipt of such  Confidential  Information to be bound by the provisions of this
Section 21), (vi) any federal or state regulatory  authority having jurisdiction
over such Purchaser,  (vii) the National Association of Insurance  Commissioners
or any similar  organization,  or any nationally  recognized  rating agency that
requires access to information  about such Purchaser's  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 such Purchaser,  (x) subject to the next succeeding  sentence,  in
response  to any  subpoena  or other  legal  process,  (y)  subject  to the next
succeeding  sentence,  in connection with any litigation to which such Purchaser
is a party or (z) if an Event of Default has occurred and is continuing,  to the
extent such Purchaser 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  such  Purchaser's  Notes,  this  Agreement  or any
Subsidiary Guarantee. If any Purchaser is required in respect of any subpoena or
other  legal  process or in  connection  with any  litigation  to  disclose  any
Confidential  Information,  it is agreed that,  to the extent  permitted by law,
such  Purchaser  will use its best  efforts to provide the  Company  with prompt
notice  of such  requirement  so  that  the  Company  may  seek  an  appropriate
protective  order.  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 21 as though it were a party to this Agreement. On reasonable request by
an  Obligor  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  Obligors
embodying the provisions of this Section 21.

0.0.0.8.3         SUBSTITUTION OF PURCHASER

                  Each  Purchaser  shall have the right to substitute any one of
such  Purchaser's  Affiliates as the purchaser of the Notes that such  Purchaser
has agreed to purchase hereunder, by written notice to the Company, which notice
shall be signed by both such  Purchaser 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,  any
reference to such  Purchaser in this  Agreement  (other than in this Section 22)
shall be deemed to refer to such  Affiliate in lieu of such original  Purchaser.
In the event that such Affiliate is so substituted as a purchaser  hereunder and
such Affiliate  thereafter transfers to such original Purchaser all of the Notes
then held by such  Affiliate,  upon  receipt  by the  Company  of notice of such
transfer,  any reference to such  Affiliate as a "Purchaser"  in this  Agreement
(other  than in this  Section  22)  shall no  longer  be deemed to refer to such
Affiliate,  but  shall  refer to such  original  Purchaser,  and  such  original
Purchaser  shall  again have all the rights of an  original  holder of the Notes
under this Agreement.

0.0.0.8.4         MISCELLANEOUS


0.0.0.8.5         Successors and Assigns

                  All covenants and other agreements contained in this Agreement
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.

0.0.0.8.6         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.

0.0.0.8.7         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.

0.0.0.8.8         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.

0.0.0.8.9         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.

0.0.0.8.10         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 New York  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. 

<PAGE>

                  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 and the Guarantor.

Very truly yours,
GTECH CORPORATION


By
Title:


GTECH HOLDINGS CORPORATION


By
Title:



<PAGE>


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

THE NORTHWESTERN MUTUAL LIFE
  INSURANCE COMPANY


By__________________________
  Title:


TEACHERS INSURANCE AND ANNUITY
  ASSOCIATION OF AMERICA


By__________________________
  Title:


ALLSTATE LIFE INSURANCE COMPANY


By__________________________
  Name:


By__________________________
  Name:

Authorized Signatories


THE VARIABLE ANNUITY LIFE
  INSURANCE COMPANY

AMERICAN GENERAL LIFE
  INSURANCE COMPANY


By__________________________
  Title:



<PAGE>


THE GUARDIAN LIFE INSURANCE
  COMPANY OF AMERICA


By__________________________
  Title:


THE GUARDIAN INSURANCE AND
  ANNUITY COMPANY, INC.


By__________________________
  Title:


FORT DEARBORN LIFE INSURANCE
  COMPANY


By__________________________
  Title:


HARTFORD LIFE INSURANCE COMPANY


By__________________________
  Title:


HARTFORD FIRE INSURANCE COMPANY


By__________________________
  Title:


HARTFORD LIFE AND ACCIDENT
  INSURANCE COMPANY


By__________________________
  Title:

THE LINCOLN NATIONAL LIFE
  INSURANCE COMPANY

By:      Lincoln Investment
         Management, Inc., its
         Attorney-In-Fact


By__________________________
  Title:


FIRST PENN-PACIFIC LIFE
  INSURANCE COMPANY

By:      Lincoln Investment
         Management, Inc., its
         Attorney-In-Fact


By__________________________
  Title:


LINCOLN NATIONAL REASSURANCE
  COMPANY

By:      Lincoln Investment
         Management, Inc., its
         Attorney-In-Fact


By__________________________
  Title:



<PAGE>


LINCOLN NATIONAL REINSURANCE
  COMPANY (BARBADOS) LTD.

By:      Lincoln Investment
         Management, Inc., its
         Attorney-In-Fact


By__________________________
  Title:


PACIFIC MUTUAL LIFE INSURANCE
  COMPANY


By__________________________
  Title:


LIFE INVESTORS INSURANCE COMPANY
  OF AMERICA


By__________________________
  Title:


MONUMENTAL LIFE INSURANCE COMPANY


By__________________________
  Title:


PFL LIFE INSURANCE COMPANY


By__________________________
  Title:



<PAGE>


THE EQUITABLE LIFE ASSURANCE
  SOCIETY OF THE UNITED STATES


By__________________________
  Title:


THE EQUITABLE OF COLORADO, INC.


By__________________________
  Title:


RELIASTAR BANKERS SECURITY
  LIFE INSURANCE COMPANY


By__________________________
  Title:


RELIASTAR LIFE INSURANCE COMPANY


By__________________________
  Title:


RELIASTAR UNITED SERVICES
  LIFE INSURANCE COMPANY


By__________________________
  Title:


NORTHERN LIFE INSURANCE COMPANY


By__________________________
  Title:

<PAGE>


WASHINGTON SQUARE ADVISORS
  PRIVATE PLACEMENT TRUST FUND


By__________________________
  Its:     Investment Advisor and
           Authorized Signatory


KEYPORT LIFE INSURANCE COMPANY

By Stein Roe & Farnham
  Incorporated, as Agent


By__________________________
  Senior Vice President


CONNECTICUT GENERAL LIFE
  INSURANCE COMPANY

By CIGNA Investments, Inc.


  By__________________________
    Name:
    Title:


CONNECTICUT GENERAL LIFE
  INSURANCE COMPANY, on
  behalf of one or more
  separate accounts

By CIGNA Investments, Inc.


  By__________________________
    Name:
    Title:



<PAGE>


LIFE INSURANCE COMPANY OF
  NORTH AMERICA

By CIGNA Investments, Inc.


  By__________________________
    Name:
    Title:


PRINCIPAL MUTUAL LIFE
  INSURANCE COMPANY


By__________________________
  Title:


By__________________________
  Title:


<PAGE>


AMERICAN LIFE & CASUALTY INSURANCE COMPANY


By__________________________
  Title:


By__________________________
  Title:



<PAGE>


 INFORMATION  RELATING TO PURCHASERS


 Name and Address of Purchaser       Series    Principal Amount

THE NORTHWESTERN MUTUAL                       A      $10,000,000
  LIFE INSURANCE COMPANY                      B      $20,000,000



<PAGE>



(1)      All payments on account of the Notes shall be made by wire transfer
         of immediately available funds to:

         Bankers Trust Company
         16 Wall Street
         Insurance Unit, 4th Floor
         New York, NY 10005
         ABA #021001033
         Name: The Northwestern Mutual Life Insurance Company
         Account No.: 00-000-027

         with  sufficient  information to identify the source and application of
         such funds, including the PPN of the issue.

(2)      Address for all notices in respect of payment and written
         confirmations of such wire transfers:

         The Northwestern Mutual Life Insurance Company
         720 East Wisconsin Avenue
         Milwaukee, WI 53202
         Attn: Investment Operations
         Telecopy:  (414) 299-5714

(3)      Securities to be delivered to:

         The Northwestern Mutual Life Insurance Company
         720 East Wisconsin Avenue
         Milwaukee, WI 53202
         Attn: Mark C. Boyle, Law Department
         Telecopy:  (414) 299-7016

(4)      Address for all other communications:

         The Northwestern Mutual Life Insurance Company
         720 East Wisconsin Avenue
         Milwaukee, WI 53202
         Attn: Securities Department
         Telecopy:  (414) 299-7124

(5)      The Northwestern Mutual Life Insurance Company
         Tax ID No. 39-0509570

<PAGE>


Name and Address of Purchaser             Series         Principal Amount

TEACHERS INSURANCE AND ANNUITY                B          $30,000,000
  ASSOCIATION OF AMERICA



<PAGE>


(1)      All payments on account of the Notes shall be made by wire transfer
         of immediately available funds to:

         Chase Manhattan Bank
         ABA No. 021000021
         New York, New York
         Account of: Teachers Insurance and Annuity
                             Association of America
                          Account Number: 910-2-766475
                         On order of: GTECH Corporation

         with  sufficient  information to identify the source and application of
         such funds as "GTECH Corporation 7.87% Series B Guaranteed Senior Notes
         due 2007 (principal or interest).

(2)      Address for all notices in respect of payments and written
         confirmations of such wire transfers:

         Teachers Insurance and Annuity
           Association of America
         730 Third Avenue
         New York, New York 10017
         Attn: Securities Accounting Division
         Telephone: (212) 916-4188
         Telecopy:  (212) 916-6955

(3)      Address for all other communications:

         Teachers Insurance and Annuity
           Association of America
         730 Third Avenue
         New York, New York 10017
         Attn: Securities Division, Private Placements
         Telephone: (212) 916-4720 (F. Haifen Tao)
                       (212) 490-9000 (general)
         Telecopy:  (212) 916-6582

(4)      Teachers Insurance and Annuity Association of America Tax ID No.
         13-1624203

<PAGE>


  Name and Address of Purchaser    Series      Principal Amount

ALLSTATE LIFE INSURANCE COMPANY       A        $11,000,000
                                                 
                                      A        $5,500,000
                                                 
                                      A        $3,000,000
                                                 
                                      A        $5,500,000



<PAGE>


(1)      All payments on account of the Notes shall be made by wire transfer
         of immediately available funds to:

         BBK = Harris Trust and Savings Bank
                  ABA #071000288
         BNF = Allstate Life Insurance Company
                  Collection Account # 168-117-0
         ORG = GTECH Corporation
         OBI = DPP

         with  sufficient  information to identify the source and application of
         such funds,  including  the PPN preceded by "DPP",  payment  date,  and
         principal, premium or interest on the security.

(2)      Address for all notices in respect of payments and written
         confirmations of such wire transfers:

         Allstate Insurance Company
         Investment Operations - Private Placements
         3075 Sanders Road, STE G4A
         Northbrook, IL 60062-7127
         Telephone: (847) 402- 8709
         Telecopy:  (847) 402-7331

(3)      Securities to be delivered to:

         Citibank, Federal Savings Bank
         Citicorp Center, 500 West Madison
         4th Floor, Zone 6
         Chicago, IL 60661-2591
         Attention: Misty Gniadek
         For Allstate Life Insurance Company/
         Safekeeping Account No. 846627

(4)      Address for all other communications and notices:

         Allstate Life Insurance Company
         Private Placements Department
         3075 Sanders Road, STE G3A
         Northbrook, IL 60062-7127
         Telephone: (847) 402-4394
         Telecopy:  (847) 402-3092

(5)      Allstate Life Insurance Company
                                                    Tax ID No. 36-2554642

<PAGE>


 Name and Address of Purchaser            Series     Principal Amount

THE VARIABLE ANNUITY LIFE                     B      $15,000,000
  INSURANCE COMPANY



<PAGE>



(1)      All payments on account of the Notes shall be made by wire transfer
         of immediately available funds to:

         ABA #011000028
         State Street Bank and Trust Company
         Boston, MA 02101
         Re: The Variable Annuity Life Insurance Company
         AC-0125-821-9
         OBI = PPN # and description of payment
         Fund Number PA 54

         with  sufficient  information to identify the source and application of
         such funds, including the PPN #, interest rate, maturity date, interest
         amount, principal amount and premium amount, if applicable.

(2)      Address for all notices in respect of payment and all         other
communications:

         The Variable Annuity Life
           Insurance Company and PA 54
         c/o State Street Bank and Trust Company
         Insurance Services Custody (AH2)
         1776 Heritage Drive
         North Quincy, MA 02171
         Telecopy:  (617) 985-4923

(3)      Duplicate payment notices and all other correspondence:

         The Variable Annuity Life Insurance Company
         c/o American General Corporation
         Attn: Investment Research Department, A37-01
         P.O. Box 3247
         Houston, TX 77253-3247

         Overnight Mail Address:
         2929 Allen Parkway
         Houston, Texas 77019-2155
         Telecopy:  (713) 831-1366

(4)      The Variable Annuity Life Insurance Company
                                                     Tax ID No. 74-1625348

<PAGE>


  Name and Address of Purchaser          Series     Principal Amount

AMERICAN GENERAL LIFE                         B      $10,000,000
  INSURANCE COMPANY



<PAGE>



(1)      All payments on account of the Notes shall be made by wire transfer
         of immediately available funds to:

         ABA #011000028
         State Street Bank and Trust Company
         Boston, MA 02101
         Re: American General Life Insurance Company
         AC-0125-880-5
         OBI = PPN # and description of payment
         Fund Number PA 40

         with  sufficient  information to identify the source and application of
         such funds, including the PPN #, interest rate, maturity date, interest
         amount, principal amount and premium amount, if applicable.

(2)      Address for all notices in respect of payment and all         other
communications:

         American General Life
           Insurance Company and PA 40
         c/o State Street Bank and Trust Company
         Insurance Services Custody (AH2)
         1776 Heritage Drive
         North Quincy, MA 02171
         Telecopy:  (617) 985-4923

(3)      Duplicate payment notices and all other correspondence:

         American General Life Insurance Company
         c/o American General Corporation
         Attn: Investment Research Department, A37-01
         P.O. Box 3247
         Houston, TX 77253-3247

         Overnight Mail Address:
         2929 Allen Parkway
         Houston, Texas 77019-2155
         Telecopy:  (713) 831-1366

(4)      American General Life Insurance Company
                                                     Tax ID No. 25-0598210

<PAGE>


  Name and Address of Purchaser      Series        Principal Amount

THE GUARDIAN LIFE INSURANCE              B            $5,000,000
  COMPANY OF AMERICA                     B            $5,000,000
                                         B            $5,000,000
                                         B            $5,000,000

(Note registered in the name of Cudd & Co.)



<PAGE>



(1)      All payments on account of the Notes shall be made by wire transfer
         of immediately available funds to:

         The  Chase  Manhattan  Bank FED ABA  #021000021  CHASE/NYC/CTR/BNF  A/C
         900-9-000200 The Guardian A/C #G05978

         with sufficient information to identify the source and application of
         such funds.

(2)      Address for all notices in respect of payment and    written
confirmation of such wire transfer:

         The Guardian Life Insurance Company of America
         Attn: Investment Accounting M-IA
         201 Park Avenue South
         New York, NY 10003
         Telecopy:  (212) 677-9023

(3)      Securities to be delivered to:

         Chase Manhattan Bank
         4 New York Plaza
         Ground Floor/Receive Window
         New York, NY 10081
         Re: The Guardian Account #G05978
         Attention:  Frank Taylor (212-623-8125)

(4)      Address for all other communications and notices:

         The Guardian Life Insurance Company of America
         201 Park Avenue South
         New York, NY 10003
         Attn: Raymond J. Henry
               Investment Department 7B
               Telecopy: (212) 777-6715

(5)      Cudd & Co. Tax ID No. 13-6022143

<PAGE>


Name and Address of Purchaser      Series  Principal Amount

THE GUARDIAN INSURANCE AND            A     $3,000,000
  ANNUITY COMPANY, INC.


(Note registered in the name of Sigler & Company)



<PAGE>



(1)      All payments on account of the Notes shall be made by wire transfer
         of immediately available funds to:

         Chase Manhattan Bank
         ABA #021000021
         For account #544755102
         Reference #MR9228419

         with sufficient information to identify the source and application of
         such funds.

(2)      Address for all notices in respect of payment and    written
confirmation of such wire transfer:

         The Guardian Life Insurance Company of America
         Attn: Investment Accounting MIA
         201 Park Avenue South
         New York, NY 10003
         Telecopy:  (212) 677-9023

(3)      Securities to be delivered to:

         Chase Manhattan Bank
         Attn: Frank Taylor
         4 New York Plaza
         Ground Floor/Receive Window
         New York, NY 10004
         Re: Account # at Chase: MR9228419

(4)      Address for all other communications and notices:

         The Guardian Life Insurance Company of America
         201 Park Avenue South
         New York, NY 10003
         Attn: Raymond J. Henry
               Investment Department 7B
               Telecopy:  (212) 777-6715

         Portfolio Manager: Raymond Henry (212) 598-7995
         Inquires concerning confirmations:
                  Dorene Smith (212) 598-8234

(5)      Sigler & Company Tax ID No. 13-3641527

<PAGE>




Name and Address of Purchaser     Series          Principal Amount

FORT DEARBORN LIFE                  A               $2,000,000
  INSURANCE COMPANY


(Note registered in the name of Var & Co.)



<PAGE>



(1)      All payments on account of the Notes shall be made by wire transfer
         of immediately available funds to:

         First Bank Minneapolis
         ABA #091000022
         For further credit to First Trust Illinois
         Account 1-801-21167365
         Wire Clearing Account 47300098
         Attn: A/C #78693302 Fort Dearborn Life

         with sufficient information to identify the source and application of
         such funds.

(2)      Address for all notices in respect of payment and all         other
communications:

         Fort Dearborn Life Insurance Company
         c/o Guardian Asset Management Corp.
         Fixed Income Securities
         201 Park Avenue South - 8B
         New York, NY 10003

         Direct inquires concerning confirmations:
         Helaine Linder (212) 598-8239

(3)      Securities to be delivered to:

         First Trust N.A.
         Attn: Physical Unit
         Asset Settlement Services
         Fourth Floor
         180 East 5th Street
         St. Paul, MN 55101

                                            (5)      Var & Co. Tax ID No.
                                                              41-6026203

<PAGE>


Name and Address of Purchaser      Series   Principal Amount

HARTFORD LIFE INSURANCE COMPANY       A     $4,000,000
                                      B     $3,000,000



<PAGE>



(1)      All payments on account of the Notes shall be made by wire transfer
         of immediately available funds to:

         Chase Manhattan Bank
         4 New York Plaza
         New York, NY 10004
         Bank ABA #021000021
         Chase NYC/Cust
         A/C #900-9-000200 for F/C/T G 06641 - CRC
         Attn: Bond Interest/Principal -
         GTECH Corporation Guaranteed Senior Notes

         with  sufficient  information to identify the source and application of
         such funds,  including PPN,  payment date,  and  principal,  premium or
         interest on the security.

(2)      Address for all notices in respect of payment and    written
         confirmation of such wire transfer:

         Hartford Investment Management Company
         c/o Portfolio Support
         P.O. Box 1744
         Hartford, CT 06114-1744
         Telecopy: (860) 843-3857

(3)      Securities to be delivered to:

         Chase Manhattan Bank
         4 New York Plaza
         Ground Floor Window
         New York, NY 10004
         Custody Account Number: G-06641*
         Account Name: Hartford Life
                  Insurance Company - CRC
         *Account number must appear on outside of envelope enclosing physical
         securities.

(4)      Address for all other communications and notices:

         Hartford Investment Management Company
         c/o Investment Department - Private Placements
         P.O. Box 1744
         Hartford, CT 06114-1744
         Telecopy:  (860) 843-4906

(5)      Hartford Life Insurance Company
                                                     Tax ID No. 06-0974148

<PAGE>


Name and Address of Purchaser       Series  Principal Amount

HARTFORD FIRE INSURANCE COMPANY       A     $6,000,000



<PAGE>



(1)      All payments on account of the Notes shall be made by wire transfer
         of immediately available funds to:

         Chase Manhattan Bank
         4 New York Plaza
         New York, NY 10004
         Bank ABA #021000021
         Chase NYC/Cust
         A/C #900-9-000200 for F/C/T G 06244 - FHO
         Attn: Bond Interest/Principal -
         GTECH Corporation Guaranteed Senior Notes

         with  sufficient  information to identify the source and application of
         such funds,  including PPN,  payment date,  and  principal,  premium or
         interest on the security.

(2)      Address for all notices in respect of payment and    written
         confirmation of such wire transfer:

         Hartford Investment Management Company
         c/o Portfolio Support
         P.O. Box 1744
         Hartford, CT 06114-1744
         Telecopy: (860) 843-3857

(3)      Securities to be delivered to:

         Chase Manhattan Bank
         4 New York Plaza
         Ground Floor Window
         New York, NY 10004
         Custody Account Number: G-06244*
         Account Name: Hartford Fire
                  Insurance Company - FHO
         *Account number must appear on outside of envelope enclosing physical
         securities.

(4)      Address for all other communications and notices:

         Hartford Investment Management Company
         c/o Investment Department - Private Placements
         P.O. Box 1744
         Hartford, CT 06114-1744
         Telecopy:  (860) 843-4906

(5)      Hartford Fire Insurance Company
                                                     Tax ID No. 06-0383750

<PAGE>


 Name and Address of Purchaser    Series   Principal Amount

HARTFORD LIFE INSURANCE COMPANY       B     $6,000,000



<PAGE>



(1)      All payments on account of the Notes shall be made by wire transfer
         of immediately available funds to:

         Chase Manhattan Bank
         4 New York Plaza
         New York, NY 10004
         Bank ABA #021000021
         Chase NYC/Cust
         A/C #900-9-000200 for F/C/T G 06612 - HVA
         Attn: Bond Interest/Principal -
         GTECH Corporation Guaranteed Senior Notes

         with  sufficient  information to identify the source and application of
         such funds,  including PPN,  payment date,  and  principal,  premium or
         interest on the security.

(2)      Address for all notices in respect of payment and    written
         confirmation of such wire transfer:

         Hartford Investment Management Company
         c/o Portfolio Support
         P.O. Box 1744
         Hartford, CT 06114-1744
         Telecopy: (860) 843-3857

(3)      Securities to be delivered to:

         Chase Manhattan Bank
         4 New York Plaza
         Ground Floor Window
         New York, NY 10004
         Custody Account Number: G-06612*
         Account Name: Hartford Life
                  Insurance Company - HVA
         *Account number must appear on outside of envelope enclosing physical
         securities.

(4)      Address for all other communications and notices:

         Hartford Investment Management Company
         c/o Investment Department - Private Placements
         P.O. Box 1744
         Hartford, CT 06114-1744
         Telecopy:  (860) 843-4906

(5)      Hartford Life Insurance Company
                                                     Tax ID No. 06-0974148

<PAGE>


 Name and Address of Purchaser      Series          Principal Amount

HARTFORD LIFE AND ACCIDENT             B            $6,000,000
  INSURANCE COMPANY




<PAGE>



(1)      All payments on account of the Notes shall be made by wire transfer
         of immediately available funds to:

         Chase Manhattan Bank
         4 New York Plaza
         New York, NY 10004
         Bank ABA #021000021
         Chase NYC/Cust
         A/C #900-9-000200 for F/C/T G 06956 - EBD
         Attn: Bond Interest/Principal -
         GTECH Corporation Guaranteed Senior Notes

         with  sufficient  information to identify the source and application of
         such funds,  including PPN,  payment date,  and  principal,  premium or
         interest on the security.

(2)      Address for all notices in respect of payment and    written
         confirmation of such wire transfer:

         Hartford Investment Management Company
         c/o Portfolio Support
         P.O. Box 1744
         Hartford, CT 06114-1744
         Telecopy: (860) 843-3857

(3)      Securities to be delivered to:

         Chase Manhattan Bank
         4 New York Plaza
         Ground Floor Window
         New York, NY 10004
         Custody Account Number: G-06956*
         Account Name: Hartford Life and Accident
                  Insurance Company - EBD
         *Account number must appear on outside of envelope enclosing physical
         securities.

(4)      Address for all other communications and notices:

         Hartford Investment Management Company
         c/o Investment Department - Private Placements
         P.O. Box 1744
         Hartford, CT 06114-1744
         Telecopy:  (860) 843-4906

(5)      Hartford Life Insurance Company
                                                     Tax ID No. 06-0838648

<PAGE>


 Name and Address of Purchaser        Series      Principal Amount

THE LINCOLN NATIONAL LIFE               B         $4,500,000
  INSURANCE COMPANY



<PAGE>



(1)      All payments on account of the Notes shall be made by wire transfer
         of immediately available funds to:

         Bankers Trust Company
         New York, NY: ABA #021001033
         Private Placement Processing
         A/C #99-911-145
         The Lincoln National Life Insurance Company (UIN)
         Custody Account Number: 98127

         with sufficient information to identify the source and application of
         such funds.

(2)      Address for all notices in respect of payment and    written
confirmation of such wire transfer:

         Bankers Trust Company
         Attn: Private Placement Unit
         P.O. Box 998; Bowling Green Station
         New York, NY 10274

(3)      Securities to be delivered to:

         Bankers Trust Company
         14 Wall Street
         4th Floor, Window #44
         New York, NY 10005
         Attn: Lorraine Squires
               Mail Stop 4049
               Telephone: (212) 618-2200

(4)      Address for all other communications and notices:

         Lincoln Investment Management, Inc.
         200 East Berry Street
         Renaissance Square
         Fort Wayne, IN 46802
         Attn: Investments/Private Placements

(5)      The Lincoln National Life Insurance Company
                                                     Tax ID No. 35-0472300

<PAGE>


Name and Address of Purchaser    Series        Principal Amount

THE LINCOLN NATIONAL LIFE          B           $2,500,000
  INSURANCE COMPANY



<PAGE>



(1)      All payments on account of the Notes shall be made by wire transfer
         of immediately available funds to:

         Bankers Trust Company
         New York, NY: ABA #021001033
         Private Placement Processing
         A/C #99-911-145
         The Lincoln National Life Insurance Company (IAD)
         Custody Account Number: 98195

         with sufficient information to identify the source and application of
         such funds.

(2)      Address for all notices in respect of payment and    written
confirmation of such wire transfer:

         Bankers Trust Company
         Attn: Private Placement Unit
         P.O. Box 998; Bowling Green Station
         New York, NY 10274

(3)      Securities to be delivered to:

         Bankers Trust Company
         14 Wall Street
         4th Floor, Window #44
         New York, NY 10005
         Attn: Lorraine Squires
               Mail Stop 4049
               Telephone: (212) 618-2200

(4)      Address for all other communications and notices:

         Lincoln Investment Management, Inc.
         200 East Berry Street
         Renaissance Square
         Fort Wayne, IN 46802
         Attn: Investments/Private Placements

(5)      The Lincoln National Life Insurance Company
                                                     Tax ID No. 35-0472300

<PAGE>


  Name and Address of Purchaser     Series         Principal Amount

THE LINCOLN NATIONAL LIFE             B           $2,500,000
  INSURANCE COMPANY



<PAGE>



(1)      All payments on account of the Notes shall be made by wire transfer
         of immediately available funds to:

         Bankers Trust Company
         New York, NY: ABA #021001033
         Private Placement Processing
         A/C #99-911-145
         The Lincoln National Life Insurance Company (IDP)
         Custody Account Number: 98131

         with sufficient information to identify the source and application of
         such funds.

(2)      Address for all notices in respect of payment and    written
confirmation of such wire transfer:

         Bankers Trust Company
         Attn: Private Placement Unit
         P.O. Box 998; Bowling Green Station
         New York, NY 10274

(3)      Securities to be delivered to:

         Bankers Trust Company
         14 Wall Street
         4th Floor, Window #44
         New York, NY 10005
         Attn: Lorraine Squires
               Mail Stop 4049
               Telephone: (212) 618-2200

(4)      Address for all other communications and notices:

         Lincoln Investment Management, Inc.
         200 East Berry Street
         Renaissance Square
         Fort Wayne, IN 46802
         Attn: Investments/Private Placements

(5)      The Lincoln National Life Insurance Company
                                                     Tax ID No. 35-0472300

<PAGE>


 Name and Address of Purchaser    Series           Principal Amount

THE LINCOLN NATIONAL LIFE           B              $2,500,000
  INSURANCE COMPANY



<PAGE>



(1)      All payments on account of the Notes shall be made by wire transfer
         of immediately available funds to:

         Bankers Trust Company
         New York, NY: ABA #021001033
         Private Placement Processing
         A/C #99-911-145
         The Lincoln National Life Insurance Company (CRP)
         Custody Account Number: 98231

         with sufficient information to identify the source and application of
         such funds.

(2)      Address for all notices in respect of payment and    written
confirmation of such wire transfer:

         Bankers Trust Company
         Attn: Private Placement Unit
         P.O. Box 998; Bowling Green Station
         New York, NY 10274

(3)      Securities to be delivered to:

         Bankers Trust Company
         14 Wall Street
         4th Floor, Window #44
         New York, NY 10005
         Attn: Lorraine Squires
               Mail Stop 4049
               Telephone: (212) 618-2200

(4)      Address for all other communications and notices:

         Lincoln Investment Management, Inc.
         200 East Berry Street
         Renaissance Square
         Fort Wayne, IN 46802
         Attn: Investments/Private Placements

(5)      The Lincoln National Life Insurance Company
                                                     Tax ID No. 35-0472300

<PAGE>


Name and Address of Purchaser   Series    Principal Amount

THE LINCOLN NATIONAL LIFE          B      $5,000,000
  INSURANCE COMPANY



<PAGE>



(1)      All payments on account of the Notes shall be made by wire transfer
         of immediately available funds to:

         Bankers Trust Company
         New York, NY: ABA #021001033
         Private Placement Processing
         A/C #99-911-145
         The Lincoln National Life Insurance Company (IAL)
         Custody Account Number: 98194

         with sufficient information to identify the source and application of
         such funds.

(2)      Address for all notices in respect of payment and    written
confirmation of such wire transfer:

         Bankers Trust Company
         Attn: Private Placement Unit
         P.O. Box 998; Bowling Green Station
         New York, NY 10274

(3)      Securities to be delivered to:

         Bankers Trust Company
         14 Wall Street
         4th Floor, Window #44
         New York, NY 10005
         Attn: Lorraine Squires
               Mail Stop 4049
               Telephone: (212) 618-2200

(4)      Address for all other communications and notices:

         Lincoln Investment Management, Inc.
         200 East Berry Street
         Renaissance Square
         Fort Wayne, IN 46802
         Attn: Investments/Private Placements

(5)      The Lincoln National Life Insurance Company
                                                     Tax ID No. 35-0472300

<PAGE>


Name and Address of Purchaser       Series       Principal Amount

THE LINCOLN NATIONAL LIFE             B          $1,000,000
  INSURANCE COMPANY



<PAGE>



(1)      All payments on account of the Notes shall be made by wire transfer
         of immediately available funds to:

         Bankers Trust Company
         New York, NY: ABA #021001033
         Private Placement Processing
         A/C #99-911-145
         The Lincoln National Life Insurance Company (REO)
         Custody Account Number: 98149

         with sufficient information to identify the source and application of
         such funds.

(2)      Address for all notices in respect of payment and    written
confirmation of such wire transfer:

         Bankers Trust Company
         Attn: Private Placement Unit
         P.O. Box 998; Bowling Green Station
         New York, NY 10274

(3)      Securities to be delivered to:

         Bankers Trust Company
         14 Wall Street
         4th Floor, Window #44
         New York, NY 10005
         Attn: Lorraine Squires
               Mail Stop 4049
               Telephone: (212) 618-2200

(4)      Address for all other communications and notices:

         Lincoln Investment Management, Inc.
         200 East Berry Street
         Renaissance Square
         Fort Wayne, IN 46802
         Attn: Investments/Private Placements

(5)      The Lincoln National Life Insurance Company
                                                     Tax ID No. 35-0472300

<PAGE>


Name and Address of Purchaser        Series        Principal Amount

THE LINCOLN NATIONAL LIFE              B           $1,000,000
  INSURANCE COMPANY

 

<PAGE>



(1)      All payments on account of the Notes shall be made by wire transfer
         of immediately available funds to:

         Bankers Trust Company
         New York, NY: ABA #021001033
         Private Placement Processing
         A/C #99-911-145
         The Lincoln National Life Insurance Company (FRA)
         Custody Account Number: 98187

         with sufficient information to identify the source and application of
         such funds.

(2)      Address for all notices in respect of payment and    written
confirmation of such wire transfer:

         Bankers Trust Company
         Attn: Private Placement Unit
         P.O. Box 998; Bowling Green Station
         New York, NY 10274

(3)      Securities to be delivered to:

         Bankers Trust Company
         14 Wall Street
         4th Floor, Window #44
         New York, NY 10005
         Attn: Lorraine Squires
               Mail Stop 4049
               Telephone: (212) 618-2200

(4)      Address for all other communications and notices:

         Lincoln Investment Management, Inc.
         200 East Berry Street
         Renaissance Square
         Fort Wayne, IN 46802
         Attn: Investments/Private Placements

(5)      The Lincoln National Life Insurance Company
                                                     Tax ID No. 35-0472300

<PAGE>


Name and Address of Purchaser     Series            Principal Amount

FIRST PENN-PACIFIC LIFE           B                     $4,500,000
  INSURANCE COMPANY

(Note registered in the name of CUDD & CO.)


<PAGE>



(1)      All payments on account of the Notes shall be made by wire transfer
         of immediately available funds to:

         Chase Manhattan Bank
         New York, NY
         ABA #021000021
         A/C #900-9-000200
         Further Credit to A/C: G-05996 First Penn-Pacific
         Life Insurance Company

         with  sufficient  information to identify the source and application of
         such funds,  including PPN,  payment date,  and  principal,  premium or
         interest on the security.

(2)      Address for all notices in respect of payment and    written
confirmation of such wire transfer:

         Lincoln Investment Management, Inc.
         200 East Berry Street
         Renaissance Square
         Fort Wayne, IN 46802
         Attn: Investment/Private Placements

(3)      Securities to be delivered to:

         Chase Manhattan Bank
         4 New York Plaza, 11th Floor
         New York, NY 10004
         Attn: Larry Zimmer
         For Account: G-05996 First Penn-Pacific Life         Insurance Company

                                            (4)      CUDD & CO. Tax ID No.
                                                              23-2044248

<PAGE>


Name and Address of Purchaser       Series            Principal Amount

LINCOLN NATIONAL REASSURANCE          B                $1,000,000
  COMPANY



<PAGE>



(1)      All payments on account of the Notes shall be made by wire transfer
         of immediately available funds to:

         Chase Manhattan Bank
         New York, NY
         ABA #021000021
         Chase NYC/CTR/BNF
         A/C #900-9-000200
         Further Credit to: G-06322 Lincoln National          Reassurance
Company

         with  sufficient  information to identify the source and application of
         such funds,  including PPN,  payment date,  and  principal,  premium or
         interest on the security.

(2)      Address for all notices in respect of payment and    written
         confirmation of such wire transfer:

         Lincoln Investment Management, Inc.
         200 East Berry Street
         Renaissance Square
         Fort Wayne, IN 46802
         Attn: Investment/Private Placements

(3)      Securities to be delivered to:

         Chase Manhattan Bank
         4 New York Plaza, 11th Floor
         New York, NY 10004
         Attn: Larry Zimmer
         For Account: G-06322 Lincoln National
                  Reassurance Company

(4)      Lincoln National Reassurance Company
                                                     Tax ID No. 06-1067046

<PAGE>


Name and Address of Purchaser    Series      Principal Amount

LINCOLN NATIONAL REINSURANCE       B         $500,000
  COMPANY (BARBADOS) LTD.
  (in Trust for Magna
  Insurance Company)


<PAGE>



(Note Registered in the name of Lincoln National Reinsurance Company
(Barbados) Ltd.)

(1)      All payments on account of the Notes shall be made by wire transfer
         of immediately available funds to:

         Chase Manhattan Bank
         New York, NY
         ABA #021000021
         Chase NYC/CTR/BNF
         A/C #900-9-000200
         Further Credit to: G-06910 Lincoln National Reins Co
(Barbados) Ltd. (in Trust for Magna Ins Co)

         with  sufficient  information to identify the source and application of
         such funds,  including PPN,  payment date,  and  principal,  premium or
         interest on the security.

(2)      Address for all notices in respect of payment and    written
         confirmation of such wire transfer:

         Lincoln Investment Management, Inc.
         200 East Berry Street
         Renaissance Square
         Fort Wayne, IN 46802
         Attn: Investment/Private Placements

(3)      Securities to be delivered to:

         Chase Manhattan Bank
         4 New York Plaza, 11th Floor
         New York, NY 10004
         Attn: Larry Zimmer
         For Account: G-06910 Lincoln National Reins Co       (Barbados) Ltd.
(in Trust for Magna Ins Co)

(4) Lincoln National
Reinsurance
Company
(Barbados) Ltd.
Tax ID No.
35-1716060

<PAGE>


Name and Address of Purchaser    Series        Principal Amount

PACIFIC MUTUAL LIFE                 A            $2,000,000
  INSURANCE COMPANY                 A            $2,000,000
                                    A            $2,000,000
                                    A            $2,000,000
                                    A            $2,000,000
                                    A            $2,000,000
                                    A            $2,000,000
                                    A            $2,000,000
                                    A            $2,000,000
                                    A            $2,000,000

(Notes registered in the name of Atwell & Co)



<PAGE>


(1)      All payments on account of the Notes shall be made by wire transfer
         of immediately available funds to:

         BBK = Chase Manhattan Bank/SSTO
         ABA #021000021
         A/C #900-9-002206
         A/C Name: Pacific Mutual General Account
         Sub A/C #47363300
         Regarding: Security Description & PPN

         with sufficient information to identify the source and application of
         such funds.

(2)      Securities to be delivered to:

         The Chase Manhattan Bank
         4 New York Plaza
         11th Floor Window
         New York, NY 10004
         Attn: Dave Calderon/Willie Frontis
         (212) 623-8122/8119
         A/C Name: Pacific Mutual General Account
         A/C #89930705

(3)      Atwell & Co
         General Tax ID No. 95-1079000
                                                     Private Placement Tax ID
                                                              No. 13-6065575

<PAGE>


Name and Address of Purchaser     Series           Principal Amount

LIFE INVESTORS INSURANCE            A                  $5,000,000
  COMPANY OF AMERICA


<PAGE>



(1)      All payments on account of the Notes shall be made by wire transfer
         of immediately available funds to:

         Citibank, N.A.
         111 Wall Street New York, NY 10043 ABA #021000089 DDA #36112805 Custody
         Account #847658

         with  sufficient  information to identify the source and application of
         such funds,  including CUSIP,  payment date, and principal,  premium or
         interest on the security.

(2)      Address for all notices in respect of payment and    written
confirmation of such wire transfer:

         AEGON USA Investment Management, Inc.
         Attn: Michael Meese
         4333 Edgewood Road N.E.
         Cedar Rapids, IA 52499-5112

(3)      Address for all other communications and notices:

         AEGON USA Investment Management, Inc.
         Attn: Director of Private Placements
         4333 Edgewood Road N.E.
         Cedar Rapids, IA 52499-5335
         Telecopy: (319) 369-2666

(5)      Life Investors Insurance Company of America
                                                     Tax ID No. 42-0191090

<PAGE>


Name and Address of Purchaser   Series         Principal Amount

MONUMENTAL LIFE                   A              $5,000,000
  INSURANCE COMPANY



<PAGE>



(1)      All payments on account of the Notes shall be made by wire transfer
         of immediately available funds to:

         Citibank, N.A.
         111 Wall Street New York, NY 10043 ABA #021000089 DDA #36112805 Custody
         Account #847785

         with  sufficient  information to identify the source and application of
         such funds,  including CUSIP,  payment date, and principal,  premium or
         interest on the security.

(2)      Address for all notices in respect of payment and    written
confirmation of such wire transfer:

         AEGON USA Investment Management, Inc.
         Attn: Michael Meese
         4333 Edgewood Road N.E.
         Cedar Rapids, IA 52499-5112

(3)      Address for all other communications and notices:

         AEGON USA Investment Management, Inc.
         Attn: Director of Private Placements
         4333 Edgewood Road N.E.
         Cedar Rapids, IA 52499-5335
         Telecopy: (319) 369-2666

(5)      Monumental Life Insurance Company
                                                     Tax ID No. 52-0419790

<PAGE>


Name and Address of Purchaser     Series            Principal Amount

PFL LIFE INSURANCE COMPANY          A                $5,000,000



<PAGE>



(1)      All payments on account of the Notes shall be made by wire transfer
         of immediately available funds to:

         Citibank, N.A.
         111 Wall Street New York, NY 10043 ABA #021000089 DDA #36112805 Custody
         Account #847659

         with  sufficient  information to identify the source and application of
         such funds,  including CUSIP,  payment date, and principal,  premium or
         interest on the security.

(2)      Address for all notices in respect of payment and    written
confirmation of such wire transfer:

         AEGON USA Investment Management, Inc.
         Attn: Michael Meese
         4333 Edgewood Road N.E.
         Cedar Rapids, IA 52499-5112

(3)      Address for all other communications and notices:

         AEGON USA Investment Management, Inc.
         Attn: Director of Private Placements
         4333 Edgewood Road N.E.
         Cedar Rapids, IA 52499-5335
         Telecopy: (319) 369-2666

(5)      PFL Life Insurance Company
                                                     Tax ID No. 39-0989781

<PAGE>


Name and Address of Purchaser       Series         Principal Amount

THE EQUITABLE LIFE ASSURANCE          A            $12,000,000
  SOCIETY OF THE UNITED STATES



<PAGE>



(1)      All payments on account of the Notes shall be made by wire transfer
         of immediately available funds to:

         The Chase Manhattan Bank, N.A.
         1251 Avenue of the Americas
         New York, NY 10020
         ABA #021-00-0021
         Account Name: The Equitable Life Assurance Society of
the United States
         Account #037-2-409417

         with  sufficient  information to identify the source and application of
         such funds,  including PPN,  payment date,  and  principal,  premium or
         interest on the security.

(2)      Address for all notices in respect of payment, written
confirmation of such wire transfer and all other     communications and
notices:

         The Equitable Life Assurance
         Society of the United States
         c/o Alliance Capital Management, L.P.
         1345 Avenue of the Americas
         New York, NY 10105
         Att:     Fixed Income Credit
                  Research Division, 38th Floor
                  Telephone: (212) 969-1488
                  Telecopy:  (212) 969-1466

(3)      Securities to be delivered to:

         The Equitable Life Assurance
         Society of the United States
         1290 Avenue of the Americas, 12th Floor
         New York, NY 10104
         Attn:    Cheryl L. Weitman
                  (212) 314-4141

(4) The Equitable Life
Assurance
Society of the
United States
Tax ID No.
13-5570651

<PAGE>


Name and Address of Purchaser      Series           Principal Amount

THE EQUITABLE OF COLORADO, INC.        A            $3,000,000




<PAGE>


(1)      All payments on account of the Notes shall be made by wire transfer
         of immediately available funds to:

         The Chase Manhattan Bank, N.A.
         1251 Avenue of the Americas
         New York, NY 10020
         ABA #021-00-0021
         Account Name: The Equitable of Colorado, Inc.
         Account #037-2-406389

         with  sufficient  information to identify the source and application of
         such funds,  including PPN,  payment date,  and  principal,  premium or
         interest on the security.

(2)      Address for all notices in respect of payment, written
confirmation of such wire transfer and all other     communications and
notices:

         The Equitable of Colorado, Inc.
         c/o Alliance Capital Management, L.P.
         135 West 50th Street, 5th Floor
         New York, NY 10020
         Attn:    Treasury Service

(3)      Securities to be delivered to:

         The Equitable Life Assurance
         Society of the United States
         1290 Avenue of the Americas, 12th Floor
         New York, NY 10104
         Attn:    Cheryl L. Weitman
                  (212) 314-4141

(4)      The Equitable of Colorado, Inc.
                                                     Tax ID No. 13-3198083

<PAGE>


Name and Address of Purchaser    Series                 Principal Amount

AMERICAN LIFE & CASUALTY           A                       $5,000,000
  INSURANCE COMPANY                B                       $10,000,000



<PAGE>


(Notes registered in the name of SALKELD & CO.)

(1)      All payments on account of the Notes shall be made by wire transfer
         of immediately available funds to:

         Bankers Trust Company
         New York, NY
         ABA #021-001-033
         DDA #00314421
         FFC:     American Life & Casualty Insurance Company
                  Account #99810

         with sufficient information to identify the source and application of
         such funds.

(2)      Address for all notices in respect of payment and    written
confirmation of such wire transfer:

         Conseco Capital Management, Inc.
         c/o American Life & Casualty Insurance Company
         P.O. Box 1925
         Carmel, IN 46032
         Attn: Account Documentation

         with a copy to:
         Conseco, Inc.
         c/o American Life & Casualty Insurance Company
         P.O. Box 1911
         Carmel, IN 46032
         Attn: Investment Accounting

(3)      Securities to be delivered to:

         Bankers Trust Company
         16 Wall Street
         Fourth Floor, Window 62
         FFC:     American Life & Casualty Insurance Company
                  Account #99810

(4)      American Life & Casualty Insurance Company
                                                     Tax ID No. 45-0103436


<PAGE>


Name and Address of Purchaser    Series              Principal Amount

RELIASTAR BANKERS SECURITY         A                     $2,000,000
  LIFE INSURANCE COMPANY

(Note registered in the name of SIGLER & CO.)



<PAGE>


(1)      All payments on account of the Notes shall be made by wire transfer
         of immediately available funds to:

         The Chase Manhattan Bank
         New York, NY
         A/C #544755102
         F/C #1960 Dept 571 NonStandard Securities
         Bank ABA #021000021

         with  sufficient  information to identify the source and application of
         such funds,  including PPN,  payment date,  and  principal,  premium or
         interest on the security.

(2)      Address for all notices in respect of payment and    written
confirmation of such wire transfer:

         ReliaStar Investment Research, Inc.
         100 Washington Avenue South, Suite 700
         Minneapolis, MN 55401-2121
         Attn: Tim Warrick
         Telephone: (612) 372-5258
         Telecopy:  (612) 372-5368

(3)      Securities to be delivered to:

         ReliaStar Investment Research, Inc.
         100 Washington Avenue South, Suite 700
         Minneapolis, MN 55401-2121
         Attn: Peggy Herbst

(4)      Address for all other communications and notices:

         ReliaStar Investment Research, Inc.
         100 Washington Avenue South, Suite 700
         Minneapolis, MN 55401-2121
         Attn: Tim Warrick

                                            (5)      SIGLER & CO. Tax ID No.
                                                              53-0242530

<PAGE>


Name and Address of Purchaser   Series                  Principal Amount

RELIASTAR LIFE                     A                       $3,000,000
  INSURANCE COMPANY



<PAGE>



(1)      All payments on account of the Notes shall be made by wire transfer
         of immediately available funds to:

         First National Bank N.A./Mpls
         601 2nd Avenue South
         Account #1102-4001-4461
         Bank ABA #091000022
         Attn: Securities Accounting

         with  sufficient  information to identify the source and application of
         such funds,  including CUSIP,  payment date, and principal,  premium or
         interest on the security.

(2)      Address for all notices in respect of payment and    written
confirmation of such wire transfer:

         ReliaStar Investment Research, Inc.
         100 Washington Avenue South, Suite 800
         Minneapolis, MN 55401-2121
         Attn: Tim Warrick
         Telephone: (612) 372-5258
         Telecopy:  (612) 372-5368

(3)      Securities to be delivered to:

         ReliaStar Investment Research, Inc.
         100 Washington Avenue South, Suite 800
         Minneapolis, MN 55401-2121
         Attn: Peggy Herbst

(4)      Address for all other communications and notices:

         ReliaStar Investment Research, Inc.
         100 Washington Avenue South, Suite 800
         Minneapolis, MN 55401-2121
         Attn: Tim Warrick

(5)      ReliaStar Life Insurance Company
                                                     Tax ID No. 41-0451140

<PAGE>


Name and Address of Purchaser      Series           Principal Amount

RELIASTAR UNITED SERVICES LIFE       A               $2,000,000
  INSURANCE COMPANY

(Note registered in the name of SALKELD & CO.)


<PAGE>



(1)      All payments on account of the Notes shall be made by wire transfer
         of immediately available funds to:

         Bankers Trust
         New York, NY
         ABA #021001033
         A/C #99-911-145

         with  sufficient  information to identify the source and application of
         such funds,  including PPN,  payment date,  and  principal,  premium or
         interest on the security.

(2)      Address for all notices in respect of payment and    written
confirmation of such wire transfer:

         ReliaStar Investment Research, Inc.
         100 Washington Avenue South, Suite 800
         Minneapolis, MN 55401-2121
         Attn: Tim Warrick
         Telephone: (612) 372-5258
         Telecopy:  (612) 372-5368

(3)      Securities to be delivered to:

         ReliaStar Investment Research, Inc.
         100 Washington Avenue South, Suite 800
         Minneapolis, MN 55401-2121
         Attn: Peggy Herbst

(4)      Address for all other communications and notices:

         ReliaStar Investment Research, Inc.
         100 Washington Avenue South, Suite 800
         Minneapolis, MN 55401-2121
         Attn: Tim Warrick

                                            (5)      SALKELD & CO. Tax ID No.
                                                              53-0159267

<PAGE>


     Name and Address of Purchaser     Series          Principal Amount

NORTHERN LIFE INSURANCE COMPANY          A                $3,000,000
                                         B                $2,000,000



<PAGE>



(1)      All payments on account of the Notes shall be made by wire transfer
         of immediately available funds to:

         First National Bank N.A./Mpls
         601 2nd Avenue South
         Account #1602-3237-6105
         Bank ABA #091000022
         Attn: Securities Accounting

         with  sufficient  information to identify the source and application of
         such funds,  including CUSIP,  payment date, and principal,  premium or
         interest on the security.

(2)      Address for all notices in respect of payment and    written
confirmation of such wire transfer:

         ReliaStar Investment Research, Inc.
         100 Washington Avenue South, Suite 800
         Minneapolis, MN 55401-2121
         Attn: Tim Warrick
         Telephone: (612) 372-5258
         Telecopy:  (612) 372-5368

(3)      Securities to be delivered to:

         ReliaStar Investment Research, Inc.
         100 Washington Avenue South, Suite 800
         Minneapolis, MN 55401-2121
         Attn: Peggy Herbst

(4)      Address for all other communications and notices:

         ReliaStar Investment Research, Inc.
         100 Washington Avenue South, Suite 800
         Minneapolis, MN 55401-2121
         Attn: Tim Warrick

(5)      Northern Life Insurance Company
                                                     Tax ID No. 41-1295933

<PAGE>

     Name and Address of Purchaser    Series     Principal Amount
WASHINGTON SQUARE ADVISERS            B           $3,000,000
  PRIVATE PLACEMENT TRUST FUND  



<PAGE>



(1)      All payments on account of the Notes shall be made by wire transfer
         of immediately available funds to:

         Account #10604960
         Bank ABA #091000022
         First National Bank N.A.
         601 2nd Avenue South
         F/F/C First Trust Company
         A/C #180121167365
         ITG A/C #47300020
         Attn: Washington Square Advisers Private
                  Placement Trust Fund

         with  sufficient  information to identify the source and application of
         such funds,  including CUSIP,  payment date, and principal,  premium or
         interest on the security.

(2)      Address for all notices in respect of payment and    written
confirmation of such wire transfer:

         Washington Square Advisers, Inc.
         100 Washington Avenue South, Suite 800
         Minneapolis, MN 55401-2121
         Attn: Frank Pintens
         Telephone: (612) 342-7128
         Telecopy:  (612) 342-3656

(3)      Securities to be delivered to:

         Washington Square Advisers, Inc.
         100 Washington Avenue South, Suite 800
         Minneapolis, MN 55401-2121
         Attn: Frank Pintens

(4)      Address for all other communications and notices:

         Washington Square Advisers, Inc.
         100 Washington Avenue South, Suite 800
         Minneapolis, MN 55401-2121
         Attn: Frank Pintens

(5) Washington Square
Advisers Private
Placement Trust
Fund Tax ID No.
41-6424976

<PAGE>


Name and Address of Purchaser        Series             Principal Amount

KEYPORT LIFE INSURANCE COMPANY          A                $15,000,000

(Note registered in the name of Hare & Co.)


<PAGE>



(1)      All payments on account of the Notes shall be made by wire transfer
         of immediately available funds to:

         Bank of Boston/Cust
         ABA #011000390
         For further credit to
         A/C #50757004 - Keyport
         Attn: Amy Hansbury
         Mail Stop 45-02-03

         with  sufficient  information to identify the source and application of
         such funds,  including PPN,  payment date,  and  principal,  premium or
         interest on the security.

(2)      Address for all notices in respect of payment, written
confirmation of such wire transfer and all other     communications and
notices:

         Keyport Life Insurance Company
         c/o Stein Roe & Farnham Incorporated
         1 South Wacker Drive
         Chicago, IL 60606
         Attn: Private Placements

(3)      Securities to be delivered to:

         Bank of Boston
         Institutional Custody Services
         150 Royall Street
         Canton, MA 02021
         Attn: Amy Hansbury
         Mail Stop 45-02-03
         Reference #50757004

(4)      Keyport Life Insurance Company
                                                     Tax ID No. 05-0302931

<PAGE>

     Name and Address of Purchaser     Series           Principal Amount
CONNECTICUT GENERAL LIFE                 A                $2,000,000
  INSURANCE COMPANY                      A                $2,000,000
                                         A                $2,000,000

(Note registered in the name of CIG & Co.)



<PAGE>


(1)      All payments on account of the Notes shall be made by wire transfer
         of immediately available funds to:

         Chase NYC/CTR/
         BNF = CIGNA Private Placements
         A/C #9009001802
         ABA #021000021

         with  sufficient  information to identify the source and application of
         such funds,  including PPN,  payment date,  and  principal,  premium or
         interest on the security.

(2)      Address for all notices in respect of payment and    written
confirmation of such wire transfer:

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

         CIG & Co.
         c/o CIGNA Investments, Inc.
         Attn: Private Securities S-307
         Operations Group
         900 Cottage Grove Road
         Hartford, CT 06152-2307
         Telecopy:  (860) 726-7203

(3)      Address for all other communications and notices:

         CIG & Co.
         c/o CIGNA Investments, Inc.
         Attn: Private Securities S-307
         James R. Kuzemchak
         900 Cottage Grove Road
         Hartford, CT 06152-2307
         Telecopy:  (860) 726-7203

(5)      Connecticut General Life Insurance Company
                                                     Tax ID No. 13-3574027

<PAGE>


     Name and Address of Purchaser     Series              Principal Amount
CONNECTICUT GENERAL LIFE                  A                $2,000,000
  INSURANCE COMPANY, on
  behalf of one of more
  separate accounts


(Note registered in the name of CIG & Co.)



<PAGE>


(1)      All payments on account of the Notes shall be made by wire transfer
         of immediately available funds to:

         Chase NYC/CTR/
         BNF = CIGNA Private Placements
         A/C #9009001802
         ABA #021000021

         with  sufficient  information to identify the source and application of
         such funds,  including PPN,  payment date,  and  principal,  premium or
         interest on the security.

(2)      Address for all notices in respect of payment and    written
confirmation of such wire transfer:

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

         CIG & Co.
         c/o CIGNA Investments, Inc.
         Attn: Private Securities S-307
         Operations Group
         900 Cottage Grove Road
         Hartford, CT 06152-2307
         Telecopy:  (860) 726-7203

(3)      Address for all other communications and notices:

         CIG & Co.
         c/o CIGNA Investments, Inc.
         Attn: Private Securities S-307
         James R. Kuzemchak
         900 Cottage Grove Road
         Hartford, CT 06152-2307
         Telecopy:  (860) 726-7203

(5)      Connecticut General Life Insurance Company
                                                     Tax ID No. 13-3574027

<PAGE>


     Name and Address of Purchaser      Series      Principal Amount
LIFE INSURANCE COMPANY                    A          $2,000,000
  OF NORTH AMERICA


(Note registered in the name of CIG & Co.)



<PAGE>


(1)      All payments on account of the Notes shall be made by wire transfer
         of immediately available funds to:

         Chase NYC/CTR/
         BNF = CIGNA Private Placements
         A/C #9009001802
         ABA #021000021

         with  sufficient  information to identify the source and application of
         such funds,  including PPN,  payment date,  and  principal,  premium or
         interest on the security.

(2)      Address for all notices in respect of payment and    written
confirmation of such wire transfer:

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

         CIG & Co.
         c/o CIGNA Investments, Inc.
         Attn: Private Securities S-307
         Operations Group
         900 Cottage Grove Road
         Hartford, CT 06152-2307
         Telecopy:  (860) 726-7203

(3)      Address for all other communications and notices:

         CIG & Co.
         c/o CIGNA Investments, Inc.
         Attn: Private Securities S-307
         James R. Kuzemchak
         900 Cottage Grove Road
         Hartford, CT 06152-2307
         Telecopy:  (860) 726-7203

(5)      Life Insurance Company of North America
                                                     Tax ID No. 13-3574027

<PAGE>

     Name and Address of Purchaser     Series       Principal Amount
PRINCIPAL MUTUAL LIFE                     A          $5,100,000
  INSURANCE COMPANY



<PAGE>



(1)      All payments on account of the Notes shall be made by wire transfer
         of immediately available funds to:

         Norwest Bank Iowa, N.A.
         7th and Walnut Streets
         Des Moines, IA 50309
         ABA #073000228
         Account #014752
         Ref: OBI PFGSE(S)B61062

         with sufficient information to identify the source and application of
         such funds.

(2)      Address for all notices in respect of payment and    written
confirmation of such wire transfer:

         Principal Mutual Life Insurance Company
         711 High Street
         Des Moines, IA 50392-0960
         Attn: Investment Department,
                  Accounting & Treasury
         Ref: Bond No. 1-B-61062

(3)      Address for all other communications and notices:

         Principal Mutual Life Insurance Company
         711 High Street
         Des Moines, IA 50392-0960
         Attn: Investment Department,
                  Securities Division
         Ref: Bond No. 1-B-61062

(5)      Principal Mutual Life Insurance Company
                                                     Tax ID No. 42-0127290

<PAGE>

     Name and Address of Purchaser     Series      Principal Amount
PRINCIPAL MUTUAL LIFE                    A            $4,900,000
  INSURANCE COMPANY



<PAGE>



(1)      All payments on account of the Notes shall be made by wire transfer
         of immediately available funds to:

         Norwest Bank Iowa, N.A.
         7th and Walnut Streets
         Des Moines, IA 50309
         ABA #073000228
         Account #032395
         Ref: OBI PFGSE(S)B61062

         with sufficient information to identify the source and application of
         such funds.

(2)      Address for all notices in respect of payment and    written
confirmation of such wire transfer:

         Principal Mutual Life Insurance Company
         711 High Street
         Des Moines, IA 50392-0960
         Attn: Investment Department,
                  Accounting & Treasury
         Ref: Bond No. 16-B-61062

(3)      Address for all other communications and notices:

         Principal Mutual Life Insurance Company
         711 High Street
         Des Moines, IA 50392-0960
         Attn: Investment Department,
                  Securities Division
         Ref: Bond No. 16-B-61062

(5)      Principal Mutual Life Insurance Company
         Tax ID No. 42-0127290

<PAGE>
SCHEDULE B
 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:

                  "Affiliate"  means,  at any  time,  and  with  respect  to any
Person, 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.  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 Guarantor.

                  "Attributable Debt" means, as to any particular lease relating
to a Sale and  Leaseback  Transaction,  the present  value of all Lease  Rentals
required to be paid by the  Guarantor or any  Restricted  Subsidiary  under such
lease during the remaining term thereof (determined in accordance with generally
accepted  financial  practice using a discount factor equal to the interest rate
implicit in such lease).

                  "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 New York City or Providence,  Rhode
Island 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 such  Capital  Lease that  would,  in  accordance  with GAAP,  appear as a
liability on a balance sheet of such Person.

                  "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 GTECH Corporation, a Delaware corporation,  or
any  successor  thereto that shall have become such in the manner  prescribed in
Section 10.2.

                  "Competitor" means each Person specified on Exhibit 3 and each
other  Person who directly or  indirectly  competes  with either  Obligor or any
Subsidiary in the business of providing and/or servicing  lottery systems and/or
electronic  benefits  transfer  systems  (provided that  "Competitor"  shall not
include any bank, trust company, savings and loan association or other financial
institution,  any pension plan, any investment  company,  any insurance company,
any

<PAGE>


broker or  dealer  or any other  similar  financial  institution  or entity  not
specified on Exhibit 3, regardless of legal form).

                  "Consolidated  Assets" means, as of any date of determination,
the total assets of the Guarantor and its Restricted Subsidiaries which would be
shown  as  assets  on a  consolidated  balance  sheet of the  Guarantor  and its
Restricted  Subsidiaries as of such time prepared in accordance with GAAP, after
eliminating all amounts properly attributable to minority interests,  if any, in
the stock and surplus of Restricted Subsidiaries.

                  "Consolidated  EBDAIT" means, as of any date of determination,
the sum (without  duplication)  of (i)  Consolidated  Net Income  (excluding any
extraordinary  gains and losses) for the four fiscal quarters ending on, or most
recently prior to, such date plus (to the extent  deducted in the computation of
such Consolidated Net Income) (ii)  Consolidated  Interest Expense for such four
fiscal  quarters plus (iii) taxes on income of the Guarantor and its  Restricted
Subsidiaries for such four fiscal quarters plus (iv) amortization,  depreciation
and all  other  non-cash  expense  items  of the  Guarantor  and its  Restricted
Subsidiaries  for such four fiscal  quarters,  all  determined on a consolidated
basis in  accordance  with  GAAP and on a pro  forma  basis in  accordance  with
generally  accepted  financial  practice  giving  effect to any  acquisition  or
disposition made during the relevant  computation  period as if such acquisition
or disposition were made on the first day of such period.

                  "Consolidated   Indebtedness"   means,   as  of  any  date  of
determination (and without  duplication),  all Indebtedness of the Guarantor and
its  Restricted   Subsidiaries   outstanding  on  such  date,  determined  on  a
consolidated basis in accordance with GAAP.

                  "Consolidated  Interest  Expense" means, with reference to any
period,  the interest  expense of the Guarantor and its Restricted  Subsidiaries
for such period, determined on a consolidated basis in accordance with GAAP.

                  "Consolidated Net Income" means, with reference to any period,
the net income (or loss) of the Guarantor and its  Restricted  Subsidiaries  for
such period, determined on a consolidated basis in accordance with GAAP.

                  "Consolidated  Shareholders'  Equity" means, as of any date of
determination,   the  total  shareholders'  equity  of  the  Guarantor  and  its
Restricted  Subsidiaries  on such date,  determined on a  consolidated  basis in
accordance with GAAP.

                  "Confidential Information"  is defined in Section 21.

                  "Credit  Facility"  means  the  Credit  Agreement  dated as of
September  15, 1994 by and among the Company,  the Lenders and  Co-Agents  party
thereto, and Nationsbank of North Carolina,  National Association,  as Agent, as
amended and in effect from time to time,  or any credit  facility or  facilities
extending, renewing or refinancing such agreement.

                  "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  with  respect to any Note 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 such Note or (ii) 2% over the
rate of interest publicly announced by Morgan Guaranty Trust Company of New York
in New York, New York as its "base" or "prime" rate.

               
  "Disposition"  is defined in Section 10.8.

                  "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 either Obligor
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.

                  "Funded  Indebtedness"  means, with respect to any Person, all
Indebtedness of such Person which by its terms or by the terms of any instrument
or agreement relating thereto matures,  or which is otherwise payable or unpaid,
one year or more from, or is directly or  indirectly  renewable or extendible at
the  option  of the  obligor  in  respect  thereof  to a date  one  year or more
(including,   without  limitation,   under  a  revolving  or  similar  agreement
obligating  the lender or lenders to extend  credit over a period of one year or
more) from, the date of creation thereof.

                  "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 other  jurisdiction  in which either Obligor
                  or any Subsidiary conducts all or any part of its business, or
                  which  asserts  jurisdiction  over any  properties  of  either
                  Obligor  or any  Subsidiary,  or  (b)  any  entity  exercising
                  executive, legislative,
         judicial, regulatory or administrative functions of, or pertaining
         to, any such government.

                  "Guarantee" is defined in Section 1.

                  "Guarantor"  means  GTECH  Holdings  Corporation,  a  Delaware
corporation,  or any successor thereto that shall have become such in the manner
prescribed in Section 10.2.

                  "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.

                  "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 14.1.

                  "Indebtedness" with respect to any Person means, at any
time, 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 all  liabilities  created
         or  arising  under  any  conditional  sale  or  other  title  retention
         agreement with respect to any such property);

                  (c)      all Capital Lease Obligations of such Person;
                  (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); and

                  (e) any Guaranty of such Person with respect to liabilities of
         a type described in any of clauses (a) through (d) hereof.

                  "Institutional Investor" means (a) any original purchaser of a
Note,  (b) any holder of a Note holding more than 5% 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.

                  "Lease Rentals" means,  for any period,  the sum of the rental
and  other  obligations  required  to be paid by the  lessee  under  any  lease,
excluding  any  amounts  required  to be  paid  by the  lessee  (whether  or not
designated  as rental or  additional  rental)  on  account  of  maintenance  and
repairs, insurance, taxes and similar charges.

                  "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" is defined in Section 8.6.

                  "Material"   means  material  in  relation  to  the  business,
operations,  affairs, financial condition, assets or properties of the Guarantor
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 Guarantor and its Restricted  Subsidiaries  taken as a whole,  or (b) the
ability of the Company or the  Guarantor to perform its  obligations  under this
Agreement  or the Notes (in the case of the Company) or the  Guarantees  (in the
case of the Guarantor), or (c) the validity or enforceability of this Agreement,
the Notes, the Guarantees or any Subsidiary Guarantee.

                     "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).

                  "Notes" is defined in Section 1.

                  "Obligors" is defined in the first paragraph of this
Agreement.

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

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

                  "Pension Plan" means an "employee pension benefit plan" within
the meaning of section 3(2) of ERISA.

                  "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 either  Obligor or any ERISA
Affiliate  or with respect to which either  Obligor or any ERISA  Affiliate  may
have any liability.

                  "Priority Debt" means the sum (without duplication) of (i) the
aggregate  unpaid  principal  amount of  Indebtedness  of the  Guarantor and any
Restricted  Subsidiary  secured by Liens (other than Liens  permitted by Section
10.3(a)  through  (j))  plus  (ii)  all  outstanding  Attributable  Debt  of the
Guarantor  and any  Restricted  Subsidiary  (other than  Attributable  Debt with
respect to any Sale and Leaseback  Transaction  permitted by Section  10.4(a) or
(b)) plus (iii) the aggregate unpaid principal amount of all Indebtedness of all
Restricted  Subsidiaries (other than Indebtedness of the Company or Indebtedness
permitted by Section 10.5(a) through (d)).

                  "Property"   or   "Properties"    means,    unless   otherwise
specifically  limited,  real or  personal  property  of any  kind,  tangible  or
intangible, choate or inchoate.

                  "PTE" means a Prohibited Transaction Exemption issued by the
Department of Labor.

                  "Purchaser" is defined in the first paragraph of this
Agreement.

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

                  "Required Holders" means, at any time, the holders of at least
51% in principal amount of the Notes at the time outstanding (exclusive of Notes
then owned by either Obligor or any of their respective Affiliates).

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

                  "Restricted  Subsidiary"  means  (i)  as of  the  date  of the
Closing, the Company, each Subsidiary Guarantor and each other Subsidiary of the
Guarantor and (ii)  thereafter (x) the Company and each other  Subsidiary of the
Guarantor  unless the Guarantor shall have designated any such other  Subsidiary
(other than any Subsidiary Guarantor) as an "Unrestricted  Subsidiary" by notice
to each holder of Notes and (y) each Unrestricted  Subsidiary that the Guarantor
shall have  designated as a "Restricted  Subsidiary" by notice to each holder of
Notes; provided, that no designation under the foregoing clause (x) or (y) shall
be effective unless, immediately after giving effect to any such designation, no
Default  or Event of Default  shall  have  occurred  and be  continuing  and the
Guarantor would be permitted by the provisions of Section 10.6 to incur at least
$1.00 of  additional  Indebtedness  owing to a Person  other  than a  Restricted
Subsidiary.  No Subsidiary that is an Unrestricted Subsidiary and has previously
been a Restricted Subsidiary may again be designated as a Restricted Subsidiary,
and no Subsidiary  that is a Restricted  Subsidiary and has  previously  been an
Unrestricted Subsidiary may again be designated as an Unrestricted Subsidiary.

                  "Sale and Leaseback Transaction" means a transaction or series
of  transactions  pursuant to which the Guarantor or any  Restricted  Subsidiary
shall  sell or  transfer  to any  Person  any  property,  whether  now  owned or
hereafter  acquired,  and,  as  part  of  the  same  transaction  or  series  of
transactions,  the Guarantor or any Restricted Subsidiary shall lease as lessee,
or  similarly  acquire the right to  possession  or use of, such  property for a
period in excess of three years.

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

                  "Senior  Financial  Officer" means any of the Chief  Financial
Officer,  the  Treasurer,  the  Comptroller  and any Assistant  Treasurer of the
Company or of the Guarantor.

                  "Series A Notes" is defined in Section 1.

                  "Series B Notes" is defined in Section 1.

                  "Significant  Subsidiary"  means at any  time  any  Restricted
Subsidiary  that would at such time  constitute a "significant  subsidiary"  (as
such term is defined in Regulation S-X of the Securities and Exchange Commission
as in effect on the date of the Closing) of the Guarantor.

                  "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  or joint  venture 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
Guarantor.

                  "Subsidiary  Guarantee"  means  a  guarantee  of a  Subsidiary
Guarantor of the  obligations of the Company under this Agreement and the Notes,
substantially in the form of Exhibit 2.

                  "Subsidiary  Guarantor"  means, as of the date of the Closing,
each Subsidiary  identified as such on Schedule 5.4 and, thereafter,  each other
Subsidiary  that  enters  into a  Subsidiary  Guarantee  as  required by Section
9.8(a), provided that such Subsidiary has not been released from its obligations
as provided in Section 9.8(b).

                  "Unrestricted   Subsidiary"   means  any   Subsidiary  of  the
Guarantor  (other than the Company)  that is  designated as such pursuant to the
provisions of the definition of the term "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  Guarantor  and  the  Guarantor's  other  Wholly-Owned
Restricted Subsidiaries at such time.


<PAGE>
SCHEDULE 4.9
                       Changes in Corporate Structure


None.

<PAGE>
SCHEDULE 5.3

GTECH Holdings Corporation Form 10-K for the fiscal year ending February 22,
1997, filed with the Securities and Exchange Commission.
<PAGE>

                                  Subsidiaries


                                  Schedule 5.4

GTECH  Holdings  Corporation  owns one  hundred  percent  of the  stock of GTECH
Corporation.  The voting  stock of all the entities set forth below is owned one
hundred percent by GTECH  Corporation,  either directly by GTECH  Corporation or
through or in conjunction  with other  subsidiaries  of GTECH  Corporation.  The
jurisdiction of each entity is set forth after its name. Transactive Corporation
is the only Subsidiary Guarantor.


Dreamport, Inc. (Delaware)

Environmental Paper Products, Inc. (RI)

GameScape, Inc. (RI)

Gaming Systems Corporation (Delaware)

Gana de Mexico S.A. de C.V.

Grand Cards Systems (Shanghai) Ltd. (China)

GRYTEK Co. Ltd. (Poland)

GTECH Argentina S.A. (Argentina)

GTECH Asia Corporation (Delaware)

GTECH Australasia Corporation (Delaware)

GTECH Canada Computer Systems Corporation (Canada)

GTECH Computer Systems Sdn Bhd (Malaysia)

GTECH Corporation (Delaware)

GTECH Corporation (Utah)

GTECH Corporation Chile, S.A. (Chile)

GTECH Czechoslovakia Corporation (Delaware)

GTECH De Mexico S.A. de C.V. (Mexico)

GTECH Eesti A.S. (Estonia)

GTECH Espana Corporation (Delaware)

GTECH Europe S.A. (Belgium)

GTECH Export Corporation (United States Virgin Islands)

GTECH Far East Pte Ltd (Singapore)

GTECH Foreign Holdings Corporation (Delaware)

GTECH Gaming Subsidiary 2 Corporation  (Delaware)

GTECH Ireland Corporation (Delaware)

GTECH Italy Corporation (Delaware)

GTECH Latin America Corporation (Delaware)

GTECH LIT Corporation (Lithuania)

GTECH Lithuania Corporation (Delaware)

GTECH Management P.I. Corporation (Delaware)

GTECH Nevada Corporation (Delaware)

GTECH Northern Europe Corporation (Delaware)

GTECH Offshore Services Limited (Jersey, Channel Islands)

GTECH South Africa Corporation (Delaware)

GTECH Suffolk Corporation (Delaware)

GTECH Sweden Corporation (Delaware)

GTECH Taiwan Corporation (Delaware)

GTECH Texas Corporation (Delaware)

GTECH U.K. Limited (U.K.)

GTECH U.K. Corporation (Delaware)

GTECH Venezuela Corporation (Delaware)

GTECH Worldserv, Inc. (Delaware)

GTECH Worldserv International, Inc. (Delaware)

GTECH Worldwide Services Corporation (Delaware)

Innovative Environmental Technologies, Inc.  (Delaware)

LAC Corporation (Rhode Island)

Loteria Asociada S.A. (Argentina)

Oy GTECH Finland Ab. (Finland)

Technology Risk Management Services, Inc.

Technology Travel Corporation (Delaware)

Transaction Strategies Inc. (Delaware)

Transactive Corporation (Delaware)
(formerly GTECH Administrative Services Corp.)

Via Video Corporation (Delaware)

Watson Land Company (Rhode Island)

<PAGE>



                                  Schedule 5.5

1. consolidated balance sheets of GTECH Holdings Corporation and subsidiaries as
of  February  24,  1996  and  February  25,  1995 and the  related  consolidated
statements of income, shareholders'equity,  and cash flows for each of the three
years in the period ended February 24, 1996.

2. consolidated balance sheets of GTECH Holdings Corporation and subsidiaries as
of  February  22,  1997  and  February  24,  1996 and the  related  consolidated
statements of income, shareholders'equity,  and cash flows for each of the three
years in the period ended February 22, 1997.



<PAGE>

                                  Schedule 5.8


Part I

1.  Subsequent  to the trial of J. David Smith,  the Company's  former  national
sales manager,  in New Jersey, the New Jersey U.S. Attorney announced in a press
release that a grand jury  investigation in that  jurisdiction is continuing but
did not specify the scope of such investigation. Thereafter, the New Jersey U.S.
Attorney's  Office issued  subpoenas to the Company.  The Texas U.S.  Attorney's
Office also has issued  subpoenas to the Company.  The Company is cooperating in
these  investigations.  The  Company  does not  believe  it has  engaged  in any
wrongdoing  in  connection  with  these  matters.  However,  since  the  current
investigations  are still  underway  and are  conducted  largely in secret,  the
Company lacks sufficient  information to determine with certainty their ultimate
scope and whether the government  authorities  will assert claims resulting from
these or other investigations that could implicate or reflect adversely upon the
Company.  Because the Company's  reputation for integrity is an important factor
in its  business  dealings  with  lottery  and  other  government  agencies,  if
government  authorities  were to make an allegation of, or if there were to be a
finding of, improper conduct on the part of or attributable to the Company, such
an allegation or finding could have a Material Adverse Effect.

2. On September  20,  1996,  Jack M. and Linda Janis filed a class action in the
Los Angeles  Superior Court (Case No.  BC157693)  against the  California  State
Lottery Commission,  GTECH Holdings Corporation and Southland  Corporation.  The
suit  involves the keno game that was operated by the  California  State Lottery
until the California Supreme Court ruled in June 1996 that it was not authorized
by the state's Lottery Law. The plaintiffs seek restitution of funds received by
the  defendants  in  connection  with that keno game on the  theories  of unjust
enrichment and unlawful,  unfair or deceptive  business  practices.  In February
1997, the Court granted the Company's motion for summary judgment on all claims,
holding that the plaintiffs  failed to state a triable issue of material fact on
the causes of action asserted. On March 4, 1997, the plaintiffs filed an amended
action  with the Court.  The Company has  publicly  stated that it believes  the
claim has no merit.  Even considering  that  plaintiffs'  chances of success are
near zero,  however,  the size of the  potential  damages  require  listing this
matter as having a possible Material Adverse Effect.

Part II

The Texas  Lottery  Commission  ("Lottery")  has  notified  the  Company  of its
intention to assess liquidated  damages in connection with a gift made by one of
its  lobbyists to the Governor of Texas,  and has requested  information  on any
other  occasion when the Company or its  lobbyists  may have  provided  meals or
entertainment to state officials  without  reimbursement.  While it has not done
so, the Lottery may take the  position  that such  actions  constitute a default
under the  Company's  contract  with the Lottery.  In addition,  the Lottery has
instructed  its staff to  prepare  and issue,  by June 30,  1997,  requests  for
proposal for the same goods and services currently provided by the Company. As a
result of this process,  the Lottery may in the future  attempt to terminate the
contract.

<PAGE>

Part A:                  Schedule 5.15

                               GTECH Corporation
                                  Debt Summary
                                    2/22/97
<TABLE>
<CAPTION>

Bank                     S/T Outstanding          Description              Final Maturity
<S>                           <C>                 <C>                      <C>      

Nations Facility              0                   Term Loan                09/99

Scotia Bank de Puerto Rico    2,136,000           Term Loan                09/98

Woodchester Credit Lyonnais   1,939,168           Term Loan                12/99

Citizens Trust                0                   Demand Note              Demand

First Union                   0                   Demand Note              Demand

NationsBank                   829,082             Capital Lease            03/98
                              473,922             Capital Lease            07/98
                              670,776             Capital Lease            08/98
</TABLE>
<TABLE>
<CAPTION>

Bank                     L/T Outstanding          Description              Final Maturity
<S>                          <C>                  <C>                      <C> 

Nations Facility              367,000,000         Term Loan                09/99

Scotia Bank de Puerto Rico    1,592,000           Term Loan                09/98

Woodchester Credit Lyonnais   3,878,342           Term Loan                12/99

Citizens Trust                1,000,000           Demand Note              Demand

First Union                   8,400,000           Demand Note              Demand

NationsBank                   71,451              Capital Lease            03/98
                             206,036              Capital Lease            07/98
                             350,958              Capital Lease            08/98

Total:                       388,547,735
</TABLE>

Part B: To the extent that any of the above-referenced Capital Leases are 
determined to be loans coupled with a security interest, they would be Liens.

<PAGE>


[FORM OF SERIES A NOTE]


                                GTECH CORPORATION

                 7.75% SERIES A GUARANTEED SENIOR NOTE DUE 2004

No. [_____]       [Date]
$[_______]        PPN[______________]

                  FOR VALUE RECEIVED, the undersigned, GTECH CORPORATION (herein
called the  "Company"),  a corporation  organized and existing under the laws of
the State of Delaware, hereby promises to pay to [ ], or registered assigns, the
principal sum of [ ] DOLLARS (or so much thereof as shall not have been prepaid)
on May 15,  2004,  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 7.75% per
annum from the date  hereof,  payable  semiannually,  on the 15th day of May and
November in each year,  commencing  with November 15, 1997,  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  and  Guarantee  Agreement  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) 9.75%
or (ii) 2% over the rate of interest publicly announced by Morgan Guaranty Trust
Company  of New York from time to time in New  York,  New York 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 the  principal  office of The Bank of New York in New York,
New York 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  and  Guarantee
Agreement referred to below.

                  This  Note  is one of a  series  of  Guaranteed  Senior  Notes
(herein called the "Notes") issued pursuant to the Note and Guarantee  Agreement
dated as of May 15, 1997 (as from time to time amended,  the "Note and Guarantee
Agreement"),  between the Company,  GTECH Holdings Corporation (the "Guarantor")
and the  respective  Purchasers  named  therein and is entitled to the  benefits
thereof.  Each holder of this Note will be deemed, by its acceptance hereof, (i)
to have agreed to the confidentiality  provisions set forth in Section 21 of the
Note and Guarantee  Agreement and (ii) to have made the representation set forth
in Section 6.2 of the Note and Guarantee Agreement.

                  Payment of the principal of, and  Make-Whole  Amount,  if any,
and interest on this Note has been  guaranteed  by the  Guarantor in  accordance
with the terms of the Note and Guarantee Agreement.


<PAGE>



                  This Note is a  registered  Note and,  as provided in the Note
and  Guarantee  Agreement,  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 Note of the same series 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.

                  This Note is subject to optional prepayment,  in whole or from
time to time in part,  at the times and on the terms  specified  in the Note and
Guarantee Agreement, but not otherwise.

                  If an Event of Default,  as defined in the Note and  Guarantee
Agreement,  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 and
Guarantee Agreement.

                  This Note shall be construed and enforced in  accordance  with
the laws of the State of New York.

GTECH CORPORATION



By_________________________
Title:


<PAGE>


 [FORM OF SERIES B NOTE]


                                GTECH CORPORATION

                 7.87% SERIES B GUARANTEED SENIOR NOTE DUE 2007

No. [_____]       [Date]
$[_______]        PPN[______________]

                  FOR VALUE RECEIVED, the undersigned, GTECH CORPORATION (herein
called the  "Company"),  a corporation  organized and existing under the laws of
the State of Delaware, hereby promises to pay to [ ], or registered assigns, the
principal sum of [ ] DOLLARS (or so much thereof as shall not have been prepaid)
on May 15,  2007,  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 7.87% per
annum from the date  hereof,  payable  semiannually,  on the 15th day of May and
November in each year,  commencing  with November 15, 1997,  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  and  Guarantee  Agreement  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) 9.87%
or (ii) 2% over the rate of interest publicly announced by Morgan Guaranty Trust
Company  of New York from time to time in New  York,  New York 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 the  principal  office of The Bank of New York in New York,
New York 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  and  Guarantee
Agreement referred to below.

                  This  Note  is one of a  series  of  Guaranteed  Senior  Notes
(herein called the "Notes") issued pursuant to the Note and Guarantee  Agreement
dated as of May 15, 1997 (as from time to time amended,  the "Note and Guarantee
Agreement"),  between the Company,  GTECH Holdings Corporation (the "Guarantor")
and the  respective  Purchasers  named  therein and is entitled to the  benefits
thereof.  Each holder of this Note will be deemed, by its acceptance hereof, (i)
to have agreed to the confidentiality  provisions set forth in Section 21 of the
Note and Guarantee  Agreement and (ii) to have made the representation set forth
in Section 6.2 of the Note and Guarantee Agreement.

                  Payment of the principal of, and  Make-Whole  Amount,  if any,
and interest on this Note has been  guaranteed  by the  Guarantor in  accordance
with the terms of the Note and Guarantee Agreement.


<PAGE>



                  This Note is a  registered  Note and,  as provided in the Note
and  Guarantee  Agreement,  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 Note of the same series 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.

                  This Note is subject to optional prepayment,  in whole or from
time to time in part,  at the times and on the terms  specified  in the Note and
Guarantee Agreement, but not otherwise.

                  If an Event of Default,  as defined in the Note and  Guarantee
Agreement,  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 and
Guarantee Agreement.

                  This Note shall be construed and enforced in  accordance  with
the laws of the State of New York.

GTECH CORPORATION



By_________________________
Title:


<PAGE>


                                   EXHIBIT 1-C


                               [FORM OF GUARANTEE]


                  For value received, the undersigned hereby unconditionally and
irrevocably  guarantees to the holder of the foregoing Note the due and punctual
payment of the principal  of,  Make-Whole  Amount,  if any, and interest on said
Note, as more fully provided in the Note and Guarantee  Agreement referred to in
said Note.

GTECH HOLDINGS CORPORATION



By___________________________
Title:

<PAGE>
Exhibit 3

Suppliers of On-Line Lottery Products and Services

1. Video Lottery Technologies, Inc. ("VLT") - shares traded on NASDAQ

2. Automated Wagering International, Inc. ("AWI"), a wholly-owned sub of VLT

3. Autotote Corporation

4. Telecontrol (an Austrian company and sub of Autotote)

5. Essnet/Alcatel (a Swedish company)

6. International Lottery and Totalizator Systems, Inc. ("ITS")

7. Berjaya Lottery Management (HK) Ltd. (A parent company of this entity
(also with Berjaya in the name) owns at least 40% of ITS.  The Berjaya
companies compete through ITS and separately, through other Berjaya affiliates)

8. Scientific Games, Inc.

9. International des Jeux ("Lotto France")

10. International Game Technology, Inc.

11. Siemens-Nixdorf Information Systems AG

12. CGK Computer Gesellschaft Konstanz mbH (a wholly-owned sub of Siemens)

Suppliers of Systems and Services for the Electronic Delivery of Government 
Benefits

1. Deluxe Data Systems, Inc., a sub of Deluxe Corporation 

2. Citibank


<PAGE>
EXHIBIT 4.4(a)

Matters To Be Covered In Opinion of Counsel To the Obligors


                  1.  Each of the  Obligors  and their  respective  Subsidiaries
being  duly  incorporated,  validly  existing  and in good  standing  and having
requisite  corporate  power  and  authority  to issue  and sell the Notes and to
execute and deliver the documents.

                  2.       The Guarantor and each Restricted Subsidiary being
duly qualified and in good standing as a foreign corporation in appropriate
jurisdictions.

                  3.       Due authorization and execution of the documents
and such documents being legal, valid, binding and enforceable.

                  4.       No conflicts with charter documents, laws or other
agreements.

                  5.       All consents required to issue and sell the Notes
and the Guarantees and to execute and deliver the documents having been
obtained.

                  6.       No litigation questioning validity of documents.

                  7. The Notes not requiring  registration  under the Securities
Act of 1933,  as  amended;  no need to  qualify  an  indenture  under  the Trust
Indenture Act of 1939, as amended.

                  8.       No violation of Regulations G, T or X of the
Federal Reserve Board.

                  9.       Neither Obligor is an "investment company", or a
company "controlled" by an "investment company", under the Investment Company
Act of 1940, as amended.


<PAGE>
EXHIBIT 4.4(b)

FORM OF OPINION OF SPECIAL COUNSEL



                FOR THE PURCHASERS



<PAGE>
                        [NAME OF SUBSIDIARY GUARANTOR]

                                   GUARANTEE


                             Dated ________________


                                    GUARANTEE

                  GUARANTEE dated as of  [_____________]  by [NAME OF SUBSIDIARY
GUARANTOR] (the "Subsidiary Guarantor"),  a corporation organized under the laws
of [___________] [(the "Guarantor Jurisdiction")]1,  in favor of each person who
is from  time  to  time a  holder  (each,  a  "Holder"  and,  collectively,  the
"Holders") of one or more of (i) the 7.75% Series A Guaranteed  Senior Notes due
2004 issued in an original  aggregate  principal amount of $150,000,000 and (ii)
the  7.87%  Series B  Guaranteed  Senior  Notes due 2007  issued in an  original
aggregate  principal  amount of  $150,000,000  (collectively,  together with all
notes  delivered in  substitution  or exchange for any of said notes pursuant to
the Note Agreement  referred to below, the "Notes") issued by GTECH Corporation,
a Delaware  corporation  (the  "Company"),  pursuant  to the Note and  Guarantee
Agreement dated as of May 15, 1997 (as amended,  modified or  supplemented  from
time  to  time,  the  "Note  Agreement")  among  the  Company,   GTECH  Holdings
Corporation  and the  Purchasers  whose  names  appear in Schedule A to the Note
Agreement.  All capitalized  terms used herein and not otherwise  defined herein
shall have the meaning ascribed thereto in the Note Agreement.

                  Section 1.        GUARANTEE, ETC.

                  Section 1.1. Guarantee. The Company will use the proceeds from
the  issuance  of the  Notes  to repay  certain  Indebtedness,  and for  general
corporate  purposes,  of the group of  companies  comprised  by Company  and its
consolidated  Subsidiaries,  and  the  Subsidiary  Guarantor  is  part  of  such
corporate group. For such valuable consideration, the receipt and sufficiency of
which are hereby  acknowledged,  the Subsidiary Guarantor does hereby absolutely
and unconditionally,  for the benefit of each of the Holders, guarantee the full
and timely payment when due,  whether by  acceleration  or otherwise  (including
amounts which,  but for the operation of the automatic stay under Section 362(a)
of the United  States  Bankruptcy  Code or any successor  statute,  would become
due), of all  indebtedness,  obligations and liabilities of the Company,  now or
hereafter existing,  under or in connection with the Note Agreement or any Note,
and whether of principal, interest (including interest which, but for the filing
of a  petition  in  bankruptcy  with  respect  to the  Company,  would  accrue),
Make-Whole Amounts, fees, expenses or otherwise,  in each case whether direct or
indirect, joint or several, absolute or contingent,  liquidated or unliquidated,
now or hereafter existing, amended, extended,  renewed, replaced,  refinanced or
restructured,  whether or not from time to time  decreased or  extinguished  and
later  increased,  created  or  incurred  (all  indebtedness,   obligations  and
liabilities  of the  Company  described  in this  Section  1.1 are  collectively
referred to as the "Guarantied Obligations").

                  Section  1.2.  Guarantee  Of  Payment.  This is a guaranty  of
payment and not merely of collection.  In the event of any default in payment or
otherwise on any of the Guarantied  Obligations,  the Subsidiary  Guarantor will
pay on demand all or any portion of the Guarantied Obligations due or thereafter
becoming due,  whether by acceleration or otherwise,  without offset of any kind
whatsoever,  without  any Holder  first  being  required to make demand upon the
Company or pursue any of its rights  against the  Company,  or against any other
Person,  including other guarantors,  and without being required to liquidate or
to realize on any collateral  security.  In any right of action  accruing to any
Holder,  such Holder may elect to proceed  against (a) the Subsidiary  Guarantor
together with the Company or any other  guarantor of any Guarantied  Obligation;
(b) the  Subsidiary  Guarantor  and the  Company  or any  such  other  guarantor
individually in separate actions;  or (c) the Subsidiary  Guarantor only without
having  first  commenced  any  action  against  the  Company  or any such  other
guarantor.

                  Section 1.3. Right to Deal with  Guarantied  Obligations.  Any
Holder, without notice to or consent of the Subsidiary Guarantor, may do any one
or more of the following,  all without impairing the liability of the Subsidiary
Guarantor  hereunder:  deal with any  Guarantied  Obligation  and any collateral
security  therefor in such manner as it may deem  advisable and renew,  amend or
extend the  Guarantied  Obligations,  the Note  Agreement,  any Note or any part
thereof; accept partial payment, or settle, release, compound, or compromise the
same; demand additional collateral security therefor,  and substitute or release
the same;  and compromise or settle with or release and discharge from liability
any other guarantor of any Guarantied Obligation,  or any other Person liable to
such Holder for all or any portion of the  obligations of any obligor in respect
of any Guarantied Obligation.

                  Section 1.4. Waiver of Subrogation.  The Subsidiary  Guarantor
hereby  unconditionally  waives  with  respect  to this  Guarantee  any right of
subrogation,  indemnity,  reimbursement or contribution from the Company and any
other guarantor.

                  Section 1.5. Other Waivers.  The Subsidiary  Guarantor  hereby
unconditionally waives with respect to this Guarantee:  (a) notice of acceptance
of this  Guarantee by any Holder and any notice of the  incurring by the Company
of any Guarantied Obligation;  (b) presentment for payment,  protest,  notice of
protest  and  notice of  dishonor  to any party  including  the  Company  or the
Subsidiary Guarantor;  (c) all other notices which the Company or the Subsidiary
Guarantor  may be entitled  to but which may  legally be waived;  (d) demand for
payment as a condition of  liability;  (e) any  disability of the Company or any
other obligor or obligors or defense  available to the Company,  the  Subsidiary
Guarantor  or any  other  obligor  or  obligors  in  respect  of any  Guarantied
Obligation,  including  absence or  cessation  of the  Company or any such other
obligor's liability for any reason whatsoever;  (f) any defense or circumstances
which might otherwise  constitute a legal or equitable  discharge of a guarantor
or surety; and (g) all rights under any otherwise applicable law dealing with or
affecting the rights of creditors of the Subsidiary  Guarantor and  inconsistent
with the express provisions hereof.

                  Section 1.6.  Subordination.  Until the Guarantied Obligations
are paid in full the Subsidiary  Guarantor hereby  unconditionally  subordinates
all present and future debts,  liabilities  or obligations of the Company to the
Subsidiary Guarantor to the Guarantied Obligations,  and all amounts received by
the Subsidiary Guarantor with respect to such debts,  liabilities or obligations
shall, upon the occurrence and during the continuance of an Event of Default, be
held in trust for the  benefit  of,  and shall be  immediately  paid over to the
Holders and to any other  Persons  who shall have the benefit of a guarantee  by
the Subsidiary  Guarantor of  Indebtedness of the Company which is owing to such
Persons  and which  ranks at least  pari passu to the  Indebtedness  owed to the
Holders,  ratably  according to the unpaid principal amount of such Indebtedness
of the  Company  owed to the  Holders  and such other  Persons.  The  Subsidiary
Guarantor, at the request of any Holder, shall execute such further documents in
favor of the Holders to further evidence and support the purpose of this Section
1.6.

                  Section  1.7.  No Right of Set Off.  No act of  commission  or
omission  of any kind or at any time upon the part of the  Company or any Holder
or their  respective  successors or assigns in respect of any matter  whatsoever
shall in any way affect or impair the rights of any Holder to enforce any right,
power or benefit  under  this  Guarantee,  and no  set-off,  recoupment,  claim,
reduction or diminution of any  obligation or any defense  (legal or equitable),
counterclaim,  cross  claim or  other  claim of any  kind or  nature  which  the
Subsidiary  Guarantor  has or may have  against the Company or any Holder or any
such  successor or assign  shall be  available to or asserted by the  Subsidiary
Guarantor in any suit or action brought by any Holder,  or any such successor or
assign,  to enforce any right,  power or benefit  under this  Guarantee or as an
offset to payment hereunder.

                  Section 1.8. Special  Representations  and Warranties relating
to the  Guarantee.  The  Subsidiary  Guarantor  represents  and  warrants to the
Holders that: (a) no other agreement, representation or special condition exists
between the Subsidiary  Guarantor and any Holder  regarding the liability of the
Subsidiary  Guarantor under this  Guarantee;  nor does any  understanding  exist
between the  Subsidiary  Guarantor  and any Holder that the  obligations  of the
Subsidiary  Guarantor  under this Guarantee are or will be other than as set out
herein; and (b) as of the date hereof,  the Subsidiary  Guarantor has no defense
whatsoever  to any action or  proceeding  that may be  brought  to enforce  this
Guarantee.

                  Section 1.9. No Waiver by Holders.  No failure or delay on the
part of any Holder in exercising any right,  power or privilege  hereunder shall
operate as a waiver  thereof;  nor shall any single or partial  exercise  of any
right,  power or  privilege  hereunder  preclude  any other or further  exercise
thereof, or the exercise of any other right, power or privilege.  Failure by any
Holder  to  insist  upon  strict  performance  hereof  shall  not  constitute  a
relinquishment  of its right to  demand  strict  performance  at  another  time.
Receipt by any Holder of any payment by any Person on any Guarantied Obligation,
with  knowledge  of a default in respect of any  Guarantied  Obligation  or of a
breach of this  Guarantee,  or both,  shall not be  construed as a waiver of the
default or breach.

                  Section 1.10.  CONTINUING GUARANTEE;  TERMINATION.  SUBJECT TO
SECTION 3.7, THIS GUARANTEE IS A CONTINUING GUARANTEE AND SHALL CONTINUE IN FULL
FORCE AND EFFECT UNTIL SUCH TIME AS ALL GUARANTIED  OBLIGATIONS  SHALL HAVE BEEN
INDEFEASIBLY PAID IN FULL.

                  Section 1.11.  Remedies  Cumulative,  etc. All remedies  under
this  Guarantee  are  cumulative  and are not  exclusive of any other rights and
remedies of the Holders  provided by law or under the Note Agreement,  any Note,
or any other applicable agreement or instrument. The extensions of credit to the
Company  pursuant to the Note Agreement  shall be presumed  conclusively to have
been made or extended,  respectively,  in reliance upon the  obligations  of the
Subsidiary Guarantor incurred pursuant to this Guarantee.

                  Section  1.12.  Repayment or  Recovery.  If claim is ever made
upon any Holder for  repayment or recovery of any amount or amounts  received in
payment  or on  account  of any of the  Guarantied  Obligations  and  any of the
Holders repays all or part of said amount by reason of (a) any judgment,  decree
or order of any  court or  administrative  body  having  jurisdiction  over such
Holder  or any of its  property  (including  as a result of any  proceedings  in
bankruptcy or reorganization  with respect to the Company) or (b) any settlement
or compromise  of any such claim  effected by such Holder with any such claimant
(including  the  original  obligor),  then  and in  such  event  the  Subsidiary
Guarantor agrees that any such judgment, decree, order, settlement or compromise
shall  be  binding  upon  it,  notwithstanding  any  revocation  hereof  or  the
cancellation  of  any  Notes  or  other  instrument  evidencing  any  Guarantied
Obligation or any security therefor,  and the Subsidiary  Guarantor shall be and
remain liable to the  aforesaid  Holder for the amount so repaid or recovered to
the same extent as if such  amount had never  originally  been  received by such
Holder.

                  [Section  1.13.  Tax  Indemnity.  (a)  In  the  event  of  the
imposition  by or for the  account of any  Governmental  Authority  of or in the
Guarantor  Jurisdiction  or any  political  subdivision  thereof or therein  (an
"Applicable  Taxing  Authority") or of any other  Governmental  Authority of any
jurisdiction in which the Subsidiary  Guarantor  resides for tax purposes or any
jurisdiction  from or  through  which the  Subsidiary  Guarantor  is making  any
payment in respect of this Guarantee,  other than any Governmental  Authority of
or in the  United  States of  America or any  political  subdivision  thereof or
therein, of any tax (whether income,  documentary,  sales, stamp,  registration,
issue, capital, property, excise or otherwise),  duty, levy, impost, fee, charge
or withholding  (each a "Tax" and collectively  "Taxes") upon or with respect to
any payments in respect of this Guarantee,  whether by withholding or otherwise,
the  Subsidiary  Guarantor  hereby agrees to pay forthwith  from time to time in
connection  with each such  payment  to each  Holder  such  amounts  as shall be
required  so that  every  payment  received  by such  Holder in  respect of this
Guarantee will not, after such  withholding or deduction or other payment for or
on account of such Tax and any interest or penalties  relating thereto,  be less
than the amount  due and  payable  to such  Holder in respect of this  Guarantee
before  the  assessment  of such Tax;  provided,  however,  that the  Subsidiary
Guarantor  shall not be obliged to pay such  amounts to any Holder in respect of
Taxes to the extent such Taxes exceed the Taxes that would have been payable:

                           (i) had such Holder not had any  connection  with the
                  Guarantor   Jurisdiction   or  any   territory   or  political
                  subdivision  thereof  other than the holding of a Note (or the
                  receipt of any  payments  in respect  thereof)  or  activities
                  incidental thereto; or

                           (ii) but for the  delay  or  failure  by such  Holder
                  (following a written  request by the Subsidiary  Guarantor) in
                  the  filing  with an  appropriate  Governmental  Authority  or
                  otherwise of forms, certificates,  documents,  applications or
                  other reasonably  required  evidence  (collectively  "Forms"),
                  that is required to be filed by such Holder to avoid or reduce
                  such Taxes and that in the case of any of the foregoing  would
                  not  result in any  confidential  or  proprietary  income  tax
                  return   information   being  revealed,   either  directly  or
                  indirectly, to any Person and such delay or failure could have
                  been  lawfully  avoided  by such  Holder,  provided  that such
                  Holder shall be deemed to have satisfied the  requirements  of
                  this clause (ii) upon the good faith completion and submission
                  of such Forms as may be specified in a written  request of the
                  Subsidiary  Guarantor  no later than 45 days after  receipt by
                  such Holder of such written request.

                  (b)  Within  60 days  after  the  date of any  payment  by the
Subsidiary  Guarantor of any Tax in respect of any payment under this  Guarantee
or this Section 1.13, the Subsidiary Guarantor shall furnish to each Holder such
documentary evidence with respect to such payment as may be reasonably requested
by such Holder.

                  (c)  The obligations of the Subsidiary Guarantor under this
Section 1.13 shall survive the transfer or payment of any Note.]1

                  Section 2.  REPRESENTATIONS.  The Subsidiary Guarantor
represents and warrants as follows:

                  Section 2.1. Organization; Power and Authority. The Subsidiary
Guarantor 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
Subsidiary  Guarantor  has the  corporate  power and  authority  to execute  and
deliver this Guarantee and to perform the provisions hereof.

                  Section 2.2. Authorization,  Etc. This Guarantee has been duly
authorized  by all  necessary  corporate  action  on the part of the  Subsidiary
Guarantor,  and this Guarantee constitutes a legal, valid and binding obligation
of the Subsidiary  Guarantor  enforceable  against the  Subsidiary  Guarantor in
accordance with its terms,  except as the enforceability  thereof 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 2.3.  Compliance with Laws,  Other  Instruments of the
Subsidiary  Guarantor,  Etc.  The  execution,  delivery and  performance  by the
Subsidiary  Guarantor of this Guarantee will not (i)  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  Subsidiary  Guarantor  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 Subsidiary
Guarantor is bound or by which the Subsidiary Guarantor or any of its properties
may be bound or affected, (ii) 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  Subsidiary
Guarantor  or (iii)  violate  any  provision  of any  statute  or other  rule or
regulation of any Governmental Authority applicable to the Subsidiary Guarantor.

                  Section  2.4.  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 Subsidiary Guarantor of this Guarantee.  [It is not necessary
to ensure the legality, validity,  enforceability or admissibility into evidence
in the Guarantor Jurisdiction of this Guarantee that this Guarantee or any other
document be filed, recorded or enrolled with any Governmental Authority, or that
any such  agreement  or  document  be stamped  with any stamp,  registration  or
similar transaction tax.]1

                  Section 2.5.  Ranking.  All obligations and liabilities of the
Subsidiary Guarantor under this Guarantee  constitute direct,  unconditional and
general  obligations  of the  Subsidiary  Guarantor and rank in right of payment
either  pari  passu  or  senior  to all  other  Indebtedness  of the  Subsidiary
Guarantor,  except for such Indebtedness which is preferred as a result of being
secured (but then only to the extent of such security).

                  [Section  2.6.  Taxes.  No  liability  for any Tax directly or
indirectly imposed,  assessed,  levied or collected by or for the account of any
Applicable Taxing Authority will be incurred by the Subsidiary  Guarantor or any
Holder as a result of the execution or delivery of this  Guarantee and, based on
present law, no deduction or  withholding  in respect of Taxes imposed by or for
the account of any Applicable  Taxing  Authority is required to be made from any
payment by the Subsidiary  Guarantor  under this  Guarantee  except for any such
withholding or deduction arising out of the conditions  described in the proviso
to Section 1.13(a).]1

                  Section 3.  MISCELLANEOUS.

                  Section 3.1. Successors and Assigns.  All agreements contained
in this Guarantee bind the Subsidiary  Guarantor and inure to the benefit of the
Holders and in each case to their respective  successors and assigns (including,
without  limitation,  any  subsequent  Holder of a Note) whether so expressed or
not.

                  Section 3.2.  Severability.  Any  provision of this  Guarantee
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 3.3.  Construction.  Each agreement  contained  herein
shall  be  construed  (absent  express  provision  to  the  contrary)  as  being
independent of each other agreement  contained  herein,  so that compliance with
any one  agreement  shall not (absent  such an express  contrary  provision)  be
deemed to excuse compliance with any other agreement. 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.

                  Section 3.4.  Governing Law. This Guarantee shall be construed
and enforced in accordance with, and the rights of the parties shall be governed
by, the law of the State of New York 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.

                  Section 3.5.  Expenses;  Indemnity.  The Subsidiary  Guarantor
will  upon  demand  pay to each  Holder  the  amount  of any and all  reasonable
expenses,  including the reasonable  fees and expenses of its counsel and of any
experts and agents,  which such Holder may incur in connection with  enforcement
of this  Guarantee  or the  failure by the  Subsidiary  Guarantor  to perform or
observe  any of the  provisions  hereof.  To the extent  permitted  by law,  the
Subsidiary  Guarantor agrees to indemnify and hold harmless each Holder and each
officer,  director,  employee, trustee or agent thereof from and against any and
all claims,  demands,  losses,  judgments and liabilities (including liabilities
for  penalties) of whatsoever  kind or nature,  growing out of or resulting from
this  Guarantee or the exercise by any Holder of any right or remedy  granted to
it  hereunder  or under the Note  Agreement  or any Note,  other than such items
arising  out of  gross  negligence  or  willful  misconduct  on the part of such
Holder.  If and to the extent that the  obligations of the Subsidiary  Guarantor
under  this  Section  3.5 are  unenforceable  for  any  reason,  the  Subsidiary
Guarantor  hereby  agrees to make the  maximum  contribution  to the payment and
satisfaction of such obligations which is permissible under applicable law.

                  Section 3.6. Waiver of Immunity.  To the extent the Subsidiary
Guarantor  may now or  hereafter  be  entitled,  in any  jurisdiction  in  which
judicial  proceedings  may at  any  time  be  commenced  with  respect  to  this
Guarantee, to claim for itself or its revenues or properties immunity from suit,
set-off,  attachment  upon  or  prior  to  judgment  or in aid of  execution  or
execution of a judgment or from any other legal process,  and to the extent that
in any such  jurisdiction  there may be attributed to the  Subsidiary  Guarantor
such an immunity  (whether or not  claimed),  the  Subsidiary  Guarantor  hereby
irrevocably  agrees not to claim and hereby  irrevocably  waives  such  immunity
until the obligations of the Subsidiary Guarantor hereunder are discharged.

                  Section  3.7.  Release.  Upon  notice by the  Company  to each
Holder in respect of the  Subsidiary  Guarantor as provided in Section 9.8(b) of
the  Note  Agreement,  the  Subsidiary  Guarantor  shall  be  released  from its
obligations under this Guarantee.

                  Section 3.8. Notices. All notices and communications  provided
for hereunder shall be in writing and sent as provided in Section 19 of the Note
Agreement (i) if to any Holder,  to the address specified for such Holder in the
Note Agreement and (ii) if to the Subsidiary  Guarantor,  to the address for the
Subsidiary Guarantor set forth on the signature pages hereof.

                  Section 3.9.  Amendments.  This Guarantee may be amended,  and
observance of any term hereof waived (either  retroactively  or  prospectively),
with (and only with) the written  consent of the  Subsidiary  Guarantor  and the
Required Holders.

                  [Section  3.10.   JURISDICTION  AND  PROCESS.  THE  SUBSIDIARY
GUARANTOR AGREES THAT ANY LEGAL ACTION OR PROCEEDING  ARISING OUT OF OR RELATING
TO THIS GUARANTEE OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION HEREWITH,  OR ANY
LEGAL ACTION OR PROCEEDING TO EXECUTE OR OTHERWISE ENFORCE ANY JUDGMENT OBTAINED
AGAINST THE SUBSIDIARY  GUARANTOR,  FOR BREACH HEREOF OR THEREOF, OR AGAINST ANY
OF ITS PROPERTIES,  MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR THE
UNITED  STATES  DISTRICT  COURT FOR THE  SOUTHERN  DISTRICT OF NEW YORK BY OR ON
BEHALF OF ANY HOLDER,  AS SUCH HOLDER MAY ELECT,  AND THE  SUBSIDIARY  GUARANTOR
HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION
OF SUCH  COURTS  FOR  PURPOSES  OF ANY SUCH  LEGAL  ACTION  OR  PROCEEDING.  THE
SUBSIDIARY  GUARANTOR HEREBY IRREVOCABLY APPOINTS AND DESIGNATES [CT CORPORATION
SYSTEM, WHOSE ADDRESS IS 1633 BROADWAY, NEW YORK, NY 10019], OR ANY OTHER PERSON
HAVING AND  MAINTAINING  A PLACE OF  BUSINESS  IN THE STATE OF NEW YORK WHOM THE
SUBSIDIARY  GUARANTOR MAY FROM TIME TO TIME HEREAFTER DESIGNATE (HAVING GIVEN 30
DAYS' NOTICE THEREOF TO EACH HOLDER),  AS THE TRUE AND LAWFUL  ATTORNEY AND DULY
AUTHORIZED  AGENT FOR  ACCEPTANCE OF SERVICE OF LEGAL PROCESS OF THE  SUBSIDIARY
GUARANTOR. THE SUBSIDIARY GUARANTOR HEREBY AGREES THAT SERVICE OF PROCESS IN ANY
SUCH  PROCEEDING  MAY BE EFFECTED  BY MAILING A COPY  THEREOF BY  REGISTERED  OR
CERTIFIED MAIL (OR ANY SUBSTANTIALLY  SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO
IT AT ITS ADDRESS  SPECIFIED  IN SECTION  3.8 OR AT SUCH OTHER  ADDRESS OF WHICH
EACH  HOLDER  SHALL  HAVE BEEN  NOTIFIED  PURSUANT  THERETO.  IN  ADDITION,  THE
SUBSIDIARY  GUARANTOR HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY OBJECTION  WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE
OF ANY SUIT,  ACTION OR PROCEEDING  ARISING OUT OF OR RELATING TO THIS GUARANTEE
OR ANY OTHER DOCUMENT  EXECUTED IN CONNECTION  HEREWITH BROUGHT IN THE COURTS OF
THE STATE OF NEW YORK OR THE  UNITED  STATES  DISTRICT  COURT  FOR THE  SOUTHERN
DISTRICT  OF NEW YORK,  AND ANY CLAIM THAT ANY SUCH SUIT,  ACTION OR  PROCEEDING
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.]1

                  [Section 3.11. Obligation to Make Payment in U.S. Dollars. All
payments  made by the  Subsidiary  Guarantor  under this  Guarantee  shall be in
lawful  money  of  the  United  States  of  America  ("U.S.  Dollars")  and  the
obligations of the Subsidiary  Guarantor to make payments in U.S. Dollars of any
of its obligations hereunder shall not be discharged or satisfied by any tender,
or any  recovery  pursuant to any  judgment,  which is expressed in or converted
into any currency other than U.S.  Dollars,  except to the extent such tender or
recovery shall result in the actual receipt by the applicable Holder of the full
amount  of  U.S.  Dollars  expressed  to be  payable  in  respect  of  any  such
obligations. The obligation of the Subsidiary Guarantor to make payments in U.S.
Dollars as aforesaid shall be enforceable as an alternative or additional  cause
of action for the purpose of recovery in U.S. Dollars of the amount,  if any, by
which such actual  receipt  shall fall short of the full amount of U.S.  Dollars
expressed  to be payable in  respect of any such  obligations,  and shall not be
affected  by  judgment  being  obtained  for  any  other  sums  due  under  this
Guarantee.]1


<PAGE>
               EXECUTED by the  Subsidiary  Guarantor  as of the day and year
first above written.



[SUBSIDIARY GUARANTOR]



By______________________
Title:


Address of Subsidiary Guarantor:


--------
1        Include bracketed  language if Subsidiary  Guarantor is organized under
         the  laws  of a  jurisdiction  other  then  the  United  States  or any
         political subdivision thereof.