OPTICAL COATING LABORATORY, INC.

                           DATED AS OF JULY 30, 1998


                            Note Purchase Agreement
                             _____________________



          $6,400,000 8.71% SERIES A1 SENIOR NOTES DUE JUNE 1, 2002
          $8,000,000 7.80% SERIES A2 SENIOR NOTES DUE JULY 31, 2008
          $30,000,000 6.69% SERIES B SENIOR NOTES DUE JULY 31, 2008


                               TABLE OF CONTENTS
                                                                       PAGE
          1.   BACKGROUND; AUTHORIZATION OF NOTES.......................  1
               1.1  Background..........................................  1
               1.2  Authorization of Issuance and Exchange of Notes.....  1
          2.   NOTE EXCHANGE; SALE AND PURCHASE OF SERIES B NOTES.......  2
               2.1  Note Exchange.......................................  2
               2.2  Sale and Purchase of Series B Notes.................  2
               2.3  Other Agreements....................................  2
          3.   CLOSING..................................................  3
          4.   CONDITIONS TO CLOSING....................................  3
               4.1  Representations and Warranties......................  3
               4.2  Performance; No Default.............................  3
               4.3  Compliance Certificates.............................  4
               4.4  Opinions of Counsel.................................  4
               4.5  Purchase Permitted By Applicable Law, etc...........  4
               4.6  Note Exchange and Sale of Other Notes...............  4
               4.7  Payment of Special Counsel Fees.....................  5
               4.8  Private Placement Numbers...........................  5
               4.9  Payments in respect of Existing Notes...............  5
               4.10 Changes in Corporate Structure......................  5
               4.11 Certain Consents and Agreements.....................  5
               4.12 Credit Agreement....................................  5
               4.13 Proceedings and Documents...........................  6
          4A.  CONDITIONS TO  THE COMPANY'S  OBLIGATION TO  ISSUE  THE
               NOTES....................................................  6
          5.   REPRESENTATIONS AND WARRANTIES OF THE COMPANY............  6
               5.1  Organization; Power and Authority...................  6
               5.2  Authorization, etc..................................  6
               5.3  Disclosure..........................................  7
               5.4  Organization   and   Ownership   of   Shares    of
                    Subsidiaries; Affiliates............................  7
               5.5  Financial Statements................................  8
               5.6  Compliance with Laws, Other Instruments, etc........  8
               5.7  Governmental Authorizations, etc....................  9
               5.8  Litigation; Observance of Agreements, Statutes and
                    Orders..............................................  9
               5.9  Taxes...............................................  9
               5.10 Title to Property; Leases...........................  9
               5.11 Licenses, Permits, etc.............................. 10
               5.12 Compliance with ERISA and Foreign Pension Plans..... 10
               5.13 Private Offering by the Company..................... 11
               5.14 Use of Proceeds; Margin Regulations................. 11
               5.15 Existing Indebtedness; Future Liens................. 12
               5.16 Foreign Assets Control Regulations, etc............. 12
               5.17 Status under Certain Statutes....................... 12
               5.18 Environmental Matters............................... 12
          6.   REPRESENTATIONS OF THE PURCHASER......................... 13
               6.1  Purchase for Investment............................. 13
               6.2  Source of Funds..................................... 13
               6.3  No Conflict......................................... 15
               6.4  Accredited Investor................................. 15
               6.5  No Brokers.......................................... 15
               6.6  Acknowledgement..................................... 15
          7.   INFORMATION AS TO COMPANY................................ 15
               7.1  Financial and Business Information.................. 15
               7.2  Officer's Certificate............................... 18
               7.3  Inspection.......................................... 19
          8.   PAYMENT OF THE NOTES..................................... 19
               8.1  Required Prepayments; Payment at Maturity........... 19
               8.2  Optional Prepayments with Make-Whole Amount......... 20
               8.3  Allocation of Partial Prepayments................... 21
               8.4  Maturity; Surrender, etc............................ 21
               8.5  No Other Optional Prepayments or Purchase of Notes.. 21
               8.6  Make-Whole Amount................................... 22
          9.   AFFIRMATIVE COVENANTS.................................... 24
               9.1  Compliance with Law................................. 24
               9.2  Insurance........................................... 24
               9.3  Maintenance of Properties........................... 25
               9.4  Payment of Taxes and Claims......................... 25
               9.5  Corporate Existence, etc............................ 25
               9.6  Designation of Subsidiaries......................... 25
               9.7  Pari Passu.......................................... 27
          10.  NEGATIVE COVENANTS....................................... 27
               10.1 Nature of Business.................................. 27
               10.2 Transactions with Affiliates........................ 27
               10.3 Fixed Charge Coverage............................... 27
               10.4 Limitations on Restricted Subsidiary Indebtedness... 27
               10.5 Limitation on Consolidated Total Debt and Priority
                    Indebtedness........................................ 28
               10.6 Liens............................................... 29
               10.7 Maintenance of Consolidated Adjusted Net Worth...... 31
               10.8 Restricted Payments and Restricted Investments...... 32
               10.9 Merger, Consolidation, etc.......................... 33
               10.10 Sale of Assets, etc................................ 34
          11.  EVENTS OF DEFAULT........................................ 35
          12.  REMEDIES ON DEFAULT, ETC................................. 38
               12.1 Acceleration........................................ 38
               12.2 Other Remedies...................................... 38
               12.3 Rescission.......................................... 39
               12.4 No Waivers or Election of Remedies, Expenses, etc... 39
          13.  REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES............ 40
               13.1 Registration of Notes............................... 40
               13.2 Transfer and Exchange of Notes...................... 40
               13.3 Replacement of Notes................................ 40
          14.  PAYMENTS ON NOTES........................................ 41
               14.1 Place of Payment.................................... 41
               14.2 Home Office Payment................................. 41
          15.  EXPENSES, ETC............................................ 41
               15.1 Transaction Expenses................................ 41
               15.2 Survival............................................ 42
          16.  SURVIVAL  OF  REPRESENTATIONS  AND  WARRANTIES;  ENTIRE
               AGREEMENT................................................ 42
          17.  AMENDMENT AND WAIVER..................................... 42
               17.1 Requirements........................................ 42
               17.2 Solicitation of Holders of Notes.................... 43
               17.3 Binding Effect, etc................................. 43
               17.4 Notes held by Company, etc.......................... 44
          18.  NOTICES.................................................. 44
          19.  REPRODUCTION OF DOCUMENTS................................ 45
          20.  CONFIDENTIAL INFORMATION................................. 45
          21.  SUBSTITUTION OF PURCHASER................................ 47
          22.  MISCELLANEOUS............................................ 47
               22.1 Successors and Assigns.............................. 47
               22.2 Payments Due on  Non-Business Days; When  Payments
                    Deemed Received..................................... 47
               22.3 Severability........................................ 47
               22.4 Construction........................................ 48
               22.5 Counterparts........................................ 48
               22.6 Governing Law....................................... 48

                              TABLE OF CONTENTS (cont.)

            SCHEDULE A     -- Information Relating to Purchasers
            SCHEDULE B     -- Defined Terms
            SCHEDULE 3     -- Payment Instructions
            SCHEDULE 4.10  -- Changes in Corporate Structure
            SCHEDULE 5.3   -- Disclosure Materials
            SCHEDULE 5.4   -- Subsidiaries  of the  Company and  Ownership
                              of Restricted Subsidiary Stock
            SCHEDULE 5.5   -- Financial Statements
            SCHEDULE 5.8   -- Certain Litigation
            SCHEDULE 5.11  -- Patents, etc.
            SCHEDULE 5.12  -- ERISA Affiliates and Foreign Pension Plans
            SCHEDULE 5.15  -- Existing Indebtedness and Liens
            SCHEDULE 10.8  -- Existing Investments
            EXHIBIT A1     -- Form of 8.71% Series A1 Senior Note due
                              June  1, 2002
            EXHIBIT A2     -- Form  of 7.80% Series A2 Senior Note due
                              July 31, 2008
            EXHIBIT B      -- Form of 6.69% Series B Senior Note due
                              July  31, 2008
            EXHIBIT 4.4(a) -- Form of Opinion of Special Counsel for the
                              Company
            EXHIBIT 4.4(b) -- Form of Opinion of Special Counsel for
                              the Purchasers


                          OPTICAL COATING LABORATORY, INC.
                               2789 Northpoint Parkway
                         Santa Rosa, California  95407-7397

              $6,400,000 8.71% SERIES A1 SENIOR NOTES DUE JUNE 1, 2002
              $8,000,000 7.80% SERIES A2 SENIOR NOTES DUE JULY 31, 2008
              $30,000,000 6.69% SERIES B SENIOR NOTES DUE JULY 31, 2008


                             Dated as of July 30, 1998

          To the Purchaser Named on
          the Signature Page Hereto

          Ladies and Gentlemen:

               OPTICAL COATING  LABORATORY,  INC., a  Delaware  corporation
          (together with its successors and assigns, the "Company"), agrees
          with you as follows:

          1.   BACKGROUND; AUTHORIZATION OF NOTES
               The Company has  heretofore issued  to Massachusetts  Mutual
          Life Insurance Company (as  successor to Connecticut Mutual  Life
          Insurance Company), Modern Woodmen  of America and American  Life
          and Casualty Insurance Company  (the "Existing Noteholders")  its
          8.71% Senior Notes due  June 1, 2002  (the "Existing Notes"),  in
          the aggregate original principal amount of $18,000,000,  pursuant
          to, and in accordance with the provisions of, those certain  Note
          Purchase Agreements  (collectively, the  "Existing Note  Purchase
          Agreement"), dated as of May 27,  1994, between the Company  and,
          respectively, each of  the Existing Noteholders.   The  aggregate
          principal amount of the  Existing Notes currently outstanding  is
          $14,400,000.

          1.2  Authorization ofIssuance and Exchange of Notes.
               (a)  Authorization of  Series A1  Notes and  Series  A2
               Notes in Exchange for Existing Notes.  In exchange for  the
               Existing Notes, the Company will authorize the issue of, and
               execute and deliver:

                         (i)  $6,400,000 aggregate principal amount of  its
                    8.71% Series  A1 Senior  Notes due  June 1,  2002  (the
                    "Series A1 Notes," such term to include any such  notes
                    issued in substitution therefor pursuant to Section  13
                    of  this  Agreement   or  the   Other  Agreements   (as
                    hereinafter defined)); and

                         (ii) $8,000,000 aggregate principal amount of  its
                    7.80% Series A2  Senior Notes  due July  31, 2008  (the
                    "Series A2 Notes," such term to include any such  notes
                    issued in substitution therefor pursuant to Section  13
                    of this Agreement or the Other Agreements).

               The exchange of the Series A1 Notes and Series A2 Notes  for
               the Existing Notes is hereinafter  referred to as the  "Note
               Exchange."

                    (b)  Authorization of Series B Notes.  The Company will
               authorize  the  issue  and  sale  of  $30,000,000  aggregate
               principal amount of its 6.69% Series B Senior Notes due July
               31, 2008 (the  "Series B Notes,"  such term  to include  any
               such notes  issued  in  substitution  therefor  pursuant  to
               Section 13 of this Agreement or the Other Agreements).

                    (c)  Forms of Notes; Certain  Definitions.  The  Series
               A1 Notes  shall be  substantially in  the  form set  out  in
               Exhibit A1, the  Series A2 Notes  shall be substantially  in
               the form set out in Exhibit A2, and the Series B Notes shall
               be substantially in the form set  out in Exhibit B, in  each
               case, with  such  changes  therefrom,  if  any,  as  may  be
               approved by you and the Company.   The Series A1 Notes,  the
               Series A2 Notes and the Series  B Notes are herein  referred
               to collectively  as  the  "Notes,"  and  individually  as  a
               "Note."  Certain  capitalized terms used  in this  Agreement
               are defined  in  Schedule  B;  references  to  a  "Section,"
               "Schedule" or an "Exhibit" are, unless otherwise  specified,
               to a Section of,  or a Schedule or  an Exhibit attached  to,
               this Agreement.

          2.   NOTE EXCHANGE;  SALE  AND  PURCHASE  OF  SERIES  B NOTES

               2.1  Note Exchange
                    
               Subject to the  terms and conditions  of this Agreement,  at
          the Closing provided for in Section 3, the Company shall  deliver
          to you, if you are a holder of any of the Existing Notes, one  or
          more Series A1 Notes or Series A2 Notes (as set forth below  your
          name on  Schedule A)  in the  aggregate principal  amount of  the
          Existing Notes  held by  you, and  in consideration  thereof  you
          shall surrender to  the Company, for  cancellation, the  Existing
          Notes held by you.  Upon  consummation of the Note Exchange,  the
          Existing Note Purchase  Agreement shall  be deemed  to have  been
          terminated (other than for the respective rights and  obligations
          of the parties under Sections 7.5,  10.3 and 10.6 thereof,  which
          shall survive such termination) and  all Existing Notes shall  be
          cancelled.

               2.2  Sale and Purchase of Series B Notes
               Subject to the terms and  conditions of this Agreement,  the
          Company will issue and sell to you, if you are a purchaser of any
          Series B Notes, and  you will purchase from  the Company, at  the
          Closing provided  for  in  Section  3,  Series  B  Notes  in  the
          principal amount specified below your name  in Schedule A at  the
          purchase price of 100% of the principal amount thereof.

                2.3  Other Agreements
               Contemporaneously with  entering  into this  Agreement,  the
          Company is entering into  separate Note Purchase Agreements  (the
          "Other Agreements") identical  with this Agreement  with each  of
          the  other   purchasers  named   in   Schedule  A   (the   "Other
          Purchasers"), providing  at such  Closing for  the Note  Exchange
          and/or sale  to each  of the  Other Purchasers  of Notes  of  the
          Series and in the principal amounts  specified below its name  in
          Schedule A.  Your obligation hereunder and the obligations of the
          Other Purchasers under the Other  Agreements are several and  not
          joint obligations  and you  shall have  no obligation  under  any
          Other  Agreement  and  no  liability   to  any  Person  for   the
          performance or non-performance by any Other Purchaser thereunder.

          3.   CLOSING
               The Note Exchange and the sale and purchase of the Series  B
          Notes shall occur  at the  offices of  Hebb &  Gitlin, One  State
          Street, Hartford, Connecticut 06103,  at 10:00 a.m., local  time,
          at a closing (the "Closing") on  August 3, 1998 or on such  other
          Business Day thereafter on  or prior to July 31,  1998 as may  be
          agreed upon by the Company and you and the Other Purchasers.   At
          the Closing, the  Company will deliver  to you the  Notes of  the
          Series to be purchased by you and/or acquired by you in the  Note
          Exchange, as the case may  be, in the form  of a single Note  (or
          such greater  number  of  Notes  in  denominations  of  at  least
          $100,000 as you may request), dated  the date of the Closing  and
          registered in your  name (or  in the  name of  your nominee),  as
          indicated in Schedule A, against:

                    (a)  in the case of the Series A1 Notes and the  Series
          A2 Notes to be  acquired by you, if  any, your surrender  of
          the  Existing  Notes  held  by   you  to  the  Company   for
          cancellation, and

                    (b)  in the case of the Series B Notes to be  purchased
          by you, if any,  payment by federal  funds wire transfer  in
          immediately available funds  of the amount  of the  purchase
          price therefor as directed by the Company in Schedule 3.
          If at  the Closing  the Company  shall fail  to tender  such
          Notes to you as provided in clauses (a) and (b) above, or any  of
          the conditions  specified  in  Section  4  shall  not  have  been
          fulfilled to your satisfaction, you  shall, at your election,  be
          relieved of all further obligations under this Agreement, without
          thereby waiving any rights you may have by reason of such failure
          or such nonfulfillment.

          4.   CONDITIONS TO CLOSING
               Your obligation to  enter into the  Note Exchange and/or  to
          purchase and pay for the Series B Notes to be sold to you at  the
          Closing,  as  specified  in  Schedule   A,  is  subject  to   the
          fulfillment to your satisfaction, prior to or at the Closing,  of
          the following conditions:

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

               4.2  Performance; No Default
               The Company  shall  have  performed and  complied  with  all
          agreements and conditions contained in this Agreement required to
          be performed or complied  with by it prior  to or at the  Closing
          and after giving effect to the  issue and sale of the Notes  (and
          the application  of  the  proceeds  thereof  as  contemplated  by
          Schedule 5.14) no Default or Event of Default shall have occurred
          and be  continuing.    Neither the  Company  nor  any  Restricted
          Subsidiary shall have entered into any transaction since the date
          of the  Memorandum that  would have  been  prohibited by  any  of
          Sections 10.2, 10.5, 10.6, 10.8, 10.9 or 10.10 had such  Sections
          applied since such date.

               4.3  Compliance Certificates
                    (a)  Officer's Certificate.    The Company  shall  have
          delivered to you an Officer's Certificate, dated the date of
          the Closing,  certifying that  the conditions  specified  in
          Sections 4.1, 4.2 and 4.10 have been fulfilled.
                    (b)  Secretary's Certificate.   The Company shall  have
          delivered to you a  certificate of its  Secretary or one  of
          its Assistant Secretaries,  dated the date  of the  Closing,
          certifying as to the resolutions attached thereto and  other
          corporate  proceedings   relating  to   the   authorization,
          execution and delivery of the Notes, this Agreement and  the
          Other Agreements.

               4.4  Opinions of Counsel
               You shall have received from
                    (a)  Collette & Erickson, counsel for the Company, and
                    (b)  Hebb & Gitlin, your special counsel,
          closing  opinions,   each  dated   the  date   of  the   Closing,
          substantially in  the  respective  forms set  forth  in  Exhibits
          4.4(a) and  4.4(b), and  as  to such  other  matters as  you  may
          reasonably request.  This Section 4.4 shall constitute  direction
          by the Company to such counsel named in the immediately preceding
          clause (a) to deliver such closing opinion to you.

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

               4.6  Note Exchange and Sale of Other Notes
               Contemporaneously with the Closing,  the Company and all  of
          the Existing Noteholders shall  consummate the Note Exchange  and
          the Company  shall sell  to the  Other Purchasers  and the  Other
          Purchasers shall purchase the Series B  Notes to be purchased  by
          them at the Closing as specified in Schedule A.

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

               4.8  Private Placement Numbers
               Private Placement Numbers 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.

               4.9  Payments in respect of Existing Notes              
               The Company  shall  have  made  payment,  to  each  Existing
          Noteholder, of all accrued interest on the outstanding  principal
          amount of the Existing Notes held by such Existing Noteholder.

               4.10 Changes in Corporate Structure
               Except as specified in Schedule 4.10, the Company shall  not
          have changed its jurisdiction of incorporation or been a party to
          any merger or consolidation and shall  not have succeeded to  all
          or any substantial part of the  liabilities of any other  entity,
          at any  time following  the date  of  the most  recent  financial
          statements referred to in Schedule 5.5.

               4.11 Certain Consents  and  Agreements.
               Each holder of  Indebtedness of the  Company the consent  of
          which is,  in the  reasonable judgment  of you  and your  special
          counsel, necessary or  desirable to permit  the Company to  enter
          into the  transactions  contemplated  by this  Agreement  and  to
          perform its  obligations in  respect of  this Agreement  and  the
          Notes shall have executed and delivered to you a consent, in form
          and substance acceptable to you, to the transactions contemplated
          by this  Agreement,  permitting the  Company  to incur  and  have
          outstanding the indebtedness and all other obligations in respect
          of this Agreement  and the Notes,  the issuance and  sale of  the
          Notes, and waiving any  default or event  of default which  might
          have occurred by  virtue of the  execution and  delivery of  this
          Agreement and the Notes.

               4.12 Credit Agreement.
               You shall  have received  a copy  of the  Credit  Agreement,
          entered into  on  the date  of  the  Closing, by  and  among  the
          Company, Bank of America National Trust and Savings  Association,
          as agent  and  letter  of credit  issuing  bank,  and  the  other
          financial institutions party thereto, certified as being true and
          complete by an officer of the Company.

                4.13 Proceedings and Documents3
                All corporate and other  proceedings in connection with  the
          transactions contemplated by this Agreement and all documents and
          instruments incident to such  transactions shall be  satisfactory
          to you and your special counsel, and you and your special counsel
          shall have received all  such counterpart originals or  certified
          or other copies of such documents  as you or they may  reasonably
          request.

               4A.  CONDITIONS TO  THE COMPANY'S  OBLIGATION TO  ISSUE
          THE NOTES
               Anything in this Agreement to the contrary  notwithstanding,
          the Company's obligation to issue the  Notes shall be subject  to
          the conditions that (i) each of  the Other Purchasers shall  have
          executed  and  delivered  a  Note  Purchase  Agreement  identical
          (except as to the identity of  the purchaser thereunder) to  this
          Agreement, and such Other Purchasers shall have accepted delivery
          of, and made payment  for, the Notes to  be purchased by them  at
          the Closing; and (ii) all of the  Existing Notes shall have  been
          surrendered and  cancelled concurrently  with, or  prior to,  the
          Closing.  The Company acknowledges that the issuance of the Notes
          to you and each Other Purchaser  on the date of the Closing,  and
          the payment by you and each  Other Purchaser for the Notes to  be
          purchased by you  and each  Other Purchaser  on the  date of  the
          Closing, if  in each  case effectuated  on the  date of  Closing,
          shall be deemed  to have been  contemporaneously effectuated  and
          shall satisfy the conditions specified in the preceding sentence.

          5.   REPRESENTATIONS AND WARRANTIES  OF THE  COMPANY
               The Company represents and warrants to  you, as of the date
          of the Closing, that:

               5.1  Organization; Power and Authority
               The Company:
                    (a)  is a corporation duly organized, validly  existing
          and in  good  standing  under  the  laws  of  the  State  of
          Delaware;
                    (b)  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; and
                    (c)  has the corporate  power and authority  to own  or
          hold under lease the properties it  purports to own or  hold
          under lease,  to  transact  the business  it  transacts  and
          proposes to transact, to execute and deliver this  Agreement
          and the Other Agreements  and the Notes  and to perform  the
          provisions hereof and thereof.

               5.2  Authorization, etc.
               This Agreement, the Other Agreements 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,  except   as   such
          enforceability may  be  limited  by  (a)  applicable  bankruptcy,
          insolvency, reorganization,  moratorium  or  other  similar  laws
          affecting the enforcement of creditors' rights generally and  (b)
          general  principles  of  equity   (regardless  of  whether   such
          enforceability is  considered in  a proceeding  in equity  or  at
          law).

               5.3  Disclosure.
               The  Company,  through  its  agent,  BancAmerica   Robertson
          Stephens, has delivered to you and each Other Purchaser a copy of
          an Offering  Memorandum,  dated  June  1998  (the  "Memorandum"),
          relating to the transactions contemplated hereby.  The Memorandum
          fairly describes, in all material respects, the general nature of
          the business  and principal  properties of  the Company  and  its
          Restricted Subsidiaries.   Except as disclosed  in Schedule  5.3,
          this Agreement,  the  Memorandum, the documents, certificates  or
          other writings delivered to you by or on behalf of the Company in
          connection with  the  transactions contemplated  hereby  and  the
          financial statements listed in Schedule 5.5, taken as a whole, do
          not contain any untrue  statement of a material  fact or omit  to
          state any material fact necessary to make the statements  therein
          not misleading in  light of  the circumstances  under which  they
          were made.  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 June 1,  1998,
          there has been no change in the financial condition,  operations,
          business,    properties  or  prospects  of  the  Company  or  any
          Restricted Subsidiary except changes that individually or in  the
          aggregate could not  reasonably be  expected to  have a  Material
          Adverse Effect.  There is no fact known to the Company that could
          reasonably be expected to have a Material Adverse Effect that has
          not been set forth  herein or in the  Memorandum or in the  other
          documents, certificates and other writings delivered to you by or
          on behalf of the Company specifically for use in connection  with
          the transactions contemplated hereby.

               5.4  Organization  and  Ownership  of  Shares   of
                    Subsidiaries; Affiliates 
                    (a)  Schedule 5.4  contains (except  as noted  therein)
               complete  and   correct   lists   of   (i)   the   Company's
               Subsidiaries, showing, as  to each  Subsidiary, the  correct
               name thereof, the jurisdiction of its organization, and  the
               percentage of  shares of  each class  of its  Capital  Stock
               outstanding owned by the Company and each other  Subsidiary,
               (ii)  the  Company's  Restricted  Subsidiaries,  (iii)   the
               Company's Affiliates, other than Subsidiaries, and (iv)  the
               Company's directors and senior officers.

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

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

                    (d)  No Subsidiary is a party to, or otherwise  subject
               to any Material legal restriction or any Material  agreement
               (other  than  this  Agreement,  the  Other  Agreements,  the
               agreements listed in Schedule 5.4 and customary  limitations
               imposed by corporate law  statutes) restricting the  ability
               of such Subsidiary to pay dividends  out of profits or  make
               any other similar distributions of profits to the Company or
               any of  its Subsidiaries  that  owns outstanding  shares  of
               Capital Stock of such Subsidiary.

                    (e)  As of  the  date  of the  Closing,  (i) the  total
               assets of all Unrestricted Subsidiaries, if such assets were
               included in the  computation of  Consolidated Total  Assets,
               would constitute less  than 20% of  such Consolidated  Total
               Assets, and  (ii) the  total revenues  of  all  Unrestricted
               Subsidiaries would constitute less than 20% of  consolidated
               total revenues of the Company  and its Subsidiaries at  such
               time.

               5.5  Financial Statementsl
               The Company has  delivered to you  and each Other  Purchaser
          copies of  the  financial  statements  of  the  Company  and  its
          Subsidiaries listed  in  Schedule 5.5.    All of  said  financial
          statements (including  in each  case  the related  schedules  and
          notes) fairly present in  all material respects the  consolidated
          financial position of the Company and its Subsidiaries as of  the
          respective dates specified in such 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).

               5.6  Compliance  with  Laws,  Other   Instruments,
          etc.
               The execution, delivery  and performance by  the Company  of
          this Agreement and the Notes will not

                    (a)  contravene, result in any breach of, or constitute
               a default under, or  result in the creation  of any Lien  in
               respect of any  property of  the Company  or any  Subsidiary
               under,  any  indenture,  mortgage,  deed  of  trust,   loan,
               purchase or credit  agreement, lease,  corporate charter  or
               by-laws, or any other agreement  or instrument to which  the
               Company or any Subsidiary is bound  or by which the  Company
               or any Subsidiary or any of their respective properties  may
               be bound or affected,
                    (b)  conflict with or result in a breach of any of  the
               terms, conditions  or  provisions of  any  order,  judgment,
               decree, or ruling of  any court, arbitrator or  Governmental
               Authority applicable to the Company or any Subsidiary, which
               conflict or breach,  individually or in  the aggregate  with
               any  and  all  other  such  conflicts  or  breaches,   could
               reasonably be expected to have a Material Adverse Effect, or
                    (c)  violate any provision of any statute or other rule
               or regulation of  any Governmental  Authority applicable  to
               the Company or any Subsidiary, which violation, individually
               or in the aggregate with any and all other such  violations,
               could reasonably  be expected  to  have a  Material  Adverse
               Effect.

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

               5.8  Litigation;   Observance    of    Agreements,
                    Statutes and Orders
                    (a)  Except as disclosed in Schedule 5.8, there are  no
               actions, suits or proceedings  pending or, to the  knowledge
               of the Company, threatened against or affecting the  Company
               or any  Subsidiary or  any property  of the  Company 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,  could  reasonably  be
               expected to have a Material Adverse Effect.
                    (b)  Neither the  Company  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.

               5.9  Taxes.
               The Company and its Subsidiaries have filed all tax  returns
          that are required  to have been  filed in  any jurisdiction,  and
          have paid all taxes shown to  be due and payable on such  returns
          and all other  taxes and assessments  levied upon  them or  their
          properties, assets,  income or  franchises,  to the  extent  such
          taxes and assessments have become due and payable and before they
          have become delinquent, except for any taxes and assessments  (a)
          the amount  of which  is not  individually  or in  the  aggregate
          Material or (b) the amount, applicability or validity of which is
          currently  being   contested  in   good  faith   by   appropriate
          proceedings  and  with  respect  to   which  the  Company  or   a
          Subsidiary, as the case may be, has established adequate reserves
          in accordance with GAAP.  The  Company knows of no basis for  any
          other tax or assessment that could reasonably be expected to have
          a Material Adverse Effect.  The charges, accruals and reserves on
          the books  of the  Company and  its  Subsidiaries in  respect  of
          Federal,  state  or  other  taxes  for  all  fiscal  periods  are
          adequate.  The Federal income tax liabilities of the Company  and
          its Subsidiaries  have been  determined by  the Internal  Revenue
          Service and paid  for all fiscal  years up to  and including  the
          fiscal year ended October 31, 1997.

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

               5.11 Licenses, Permits, etc.
               Except as disclosed in Schedule 5.11,
                    (a)  the Company and  its Subsidiaries  own or  possess
               all licenses, permits, franchises, authorizations,  patents,
               copyrights, service marks,  trademarks and  trade names,  or
               rights thereto, that  individually or in  the aggregate  are
               Material, without known conflict with the rights of others;
                    (b)  to the best knowledge  of the Company, no  product
               or practice  of the  Company  or any  Restricted  Subsidiary
               infringes in  any  material  respect  any  license,  permit,
               franchise, authorization, patent,  copyright, service  mark,
               trademark, trade  name or  other right  owned by  any  other
               Person; and
                    (c)  to the best knowledge of the Company, there is  no
               Material violation by any Person of any right of the Company
               or any  of  its Subsidiaries  with  respect to  any  patent,
               copyright, service  mark,  trademark, trade  name  or  other
               right  owned  or  used  by  the   Company  or  any  of   its
               Subsidiaries.

               5.12 Compliance with  ERISA  and  Foreign  Pension
                    Plans        
                    (a)  The Company and each ERISA Affiliate have operated
               and administered each Plan in compliance with all applicable
               laws except for such instances of noncompliance as have  not
               resulted in and could not  reasonably be expected to  result
               in a Material Adverse Effect.   Neither the Company nor  any
               ERISA Affiliate has incurred any liability pursuant to Title
               I or IV of ERISA or the penalty or excise tax provisions  of
               the Code relating to employee  benefit plans (as defined  in
               section 3 of ERISA), and no event, transaction or  condition
               has occurred or exists that could reasonably be expected  to
               result in  the  incurrence  of any  such  liability  by  the
               Company or any ERISA Affiliate, or in the imposition of  any
               Lien on  any of  the rights,  properties  or assets  of  the
               Company or any ERISA Affiliate,  in either case pursuant  to
               Title I or  IV of  ERISA or to  such penalty  or excise  tax
               provisions or  to section 401(a)(29)  or  412 of  the  Code,
               other than  such  liabilities  or  Liens  as  would  not  be
               individually or in the aggregate Material.
                    (b)  The  present  value   of  the  aggregate   benefit
               liabilities  under   each   of   the   Plans   (other   than
               Multiemployer Plans),  determined  as  of the  end  of  such
               Plan's most recently  ended plan year  on the  basis of  the
               actuarial assumptions specified for funding purposes in such
               Plan's most  recent  actuarial  valuation  report,  did  not
               exceed the aggregate  current value  of the  assets of  such
               Plan allocable  to  such  benefit  liabilities.    The  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 Company  and  the ERISA  Affiliates  have  not
               incurred withdrawal  liabilities  (and are  not  subject  to
               contingent withdrawal  liabilities)  under  section 4201  or
               4204  of  ERISA  in  respect  of  Multiemployer  Plans  that
               individually or in the aggregate are Material.
                    (d)  The  expected  postretirement  benefit  obligation
               (determined as  of  the  last  day  of  the  Company's  most
               recently ended  fiscal  year in  accordance  with  Financial
               Accounting Standards Board Statement No. 106, without regard
               to  liabilities   attributable  to   continuation   coverage
               mandated by section 4980B  of the Code)  of the Company  and
               its Restricted Subsidiaries is not Material.
                    (e)  The execution and delivery  of this Agreement  and
               the issuance  and  sale  of the  Notes  hereunder  will  not
               involve any transaction that is subject to the  prohibitions
               of section 406 of ERISA  or in connection  with which a  tax
               could be  imposed pursuant  to section 4975(c)(1)(A)-(D)  of
               the Code.  The  representation by the  Company in the  first
               sentence of this  Section 5.12(e) is  made in reliance  upon
               and subject  to  the  accuracy  of  your  representation  in
               Section 6.2 as to the Sources used to pay the purchase price
               of the Notes to be purchased by you.
                    (f)  Schedule 5.12 sets forth all ERISA Affiliates  and
               all "employee benefit plans"  maintained by the Company  (or
               any "affiliate" thereof)  or in respect  of which the  Notes
               could constitute an  "employer security" ("employee  benefit
               plan" has  the  meaning specified  in  section 3  of  ERISA,
               "affiliate" has the meaning  specified in section 407(d)  of
               ERISA and section  V of the  Department of Labor  Prohibited
               Transaction Exemption 95-60 (60 FR 35925, July 12, 1995) and
               "employer security"  has the  meaning specified  in  section
               407(d) of ERISA).
                    (g)  The present  value of  all benefits  vested  under
               each Foreign Pension Plan, determined as of the most  recent
               valuation date in respect thereof, does not exceed the value
               of the assets of such Foreign Pension Plan, and all required
               payments in  respect of  funding each  such Foreign  Pension
               Plan have been made.

               5.13 Private Offering  by  the Company
               Neither the  Company nor  anyone acting  on its  behalf  has
          offered the  Notes or  any similar  Securities  for sale  to,  or
          solicited any offer  to buy any  of the same  from, or  otherwise
          approached or  negotiated in  respect  thereof with,  any  Person
          other than you, the Other Purchasers  and not more than 10  other
          Institutional Investors, each of which has been offered the Notes
          at a private sale for investment.  Neither the Company nor anyone
          acting on its  behalf has taken,  or will take,  any action  that
          would  subject  the  issuance  or  sale  of  the  Notes  to   the
          registration requirements of section 5 of the Securities Act.

               5.14 Use of Proceeds; Margin Regulations
               The Company will apply the proceeds of the sale of the Notes
          to  refinance  the  Existing  Notes  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 U of  the Board of  Governors of  the Federal  Reserve
          System (12 CFR 221), or for the purpose of buying or carrying  or
          trading in any Securities under such circumstances as to  involve
          the Company in a violation of Regulation X of said Board (12  CFR
          224) or  to  involve any  broker  or  dealer in  a  violation  of
          Regulation T of said Board (12  CFR 220).  Margin stock does  not
          constitute more than 1% of the  value of the consolidated  assets
          of the Company and its Subsidiaries and the Company does not have
          any present intention that margin stock will constitute more than
          1% 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 U.

               5.15 Existing Indebtedness; Future Liens
                    (a)  Except as  described therein,  Schedule 5.15  sets
               forth  a  complete  and  correct  list  of  all  outstanding
               Indebtedness of the Company and its Restricted  Subsidiaries
               as of  January 31,  1998 (and  specifying, as  to each  such
               Indebtedness,  the   collateral,  if   any,  securing   such
               Indebtedness), 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
               Company or its Restricted Subsidiaries.  Neither the Company
               nor any Restricted Subsidiary is in default and no waiver of
               default is  currently  in  effect, in  the  payment  of  any
               principal or interest on any Indebtedness of the Company  or
               such Restricted Subsidiary and no event or condition  exists
               with respect  to  any Indebtedness  of  the Company  or  any
               Restricted Subsidiary that would permit (or that with notice
               or the lapse  of time, or  both, would permit)  one or  more
               Persons to cause such Indebtedness to become due and payable
               before its stated maturity or before its regularly scheduled
               dates of payment.
                    (b)  Except as disclosed in Schedule 5.15, neither  the
               Company  nor  any  Restricted   Subsidiary  has  agreed   or
               consented to  cause  or  permit  in  the  future  (upon  the
               happening  of  a  contingency  or  otherwise)  any  of   its
               property, whether  now owned  or hereafter  acquired, to  be
               subject to a Lien not permitted by Section 10.6(a).

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

               5.17 Status under Certain Statutes
               Neither  the  Company  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
          Transportation Acts (49 U.S.C.), as amended, or the Federal Power
          Act, as amended.

               5.18 Environmental Matters
               Neither the Company nor any Subsidiary has knowledge of  any
          claim or has received any notice of any claim, and no  proceeding
          has been instituted (and not resolved) raising any claim  against
          the Company or any of its Subsidiaries or any of their respective
          real properties now or formerly owned, leased or operated by  any
          of them or other assets, alleging  any damage to the  environment
          or violation of  any Environmental  Laws, except,  in each  case,
          such as could not reasonably be expected to result in a  Material
          Adverse Effect.  Except as otherwise disclosed to you in writing,
                    (a)  neither  the  Company   nor  any  Subsidiary   has
               knowledge of any facts which would  give rise to any  claim,
               public or  private, of  violation of  Environmental Laws  or
               damage to the environment emanating from, occurring on or in
               any way related  to real properties  now or formerly  owned,
               leased or operated  by any  of them  or to  other assets  or
               their  use,  except,  in  each  case,  such  as  could   not
               reasonably be  expected  to  result in  a  Material  Adverse
               Effect;
                    (b)  neither the Company  nor any  of its  Subsidiaries
               has stored any Hazardous Materials on real properties now or
               formerly owned,  leased  or  operated  by  any  of  them  or
               disposed of any Hazardous Materials in a manner contrary  to
               any Environmental Laws in each case in any manner that could
               reasonably be  expected  to  result in  a  Material  Adverse
               Effect; and
                     (c)  all buildings on  all real  properties now  owned,
               leased or operated by the Company or any of its Subsidiaries
               are in compliance with applicable Environmental Laws, except
               where failure to comply could not reasonably be expected  to
               result in a Material Adverse Effect.

               6.   REPRESENTATIONS OF THE PURCHASER.
                    6.1  Purchase for Investment1
               You represent that you are purchasing the Notes for your own
          account or for one or more separate accounts maintained by you or
          for the account  of one or  more pension or  trust funds and  not
          with a  view  to  the distribution  thereof,  provided  that  the
          disposition of  your or  their property  shall  at all  times  be
          within your or their control.  You understand that the Notes have
          not been registered under  the Securities Act  and may be  resold
          only if registered pursuant to  the provisions of the  Securities
          Act or if  an exemption  from registration  is available,  except
          under circumstances where neither  such registration nor such  an
          exemption is  required  by  law, and  that  the  Company  is  not
          required to register the Notes.

               6.2  Source of Funds
               You represent that at least one of the following  statements
          is an  accurate representation  as to  each  source of  funds  (a
          "Source") to be  used by  you to pay  the purchase  price of  the
          Notes to be purchased by you hereunder:
                    (a)  the  Source  is  an  "insurance  company   general
               account" as  defined in  United States  Department of  Labor
               Prohibited Transaction Exemption ("PTE") 95-60 (60 FR 35925,
               July 12, 1995)  and in  respect thereof  you represent  that
               there is no "employee benefit  plan" (as defined in  section
               3(3) of ERISA and section  4975(e)(1) of the Code,  treating
               as a single plan all plans  maintained by the same  employer
               or employee organization or affiliate thereof) with  respect
               to which  the amount  of the  general account  reserves  and
               liabilities of all contracts  held by or  on behalf of  such
               plan exceeds 10%  of the total  reserves and liabilities  of
               such  general   account  (exclusive   of  separate   account
               liabilities) plus  surplus, as  set  forth in  the  National
               Association of  Insurance  Commissioners'  Annual  Statement
               filed with your state of domicile; or
                    (b)  if you are an  insurance company, the Source  does
               not  include  assets  allocated  to  any  separate   account
               maintained by you in which any employee benefit plan (or its
               related trust)  has  any  interest, other  than  a  separate
               account that is  maintained solely in  connection with  your
               fixed  contractual  obligations  under  which  the   amounts
               payable, or credited, to such plan and 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  you have  disclosed 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 PTE 84-14 (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 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.

               6.3  No Conflict.
               You  represent  to  the  Company  that  your  execution  and
          delivery of this Agreement  and purchase of  the Notes have  been
          duly authorized and do not conflict in any material respect  with
          any  articles  of   incorporation,  bylaws,   charter,  or   law,
          regulation or order of specific application  to you.  If you  are
          surrendering any Existing  Notes, you further  represent that  no
          other Person has any right or interest in any such Existing  Note
          so surrendered and cancelled.

               6.4  Accredited Investor
               You represent to  the Company  that you  are an  "accredited
          investor" as  such  term  is defined  in  Section  2(15)  of  the
          Securities Act.

               6.5  No Brokers
               Subject to  the  next  sentence of  this  Section  6.5,  you
          represent to the Company that you have not retained any broker or
          agreed to any broker's or finder's  fee for which you would  have
          liability for or on account of this Agreement or for the purchase
          of the  Notes  contemplated  hereby.   It  is  acknowledged  that
          BancAmerica  Robertson  Stephens  has   been  retained  by,   and
          represents, the Company (and not you).

               6.6  Acknowledgement
               You understand and  acknowledge that some  of the  Company's
          warranties and representations in Section 5 are made in  reliance
          upon your representations in this Section 6.

          7.   INFORMATION AS TO COMPANY 
               7.1  Financial and Business Information
               The Company shall deliver to each holder of Notes that is an
          Institutional Investor:
                    (a)  Quarterly Statements -- within  60 days after  the
               end of each quarterly fiscal period  in each fiscal year  of
               the Company (other than the last quarterly fiscal period  of
               each such fiscal year), duplicate copies of,
                         (i)  an unaudited  consolidated balance  sheet  of
                    the Company and its Subsidiaries as at the end of  such
                    quarter, and
                         (ii) unaudited consolidated statements of  income,
                    stockholders' equity and cash flows of the Company  and
                    its Subsidiaries, for such quarter and (in the case  of
                    the second and third quarters)  for the portion of  the
                    fiscal year ending with such quarter,
               setting forth in each case  in comparative form the  figures
               for the corresponding periods  in the previous fiscal  year,
               all in reasonable detail,  prepared in accordance with  GAAP
               applicable to quarterly financial statements generally,  and
               certified  by   a  Senior   Financial  Officer   as   fairly
               presenting,  in  all  material  respects,  the  consolidated
               financial position of  the companies being  reported on  and
               their consolidated  results of  operations and  cash  flows,
               subject to  changes  resulting  from  year-end  adjustments,
               provided that  delivery  within the  time  period  specified
               above of copies  of the Company's  Quarterly Report on  Form
               10-Q prepared in compliance  with the requirements  therefor
               and filed  with  the SEC  shall  be deemed  to  satisfy  the
               requirements of this Section 7.1(a);
                    (b)  Annual Statements -- within 105 days after the end
               of each fiscal year of the Company, duplicate copies of,
                         (i)  a consolidated balance  sheet of the  Company
                    and its Subsidiaries, as at the end of such year, and
                         (ii) consolidated    statements     of     income,
                    stockholders' equity and cash flows of the Company  and
                    its Subsidiaries, for such year,
               setting forth in each case  in comparative form the  figures
               for the  previous fiscal  year,  all in  reasonable  detail,
               prepared in  accordance with  GAAP,  and accompanied  by  an
               opinion thereon of independent certified public  accountants
               of recognized national standing,  which opinion shall  state
               that  such  financial  statements  present  fairly,  in  all
               material respects,  the consolidated  financial position  of
               the companies  being reported  upon and  their  consolidated
               results of operations and cash flows and have been  prepared
               in conformity with  GAAP, and that  the examination of  such
               accountants in connection with such financial statements has
               been made  in accordance  with generally  accepted  auditing
               standards, and that such  audit provides a reasonable  basis
               for such  opinion in  the circumstances;  provided that  the
               delivery within  the  time  period specified  above  of  the
               Company's Annual Report  on Form 10-K  for such fiscal  year
               prepared in accordance  with the  requirements therefor  and
               filed  with  the  SEC,  shall  be  deemed  to  satisfy   the
               requirements of this Section 7.1(b);
                    (c)  Additional Financial  Statements  -- if,  for  any
               fiscal period of the Company, either
                         (i)  total assets of all Unrestricted Subsidiaries
                    as at the  end of such  fiscal period,  if such  assets
                    were included in the computation of Consolidated  Total
                    Assets as  at  the end  of  such fiscal  period,  would
                    constitute more  than 10%  of such  Consolidated  Total
                    Assets, or
                         (ii) total   revenues    of    all    Unrestricted
                    Subsidiaries for such fiscal period, if revenues  would
                    constitute more than 10% of consolidated total revenues
                    of the Company and its Subsidiaries for such period,
               concurrently with the delivery of the applicable  statements
               referred to in Section 7.1(a) or Section 7.1(b) required  to
               be delivered for such fiscal period,
                         (A)  unaudited  combined  and  combining   balance
                    sheets of the Unrestricted Subsidiaries, as at the  end
                    of such fiscal period, and
                         (B)  unaudited combined  and combining  statements
                    of  income   and  cash   flows  of   the   Unrestricted
                    Subsidiaries, for such fiscal period,
               and, in the case of  the combined financial statements,  (1)
               reflecting all  eliminations  and  adjustments  required  to
               reconcile such  statements  to  the  consolidated  financial
               statements delivered  for  such fiscal  period  pursuant  to
               Section 7.1(a) or Section 7.1(b) above, as the case may  be,
               and (2) setting forth, 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  such  financial  statements  generally,  and
               certified  by   a  Senior   Financial  Officer   as   fairly
               presenting, in all material respects, the combined financial
               position of the Unrestricted Subsidiaries and their combined
               results of  operations and  cash flows,  subject to  changes
               resulting from year-end adjustments;
                    (d)  SEC and  Other  Reports  --  promptly  upon  their
               becoming  available,  one   copy  of   (i)  each   financial
               statement,  report  (including,   without  limitation,   the
               Company's annual report  to shareholders,  if any,  prepared
               pursuant to Rule  14a-3 under the  Exchange Act), notice  or
               proxy statement sent  by the  Company or  any Subsidiary  to
               public securities holders  generally, and (ii) each  regular
               or periodic  report,  each registration  statement  (without
               exhibits except as expressly requested by such holder),  and
               each prospectus  and all  amendments  thereto filed  by  the
               Company or  any Subsidiary  with the  SEC and  of all  press
               releases and other  statements made  available generally  by
               the Company  or  any  Restricted Subsidiary  to  the  public
               concerning developments that are Material;
                    (e)  Notice of Default or Event of Default -- promptly,
               and in  any  event  within five  days  after  a  Responsible
               Officer becoming aware  of the existence  of any Default  or
               Event of Default or that any Person has given any notice  or
               taken any action with respect to a claimed default hereunder
               or that any Person has given any notice or taken any  action
               with respect to a claimed default of the type referred to in
               Section 11(f), a  written notice specifying  the nature  and
               period of existence thereof and  what action the Company  is
               taking or proposes to take with respect thereto;
                    (f)  ERISA Matters -- promptly, and in any event within
               five days after a Responsible Officer becoming aware of  any
               of the following, a written notice setting forth the  nature
               thereof and the action, if any, that the Company or an ERISA
               Affiliate proposes to take with respect thereto:
                         (i)  with respect  to  any  Plan,  any  reportable
                    event, as defined in  section 4043(c) of ERISA and  the
                    regulations thereunder,  for which  notice thereof  has
                    not been  waived pursuant  to  such regulations  as  in
                    effect on the date of the Closing; or
                         (ii) the taking by the PBGC of steps to institute,
                    or the threatening by the  PBGC of the institution  of,
                    proceedings  under  section 4042   of  ERISA  for   the
                    termination of,  or the  appointment  of a  trustee  to
                    administer, any Plan, or the receipt by the Company  or
                    any ERISA Affiliate  of a notice  from a  Multiemployer
                    Plan that such action has been  taken by the PBGC  with
                    respect to such Multiemployer Plan; or
                         (iii)     any event, transaction or condition that
                    could result in the incurrence of any liability by  the
                    Company or any ERISA Affiliate  pursuant to Title I  or
                    IV of ERISA or the penalty or excise tax provisions  of
                    the Code relating to employee benefit plans, or in  the
                    imposition of any Lien on any of the rights, properties
                    or  assets  of  the  Company  or  any  ERISA  Affiliate
                    pursuant to Title I or IV  of ERISA or such penalty  or
                    excise tax provisions, if such liability or Lien, taken
                    together with any other such liabilities or Liens  then
                    existing,  could  reasonably  be  expected  to  have  a
                    Material Adverse Effect;
                    (g)  Notices from Governmental  Authority --  promptly,
               and in any event within 30  days of receipt thereof,  copies
               of any  notice to  the Company  or any  Subsidiary from  any
               Federal or  state  Governmental Authority  relating  to  any
               order, ruling, statute or other law or regulation that could
               reasonably be expected to have a Material Adverse Effect;
                    (h)  Actions,   Proceedings   --   promptly   after   a
               Responsible  Officer  becomes  aware  of  the   commencement
               thereof, notice of any action or proceeding relating to  the
               Company or  any  Subsidiary  in  any  court  or  before  any
               Governmental Authority or arbitration  board or tribunal  as
               to which there  is a  reasonable possibility  of an  adverse
               determination  and  that,  if  adversely  determined,  could
               reasonably be expected  to have a  Material Adverse  Effect;
               and
                    (i)  Requested   Information    --   with    reasonable
               promptness, such other data and information relating to  the
               business, operations, affairs,  financial condition,  assets
               or properties of the Company or  any of its Subsidiaries  or
               relating to  the  ability  of the  Company  to  perform  its
               obligations hereunder and  under the Notes  as from time  to
               time may  be  reasonably requested  by  any such  holder  of
               Notes, or such information regarding the Company required to
               satisfy the requirements of 17 C.F.R. S230.144A, as  amended
               from time  to  time,  in connection  with  any  contemplated
               transfer of the Notes.

               7.2  Officer's Certificate
               Each set of  financial statements delivered  to a holder  of
          Notes pursuant to Section 7.1(a)  or Section 7.1(b) hereof  shall
          be accompanied by  a certificate  of a  Senior Financial  Officer
          setting forth:
                    (a)  Covenant Compliance -- the information  (including
               detailed  calculations)  required  in  order  to   establish
               whether the Company was in compliance with the  requirements
               of Sections 7.1(c),  10.3 through  10.10, inclusive,  during
               the quarterly  or annual  period covered  by the  statements
               then being furnished  (including with respect  to each  such
               Section, where applicable, the  calculations of the  maximum
               or minimum amount, ratio or percentage, as the case may  be,
               permissible under  the  terms  of  such  Sections,  and  the
               calculation of  the  amount,  ratio or  percentage  then  in
               existence); and
                    (b)  Event of Default -- a statement that such  officer
               has reviewed  the relevant  terms hereof  and has  made,  or
               caused to be made, under his or her supervision, a review of
               the transactions  and  conditions  of the  Company  and  its
               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  has  not
               disclosed the existence during such period of any  condition
               or event that constitutes a Default  or an Event of  Default
               or, if  any  such  condition  or  event  existed  or  exists
               (including, without limitation, any such event or  condition
               resulting from the failure of the Company or any  Subsidiary
               to comply with any Environmental Law), specifying the nature
               and period of existence thereof and what action the  Company
               shall have taken or proposes to take with respect thereto.

               7.3  Inspection
               The Company shall permit the representatives of each  holder
          of Notes that is an Institutional Investor:
                    (a)  No Default --  if no Default  or Event of  Default
               then  exists,  at  the  expense  of  such  holder  and  upon
               reasonable  prior  notice  to  the  Company,  to  visit  the
               principal executive office  of the Company,  to discuss  the
               affairs, finances  and  accounts  of  the  Company  and  its
               Subsidiaries with  the  Company's officers,  and  (with  the
               consent  of  the   Company,  which  consent   will  not   be
               unreasonably withheld) its  independent public  accountants,
               and (with the consent of the Company, which consent will not
               be unreasonably  withheld) to  visit the  other offices  and
               properties of the Company and  each Subsidiary, all at  such
               reasonable times and as often as may be reasonably requested
               in writing; and
                    (b)  Default -- if a Default  or Event of Default  then
               exists, at the expense of the Company, to visit and  inspect
               any of  the offices  or properties  of  the Company  or  any
               Subsidiary,  to  examine  all  their  respective  books   of
               account, records, reports and  other papers, to make  copies
               and extracts  therefrom,  and to  discuss  their  respective
               affairs,  finances  and   accounts  with  their   respective
               officers and  independent public  accountants (and  by  this
               provision the Company authorizes said accountants to discuss
               the affairs, finances  and accounts of  the Company and  its
               Subsidiaries), all  at such  times and  as often  as may  be
               requested.

          8.   PAYMENT OF THE NOTES
               8.1  Required Prepayments; Payment at  Maturity
               Regardless  of  the  amount  of  the  Notes  which  may   be
          outstanding from time to  time, the Company  shall prepay or,  in
          the case of principal  amounts due at the  maturity of any  Note,
          pay, and there  shall become due  and payable  on the  respective
          dates specified below, the respective aggregate principal amounts
          of each Series of Notes hereinafter set forth opposite such dates
          (or such lesser amount as would constitute payment in full of the
          Notes of such Series):

                             Principal      Principal       Principal
             Date:           Amount         Amount          Amount
                             of Series A1   of Series A2    of Series B
                             Notes          Notes           Notes
                             to be prepaid  to be prepaid   to be prepaid
                             or paid:       or paid         or paid

             June 1, 1999    $1,600,000         $0              $0
             June 1, 2000    $1,600,000         $0              $0
             June 1, 2001    $1,600,000         $0              $0
             June 1, 2002    $1,600,000         $0              $0

                             Principal      Principal       Principal
             Date:           Amount         Amount          Amount
                             of Series A1   of Series A2    of Series B
                             Notes          Notes           Notes
                             to be prepaid  to be prepaid   to be prepaid
                             or paid:       or paid         or paid


             July 31, 2002      $0          $1,142,857      $4,286,000
             July 31, 2003      $0          $1,142,857      $4,286,000
             July 31, 2004      $0          $1,142,857      $4,286,000
             July 31, 2005      $0          $1,142,857      $4,286,000
             July 31, 2006      $0          $1,142,857      $4,286,000
             July 31, 2007      $0          $1,142,857      $4,286,000
             July 31, 2008      $0          $1,142,858      $4,284,000
                              ____          __________     ___________

             Totals           $6,400,000    $8,000,000     $30,000,000


          Each partial prepayment of the Notes  of each Series pursuant  to
          Section 8.2 will  reduce the principal  amount of each  mandatory
          prepayment applicable to the Notes of  such Series, as set  forth
          in this Section 8.1, and the payment at maturity of the Notes  of
          such Series,  in  the same  proportion  as the  aggregate  unpaid
          principal amount of  the Notes  of such  Series is  reduced as  a
          result of such prepayment.

               8.2  Optional Prepayments with Make-Whole Amount
               Subject to the provisions of  Section 8.3, 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 (but if in part,
          in an amount not  less than $1,000,000 or  such lesser amount  as
          shall then be outstanding),  at 100% of  the principal amount  so
          prepaid, plus the Make-Whole Amount 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
                    (a)  specify such prepayment date,
                    (b)  specify the  aggregate  principal  amount  of  the
               Notes of each Series to be prepaid on such date,
                    (c)  specify the principal amount of each Note held  by
               such holder  to be  prepaid (determined  in accordance  with
               Section 8.3),
                    (d)  specify the interest to be paid on the  prepayment
               date with respect  to such principal  amount being  prepaid,
               and
                    (e)  be  accompanied  by  a  certificate  of  a  Senior
               Financial Officer as to the estimated Make-Whole Amount  due
               in connection  with such  prepayment (calculated  as if  the
               date of  such  notice  were the  date  of  the  prepayment),
               setting forth the details of such computation.
          Two Business Days  prior to  such prepayment,  the Company  shall
          deliver to  each  holder  of Notes  a  certificate  of  a  Senior
          Financial Officer specifying the  calculation of such  Make-Whole
          Amount as of the specified prepayment date.

               8.3  Allocation of  Partial Prepayments
               In the  case of  each partial  prepayment  of the  Series  B
          Notes, the principal amount of the  Series B Notes to be  prepaid
          shall be allocated among  all of the Series  B Notes at the  time
          outstanding in  proportion,  as  nearly as  practicable,  to  the
          respective unpaid principal amounts thereof.  The Company may, at
          its option, pursuant  to Section 8.2,  (a) prepay  the Series  A1
          Notes and  the Series  A2 Notes  without prepaying  the Series  B
          Notes, and (b) prepay  the Series B  Notes without prepaying  the
          Series A1 Notes or the Series A2 Notes; provided that all partial
          prepayments of  the  Series A1  Notes  and the  Series  A2  Notes
          pursuant to Section  8.2 shall  be allocated  to all  outstanding
          Series A1  Notes  and  Series A2  Notes  (without  distinguishing
          between  the  Series)  ratably  in  accordance  with  the  unpaid
          principal amounts thereof.

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

               8.5  No Other Optional Prepayments or Purchase  of Notes
               The Company will not prepay (whether directly or  indirectly
          by  purchase,  redemption  or  other  acquisition)  any  of   the
          outstanding Notes except  upon the payment  or prepayment of  the
          Notes in  accordance with  the  terms of  this  Section 8  or  in
          connection with an offer made pursuant to Section 10.10(b).   The
          Company will  promptly cancel  all Notes  acquired by  it or  any
          Affiliate pursuant  to any  payment,  prepayment or  purchase  of
          Notes pursuant to any  provision of this Section  8 and no  Notes
          may be issued in substitution or exchange for any such Notes.

               8.6  Make-Whole Amount
               The term "Make-Whole Amount" means, with respect to  Prepaid
          Principal and the date the payment  thereof is due (the  "Payment
          Date") an amount  equal to  the excess  (if any)  of the  Present
          Value of the Prepaid Cash Flows  over the amount of such  Prepaid
          Principal, determined in respect of such Prepaid Principal as  of
          such Payment Date.  As used in this definition:
                    "Prepaid Principal" means any portion of the  principal
               amount of the Notes of any Series being paid for any  reason
               (including,  without   limitation,  acceleration,   optional
               prepayment or  mandatory  payment required  because  of  the
               occurrence  of  a  contingency)   prior  to  its   regularly
               scheduled maturity date.
                    "Present Value of the  Prepaid Cash Flows" means,  with
               respect  to  any  Prepaid  Principal,  the  Indebtedness  in
               respect of which  such Prepaid Principal  was paid, and  any
               Payment Date  in respect  thereof, the  sum of  the  present
               values of the then remaining scheduled payments of principal
               and interest that would have been payable in respect of such
               Indebtedness but that are no longer  payable as a result  of
               such payment.  In determining such present values,
                         (a)  the amount  of interest  accrued through  and
                    including the  day immediately  preceding such  Payment
                    Date on  such  Prepaid Principal  since  the  scheduled
                    interest  payment  date   immediately  preceding   such
                    Payment Date shall be deducted  from the first of  such
                    payments of interest, and
                         (b)  a discount rate per annum equal to the  Make-
                    Whole Discount  Rate determined  with respect  to  such
                    Prepaid Principal and such Payment Date divided by two,
                    and a discount period  of six months  of 30 days  each,
                    shall be used.
                    "Make-Whole Discount  Rate" means,  in respect  of  any
               Payment Date, the sum of:
                         (a)  .50% per annum; plus
                         (b)  the per annum percentage rate (rounded to the
                    nearest  three  decimal  places)  equal  to  the   bond
                    equivalent  yield   to   maturity  derived   from   the
                    Applicable Treasury Rate determined as of the date that
                    is two Business Days prior to such Payment Date.
                    "Applicable Treasury Rate" means, at any time:
                         (a)  the Dow Jones  Markets Service  Rate at  such
                    time;
                         (b)  if the Dow Jones Markets Service is not  then
                    quoting yields on United States Government  Securities,
                    then the Bloomberg Rate at such time;
                         (c)  if neither the Dow Jones Markets Service  nor
                    the Bloomberg Financial Markets System is then  quoting
                    yields on United States Government Securities, then the
                    per annum  yield  reported  on  such  other  electronic
                    quotation service selected by the Company and agreed to
                    by the holders of a majority of the applicable  Prepaid
                    Principal at 10:00 a.m. (New  York time) on the  second
                    Business Day  preceding such  Payment Date  for  United
                    States Government Securities having a maturity (rounded
                    to  the  nearest  month)  corresponding  to  the   then
                    Weighted Average  Life  to  Maturity  of  such  Prepaid
                    Principal at such time; and
                         (d)  if neither the Dow Jones Markets Service  nor
                    the Bloomberg Financial Markets System is then  quoting
                    yields on United States  Government Securities and  the
                    Company and the holders of  a majority of such  Prepaid
                    Principal  cannot agree on another electronic quotation
                    service, then the Applicable H.15 Rate at such time.
               In each  such  case,  if  no  such  United  States  Treasury
               obligation with a  Treasury Constant Maturity  corresponding
               exactly to such Weighted Average Life to Maturity is listed,
               then the yields for the  two then most current  hypothetical
               United States  Treasury obligations  with Treasury  Constant
               Maturities  most  closely  corresponding  to  such  Weighted
               Average Life to Maturity (one with a longer maturity and one
               with a shorter maturity,  if available) shall be  calculated
               pursuant to the immediately preceding sentence and the Make-
               Whole Discount Rate  shall be  interpolated or  extrapolated
               from such yields on a straight-line basis.
                    "Applicable H.15" means, at any time, the United States
               Federal Reserve  Statistical  Release  H.15(519)  then  most
               recently published and available to  the public, or if  such
               publication is  not  available,  then any  other  source  of
               current  information  in  respect   of  interest  rates   on
               Securities of the United States of America that is generally
               available and, in the judgment of the holders of a  majority
               of  applicable  Prepaid   Principal,  provides   information
               reasonably comparable to the H.15(519) report.
                    "Applicable H.15  Rate" means,  at any  time, the  then
               most current annual  yield to maturity  of the  hypothetical
               United  States  Treasury  obligation  listed  in  the   then
               Applicable H.15 with a maturity  equal to the then  Weighted
               Average  Life  to   Maturity  of   the  applicable   Prepaid
               Principal.
                    "Bloomberg Rate" means at any time the per annum  yield
               reported on the Bloomberg Financial Markets System at  10:00
               a.m. (New York  time) on the  second Business Day  preceding
               the applicable  Payment  Date  for  United  States  Treasury
               obligations   having    a   Treasury    Constant    Maturity
               corresponding to the then Weighted Average Life to  Maturity
               of such Prepaid Principal.   Page USD shall  be used as  the
               source of such yields, or if not then available, such  other
               screen available on the  Bloomberg Financial Markets  System
               as shall, in the opinion of the holders of a majority of the
               Prepaid Principal, provide equivalent information.
                    "Dow Jones Markets Service Rate" means at any time  the
               per annum yield reported on the Dow Jones Markets Service at
               10:00 a.m.  (New  York  time) on  the  second  Business  Day
               preceding the  applicable  Payment Date  for  United  States
               Treasury obligations  having  a Treasury  Constant  Maturity
               (rounded to  the nearest  month) corresponding  to the  then
               Weighted Average Life to Maturity of such Prepaid Principal.
               Page 678 shall be used as  the source of such yields, or  if
               not then available, such other  screen available on the  Dow
               Jones Markets  Service  as  shall, in  the  opinion  of  the
               holders of a majority  of the applicable Prepaid  Principal,
               provide equivalent information.
                    "Treasury Constant Maturity" has the meaning  specified
               in the Applicable H.15.
                    "Weighted Average Life to  Maturity" means, in  respect
               of any Prepaid Principal, the number of years (calculated to
               the nearest  1/12th)  obtained  by  dividing  the  Remaining
               Dollar-Years of  such  Prepaid  Principal  by  such  Prepaid
               Principal, determined as of such Payment Date.
                    "Remaining  Dollar-Years"  means,  in  respect  of  any
               Prepaid Principal, the result obtained by:
                         (a)  multiplying,  in  the   case  of  each   then
                    remaining scheduled  payment  of principal  that  would
                    have been payable in respect of such Prepaid  Principal
                    but is no longer payable as a result of the payment  of
                    such Prepaid Principal;
                              (i)  an  amount  equal   to  such   scheduled
                         payment of principal; by
                              (ii) the number of  years (calculated to  the
                         nearest  1/12th)  that  will  elapse  between  the
                         applicable  Payment   Date  and   the  date   such
                         scheduled principal payment would  be due if  such
                         Prepaid Principal had not been so prepaid; and
                         (b)  calculating the sum of  each of the  products
                    obtained in the preceding subsection (a).

          9.   AFFIRMATIVE COVENANTS
               The Company covenants that so long  as any of the Notes  are
          outstanding:
               9.1  Compliance with Law.
               The Company will and will cause each of its Subsidiaries  to
          comply  with  all  laws,  ordinances  or  governmental  rules  or
          regulations to which each of them is subject, and will obtain and
          maintain  in   effect   all  licenses,   certificates,   permits,
          franchises and other governmental authorizations necessary to the
          ownership of their  respective properties  or to  the conduct  of
          their respective businesses, in each case to the extent necessary
          to ensure  that  non-compliance  with such  laws,  ordinances  or
          governmental rules  or  regulations  or  failures  to  obtain  or
          maintain  in   effect  such   licenses,  certificates,   permits,
          franchises  and  other  governmental  authorizations  could  not,
          individually or in the aggregate, reasonably be expected to  have
          a Material Adverse Effect.
               9.2  Insurance.
               The Company  will  and will  cause  each of  its  Restricted
          Subsidiaries to maintain,  with financially  sound and  reputable
          insurers, insurance with respect  to their respective  properties
          and businesses against such casualties and contingencies, of such
          types, on such terms and in such amounts (including  deductibles,
          co-insurance  and  self-insurance,   if  adequate  reserves   are
          maintained with respect thereto) as is  customary in the case  of
          entities of  established reputations  engaged in  the same  or  a
          similar business and similarly situated.

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

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

               9.5  Corporate Existence, etc.
               The Company  will at  all times  preserve and  keep in  full
          force and effect  its corporate existence.   Subject to  Sections
          10.9 and 10.10, the Company will  at all times preserve and  keep
          in full force and effect the  corporate existence of each of  its
          Subsidiaries (unless  merged into  the  Company or  a  Restricted
          Subsidiary) and all rights and franchises of the Company and  its
          Subsidiaries unless, in the good  faith judgment of the  Company,
          the termination of or failure to preserve and keep in full  force
          and effect  such corporate  existence, right  or franchise  could
          not, individually or  in the aggregate,  have a Material  Adverse
          Effect.

               9.6  Designation of Subsidiaries.
                    (a)  Right of Designation.  Subject to the satisfaction
               of the  requirements of  Section 9.6(c),  the Company  shall
               have the right to designate each Subsidiary as a  Restricted
               Subsidiary or an  Unrestricted Subsidiary  by delivering  to
               each holder of Notes a writing, signed by a Senior Financial
               Officer, certifying that the  Board of Directors shall  have
               so  designated  such  Subsidiary  within  30  days  of   the
               acquisition  by  the  Company  or  any  Subsidiary  of   the
               necessary percentages  of  Voting  Stock  and  other  equity
               interests of such Subsidiary as set forth in the  definition
               of  "Subsidiary"  contained  in   Schedule  B.    Any   such
               Subsidiary not so designated within such 30-day period shall
               be deemed, on and  after such date  and without any  further
               action by the Company or any  holder of Notes, to have  been
               originally designated  by  the Company  as  an  Unrestricted
               Subsidiary, and  such  Subsidiary  may  be  redesignated  as
               contemplated by  Section 9.6(b)  and Section  9.6(c).   Each
               Subsidiary designated as a Restricted Subsidiary in Schedule
               5.4 shall be a Restricted Subsidiary  on and after the  date
               of the Closing and all other Subsidiaries, if any, listed in
               Schedule  5.4   shall,  subject   to  Section   9.6(b),   be
               Unrestricted Subsidiaries  on  and  after the  date  of  the
               Closing.

                    (b)  Right  of   Redesignation.      Subject   to   the
               satisfaction of  the  requirements of  Section  9.6(c),  the
               Company may at any time designate

                         (i)  any Unrestricted Subsidiary  as a  Restricted
                    Subsidiary, or

                         (ii) any Restricted Subsidiary as an  Unrestricted
                    Subsidiary, by  delivering  to each  holder of  Notes a
                    written  notice,  signed by a  Senior Financial Officer,
                    certifying  that  the  Board of Directors shall have so
                    designated such Subsidiary.

                    (c)  Designation Criteria.
                         (i)  No Subsidiary  shall at  any time  after  the
                    date of  the  Closing  be designated  as  a  Restricted
                    Subsidiary, unless

                              (A)   immediately before and after, and after
                         giving effect  to such  designation, and  assuming
                         that all obligations, liabilities and  Investments
                         of,  and  all  Liens  on  the  property  of,  such
                         Subsidiary being  so designated  were incurred  or
                         made contemporaneously with  such designation,  no
                         Default or Event of Default exists or would exist,
                         and

                              (B)  such  Subsidiary  shall  not  previously
                         have been  redesignated pursuant  to this  Section
                         9.6 more than twice.
                         (ii) No Subsidiary  shall at  any time  after  the
                    date of the  Closing be designated  as an  Unrestricted
                    Subsidiary, unless

                              (A)   immediately before and after, and after
                         giving effect to such  designation, no Default  or
                         Event of Default exists or would exist, and

                              (B)  such  Subsidiary  shall  not  previously
                         have been  redesignated pursuant  to this  Section
                         9.6 more than twice.

                    (d)  Effectiveness.   Other than  as set  forth in  the
               last two sentences of Section 9.6(a), any designation  under
               this Section 9.6  that satisfies all  of the conditions  set
               forth  in  this  Section 9.6  shall  become  effective,  for
               purposes of this Agreement, on  the day that notice  thereof
               shall have been  delivered by  the Company  and received  by
               each holder of  Notes in accordance  with the provisions  of
               Section 18.

                    (e)  Covenant Compliance.    Each  notice  required  by
               Section 9.6(d) shall  be accompanied by  a certificate of  a
               Senior  Financial  Officer  setting  forth  the  information
               (including  detailed  calculations)  required  in  order  to
               establish whether  the Company  is  in compliance  with  the
               requirements  of  Sections   10.3  through  Section   10.10,
               inclusive, at the time of such designation, and  immediately
               after giving effect thereto (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 amounts, ratio or percentage at  such
               times).

               9.7  Pari Passu.

               The Company covenants that  its obligations under the  Notes
          and under this  Agreement and the  Other Agreements  do and  will
          rank at least pari  passu with all its  other present and  future
          unsecured Senior Debt.

          10.  NEGATIVE COVENANTS.
               The Company covenants that so long  as any of the Notes  are
          outstanding:

               10.1 Nature of Business.
               The Company will  not, and  will not  permit any  Restricted
          Subsidiary to, engage in  any business if,  as a result  thereof,
          the principal  businesses  of  the  Company  and  its  Restricted
          Subsidiaries, taken as  a whole, would  be changed  substantially
          from the businesses thereof described in the Memorandum.

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

               10.3 Fixed Charge Coverage.
               The Company will not, at  any time, permit Consolidated  Net
          Income Available  for  Fixed  Charges  for  the  period  of  four
          consecutive fiscal quarters of the Company most recently ended at
          such time to be less than 150% of Consolidated Fixed Charges  for
          such period.

               10.4 Limitations on Restricted Subsidiary Indebtedness and
                    Intercompany Indebtedness.

                    (a)  Limitation on Restricted Subsidiary  Indebtedness.
               The Company will  not, at  any time,  permit any  Restricted
               Subsidiary to incur,  issue, assume or  in any other  manner
               become liable in respect of any Indebtedness unless
                         (i)  such  Indebtedness  is  Excluded   Restricted
                    Subsidiary Indebtedness  and immediately  prior to  the
                    creation thereof, and after  giving effect thereto  and
                    to any concurrent application  of the proceeds of  such
                    Indebtedness, no  Default  or Event  of  Default  would
                    exist, or
                         (ii) such Indebtedness is not Excluded  Restricted
                    Subsidiary Indebtedness and is permitted to be incurred
                    at such time under Section 10.5, or
                         (iii)     such   Indebtedness   is   a    renewal,
                    extension (as  to time)  or refunding  of  Indebtedness
                    previously incurred in  accordance with  clause (i)  or
                    clause (ii) hereof, and
                              (A)  the principal amount of the Indebtedness
                         being so renewed,  extended or  refunded which  is
                         outstanding at the time of such renewal, extension
                         or refunding is not increased, and
                              (B)  immediately  prior   to  such   renewal,
                         extension or  refunding, and  after giving  effect
                         thereto, no  Default  or Event  of  Default  would
                         exist.
                    (b)  No Restrictions  on  Distributions.   The  Company
               will  not  permit  any   Restricted  Subsidiary  to   become
               obligated in respect of any  Indebtedness after the date  of
               the Closing  if  any  agreement, note  or  other  instrument
               executed in connection with, or as a condition to  obtaining
               the  funds  constituting,  such  Indebtedness  contains  any
               limitation or restriction on the ability of such  Restricted
               Subsidiary to declare  or make Distributions  in respect  of
               its Capital Stock.
                    (c)  Disposition of Restricted Subsidiary Indebtedness.
               Each  Restricted  Subsidiary,   any  of  whose   outstanding
               Indebtedness is at any  time sold, transferred or  otherwise
               disposed of by the Company or another Restricted Subsidiary,
               shall be deemed to have incurred all such Indebtedness,  and
               all Liens securing such Indebtedness  (if any), at the  time
               of such sale, transfer or other disposition.
                    (d)  Limitation  on  Intercompany  Indebtedness.    The
               Company will not, at  any time, incur,  issue, assume or  in
               any  other   manner  become   liable  in   respect  of   any
               Indebtedness owing to any Subsidiary unless
                         (i)  such Subsidiary is a Wholly-Owned  Restricted
                    Subsidiary, and
                         (ii) all of the  Company's obligations in  respect
                    of such  Indebtedness  are  subordinated  in  right  of
                    payment and security to the Company's obligations under
                    the Notes on terms and conditions satisfactory in form,
                    scope and substance to the Required Holders.
                    10.5 Limitation on  Consolidated  Total  Debt  and
               Priority Indebtedness.
                    (a)  Limitation  on  Consolidated  Total  Debt.     The
               Company will  not, at  any time,  permit Consolidated  Total
               Debt to exceed 60% of Consolidated Total Capitalization,  in
               each case determined at such time.
                    (b)  Limitation on Priority Indebtedness.  The  Company
               will not, at any time, or at any time permit any  Restricted
               Subsidiary to, incur, issue, assume  or in any other  manner
               become liable  in  respect  of  any  Priority  Indebtedness,
               unless
                         (i)  immediately prior  to the  creation  thereof,
                    and after giving effect  thereto and to any  concurrent
                    retirement of  any  other  Priority  Indebtedness,  the
                    aggregate amount  of  Priority Indebtedness  would  not
                    exceed 15% of Consolidated  Total Assets at such  time,
                    and
                         (ii) no Default or Event of Default would exist.

               10.6 Liens.
                    (a)  Negative Pledge.  The  Company will not, and  will
               not permit any Restricted Subsidiary to, cause or permit  to
               exist, or agree or  consent to cause or  permit to exist  in
               the  future  (upon  the   happening  of  a  contingency   or
               otherwise), any  of their  property,  whether now  owned  or
               hereafter acquired, to be subject to any Lien except:
                         (i)  Taxes, etc. -- Liens securing property taxes,
                    assessments or governmental  charges or  levies or  the
                    claims or demands of materialmen, mechanics,  carriers,
                    warehousemen,  vendors,   landlords  and   other   like
                    Persons, so long as the payment  thereof is not at  the
                    time required by Section 9.4;
                         (ii) Judicial Liens -- Liens
                              (A)  arising from  judicial  attachments  and
                         judgments,
                              (B)  securing  appeal  bonds  or  supersedeas
                         bonds, and
                              (C)  arising   in   connection   with   court
                         proceedings (including, without limitation, surety
                         bonds  and  letters   of  credit   or  any   other
                         instrument serving a similar purpose),
                    provided that  (1) any  such attachments  or  judgments
                    relating thereto have been stayed, bonded or discharged
                    within 60 days of the  entry thereof and the  execution
                    or  other  enforcement  of  such  Liens  is   otherwise
                    effectively stayed, (2) the claims secured thereby  are
                    being  actively  contested   in  good   faith  and   by
                    appropriate proceedings,  (3)  adequate  book  reserves
                    shall have been  established and  maintained and  shall
                    exist with respect thereto and (4) the aggregate amount
                    so  secured  shall  not  at  any  time  exceed  10%  of
                    Consolidated Adjusted Net Worth at such time;
                         (iii)     Ordinary Course Business Liens --  Liens
                    incurred or  deposits made  in the  ordinary course  of
                    business
                              (A)  in     connection     with      workers'
                         compensation,   unemployment   insurance,   social
                         security and other like  laws to secure  statutory
                         or public   obligations  of  the Company  or  such
                         Restricted Subsidiary in respect thereof, and
                              (B)  to secure the performance of letters  of
                         credit, bids,  tenders, sales  contracts,  leases,
                         statutory  obligations,  surety  and   performance
                         bonds (of a type other  than set forth in  Section
                         10.6(a)(ii)) and  other  similar  obligations  not
                         incurred  in  connection  with  the  borrowing  of
                         money, the obtaining of advances or the payment of
                         the deferred purchase price of property;
                    provided, however, that all such  Liens do not, in  the
                    aggregate, materially detract  from the  value of  such
                    property or materially interfere  with the use of  such
                    property in the ordinary conduct of the business of the
                    Company and  its Restricted  Subsidiaries, taken  as  a
                    whole;
                         (iv) Certain Encumbrances --  Liens in the  nature
                    of reservations, exceptions, encroachments,  easements,
                    rights-of-way,  covenants,  conditions,   restrictions,
                    leases  and   other   similar   title   exceptions   or
                    encumbrances affecting  real  property,  provided  that
                    such  exceptions  and  encumbrances   do  not  in   the
                    aggregate materially  detract from  the value  of  such
                    properties or materially interfere with the use of such
                    property in the ordinary conduct of the business of the
                    Company and  its Restricted  Subsidiaries, taken  as  a
                    whole;
                         (v)  Intercompany Liens -- Liens on property of  a
                    Restricted Subsidiary, provided that such Liens  secure
                    only Indebtedness  or other  obligations owing  to  the
                    Company;
                         (vi) Closing Date Liens --  Liens in existence  on
                    the date of the Closing securing Indebtedness, provided
                    that such Liens  and the  Indebtedness secured  thereby
                    are described in Schedule 5.15;
                         (vii)     Purchase Money Liens  -- Purchase  Money
                    Liens, if,  after  giving  effect thereto  and  to  any
                    concurrent transactions, each such Purchase Money  Lien
                    secures Indebtedness  in an  amount not  exceeding  the
                    lesser of
                              (A)  the cost of acquisition or construction,
                         or
                              (B)  the Fair Market Value
                    of the particular property  to which such  Indebtedness
                    relates;

                         (viii)    Other  Liens  --  other  Liens  securing
                    Indebtedness  of   the   Company  or   any   Restricted
                    Subsidiary  not  otherwise  permitted  by  clauses  (i)
                    through  clause  (vii),  inclusive,  of  this   Section
                    10.6(a), provided that,
                              (A)  the Indebtedness secured thereby is,  at
                         the time of the  incurrence thereof, permitted  to
                         be incurred and outstanding in accordance with the
                         provisions of  Section 10.4(a)  and Section  10.5,
                         and
                              (B)  no Default  or  Event of  Default  would
                         exist; and
                         (ix) Refinancings,  Extensions,   etc.  --   Liens
                    securing  renewals,   extensions  (as   to  time)   and
                    refinancings  of  Indebtedness  secured  by  the  Liens
                    described in clause (i)  through clause (viii) of  this
                    Section 10.6(a), provided that
                              (A)  the  amount  of  Indebtedness  or  other
                         obligations secured  by  each  such  Lien  is  not
                         increased  in  excess  of   the  amount  of   such
                         Indebtedness or other  obligations outstanding  on
                         the   date   of   such   renewal,   extension   or
                         refinancing,
                              (B)  none  of  such  Liens  is  extended   to
                         encumber or  otherwise  relate  to  or  cover  any
                         additional  property   of  the   Company  or   any
                         Restricted Subsidiary, and
                              (C)  immediately prior  to,  and  immediately
                         after the consummation of such renewal,  extension
                         or refinancing, and  after giving effect  thereto,
                         no Default  or Event  of Default  exists or  would
                         exist.
                    (b)  Equal and Ratable Lien;  Equitable Lien.  In  case
               any property shall be  subjected to a  Lien in violation  of
               this Section 10.6, the Company will forthwith make or  cause
               to be made,  to the fullest  extent permitted by  applicable
               law, provision whereby the Notes will be secured equally and
               ratably with all other obligations secured thereby  pursuant
               to such agreements and instruments  as shall be approved  by
               the Required  Holders,  and the  Company  will cause  to  be
               delivered to each holder of Notes an opinion of  independent
               counsel (selected by the Company and reasonably satisfactory
               to the Required Holders) to the effect that such  agreements
               and instruments  are enforceable  in accordance  with  their
               terms.  Regardless of whether the Company complies with  the
               provisions of the  immediately preceding  sentence, in  case
               any property shall be  subjected to a  Lien in violation  of
               this Section 10.6, the Notes shall have the benefit, to  the
               fullest extent that, and with such priority as, the  holders
               of Notes may be entitled thereto under applicable law, of an
               equitable Lien  on  such property  securing  the Notes.    A
               violation of this Section 10.6  will constitute an Event  of
               Default, whether or not any such provision is made or action
               is taken pursuant to this Section 10.6(b).
                    (c)  Financing Statements.  The  Company will not,  and
               will not permit any Restricted Subsidiary to, sign or file a
               financing statement under the Uniform Commercial Code of any
               jurisdiction that  names  the  Company  or  such  Restricted
               Subsidiary  as  debtor,  or  sign  any  security   agreement
               authorizing any secured  party thereunder to  file any  such
               financing statement, except, in  any such case, a  financing
               statement filed  or to  be filed  to  perfect or  protect  a
               security  interest  that  the  Company  or  such  Restricted
               Subsidiary is entitled to create, assume or incur, or permit
               to exist,  under the  foregoing provisions  of this  Section
               10.6 or to  evidence for informational  purposes a  lessor's
               interest in  property  leased to  the  Company or  any  such
               Restricted Subsidiary.
               10.7 Maintenance  of  Consolidated  Adjusted   Net
                    Worth.
               The Company  will  not,  at any  time,  permit  Consolidated
          Adjusted Net Worth to be less than the sum of
                    (a)  $70,000,000 plus
                    (b)  an aggregate amount equal  to 25% of  Consolidated
               Net Income (but, in  each case, only  if a positive  number)
               for each completed fiscal  quarter of the Company  beginning
               with the fiscal quarter ended July 31, 1998.
               10.8 Restricted    Payments     and     Restricted
          Investments.
                    (a)  Limit  on  Restricted   Payments  and   Restricted
               Investments.  The Company will not at any time, and will not
               at any time permit any Restricted Subsidiary to, declare  or
               make  any  Restricted   Payment  or   make  any   Restricted
               Investment unless:
                         (i)  immediately after,  and after  giving  effect
                    to,  such   Restricted  Payment   or  such   Restricted
                    Investment, the sum of the aggregate amount of  (x) all
                    Restricted Payments declared or made during the  period
                    from and after the date of the Closing to and including
                    the  date   such  Restricted   Payment  or   Restricted
                    Investment is made, plus (y) all Restricted Investments
                    held at such  time by  the Company  and its  Restricted
                    Subsidiaries would not exceed the sum of
                              (A)  $10,000,000, plus
                              (B)  the sum  of 50%  (or minus  100% in  the
                         case of a deficit) of Consolidated Net Income  for
                         the period commencing on and including May 1, 1998
                         and  ending  on  and   including  the  date   such
                         Restricted Payment  is declared  or made  or  such
                         Restricted Investment is made, plus
                              (C)  the aggregate  amount of  cash  proceeds
                         (net of all  costs and  out-of-pocket expenses  in
                         connection    therewith,    including,     without
                         limitation, placement, underwriting and  brokerage
                         fees and expenses) received by the Company and its
                         Restricted Subsidiaries after  April 30, 1998  and
                         prior to such time from  the issuance and sale  of
                         (I) Capital Stock (other than Redeemable Stock) of
                         the  Company  (either  directly  or  through   the
                         exercise of warrants, rights  or other options  or
                         the exercise of  any rights of  the holder of  any
                         Indebtedness  of  the  Company  to  convert   such
                         Indebtedness  to   Capital   Stock   (other   than
                         Redeemable Stock)) or (II) any warrants, rights or
                         other options to purchase such Capital Stock; and
                         (ii) at  the   time   of  such   declaration   and
                    immediately before, and  after giving  effect to,  such
                    Restricted Payment  or such  Restricted Investment,  no
                    Default or Event of Default exists or would exist.
                    (b)  Time of Payment.  The Company will not authorize a
               Distribution on any class of its  Capital Stock that is  not
               payable within 90 days of authorization.
                    (c)  New Restricted Subsidiaries.  Any Subsidiary which
               becomes a  Restricted  Subsidiary  after  the  date  of  the
               Closing shall  be deemed  to have  made,  at the  time  such
               Subsidiary becomes a  Restricted Subsidiary, all  Restricted
               Investments of  such Subsidiary  existing immediately  after
               such Subsidiary shall have become a Restricted Subsidiary.
               10.9 Merger, Consolidation, etc.
                    (a)  Merger and Consolidation.   The Company will  not,
               and will not permit any Restricted Subsidiary to, merge with
               or into,  consolidate  with,  or sell,  lease,  transfer  or
               otherwise dispose of all or substantially all of its  assets
               to, any other Person, or permit any other Person to merge or
               consolidate with  or into  it, provided  that the  foregoing
               restriction does not apply to
                         (i)  the merger  or consolidation  of the  Company
                    into or with,  or the  sale by  the Company  of all  or
                    substantially   all   of   its   assets   to,   another
                    corporation, if:
                              (A)  the corporation that  results from  such
                         merger or consolidation  or that  acquires all  or
                         substantially all of  such assets (the  "Surviving
                         Corporation") is organized under  the laws of  the
                         United States of America, any state thereof or the
                         District of Columbia;
                              (B)  the due  and  punctual  payment  of  the
                         principal of and  Make-Whole Amount,  if any,  and
                         interest on all of  the Notes, according to  their
                         tenor, and the  due and  punctual performance  and
                         observance of all the  covenants in the Notes  and
                         this Agreement to be performed or observed by  the
                         Company, are  expressly assumed  by the  Surviving
                         Corporation  pursuant  to   such  agreements   and
                         instruments as shall be  approved by the  Required
                         Holders, and the Company causes to be delivered to
                         each holder  of Notes  an opinion  of  independent
                         counsel  reasonably  acceptable  to  the  Required
                         Holders to  the effect  that such  agreements  and
                         instruments are  enforceable  in  accordance  with
                         their terms (subject to customary qualifications);
                         and
                              (C)  immediately prior  to,  and  immediately
                         after the  consummation  of the  transaction,  and
                         after giving effect thereto,  no Default or  Event
                         of Default exists or would exist;
                         (ii) a merger of a Restricted Subsidiary into,  or
                    a consolidation of  a Restricted  Subsidiary with,  the
                    Company (so  long  as  the  Company  is  the  surviving
                    entity) or  a  Wholly-Owned Restricted  Subsidiary  (so
                    long as such Wholly-Owned Restricted Subsidiary is  the
                    surviving entity) or the sale or other disposition by a
                    Restricted Subsidiary of  all or  substantially all  of
                    its assets to the Company or a Wholly-Owned  Restricted
                    Subsidiary; and
                         (iii)     the merger  of a  Restricted  Subsidiary
                    into, or consolidation of a Restricted Subsidiary with,
                    or the  sale  or  other  disposition  by  a  Restricted
                    Subsidiary of all  or substantially all  of its  assets
                    to,  another  corporation  (which   shall  not  be   an
                    Affiliate or a Restricted Subsidiary), if
                              (A)  such  transaction   complies,   in   all
                         respects, with  the provisions  of Section  10.10,
                         and
                              (B)  immediately prior  to,  and  immediately
                         after the  consummation  of the  transaction,  and
                         after giving effect thereto,  no Default or  Event
                         of Default exists or would exist.
                    (b)  Acquisition of Stock, etc.  The Company will  not,
               and will not  permit any Restricted  Subsidiary to,  acquire
               any Capital Stock of any Person  if upon completion of  such
               acquisition such Person would be a Restricted Subsidiary, or
               acquire all of the property of,  or such of the property  as
               would permit  the transferee  to continue  any one  or  more
               integral  business   operations  of,   any  Person   unless,
               immediately prior to, and immediately after the consummation
               of such  acquisition, and  after giving  effect thereto,  no
               Default or Event of Default exists or would exist.
               10.10     Sale of Assets, etc.
                    (a)  Sale of Assets,  etc.  The  Company will not,  and
               will not permit any of its Restricted Subsidiaries to,  make
               any Asset Disposition, unless:
                         (i)  in the  good faith  opinion of  the  Company,
                    such Asset Disposition is in exchange for consideration
                    having a Fair Market  Value at least  equal to that  of
                    the property exchanged; and
                         (ii) immediately after giving effect to such Asset
                    Disposition:
                              (A)  no Default  or  Event of  Default  would
                         exist; and
                              (B)  the Disposition  Value of  all  property
                         that was the subject  of any Asset Disposition  by
                         the  Company  and   its  Restricted   Subsidiaries
                         occurring during such fiscal year would not exceed
                         10% of Consolidated Total Assets determined as  of
                         the end  of the  then most  recently ended  fiscal
                         year (such amount in respect of the fiscal year in
                         which such  Transfer is  proposed  to be  made  is
                         herein  referred  to   as  the  "Specified   Asset
                         Percentage").
                    (b)  Transfers in Excess of the Specified Percentage.
                         (i)  Application  of   Excess   Proceeds   Amount.
                    Notwithstanding the provisions of Section 10.10(a), the
                    Company may, and may permit a Restricted Subsidiary to,
                    Transfer, in any fiscal  year of the Company,  property
                    having  an  aggregate  book  value  in  excess  of  the
                    Specified Asset Percentage for such fiscal year of  the
                    Company if:
                              (A)  the Excess  Proceeds Amount  shall  have
                         been applied  by the  Company or  such  Restricted
                         Subsidiary to  a  Qualified  Proceeds  Application
                         within 360  days of  the  receipt thereof  by  the
                         Company or such Restricted Subsidiary;
                              (B)  immediately   before   and   after   the
                         consummation of  each  such  Transfer,  and  after
                         giving effect  thereto,  no Default  or  Event  of
                         Default exists or would exist; and
                              (C)  prior to or  contemporaneously with  the
                         application of all or  any portion of such  Excess
                         Proceeds Amount, the Company shall have  delivered
                         a certificate of a  Senior Officer to each  holder
                         of Notes providing a detailed description of  such
                         application and certifying that the conditions set
                         forth in subclause  (A) and  subclause (B)  hereof
                         have been satisfied.
                         (ii) Failure   to    Apply    Proceeds.        If,
                    notwithstanding  the   provisions   of   this   Section
                    10.10(b), the Company shall fail to comply with any  of
                    the requirements  of  Section  10.10(b)(i),  then  such
                    failure to comply with any  such provisions as of  such
                    date shall be deemed to be an Event of Default.
          11.  EVENTS OF DEFAULT.
               An "Event of Default"  shall exist if  any of the  following
          conditions or events shall occur and be continuing:
                    (a)  Principal or  Make-Whole  Amount Payments  --  the
               Company defaults 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)  Interest Payments -- the  Company defaults in  the
               payment of  any interest  on any  Note  for more  than  five
               Business Days after the same becomes due and payable; or
                    (c)  Particular  Covenant  Defaults   --  the   Company
               defaults in the performance of  or compliance with any  term
               contained in any of Sections 10.2 through 10.10,  inclusive,
               or Section 7.1(e); or
                    (d)  Other Defaults  --  the Company  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 such default is not remedied  within
               30 days  after  the  earlier of  (i) a  Responsible  Officer
               obtaining actual  knowledge  of such  default  and  (ii) the
               Company receiving written  notice of such  default from  any
               holder of a Note; or
                    (e)  Warranties    or     Representations    --     any
               representation or warranty made in  writing by or on  behalf
               of the Company  or by  any officer  of the  Company in  this
               Agreement or in any writing furnished in connection with the
               transactions contemplated hereby proves  to have been  false
               or incorrect in any material respect on the date as of which
               made; or
                    (f)  Default on Indebtedness or Security --
                         (i)  the Company or any Significant 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
                    (other than Indebtedness under  this Agreement and  the
                    Notes) beyond any period of grace provided with respect
                    thereto, that individually or together with such  other
                    Indebtedness as to which any such failure exists has an
                    aggregate outstanding  principal  amount in  excess  of
                    $5,000,000, or
                         (ii) the Company or any Significant Subsidiary  is
                    in default in the performance of or compliance with any
                    term of any  evidence of any  Indebtedness (other  than
                    Indebtedness under this Agreement and the Notes),  that
                    individually or together  with such other  Indebtedness
                    as to which  any such failure  exists has an  aggregate
                    outstanding principal amount  in excess of  $5,000,000,
                    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 (or  one
                    or  more   Persons  are   entitled  to   declare   such
                    Indebtedness to be), due and payable before its  stated
                    maturity or  before its  regularly scheduled  dates  of
                    payment, or
                         (iii)     as a  consequence of  the occurrence  or
                    continuation of any event or condition (other than  the
                    passage  of  time  or  the  right  of  the  holder   of
                    Indebtedness to convert  such Indebtedness into  equity
                    interests),
                              (A)  the   Company    or   any    Significant
                         Subsidiary has  become  obligated to  purchase  or
                         repay Indebtedness before its regular maturity  or
                         before its regularly scheduled dates of payment in
                         an  aggregate  outstanding  principal  amount   in
                         excess of $5,000,000, or
                              (B)  one or more  Persons have  the right  to
                         require the Company or any Significant  Subsidiary
                         so to purchase or repay such Indebtedness; or
                    (g)  Voluntary Petitions, etc. --   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)  Involuntary Bankruptcy Proceedings  -- a court  or
               governmental authority of  competent jurisdiction enters  an
               order appointing,  without consent  by  the Company  or  any
               Significant Subsidiary,  a custodian,  receiver, trustee  or
               other officer  with  similar  powers  with  respect  to  the
               Company or any Significant Subsidiary or with respect to any
               substantial part  of  the property  of  the Company  or  any
               Significant Subsidiary, or constituting an order for  relief
               or approving a petition for relief or reorganization or  any
               other petition in bankruptcy or  for liquidation or to  take
               advantage  of  any  bankruptcy  or  insolvency  law  of  any
               jurisdiction, or  ordering  the dissolution,  winding-up  or
               liquidation of the Company or any Significant Subsidiary, or
               any such petition shall be filed against the Company or  any
               Significant Subsidiary and such order or petition shall  not
               be dismissed within 60 days; or
                    (i)  Undischarged Final Judgments  -- a final  judgment
               or judgments for the payment of money aggregating in  excess
               of $5,000,000  are  rendered  against one  or  more  of  the
               Company and its Significant 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)  ERISA -- if
                         (i)  any Plan shall  fail to  satisfy the  minimum
                    funding standards of  ERISA or  the Code  for any  plan
                    year or part thereof or a  waiver of such standards  or
                    extension of  any  amortization  period  is  sought  or
                    granted under section 412 of the Code,
                         (ii) a notice  of  intent  to  terminate any  Plan
                    shall have been or is  reasonably expected to be  filed
                    with  the  PBGC  or  the  PBGC  shall  have  instituted
                    proceedings under ERISA  section 4042  to terminate  or
                    appoint a trustee  to administer any  Plan or the  PBGC
                    shall have notified the Company or any ERISA  Affiliate
                    that  a  Plan  may  become   a  subject  of  any   such
                    proceedings,
                         (iii)     the  aggregate   "amount   of   unfunded
                    benefit liabilities"  (within  the meaning  of  section
                    4001(a)(18) of ERISA)  under all  Plans, determined  in
                    accordance with Title IV of  ERISA, shall exceed 5%  of
                    Consolidated Adjusted Net Worth,
                         (iv) the Company or any ERISA Affiliate shall have
                    incurred  or  is  reasonably  expected  to  incur   any
                    liability pursuant to  Title I or  IV of  ERISA or  the
                    penalty or excise tax  provisions of the Code  relating
                    to employee benefit plans,
                         (v)  the Company or any ERISA Affiliate  withdraws
                    from any Multiemployer Plan, or
                         (vi) the Company or any Subsidiary establishes  or
                    amends any employee welfare benefit plan that  provides
                    post-employment welfare benefits in a manner that would
                    increase the liability of the Company or any Restricted
                    Subsidiary thereunder;
               and any  such  event  or events  described  in  clauses  (i)
               through (vi) above, either individually or together with any
               other such event or events, could reasonably be expected  to
               have a Material Adverse Effect.
          As used in Section 11(j), the  terms "employee benefit plan"  and
          "employee  welfare  benefit  plan"  shall  have  the   respective
          meanings assigned to such terms in section 3 of ERISA.
          12.  REMEDIES ON DEFAULT, ETC.
               12.1 Acceleration.
                    (a)  If an Event of Default with respect to the Company
               described in paragraph (g)  or paragraph (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,
                         (i)  any  holder  or  holders  of  a  majority  in
                    principal amount of the Series  A1 Notes and Series  A2
                    Notes at the time outstanding may at any time at its or
                    their option,  by notice  or  notices to  the  Company,
                    declare all the  Series A1  Notes and  Series A2  Notes
                    then outstanding to be immediately due and payable, and
                         (ii) any  holder  or  holders  of  a  majority  in
                    principal amount  of the  Series B  Notes at  the  time
                    outstanding may at any time at its or their option,  by
                    notice or  notices  to  the Company,  declare  all  the
                    Series B 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 Make-Whole Amount determined in respect of such principal
          amount (to the  full extent permitted  by applicable law),  shall
          all be  immediately  due and  payable,  in each  and  every  case
          without presentment, demand,  protest or further  notice, all  of
          which are  hereby  waived.   The  Company acknowledges,  and  the
          parties hereto agree, that each holder of a Note has the right to
          maintain its investment in the Notes  free from repayment by  the
          Company (except as herein specifically provided for) and that the
          provision for payment of  a Make-Whole Amount  by the Company  in
          the event that  the Notes  are prepaid  or are  accelerated as  a
          result  of  an   Event  of  Default,   is  intended  to   provide
          compensation  for  the  deprivation  of  such  right  under  such
          circumstances.
               12.2 Other Remedies.
               If any  Default or  Event of  Default  has occurred  and  is
          continuing, and irrespective of whether any Notes have become  or
          have been  declared immediately  due  and payable  under  Section
          12.1, the holder of any Note at the time outstanding may  proceed
          to protect and enforce the rights of such holder by an action  at
          law, suit in equity or other appropriate proceeding, whether  for
          the specific performance of any agreement contained herein or  in
          any Note, or for an injunction against a violation of any of  the
          terms hereof or thereof, or in  aid of the exercise of any  power
          granted hereby or thereby or by law or otherwise.
               12.3 Rescission.
                    (a)  Series A1 Notes and Series A2 Notes.  At any  time
               after any  Series A1  Notes and  Series A2  Notes have  been
               declared due and  payable pursuant to  clause (b) or  clause
               (c) of Section 12.1, the holders of not less than a majority
               in principal amount  of the Series  A1 Notes  and Series  A2
               Notes then outstanding,  by written notice  to the  Company,
               may  rescind  and  annul   any  such  declaration  and   its
               consequences  if  (i) the  Company  has  paid  all   overdue
               interest on the  Series A1 Notes  and Series  A2 Notes,  all
               principal of and Make-Whole Amount, if any, due and  payable
               on any Series  A1 Notes and  Series A2 Notes  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 Series A1 Notes and  Series A2 Notes, at the  Default
               Rate, (ii) all Events  of Default and  Defaults, other  than
               non-payment of amounts that have become due solely by reason
               of such declaration,  have been  cured or  have been  waived
               pursuant to Section 17, and (iii) no judgment or decree  has
               been entered  for the  payment of  any monies  due  pursuant
               hereto or to the Series A1 Notes and Series A2 Notes.
                    (b)  Series B Notes.   At any time  after any Series  B
               Notes have been declared due and payable pursuant to  clause
               (b) or clause (c) of Section  12.1, the holders of not  less
               than a majority  in principal amount  of the  Series B  then
               outstanding, by written notice  to the Company, may  rescind
               and annul  any  such  declaration and  its  consequences  if
               (i) the Company has paid all overdue interest on the  Series
               B Notes, all principal of and Make-Whole Amount, if any, due
               and payable on any  Series B Notes 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
               Series B  Notes, at  the Default  Rate, (ii) all  Events  of
               Default and Defaults, other than non-payment of amounts that
               have become due solely by  reason of such declaration,  have
               been cured or have been  waived pursuant to Section 17,  and
               (iii) no judgment or decree has been entered for the payment
               of any monies due pursuant hereto or to the Series B Notes.
                    (c)  Effect  on   Subsequent  Events   of  Default   or
               Defaults.  No rescission and annulment under Section 12.3(a)
               or Section 12.3(b) will extend  to or affect any  subsequent
               Event of Default or Default  or impair any right  consequent
               thereon.
               12.4 No Waivers or Election of Remedies, Expenses, etc.
               No course of dealing and no delay on the part of any  holder
          of any  Note  in exercising  any  right, power  or  remedy  shall
          operate as a waiver thereof or otherwise prejudice such  holder's
          rights, powers or remedies.  No right, power or remedy  conferred
          by this Agreement or by any Note upon any holder thereof shall be
          exclusive of any other right, power or remedy referred to  herein
          or therein or now  or hereafter available at  law, in equity,  by
          statute or otherwise.   Without limiting  the obligations of  the
          Company under Section 15, the Company  will pay to the holder  of
          each Note on demand such further amount as shall be sufficient to
          cover all  costs and  expenses of  such  holder incurred  in  any
          enforcement or  collection  under  this  Section  12,  including,
          without limitation,  reasonable  attorneys'  fees,  expenses  and
          disbursements.
          13.  REGISTRATION; EXCHANGE;  SUBSTITUTION OF  NOTES.
               The Company shall keep at  its principal executive office  a
          register for the  registration and registration  of transfers  of
          Notes.  The name and address of each holder of one or more Notes,
          each transfer thereof and the name and address of each transferee
          of one or more Notes shall be registered in such register.  Prior
          to due presentment  for registration of  transfer, the Person  in
          whose name  any Note  shall be  registered  shall be  deemed  and
          treated as the owner and holder thereof for all purposes  hereof,
          and the Company shall not be affected by any notice or  knowledge
          to the contrary.  The Company shall give to any holder of a  Note
          that is an Institutional Investor promptly upon request therefor,
          a complete and  correct copy of  the names and  addresses of  all
          registered holders of Notes.
               13.2 Transfer and Exchange of Notes.
               Upon surrender of any Note at the principal executive office
          of the Company for registration of  transfer or exchange (and  in
          the case  of  a  surrender for  registration  of  transfer,  duly
          endorsed or accompanied by a written instrument of transfer  duly
          executed by the registered  holder of such  Note or 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 A1, Exhibit A2 or Exhibit B,
          as the case may be.  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  $100,000,  provided  that   if  necessary  to  enable   the
          registration of transfer  by a holder  of its  entire holding  of
          Notes, one Note may be in  a denomination of less than  $100,000.
          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.  The Company  shall
          not be required to recognize any  transfer of Notes other than  a
          transfer effected  in  accordance  with the  provisions  of  this
          Section 13.2.
               13.3 Replacement of Notes.
               Upon  receipt  by   the  Company   of  evidence   reasonably
          satisfactory to  it of  the ownership  of  and the  loss,  theft,
          destruction or mutilation of any  Note (which evidence shall  be,
          in the  case  of  an Institutional  Investor,  notice  from  such
          Institutional Investor of  such ownership and  such loss,  theft,
          destruction or mutilation), and
                    (a)  in the  case of  loss,  theft or  destruction,  of
               indemnity reasonably satisfactory  to it  (provided that  if
               the holder of such Note is, or is a nominee for, an original
               purchaser or an  Institutional Investor,  such Person's  own
               unsecured agreement  of  indemnity  shall be  deemed  to  be
               satisfactory), or
                    (b)  in the  case  of mutilation,  upon  surrender  and
               cancellation thereof,
          the Company at its own expense shall execute and deliver, in lieu
          thereof, a  new  Note  of 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.
          14.  PAYMENTS ON NOTES.
               14.1  Place of Payment.
               Subject to Section 14.2,  payments of principal,  Make-Whole
          Amount, if  any, and  interest becoming  due and  payable on  the
          Notes shall be made  in Santa Rosa,  California at the  principal
          office of the Company 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 the  United
          States.

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

          15.  EXPENSES, ETC.
               15.1 Transaction Expenses.
               Whether or  not  the transactions  contemplated  hereby  are
          consummated,  the  Company  will  pay  all  costs  and   expenses
          (including reasonable attorneys' fees  of a special counsel  and,
          if reasonably required, local or  other counsel) incurred by  you
          and each Other Purchaser or holder  of a Note in connection  with
          such transactions and in connection with any amendments,  waivers
          or consents under or  in respect of this  Agreement or the  Notes
          (whether  or  not  such  amendment,  waiver  or  consent  becomes
          effective), including,  without  limitation: (a)  the  costs  and
          expenses incurred  in  enforcing  or  defending  (or  determining
          whether or  how  to enforce  or  defend) any  rights  under  this
          Agreement or the Notes or in responding to any subpoena or  other
          legal  process  or  informal   investigative  demand  issued   in
          connection with  this Agreement  or the  Notes, or  by reason  of
          being a  holder of  any Note,  and (b)  the costs  and  expenses,
          including financial advisors' fees,  incurred in connection  with
          the insolvency or  bankruptcy of the  Company or any  Significant
          Subsidiary or in connection with any work-out or restructuring of
          the transactions  contemplated  hereby and  by  the Notes.    The
          Company will pay, and  will save you and  each other holder of  a
          Note harmless from, all claims in  respect of any fees, costs  or
          expenses if  any,  of  brokers  and  finders  (other  than  those
          retained by you).
               15.2 Survival.
               The obligations of  the Company under  this Section 15  will
          survive the payment  or transfer  of any  Note, the  enforcement,
          amendment or waiver  of any provision  of this  Agreement or  the
          Notes, and the termination of this Agreement.

          16.  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  you of any  Note or  portion
          thereof or interest therein and the payment of any Note, and  may
          be relied upon by any subsequent holder of a Note, regardless  of
          any investigation made at any time by or on behalf of you or  any
          other holder  of  a  Note.    All  statements  contained  in  any
          certificate or other instrument delivered by or on behalf of  the
          Company  pursuant   to   this   Agreement     shall   be   deemed
          representations  and  warranties  of   the  Company  under   this
          Agreement.  Subject to the preceding sentence, this Agreement and
          the Notes embody the  entire agreement and understanding  between
          you and  the  Company  and supersede  all  prior  agreements  and
          understandings relating to the subject matter hereof.

          17.  AMENDMENT AND WAIVER.
               17.1 Requirements.
                    (a)  Series A1 Notes and Series A2  Notes.  So long  as
               any Series A1 Notes or Series A2 Notes are outstanding, this
               Agreement and the Series A1 Notes and Series A2 Notes may be
               amended, and the observance  of any term  hereof or of  such
               Notes may be waived (either retroactively or prospectively),
               with (and only with) the written consent of the Company  and
               the holders of a majority in principal amount of the  Series
               A1 Notes and Series A2 Notes at the time outstanding, except
               that (i) no amendment or waiver of any of the provisions  of
               any of Sections 1, 2, 3, 4, 5, 6 and 21, or any defined term
               (as it is used therein), will be effective as to you  unless
               consented to by you in writing,  and (ii) no such  amendment
               or waiver may, without the written consent of the holder  of
               each  Series  A1  Note  and  Series  A2  Note  at  the  time
               outstanding affected thereby, (A) 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 change the rate or  the time of payment or method  of
               computation of interest or of the Make-Whole Amount on,  the
               Series  A1  Notes  or   Series  A2  Notes,  (B) change   the
               percentage of the  principal amount of  the Series A1  Notes
               and Series A2  Notes the holders  of which  are required  to
               consent to any such amendment or waiver, or (C) amend any of
               Sections 8, 11(a), 11(b), 12, 17 and 20.
                    (b)  Series B Notes.  So long as any Series B Notes are
               outstanding, this Agreement  and the Series  B Notes may  be
               amended, and the observance  of any term  hereof or of  such
               Notes may be waived (either retroactively or prospectively),
               with (and only with) the written consent of the Company  and
               the holders of a majority in principal amount of the  Series
               B  Notes  at  the  time  outstanding,  except  that  (i)  no
               amendment or  waiver of  any of  the  provisions of  any  of
               Sections 1, 2, 3, 4, 5, 6 and 21, or any defined term (as it
               is used  therein),  will  be  effective  as  to  you  unless
               consented to by you in writing,  and (ii) no such  amendment
               or waiver may, without the written consent of the holder  of
               each Series B Note at the time outstanding affected thereby,
               (A) 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 change the rate or
               the time of payment or method of computation of interest  or
               of the Make-Whole Amount on, the Series B Notes,  (B) change
               the percentage of the principal amount of the Series B Notes
               the holders of  which are required  to consent  to any  such
               amendment or waiver, or (C) amend any of Sections 8,  11(a),
               11(b), 12, 17 and 20.
               17.2 Solicitation of  Holders of  Notes.
                    (a)  Solicitation.    The  Company  will  provide  each
               holder of the  Notes (irrespective  of the  amount of  Notes
               then owned by it) with sufficient information,  sufficiently
               far in advance of the date a decision is required, to enable
               such holder to make an informed and considered decision with
               respect to  any proposed  amendment,  waiver or  consent  in
               respect of any  of the provisions  hereof or  of the  Notes.
               The Company will deliver executed or true and correct copies
               of each amendment,  waiver or consent  effected pursuant  to
               the  provisions  of  this  Section 17  to  each  holder   of
               outstanding Notes promptly following the date on which it is
               executed and  delivered  by,  or  receives  the  consent  or
               approval of, the requisite holders of Notes.
                    (b)  Payment.    The  Company  will  not  directly   or
               indirectly pay or cause to be paid any remuneration, whether
               by way  of  supplemental  or  additional  interest,  fee  or
               otherwise, or grant any security, to any holder of Notes  as
               consideration for or as an  inducement to the entering  into
               by any holder of Notes of any waiver or amendment of any  of
               the terms and provisions hereof pursuant to Section  17.1(a)
               or  Section  17.1(b),  as  the  case  may  be,  unless  such
               remuneration  is   concurrently   paid,   or   security   is
               concurrently granted,  on the  same terms,  ratably to  each
               holder of Notes  of any Series  affected by  such waiver  or
               amendment, as the case may be, then outstanding even if such
               holder did not consent to such waiver or amendment.

               17.3 Binding Effect, etc.
               Any  amendment  or  waiver  consented  to  as  provided   in
          Section 17.1(a) and  Section  17.1(b)   applies  equally  to  all
          holders of each  Series of Notes  affected by  such amendment  or
          waiver and is binding  upon them and upon  each future holder  of
          any Note of such  Series and upon the  Company without regard  to
          whether such Note has been marked  to indicate such amendment  or
          waiver.  No such amendment or waiver will extend to or affect any
          obligation, covenant, agreement, Default or Event of Default  not
          expressly amended  or  waived  or  impair  any  right  consequent
          thereon.  No course of dealing between the Company and the holder
          of any Note nor any delay  in exercising any rights hereunder  or
          under any Note  shall operate as  a waiver of  any rights of  any
          holder of such Note.  As  used herein, the term "this  Agreement"
          and references thereto shall mean this  Agreement as it may  from
          time to time be amended or supplemented.
               17.4 Notes held by Company, etc.
               Solely for the purpose of determining whether the holders of
          the requisite  percentage of  the aggregate  principal amount  of
          Notes then outstanding  approved or consented  to any  amendment,
          waiver or consent to be given under this Agreement or the  Notes,
          or have directed the taking of  any action provided herein or  in
          the Notes to  be taken  upon the direction  of the  holders of  a
          specified percentage of the  aggregate principal amount of  Notes
          then outstanding,  Notes  directly  or indirectly  owned  by  the
          Company or  any of  its  Affiliates shall  be  deemed not  to  be
          outstanding.

          18.  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:
                    (i)  if to you  or your nominee,  to you or  it at  the
               address specified for such communications in Schedule A,  or
               at such other address as you  or it shall have specified  to
               the Company in writing,
                    (ii) if to any other holder of any Note, to such holder
               at such address as such other holder shall have specified to
               the Company in writing, or

                    (iii)     if to the Company,
                              Optical Coating Laboratory, Inc.
                              2789 Northpoint Parkway
                              Santa Rosa, California 95407-7397
                              Attention: Mr.Craig B. Collins,
                              Vice President, Finance and
                              Chief Financial  Officer and

                              Joseph  C. Zils, Esq.,
                              Vice President and Corporate Counsel
                              Phone:    (707) 545-6440
                              Facsimile:     (707) 525-6840
                              with a copy to:

                         John V. Erickson, Esq.
                         Collette & Erickson
                         555 California Street, Suite 4350
                         San Francisco, California  94104
                         Phone:    (415) 788-4646
                         Facsimile:     (415) 788-6929

               or at such other address as the Company shall have furnished
               in  writing  to  all  holders  of  the  Notes  at  the  time
               outstanding.

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

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

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

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

          22.  MISCELLANEOUS
               22.1 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.
               22.2 Payments  Due  on  Non-Business  Days;   When
                    Payments Deemed Received.
                    (a)  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.
                    (b)  Payments, When Received.   Any payment to be  made
               to the holders of Notes hereunder  or under the Notes  shall
               be deemed to have been made on the Business Day such payment
               actually becomes available to  such holder at such  holder's
               bank prior to 12:00 noon (local time of such bank).
               22.3 Severability.
               Any provision  of  this  Agreement  that  is  prohibited  or
          unenforceable in any jurisdiction shall, as to such jurisdiction,
          be  ineffective   to   the   extent  of   such   prohibition   or
          unenforceability without  invalidating the  remaining  provisions
          hereof, and  any  such  prohibition or  unenforceability  in  any
          jurisdiction shall  (to the  full extent  permitted by  law)  not
          invalidate or render  unenforceable such provision  in any  other
          jurisdiction.
               22.4 Construction.
               Each covenant contained  herein shall  be construed  (absent
          express provision to the contrary)  as being independent of  each
          other covenant contained herein, so that compliance with any  one
          covenant shall not (absent such an express contrary provision) be
          deemed to excuse compliance with any  other covenant.  Where  any
          provision herein refers to action to  be taken by any Person,  or
          which such Person is prohibited from taking, such provision shall
          be applicable whether such action is taken directly or indirectly
          by such Person.
               22.5 Counterparts.
               This  Agreement   may  be   executed   in  any   number   of
          counterparts, each of which shall be an original but all of which
          together shall constitute one  instrument.  Each counterpart  may
          consist of a number  of copies hereof, each  signed by less  than
          all, but together signed by all, of the parties hereto.
               22.6 Governing Law.
               THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
          WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW
          OF THE STATE OF CONNECTICUT 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.


          [Remainder of page intentionally blank.   Next page is  signature
          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.

                                       Very truly yours,

                                       OPTICAL  COATING  LABORATORY, INC.

                                       By
                                       Name:
                                       Title:

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

          [PURCHASER]

          By:
          Name:
          Title:


          OPTICAL COATING LABORATORY, INC.          NOTE PURCHASE AGREEMENT


                                     SCHEDULE A
                         INFORMATION RELATING TO PURCHASERS


          Purchaser   MODERN WOODMEN OF AMERICA
          Name
          Name in Note is       Modern Woodmen of America
          Registered
          Series; Note          Series A1; RA1-1; $4,000,000
          Registration Number;
          Principal Amount
          Description of        R-3; $4,000,000
          Existing Note
          Surrendered for
          Cancellation;
          Outstanding
          Principal Amount
          Payment on Account
          of Note

               Method           Federal Funds Wire Transfer
              
               Account          The Northern Trust Company
                                50 South LaSalle Street
               Information      Chicago, IL  60675
                                Account Name:  Modern Woodmen of America
                                Account No. 84352
          Accompanying          Name of Company:    OPTICAL COATING
          Information                               LABORATORY, INC.
                                Description of
                                Security:      8.71% Series A1 Senior
                                               Notes Due June 1, 2002
                                PPN:           683829 A@ 4
                                Due Date and Application (as among
                                principal, Make-Whole Amount and
                                interest) of the payment being made:
          Address for Notices   Modern Woodmen of America
          Related to Payments   Attn:  Investment Department
                                1701 1st Avenue
                                Rock Island, IL 61201
          Address for all       Modern Woodmen of America
          other Notices         Attn: Investment Department
                                1701 1st Avenue
                                Rock Island, IL 61201
                                Telecopy: (309) 786-1701

          Purchaser   MODERN WOODMEN OF AMERICA
          Name
          Other Instructions    MODERN WOODMEN OF AMERICA

                                By_______________________
                                     Name:
                                     Title:
          Instructions re       Investment Department of Purchaser
          Delivery of Notes
          Tax Identification    36-1493430
          Number

          OPTICAL COATING LABORATORY, INC.          NOTE PURCHASE AGREEMENT

                                    Schedule A-2

          Purchaser   AMERICAN LIFE AND CASUALTY INSURANCE
          Name                  COMPANY

          Name in Which Note    Salkeld & Co.
          is Registered
          Series; Note          Series A1; RA1-2; $2,400,000
          Registration Number;
          Principal Amount
          Description of        R-4; $2,400,000
          Existing Note
          Surrendered for
          Cancellation;
          Outstanding
          Principal Amount
          Payment on Account
          of Note
                                Federal Funds Wire Transfer
               Method
                                Care of Banker's Trust
               Account          ABA #021001033
               Information      Account No. 99911145
                                Attention:  FFC:    American Life and
                                          Casualty Insurance Company
                                          99810
          Accompanying          Name of Company:    OPTICAL COATING
          Information                          LABORATORY, INC.
                                Description of
                                Security:      8.71% Series A1 Senior
                                               Notes Due June 1, 2002
                                PPN:           683829 A@ 4
                                Due Date and Application (as among
                                principal, Make-Whole Amount and
                                interest) of the payment being made:
          Address for Notices   American Life and Casualty Insurance
          Related to Payments   Company
                                11825 N. Pennsylvania Avenue
                                P.O. Box 1925
                                Carmel, IN  46032
                                Attn:  Dan Skiba
                                Telephone:     317-817-6954
                                Fax:      317-817-2779
          Address for all       American Life and Casualty Insurance
          other Notices         Company

          OPTICAL COATING LABORATORY, INC.          NOTE PURCHASE AGREEMENT

                                    Schedule A-3

          Purchaser             AMERICAN LIFE AND CASUALTY INSURANCE
          Name                  COMPANY

                                11825 N. Pennsylvania Avenue
                                P.O. Box 1925
                                Carmel, IN  46032
                                Attn:  Dan Skiba
                                Telephone:     317-817-6954
                                Fax:      317-817-2779

          Other Instructions    AMERICAN LIFE AND CASUALTY INSURANCE
                                COMPANY

                                By_______________________
                                     Name:
                                     Title:

          Instructions re       Law Department of Purchaser
          Delivery of Notes
          Tax Identification    45-0103436
          Number

          OPTICAL COATING LABORATORY, INC.          NOTE PURCHASE AGREEMENT

                                    Schedule A-4

          Purchaser             MASSACHUSETTS MUTUAL LIFE INSURANCE
          Name                  COMPANY

          Name in Which Note    Massachusetts Mutual Life Insurance
          is Registered         Company
          Series; Note          Series A2; RA2-1; $8,000,000
          Registration Number;
          Principal Amount
          Description of
          Existing,Notes        R-2; $4,000,000
          Surrendered for
          Cancellation;
          Outstanding
          Payment on Account
          of Note
                                Federal Funds Wire Transfer
               Method
                                Chase Manhattan Bank, N.A.
               Account          4 Chase MetroTech Center
               Information      New York, NY 10081
                                ABA No.: 021000021
                                For Segment 43 - Par Whole Life
                                Account No.  910-2-742765
                                Re:  See "Accompanying information" below
                                With telephone advice of payment to the
                                Securities Custody and Collection
                                Department of Massachusetts Mutual Life
                                Insurance Company at (413) 744-3878
          Accompanying          Name of Company:    OPTICAL COATING
          Information                               LABORATORY, INC.
                                Description of
                                Security:      7.80% Series A2 Senior
                                               Note Due July 31, 2008
                                PPN:           683829 A# 2
                                Due Date and Application (as among
                                principal, Make-Whole Amount and
                                interest) of the payment being made:
          Address for Notices   Massachusetts Mutual Life
          Related to Payments   Insurance Company
                                1295 State Street
                                Springfield, MA  01111
                                Attn:     Securities Custody and
                                          Collection Department, F 381

          OPTICAL COATING LABORATORY, INC.          NOTE PURCHASE AGREEMENT
                                    Schedule A-5

          Purchaser             MASSACHUSETTS MUTUAL LIFE INSURANCE
          Name                  COMPANY

                                     
          Address for all       Massachusetts Mutual Life
          other Notices         Insurance Company
                                1295 State Street
                                Springfield, MA  01111
                                Attn:   Securities Investment Division
                                        Lawrence D. Stillman, Managing
                                        Director
          Other Instructions    MASSACHUSETTS MUTUAL LIFE INSURANCE
                                COMPANY

                                By_______________________
                                     Name:
                                     Title:
          Instructions re       Law Department of Purchaser
          Delivery of Notes
          Tax Identification    04-1590850
          Number

          OPTICAL COATING LABORATORY, INC.          NOTE PURCHASE AGREEMENT

                                    Schedule A-6

          Purchaser             MASSACHUSETTS MUTUAL LIFE INSURANCE
          Name                  COMPANY

          Name in Which Note    Massachusetts Mutual Life Insurance
          is Registered         Company
          Series; Note          Series B; RB-1; $12,500,000
          Registration Number;
          Principal Amount
          Payment on Account
          of Note
                                Federal Funds Wire Transfer
               Method
                                Citibank, N.A.
               Account          111 Wall Street
               Information      New York, NY 10043
                                ABA No. 021000089
                                For MassMutual Long Term Pool
                                Account No. 4067-3488
                                Re:  See "Accompanying information" below
                                With telephone advice of payment to the
                                Securities Custody and Collection
                                Department of Massachusetts Mutual Life
                                Insurance Company at (413) 744-3878
          Accompanying          Name of Company:    OPTICAL COATING
          Information                               LABORATORY, INC.
                                Description of
                                Security:      6.69% Series B Senior
                                               Notes Due July 31, 2008
                                PPN:           683829 B* 5
                                Due Date and Application (as among
                                principal, Make-Whole Amount and
                                interest) of the payment being made:
          Address for Notices   Massachusetts Mutual Life
          Related to Payments   Insurance Company
                                1295 State Street
                                Springfield, MA  01111
                                Attn:     Securities Custody and
                                     Collection Department, F 381
          Address for all       Massachusetts Mutual Life
          other Notices         Insurance Company
                                1295 State Street
                                Springfield, MA  01111
                                Attn:     Securities Investment Division

          OPTICAL COATING LABORATORY, INC.          NOTE PURCHASE AGREEMENT
                                    Schedule A-7

          Purchaser             MASSACHUSETTS MUTUAL LIFE INSURANCE
          Name                  COMPANY

                                     Lawrence D. Stillman, Managing
                                     Director
          Other Instructions    MASSACHUSETTS MUTUAL LIFE INSURANCE
                                COMPANY

                                By_______________________
                                     Name:
                                     Title:
          Instructions re       Law Department of Purchaser
          Delivery of Notes
          Tax Identification    04-1590850
          Number

          OPTICAL COATING LABORATORY, INC.          NOTE PURCHASE AGREEMENT

                                    Schedule A-8

          Purchaser             MASSACHUSETTS MUTUAL LIFE INSURANCE
          Name                  COMPANY

          Name in Which Note    Massachusetts Mutual Life Insurance
          is Registered         Company
          Series; Note          Series B; RB-2; $2,500,000
          Registration Number;
          Principal Amount
          Payment on Account
          of Note
                                Federal Funds Wire Transfer
               Method
                                Chase Manhattan Bank, N.A.
               Account          4 Chase MetroTech Center
               Information      New York, NY 10081
                                ABA No.: 021000021
                                For MassMutual Pension Management
                                Account No.  910-2594018
                                Re:  See "Accompanying information" below
                                With telephone advice of payment to the
                                Securities Custody and Collection
                                Department of Massachusetts Mutual Life
                                Insurance Company at (413) 744-3878
          Accompanying          Name of Company:    OPTICAL COATING
          Information                               LABORATORY, INC.
                                Description of
                                Security:      6.69% Series B Senior
                                               Notes Due July 31, 2008
                                PPN:           683829 B* 5
                                Due Date and Application (as among
                                principal, Make-Whole Amount and
                                interest) of the payment being made:
          Address for Notices   Massachusetts Mutual Life
          Related to Payments   Insurance Company
                                1295 State Street
                                Springfield, MA  01111
                                Attn:     Securities Custody and
                                     Collection Department
                                     F 381
          Address for all       Massachusetts Mutual Life Insurance
          other Notices         Company
                                1295 State Street
                                Springfield, MA  01111


          OPTICAL COATING LABORATORY, INC.          NOTE PURCHASE AGREEMENT

                                    Schedule A-9

          Purchaser             MASSACHUSETTS MUTUAL LIFE INSURANCE
          Name                  COMPANY

                                Attn:     Securities Investment Division
                                     Lawrence D. Stillman, Managing
                                     Director
          Other Instructions    MASSACHUSETTS MUTUAL LIFE INSURANCE
                                COMPANY

                                By_______________________
                                     Name:
                                     Title:
          Instructions re       Law Department of Purchaser
          Delivery of Notes
          Tax Identification    04-1590850
          Number


          OPTICAL COATING LABORATORY, INC.          NOTE PURCHASE AGREEMENT

                                    Schedule A-10

          Purchaser             MASSACHUSETTS MUTUAL LIFE INSURANCE
          Name                  COMPANY

          Name in Which Note    Massachusetts Mutual Life Insurance
          is Registered         Company
          Series; Note          Series B; RB-3; $3,000,000
          Registration Number;
          Principal Amount
          Payment on Account
          of Note
                                Federal Funds Wire Transfer
               Method
                                Citibank, N.A.
               Account          111 Wall Street
               Information      New York, NY 10043
                                ABA No. 021000089
                                For MassMutual B-14
                                Account No. 4065-5546
                                Re:  See "Accompanying information" below
                                With telephone advice of payment to the
                                Securities Custody and Collection
                                Department of Massachusetts Mutual Life
                                Insurance Company at (413) 744-3878
          Accompanying          Name of Company:    OPTICAL COATING
          Information                          LABORATORY, INC.
                                Description of
                                Security:      6.69% Series B Senior
                                               Notes Due July 31, 2008
                                PPN:           683829 B* 5
                                Due Date and Application (as among
                                principal, Make-Whole Amount and
                                interest) of the payment being made:
          Address for Notices   Massachusetts Mutual Life
          Related to Payments   Insurance Company
                                1295 State Street
                                Springfield, MA  01111
                                Attn:     Securities Custody and
                                     Collection Department, F 381
          Address for all       Massachusetts Mutual Life
          other Notices         Insurance Company
                                1295 State Street
                                Springfield, MA  01111
                                Attn:     Securities Investment Division
                                     

          OPTICAL COATING LABORATORY, INC.          NOTE PURCHASE AGREEMENT

                                    Schedule A-11

          Purchaser             MASSACHUSETTS MUTUAL LIFE INSURANCE
          Name                  COMPANY

                                    Lawrence D. Stillman, Managing Director

          Other Instructions    MASSACHUSETTS MUTUAL LIFE INSURANCE
                                COMPANY

                                By_______________________
                                     Name:
                                     Title:
          Instructions re       Law Department of Purchaser
          Delivery of Notes
          Tax Identification    04-1590850
          Number

          OPTICAL COATING LABORATORY, INC.          NOTE PURCHASE AGREEMENT
                                    Schedule A-12

          Purchaser             BAYSTATE HEALTH SYSTEMS, INC.
          Name
          Name in Which Note    MAC & Co.
          is Registered
          Series; Note          Series B; RB-4; $500,000
          Registration Number;
          Principal Amount
          Payment on Account
          of Note
                                Federal Funds Wire Transfer
               Method
                                Boston Safe Deposit and Trust Company
               Account          ABA No. 011001234
               Information      DDA No. 048771
                                Ref:  Baystate Health Systems
                                Intermediate Aggregate
                                A/C #BPOF3001002
                                Re:  See "Accompanying information" below
                                With telephone advice of payment to the
                                Securities Custody and Collection
                                Department of Massachusetts Mutual Life
                                Insurance Company at (413) 744-3561
          Accompanying          Name of Company:    OPTICAL COATING
          Information                               LABORATORY, INC.
                                Description of
                                Security:      6.69% Series B Senior
                                               Notes Due July 31, 2008
                                PPN:           683829 B* 5
                                Due Date and Application (as among
                                principal, Make-Whole Amount and
                                interest) of the payment being made:
          Address for Notices   Baystate Health Systems, Inc.
          Related to Payments   c/o Massachusetts Mutual Life
                                  Insurance Company
                                1295 State Street
                                Springfield, MA  01111
                                Attn:     Securities Custody and
                                     Collection Department, F 381
          Address for all       Baystate Health Systems, Inc.
          other Notices         c/o Massachusetts Mutual Life Insurance
                                Company
                                1295 State Street
                                Springfield, MA  01111
                                Attn:     Securities Investment Division
                                     Lawrence D. Stillman, Managing
                                     Director


          OPTICAL COATING LABORATORY, INC.          NOTE PURCHASE AGREEMENT

                                    Schedule A-13

          Purchaser                  BAYSTATE HEALTH SYSTEMS, INC.
          Name
          Other Instructions         BAYSTATE HEALTH SYSTEMS, INC.
                                     By Massachusetts Mutual Life
                                     Insurance Company, as Investment
                                     Adviser
                                     By_______________________
                                     Name:
                                     Title:
          Instructions re       Law Department of Purchaser
          Delivery of Notes
          Tax Identification    04-2105941
          Number

          OPTICAL COATING LABORATORY, INC.          NOTE PURCHASE AGREEMENT

                                    Schedule A-14

          Purchaser             PRINCIPAL LIFE INSURANCE COMPANY
          Name
          Name in Which Note    Principal Life Insurance Company
          is Registered
          Series; Note          Series B; RB-5; $11,500,000
          Registration Number;
          Principal Amount
          Payment on Account
          of Note
                                Federal Funds Wire Transfer (by 12:00
               Method           Noon New York City time)
               Account          Norwest Bank Iowa, N.A.
               Information      7th and Walnut Streets
                                Des Moines, IA 50309
                                ABA # 073000228
                                For credit to Principal Life Insurance
                                Company
                                Account No. 014752
                                OBI PFGSE (S)B0061658()
                                Re:  See "Accompanying Information" below
          Accompanying          Name of Company:    OPTICAL COATING
          Information                          LABORATORY, INC.
                                Description of
                                Security:      6.69% Series B Senior
                                               Notes Due July 31, 2008
                                PPN:           683829 B* 5
                                Due Date and Application (as among
                                principal, Make-Whole Amount and
                                interest) of the payment being made:
          Address for Notices   Principal Life Insurance Company
          Related to Payments   711 High Street
                                Des Moines, IA 50392-0960
                                Attn:  Investment Accounting - Securities
                                Fax:  515-248-2643
                                Confirmation:  515-247-0689
          Address for all       Principal Life Insurance Company
          other Notices         711 High Street
                                Des Moines, IA 50392-0800
                                Attn:  Investment - Securities
                                Fax:  515-248-2490
                                Confirmation:  515-248-3495
          Other Instructions    PRINCIPAL LIFE INSURANCE COMPANY

          OPTICAL COATING LABORATORY, INC.          NOTE PURCHASE AGREEMENT

                                    Schedule A-15

          Purchaser             PRINCIPAL LIFE INSURANCE COMPANY
          Name

                                By_______________________
                                     Name:
                                     Title:

                                By_______________________
                                     Name:
                                     Title:
          Instructions re       Debra Svoboda Epp, Esq.
          Delivery of Notes     Principal Life Insurance Company
                                711 High Street
                                Des Moines, IA 50392-0301
          Tax Identification    42-0127290
          Number

          OPTICAL COATING LABORATORY, INC.          NOTE PURCHASE AGREEMENT

                                    Schedule B-16

                                     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,  a  Person (other  than  a
          Restricted Subsidiary)
                    (a)  that directly or  indirectly through  one or  more
               intermediaries Controls, or  is Controlled by,  or is  under
               common Control with, the Company,
                    (b)  that beneficially owns or holds 10% or more of any
               class of the Voting Stock of the Company,
                    (c)  10% or more of the Voting Stock (or in the case of
               a Person  that is  not a  corporation, 10%  or more  of  the
               equity interest) of which is  beneficially owned or held  by
               the Company or a Subsidiary, or
                    (d)  that is an officer or director (or a member of the
               immediate family of an officer  or director) of the  Company
               or any Subsidiary,
          at such time.
          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.
               "Agreement, this" is defined in Section 17.3.
               "Asset Disposition" means any Transfer except:
                    (a)  any Transfer from  the Company  to a  Wholly-Owned
               Restricted Subsidiary, and  any Transfer  from a  Restricted
               Subsidiary to the  Company or to  a Wholly-Owned  Restricted
               Subsidiary,
                    (b)  any  Transfer  made  in  the  ordinary  course  of
               business and  involving only  property  that is  either  (i)
               inventory  held  for  sale  or  (ii)  equipment,   fixtures,
               supplies or materials no longer required in the operation of
               the business  of  the  Company  or  any  of  its  Restricted
               Subsidiaries, or that is obsolete,
                    (c)  a  Transfer  as   part  of  a   Sale-and-Leaseback
               Transaction,
                    (d)  Transfers  of  miscellaneous  items  of   property
               having an individual current book value of less  $1,000,000,
               so long as the aggregate book value of all property  subject
               to Transfers during any fiscal year of the Company  pursuant
               to this  clause (d)  does  not exceed  $2,000,000  for  such
               fiscal year, and
                    (e)  Transfers  of  property  in  connection  with   an
               exchange  of  property  by  the  Company  or  a   Restricted
               Subsidiary with  another Person,  so  long as  the  property
               received by  the Company  or such  Restricted Subsidiary  in
               such exchange shall  have a  substantially similar  business
               use as, and a Fair Market Value equal to or greater than the
               Fair Market Value of, the property subject to such Transfer.
               "Attributable Debt" means, at any time, with respect to  the
          Company or any  Restricted Subsidiary, the  present value of  all
          Operating Rentals  required to  be paid  by the  Company or  such
          Restricted Subsidiary  under each  lease  created pursuant  to  a
          Sale-and-Leaseback Transaction  during  the then  remaining  term
          thereof  (determined  in   accordance  with  generally   accepted
          financial practice using a discount factor equal to the  interest
          rate implicit in such lease if  known or, if not known, of  6.69%
          per annum).
               "Business Day"  means,  at any  time,  a day  other  than  a
          Saturday, a Sunday or a day  on which the bank designated by  the
          holder of a Note to receive (for such holder's account)  payments
          on such Note  is required by  law (other than  a general  banking
          moratorium or  holiday for  a period  exceeding four  consecutive
          days) 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 which would, in accordance
          with GAAP,  appear as  a liability  on a  balance sheet  of  such
          Person.
               "Capital Stock"  means any  class  of capital  stock,  share
          capital or similar equity interest of a 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" is defined  in the introductory  sentence of  this
          Agreement.
               "Confidential Information" is defined in Section 20.
               "Consolidated Adjusted Net Worth" means, at any time,
                    (a)  the sum of
                         (i)  the par value (or  value stated on the  books
                    of the corporation) at such  time of the Capital  Stock
                    of the  Company,  plus  (or minus  in  the  case  of  a
                    deficit), plus
                         (ii) the amount  of  the paid-in  surplus  of  the
                    Company at such time, plus (or  minus in the case of  a
                    deficit), plus
                         (iii)     the amount of  the retained earnings  of
                    the Company at such time; minus
                    (b)  the net book value  at such time (after  deducting
               related depreciation, obsolescence, amortization,  valuation
               and other proper reserves) of  all Intangible Assets of  the
               Company and its Restricted Subsidiaries, other than Excluded
               Intangible Assets,
          in each case, as would appear on a consolidated balance sheet for
          the Company and its Restricted Subsidiaries at such time prepared
          in accordance with GAAP.
               As used in this definition:
                    Intangible Assets -- with respect to any Person, at any
               time, means the following:
                         (a)  deferred assets, other than prepaid  expenses
                    which are  refundable (including,  without  limitation,
                    insurance and prepaid taxes);
                         (b)  patents, copyrights, trademarks, trade names,
                    service  marks,  brand  names,  franchises,   goodwill,
                    experimental expenses and other similar intangibles;
                         (c)  unamortized debt discount and expense;
                         (d)  lease rights; and
                         (e)  all other property which would be  considered
                    to be intangible under GAAP.
                    Excluded Intangible Assets -- means, at any time,
                         (a)  all Intangible Assets of the Company and  its
                    Restricted Subsidiaries  existing on  the date  of  the
                    Closing as would appear on a consolidated balance sheet
                    for such Persons on the date of the Closing prepared in
                    accordance with GAAP, and
                         (b)  all Intangible Assets of the Company and  its
                    Restricted   Subsidiaries   in   respect   of   prepaid
                    royalties,  patents,   copyrights,  trademarks,   trade
                    names, service marks and  brand names not in  existence
                    on the  date  of the  Closing,  as would  appear  on  a
                    consolidated balance  sheet for  such Persons  at  such
                    time prepared in accordance with GAAP.
               "Consolidated Fixed Charges" means, for any period, the  sum
          of
                    (a)  Consolidated Interest Expense, plus
                    (b)  Consolidated Operating Rental Expense,
          in each case, determined for such period.
               "Consolidated Interest Expense" means,  for any period,  the
          aggregate amount of interest accrued  or capitalized on, or  with
          respect to,  Consolidated  Total Indebtedness  for  such  period,
          including, without  limitation,  amortization of  debt  discount,
          imputed interest on Capital Leases and interest on the Notes.
               "Consolidated  Net  Income"  means,  for  any  period,   net
          earnings (or  loss) after  income taxes  of the  Company and  its
          Restricted  Subsidiaries  for  such   period,  determined  on   a
          consolidated basis for such Persons in accordance with GAAP,  but
          excluding:
                    (a)  net earnings (or loss) of any Person accrued prior
               to the date  such Person became  a Restricted Subsidiary  or
               was merged  into  or  consolidated with  the  Company  or  a
               Restricted Subsidiary;
                    (b)  any extraordinary, unusual  or nonrecurring  gains
               or losses;
                    (c)  any gain arising from any reappraisal or  write-up
               of assets;
                    (d)  any portion of the net earnings of any  Restricted
               Subsidiary  that,  by  reason   of  any  contract,   charter
               restriction, applicable  law or  regulation, is  unavailable
               for payment  of dividends  to the  Company or  a  Restricted
               Subsidiary;
                    (e)  any gain or  loss (net of  tax effects  applicable
               thereto) during such  period resulting from  the receipt  of
               any proceeds of any  insurance policy, other than  Permitted
               Insurance Proceeds for such period;
                    (f)  any earnings of any Person acquired by the Company
               or any  Restricted Subsidiary  through purchase,  merger  or
               consolidation  or  otherwise,  or  earnings  of  any  Person
               substantially all of whose assets have been acquired by  the
               Company or any Restricted  Subsidiary, for any period  prior
               to the date of acquisition;
                    (g)  net  earnings  of   any  Person   (other  than   a
               Restricted  Subsidiary)  in   which  the   Company  or   any
               Restricted  Subsidiary  shall  have  an  ownership  interest
               unless such net earnings  shall have actually been  received
               by the Company or such Restricted Subsidiary in the form  of
               cash distributions;
                    (h)  any gain or loss  arising from the acquisition  of
               any Securities of the Company or any Restricted Subsidiary;
                    (i)  any portion of the net earnings of the Company and
               its Restricted Subsidiaries that cannot be freely  converted
               into United States dollars; and
                    (j)  any gain or  loss reflected in  such net  earnings
               for such period that results solely from adjustments to  net
               earnings from prior periods due to the cumulative effect  of
               changes in any accounting principles required by GAAP.
               "Consolidated Net Income Available for Fixed Charges" means,
          for any period, the sum of
                    (a)  Consolidated Net Income, plus
                    (b)  the aggregate amount of
                         (i)  income taxes, and
                         (ii) Consolidated Fixed Charges,
                    (to the  extent,  and only  to  the extent,  that  such
                    aggregate amount  was deducted  in the  computation  of
                    Consolidated Net Income),
          in each  case accrued  for such  period by  the Company  and  its
          Restricted Subsidiaries, determined on  a consolidated basis  for
          such Persons.
               "Consolidated Operating Rental Expense" means, with  respect
          to any period, the aggregate amount of Operating Rentals  accrued
          for such  period  on, or  with  respect to,  Long-Term  Operating
          Leases of the Company and its Restricted Subsidiaries (other than
          Long-Term Operating Leases between the Company and any Restricted
          Subsidiary or between Restricted  Subsidiaries), determined on  a
          consolidated basis for such Persons for such period in accordance
          with GAAP.
               As used in this definition:
                    "Excluded Lease" means
                         (a)  any Capital Lease, and
                         (b)  any lease (whether or not a Capital Lease) of
                    word processing,  data,  communications,  computer  and
                    office equipment.
                    "Long-Term Operating Lease"  means any Operating  Lease
               with an original  term of more  than three years  (including
               any extension of such term at the option of the lessor)  and
               that is not cancelable during such term at the option of the
               lessee without incurrence  by the lessee  of a  cancellation
               charge or similar liability.
                    "Operating  Lease"  means  any  lease  other  than   an
               Excluded Lease.
               "Consolidated Total Assets"  means, at any  time, the  total
          amount  of  all  assets  of   the  Company  and  its   Restricted
          Subsidiaries, determined on a consolidated basis for such Persons
          at such time in accordance with GAAP.
               "Consolidated Total Capitalization" means, at any time,  the
          sum of
                    (a)  Consolidated Total Debt, plus
                    (b)  Consolidated Adjusted Net Worth,
          in each case, determined at such time.
               "Consolidated Total  Debt" means,  at  any time,  the  total
          amount  of  all   Debt  of   the  Company   and  its   Restricted
          Subsidiaries, determined on a consolidated basis for such Persons
          at such time in accordance with GAAP.
               "Consolidated Total Indebtedness"  means, at  any time,  the
          total  amount  of  all  Indebtedness  of  the  Company  and   its
          Restricted Subsidiaries, determined on  a consolidated basis  for
          such Persons at such time in accordance with GAAP.
               "Debt"  means,   with  respect   to  any   Person,   without
          duplication,
                    (a)  its liabilities for borrowed money (whether or not
               evidenced by a Security);
                    (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 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);
                    (d)  its Capital Lease Obligations;
                    (e)  Swaps of such Person; and
                    (f)  its Guaranties (other than Excluded Guaranties) of
               any liabilities of  another Person constituting  liabilities
               of a  type  set forth  in  clause (a)  through  clause  (e),
               inclusive;
          in each case, at such time, provided that trade accounts  payable
          incurred by such Person in the ordinary course of business  shall
          not constitute "Debt."
               "Debt Prepayment  Application" means,  with respect  to  any
          Transfer of property by the Company or any Restricted Subsidiary,
          the application by the Company  or such Restricted Subsidiary  of
          cash in an amount equal to  the Net Proceeds Amount with  respect
          to such  Transfer to  pay  Senior Debt  of  the Company  or  such
          Restricted Subsidiary (other than Senior Debt owing to any of the
          Restricted Subsidiaries  or  any  Affiliate and  Senior  Debt  in
          respect of any revolving credit or similar facility providing the
          Company or such  Restricted Subsidiary with  the right to  obtain
          loans or other extensions of credit from time to time, except  to
          the extent that in  connection with such  payment of Senior  Debt
          the  availability  of  credit  under  such  credit  facility   is
          permanently reduced by an amount not less than the amount of such
          proceeds applied to  the payment of  such Senior Debt),  provided
          that in the course of making  such application the Company  shall
          offer to prepay each outstanding Note in accordance with  Section
          10.10(b) in a  principal amount that  equals the Ratable  Portion
          for such Note.   If any  holder of a  Note fails  to accept  such
          offer of prepayment, then, for purposes of the preceding sentence
          only, the Company nevertheless will be deemed to have paid Senior
          Debt in an amount equal to the Ratable Portion for such Note.
               As used in this definition,
                    "Ratable Portion" means, for any Note, an amount  equal
               to the product of
                         (a)  the Net Proceeds Amount  being so offered  to
                    the payment of Senior Debt, multiplied by
                         (b)  a fraction  the  numerator of  which  is  the
                    outstanding principal  amount  of  such  Note  and  the
                    denominator  of  which  is  the  aggregate  outstanding
                    principal amount of Senior Debt of the Company and  its
                    Restricted Subsidiaries.
               "Debt Prepayment  Application Date"  is defined  in  Section
          10.10(b).
               "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  the Notes  of  any
          Series, that rate  of interest per  annum that is  the lesser  of
          (a) 1% per annum above the rate of interest stated in clause  (a)
          of the first paragraph  of the Notes of  such Series or (ii)  the
          highest rate allowed by applicable law.
               "Disposition Value" means, at any time, with respect to  any
          property
                    (a)  in the case of  property that does not  constitute
               Restricted Subsidiary Stock, the book value thereof,  valued
               at the  time  of  such disposition  in  good  faith  by  the
               Company, and
                    (b)  in  the   case   of  property   that   constitutes
               Restricted  Subsidiary  Stock,  an  amount  equal  to   that
               percentage of book  value of  the assets  of the  Restricted
               Subsidiary that  issued  such  stock  as  is  equal  to  the
               percentage that the book value of such Restricted Subsidiary
               Stock represents of the book value of all of the outstanding
               Capital Stock of  such Restricted  Subsidiary (assuming,  in
               making such  calculations, that  all Securities  convertible
               into such Capital  Stock are  so converted  and giving  full
               effect to all transactions that  would occur or be  required
               in connection with such  conversion) determined at the  time
               of the disposition thereof, in good faith by the Company.
               "Distribution" means, without  duplication, with respect  to
               any corporation:
                    (a)  any dividend  or  other  distribution,  direct  or
               indirect, on account of any shares of Capital Stock of  such
               corporation now or hereafter outstanding, whether in cash or
               other property,  except  a dividend  or  other  distribution
               payable solely in  shares of Capital  Stock of such  Person;
               and
                    (b)  any  redemption,  retirement,  purchase  or  other
               acquisition, direct or  indirect, of any  shares of  Capital
               Stock of  such  corporation now  or  hereafter  outstanding,
               including, without limitation, any deferred payment made  by
               such corporation in connection  with the acquisition of  its
               Capital Stock,  or of  any warrants,  rights or  options  to
               acquire any shares of such Capital Stock.
               "Environmental Laws"  means  any  and  all  Federal,  state,
          local,  and  foreign  statutes,  laws,  regulations,  ordinances,
          rules, judgments, orders, decrees, permits, concessions,  grants,
          franchises, licenses,  agreements  or  governmental  restrictions
          relating to pollution  and the protection  of the environment  or
          the release of any materials into the environment, including  but
          not limited to those related  to hazardous substances or  wastes,
          air emissions and discharges to waste or public systems.
               "ERISA" means the Employee Retirement Income Security Act of
          1974, as amended from time to time, and the rules and regulations
          promulgated thereunder from time to time in effect.
               "ERISA Affiliate" means  any trade or  business (whether  or
          not incorporated) that is treated  as a single employer  together
          with the Company under section 414 of the Code.
               "Event of Default" is defined in Section 11.
               "Excess Proceeds  Amount" means,  in respect  of any  fiscal
          year, an aggregate amount equal to (x) one hundred percent (100%)
          of the  Net  Proceeds  Amount in  respect  of  all  Transfers  of
          property by the  Company and the  Restricted Subsidiaries  during
          such fiscal  year, minus  (y) an  amount, expressed  in  Dollars,
          equal to the Specified Asset Percentage in respect of such fiscal
          year.
               "Exchange Act" means the Securities Exchange Act of 1934, as
          amended from time to time.
               "Excluded Guaranty" means any Guaranty in effect on the date
          of the Closing and described in  Schedule 5.15 under the  caption
          "Existing Guaranties," and any renewal or extension (as to  time)
          in respect  of any  such Guaranty,  provided that  the  aggregate
          amount of  the  obligations  of the  Company  or  any  Restricted
          Subsidiary thereunder is not increased,
                    (a)  in the  case of  the  "Existing Guaranty"  by  the
               Company in favor  of Hakuto Co.,  Ltd. with  respect to  the
               obligations of Hakuto-OCLI Co., Ltd., above an amount  equal
               to $3,000,000; and
                    (b)  in the case  of the  other "Existing  Guaranties,"
               above the maximum  amount of the  liquidated and  contingent
               obligations of the Company  and its Restricted  Subsidiaries
               thereunder immediately prior to such renewal or extension.
               "Excluded Restricted Subsidiary  Indebtedness" means at  any
          time (without duplication):
                    (a)  Indebtedness of a  Restricted Subsidiary owing  to
               the Company or to a Wholly-Owned Restricted Subsidiary,
                    (b)  Indebtedness   of    a    Restricted    Subsidiary
               outstanding on the  date of  the Closing  and identified  on
               Schedule  5.15  under   the  caption  "Existing   Restricted
               Subsidiary Indebtedness,"
                    (c)  Indebtedness of  a Restricted  Subsidiary  secured
               by, and  in respect  of, Liens  permitted pursuant  to,  and
               created  in  accordance  with,  the  provisions  of  Section
               10.6(a)(vii), and
                    (d)  Indebtedness of a  Restricted Subsidiary  incurred
               by any Person prior to the  date on which such Person  shall
               have become  a  Restricted  Subsidiary or  shall  have  been
               merged with  or into,  or  consolidated with,  a  Restricted
               Subsidiary, so long as such Indebtedness was not incurred in
               contemplation of such Person becoming, merging with or  into
               or consolidating with, a Restricted Subsidiary,
          in each case, at such time.
               "Existing Note  Purchase Agreement"  is defined  in  Section
          1.1.
               "Existing Noteholders" is defined in Section 1.1.
               "Existing Notes" is defined in Section 1.1.
               "Fair Market Value" means, at any  time and with respect  to
          any property,  the sale  value of  such  property that  would  be
          realized in an arm's-length sale at such time between an informed
          and willing buyer  and an  informed and  willing seller  (neither
          being under a compulsion to buy or sell).
               "Foreign Pension Plan" means any plan, fund or other similar
          program that is
                    (a)  established or  maintained outside  of the  United
               States of America by any one  or more of the Company or  its
               Subsidiaries primarily  for  the benefit  of  the  employees
               (substantially all of  whom are aliens  not residing in  the
               United  States   of  America)   of  the   Company  or   such
               Subsidiaries which  plan,  fund  or  other  similar  program
               provides for retirement income for such employees or results
               in a deferral of income for such employees in  contemplation
               of retirement, and
                    (b)  not otherwise subject to ERISA.
               "GAAP" means generally accepted accounting principles as  in
          effect from time to time in the United States of America.
               "Governmental Authority" means
                    (a)  the government of
                         (i)  the United States of America or any state  or
                    other political subdivision thereof, or
                         (ii) any jurisdiction in which the Company or  any
                    Restricted Subsidiary conducts all  or any part of  its
                    business,  or  that   asserts  jurisdiction  over   any
                    properties of the Company or any Restricted Subsidiary,
                    or
                    (b)  any  entity  exercising  executive,   legislative,
               judicial, regulatory  or  administrative  functions  of,  or
               pertaining to, any such government.
               "Guaranty" means, with respect to any Person, any obligation
          (except the endorsement  in the  ordinary course  of business  of
          negotiable instruments for deposit or collection) of such  Person
          guaranteeing or in effect guaranteeing any indebtedness, dividend
          or other obligation of  any other Person  in any manner,  whether
          directly   or   indirectly,   including,   without    limitation,
          obligations  incurred   through  an   agreement,  contingent   or
          otherwise, by such Person:
                     (a)  to purchase such indebtedness or obligation or any
               property constituting security therefor;
                    (b)  to advance or supply funds (i) for the purchase or
               payment of  such  indebtedness  or obligation,  or  (ii)  to
               maintain  any  working  capital   or  other  balance   sheet
               condition or  any income  statement condition  of any  other
               Person or otherwise to advance  or make available funds  for
               the purchase or payment of such indebtedness or obligation;
                    (c)  to lease properties or  to purchase properties  or
               services primarily for the purpose of assuring the owner  of
               such indebtedness or obligation of the ability of any  other
               Person to make payment of the indebtedness or obligation; or
                    (d)  otherwise to assure the owner of such indebtedness
               or obligation against loss in respect thereof.
          In any computation  of the indebtedness  or other liabilities  of
          the  obligor  under  any  Guaranty,  the  indebtedness  or  other
          obligations that  are  the  subject of  such  Guaranty  shall  be
          assumed to be direct obligations of such obligor.
               "Hazardous Material" means any and all pollutants, toxic  or
          hazardous wastes or any other substances that might pose a hazard
          to health or  safety, the  removal of  which is  required or  the
          generation,  manufacture,   refining,   production,   processing,
          treatment,  storage,  handling,  transportation,  transfer,  use,
          disposal, release, discharge, spillage, seepage, or filtration of
          which is or shall be restricted,  prohibited or penalized by  any
          applicable law  (including,  without limitation,  asbestos,  urea
          formaldehyde foam insulation and polychlorinated biphenyls).
               "holder" means,  with respect  to any  Note, the  Person  in
          whose name such Note is registered in the register maintained  by
          the Company pursuant to Section 13.1.
               "Indebtedness" means,  with respect  to  any Person  at  any
          time, without duplication:
                    (a)  its liabilities for borrowed money (whether or not
               evidenced by a Security);
                    (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)  its obligations in respect of Redeemable Stock;
                    (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);
                    (e)  its Capital Lease Obligations;
                    (f)  the present value  of all payments  due under  any
               arrangement for retention of  title or any conditional  sale
               agreement (other than a Capital Lease{xe "Capital  Lease"}),
               in each case discounted in accordance with GAAP;
                    (g)  obligations of such Person  in respect of  letters
               of credit,  acceptances,  performance bonds  or  instruments
               serving a similar  function issued or  accepted by banks  or
               other financial institutions for the account of such  Person
               (other than obligations in  respect of any such  instruments
               relating to,  or  in  support of,  trade  payables  of  such
               Person);
                    (h)  Swaps of such Person; and
                    (i)  its Guaranties (other than Excluded Guaranties) of
               any liabilities of  another Person constituting  liabilities
               of a  type  set forth  in  clause (a)  through  clause  (h),
               inclusive;
          in each case, at such time, provided that trade accounts  payable
          incurred by such Person in the ordinary course of business  shall
          not constitute "Indebtedness."
               "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.
               "Investment" means  any  investment,  made  in  cash  or  by
          delivery  of  property,   by  the  Company   or  any   Restricted
          Subsidiary:
                    (a)  in any Person,  whether by  acquisition of  stock,
               Indebtedness or other  obligation or Security,  or by  loan,
               Guaranty, advance, capital contribution or otherwise; or
                    (b)  in any property.
               "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).  The term "Lien" does not  include
          negative pledge clauses in  agreements relating to the  borrowing
          of money.
               "Make-Whole Amount" is defined in Section 8.6.
               "Material" means  material  in  relation  to  the  business,
          operations, affairs, financial condition, assets, properties,  or
          prospects of the Company  and its Restricted Subsidiaries,  taken
          as a whole.
               "Material Adverse Effect" means a material adverse effect on
          (a)  the  business,  operations,  affairs,  financial  condition,
          assets  or  properties   of  the  Company   and  its   Restricted
          Subsidiaries, taken as a whole, or (b) the ability of the Company
          to perform its obligations under this Agreement and the Notes, or
          (c) the  validity  or enforceability  of  this Agreement  or  the
          Notes.
               "Memorandum" is defined in Section 5.3.
               "Multiemployer Plan" means any Plan that is a "multiemployer
          plan" (as such term is defined in section 4001(a)(3) of ERISA).
               "Net Proceeds Amount" means, with respect to any Transfer of
          any property by any Person, an amount equal to the difference of
                    (a)  the aggregate amount of the consideration  (valued
               at the Fair Market Value of  such consideration at the  time
               of the  consummation  of  such Transfer)  received  by  such
               Person in respect of such Transfer, minus
                    (b)  all ordinary  and reasonable  out-of-pocket  costs
               and expenses actually incurred by such Person in  connection
               with such Transfer (including, without limitation, all taxes
               payable in connection with such Transfer).
               "Note Exchange" is defined in Section 1.2(a).
               "Notes" is defined in Section 1.2(c).
               "Officer's Certificate"  means  a certificate  of  a  Senior
          Financial Officer or of  any other officer  of the Company  whose
          responsibilities  extend   to   the  subject   matter   of   such
          certificate.
               "Operating Rentals" means, with  respect to any period,  the
          sum of  the  minimum  amount  of  rental  and  other  obligations
          required to be  paid during  such period  by the  Company or  any
          Restricted Subsidiary  as  lessee under  all  leases of  real  or
          personal property  (other  than Capital  Leases),  excluding  any
          amounts required to be paid by the lessee (whether or not therein
          designated as  rental  or  additional rental)  (a) which  are  on
          account   of   maintenance   and   repairs,   insurance,   taxes,
          assessments, water rates  and similar charges,  or (b) which  are
          based on profits, revenues or sales  realized by the lessee  from
          the leased property or otherwise based on the performance of  the
          lessee.
               "Other Agreements" is defined in Section 2.3.
               "Other Purchasers" is defined in Section 2.3.
               "Payment Date" is defined in Section 8.6.
               "PBGC"  means  the  Pension  Benefit  Guaranty   Corporation
          referred to and defined in ERISA or any successor thereto.
               "Permitted Insurance  Proceeds" means  with respect  to  any
          period, (a)  proceeds of  insurance received  during such  period
          from business  interruption coverage,  and  (b) proceeds  of  any
          insurance received  during such  period as  a settlement  of  any
          property loss or a reimbursement of any expenses related  thereto
          in an amount not in excess of the amount of such loss or expenses
          that is required to be reflected as a loss in the net earnings of
          the Company  and its  Restricted  Subsidiaries, determined  on  a
          consolidated basis  for such  Persons  in accordance  with  GAAP,
          provided that such insurance  proceeds were received within  four
          fiscal quarters of the  time such loss or  expenses, as the  case
          may be, were reflected in such net earnings.
               "Person"  means  an  individual,  partnership,  corporation,
          limited liability  company,  association,  trust,  unincorporated
          organization, or a government or agency or political  subdivision
          thereof.
               "Plan" means  an  "employee  benefit plan"  (as  defined  in
          section 3(3)  of ERISA)  that is  or, within  the preceding  five
          years,  has  been   established  or  maintained,   or  to   which
          contributions are or, within the preceding five years, have  been
          made or  required  to  be  made, by  the  Company  or  any  ERISA
          Affiliate or  with respect  to which  the  Company or  any  ERISA
          Affiliate may have any liability.
               "Preferred Stock"  means any  class of  Capital Stock  of  a
          corporation that is  preferred over  any other  class of  Capital
          Stock of such corporation as to  the payment of dividends or  the
          payment of any  amount upon  liquidation or  dissolution of  such
          corporation.
               "Priority  Indebtedness"   means,  at   any  time,   without
          duplication, the sum of
                    (a)  all Indebtedness  of the  Company secured  by  any
               Lien on  any  property  of the  Company  or  any  Restricted
               Subsidiary outstanding  at such  time, other  than any  such
               Indebtedness secured by Liens permitted  by any one or  more
               of clauses (a)(i)  through (a)(vii),  inclusive, of  Section
               10.6,  or  clause  (a)(ix)  of  Section  10.6  (unless  such
               Indebtedness  is  a  renewal,  extension  (as  to  time)  or
               refinancing of Indebtedness secured  by a Lien described  in
               clause (viii) of Section 10.6(a)), plus
                    (b)  Total    Restricted    Subsidiary     Indebtedness
               outstanding at such time, plus
                    (c)  all issued and outstanding Preferred Stock of  the
               Restricted Subsidiaries at such time (valued at the  greater
               of its voluntary  or involuntary liquidation  price at  such
               time, but exclusive of accrued dividends), plus
                    (d)  all Attributable  Debt  of  the  Company  and  its
               Restricted Subsidiaries outstanding at such time.
               "property   or   properties"    means,   unless    otherwise
          specifically limited,  real or  personal  property of  any  kind,
          tangible or intangible, choate or inchoate.
               "Property Reinvestment Application"  means, with respect  to
          any Transfer of property, the application  of an amount equal  to
          the Net  Proceeds Amount  with respect  to such  Transfer to  the
          acquisition by  the  Company  or  any  Restricted  Subsidiary  of
          operating assets of the Company or any Restricted Subsidiary of a
          nature generally similar, and a value at least equivalent, to the
          property subject to such Transfer.
               "PTE" is defined in Section 6.2(a).
               "Purchase Money Lien" means:
                    (a)  a Lien  (including,  without  limitation,  a  Lien
               arising in  connection with  a Capital  Lease) held  by  any
               Person (whether  or  not the  seller  of such  property)  on
               property acquired, constructed or improved by the Company or
               any Restricted  Subsidiary,  which  Lien secures  all  or  a
               portion of the related purchase price or construction  costs
               of such property, provided that
                         (i)  such Lien
                                   (A)  is created contemporaneously  with,
                              or within two hundred seventy (270) days  of,
                              such  acquisition  or  improvement,  or   the
                              completion of such construction,
                                   (B)  encumbers only property  purchased,
                              constructed or improved after the date of the
                              Closing and acquired, constructed or improved
                              with the proceeds of the Indebtedness secured
                              thereby, and
                                   (C)  is not thereafter  extended to  any
                              other property; and
                         (ii) after giving effect to  the creation of  such
                    Lien, and to any concurrent transactions, no Default or
                    Event of Default would exist;
                    (b)  Liens existing on property acquired by the Company
               or a Restricted  Subsidiary after  the date  of the  Closing
               which  Liens  existed  at  the  time  of  such  acquisition,
               provided that
                         (i)  such Liens
                                   (A)  were not placed  on such  property,
                              and  do  not  secure  Indebtedness   created,
                              incurred,      issued       or       assumed,
                              contemporaneously with  or in  any manner  in
                              contemplation of,  the  acquisition  of  such
                              property by  the Company  or such  Restricted
                              Subsidiary, and
                                   (B)  do not extend to any other property
                              of the Company  or any Restricted  Subsidiary
                              after such acquisition, and
                         (ii) after giving effect to such acquisition,  and
                    to any concurrent transactions, no Default or Event  of
                    Default would exist; and
                    (c)  Liens existing on the  property, Capital Stock  or
               Indebtedness of a Person at the  time such Person becomes  a
               Restricted Subsidiary or is merged into or consolidated with
               the  Company  or   a  Restricted  Subsidiary,   or  all   or
               substantially  all  of  the   property,  Capital  Stock   or
               Indebtedness of  such Person  is sold,  leased or  otherwise
               disposed of to the Company or another Restricted Subsidiary,
               provided that
                         (i)  such Lien shall only  extend to or cover  any
                    property owned  by such  Person,  or Capital  Stock  or
                    Indebtedness issued or created by such Person, prior to
                    the time such Person became a Restricted Subsidiary, or
                    prior to  such  merger, consolidation,  sale  or  other
                    disposition,
                         (ii) such Lien was not created in contemplation of
                    any such transaction, and
                         (iii)     after giving effect to such transaction,
                    and to any concurrent transactions, no Default or Event
                    of Default would exist.
               "QPAM Exemption" is defined in Section 6.2(d).
               "Qualified Proceeds  Application" means  the application  by
          the Company or  a Restricted  Subsidiary of  the Excess  Proceeds
          Amount with respect to Transfers described in Section 10.10(b) to
          either (or both) of the following:
                    (a)    the  acquisition  of  operating  assets  of  the
               Company or any Restricted Subsidiary of a similar nature  to
               be used in the  ordinary course of  business of such  Person
               described in Section 10.1 (as  determined in the good  faith
               opinion of the  Board of Directors  of the  Company or  such
               Restricted Subsidiary, as the case may be); or
                    (b)   to  pay the  outstanding  principal of,  and  the
               applicable premium (if any) on,  Senior Debt of the  Company
               or any Restricted Subsidiary (other than Senior Debt held by
               the Company, any Restricted  Subsidiary or any Affiliate  or
               Senior Debt in  respect of any  revolving credit or  similar
               credit facility  providing  the Company  or  any  Restricted
               Subsidiary  with  the  right   to  obtain  loans  or   other
               extensions of credit from time to time, except to the extent
               that in  connection with  such payment  of Senior  Debt  the
               availability  of  credit  under  such  credit  facility   is
               permanently reduced by an amount not less than the amount of
               such proceeds applied to the payment of such Senior Debt).
               To the extent that any such proceeds are applied as provided
          in clause  (b) of  this definition  and such  Senior Debt  to  be
          repaid is Senior Debt evidenced by  the Notes, the Company  shall
          comply with  the provisions  of Section  8.2 in  respect of  such
          prepayment.
               "Redeemable Stock" means, with  respect to any Person,  each
          share of such Person's Capital Stock that is:
                    (a)  redeemable, payable or required to be purchased or
               otherwise  retired  or  extinguished,  or  convertible  into
               indebtedness of such Person
                         (i)  at a fixed or  determinable date, whether  by
                    operation of a sinking fund or otherwise,
                         (ii) at the option of  any Person other than  such
                    Person, or
                         (iii)     upon the occurrence  of a condition  not
                    solely within the control of such Person; or
                    (b)  convertible into other Redeemable Stock.
               "Required Holders" means, at any time, the holder or holders
          of a  majority in  principal  amount of  the  Notes at  the  time
          outstanding (exclusive of Notes then owned by the Company or  any
          of its Affiliates).
               "Responsible Officer" means any Senior Financial Officer and
          any other  officer of  the Company  with responsibility  for  the
          administration of the relevant portion of this Agreement.
               "Restricted Investments"  means all  Investments except  the
          following:
                    (a)  property to  be used  in  the ordinary  course  of
               business of the Company and its Restricted Subsidiaries;
                    (b)  current assets arising from the sale of goods  and
               services in the ordinary course  of business of the  Company
               and its Restricted Subsidiaries;
                    (c)  Investments in one or more Restricted Subsidiaries
               or any Person that concurrently with such Investment becomes
               a Restricted Subsidiary;
                    (d)  Investments existing on  the date  of the  Closing
               and disclosed in Schedule 10.8;
                    (e)  Investments   in    United    States    Government
               Securities, provided  that  such obligations  mature  within
               three years from the date of acquisition thereof;
                    (f)  Investments in tax-exempt obligations of any state
               of the United States of America, or any municipality of  any
               such state, in each case rated "AA" or better by S&P,  "Aa2"
               or better by Moody's  or an equivalent  rating by any  other
               credit  rating  agency  of  recognized  national   standing,
               provided that such obligations  mature within 365 days  from
               the date of acquisition thereof;
                    (g)  Investments in certificates of deposit or banker's
               acceptances issued by an Acceptable Bank, provided that such
               obligations  mature  within  365  days  from  the  date   of
               acquisition thereof;
                    (h)  Investments in commercial paper  given one of  the
               two highest  ratings by  S&P, Moody's  or any  other  credit
               rating agency of recognized  national standing and  maturing
               not more than 270 days from the date of creation thereof;
                    (i)  Investments in  money market  investment  programs
               and in publicly-traded shares  in any open-end mutual  fund,
               in each case that invest solely  in Investments of the  type
               described in clause (e), clause (g),  or clause (h) of  this
               definition and has  total assets  in excess  of One  Billion
               Dollars ($1,000,000,000), provided that such Investments are
               classified as current assets in accordance with GAAP;
                    (j)  Investments in treasury stock; and
                    (k)  Investments in Permitted Repurchase Agreements.
               As of any date of determination, each Restricted  Investment
          shall be valued at the greater of:
                    (x)  the amount at which such Restricted Investment  is
               shown on the books of the  Company or any of its  Restricted
               Subsidiaries (or zero if  such Restricted Investment is  not
               shown on any such books); and
                    (y)  either
                         (i)  in the case of any Guaranty of the obligation
                    of any Person, the amount which  the Company or any  of
                    its Restricted Subsidiaries has paid on account of such
                    obligation less any recoupment  by the Company or  such
                    Restricted Subsidiary of any such payments, or
                         (ii) in  the   case   of  any   other   Restricted
                    Investment, the excess  of (A) the  greater of (1)  the
                    amount originally entered on  the books of the  Company
                    or any  of  its Restricted  Subsidiaries  with  respect
                    thereto and (2) the cost thereof to the Company or  its
                    Restricted Subsidiary over  (B) any  return of  capital
                    (after  income  taxes  applicable  thereto)  upon  such
                    Restricted  Investment  through   the  sale  or   other
                    liquidation thereof or part thereof or otherwise.
               As used in this definition of "Restricted Investments":
                    "Acceptable Bank"  means  any  bank  or  trust  company
               (i) which is organized under the  laws of the United  States
               of America  or any  state thereof,  (ii) which has  capital,
               surplus  and   undivided   profits  aggregating   at   least
               $500,000,000,  and  (iii) whose  long-term  unsecured   debt
               obligations (or the long-term unsecured debt obligations  of
               the bank holding company owning all of the Capital Stock  of
               such bank or trust company) shall have been given one of the
               two highest  ratings by  S&P, Moody's  or any  other  credit
               rating agency of recognized national standing.
                    "Moody's" means Moody's Investors Service, Inc.
                    "Permitted Repurchase  Agreements"  means  any  written
               agreement:
                         (a)  that provides for
                              (i)  the  transfer  of  one  or  more  United
                         States Governmental Securities to the Company or a
                         Restricted  Subsidiary  from  an  Acceptable  Bank
                         against a transfer of funds (the "transfer price")
                         by the Company  or such  Restricted Subsidiary  to
                         such Acceptable Bank, and
                              (ii) a simultaneous agreement by the  Company
                         or such Restricted Subsidiary, in connection  with
                         such  transfer  of  funds,  to  transfer  to  such
                         Acceptable Bank the same or substantially  similar
                         United States Governmental Securities for a  price
                         not less than the transfer price plus a reasonable
                         return thereon at  a date certain  not later  than
                         one (1) year after such transfer of funds; and
                         (b)  in respect  of  which  the  Company  or  such
                    Restricted Subsidiary shall have the right, whether  by
                    contract or pursuant  to applicable  law, to  liquidate
                    such repurchase agreement  upon the  occurrence of  any
                    default thereunder.
                    "S&P" means Standard & Poor's Ratings Group, a division
               of McGraw Hill, Inc.
               "Restricted Payment" means any  Distribution (other than  on
          account of Capital Stock of a Restricted Subsidiary owned legally
          and beneficially  by the  Company  or a  Restricted  Subsidiary),
          including, without limitation, any Distribution resulting in  the
          acquisition by the Company  of Securities which would  constitute
          treasury stock.
               "Restricted Subsidiary"  means, at  any time,  a  Subsidiary
          which
                    (a)  as of the date of the Closing has been  designated
               as a "Restricted Subsidiary" in Schedule 5.4, or
                    (b)  after the date of  the Closing, and in  accordance
               with Section  9.6,  has  been designated  as  a  "Restricted
               Subsidiary."
               "Restricted Subsidiary  Stock" means,  with respect  to  any
          Person, the Capital Stock (or any options or warrants to purchase
          stock or other  Securities exchangeable for  or convertible  into
          any Capital Stock) of any Restricted Subsidiary of such Person.
               "Sale-and-Leaseback  Transaction"  means  a  transaction  or
          series of  transactions  pursuant to  which  the Company  or  any
          Restricted Subsidiary shall sell or transfer to any Person (other
          than by  a  Restricted  Subsidiary  to  the  Company  or  another
          Restricted Subsidiary) any property constructed or acquired after
          the date of  Closing, and,  as part  of the  same transaction  or
          series of transactions, the Company or such Restricted Subsidiary
          shall, within 180 days of the completion of such construction  or
          acquisition, rent or lease as lessee, such property.
               "SEC" means,  at  any  time,  the  Securities  and  Exchange
          Commission or any other Federal agency at such time administering
          the Securities Act.
               "Securities Act"  means  the  Securities  Act  of  1933,  as
          amended from time to time.
               "Security" has the meaning set forth in section 2(1) of  the
          Securities Act.
               "Senior Debt" means the Notes and any Debt of the Company or
          its Restricted Subsidiaries that by its terms is not subordinated
          in right of payment to any  unsecured Debt of the Company or  any
          Restricted Subsidiary.
               "Senior  Financial  Officer"   means  the  chief   financial
          officer, principal accounting  officer, treasurer or  comptroller
          of the Company.
               "Series" means any one or more of the series of Notes issued
          hereunder.
               "Series A1 Notes" is defined in Section 1.2(a)(i).
               "Series A2 Notes" is defined in Section 1.2(a)(ii).
               "Series B Notes" is defined in Section 1.2(b).
               "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 SEC
          as in effect on the date of the Closing) of the Company.
               "Source" is defined in Section 6.2.
               "Specified Asset Percentage" is defined in Section 10.10(a).
               "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 Company.
               "Surviving Corporation" is defined in Section 10.9(a)(i)(A).
               "Swaps"  means,  with   respect  to   any  Person,   payment
          obligations with respect to  interest rate swaps, currency  swaps
          and similar obligations obligating such Person to make  payments,
          whether periodically or upon the happening of a contingency.  For
          the purposes  of this  Agreement, the  amount of  the  obligation
          under any Swap shall be the amount determined in respect  thereof
          as of the end of the  then most recently ended fiscal quarter  of
          such  Person,  based  on  the  assumption  that  such  Swap   had
          terminated at the end of such fiscal quarter, and in making  such
          determination, if any  agreement relating to  such Swap  provides
          for the  netting  of  amounts  payable  by  and  to  such  Person
          thereunder or if any such agreement provides for the simultaneous
          payment of amounts by and to such Person, then in each such case,
          the amount  of  such  obligation  shall  be  the  net  amount  so
          determined.
               "Total Restricted  Subsidiary  Indebtedness" means,  at  any
          time, without duplication
                    (a)  the  aggregate  Indebtedness  of  all   Restricted
               Subsidiaries outstanding at such time, and
                    (b)  the aggregate  amount of  claims (whether  or  not
               contingent  or  liquidated  at  such  time)  in  respect  of
               (including,   without   limitation,   accumulated,    unpaid
               dividends  on)  all  Preferred   Stock  (and  other   equity
               Securities  and  all  other  Securities  convertible   into,
               exchangeable for,  or representing  the right  to  purchase,
               Preferred Stock) of all Restricted Subsidiaries  outstanding
               at such  time (whether  or not  any right  of redemption  or
               conversion is  exercisable by  the  holder thereof  at  such
               time),
          determined, in each case, on a  combined basis for such  Persons,
          but excluding from such  calculation (i) all Excluded  Restricted
          Subsidiary Indebtedness at such time and (ii) all such  Preferred
          Stock  and  other  equity   Securities  which  are  legally   and
          beneficially owned by the Company or any Wholly-Owned  Restricted
          Subsidiary.
               "Transfer"  means,   with  respect   to  any   Person,   any
          transaction in  which such  Person sells,  conveys, transfers  or
          leases (as  lessor)  any  of  its  property,  including,  without
          limitation, Restricted Subsidiary Stock.
               "United  States  Government   Security"  means  any   direct
          obligation of, or obligation guaranteed by, the United States  of
          America, or any agency controlled or  supervised by or acting  as
          an instrumentality of  the United States  of America pursuant  to
          authority granted  by  the  Congress  of  the  United  States  of
          America, so long as such obligation  or guarantee shall have  the
          benefit of the  full faith  and credit  of the  United States  of
          America which  shall  have  been pledged  pursuant  to  authority
          granted by the Congress of the United States of America.
               "Unrestricted Subsidiary"  at any  time means  a  Subsidiary
          which,
                    (a)  as of the date of the Closing, is not a Restricted
               Subsidiary,
                    (b)  after the date  of the Closing  and in  accordance
               with  Section  9.6,  has  been  designated  as,  or   deemed
               designated as, an "Unrestricted Subsidiary," or
                    (c)  otherwise does  not  satisfy the  criteria  for  a
               Restricted  Subsidiary  set  forth  in  the  definition   of
               "Restricted Subsidiary" contained in this Schedule B.
               "Voting Stock" means Capital Stock  of any class or  classes
          of a Person the holders of  which are ordinarily, in the  absence
          of contingencies,  entitled  to  elect  corporate  directors  (or
          Persons performing similar functions).

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

                                     SCHEDULE 3
                                PAYMENT INSTRUCTIONS

               Bank of America
               ABA No. 121000358
               For the account of Optical Coating Laboratory, Inc.
               Account Number:  14980-00084
               Contact Name and Telephone  Number:  Joyce Drumgoole,  (925)
                675-7132)

                                    SCHEDULE 4.10
                           CHANGES IN CORPORATE STRUCTURE

          None

                                    SCHEDULE 5.3
                                DISCLOSURE MATERIALS

          None


                                    SCHEDULE 5.4
            SUBSIDIARIES OF THE COMPANY AND OWNERSHIP OF SUBSIDIARY STOCK

          (a)(i) and (a)(ii)  The Company's  Subsidiaries, showing,  as  to
          each Subsidiary, the  correct name thereof,  the jurisdiction  of
          its organization, and the percentage of  shares of each class  of
          its Capital Stock outstanding owned by the Company and each other
          Subsidiary.
                                                       Percent of Place of
          Subsidiary Name                              OwnershipIncorporation

          Unrestricted Subsidiaries:
          Hakuto-OCLI, Ltd. (OCLI Asia)................  50%         Japan
          OCLI International Service Corporation....... 100%    California
          OCLI Foreign Sales Corporation............... 100%          Guam
          OCLI Optical Coating Laboratory GmbH......... 100%       Germany
          MMG Glastechnik GmbH......................... 100%       Germany
          OCLI Optical Coatings Espana S.A............. 100%         Spain
          Optical Coating Laboratory B.V............... 100%   Netherlands
          Optical Coating Laboratory EURL.............. 100%        France

          Restricted Subsidiaries:
          OCLI Optical Coating Laboratory, Ltd......... 100%      Scotland
          Flex Products, Inc...........................  60%      Delaware

          (a)(iii)The Company's Affiliates, other than Subsidiaries
          Beneficial Owner                     Numberrof       SPercenteof

          OCLI 401(k)/ESOP Plan               *1,552,129            *12.9%
           c/o Optical Coating Laboratory, Inc.
           2789 Northpoint Parkway
           Santa Rosa, California  95407-7397

          *At June 30, 1998

 
                                    SCHEDULE 5.5
                                FINANCIAL STATEMENTS

          Financial statements as contained in the Company's Form 10-K  for
          the year ended October 31, 1997  and Form 10-Q for the three  and
          six months ended April 30, 1998.


                                    SCHEDULE 5.8
                                 CERTAIN LITIGATION

          1.   In  1997,  Optical  Corporation  of  America  (_ OCA_)   and
               certain  of  its  directors  and  officers  (_ Affiliates_ )
               commenced suit against  the Company.   The complaint  arises
               out of a letter of intent executed by the Company and OCA in
               March 1996 and an ensuing  merger agreement executed by  the
               Company and OCA in June 1996.   Under the merger  agreement,
               the Company would acquire OCA.  The complaint seeks  damages
               for costs  and  expenses incurred  by  OCA in  pursuing  the
               merger transaction  with the  Company due  to the  Company's
               alleged negligent misrepresentations  to OCA and  Affiliates
               and the Company's  alleged breach  of its  letter of  intent
               with OCA.  The Company  has filed counterclaims against  OCA
               and the  Affiliates  based on  OCA's  breach of  the  merger
               agreement and  is seeking  damages based  on the  difference
               between the value of OCA's business  to the Company and  the
               agreed upon purchase price under the merger agreement.   The
               Company does not believe that this litigation will have  any
               material adverse effect on  its future operating results  or
               financial condition.
          2.   In 1997,  Flex  Products  filed  a  suit  in  United  States
               District Court for the Eastern District of Michigan alleging
               that BASF  Corporation (BASF)  and  BASF AG  have  infringed
               Flex's patents covering optically variable thin film  flakes
               which, when  mixed  with  paints  and  inks,  produce  color
               shifting visual properties.  The complaint requests that the
               Court enjoin BASF from importing, making, using, selling  or
               offering to  sell  the  infringing  pigment  in  the  United
               States.    The   complaint  also  seeks   damages  for   the
               infringement, including treble  damages if the  infringement
               is found  to  be  willful.  BASF  Corporation  has  filed  a
               counterclaim  seeking  a  declaration  that  the  patent  in
               question is  invalid.   Both BASF  companies have  requested
               that they  be  awarded  their  attorneys'  fees  and  costs.
               Management  remains  confident  in  the  validity  of   Flex
               Products' patent, and based  upon the information  currently
               available, that the BASF product is, in fact, covered by the
               patent.
          3.   During the past several years, the Company has been  engaged
               in litigation  in the  United  Kingdom (_ U.K._ )  involving
               infringement of  a  Company  patent by  Pilkington,  a  U.K.
               company.  The Company won its  action at the Patents  County
               Courts level but lost on appeal to the U.K. House of  Lords.
               During the injunction period,  Pilkington submitted a  claim
               for damages  totaling approximately  $1.6 million  for  lost
               profits.  The Company and legal  counsel are in the  process
               of reviewing the claim.  Management believes that the amount
               of the  claim  is  substantially  overstated  and  that  the
               ultimate settlement will not have a material adverse  effect
               on the financial statements.

                                    SCHEDULE 5.11
                                    PATENTS, ETC.

          None.

          (Note: Assuming BASF is settled prior to close.)


                                    SCHEDULE 5.12
                     ERISA AFFILIATES AND FOREIGN PENSION PLANS

          1.   OCLI 401(k)/ESOP Plan
               c/o Optical Coating Laboratory, Inc.
               2789 Northpoint Parkway
               Santa Rosa, California  95407-7397
               Trustees:  T. Rowe Price
               Administrative Committee:
               Craig Collins, Vice President,  Finance
               and Chief  Financial Officer
               Jill Sanford, Manager, Compensation and Benefits
               Holly Neal, Corporate Controller

          2.   The OCLI Optical Coating Laboratory, Ltd., Scotland Insurance
               Ridge Way
               Hillend Industrial Park
               Dalgety Bay, Fife
               Scotland, KY11 5FR
               Trustees:  All employees of OCLI Optical
                          Coating Laboratory, Ltd.
               Administrative Committee:
               Ian Manson, Finance Director
               Gordon Latto, Manufacturing Scheduler/Technician
          3.   Employees of  OCLI/MMG Division, Germany and
               OCLI Optical Coating Laboratory GmbH, Germany
               accrue retirement  benefits under the German  National
               Program.
               Trustees:  Not Applicable


                                    SCHEDULE 5.15
                           EXISTING INDEBTEDNESS AND LIENS

          See the attached "Minimum  Operating Lease Commitments" schedule
          in addition to the following debt schedule as of 4/30/98:

          (Amounts in thousands)                             At 4/30/98
          -------------------------------------------------------------
          Unsecured senior notes. Interest at 8.71% payable semiannually.
            Principal payable in annual installments of $3.6 million from
            1998 through 2002. .................................. $14,400

          Bank  of  America  NT&SA.  Unsecured  bank  term  loan.
           Variable interest rates averaging 6.8% at October 31, 1997,
           payable quarterly, with semiannual principal payments of
           $2 million. ...........................................$ 8,000

          Bank of America  NT&SA. Unsecured borrowings under bank line of
           credit. Variable interest rate averaging 6.7% at October 31, 1997,
           payable quarterly or specified  duration period.  Principal due
           upon expiration on April 28, 2000......................$ 3,000

          Aid Association for Lutherans. Mortgage payable.  Interest at 8%.
            Collateralized by a 72,000 sq. ft. newly constructed building
            and related land.  Principal and interest payments of $25,000
            per month through 2011................................ $ 2,370

          Aid Association  for Lutherans.  Mortgage payable.   Interest
           at 7.5%. Collateralized by a  65,000 sq. ft. newly
           constructed building and related land leased to Flex
           Products. Principal and interest payments of $28,000 per month
           through 2011............................................$ 2,735

          Scottish Development Agency.  Building loan, with a conditional
           interest moratorium from  February 1, 1995 through January  31,
           1998, with interest at  9.5% thereafter.  Semiannual principal
           payments of approximately $100,000 are payable through January
           1998 with subsequent payments of $331,000, comprising principal
           and interest, through 2006. Collateralized by the land and
           building of the Company's Scottish subsidiary...........$ 3,748

          ABN AMRO   Unsecured  bank note.   Interest  at 5.6%.  Quarterly
           principal and interest payments of  approximately $300,000
           through December 2002. .................................$ 4,075

          Deutsche Bank. Bank loans of OCLI/MMG Division with interest
           rates ranging from 4.5% to 7.5%. Payable in semiannual and
           annual installments through 2020. Partly collateralized by
           mortgages on OCLI/MMG Division land and buildings and liens
           on equipment. ..........................................$ 3,284

          Asahi Bank. Bank line of Credit - Hakuto/OCLI J.V.,
          Japan. ..................................................$ 1,498

          Present value  of obligations  under  capital leases  at  imputed
          interest rates from 8.0% to 9.5% payable in monthly installments
          through 2004. ...........................................$ 2,166

          The Company has a $32 million unsecured credit facility comprised
          of a $10 million  term loan and a  $20 million revolving line  of
          credit (increased from $15 million in 1997).  The revolving  line
          of credit  carries a  commitment fee  of .375%  per year  on  the
          unused portion of  the facility and  expires on  April 28,  2000.
          The Company  has  a  surety bond  for  $903,000  to  satisfy  the
          Company's workers' compensation self-insurance requirements.  The
          surety bond carries a fee of 1.00% per year.

          During 1997, the Company replaced its 8%, $5 million note payable
          to private parties with a 5.6% bank note.  Payments of  principal
          and interest under the new note  are denominated in German  marks
          and are approximately $300,000 per quarter through December 2002.
          In connection  with  the note  payable  to private  parties,  the
          Company carried an incremental credit facility to cover a  surety
          letter for approximately $2.5 million issued to secure 50% of the
          Company's obligation arising from  the purchase of  MMG.  As  the
          new note  does not  require a  surety  letter, the  $2.5  million
          surety letter was canceled.

          During  1997,  the  Company  recorded  capital  leases   totaling
          $2,037,000 to  finance  the hardware,  software  and  integration
          costs of a new computer system that is to be implemented in 1998.
          Lease terms  run through  February  2002 with  payments  totaling
          approximately $50,000 per month.

          The Company's subsidiary in Scotland has a credit arrangement  of
          up to approximately  $490,000 at  market interest  rates and  has
          outstanding  letters  of  credit  of  approximately  $330,000  to
          guarantee import  duties.   There were  no borrowings  under  the
          credit arrangement in fiscal years 1997 or 1996.

          The Company's subsidiary in Germany has various credit facilities
          with local banks totaling  approximately $381,000 which are  used
          for working capital  requirements.  These  credit facilities  are
          utilized as part of normal local payment practices.

          During 1996,  the  Company  entered  into  three  sale/lease-back
          arrangements for a newly acquired continuous coating machine  and
          related equipment and for two newly acquired coating machines  to
          be used in the manufacturing operations  of Flex Products.   Cash
          proceeds  from  the  sale/lease-back  arrangements  exceeded  the
          Company's cost by  approximately $750,000 which  was recorded  as
          deferred revenue and is being amortized against lease expenses at
          the rate of approximately $125,000 per year.  The lease terms are
          six years with monthly  payments totaling approximately  $290,000
          and buyout provisions at the end of each lease.

          The Company  has  certain financial  covenants  and  restrictions
          under its  bank  credit  arrangements and  the  unsecured  senior
          notes.


                                   SCHEDULE 10.8

                                EXISTING INVESTMENTS

          Please see the attached schedules:
          1.Santa Rosa Investments Purchased
          2.Santa Rosa Investments Sold
          3.Santa Rosa Balance On Hand at 7/21/98


                           FORM OF SERIES A1 SENIOR NOTE

                                    Exhibit A1-1


                                                                 EXHIBIT A1
                            FORM OF SERIES A1 SENIOR NOTE
                          OPTICAL COATING LABORATORY, INC.
                    8.71% SERIES A1 SENIOR NOTE DUE JUNE 1, 2002

          No. RA1-___                                                [Date]
          $_______                                        PPN:  683829 A@ 4

               FOR  VALUE  RECEIVED,   the  undersigned,  OPTICAL COATING
          LABORATORY, INC.  (hereinafter called the"Company"), a corporation
         organized and existing under the laws of the State of Delaware,
         hereby promises to pay __________________, or registered assigns,
         the principal sum of _____________________________________ on
         June 1, 2002, 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 8.71% per annum from the date hereof, payable
         semiannually on the first day of June and December in each year
         commencing with the June 1 and December 1 next succeeding
         the date hereof, until the principal hereof shall have become due
         and payable, and (b) to the extent permitted by law on any overdue
         payment (including any overdue prepayment) of principal, any overdue
         payment of interest and any overdue payment of any Make=Whole Amount
         as defined in the Note Purchase Agreements referred to below),
         payable semiannually as aforesaid (or, at the option of the
         registered holder hereof, on demand), at a rate per annum from
         time to time equal to the lesser of (i) 9.71%, and (ii) the highest
         rate allowed by applicable law.

               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  address shown  in  the
          register maintained by the  Company for such  purpose or at  such
          other place  as  the Company  shall  have designated  by  written
          notice to  the  holder of  this  Note  as provided  in  the  Note
          Purchase Agreements referred to below.

               This Note is one of a series of Senior Notes (herein  called
          the  "Notes")   issued  pursuant   to  separate   Note   Purchase
          Agreements, dated  as of  July 30,  1998 (as  from time  to  time
          amended, the "Note Purchase Agreements"), between the Company 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  20  of  the  Note   Purchase
          Agreements and (ii) to have made the representation set forth  in
          Section 6.2 of the Note Purchase Agreements.

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

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

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

               THIS NOTE AND THE NOTE PURCHASE AGREEMENTS SHALL BE GOVERNED
          BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE
          STATE OF CONNECTICUT, 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.

                                  OPTICAL COATING LABORATORY,INC.

                                  By
                                  Name:
                                  Title:


                           FORM OF SERIES A1 SENIOR NOTE

                                    Exhibit A1-2




                                                                 EXHIBIT A2
                            FORM OF SERIES A2 SENIOR NOTE
                          OPTICAL COATING LABORATORY, INC.
                    7.80% SERIES A2 SENIOR NOTE DUE JULY 31, 2008
          No. RA2-___                                                [Date]
          $_______                                        PPN:  683829 A# 2
               FOR  VALUE  RECEIVED,   the  undersigned,  OPTICAL COATING
          LABORATORY, INC.  (hereinafter called the"Company"), a corporation
         organized and existing under the laws of the State of Delaware,
         hereby promises to pay __________________, or registered assigns,
         the principal sum of _____________________________________ on
         July 31, 2008, with interest (computed on the basis of a 360-day
         year of twelve 30-day months) (a) on the unpaid balance thereof
         at the rate of 7.80% per annum from the date hereof, payable
         semiannually on the 31st day of January and July in each year,
         commencing on the later of January 31, 1999 and the January 31 or
         July 31 next succeeding the date hereof, until the principal hereof
         shall have become due and payable, and (b) to the extent permitted
         by law on any overdue payment (including any overdue prepayment)
         of principal, any overdue payment of interest and any overdue
         payment of any Make=Whole Amount as defined in the Note Purchase
         Agreements referred to below), payable semiannually as aforesaid
         (or, at the option of the registered holder hereof, on demand),
         at a rate per annum from time to time equal to the lesser of
         (i) 8.809%, and (ii) the highest rate allowed by applicable law.

               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  address shown  in  the
          register maintained by the  Company for such  purpose or at  such
          other place  as  the Company  shall  have designated  by  written
          notice to  the  holder of  this  Note  as provided  in  the  Note
          Purchase Agreements referred to below.

               This Note is one of a series of Senior Notes (herein  called
          the  "Notes")   issued  pursuant   to  separate   Note   Purchase
          Agreements, dated  as of  July 30,  1998 (as  from time  to  time
          amended, the "Note Purchase Agreements"), between the Company 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  20  of  the  Note   Purchase
          Agreements and (ii) to have made the representation set forth  in
          Section 6.2 of the Note Purchase Agreements.

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

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

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

               THIS NOTE AND THE NOTE PURCHASE AGREEMENTS SHALL BE GOVERNED
          BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE
          STATE OF CONNECTICUT, 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.

                            OPTICAL  COATING   LABORATORY, INC.

                            By
                            Name:
                            Title:


                           FORM OF SERIES B1 SENIOR NOTE

                                    Exhibit B1


                                                                  EXHIBIT B
                            FORM OF SERIES B SENIOR NOTE
                          OPTICAL COATING LABORATORY, INC.
                    6.69% SERIES B SENIOR NOTE DUE JULY 31, 2008
          No. RB-___                                                 [Date]
          $_______                                        PPN:  683829 B* 5

               FOR  VALUE  RECEIVED,   the  undersigned,  OPTICAL COATING
          LABORATORY, INC.  (hereinafter called the"Company"), a corporation
         organized and existing under the laws of the State of Delaware,
         hereby promises to pay __________________, or registered assigns,
         the principal sum of _____________________________________ on
         July 31, 2008, with interest (computed on the basis of a 360-day
         year of twelve 30-day months) (a) on the unpaid balance thereof
         at the rate of 6.69% per annum from the date hereof, payable
         semiannually on the 31st day of January and July next succeeding
         the date hereof, until the principal hereof shall have become due
         and payable, and (b) to the extent permitted by law on any overdue
         payment (including any overdue prepayment) of principal, any overdue
         payment of interest and any overdue payment of any Make=Whole Amount
         as defined in the Note Purchase Agreements referred to below),
         payable semiannually as aforesaid (or, at the option of the
         registered holder hereof, on demand), at a rate per annum from
         time to time equal to the lesser of (i) 7.69%, and (ii) the highest
         rate allowed by applicable law.

               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  address shown  in  the
          register maintained by the  Company for such  purpose or at  such
          other place  as  the Company  shall  have designated  by  written
          notice to  the  holder of  this  Note  as provided  in  the  Note
          Purchase Agreements referred to below.

               This Note is one of a series of Senior Notes (herein  called
          the  "Notes")   issued  pursuant   to  separate   Note   Purchase
          Agreements, dated  as of  July 30,  1998 (as  from time  to  time
          amended, the "Note Purchase Agreements"), between the Company 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  20  of  the  Note   Purchase
          Agreements and (ii) to have made the representation set forth  in
          Section 6.2 of the Note Purchase Agreements.

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

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

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

               THIS NOTE AND THE NOTE PURCHASE AGREEMENTS SHALL BE GOVERNED
          BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE
          STATE OF CONNECTICUT, 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.

                                 OPTICAL COATING LABORATORY, INC.

                                 By
                                 Name:
                                 Title:


                                                             EXHIBIT 4.4(a)

                                         FORM OF OPINION OF SPECIAL COUNSEL
                                                             TO THE COMPANY

                                   August 3, 1998






To the Persons Listed on Annex 1 Hereto:


     Re:  Optical Coating Laboratory, Inc. $44,400,000,
          Senior Notes Due June 1, 2002 and July 31,
2008

Ladies and Gentlemen:

     We have acted as counsel to Optical Coating
Laboratory, Inc., a Delaware corporation (the
"Company"), and the Restricted Subsidiaries in
connection with the execution and delivery by the
Company of separate Note Purchase Agreements, dated as
of July 30, 1998 (collectively, the "Agreement"), with,
respectively, each of the purchasers listed on Schedule
A attached thereto (collectively the "Purchasers").  We
are delivering this opinion to you pursuant to
Section 4.4 of the Agreement.  All capitalized terms
used and not expressly defined herein shall have the
meaning given to them in the Agreement.

     In connection with the foregoing we have been
furnished with originals or copies certified to our
satisfaction of such corporate or other records of the
Company and the Restricted Subsidiaries, with such
certificates of officers and representatives of the
Company and the Restricted Subsidiaries, and with such
other documents, and we have made such other
examinations, investigations and inquiries of the
Company and the Restricted Subsidiaries and their
respective officers, as we have deemed necessary as a
basis for the opinions expressed below.

     Without limiting the foregoing, we have examined
executed copies of the following documents addressed to
the Purchasers or to which the Purchasers are each a
party (all of which are sometimes collectively referred
to as the "Documents"):

     A.   The Agreement and all exhibits thereto;

     B.   The Company's 8.71% Senior Notes due June 1,
2002, dated the date hereof, the Company's 7.80% Senior
Notes due July 31, 2008, dated the date hereof, and the
Company's 6.69% Senior Notes due July 31, 2008, dated
the date hereof, each in the form, principal amount and
with the registration numbers set forth in Schedule A
and Exhibits A1, A2 and B (respectively) to the
Agreement delivered to the Purchasers on the date
hereof pursuant to the Agreement (the "Notes"); and

     C.   The documents executed and delivered by the
Company in connection with the transactions
contemplated by the Agreement.

     In connection with this opinion, we also have
examined and relied upon originals, or copies certified
or otherwise identified to our satisfaction as being
true copies, of the following, each dated this date
unless otherwise indicated:

     A.   Certificates of the Secretary of the Company
certifying as to (i) the Certificate of Incorporation
and Bylaws of the Company and (ii) resolutions adopted
by the Board of Directors of the Company;

     B.   Certificates of the Secretaries or other
appropriate officers of each of the Significant
Restricted Subsidiaries (defined as a Restricted
Subsidiary that is also a Significant Subsidiary)
certifying as to the Articles of Incorporation,
Certificate of Incorporation or other similar charter
document, as the case may be, and Bylaws or other
similar charter document of each such Significant
Restricted Subsidiary;

     C.   A certificate executed by Charles J. Abbe,
President and Chief Executive Officer of the Company,
Craig B. Collins, Vice President, Finance and Chief
Financial Officer of the Company, and Jeffrey M. Ryan,
Assistant Treasurer of the Company (the "Company's
Certificate"), stating that aside from certain
outstanding indentures and loan, credit, guaranty or
lease agreements, all of which are identified in said
certificate, no other agreements or instruments or
orders, writs, judgments, awards, injunctions and
decrees, affect or purport to affect the right of the
Company to borrow money or to undertake and perform
obligations of the Company under the Documents;

     D.   A Certificate of the Secretary of State of
Delaware, dated July 28, 1998, attesting to the
continued corporate existence and good standing of the
Company in that state;

     E.   Certificates of recent dates of the
Secretaries of State or other appropriate governmental
authority of those jurisdictions where the Company or
any Significant Restricted Subsidiary is required to be
qualified and in good standing to do business and where
its failure to be so qualified or in good standing
would have a Material Adverse Effect, attesting to its
qualification and good standing in those jurisdictions,
each of which is identified on Annex 2 hereto;

     F.   Certificates of recent dates of the
Secretaries of State or other appropriate governmental
authorities of those jurisdictions where each of the
Significant Restricted Subsidiaries is incorporated
attesting to the continued corporate existence and good
standing of each such Significant Restricted Subsidiary
in its respective state or jurisdiction of
incorporation;

     G.   A letter to Hebb & Gitlin and this firm from
BancAmerica Robertson Stephens, describing the manner
of the offering of the Notes (the "Offeree Letter");

     H.   The opinion of Hebb & Gitlin, counsel to the
Purchasers, as to all matters governed by Connecticut
law, dated the date hereof; and

     I.   Originals, or copies certified or otherwise
identified to our satisfaction, of such other
documents, records, instruments and certificates of
public officials as we have deemed necessary or
appropriate to enable us to render this opinion.

     We have also examined originals or copies of the
documents listed in the Company's Certificate.

     In conducting our examination we have assumed,
without investigation, the genuineness of all
signatures (other than the signatures of officers of
the Company with respect to the Documents), the
correctness of all certificates, the authenticity of
all certificates and documents submitted to us as
originals, the conformity to original documents of all
documents submitted to us as certified or photostatic
copies and the authenticity of the originals of such
copies, and the accuracy and completeness of all
records made available to us by the Company or any of
the Restricted Subsidiaries.  We have also assumed,
without investigation, the accuracy of the
representations and warranties as to factual matters
made by any party in the Documents and the accuracy of
the representations and factual statements made to us
by officers or employees of the Company and the
Restricted Subsidiaries and by public officials.  In
making our examination of documents and instruments
executed by any person or entity, we have, subject to
the next succeeding sentence, assumed, without
investigation, that each such person or entity has
(i) the power, capacity, right and legal authority to
enter into and perform all of its obligations under
such documents and instruments, (ii) duly authorized
all requisite action with respect to such documents and
instruments, and (iii) duly executed and delivered such
documents and instruments.  We have not, however, made
the assumptions set forth in the immediately preceding
sentence with respect to the Company or the Restricted
Subsidiaries or their respective power, capacity,
right, authority, authorization or execution of
documents and instruments.

     Whenever a statement below is qualified by the
phrases "known to us" or "to our knowledge," it is
intended to indicate that during the course of our
representation of the Company and the Restricted
Subsidiaries, no information that would give us actual
knowledge of, or a reasonable belief concerning, the
inaccuracy of such statement has come to the attention
of those attorneys in this firm who have rendered legal
services to the Company or the Restricted Subsidiaries.
Except as otherwise expressly indicated, we have not
undertaken any independent investigation to determine
the accuracy of such statement, and any limited inquiry
undertaken by us during the preparation of this opinion
letter should not be regarded as such an investigation.
No inference as to our knowledge of any matters bearing
on the accuracy of any such statement should be drawn
from the fact of our representation of the Company or
the Restricted Subsidiaries.

     In rendering the opinions hereinafter expressed,
we have also assumed, without investigation, that the
following facts are true:

     1.   The Purchasers will enforce their rights
under the Documents in circumstances and in a manner in
which it is commercially reasonable to do so, and in
accordance with all procedural requirements under
applicable law.

     2.   Other than the Company and the Restricted
Subsidiaries, no party to any of the Documents or any
agreement relating thereto is subject to any statute,
rule, or regulation, or to any impediment to which
contracting parties are generally not subject, which
requires the Company, any of the Restricted
Subsidiaries or any other person or party to obtain the
consent of or to make a declaration or filing with any
governmental authority or other person or entity as a
condition to the execution, delivery or performance of
the Documents.

     3.   The Purchasers are each incorporated admitted
insurers as such term is used in Section 1100.1 of the
California Insurance Code.

     The opinions expressed below are subject to the
following qualifications:

     1.   Our opinions below are subject to the
following: (a) the effect of bankruptcy, insolvency,
reorganization, arrangement, moratorium and other
similar laws now or hereafter in effect relating to or
affecting the rights of creditors generally; and (b)
the limitations imposed by California law, federal law,
or equitable or public policy principles upon the
availability of injunctive relief or other equitable
remedies, including, without limitation, the effect of
California and federal court decisions invoking
statutes or principles of equity or of public policy,
which have held that certain covenants and provisions
of agreements are unenforceable where: (i) the breach
of such covenants or provisions results in acceleration
or the imposition of late payment charges or increased
interest rates upon delinquency in the payment of
indebtedness due under debt instruments, and it cannot
be demonstrated that the enforcement of such
restrictions or burdens is reasonably necessary for the
protection of the creditor, or (ii) the creditor's
enforcement of such covenants or provisions under the
circumstances would violate the creditor's implied
covenant of good faith and fair dealing.

     2.   We are members of the Bar of the State of
California and do not hold ourselves out as experts on
the law of any other state.  Consequently, our opinions
below are limited to the effect of the laws of the
State of California, of the federal laws of the United
States and, with respect only to our opinions expressed
in paragraphs (i), (iv), (v), (vi) and (vii) below, of
the General Corporation Law of the State of Delaware.
Accordingly, we express no opinion with respect to the
laws of any other jurisdiction, or the effect thereof,
on the transactions contemplated by the Documents.  We
note that the Documents provide that they are governed
by the laws of the State of Connecticut.  Accordingly,
our opinions expressed in paragraphs (iv), (v) and (vi)
below assume that the laws of the State of Connecticut
are the same as the laws of the State of California and
that the substantive law of California would apply to
each matter referenced in such paragraphs, including,
without limitation, its laws and exemptions pertaining
to usury.

     3.   Our opinions below are limited to matters
expressly set forth in this opinion letter, and no
opinion is to be implied or may be inferred beyond the
matters expressly so stated.

     Based upon and subject to the foregoing, we are of
the opinion that:

     (i)  The Company and each Significant Restricted
Subsidiary is a corporation duly incorporated, validly
existing and in good standing under the laws of its
state or other jurisdiction of incorporation and has
all requisite corporate power and authority to carry on
its business and own its Property.

     (ii)  The Company and each Significant Restricted
Subsidiary is duly qualified and is in good standing as
a foreign corporation in each jurisdiction where the
character of its Properties or the nature of its
activities makes such qualification necessary, except
where the failure to so qualify and be in good standing
would not, in the aggregate, have a Material Adverse
Effect.

     (iii)  To the best of our knowledge after due
inquiry of officers of the Company, there is no
judgment, order, action, suit, proceeding, inquiry,
order or investigation, at law or in equity, before any
court or Governmental Authority, arbitration board or
tribunal, pending or threatened against the Company or
any one or more of the Restricted Subsidiaries, except
for any such judgment, order, action, suit, proceeding,
inquiry, order or investigation that would not, in the
aggregate for the Company and the Subsidiaries, have a
Material Adverse Effect.

     (iv)  The Company has the requisite corporate
power and authority to execute and deliver the
Agreement, to issue and sell the Notes, and to perform
its obligations set forth in each of the Agreement and
the Notes.

     (v)  Each of the Agreement and the Notes has been
duly authorized by all necessary corporate action on
the part of the Company (no action on the part of the
stockholders of the Company being required in respect
thereof), has been duly executed and delivered by
authorized officers of the Company, and constitutes a
legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its
terms.

     (vi)  The execution and delivery of the Agreement
and the Notes and the issue and sale of the Notes by
the Company, and the performance by the Company of its
obligations thereunder, will not conflict with,
constitute a violation of, result in a breach of any
provision of, constitute a default under, or result in
the creation or imposition of any Lien or encumbrance
upon any of its Property or the Property of a
Restricted Subsidiary pursuant to the certificate of
incorporation or bylaws of the Company or such
Restricted Subsidiary, any applicable statute, rule or
regulation known to us to which the Company or any
Restricted Subsidiary is subject, or, to our knowledge
after due inquiry of officers of the Company, any
agreement or instrument to which the Company or such
Restricted Subsidiary is a party and which is listed in
the Company's Certificate.

     (vii)  All consents, approvals and authorizations
of, and all designations, declarations, filings,
registrations, qualifications and recordations with,
Governmental Authorities required on the part of the
Company have been obtained in connection with the
execution and delivery of each of the Agreement and the
Notes and the issue and sale of the Notes and the use
of the proceeds thereof.

     (viii)  Under existing law, the Notes are not
subject to the registration requirements under the
Securities Act of 1933, as amended, and the Company is
not required to qualify an indenture with respect
thereto under the Trust Indenture Act of 1939, as
amended.

     (ix)  Neither the issuance of the Notes nor the
intended use of the proceeds of the Notes (as set forth
in Section 5.14 of the Agreement) will violate
Regulations T, U or X of the Federal Reserve Board.

     (x)  The Company

          (a)  is not an "investment company" within
     the meaning of the Investment Company Act of 1940,
     as amended, and

          (b)  is not a "holding company" or an
     "affiliate" of a "holding company," or a
     "subsidiary company" of a "holding company," or a
     "public utility" within the meaning of the Public
     Utility Holding Company Act of 1935, as amended.

     (xi)  Based solely on our physical inspection of
the relevant stock certificates and our inquiry of
officers of the Company, the Company and each
Restricted Subsidiary has good title to all of the
shares it purports to own of the capital stock of each
Restricted Subsidiary, free and clear in each case of
any perfected security interest and any other Lien.

     (xii) Section 22.6 of the Agreement provides that
the Agreement will be construed and enforced according
to the laws of the State of Connecticut.  With respect
to that provision, we observe that such choice-of-laws
provisions would likely be respected by California
courts where the clause appears in a contract freely
and voluntarily entered into by parties who negotiate
at arm's length, and where (1) there is a reasonable or
"substantial" relationship between the chosen state and
the parties or their transaction, or (2) there is any
other reasonable basis for the parties' choice of law.
See Nedlloyd Lines B.V. v. Superior Court of San Mateo
County, 3 Cal.4th 459, 11 Cal.Rptr.2d 330 (1992).
Additionally, Nedlloyd notes the following additional
qualification to the enforcement of choice-of-laws
clauses in California:

          ... the court must next determine whether the
     chosen state's law is contrary to a fundamental
     policy of California.  If there is no such
     conflict, the court shall enforce the parties'
     choice of law.  If, however, there is a
     fundamental conflict with California law, the
     court must then determine whether California has a
     "materially greater interest than the chosen state
     in the determination of the particular issue ...."
     If California has a materially greater interest
     than the chosen state, the choice of law shall be
     enforced .... [Footnotes and citations omitted.]
     Id. at 334.

     With regard to the first test of enforceability
noted in Nedlloyd (that is, whether there is a
reasonable or substantial relationship between the
chosen state and the parties or their transaction or
another reasonable basis for the choice of law), we
note that the Company is a Delaware corporation with
its corporate headquarters in California.  We also note
that the Existing Note Purchase Agreement and the
Existing Notes are governed by the laws of the State of
Connecticut.  We would expect that while a California
court would be inclined to uphold the parties' freely
chosen contractual choice-of-law, the fact that the
Existing Note Purchase Agreement and the Existing Notes
are governed by Connecticut law would be a factor in
its decision whether to enforce the clause in this
case.

     The second test in Nedlloyd requires the Court to
assess whether the chosen state's law is contrary to a
fundamental policy of California, and if so, whether
California has a "materially greater interest" in the
determination of the particular issue.  While it is not
entirely clear from Nedlloyd as to what constitutes a
"fundamental policy" of California, it appears from the
court's reasoning that California courts will look to
whether there is a state regulatory policy, statute or
constitutional provision designed to restrict the
parties' freedom to contract with respect to an issue
in dispute.  In this regard, we note that because the
obligations evidenced by the Notes are unsecured, the
Purchasers' remedies are not subject to such
fundamental policies of the State of California as its
anti-deficiency statutes and protections, the waiver of
which are subject to restrictions in many cases by
statute or case law.  On the other hand, California
case law and statutes tend to be protective of
borrowers and guarantors in general, and those
protections could be deemed "fundamental policies" of
the State to the extent that Connecticut law does not
provide substantially similar protections.

     The final step in the analysis of this second test
requires the court to decide whether or not California
has a "materially greater interest" than the parties'
chosen forum in the resolution of the fundamental
public policy issue in dispute.  If so, then the
parties' choice-of-law provision could be ignored or
invalidated by the court.  In this connection, the
Nedlloyd court did not reach a conclusion regarding
this issue in that case, because the court did not find
a conflict between the choice-of-law provision and a
fundamental State policy.

     Subject to the forgoing and all other limitations
set forth in this letter, we believe that the courts of
California would probably give effect to the choice-of-
law provisions in the Agreement, if the application of
Connecticut law does not result in the violation of a
fundamental California public policy, and in particular
policies providing protections to borrowers.  However,
we have doubts as to whether a California court would
give effect to the choice-of-laws provisions under
circumstances where the application of Connecticut law
would result in the Company being denied material
protections that would be provided to it as a borrower
under California law.

     (xiii)  The stated rates of interest of 8.71%,
7.80%, and 6.69% and of default interest of one percent
(1.00%) over the stated rates under the Notes are not
in excess of the maximum rate of interest on loans
permitted under California usury law in the absence of
an exemption therefrom.  Such permitted maximum rate of
interest is on the date hereof 10% per annum.  We
express no opinion as to whether any additional
consideration that may be paid by the Company pursuant
to the Notes and the Agreement, including, without
limitation, the Make-Whole Amount, would render the
transactions contemplated thereunder usurious.

     This opinion letter is rendered solely for the
benefit of the Purchasers and their special counsel in
connection with the transaction described in the
Documents.  Without our prior written consent, this
opinion letter may not be (a) relied upon by any other
person or entity or used for any other purpose; (b)
quoted in whole or in part or otherwise referred to in
any report or document; or (c) furnished (the original
or copies thereof) to any person or entity, except (i)
this opinion may be quoted or disclosed in connection
with the enforcement of the Documents by the
Purchasers, (ii) future holders of the Notes may rely
on this opinion as if it were addressed to them, and
(iii) each Purchaser and each such future holder of
Notes may make this opinion available for inspection by
the National Association of Insurance Commissioners and
other regulatory authorities having jurisdiction over
such Person's affairs and by any prospective purchaser
or assignee of any of the Notes.

                         Very truly yours,



                         Collette & Erickson LLP




                                       ANNEX 1
                                     Addressees

          Optical Coating Laboratory, Inc.
          2789 Northpoint Parkway
          Santa Rosa, California 95407-7397

          Modern Woodmen of America
          1701 1st Avenue
          Rock Island, Illinois 61201

          American Life and Casualty Insurance Company
          405 6th Avenue
          Des Moines, Iowa 50309

          Massachusetts Mutual Life
          Insurance Company
          1295 State Street
          Springfield, MA  01111

          Baystate Health Systems, Inc.
          c/o Massachusetts Mutual Life Insurance Company
          1295 State Street
          Springfield, MA  01111

          Principal Life Insurance Company
          711 High Street
          Des Moines, IA 50392-0800

          Hebb & Gitlin
          One State Street
          Hartford, CT 06103



                                       ANNEX 2

                         Foreign Good Standing Certificates

                         Corporation                        State

                         Optical Coating Laboratory, Inc.   Delaware
                                                            California

                         Flex Products, Inc.                Delaware
                                                            California

                                 EXHIBIT 4.4(b)

                FORM OF OPINION OF SPECIAL COUNSEL TO THE PURCHASERS
                            [Letterhead of Hebb & Gitlin]

                                                             [Closing Date]
          To the Persons Listed on
           Annex 1 hereto
               Re:  Optical Coating Laboratory, Inc. (the "Company")
          Ladies and Gentlemen:
               Reference is made to  the separate Note Purchase  Agreements
          (collectively, the "Note Purchase  Agreement"), each dated as  of
          July 30, 1998, between the Company and, respectively, each of the
          purchasers  listed   on   Schedule  A   attached   thereto   (the
          "Purchasers"), which  provide, among  other things,  for (i)  the
          issuance by the Company of its  8.71% Series A1 Senior Notes  Due
          June 1, 2002  in the aggregate  principal amount  of Six  Million
          Four Hundred  Thousand Dollars  ($6,400,000)  and the  its  7.80%
          Series A2  Senior  Notes  Due July  31,  2008  in  the  aggregate
          principal amount of Eight  Million Dollars ($8,000,000), in  each
          case in exchange for the surrender of the Existing Notes held  by
          the Existing Noteholders and  (ii) the issuance  and sale by  the
          Company and the purchase by the  Purchasers on Schedule A to  the
          Note Purchase Agreement  of the Company's  6.69% Series B  Senior
          Notes Due  July 31,  2008 in  the aggregate  principal amount  of
          Thirty Million Dollars ($30,000,000).  The capitalized terms used
          herein and not defined herein have the meanings specified in  the
          Note Purchase Agreement.
               We have  acted  as  special counsel  to  the  Purchasers  in
          connection  with  the  transactions  contemplated  by  the   Note
          Purchase Agreement.  This opinion is delivered to you pursuant to
          Section 4.4(b) of the Note Purchase Agreement.  In acting as such
          counsel, we have examined:
                    (a)  the Note Purchase Agreement;
                    (b)  the Company's  8.71% Series  A1 Senior  Notes  Due
               June 1, 2002, dated the date hereof, in the form of  Exhibit
               A1 to the Note Purchase  Agreement, in the principal  amount
               and with the registration numbers set forth on Schedule A to
               the Note Purchase Agreement (the "Series A1 Notes");
                    (c)  the Company's  7.80% Series  A2 Senior  Notes  Due
               July 31, 2008, dated the date hereof, in the form of Exhibit
               A2 to the Note Purchase  Agreement, in the principal  amount
               and with the registration numbers set forth on Schedule A to
               the Note Purchase Agreement (the "Series A2 Notes");
                    (d)  the Company's 6.69% Series B Senior Notes Due July
               31, 2008, dated the date hereof, in the form of Exhibit B to
               the Note  Purchase Agreement,  in the  principal amount  and
               with the registration numbers set forth on Schedule A to the
               Note Purchase Agreement (the "Series B Notes," and  together
               with the Series A1 Notes and Series A2 Notes, the "Notes");
                    (e)  a certificate of certain officers of the  Company,
               dated the date hereof;
                    (f)  a certificate of the [Assistant] Secretary of  the
               Company, dated the date hereof;
                    (g)  a  letter  to  Hebb  &  Gitlin  from   BancAmerica
               Robertson Stephens, dated  the date  hereof, making  certain
               representations with  respect to  the  manner in  which  the
               Notes were offered (the "Offeree Letter");
                    (h)  the opinion of Collette & Erickson, counsel to the
               Company and  the  Restricted Subsidiaries,  dated  the  date
               hereof; and
                    (i)  originals,  or  copies   certified  or   otherwise
               identified to  our satisfaction,  of such  other  documents,
               records, instruments and certificates of public officials as
               we have  deemed necessary  or appropriate  to enable  us  to
               render this opinion.
               In rendering our opinion, we have  relied, to the extent  we
               deem necessary and proper, on:
                    (i)  warranties  and  representations  as  to   certain
               factual matters contained in the Note Purchase Agreement;
                    (ii) the Offeree Letter; and
                    (iii)     said opinion  of  Collette  &  Erickson  with
               respect to all questions governed by California law and with
               respect to all questions  concerning the due  incorporation,
               valid existence and good  standing, power and authority  of,
               and the authorization, execution and delivery of instruments
               by, the Company  (except that  we have  made an  independent
               examination of  a  certified  copy  of  the  certificate  of
               incorporation of the Company and the certificates  specified
               in clause (e) and clause (f) above).

               We have reviewed  the opinion of  Collette & Erickson  being
          delivered to you on the date hereof.  Based on such investigation
          as we have  deemed appropriate, such  opinion is satisfactory  in
          form and scope to  us, and in our  opinion the Purchasers and  we
          are justified in relying thereon.
               Our opinion in Section 5 below  is based solely on a  review
          of generally applicable laws of the United States of America  and
          the State of Connecticut, and not on any search with respect  to,
          or  review   of,  any   orders,  decrees,   judgments  or   other
          determinations specifically applicable to, the Company.
                Based on the foregoing, we are of the following opinions:
               1.   The Company is a corporation duly incorporated, validly
          existing and in  good standing  under the  laws of  the State  of
          Delaware.
               2.    The  Company has  all  requisite corporate  power  and
          authority to execute and deliver the Note Purchase Agreement,  to
          issue and  sell the  Notes, and  to perform  its obligations  set
          forth in each of the Note Purchase Agreement and the Notes.
               3.   Each of the Note Purchase  Agreement and the Notes  has
          been duly authorized  by all  necessary corporate  action on  the
          part of the Company, has been duly executed and delivered by  one
          or more authorized  officers of  the Company,  and constitutes  a
          legal, valid and binding  obligation of the Company,  enforceable
          against the Company in accordance with its terms.
               4.   The  execution  and  delivery  of  the  Note   Purchase
          Agreement and the Notes  and the issue and  sale of the Notes  by
          the  Company,  and  the  performance   by  the  Company  of   its
          obligations thereunder,  will  not  conflict with,  result  in  a
          breach of any provision of, constitute a default under, or result
          in the  creation  or imposition  of  any  Lien upon  any  of  its
          Properties pursuant  to,  the  certificate  of  incorporation  or
          bylaws of the Company.
               5.   No consents, approvals or authorizations of any Federal
          or State of Connecticut governmental authorities are required  in
          connection with the execution  and delivery of  each of the  Note
          Purchase Agreement and the Notes, and the offer, issue, sale  and
          delivery of the Notes.
               6.   Under existing law,  the Notes are  not subject to  the
          registration requirements  of   the Securities  Act of  1933,  as
          amended, and the Company is not required to qualify an  indenture
          with respect thereto under  the Trust Indenture  Act of 1939,  as
          amended.
               All  opinions   herein  contained   with  respect   to   the
          enforceability of documents and instruments are qualified to  the
          extent that:
                    (a)  the availability of equitable remedies,  including
               without  limitation,  specific  enforcement  and  injunctive
               relief, is subject  to the  discretion of  the court  before
               which any proceedings therefor may be brought; and
                    (b)  the enforceability  of certain  terms provided  in
               the Note Purchase Agreement and the Notes may be limited by
                         (i)  applicable    bankruptcy,     reorganization,
                    arrangement, insolvency,  moratorium  or  similar  laws
                    affecting  the   enforcement   of   creditors'   rights
                    generally as at the time in effect, and
                         (ii) common law  or  statutory  requirements  with
                    respect to commercial reasonableness.
               Except in reliance  on the  opinion of  Collette &  Erickson
          delivered to the Purchasers  on the date  hereof, and subject  to
          all of the assumptions and  qualifications set forth therein,  we
          express no opinion as to the  law of any jurisdiction other  than
          the law of  the State of  Connecticut and  United States  federal
          law.  Collette & Erickson may  rely on this opinion for the  sole
          purpose of rendering  their opinion  to be  rendered pursuant  to
          Section 4.4(a) of the Note Purchase Agreement.
               Subsequent holders of the Notes may rely on this opinion  as
          if it were addressed to them.
                                             Very truly yours,


                                       ANNEX 1
                                      Addressees

          Modern Woodmen of America
          1701 1st Avenue
          Rock Island, Illinois 61201

          American Life and Casualty Insurance Company
          405 6th Avenue
          Des Moines, Iowa 50309

          Massachusetts Mutual Life
          Insurance Company
          1295 State Street
          Springfield, MA  01111

          Baystate Health Systems, Inc.
          c/o Massachusetts Mutual Life Insurance Company
          1295 State Street
          Springfield, MA  01111

          Principal Life Insurance Company
          711 High Street
          Des Moines, IA 50392-0800