Document:

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                                                                     Exhibit 4.9

                       CARPENTER TECHNOLOGY CORPORATION

                          Medium-Term Notes, Series C

                  EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
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                                                                 August 13, 2001

J.P. Morgan Securities Inc.
Credit Suisse First Boston Corporation
c/o J.P. Morgan Securities Inc.
270 Park Avenue
New York, New York 10017

Ladies and Gentlemen:

          Carpenter Technology Corporation, a Delaware corporation (the
"Company"), has agreed to issue and sell $100,000,000 aggregate principal amount
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of its 7 5/8% Notes due 2011 ("Securities") under its Medium-Term Note Program,
                               ----------
Series C (the "Program"), to J.P. Morgan Securities Inc. ("JPMorgan"), and
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Credit Suisse First Boston Corporation (together with JPMorgan, the "Agents"),
                                                                     ------
as principals, upon the terms and subject to the conditions set forth in the
Distribution Agreement dated July 31, 2001 among the Company and the Agents (the
"Distribution Agreement") and a Terms Agreement dated August 8, 2001 among the
 ----------------------
Company and the Agents the ("Terms Agreement").  Capitalized terms used but not
                             ----------------
defined herein shall have the meanings given to such terms in the Distribution
Agreement.

          In satisfaction of a condition to the obligations of the Agents under
the Distribution Agreement and the Terms Agreement, the Company agrees with the
Agents, for the benefit of the holders (including the Agents) of the Securities,
the Exchange Securities (as defined herein) and the Private Exchange Securities
(as defined herein) (collectively, the "Holders"), as set forth in this
                                        -------
Agreement.

          1.   Registered Exchange Offer.  The Company shall (i) prepare and,
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not later than 60 days following the date of original issuance of the Securities
(the "Issue Date"), file with the Commission a registration statement (the
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"Exchange Offer Registration Statement") on an appropriate form under the
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Securities Act with respect to a proposed offer to the Holders of the Securities
(the "Registered Exchange Offer") to issue and deliver to such Holders, in
      -------------------------
exchange for the Securities, a like aggregate principal amount of debt
securities of the Company (the "Exchange Securities") that are identical in all
                                -------------------
material respects to the Securities, except for the transfer restrictions
relating to the Securities, (ii) use its reasonable best

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efforts to cause the Exchange Offer Registration Statement to become effective
under the Securities Act no later than 120 days after the Issue Date and the
Registered Exchange Offer to be consummated no later than 150 days after the
Issue Date and (iii) keep the Exchange Offer Registration Statement effective
for not less than 20 business days (or longer, if required by applicable law)
after the date on which notice of the Registered Exchange Offer is mailed to the
Holders (such period being called the "Exchange Offer Registration Period"). The
                                       ----------------------------------
Exchange Securities will be issued under the Indenture or an indenture (the
"Exchange Securities Indenture") between the Company and the Trustee or such
 -----------------------------
other bank or trust company that is reasonably satisfactory to the Agents, as
trustee (the "Exchange Securities Trustee"), such indenture to be identical in
              ---------------------------
all material respects to the Indenture, except for the transfer restrictions
relating to the Securities (as described above).

          Upon the effectiveness of the Exchange Offer Registration Statement,
the Company shall promptly commence the Registered Exchange Offer, it being the
objective of such Registered Exchange Offer to enable each Holder electing to
exchange Securities for Exchange Securities (assuming that such Holder (a) is
not an affiliate of the Company or an Exchanging Dealer (as defined herein) not
complying with the requirements of the next sentence, (b) is not an Agent
holding Securities that have, or that are reasonably likely to have, the status
of an unsold allotment in an initial distribution, (c) acquires the Exchange
Securities in the ordinary course of such Holder's business and (d) has no
arrangements or understandings with any person to participate in the
distribution of the Exchange Securities) and to trade such Exchange Securities
from and after their receipt without any limitations or restrictions under the
Securities Act and without material restrictions under the securities laws of
the several states of the United States.  The Company, the Agents and each
Exchanging Dealer acknowledge that, pursuant to current interpretations by the
Commission's staff of Section 5 of the Securities Act, each Holder that is a
broker-dealer electing to exchange Securities, acquired for its own account as a
result of market-making activities or other trading activities, for Exchange
Securities (an "Exchanging Dealer"), is required to deliver a prospectus
                -----------------
containing substantially the information set forth in Annex A hereto on the
cover, in Annex B hereto in the "Exchange Offer Procedures" section and the
"Purpose of the Exchange Offer" section and in Annex C hereto in the "Plan of
Distribution" section of such prospectus in connection with a sale of any such
Exchange Securities received by such Exchanging Dealer pursuant to the
Registered Exchange Offer.

          If, prior to the consummation of the Registered Exchange Offer, any
Holder holds any Securities acquired by it that have, or that are reasonably
likely to be determined to have, the status of an unsold allotment in an initial
distribution, or any Holder is not entitled to participate in the Registered
Exchange Offer, the Company shall, upon the written request of any such Holder,
simultaneously with the delivery of the Exchange Securities in the Registered
Exchange Offer, issue and deliver to any such Holder, in exchange for the
Securities held by such Holder (the "Private Exchange"), a like aggregate
                                     ----------------
principal amount of debt securities of the Company (the "Private Exchange
                                                         ----------------
Securities") that are identical in all material respects to the Exchange
----------
Securities, except for the transfer restrictions relating to such Private
Exchange Securities.  The Private Exchange Securities will be issued under the
same inden-

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ture as the Exchange Securities, and the Company shall use its reasonable best
efforts to cause the Private Exchange Securities to bear the same CUSIP number
as the Exchange Securities.

          In connection with the Registered Exchange Offer, the Company shall:

          (a)  mail or cause to be mailed to each Holder a copy of the
     prospectus forming part of the Exchange Offer Registration Statement,
     together with an appropriate letter of transmittal and related documents;

          (b)  keep the Registered Exchange Offer open for not less than 20
     business days (or longer, if required by applicable law) after the date on
     which notice of the Registered Exchange Offer is mailed to the Holders;

          (c)  utilize the services of a depositary for the Registered Exchange
     Offer with an address in the Borough of Manhattan, The City of New York;

          (d)  permit Holders to withdraw tendered Securities at any time prior
     to the close of business, New York City time, on the last business day on
     which the Registered Exchange Offer shall remain open; and

          (e)  otherwise comply in all material respects with all laws that are
     applicable to the Registered Exchange Offer.

          As soon as is reasonably practicable after the close of the Registered
Exchange Offer and any Private Exchange, as the case may be, the Company shall:

          (a)  accept for exchange all Securities tendered and not validly
     withdrawn pursuant to the Registered Exchange Offer and the Private
     Exchange;

          (b)  deliver to the Trustee for cancellation all Securities so
     accepted for exchange; and

          (c)  cause the Trustee or the Exchange Securities Trustee, as the case
     may be, promptly to authenticate and deliver to each Holder, Exchange
     Securities or Private Exchange Securities, as the case may be, equal in
     principal amount to the Securities of such Holder so accepted for exchange.

          The Company shall use its reasonable best efforts to keep the Exchange
Offer Registration Statement effective and to amend and supplement the
prospectus contained therein in order to permit such prospectus to be used by
all Exchanging Dealers and broker-dealers subject to the prospectus delivery
requirements of the Securities Act for such period of time as such persons must
comply with such requirements in order to resell the Exchange Securities;
provided that (i) in the case where such prospectus and any amendment or
supplement thereto must be delivered by an Exchanging Dealer, such period shall
be the lesser of 180 days and the date on which all Exchanging Dealers have sold
all Exchange Securities held

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by them and (ii) the Company shall make such prospectus and any amendment or
supplement thereto available to any broker-dealer for use in connection with any
resale of any Exchange Securities for a period of not less than 180 days after
the consummation of the Registered Exchange Offer.

          Notwithstanding the provisions of the foregoing paragraph with respect
to the period of time during which the Company shall use its reasonable best
efforts to enable the use of the prospectus contained in the Exchange Offer
Registration Statement, but subject to Section 3(b), the Company may issue a
notice that the Exchange Offer Registration Statement is unusable pending the
announcement of a material corporate or business transaction and may issue any
notice suspending the use of the Exchange Offer Registration Statement that the
Company reasonably believes is required under applicable securities laws to be
issued.

          The Indenture or the Exchange Securities Indenture, as the case may
be, shall provide that the Securities, the Exchange Securities and the Private
Exchange Securities shall vote and consent together on all matters as one class
and that none of the Securities, the Exchange Securities or the Private Exchange
Securities will have the right to vote or consent as a separate class on any
matter.

          Interest on each Exchange Security and Private Exchange Security
issued pursuant to the Registered Exchange Offer and in the Private Exchange
will accrue from the last interest payment date on which interest was paid on
the Securities surrendered in exchange therefor or, if no interest has been paid
on the Securities, from the Issue Date.

          Each Holder participating in the Registered Exchange Offer shall be
required to represent to the Company that at the time of the consummation of the
Registered Exchange Offer (i) any Exchange Securities received by such Holder
will be acquired in the ordinary course of business, (ii) such Holder will have
no arrangements or understanding with any person to participate in the
distribution of the Securities or the Exchange Securities within the meaning of
the Securities Act and (iii) such Holder is not an affiliate of the Company or,
if it is such an affiliate, such Holder will comply with the registration and
prospectus delivery requirements of the Securities Act to the extent applicable.

          Notwithstanding any other provisions hereof, the Company will use its
reasonable best efforts to ensure that (i) any Exchange Offer Registration
Statement and any amendment thereto and any prospectus forming part thereof and
any supplement thereto complies in all material respects with the Securities Act
and the rules and regulations of the Commission thereunder, (ii) any Exchange
Offer Registration Statement and any amendment thereto does not, when it becomes
effective, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading and (iii) any prospectus forming part of any Exchange
Offer Registration Statement, and any supplement to such prospectus, does not,
as of the consummation of the Registered Exchange Offer, include an untrue
statement of a material fact or omit to state

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a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.

          2.   Shelf Registration.  If (i) because of any change in law or
               ------------------
applicable interpretations thereof by the Commission's staff the Company is not
permitted to effect the Registered Exchange Offer as contemplated by Section 1
hereof, or (ii) for any other reason the Registered Exchange Offer is not
consummated within 150 days after the Issue Date, or (iii) any Securities
tendered pursuant to the Registered Exchange Offer are not exchanged for
Exchange Securities within 10 days of being accepted in the Registered Exchange
Offer; or (iv) any Agent so requests with respect to Securities or Private
Exchange Securities not eligible to be exchanged for Exchange Securities in the
Registered Exchange Offer and held by it following the consummation of the
Registered Exchange Offer, or (v) any applicable law or interpretations do not
permit any Holder to participate in the Registered Exchange Offer, or (vi) any
Holder that participates in the Registered Exchange Offer does not receive
freely transferable Exchange Securities in exchange for tendered Securities,
then the following provisions shall apply:

          (a)  The Company shall (i) use its reasonable best efforts to file as
     promptly as practicable (but in no event more than 45 days after so
     required or requested pursuant to this Section 2) with the Commission (the
     "Shelf Filing Date"), and (ii) thereafter use its reasonable best efforts
      -----------------
     to cause to be declared effective, a shelf registration statement on an
     appropriate form under the Securities Act relating to the offer and sale of
     the Transfer Restricted Securities (as defined below) by the Holders
     thereof from time to time in accordance with the methods of distribution
     set forth in such registration statement (hereafter, a "Shelf Registration
                                                             ------------------
     Statement" and, together with any Exchange Offer Registration Statement, a
     ---------
     "Registration Statement").  If, after the Company has filed an Exchange
      ----------------------
     Offer Registration Statement that satisfies the requirements of Section 1
     above, the Company is required to file and make effective a Shelf
     Registration Statement solely because the Registered Exchange Offer is not
     permitted for reasons set forth under clause (i) above, then the filing of
     the Exchange Offer Registration Statement shall be deemed to satisfy the
     requirements of clause (a)(i) of the immediately preceding sentence.

          (b)  The Company shall use its reasonable best efforts to keep the
     Shelf Registration Statement continuously effective in order to permit the
     prospectus forming part thereof to be used by Holders of Transfer
     Restricted Securities for a period ending on the earlier of (i) two years
     from the Issue Date or such shorter period that will terminate when all the
     Transfer Restricted Securities covered by the Shelf Registration Statement
     have been sold pursuant thereto and (ii) the date on which the Securities
     become eligible for resale without volume restrictions pursuant to Rule 144
     under the Securities Act (in any such case, such period being called the
     "Shelf Registration Period").  The Company shall be deemed not to have used
      -------------------------
     its reasonable best efforts to keep the Shelf Registration Statement
     effective during the requisite period if the Company voluntarily takes any
     action that would result in Holders of Transfer Re-

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     stricted Securities covered thereby not being able to offer and sell such
     Transfer Restricted Securities during that period, unless such action is
     permitted hereunder or the Company reasonably believes such action is
     required by applicable law.

          (c)  Notwithstanding the provisions of Section 2(b), but subject to
     Section 3(b), the Company may issue a notice that the Shelf Registration
     Statement is unusable pending the announcement of a material corporate or
     business transaction and may issue any notice suspending the use of the
     Shelf Registration Statement that the Company reasonably believes is
     required under applicable securities laws to be issued.

          (d)  Notwithstanding any other provisions hereof, the Company will use
     its reasonable best efforts to ensure that (i) any Shelf Registration
     Statement and any amendment thereto and any prospectus forming part thereof
     and any supplement thereto complies in all material respects with the
     Securities Act and the rules and regulations of the Commission thereunder,
     (ii) any Shelf Registration Statement and any amendment thereto (in either
     case, other than with respect to information included therein in reliance
     upon or in conformity with written information furnished to the Company by
     or on behalf of any Holder specifically for use therein (the "Holders'
                                                                   --------
     Information")) does not contain an untrue statement of a material fact or
     -----------
     omit to state a material fact required to be stated therein or necessary to
     make the statements therein not misleading and (iii) any prospectus forming
     part of any Shelf Registration Statement, and any supplement to such
     prospectus (in either case, other than with respect to Holders'
     Information), does not include an untrue statement of a material fact or
     omit to state a material fact necessary in order to make the statements
     therein, in the light of the circumstances under which they were made, not
     misleading.

          (e)  In the absence of the events described in clauses (i) through
     (vi) of the first paragraph of this Section 2, the Company shall not be
     permitted to discharge its obligations hereunder by means of the filing of
     a Shelf Registration Statement.

          3.   Additional Interest.  (a)  The parties hereto agree that the
               -------------------
Holders of Transfer Restricted Securities will suffer damages if the Company
fails to fulfill its obligations under Section 1 or Section 2, as applicable,
and that it would not be feasible to ascertain the extent of such damages.
Accordingly, if (i) the Exchange Offer Registration Statement is not filed with
the Commission on or prior to 60 days after the Issue Date or the Shelf
Registration Statement is not filed with the Commission on or before the Shelf
Filing Date, (ii) the Exchange Offer Registration Statement is not declared
effective within 120 days after the Issue Date or the Shelf Registration
Statement is not declared effective within 90 days of the Shelf Filing Date,
(iii) the Registered Exchange Offer is not consummated on or prior to 150 days
after the Issue Date, or (iv) the Shelf Registration Statement is filed and
declared effective within 90 days after the Shelf Filing Date but shall
thereafter cease to be effective (at any time that the Company is obligated to
maintain the effectiveness thereof) without being succeeded within 60 days by an
additional Registration Statement filed and declared effective (each such event
referred to in clauses (i) through (iv), a "Registration Default"), the Com-
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pany will be obligated to pay additional cash interest to each Holder of
Transfer Restricted Securities, during the period of one or more such
Registration Defaults, in an amount equal to 0.25% per annum of the principal
amount of Transfer Restricted Securities held by such Holder during the first
90-day period following such Registration Default, increasing by an additional
0.25% per annum during each subsequent 90-day period up to a maximum of 1.00%
per annum, until (i) the applicable Registration Statement is filed, (ii) the
Exchange Offer Registration Statement or the Shelf Registration Statement, as
the case may be, is declared effective, (iii) the Registered Exchange Offer is
consummated, or (iv) the Shelf Registration Statement again becomes effective,
as the case may be. Following the cure of all Registration Defaults, the accrual
of additional interest will cease. Notwithstanding any other provisions hereof,
the Company shall in no event be required to pay additional interest hereunder
for more than one Registration Default at any given time. As used herein, the
term "Transfer Restricted Securities" means (i) each Security until the date on
      ------------------------------
which such Security has been exchanged for a freely transferable Exchange
Security in the Registered Exchange Offer, (ii) each Security or Private
Exchange Security until the date on which it has been effectively registered
under the Securities Act and disposed of in accordance with the Shelf
Registration Statement or (iii) each Security or Private Exchange Security until
the date on which it is distributed to the public pursuant to Rule 144 under the
Securities Act or is saleable pursuant to Rule 144(k) under the Securities Act.
Notwithstanding anything to the contrary in this Section 3, the Company shall
not be required to pay additional interest to a Holder of Transfer Restricted
Securities if such Holder failed to comply with its obligations to make the
representations set forth in the second to last paragraph of Section 1 or failed
to provide the information required to be provided by it, if any, pursuant to
Section 4(n).

          (b)  If the Company issues a notice that the Exchange Offer
Registration Statement is unusable or has been suspended pursuant to the seventh
paragraph of Section 1 or the Shelf Registration Statement is unusable or has
been suspended pursuant to Section 2(c), as the case may be, and the number of
days in any consecutive twelve-month period for which all such notices are
issued and effective exceeds 30 days in the aggregate, then the Company will be
obligated to pay additional interest to each Holder of Transfer Restricted
Securities, with respect to the first 90-day period following such 30 days, in
an amount equal to 0.25% per annum (which rate will be increased by an
additional 0.25% per annum for each subsequent 90-day period that additional
interest continues to accrue, provided that the rate at which such additional
interest accrues may in no event exceed 1.00% per annum) of the principal amount
in respect of the Securities constituting Transfer Restricted Securities.  Upon
declaration by the Company that the Exchange Offer Registration Statement or
Shelf Registration Statement, as the case may be, is usable after the period of
time described in the preceding sentence, the amount of accrual shall cease;
provided, however, that if after any such cessation of the accrual of additional
interest the Exchange Offer Registration Statement or Shelf Registration
Statement again ceases to be usable beyond the period permitted above,
additional interest will again accrue pursuant to the foregoing provisions.

          (c)  The Company shall notify the Trustee and the Paying Agent under
the Indenture promptly upon the happening of each and every Registration
Default.  The Com-

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<PAGE>

pany shall pay the additional interest due on the Transfer Restricted Securities
by depositing with the Paying Agent (which may not be the Company for these
purposes), in trust, for the benefit of the Holders thereof, prior to 10:00
a.m., New York City time, on the next interest payment date specified by the
Indenture and the Securities, sums sufficient to pay the additional interest
then due. The additional interest due shall be payable on each interest payment
date specified by the Indenture and the Securities to the record holder entitled
to receive the interest payment to be made on such date. Each obligation to pay
additional interest shall be deemed to accrue from and including the date of the
applicable Registration Default.

          (d)  The parties hereto agree that the additional interest provided
for in this Section 3 constitutes a reasonable estimate of and is intended to
constitute the sole damages that will be suffered by Holders of Transfer
Restricted Securities by reason of the failure of (i) the Shelf Registration
Statement or the Exchange Offer Registration Statement to be filed, (ii) the
Shelf Registration Statement to remain effective or (iii) the Exchange Offer
Registration Statement to be declared effective and the Registered Exchange
Offer to be consummated, in each case to the extent required by this Agreement.

          4.   Registration Procedures.  In connection with any Registration
               -----------------------
Statement, the following provisions shall apply:

          (a)  The Company shall (i) furnish to each Agent, prior to the filing
     thereof with the Commission, a copy of the Registration Statement and each
     amendment thereof and each supplement, if any, to the prospectus included
     therein and shall use its reasonable best efforts to reflect in each such
     document, when so filed with the Commission, such comments as any Agent may
     reasonably propose; (ii) include the information set forth in Annex A
     hereto on the cover, in Annex B hereto in the "Exchange Offer Procedures"
     section and the "Purpose of the Exchange Offer" section and in Annex C
     hereto in the "Plan of Distribution" section of the prospectus forming a
     part of the Exchange Offer Registration Statement, and include the
     information set forth in Annex D hereto in the Letter of Transmittal
     delivered pursuant to the Registered Exchange Offer; and (iii) if requested
     in writing by any Agent, include the information required by Items 507 or
     508 of Regulation S-K, as applicable, in the prospectus forming a part of
     the Exchange Offer Registration Statement.

          (b)  The Company shall advise each Agent, each Exchanging Dealer and
     the Holders (if applicable) and, if requested by any such person, confirm
     such advice in writing (which advice pursuant to clauses (ii)-(v) hereof
     shall be accompanied by an instruction to suspend the use of the prospectus
     until the requisite changes have been made):

               (i)  when any Registration Statement and any amendment thereto
       has been filed with the Commission and when such Registration Statement
       or any post-effective amendment thereto has become effective;

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<PAGE>

               (ii)  of any request by the Commission for amendments or
       supplements to any Registration Statement or the prospectus included
       therein or for additional information;

               (iii) of the issuance by the Commission of any stop order
       suspending the effectiveness of any Registration Statement or the
       initiation of any proceedings for that purpose;

               (iv)  of the receipt by the Company of any notification with
       respect to the suspension of the qualification of the Securities, the
       Exchange Securities or the Private Exchange Securities for sale in any
       jurisdiction or the initiation or threatening of any proceeding for such
       purpose; and

               (v)   of the happening of any event that requires the making of
       any changes in any Registration Statement or the prospectus included
       therein in order that the statements therein are not misleading and do
       not omit to state a material fact required to be stated therein or
       necessary to make the statements therein not misleading.

          (c)  The Company will make every reasonable effort to obtain the
     withdrawal at the earliest possible time of any order suspending the
     effectiveness of any Registration Statement.

          (d)  The Company will furnish to each Holder of Transfer Restricted
     Securities included within the coverage of any Shelf Registration
     Statement, without charge, at least one conformed copy of such Shelf
     Registration Statement and any post-effective amendment thereto, including
     financial statements and schedules and, if any such Holder so requests in
     writing, all exhibits thereto (including those, if any, incorporated by
     reference).

          (e)  The Company will, during the Shelf Registration Period, promptly
     deliver to each Holder of Transfer Restricted Securities included within
     the coverage of any Shelf Registration Statement, without charge, as many
     copies of the prospectus (including each preliminary prospectus) included
     in such Shelf Registration Statement and any amendment or supplement
     thereto as such Holder may reasonably request; and the Company consents to
     the use of such prospectus or any amendment or supplement thereto by each
     of the selling Holders of Transfer Restricted Securities in connection with
     the offer and sale of the Transfer Restricted Securities covered by such
     prospectus or any amendment or supplement thereto.

          (f)  The Company will furnish to each Agent and each Exchanging
     Dealer, and to any other Holder who so requests, without charge, at least
     one conformed copy of the Exchange Offer Registration Statement and any
     post-effective amendment thereto, including financial statements and
     schedules and, if any Agent or Exchanging

                                      -9-

<PAGE>

     Dealer or any such Holder so requests in writing, all exhibits thereto
     (including those, if any, incorporated by reference).

          (g)  The Company will, during the Exchange Offer Registration Period
     or the Shelf Registration Period, as applicable, promptly deliver to each
     Agent, each Exchanging Dealer and such other persons that are required to
     deliver a prospectus following the Registered Exchange Offer, without
     charge, as many copies of the final prospectus included in the Exchange
     Offer Registration Statement or the Shelf Registration Statement and any
     amendment or supplement thereto as such Agent, Exchanging Dealer or other
     persons may reasonably request; and the Company consents to the use of such
     prospectus or any amendment or supplement thereto by any such Agent,
     Exchanging Dealer or other persons, as applicable, as aforesaid.

          (h)  Prior to the effective date of any Registration Statement, the
     Company will use its reasonable best efforts to register or qualify, or
     cooperate with the Holders of Securities, Exchange Securities or Private
     Exchange Securities included therein and their respective counsel in
     connection with the registration or qualification of, such Securities,
     Exchange Securities or Private Exchange Securities for offer and sale under
     the securities or blue sky laws of such jurisdictions as any such Holder
     reasonably requests in writing and do any and all other acts or things
     necessary or advisable to enable the offer and sale in such jurisdictions
     of the Securities, Exchange Securities or Private Exchange Securities
     covered by such Registration Statement; provided that the Company will not
     be required to register or qualify generally to do business in any
     jurisdiction where it is not then so qualified or to take any action which
     would subject it to general service of process or to taxation in any such
     jurisdiction where it is not then so subject.

          (i)  The Company will cooperate with the Holders of Securities,
     Exchange Securities or Private Exchange Securities to facilitate the timely
     preparation and delivery of certificates representing Securities, Exchange
     Securities or Private Exchange Securities to be sold pursuant to any
     Registration Statement free of any restrictive legends and in such
     denominations and registered in such names as the Holders thereof may
     request in writing prior to sales of Securities, Exchange Securities or
     Private Exchange Securities pursuant to such Registration Statement.

          (j)  If any event contemplated by Section 4(b)(ii) through (v) occurs
     during the period for which the Company is required to maintain an
     effective Registration Statement, the Company will promptly prepare and
     file with the Commission a post-effective amendment to the Registration
     Statement or a supplement to the related prospectus or file any other
     required document so that, as thereafter delivered to purchasers of the
     Securities, Exchange Securities or Private Exchange Securities from a
     Holder, the prospectus will not include an untrue statement of a material
     fact or omit to state a material fact necessary in order to make the
     statements therein, in the light of the circumstances under which they were
     made, not misleading.

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<PAGE>

          (k)  Not later than the effective date of the applicable Registration
     Statement, the Company will provide a CUSIP number for the Securities, the
     Exchange Securities and the Private Exchange Securities, as the case may
     be, and provide the applicable trustee with printed certificates for the
     Securities, the Exchange Securities or the Private Exchange Securities, as
     the case may be, in a form eligible for deposit with The Depository Trust
     Company.

          (l)  The Company will comply with all applicable rules and regulations
     of the Commission and will make generally available to its security holders
     as soon as practicable after the effective date of the applicable
     Registration Statement an earning statement satisfying the provisions of
     Section 11(a) of the Securities Act; provided that in no event shall such
     earning statement be delivered later than 45 days after the end of a 12-
     month period (or 90 days, if such period is a fiscal year) beginning with
     the first month of the Company's first fiscal quarter commencing after the
     effective date of the applicable Registration Statement, which statement
     shall cover such 12-month period.

          (m)  The Company will cause the Indenture or the Exchange Securities
     Indenture, as the case may be, to be qualified under the Trust Indenture
     Act as required by applicable law in a timely manner.

          (n)  The Company may require each Holder of Transfer Restricted
     Securities to be registered pursuant to any Shelf Registration Statement to
     furnish to the Company such information concerning the Holder and the
     distribution of such Transfer Restricted Securities as the Company may from
     time to time reasonably require for inclusion in such Shelf Registration
     Statement, and the Company may exclude from such registration the Transfer
     Restricted Securities of any Holder that fails to furnish such information
     within a reasonable time after receiving such request.

          (o)  Each Holder of Transfer Restricted Securities agrees by
     acquisition of such Transfer Restricted Securities that, upon receipt of
     any notice from the Company pursuant to the seventh paragraph of Section 1,
     Section 2(c) or Section 4(b)(ii) through (v), such Holder will discontinue
     disposition of such Transfer Restricted Securities until such Holder's
     receipt of copies of the supplemental or amended prospectus contemplated by
     Section 4(j) or until advised in writing (the "Advice") by the Company that
                                                    ------
     the use of the applicable prospectus may be resumed.  If the Company shall
     give any notice under the seventh paragraph of Section 1, Section 2(c) or
     Section 4(b)(ii) through (v) during the period that the Company is required
     to maintain an effective Registration Statement (the "Effectiveness
                                                           -------------
     Period"), such Effectiveness Period shall be extended by the number of days
     ------
     during such period from and including the date of the giving of such notice
     to and including the date when each seller of Transfer Restricted
     Securities covered by such Registration Statement shall have received (x)
     the copies of the supplemental or amended prospectus contemplated by
     Section 4(j) (if an amended or supplemental prospectus is required) or (y)
     the Advice (if no amended or supplemental prospectus is required).

                                      -11-

<PAGE>

          (p)  In the case of a Shelf Registration Statement, the Company shall
     enter into such customary agreements (including, if requested, an
     underwriting agreement in customary form) and take all such other action,
     if any, as Holders of a majority in aggregate principal amount of the
     Securities, Exchange Securities and Private Exchange Securities being sold
     or the managing underwriters (if any) shall reasonably request in order to
     facilitate any disposition of Securities, Exchange Securities or Private
     Exchange Securities pursuant to such Shelf Registration Statement.

          (q)  In the case of a Shelf Registration Statement, the Company shall
     (i) make reasonably available for inspection by a representative of, and
     Special Counsel (as defined below) acting for, Holders of a majority in
     aggregate principal amount of the Securities, Exchange Securities and
     Private Exchange Securities being sold and any underwriter participating in
     any disposition of Securities, Exchange Securities or Private Exchange
     Securities pursuant to such Shelf Registration Statement, all relevant
     financial and other records, pertinent corporate documents and properties
     of the Company and its subsidiaries and (ii) use its reasonable best
     efforts to have its officers, directors, employees, accountants and counsel
     supply all relevant information reasonably requested by such
     representative, Special Counsel or any such underwriter (an "Inspector") in
                                                                  ---------
     connection with such Shelf Registration Statement.

          (r)  In the case of a Shelf Registration Statement, the Company shall,
     if requested by Holders of a majority in aggregate principal amount of the
     Securities, Exchange Securities and Private Exchange Securities being sold,
     their Special Counsel or the managing underwriters (if any) in connection
     with such Shelf Registration Statement, use its reasonable best efforts to
     cause (i) its counsel to deliver an opinion relating to the Shelf
     Registration Statement and the Securities, Exchange Securities or Private
     Exchange Securities, as applicable, in customary form, (ii) its officers to
     execute and deliver all customary documents and certificates requested by
     Holders of a majority in aggregate principal amount of the Securities,
     Exchange Securities and Private Exchange Securities being sold, their
     Special Counsel or the managing underwriters (if any) and (iii) its
     independent public accountants to provide a comfort letter or letters in
     customary form, subject to receipt of appropriate documentation as
     contemplated, and only if permitted, by Statement of Auditing Standards No.
     72.

          5.   Registration Expenses.  The Company will bear all expenses
               ---------------------
incurred in connection with the performance of its obligations under Sections 1,
2, 3 and 4 and the Company will reimburse the Agents and the Holders for the
reasonable fees and disbursements of one firm of attorneys (in addition to any
local counsel) chosen by the Holders of a majority in aggregate principal amount
of the Securities, the Exchange Securities and the Private Exchange Securities
to be sold pursuant to each Registration Statement (the "Special Counsel")
                                                         ---------------
acting for the Agents or Holders in connection therewith.

          6.   Indemnification.  (a)  In the event of a Shelf Registration
               ---------------
Statement or in connection with any prospectus delivery pursuant to an Exchange
Offer Registration

                                      -12-

<PAGE>

Statement by an Agent or Exchanging Dealer, as applicable, the Company shall
indemnify and hold harmless each Holder (including, without limitation, any such
Agent or Exchanging Dealer), its affiliates, their respective officers,
directors, employees, representatives and agents, and each person, if any, who
controls such Holder within the meaning of the Securities Act or the Exchange
Act (collectively referred to for purposes of this Section 6 and Section 7 as a
Holder) from and against any loss, claim, damage or liability, joint or several,
or any action in respect thereof (including, without limitation, any loss,
claim, damage, liability or action relating to purchases and sales of
Securities, Exchange Securities or Private Exchange Securities), to which that
Holder may become subject, whether commenced or threatened, under the Securities
Act, the Exchange Act, any other federal or state statutory law or regulation,
at common law or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in any such Registration Statement
or any prospectus forming part thereof or in any amendment or supplement thereto
or (ii) the omission or alleged omission to state therein a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, and shall reimburse each Holder promptly upon demand for any legal
or other expenses reasonably incurred by that Holder in connection with
investigating or defending or preparing to defend against or appearing as a
third party witness in connection with any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that the Company
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of, or is based upon, an untrue statement
or alleged untrue statement in or omission or alleged omission from any of such
documents in reliance upon and in conformity with any Holders' Information; and
provided, further, that with respect to any such untrue statement in or omission
from any related preliminary prospectus, the indemnity agreement contained in
this Section 6(a) shall not inure to the benefit of any Holder from whom the
person asserting any such loss, claim, damage, liability or action received
Securities, Exchange Securities or Private Exchange Securities to the extent
that such loss, claim, damage, liability or action of or with respect to such
Holder results from the fact that both (A) a copy of the final prospectus was
not sent or given to such person at or prior to the written confirmation of the
sale of such Securities, Exchange Securities or Private Exchange Securities to
such person and (B) the untrue statement in or omission from the related
preliminary prospectus was corrected in the final prospectus unless, in either
case, such failure to deliver the final prospectus was a result of non-
compliance by the Company with Section 4(d), 4(e), 4(f) or 4(g).

          (b)  In the event of a Shelf Registration Statement, each Holder shall
indemnify and hold harmless the Company, its affiliates, their respective
officers, directors, employees, representatives and agents, and each person, if
any, who controls the Company within the meaning of the Securities Act or the
Exchange Act (collectively referred to for purposes of this Section 6(b) and
Section 7 as the Company), from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which the
Company may become subject, whether commenced or threatened, under the
Securities Act, the Exchange Act, any other federal or state statutory law or
regulation, at common law or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i)

                                      -13-

<PAGE>

any untrue statement or alleged untrue statement of a material fact contained in
any such Registration Statement or any prospectus forming part thereof or in any
amendment or supplement thereto or (ii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, but in each case only to the extent that
the untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with any Holders' Information
furnished to the Company, and shall reimburse the Company promptly upon demand
for any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending or preparing to defend against or appearing as a
third party witness in connection with any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that no such Holder
shall be liable for any indemnity claims hereunder in excess of the amount of
net proceeds received by such Holder from the sale of Securities, Exchange
Securities or Private Exchange Securities pursuant to such Shelf Registration
Statement.

          (c)  Promptly after receipt by an indemnified party under this Section
6 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party pursuant to Section 6(a) or 6(b), notify the indemnifying
party in writing of the claim or the commencement of that action; provided,
however, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have under this Section 6 except to the extent
that it has been materially prejudiced (through the forfeiture of substantive
rights or defenses) by such failure; and provided, further, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have to an indemnified party otherwise than under this Section 6.  If any
such claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party.  After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 6 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than the reasonable costs of investigation; provided, however,
that an indemnified party shall have the right to employ its own counsel in any
such action, but the fees, expenses and other charges of such counsel for the
indemnified party will be at the expense of such indemnified party unless (1)
the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the indemnified party has reasonably
concluded (based upon advice of counsel to the indemnified party) that there may
be legal defenses available to it or other indemnified parties that are
different from or in addition to those available to the indemnifying party, (3)
a conflict or potential conflict exists (based upon advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (4) the indemnifying party
has not in fact employed counsel reasonably satisfactory to the indemnified
party to assume the defense of such action within a reasonable time after
receiving

                                      -14-

<PAGE>

notice of the commencement of the action, in each of which cases the reasonable
fees, disbursements and other charges of counsel will be at the expense of the
indemnifying party or parties. It is understood that the indemnifying party or
parties shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the reasonable fees, disbursements and
other charges of more than one separate firm of attorneys (in addition to any
local counsel) at any one time for all such indemnified party or parties. Each
indemnified party, as a condition of the indemnity agreements contained in
Sections 6(a) and 6(b), shall use all reasonable efforts to cooperate with the
indemnifying party in the defense of any such action or claim. No indemnifying
party shall be liable for any settlement of any such action effected without its
written consent (which consent shall not be unreasonably withheld), but if
settled with its written consent or if there be a final judgment for the
plaintiff in any such action, the indemnifying party agrees to indemnify and
hold harmless any indemnified party from and against any loss or liability by
reason of such settlement or judgment. No indemnifying party shall, without the
prior written consent of the indemnified party (which consent shall not be
unreasonably withheld), effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.

          7.   Contribution.  If the indemnification provided for in Section 6
               ------------
is unavailable or insufficient to hold harmless an indemnified party under
Section 6(a) or 6(b), then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, (i) in such proportion as shall be appropriate to
reflect the relative benefits received by the Company from the offering and sale
of the Securities, on the one hand, and a Holder with respect to the sale by
such Holder of Securities, Exchange Securities or Private Exchange Securities,
on the other, or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and such Holder on the other with respect
to the statements or omissions that resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant equitable
considerations.  The relative benefits received by the Company on the one hand
and a Holder on the other with respect to such offering and such sale shall be
deemed to be in the same proportion as the total net proceeds from the offering
of the Securities (before deducting expenses) received by or on behalf of the
Company as set forth in the table on the cover of the Offering Memorandum, on
the one hand, bear to the total proceeds received by such Holder with respect to
its sale of Securities, Exchange Securities or Private Exchange Securities, on
the other.  The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to the Company or
information supplied by the Company on the one hand or to any Holders'
Information supplied by such Holder on the other, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission.  The parties

                                      -15-

<PAGE>

hereto agree that it would not be just and equitable if contributions pursuant
to this Section 7 were to be determined by pro rata allocation or by any other
method of allocation that does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section 7 shall be deemed to include, for
purposes of this Section 7, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending or preparing to defend any such
action or claim. Notwithstanding the provisions of this Section 7, an
indemnifying party that is a Holder of Securities, Exchange Securities or
Private Exchange Securities shall not be required to contribute any amount in
excess of the amount by which the total price at which the Securities, Exchange
Securities or Private Exchange Securities sold by such indemnifying party to any
purchaser exceeds the amount of any damages which such indemnifying party has
otherwise paid or become liable to pay by reason of any untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.

          8.   Rules 144 and 144A.  For so long as any Transfer Restricted
               ------------------
Securities remain outstanding, the Company shall use its reasonable best efforts
to file the reports required to be filed by it under the Securities Act and the
Exchange Act in a timely manner and, if at any time the Company is not required
to file such reports, it will, upon the written request of any Holder of
Transfer Restricted Securities, make publicly available other information so
long as necessary to permit sales of such Holder's securities pursuant to Rules
144 and 144A.  The Company covenants that it will take such further action as
any Holder of Transfer Restricted Securities may reasonably request, all to the
extent required from time to time to enable such Holder to sell Transfer
Restricted Securities without registration under the Securities Act within the
limitation of the exemptions provided by Rules 144 and 144A (including, without
limitation, the requirements of Rule 144A(d)(4)).  Upon the written request of
any Holder of Transfer Restricted Securities, the Company shall deliver to such
Holder a written statement as to whether it has complied with such requirements.
Notwithstanding the foregoing, nothing in this Section 8 shall be deemed to
require the Company to register any of its securities pursuant to the Exchange
Act.

          9.   Underwritten Registrations.  If any of the Transfer Restricted
               --------------------------
Securities covered by any Shelf Registration Statement are to be sold in an
underwritten offering, the investment banker or investment bankers and manager
or managers that will administer the offering will be selected by the Holders of
a majority in aggregate principal amount of such Transfer Restricted Securities
included in such offering, subject to the consent of the Company (which shall
not be unreasonably withheld or delayed), and such Holders shall be responsible
for all underwriting commissions and discounts in connection therewith.

          No person may participate in any underwritten registration hereunder
unless such person (i) agrees to sell such person's Transfer Restricted
Securities on the basis reasonably provided in any underwriting arrangements
approved by the persons entitled

                                      -16-

<PAGE>

hereunder to approve such arrangements and (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements.

          10.  Amendments and Waivers.  The provisions of this Agreement may not
               ----------------------
be amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, unless the Company has obtained the
written consent of Holders of a majority in aggregate principal amount of the
Securities, the Exchange Securities and the Private Exchange Securities, taken
as a single class.  Notwithstanding the foregoing, a waiver or consent to depart
from the provisions hereof with respect to a matter that relates exclusively to
the rights of Holders whose Securities, Exchange Securities or Private Exchange
Securities are being sold pursuant to a Registration Statement and that does not
directly or indirectly affect the rights of other Holders may be given by
Holders of a majority in aggregate principal amount of the Securities, the
Exchange Securities and the Private Exchange Securities being sold by such
Holders pursuant to such Registration Statement.

          11.  Notices.  All notices and other communications provided for or
               -------
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telecopier or air courier
guaranteeing next-day delivery:

          (1)  if to a Holder, at the most current address given by such Holder
     to the Company in accordance with the provisions of this Section 10(b),
     which address initially is, with respect to each Holder, the address of
     such Holder maintained by the Registrar under the Indenture, with a copy in
     like manner to JPMorgan, a division of Chase Securities Inc., and Credit
     Suisse First Boston Corporation;

          (2)  if to an Agent, initially at its address set forth in the
     Distribution Agreement; and

          (3)  if to the Company, initially at the address of the Company set
     forth in the Distribution Agreement.

          All such notices and communications shall be deemed to have been duly
given:  when delivered by hand, if personally delivered; one business day after
being delivered to a next-day air courier; five business days after being
deposited in the mail; and when receipt is acknowledged by the recipient's
telecopier machine, if sent by telecopier.

          12.  Successors And Assigns.  This Agreement shall be binding upon the
               ----------------------
Company and its successors and assigns.  If any transferee of any Holder shall
acquire Transfer Restricted Securities in any manner, whether by operation of
law or otherwise, such Transfer Restricted Securities shall be held subject to
all of the terms of this Agreement, and by taking and holding such Transfer
Restricted Securities such transferee shall be conclusively deemed to have
agreed to be bound by and to perform all of the terms and provisions of this
Agreement, and such transferee shall be entitled to receive the benefits hereof.

                                      -17-

<PAGE>

          13.  Counterparts.  This Agreement may be executed in any number of
               ------------
counterparts (which may be delivered in original form or by telecopier) and by
the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.

          14.  Definition of Terms.  For purposes of this Agreement, (a) the
               -------------------
term "business day" means any day on which the New York Stock Exchange, Inc. is
open for trading, (b) the term "subsidiary" has the meaning set forth in Rule
405 under the Securities Act and (c) except where otherwise expressly provided,
the term "affiliate" has the meaning set forth in Rule 405 under the Securities
Act.

          15.  Headings.  The headings in this Agreement are for convenience of
               --------
reference only and shall not limit or otherwise affect the meaning hereof.

          16.  Governing Law.  This Agreement shall be governed by and construed
               -------------
in accordance with the laws of the State of New York.

          17.  Remedies.  In the event of a breach by the Company or by any
               --------
Holder of any of their respective obligations under this Agreement, each Holder
or the Company, as the case may be, in addition to being entitled to exercise
all rights granted by law, including recovery of damages (other than the
recovery of damages for a breach by the Company of its obligations under
Sections 1 or 2 hereof for which additional interest has been paid pursuant to
Section 3 hereof), will be entitled to specific performance of its rights under
this Agreement.  The Company and each Holder agree that monetary damages would
not be adequate compensation for any loss incurred by reason of a breach by it
of any of the provisions of this Agreement and hereby further agree that, in the
event of any action for specific performance in respect of such breach, it shall
waive the defense that a remedy at law would be adequate.

          18.  No Inconsistent Agreements.  The Company represents, warrants and
               --------------------------
agrees that (i) it has not entered into, shall not, on or after the date of this
Agreement, enter into any agreement that is inconsistent with the rights granted
to the Holders in this Agreement or otherwise conflicts with the provisions
hereof, (ii) it has not previously entered into any agreement which remains in
effect granting any registration rights with respect to any of its debt
securities to any person and (iii) without limiting the generality of the
foregoing, without the written consent of the Holders of a majority in aggregate
principal amount of the then outstanding Transfer Restricted Securities, it
shall not grant to any person the right to request the Company to register any
debt securities of the Company under the Securities Act unless the rights so
granted are not in conflict or inconsistent with the provisions of this
Agreement.

          19.  No Piggyback on Registrations.  Neither the Company nor any of
               -----------------------------
its security holders (other than the Holders of Transfer Restricted Securities
in such capacity) shall have the right to include any securities of the Company
in any Shelf Registration or Registered Exchange Offer other than Transfer
Restricted Securities.

                                      -18-

<PAGE>

          20.  Severability.  The remedies provided herein are cumulative and
               ------------
not exclusive of any remedies provided by law. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and
the parties hereto shall use their reasonable best efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.

                           [Signature page follows]

                                      -19-

<PAGE>

          Please confirm that the foregoing correctly sets forth the agreement
among the Company and the Agents.

                                   Very truly yours,

                                   CARPENTER TECHNOLOGY CORPORATION

                                   By: /s/ Jaime Vasquez
                                      ---------------------------------
                                      Name: Jaime Vasquez
                                      Title: Vice President and Treasurer
Accepted:

J.P. MORGAN SECURITIES INC.

By: /s/ J. C. Padilla
   --------------------------------
          Authorized Signatory

CREDIT SUISSE FIRST BOSTON CORPORATION

By: /s/ Helena M. Wilner
   --------------------------------
          Authorized Signatory

<PAGE>

                                                                         ANNEX A

          Each broker-dealer that receives Exchange Securities for its own
account pursuant to the Registered Exchange Offer must acknowledge that it will
deliver a prospectus in connection with any resale of such Exchange Securities.
The Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.  This Prospectus, as it
may be amended or supplemented from time to time, may be used by a broker-dealer
in connection with resales of Exchange Securities received in exchange for
Securities where such Securities were acquired by such broker-dealer as a result
of market-making activities or other trading activities.  The Company has agreed
that, for a period of 180 days after the Expiration Date (as defined herein), it
will make this Prospectus available to any broker-dealer for use in connection
with any such resale.  See "Plan of Distribution".

<PAGE>

                                                                         ANNEX B

          Each broker-dealer that receives Exchange Securities for its own
account in exchange for Securities, where such Securities were acquired by such
broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Securities.  See "Plan of Distribution".

<PAGE>

                                                                         ANNEX C

                              PLAN OF DISTRIBUTION

          Each broker-dealer that receives Exchange Securities for its own
account pursuant to the Registered Exchange Offer must acknowledge that it will
deliver a prospectus in connection with any resale of such Exchange Securities.
This Prospectus, as it may be amended or supplemented from time to time, may be
used by a broker-dealer in connection with resales of Exchange Securities
received in exchange for Securities where such Securities were acquired as a
result of market-making activities or other trading activities.  The Company has
agreed that, for a period of 180 days after the Expiration Date, it will make
this prospectus, as amended or supplemented, available to any broker-dealer for
use in connection with any such resale.  In addition, until __________, 20__,
all dealers effecting transactions in the Exchange Securities may be required to
deliver a prospectus.

          The Company will not receive any proceeds from any sale of Exchange
Securities by broker-dealers.  Exchange Securities received by broker-dealers
for their own account pursuant to the Registered Exchange Offer may be sold from
time to time in one or more transactions in the over-the-counter market, in
negotiated transactions, through the writing of options on the Exchange
Securities or a combination of such methods of resale, at market prices
prevailing at the time of resale, at prices related to such prevailing market
prices or at negotiated prices.  Any such resale may be made directly to
purchasers or to or through brokers or dealers who may receive compensation in
the form of commissions or concessions from any such broker-dealer or the
purchasers of any such Exchange Securities.  Any broker-dealer that resells
Exchange Securities that were received by it for its own account pursuant to the
Registered Exchange Offer and any broker or dealer that participates in a
distribution of such Exchange Securities may be deemed to be an "underwriter"
within the meaning of the Securities Act and any profit on any such resale of
Exchange Securities and any commission or concessions received by any such
persons may be deemed to be underwriting compensation under the Securities Act.
The Letter of Transmittal states that, by acknowledging that it will deliver and
by delivering a prospectus, a broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act.

          For a period of 180 days after the Expiration Date the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal.  The Company has agreed to pay all expenses
incident to the Registered Exchange Offer (including the expenses of one counsel
for the Holders of the Securities) other than commissions or concessions of any
broker-dealers and will indemnify the Holders of the Securities (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.

<PAGE>

                                                                         ANNEX D

[_]  CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
     COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
     THERETO.

     Name:
     Address:

If the undersigned is not a broker-dealer, the undersigned represents that it is
not engaged in, and does not intend to engage in, a distribution of Exchange
Securities.  If the undersigned is a broker-dealer that will receive Exchange
Securities for its own account in exchange for Securities that were acquired as
a result of market-making activities or other trading activities, it
acknowledges that it will deliver a prospectus in connection with any resale of
such Exchange Securities; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.<PAGE>

                                                                   Exhibit 10.17

                       CARPENTER TECHNOLOGY CORPORATION

                                 $100,000,000

                          Medium-Term Notes, Series C
               Due from 9 Months to 30 Years from Date of Issue

                            DISTRIBUTION AGREEMENT

                                                                   July 31, 2001

J.P. MORGAN SECURITIES INC.
270 Park Avenue
New York, New York  100017

CREDIT SUISSE FIRST BOSTON CORPORATION
Eleven Madison Avenue
New York, New York  10010

Ladies and Gentlemen:

         CARPENTER TECHNOLOGY CORPORATION, a Delaware corporation (the
"Company"), confirms its agreement with each of you with respect to the issue
 -------
and sale from time to time by the Company of up to $100,000,000 in aggregate
principal amount of its Medium-Term Notes, Series C, due from 9 months to 30
years from date of issue (the "Securities"), pursuant to one or more Offering
                               ----------
Memorandums (as hereinafter defined), and agrees with each of you (individually,
an "Agent," and collectively, the "Agents," which term shall include any
    -----                          ------
additional agents appointed pursuant to Section 13 hereof) as set forth in this
Agreement.  The Securities will be issued under an indenture dated as of January
12, 1994 (the "Indenture") between the Company and U.S. Bank Trust National
               ---------
Association, formerly known as First Trust of New York, National Association, as
successor Trustee (the "Trustee").  The Securities of any particular issuance
                        -------
shall have the maturities, interest rates, redemption provisions, if any, and
other terms set forth in the Offering Memorandum (as hereinafter defined)
relating thereto.  The Securities will be issued, and the terms and rights
thereof established, from time to time by the Company in accordance with the
Indenture.

         On the basis of the representations and warranties herein contained,
but subject to the terms and conditions stated herein and to the reservation by
the Company of the right to sell Securities directly to investors (other than
broker-dealers) on its own behalf, the Company hereby (i) appoints the Agents as
the exclusive agents of the Company for the purpose of so-

<PAGE>

                                      -2-

liciting and receiving offers to purchase Securities from the Company by others
pursuant to Section 2(a) hereof and (ii) agrees that, except as otherwise
contemplated herein, whenever it determines to sell Securities directly to any
Agent as principal, it may enter into a separate agreement (each a "Terms
                                                                    -----
Agreement"), substantially in the form of Exhibit A hereto, relating to such
---------                                 ---------
sale in accordance with Section 2(b) hereof.

         The Company has prepared a base offering memorandum (the "Base
                                                                    ----
Memorandum") in respect of the Securities.  In connection with each offering of
----------
Securities, the Company shall prepare a preliminary pricing supplement and a
final pricing supplement.  The Base Memorandum as supplemented by the
preliminary pricing supplement relating to an offering of Securities is
hereinafter referred to as the "Preliminary Memorandum."  The Base Memorandum as
                                ----------------------
supplemented by the final pricing supplement relating to an offering of
Securities is hereinafter referred to as the "Final Memorandum."  The
                                              ----------------
Preliminary Memorandum and the Final Memorandum relating to an offering of
Securities collectively are hereinafter referred to as the "Offering
                                                            --------
Memorandum."  Any reference in this Agreement to the Base Memorandum, the
----------
Preliminary Memorandum, the Final Memorandum or the Offering Memorandum shall be
deemed to refer to and include any documents incorporated by reference therein.
Unless expressly provided otherwise in this Agreement and any applicable Terms
Agreement, references to the Offering Memorandum as of the Commencement Date (as
hereinafter defined) shall refer to the Preliminary Memorandum relating to an
offering of Securities and references to the Offering Memorandum as of the date
of the applicable Terms Agreement or the Time of Delivery shall refer to the
Offering Memorandum relating to an offering of Securities.

         The sale of the Securities will be made without registration of the
Securities under the Securities Act of 1933, as amended (the "Securities Act"),
                                                              --------------
in reliance upon exemptions therefrom under the Securities Act.  In each case in
which the Company sells Securities to an Agent as principal, the purchasers of
such Securities and their direct and indirect transferees will be entitled to
the benefits of an Exchange and Registration Rights Agreement, to be dated as of
the corresponding Time of Delivery (as hereinafter defined), substantially in
the form of Exhibit B hereto (each a "Registration Rights Agreement").
            ---------                 -----------------------------

         1.   Representations and Warranties.  The Company represents and
warrants to, and agrees with, each Agent as of the Commencement Date and, with
respect to each offering of Securities, as of each date on which the Company
accepts an offer to purchase such Securities (including the date of the Terms
Agreement or other agreement in the case of a purchase by an Agent as principal
and as of the corresponding Time of Delivery, as follows:

         (a)  As of the date of the Preliminary Memorandum, the Preliminary
     Memorandum does not include any untrue statement of a material fact or omit
     to state any material fact necessary to make the statements therein, in
     light of the circum-

<PAGE>

                                      -3-

     stances under which they were made, not misleading, and as of the date of
     any applicable Terms Agreement, the Final Memorandum does not include any
     untrue statement of a material fact or omit to state any material fact
     necessary to make the statements therein, in light of the circumstances
     under which they were made, not misleading, except that the foregoing does
     not apply to statements in or omissions from any of such documents based
     upon written information furnished to the Company by any Agent specifically
     for use therein.

         (b)  Each document, if any, filed or to be filed pursuant to the
     Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
                                                       ------------
     incorporated by reference in the Offering Memorandum complied, or will
     comply when so filed, as to form in all material respects with the Exchange
     Act and did not, or will not when so filed, contain an untrue statement of
     a material fact or omit to state a material fact necessary to make the
     statements made, in the light of the circumstances under which they were
     made, not misleading; provided, however, that this representation and
     warranty shall not apply to any statements in or omissions from any such
     documents based upon written information furnished to the Company by any
     Agent specifically for use therein.

         (c)  The Company has been duly incorporated and is validly existing as
     a corporation in good standing under the laws of the State of Delaware,
     with corporate power and authority to own its properties and conduct its
     business as described in the Offering Memorandum, and has been duly
     qualified as a foreign corporation for the transaction of business and is
     in good standing under the laws of each other jurisdiction in which it owns
     or leases properties, or conducts any business, so as to require such
     qualification, other than where the failure to be so qualified or in good
     standing would not have a material adverse effect on the general affairs,
     business, prospects, management, financial position, stockholders' equity
     or results of operations (a "Material Adverse Effect") of the Company and
                                  -----------------------
     its subsidiaries, taken as a whole.

         (d)  Each of the Company's subsidiaries has been duly incorporated and
     is validly existing as a corporation under the laws of its jurisdiction of
     incorporation, with corporate power and authority to own its properties and
     conduct its business as described in the Offering Memorandum, and has been
     duly qualified as a foreign corporation for the transaction of business and
     is in good standing under the laws of each jurisdiction in which it owns or
     leases properties, or conducts any business, so as to require such
     qualification, other than where the failure to be so qualified or in good
     standing would not have a Material Adverse Effect on the Company and its
     subsidiaries, taken as a whole; and all the outstanding shares of capital
     stock of each subsidiary of the Company have been duly authorized and
     validly issued, are fully-paid and non-assessable, and (except, in the case
     of foreign subsidiaries, for directors' qualifying

<PAGE>

                                      -4-

     shares) are owned by the Company, directly or indirectly, free and clear of
     all liens, encumbrances, security interests and claims.

         (e)  The Indenture has been duly authorized, executed and delivered by
     the Company and has been qualified under the Trust Indenture Act of 1939,
     as amended (the "Trust Indenture Act"); the Indenture complies as to form
                      -------------------
     in all material respects with the requirements of the Trust Indenture Act;
     the Securities, the Exchange Securities (as defined in the Registration
     Rights Agreement) and the Private Exchange Securities (as defined in the
     Registration Rights Agreement) have been duly authorized by the Company;
     and when issued and delivered in accordance with the Indenture and, in the
     case of the Securities, when delivered to and paid for by the purchasers
     thereof in accordance with this Agreement and any applicable Terms
     Agreement, the Securities, the Exchange Securities and the Private Exchange
     Securities will have been duly executed, authenticated, issued and
     delivered by the Company, and the Securities of any particular issuance of
     Securities will conform in all material respects to the description thereof
     contained in the Offering Memorandum relating to such issuance of
     Securities, and the Indenture, the Securities, the Exchange Securities and
     the Private Exchange Securities will constitute valid and legally binding
     obligations of the Company, entitled to the benefits of the Indenture and
     enforceable against the Company in accordance with their terms, subject, as
     to enforcement, to bankruptcy, insolvency, fraudulent transfer,
     reorganization, moratorium and similar laws of general applicability
     relating to or affecting creditors' rights, to public policy considerations
     and to general equity principles.

         (f)  No consent, approval, authorization or order of, or filing with,
     any governmental agency or body or any court is required for the
     consummation of the transactions contemplated by any applicable Terms
     Agreement (including the provisions of this Agreement), the Registration
     Rights Agreement or the Indenture in connection with the issuance and sale
     of the Securities by the Company, except such as may be required under
     state securities or Blue Sky laws.

         (g)  The execution, delivery and performance of the Indenture, any
     applicable Terms Agreement (including the provisions of this Agreement),
     the Registration Rights Agreement and the issuance and sale of the
     Securities and compliance with the terms and provisions thereof do not and
     will not (i) contravene any provision of the certificate of incorporation,
     by-laws or other organizational documents of the Company or of any of its
     subsidiaries, or (ii) conflict with or result in a breach or violation of
     any of the terms and provisions of, or constitute a default under
     (including, without limitation, any event which with notice or lapse of
     time, or both, would constitute a default under), or result in the creation
     or imposition of any lien, charge or encumbrance upon any assets or
     properties of the Company or of any of its subsidiaries un-

<PAGE>

                                      -5-

     der, any statute, rule, regulation, order or decree of any governmental
     agency or body or any court having jurisdiction over any of them or any of
     their respective properties, assets or operations, or any indenture,
     mortgage, loan agreement, note or other agreement or instrument for
     borrowed money, any guarantee of any agreement or instrument for borrowed
     money or any lease, permit, license or other agreement or instrument to
     which the Company or any of its subsidiaries is a party or by which the
     Company or any of its subsidiaries is bound or to which any of the
     properties, assets or operations of any of them is subject, other than, in
     the case of this clause (ii), any such conflict, breach, violation,
     default, lien, charge or encumbrance as would not singly or in the
     aggregate with all such other conflicts, breaches, violations, defaults,
     liens, charges or encumbrances reasonably be expected to have a Material
     Adverse Effect.

         Neither the Company nor any of its subsidiaries is (i) in violation of
     or in default under its certificate of incorporation, by-laws or other
     organizational documents, or (ii) in breach or violation of any of the
     terms and provisions of, or in default under (nor has any event which with
     notice or lapse of time, or both, would constitute a default under), any
     statute, rule, regulation, order or decree of any governmental agency or
     body or any court having jurisdiction over any of them or any of their
     respective properties, assets or operations, or any indenture, mortgage,
     loan agreement, note or other agreement or instrument for borrowed money,
     any guarantee of any agreement or instrument for borrowed money or any
     lease, permit, license or other agreement or instrument to which the
     Company or any of its subsidiaries is a party or by which the Company or
     any of its subsidiaries is bound or to which any of the properties, assets
     or operations of any of them is subject, other than, in the case of this
     clause (ii), any such breach, violation, default, lien, charge or
     encumbrance as would not singly or in the aggregate with all such other
     breaches, violations, defaults, liens, charges or encumbrances reasonably
     be expected to have a Material Adverse Effect.

         (h)  This Agreement and any applicable Terms Agreement have been duly
     authorized, executed and delivered by the Company.  The Registration Rights
     Agreement has been duly authorized, executed and delivered by the Company
     and constitutes a valid and legally binding obligation of the Company,
     enforceable against the Company in accordance with its terms, except that
     (i) the enforceability thereof may be subject to bankruptcy, insolvency,
     fraudulent transfer, reorganization, moratorium and similar laws of general
     applicability relating to or affecting creditors' rights, to public policy
     considerations and to general equity principles, (ii) any rights to
     indemnity and contribution thereunder may be limited by federal and state
     securities laws and public policy considerations and (iii) the
     enforceability of provisions imposing liquidated damages, penalties or an
     increase in interest rate upon the occurrence of certain events may be
     limited in certain circumstances.

<PAGE>

                                      -6-

         (i)  The Company has an authorized capitalization as set forth in the
     Offering Memorandum and such authorized capital stock conforms as to legal
     matters to the description thereof set forth and incorporated by reference
     in the Offering Memorandum, and all of the outstanding shares of capital
     stock of the Company have been duly authorized and validly issued, are
     fully paid and non-assessable and are not subject to any preemptive or
     similar rights; and, except as described in or expressly contemplated by
     the Offering Memorandum, there are no outstanding rights (including,
     without limitation, preemptive rights), warrants or options to acquire, or
     instruments convertible into or exchangeable for, any shares of capital
     stock or other equity interest in the Company or any of its subsidiaries,
     or any contract, commitment, agreement, understanding or arrangement of any
     kind relating to the issuance of any capital stock of the Company or any
     such subsidiary, any such convertible or exchangeable securities or any
     such rights, warrants or options.

         (j)  Each of the Company and its subsidiaries has obtained all
     licenses, permits, certificates, consents, orders, approvals and other
     authorizations from, and has made all declarations and filings with, all
     federal, state, local and other governmental authorities (including foreign
     regulatory agencies), all self-regulatory organizations and all courts and
     other tribunals, domestic or foreign, necessary to own or lease, as the
     case may be, and to operate its properties and to carry on its business as
     conducted as of the date hereof, except where the failure to do so,
     individually or in the aggregate, would not have a Material Adverse Effect
     on the Company and its subsidiaries, taken as a whole, and neither the
     Company nor any such subsidiary has received any actual notice of any
     proceeding relating to revocation or modification of any such license,
     permit, certificate, consent, order, approval or other authorization,
     except as described in the Offering Memorandum; and each of the Company and
     its subsidiaries is in compliance with all laws and regulations relating to
     the conduct of its business as conducted as of the date hereof, except
     where the failure to do so, individually or in the aggregate, would not
     have a Material Adverse Effect on the Company and its subsidiaries, taken
     as a whole.

         (k)  To the best knowledge of the Company, the Company and its
     subsidiaries (i) are in compliance with all applicable foreign, federal,
     state and local laws and regulations relating to the protection of human
     health and safety, the environment, natural resources and solid, hazardous
     or toxic substances, materials or wastes ("Environmental Laws"), (ii) have
                                                ------------------
     received all permits, licenses or other approvals required of them under
     all applicable Environmental Laws to conduct their respective businesses
     (collectively, "Environmental Authorizations") and (iii) are in compliance
                     ----------------------------
     with all terms and conditions of any such Environmental Authorizations,
     except where such noncompliance with Environmental Laws, failure to receive
     required Environmental

<PAGE>

                                      -7-

     Authorizations or failure to comply with the terms and conditions of such
     Environmental Authorizations would not reasonably be expected, singly or in
     the aggregate, to have a Material Adverse Effect on the Company and its
     subsidiaries, taken as a whole.

         (l)  Other than as disclosed in the Offering Memorandum, to the best
     knowledge of the Company, there are no (a) discharges, disposals or
     releases of any solid, hazardous or toxic substances, materials or wastes
     (collectively, "Hazardous Materials") present on, at, under or emanating
                     -------------------
     from any of the properties currently or formerly owned or leased by the
     Company or any of its subsidiaries, or their respective corporate
     predecessors in interest, or (b) spills, releases, discharges or disposals
     of Hazardous Materials that have occurred or are presently occurring from
     the properties of the Company as a result of any construction on or
     operation and use of the properties of the Company, which presence,
     discharge, disposal or release would reasonably be expected, individually
     or in the aggregate, to have a Material Adverse Effect on the Company and
     its subsidiaries, taken as a whole.

         (m)  The Company and its subsidiaries have good and marketable title in
     fee simple to all items of real property and good and marketable title to
     all personal property owned by them, in each case free and clear of all
     liens, encumbrances and defects except such as are described or referred to
     in the Offering Memorandum or such as do not materially affect the value of
     such property and do not interfere with the use made or proposed to be made
     of such property by the Company and its subsidiaries; and any real property
     and buildings held under lease by the Company and its subsidiaries are held
     by them under valid, existing and enforceable leases with such exceptions
     as are not material to the general affairs, business, prospects,
     management, financial position, stockholders' equity or results of
     operations of the Company and its subsidiaries, taken as a whole, and do
     not interfere with the use made or proposed to be made of such property and
     buildings by the Company or its subsidiaries.

         (n)  In the ordinary course of its business, the Company conducts a
     periodic review of the effect of Environmental Laws on the business,
     operations and properties of the Company and its subsidiaries, in the
     course of which it identifies and evaluates associated costs and
     liabilities (including, without limitation, any capital or operating
     expenditures required for clean-up, closure of properties or compliance
     with Environmental Laws or any Environmental Authorizations, any related
     constraints on operating activities and any potential liabilities to third
     parties).  On the basis of such review, the Company has reasonably
     concluded that such associated costs and liabilities would not reasonably
     be expected, individually or in the aggregate, to have a Material Adverse
     Effect on the Company and its subsidiaries, taken as a whole.

<PAGE>

                                      -8-

         (o)  Except as set forth in the Offering Memorandum, there are no
     pending actions, suits, proceedings or investigations against or affecting
     the Company or any of its subsidiaries, or with respect to which the
     Company or any of the subsidiaries is responsible by way of indemnity or
     otherwise, that would singly or in the aggregate with all such other
     actions, suits, investigations or proceedings reasonably be expected to
     have a Material Adverse Effect on the Company, or reasonably be expected to
     have a material adverse effect on the ability of the Company to perform its
     obligations under this Agreement, the Indenture, the Securities or any
     applicable Terms Agreement; and, to the best knowledge of the Company,
     except as set forth in the Final Memorandum, no such actions, suits,
     proceedings or investigations are threatened.

         (p)  Since the respective dates as of which information is given in the
     Offering Memorandum, there has not been any change in the capital stock or
     long-term debt of the Company or any of its subsidiaries, or any material
     adverse change, or any development involving a prospective material adverse
     change, in or affecting the general affairs, business, prospects,
     management, financial position, stockholders' equity or results of
     operations of the Company and its subsidiaries, taken as a whole, otherwise
     than as set forth or contemplated in the Offering Memorandum; and except as
     set forth or contemplated in the Offering Memorandum, neither the Company
     nor any of its subsidiaries has entered into any transaction or agreement
     (whether or not in the ordinary course of business) material to the Company
     and its subsidiaries, taken as a whole.

         (q)  The Company maintains a system of internal accounting controls
     sufficient to provide reasonable assurances that (i) transactions are
     executed in accordance with management's general or specific authorization;
     (ii) transactions are recorded as necessary to permit preparation of
     financial statements in conformity with generally accepted accounting
     principles and to maintain accountability for assets; (iii) access to
     assets is permitted only in accordance with management's general or
     specific authorization; and (iv) the recorded accountability for assets is
     compared with existing assets at reasonable intervals and appropriate
     action is taken with respect to any differences.

         (r)  The Company is not and, after giving effect to the offering and
     sale of the Securities and the application of the proceeds thereof as
     described in the Final Memorandum, will not be an "investment company" as
     defined in the Investment Company Act of 1940.

         (s)  The Company and its subsidiaries have filed all federal, state,
     local and foreign tax returns which have been required to be filed and have
     paid all taxes shown thereon and all assessments received by them or any of
     them to the extent that such taxes have become due and are not being
     contested in good faith, except where the

<PAGE>

                                      -9-

     failure to file such returns or pay such taxes would not reasonably be
     expected to have a Material Adverse Effect on the Company and its
     subsidiaries, taken as a whole; and, except as disclosed in the Offering
     Memorandum, there is no material tax deficiency known to the Company which
     has been or might reasonably be expected to be asserted or threatened
     against the Company or any subsidiary.

         (t)  Except as set forth in the Offering Memorandum, no labor
     disturbance by the employees of the Company or any of its subsidiaries
     exists or, to the best knowledge of the Company, is threatened that would
     singly or in the aggregate with all such other labor disturbances
     reasonably be expected to have a Material Adverse Effect on the Company and
     its subsidiaries, taken as a whole.

         (u)  To the best knowledge of the Company, PricewaterhouseCoopers LLP,
     the accounting firm that certified certain financial statements of the
     Company and its subsidiaries, are independent public accountants as
     required by the Securities Act.

         (v)  The financial statements, and the related notes thereto, included
     or incorporated by reference in the Offering Memorandum present fairly the
     consolidated financial position of the Company and its consolidated
     subsidiaries as of the dates indicated and the results of their operations
     and changes in their consolidated cash flows for the periods specified;
     said financial statements have been prepared in conformity with generally
     accepted accounting principles (except that the footnotes to the interim
     financial statements do not comply with generally accepted accounting
     principles) applied on a consistent basis, and the supporting schedules
     included or incorporated by reference in the Offering Memorandum present
     fairly the information required to be stated therein; any pro forma
     financial information, and the related notes thereto, included or
     incorporated by reference in the Offering Memorandum has been prepared in
     accordance with the applicable requirements of the Exchange Act, and is
     based upon good faith estimates and assumptions believed by the Company to
     be reasonable.

         (w)  Each employee benefit plan, within the meaning of Section 3(3) of
     the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
                                                                       -----
     that is maintained, administered or contributed to by the Company or any of
     its affiliates for employees or former employees of the Company and its
     affiliates has been maintained in all material respects in compliance with
     its terms and the requirements of any applicable statutes, orders, rules
     and regulations, including but not limited to ERISA and the Internal
     Revenue Code of 1986, as amended ("Code").  No prohibited transaction,
                                        ----
     within the meaning of Section 406 of ERISA or Section 4975 of the Code, has
     occurred with respect to any such plan excluding transactions effected
     pursuant to a statutory or administrative exemption.  For each such plan
     which is subject to the funding rules of Section 412 of the Code or Section
     302 of ERISA, no "accumulated

<PAGE>

                                     -10-

     funding deficiency" as defined in Section 412 of the Code has been
     incurred, whether or not waived. The aggregate fair market value of the
     assets of all such plans (excluding for these purposes accrued but unpaid
     contributions) exceed the present value of all benefits accrued under all
     such plans determined using reasonable actuarial assumptions.

         (x)  The statements set forth in the Offering Memorandum under the
     captions "Supplemental Description of Notes," "Description of Notes" and
     "Tax Considerations," to the extent such statements purport to summarize or
     describe the terms of the Securities, factual matters of law or regulation
     or constitute summaries of documents described therein, are accurate and
     complete in all material respects.

         (y)  Immediately after any sale of Securities by the Company hereunder
     or under any applicable Terms Agreement, the aggregate amount of Securities
     which shall have been issued and sold by the Company hereunder or under any
     Terms Agreement or otherwise pursuant to an Offering Memorandum will not
     exceed the aggregate principal amount of Securities set forth on the front
     cover of the Base Memorandum.

         (z)  The Company has and will maintain property and casualty insurance
     in favor of the Company and its subsidiaries (as the case may be) with
     respect to each of the Company's properties, in an amount and on such terms
     as is reasonable and customary for businesses of the type conducted and
     proposed to be conducted by the Company and its subsidiaries; the Company
     has not received from any insurance company written notice of any material
     defects or deficiencies affecting the insurability of any of its
     properties.

         (aa) None of the transactions contemplated by this Agreement and any
     applicable Terms Agreement (including, without limitation, the use of the
     proceeds from the sale of the Securities) will violate or result in a
     violation of Section 7 of the Exchange Act, or any regulation promulgated
     thereunder, including, without limitation, Regulations T, U, and X of the
     Board of Governors of the Federal Reserve System.

         (bb) None of the Company, its subsidiaries or any of their respective
     "affiliates" (as defined in Rule 501(b) of Regulation D under the
     Securities Act) has directly, or through any agent, sold, offered for sale,
     solicited offers to buy or otherwise negotiated in respect of, any
     "security" (as defined in the Securities Act) which is or could be
     integrated with the sale of the Securities in a manner that would require
     the registration under the Securities Act of the offering of the Securities
     contemplated by the Offering Memorandum as of the date of any applicable
     Terms Agreement.

<PAGE>

                                     -11-

         (cc) None of the Company, its subsidiaries or any of their respective
     "affiliates" (as defined in Rule 501(b) of Regulation D under the
     Securities Act) or any person (other than the Agents, as to which the
     Company makes no representation) acting on its or their behalf has offered
     or sold the Securities by means of any general solicitation or general
     advertising within the meaning of Rule 502(c) of Regulation D under the
     Securities Act or, with respect to Securities sold outside the United
     States to non-U.S. persons (as defined in Rule 902 under the Securities
     Act), by means of any directed selling efforts within the meaning of Rule
     902 under the Securities Act and the Company, its subsidiaries, their
     respective affiliates and any person acting on its or their behalf have
     complied with and will use their reasonable best efforts to implement the
     "offering restrictions" within the meaning of such Rule 902.

         (dd) The Securities satisfy the requirements set forth in Rule
     144A(d)(3) under the Securities Act.

         (ee) Assuming that the representations and agreements of the Agents
     contained in this Agreement and any applicable Terms Agreement are true and
     correct and assuming compliance by the Agents with their agreements
     contained in this Agreement and such Terms Agreement, it is not necessary
     in connection with the offer, sale and delivery of the Securities to the
     Agents in the manner contemplated by this Agreement and such Terms
     Agreement to register the Securities under the Securities Act.

         (ff) No holder of securities of the Company or any subsidiary of the
     Company will be entitled to have such securities registered under the
     registration statements required to be filed by the Company pursuant to the
     Registration Rights Agreement, other than as expressly permitted thereby.

         2.   Solicitations as Agent; Purchases as Principal.

         (a)  Solicitations as Agent.  On the basis of the representations and
warranties herein contained, but subject to the terms and conditions herein set
forth, each of the Agents hereby severally and not jointly agrees, as agent of
the Company, to use its reasonable efforts to solicit offers to purchase the
Securities from the Company from time to time upon the terms and conditions set
forth in the applicable Offering Memorandum.  So long as this Agreement shall
remain in effect with respect to any Agent, the Company shall not, without the
consent of such Agent (which consent shall not be unreasonably withheld),
solicit or accept offers to purchase, or sell, in the United States Securities
or any other substantially similar debt securities with a maturity at the time
of original issuance of 9 months to 30 years except (i) pursuant to this
Agreement or any applicable Terms Agreement, (ii) pursuant to a private
placement not constituting a public offering under the Securities Act that does
not pro-

<PAGE>

                                     -12-

vide for a continuous private placement of medium-term debt securities, (iii) in
connection with a firm commitment underwriting pursuant to an underwriting
agreement that does not provide for a continuous public offering of medium-term
debt securities, or (iv) in connection with the continuous offering of asset-
backed medium-term debt securities rated "AA" (or an equivalent rating) or
higher by a nationally recognized statistical rating organization (as defined
for purposes of Rule 436(g) under the Securities Act) (a "Rating Organization").
                                                          -------------------
However, the Company reserves the right to sell, and may solicit and accept
offers to purchase, Securities directly on its own behalf to investors (other
than broker-dealers).

          The Company reserves the right, in its sole discretion, to instruct
the Agents to suspend at any time, for any period of time or permanently, the
solicitation of offers to purchase Securities.  Upon receipt of at least one
business day's prior notice from the Company, each Agent will suspend
solicitation of offers to purchase Securities from the Company until such time
as the Company has advised such Agent or Agents that such solicitation may be
resumed.  During the period of time that such solicitation is suspended, the
Company shall not be required to deliver any opinions, letters or certificates
in accordance with Sections 4(i), 4(j) and 4(k) hereof; provided that if the
Offering Memorandum relating to such solicitation is amended or supplemented
during the period of suspension (other than by an amendment or supplement
providing solely for a change in the interest rates, redemption provisions,
amortization schedules or maturities offered for the Securities or for a change
that the Agents deem to be immaterial), no Agent shall be required to resume
soliciting offers to purchase Securities until the Company has delivered such
opinions, letters and certificates as such Agent may reasonably request.

          The Company agrees to pay each Agent, as consideration for the sale of
each Security resulting from a solicitation made or an offer to purchase
received by such Agent, a commission in the form of a discount from the purchase
price of such Security in an amount equal to the following applicable percentage
of the principal amount of such Security sold:

----------------------------------------------------------------------------
                                          Commission percentage of
                                         aggregate principal amount
Range of Maturities                          of Securities sold
----------------------------------------------------------------------------
From 9 months to less than 1 year                  .125%
----------------------------------------------------------------------------
From 1 year to less than 18 months                 .150%
----------------------------------------------------------------------------
From 18 months to less than 2 years                .200%
----------------------------------------------------------------------------
From 2 years to less than 3 years                  .250%
----------------------------------------------------------------------------
From 3 years to less than 4 years                  .350%
----------------------------------------------------------------------------
From 4 years to less than 5 years                  .450%
----------------------------------------------------------------------------
From 5 years to less than 6 years                  .500%
----------------------------------------------------------------------------
From 6 years to less than 7 years                  .550%
----------------------------------------------------------------------------
From 7 years to less than 10 years                 .600%
----------------------------------------------------------------------------

<PAGE>

                                     -13-

----------------------------------------------------------------------------
                                           Commission percentage of
                                          aggregate principal amount
Range of Maturities                          of Securities sold
----------------------------------------------------------------------------
From 10 years to less than 15 years                .625%
----------------------------------------------------------------------------
From 15 years to less than 20 years                .700%
----------------------------------------------------------------------------
20 years to and including 30 years                 .750%
----------------------------------------------------------------------------

          The Agents are authorized to solicit offers to purchase Securities
only in the principal amount of $1,000 or any amount in excess thereof which is
an integral multiple of $1,000.  Each Agent shall communicate to the Company,
orally or in writing, each offer to purchase Securities received by such Agent
as agent that in its judgment should be considered by the Company.  The Company
shall have the sole right to accept offers to purchase the Securities and may
reject any such offer in whole or in part.  Each Agent shall have the right, in
its sole discretion, to reject any offer to purchase Securities, in whole or in
part, that it considers to be unacceptable and any such rejection shall not be
deemed a breach of its agreements herein contained.  The procedural details
relating to the issue and delivery of Securities sold by an Agent as agent and
the payment therefor are set forth in the Administrative Procedures (as
hereinafter defined).

          (b) Purchases as Principal.  Each sale of Securities to any Agent as
principal shall be made in accordance with the terms of this Agreement and
(unless such Agent shall otherwise agree) a Terms Agreement which will provide
for the sale of such Securities to, and the purchase thereof by, such Agent.  A
Terms Agreement will be substantially in the form of Exhibit A hereto but may
                                                     ---------
take the form of an exchange of any standard form of written telecommunication
between an Agent and the Company and may also specify certain provisions
relating to the reoffering of such Securities by such Agent.  The commitment of
any Agent to purchase Securities as principal, whether pursuant to a Terms
Agreement or otherwise, shall be deemed to have been made on the basis of the
representations and warranties of the Company contained herein and shall be
subject to the terms and conditions set forth herein and in the applicable Terms
Agreement.  Each agreement by an Agent to purchase Securities as principal
(pursuant to a Terms Agreement or otherwise) shall specify the principal amount
of Securities to be purchased by such Agent pursuant thereto, the price to be
paid to the Company for such Securities, the maturity date of such Securities,
the interest rate or interest rate basis, if any, applicable to such Securities,
any other terms of such Securities, the time and date and place of delivery of
and payment for such Securities (the time and date of any and each such delivery
and payment, the "Time of Delivery") and any provisions relating to rights of,
                  ----------------
and default by, initial purchasers acting together with such Agent in the
reoffering of Securities, and shall also specify any requirements for opinions
of counsel, accountants' letters and officers' certificates pursuant to Section
4 hereof.  Unless otherwise specified in a Terms Agreement, the procedural
details relating to the issue and delivery of Securities pur-

<PAGE>

                                      -14-

chased by an Agent as principal and the payment therefor shall be as set forth
in the Administrative Procedures (as hereinafter defined).

          (c)  Obligations Several.  The Company acknowledges that the
obligations of the Agents are several and not joint and, subject to the
provisions of this Section 2, each Agent shall have complete discretion as to
the manner in which it solicits purchasers for the Securities and as to the
identity thereof.

          (d)  Administrative Procedures.  The Agents and the Company agree to
perform their respective duties and obligations specifically provided to be
performed in the Medium-Term Notes Administrative Procedures (the
"Administrative Procedures") attached hereto as Exhibit C, as the same may be
 -------------------------                      ---------
amended from time to time.  The Administrative Procedures may be amended only by
written agreement of the Company and each of the Agents.

          3.   Commencement Date.  The Company's Medium-Term Note Program,
Series C, shall commence on the date of this Agreement (the "Commencement
                                                             ------------
Date").  After the Commencement Date, the Agents may commence the solicitation
----
of offers to purchase Securities and the Company may accept an offer by any
Agent to purchase Securities as principal.

          4.   Covenants of the Company.  The Company covenants and agrees with
each Agent:

          (a)  (i)  To make no amendment or supplement to the Offering
     Memorandum relating to an offering of Securities to be sold through or to
     any Agent pursuant to this Agreement or any Terms Agreement prior to the
     termination of such offering of Securities which shall be reasonably
     disapproved by such Agent after reasonable opportunity to comment thereon,
     unless in the opinion of counsel for the Company such amendment or
     supplement is required by law; provided, however, that the foregoing shall
     not apply to any of the Company's periodic filings with the Commission
     described in subsection (iii) below, copies of which filings the Company
     will cause to be delivered to the Agents promptly after their transmission
     to the Commission for filing; (ii) subject to the foregoing clause (i),
     promptly to prepare, with respect to any Securities to be sold through or
     to such Agent pursuant to this Agreement or any Terms Agreement, a
     Preliminary Memorandum and a Final Memorandum with respect to such
     Securities in a form previously approved by such Agent (which approval
     shall not be unreasonably withheld or delayed); and (iii) promptly to file
     all reports and any definitive proxy or information statements required to
     be filed by the Company with the Commission pursuant to Section 13(a),
     13(c), 14 or 15(d) of the Exchange Act during the distribution of the
     Securities or any Private Exchange Securities. The Company will promptly
     advise each Agent of (i) any amendment or supplement to any

<PAGE>

                                      -15-

     Offering Memorandum relating to the Securities; (ii) the issuance of any
     order preventing or suspending the use of any Offering Memorandum relating
     to the Securities or the initiation or threatening of any proceeding for
     that purpose, or of any request for any amendment or supplement to the
     Offering Memorandum or for additional information; and (iii) the receipt by
     the Company of any notification with respect to any suspension of the
     qualification of the Securities for offering or sale in any jurisdiction or
     the initiation or threatening of any proceeding for any such purpose. The
     Company agrees to use its reasonable best efforts to prevent the issuance
     of any such order preventing or suspending the use of any such Offering
     Memorandum or of any notification suspending any such qualification of the
     Securities and, if issued, to use promptly its reasonable best efforts to
     obtain withdrawal thereof as soon as possible. If an Offering Memorandum is
     amended or supplemented as a result of the filing under the Exchange Act of
     any document incorporated by reference therein, no Agent shall be obligated
     to solicit offers to purchase Securities so long as it is not reasonably
     satisfied with such document.

          (b)  To endeavor to qualify the Securities for offer and sale under
     the securities or Blue Sky laws of such jurisdictions as the Agents shall
     reasonably request and to continue such qualifications in effect so long as
     reasonably required in connection with the distribution of the Securities,
     provided that the Company shall not be required to qualify as a foreign
     corporation or to file a general consent to service of process in any
     jurisdiction.

          (c)  To furnish each Agent and counsel to the Agents, at the expense
     of the Company, a signed copy of each Offering Memorandum and each
     amendment or supplement thereto, in each case including documents
     incorporated by reference therein, and, during the period mentioned in
     paragraph (d) below, to furnish each Agent as many copies of the
     Preliminary Memorandum and the Final Memorandum (including all amendments
     and supplements thereto) and documents incorporated by reference therein as
     such Agent may reasonably request.

          (d)  If at any time prior to the completion of any distribution of the
     Securities or any Private Exchange Securities, any event shall occur as a
     result of which the Offering Memorandum relating thereto, as then amended
     or supplemented, would include an untrue statement of a material fact or
     omit to state any material fact necessary in order to make the statements
     therein, in the light of the circumstances under which they were made, not
     misleading, or if, in the opinion of the Agents or the Company, it is
     necessary at any time to amend or supplement the Offering Memorandum to
     comply with law, to immediately notify the Agents by telephone (with
     confirmation in writing) and request each Agent (i) in its capacity as
     agent of the Company, to suspend solicitation of offers to purchase
     Securities from the Company (and, if so notified,

<PAGE>

                                      -16-

     such Agent shall immediately cease such solicitations and immediately cease
     using the Offering Memorandum as soon as practicable, but in any event not
     later than one business day later); and (ii) to cease sales of any
     Securities such Agent may then own as principal. If, as a result of the
     occurrence of any event described in the first sentence of this Section
     4(d), the Company shall decide to amend or supplement the Offering
     Memorandum, as then amended or supplemented, it shall so advise each Agent
     promptly by telephone (with confirmation in writing) and, at its expense,
     shall prepare an amendment or supplement to the Offering Memorandum, as
     then amended or supplemented, that will correct such statement or omission
     or effect such compliance and will supply such amended or supplemented
     Offering Memorandum to the Agents in such quantities as they may reasonably
     request. If any such amendment or supplement and any documents, opinions,
     letters and certificates furnished to the Agents pursuant to Sections 4(e),
     4(i), 4(j) and 4(k) hereof in connection with the preparation of such
     amendment or supplement are reasonably satisfactory in all respects to the
     Agents, the Agents will resume the solicitation of offers to purchase
     Securities hereunder. Notwithstanding any other provision of this Section
     4(d), until the distribution of any Securities any Agent may own as
     principal has been completed or in the event such Agent, in the reasonable
     opinion of its counsel, is otherwise required to deliver an Offering
     Memorandum in respect of a transaction in the Securities, if any event
     described in the first sentence of this Section 4(d) occurs, the Company
     will (i) at its own expense, promptly prepare an amendment or supplement to
     the Offering Memorandum, reasonably satisfactory in all respects to such
     Agent, that will correct such statement or omission or effect such
     compliance, (ii) supply such amended or supplemented Offering Memorandum to
     such Agent in such quantities as such Agent may reasonably request and
     (iii) furnish to such Agent pursuant to Sections 4(e), 4(i), 4(j) and 4(k)
     hereof such documents, certificates, opinions and letters as it may request
     in connection with the preparation of such amendment or supplement.

          (e)  To furnish to the Agents during the term of this Agreement such
     relevant documents and certificates of officers of the Company relating to
     the business, operations and affairs of the Company, the Base Memorandum,
     any Preliminary Memorandum, any Final Memorandum, any amendments or
     supplements thereto, the Indenture, the Securities, the Exchange
     Securities, the Private Exchange Securities, this Agreement, the
     Administrative Procedures, any applicable Terms Agreement and the
     performance by the Company of its obligations hereunder or thereunder as
     the Agents may from time to time reasonably request and shall notify the
     Agents promptly in writing of any downgrading, or on its receipt of any
     notice of (i) any intended or potential downgrading or (ii) any review or
     possible change that indicates a downgrading or possible downgrading in the
     rating accorded any securities of, or guaranteed by, the Company by any
     Rating Organization.

<PAGE>

                                      -17-

          (f)  That each time the Company sells Securities to any Agent as
     principal pursuant to a Terms Agreement or other agreement and such Terms
     Agreement or other agreement specifies the execution and delivery of a
     Registration Rights Agreement under this Section 4(f) as a condition to the
     purchase of Securities pursuant to such Terms Agreement or other agreement,
     the Company shall execute and deliver a Registration Rights Agreement of
     the same tenor as the Registration Rights Agreement referred to in Section
     6(g) hereof, but modified to relate to such Securities.

          (g)  To furnish to the Agents, during the term of this Agreement, (but
     after five years from the date of this Agreement, upon request) copies of
     all reports or other communications (financial or other) furnished to
     holders of Securities and copies of any reports and financial statements
     furnished to or filed with the Commission or any national securities
     exchange on which any class of securities of the Company is listed.

          (h)  From the date of any applicable Terms Agreement or other
     agreement by any Agent to purchase Securities as principal and continuing
     to and including the business day following the related Time of Delivery,
     not to offer, sell, contract to sell or otherwise dispose of in the United
     States any debt securities of or guaranteed by the Company which are
     substantially similar to the Securities, without the prior written consent
     of such Agent (which consent shall not be unreasonably withheld), except
     (i) pursuant to this Agreement and any Terms Agreement, (ii) pursuant to a
     private placement not constituting a public offering under the Securities
     Act that does not provide for a continuous private placement of medium-term
     debt securities, (iii) in connection with a firm commitment underwriting
     pursuant to an underwriting agreement that does not provide for a
     continuous offering of medium-term debt securities, or (iv) in connection
     with the continuous public offering of asset-backed medium-term debt
     securities rated "AA" (or an equivalent rating) or higher by a Rating
     Organization.

          (i)  That each time the Company updates an Offering Memorandum,
     whether through amendment, supplement or otherwise (other than for the
     purpose of reflecting the terms of any applicable Terms Agreement or for a
     change the Agents deem to be immaterial), or creates a new Base Memorandum
     or Preliminary Memorandum, and each time the Company sells Securities to
     any Agent as principal pursuant to a Terms Agreement or other agreement and
     such Terms Agreement or other agreement specifies the delivery of opinions
     under this Section 4(i) as a condition to the purchase of Securities
     pursuant to such Terms Agreement or other agreement, the Company shall
     furnish or cause to be furnished forthwith to such Agent written opinions
     of Dechert, or other counsel for the Company reasonably satisfactory to
     such Agent, and John R. Welty, or any successor General Counsel of the
     Company, each dated the date of such update to an Offering Memorandum or
     creation of a new Base

<PAGE>

                                      -18-

     Memorandum or Preliminary Memorandum, or the Time of Delivery relating to
     such sale, as the case may be, in forms reasonably satisfactory to such
     Agent, of the same tenors as the opinions referred to in Section 6(b) and
     6(c) hereof, respectively, but modified to relate thereto, or, in lieu of
     either such opinion, counsel last furnishing such an opinion may furnish to
     such Agent a letter to the effect that such Agent may rely on the opinion
     of such counsel which was last furnished to such Agent to the same extent
     as though it were dated the date of such letter (except that the statements
     in such last opinion shall be deemed to relate to such updated Offering
     Memorandum or new Base Memorandum or Preliminary Memorandum or such Time of
     Delivery).

          (j)  That each time the Company updates an Offering Memorandum to
     include or incorporate amended or supplemented financial information and
     each time the Company sells Securities to any Agent as principal pursuant
     to a Terms Agreement or other agreement, the Company shall cause the
     independent certified public accountants who have certified the financial
     statements of the Company and its subsidiaries included or incorporated by
     reference in such Offering Memorandum forthwith to furnish such Agent a
     letter, dated the date of such Offering Memorandum or the date of such
     Terms Agreement or other agreement (and, if such Terms Agreement or other
     agreement specifies the delivery of a letter under this Section 4(j) as a
     condition to the purchase of Securities pursuant to such Terms Agreement or
     other agreement, the Time of Delivery relating to such sale), as the case
     may be, in form reasonably satisfactory to such Agent, of the same tenor as
     the letter referred to in Section 6(e) hereof but modified to relate to
     such Offering Memorandum, provided, however, that, with respect to any
     financial information or other matter, such letter may reconfirm as true
     and correct at such date, as though made at and as of such date, rather
     than repeat, statements with respect to such financial information or other
     matter made in the letter referred to in Section 6(e) hereof which was last
     furnished to such Agent.

          (k)  That each time the Company updates an Offering Memorandum,
     whether through amendment, supplement or otherwise (other than for the
     purpose of reflecting the terms of any applicable Terms Agreement for a
     change the Agents deem to be immaterial), or creates a new Base Memorandum
     or Preliminary Memorandum and each time the Company sells Securities to any
     Agent as principal and the applicable Terms Agreement or other agreement
     specifies the delivery of a certificate under this Section 4(k) as a
     condition to the purchase of Securities pursuant to such Terms Agreement or
     other agreement, the Company shall furnish or cause to be furnished
     forthwith to such Agent a certificate signed by an executive officer of the
     Company, dated the date of such updates to an Offering Memorandum or
     creation of a new Base Memorandum or Preliminary Memorandum or the Time of
     Delivery relating to such sale, as the case may be, in form reasonably
     satisfactory to such Agent, of the same

<PAGE>

                                      -19-

     tenor as the certificates referred to in Section 6(f) but modified to
     relate thereto or to the effect that the statements contained in the
     certificate referred to in Section 6(f) hereof which was last furnished to
     such Agent are true and correct at such date as though made at and as of
     such date (except that such statements shall be deemed to relate to such
     updated Offering Memorandum or new Base Memorandum or Preliminary
     Memorandum or such Time of Delivery).

          (l)  To use the net proceeds received by the Company from the sale of
     the Securities pursuant to this Agreement and any Terms Agreement in the
     manner specified in the Offering Memorandum relating thereto.

          (m)  To use its reasonable best efforts to permit the Securities to be
     eligible for clearance and settlement through The Depositary Trust Company.

          (n)  To furnish to the holders of the Securities as soon as
     practicable after the end of each fiscal year an annual report (including a
     balance sheet and statements of income, stockholders' equity and cash flows
     of the Company and its consolidated subsidiaries certified by independent
     public accountants) and, as soon as practicable after the end of each of
     the first three quarters of each fiscal year (beginning with the fiscal
     quarter ending after the date of the applicable Offering Memorandum),
     consolidated summary financial information of the Company and its
     subsidiaries of such quarter in reasonable detail (which requirement shall
     be deemed to be satisfied upon the filing with the Commission by the
     Company of its Annual Reports on Form 10-K and Quarterly Reports on
     Form 10-Q).

          (o)  During the period of two years after the closing date of each
     issuance and sale of Securities, not to, and to use its reasonable best
     efforts to cause its "affiliates" (as defined in Rule 144 under the
     Securities Act) not to, resell any of such Securities which constitute
     "restricted securities" under Rule 144 that have been reacquired by any of
     them.

          (p)  While any Securities remain outstanding and are "restricted
     securities" within the meaning of Rule 144(a)(3) under the Securities Act,
     during any period in which it is not subject to Section 13 or 15(d) under
     the Exchange Act, make available, at its expense, to the Agents and any
     holder of Securities in connection with any sale thereof and any
     prospective purchaser of Securities, in each case upon request, the
     information specified in, and meeting the requirements of, Rule 144A(d)(4)
     under the Securities Act (or any successor thereto).

<PAGE>

                                      -20-

          (q)  Not to take any action prohibited by Regulation M under the
     Exchange Act in connection with the distribution of the Securities under
     this Agreement or any Terms Agreement.

          (r)  Not to solicit any offer to buy or offer or sell the Securities
     by means of any form of general solicitation or general advertising within
     the meaning of Rule 502(c) of Regulation D under the Securities Act.

          (s)  With respect to Securities sold outside the United States to non-
     U.S. persons (as defined in Rule 902 under the Securities Act), not to
     register any transfer of such Securities not made in accordance with the
     provisions of Regulation S under the Securities Act and not to, except in
     accordance with the provisions of Regulation S under the Securities Act,
     issue any such Securities in definitive form.

          (t)  Not to sell, offer for sale or solicit offers to buy or otherwise
     negotiate in respect of any "security" (as defined in the Securities Act)
     which could be integrated with the sale of the Securities in a manner which
     would require the registration under the Securities Act of the Securities.

          (u)  To comply in all material respects with the terms and conditions
     of the Registration Rights Agreement.

          5.   Costs and Expenses.  The Company covenants and agrees with each
Agent that the Company will, whether or not any sale of Securities is
consummated, pay all costs and expenses incident to the performance of its
obligations hereunder and under any applicable Terms Agreement, including,
without limiting the generality of the foregoing, all costs and expenses:  (i)
incident to the preparation, issuance, execution, authentication and delivery of
the Securities, including any reasonable expenses of the Trustee, (ii) incident
to the preparation, printing and distribution of each Preliminary Memorandum and
each Final Memorandum (including in each case all exhibits, amendments and
supplements thereto), (iii) incurred in connection with the registration or
qualification and determination of eligibility for investment of the Securities
under the laws of such jurisdictions as the Agents (or in connection with any
Terms Agreement, the applicable Agent) may reasonably request pursuant to
Section 4(b) (including reasonable related fees of counsel for the Agents (or
such Agent) and their reasonable related disbursements), (iv) in connection with
the printing (including word processing and duplication costs) and delivery of
this Agreement, any Terms Agreement, the Registration Rights Agreement, the
Indenture, any Blue Sky Memoranda and any Legal Investment Survey and the
furnishing to the Agents and dealers of copies of each Preliminary Memorandum
and each Final Memorandum, including mailing and shipping, as herein provided,
(v) payable to rating agencies in connection with the rating of the Securities,
(vi) the reasonable fees and disbursements of one firm of attorneys
(specifically Cahill

<PAGE>

                                      -21-

Gordon & Reindel) providing legal counsel to the Agents incurred in connection
with the offering and sale of the Securities, including any opinions to be
rendered by such counsel hereunder, and (vii) any advertising and out-of-pocket
expenses reasonably incurred by the Agents in connection with the performance of
their obligations hereunder, including in connection with a "road show"
presentation to potential investors.

          6.   Conditions.  The obligation of any Agent, as agent of the
Company, at any time ("Solicitation Time") to solicit offers to purchase the
                       -----------------
Securities, the obligation of any Agent to purchase Securities as principal
pursuant to any Terms Agreement or otherwise, and the obligation of any other
purchaser to purchase Securities shall in each case be subject to (1) the
condition that all representations and warranties of the Company herein and all
statements of officers of the Company made in any certificate furnished pursuant
to the provisions hereof are true and correct (i) in the case of an Agent's
obligation to solicit offers to purchase Securities, at and as of such
Solicitation Time and (ii) in the case of any Agent's or any other purchaser's
obligation to purchase Securities, at and as of the time the Company accepts the
offer to purchase such Securities and, as the case may be, at and as of the
related Time of Delivery or time of purchase; (2) the condition that at or prior
to such Solicitation Time, time of acceptance, Time of Delivery or time of
purchase, as the case may be, the Company shall have complied with all its
agreements and all conditions on its part to be performed or satisfied hereunder
prior to such relevant time; and (3) the following additional conditions when
and as specified:

          (a)  Prior to such Solicitation Time or corresponding Time of Delivery
     or time of purchase, as the case may be:

               (i)   and subsequent to the date of this Agreement, there shall
          not have occurred any downgrading, nor shall any notice have been
          given of (A) any intended or potential downgrading or (B) any review
          or possible change that indicates a downgrading or possible
          downgrading in the rating accorded any securities of or guaranteed by
          the Company by any Rating Organization;

               (ii)  and subsequent to the date of this Agreement, there shall
          not have been any material adverse change in the financial condition
          or results of operations of the Company and its subsidiaries, taken as
          a whole, otherwise than as set forth or contemplated in the Final
          Memorandum, the effect of which in the judgment of the applicable
          Agent makes it impracticable or inadvisable to market the Securities
          on the terms and in the manner contemplated in the Final Memorandum;
          and

               (iii) and subsequent to the date of this Agreement, there shall
          not have occurred (a) any suspension or limitation of trading in
          securities generally on

<PAGE>

                                      -22-

          the New York Stock Exchange, or any setting of minimum prices for
          trading on such exchange, or any suspension of trading of any
          securities of the Company on any exchange or in the over-the-counter
          market; (b) any banking moratorium declared by U.S. Federal or New
          York authorities; or (c) any outbreak or escalation of major
          hostilities in which the United States is involved, any declaration of
          war by Congress or any other substantial national or international
          calamity or emergency if, in the judgment of the applicable Agent, the
          effect of any such outbreak, escalation, declaration, calamity or
          emergency makes it impractical or inadvisable to proceed with
          completion of the sale of and payment for the Securities.

          (b)  In the case of a purchase of Securities by an Agent as principal
     pursuant to a Terms Agreement or otherwise, if called for by the applicable
     Terms Agreement or other agreement, at the corresponding Time of Delivery,
     Dechert, counsel for the Company, shall have furnished to the relevant
     Agent or Agents their written opinion, dated the Time of Delivery, in form
     and substance satisfactory to such Agent or Agents, to the effect that:

               (i)   the Company has been duly incorporated and is validly
          existing as a corporation in good standing under the laws of its
          jurisdiction of incorporation, with corporate power and authority to
          own its properties and conduct its business as described in the
          Offering Memorandum;

               (ii)  the Indenture has been duly authorized, executed and
          delivered by the Company, has been qualified under the Trust Indenture
          Act and constitutes a valid and legally binding obligation of the
          Company enforceable against the Company in accordance with its terms,
          subject, as to enforcement, to bankruptcy, insolvency, fraudulent
          transfer, reorganization, moratorium and similar laws of general
          applicability relating to or affecting creditors' rights, to public
          policy considerations and to general equity principles; the Indenture
          complies as to form in all material respects with the requirements of
          the Trust Indenture Act; the Securities, the Exchange Securities and
          the Private Exchange Securities have been duly authorized by the
          Company and, when the terms thereof have been established and when
          they have been executed, authenticated, issued and delivered in the
          manner provided in the Indenture and, in the case of the Securities,
          sold through an Agent as agent or to any Agent as principal pursuant
          to a Terms Agreement, will constitute, valid and legally binding
          obligations of the Company enforceable against the Company in
          accordance with their terms, subject, as to enforcement, to
          bankruptcy, insolvency, fraudulent transfer, reorganization,
          moratorium and similar laws of general applicability relating to or
          affecting creditors' rights, and to general equity principles (it
          being

<PAGE>

                                      -23-

          understood that such counsel may assume that (a) at the time of such
          issuance, sale and delivery of each Security, the authorization of the
          Securities will not have been modified or rescinded and there will not
          have occurred any change in law affecting the validity, legally
          binding character or enforceability of such Security, and (b) neither
          the issuance, sale and delivery of any Security, nor any of the terms
          of such Security, nor compliance by the Company with such terms, will
          violate any applicable law, any agreement or instrument then binding
          upon the Company or any restriction imposed by any court or
          governmental body having jurisdiction over the Company, in each case
          to the extent not in effect on the date of such opinion);

               (iii) no consent, approval, authorization or order, license,
          registration or qualification of or with any governmental agency or
          body or any court is required for the consummation of the transactions
          contemplated by this Agreement and any applicable Terms Agreement, the
          Registration Rights Agreement or the Indenture in connection with the
          issuance or sale of the Securities by the Company, except such as may
          be required under state securities or Blue Sky laws (it being
          understood that such counsel may assume with respect to each
          particular Security that the inclusion of any alternative or
          additional terms in such Security that are not currently specified in
          the form of Securities approved by the actions of the authorized
          officers would not require the Company to obtain any regulatory
          consent, authorization or approval or make any regulatory filing in
          order for the Company to issue sell and deliver such Security);

               (iv)  the execution, delivery and performance of the Indenture,
          this Agreement and any applicable Terms Agreement, the Registration
          Rights Agreement and the issuance and sale of the Securities and
          compliance with the terms and provisions of the Indenture, this
          Agreement and any applicable Terms Agreement, the Registration Rights
          Agreement and the terms of the Securities described in the Offering
          Memorandum will not conflict with or result in a breach or violation
          of any of the terms and provisions of, or constitute a default under,
          any material statute, rule, regulation or order of any governmental
          agency or body or any court having jurisdiction over the Company, any
          subsidiary incorporated in the United States of America or any of
          their respective properties known to such counsel, or the charter or
          by-laws of the Company or any "significant subsidiary" (as defined in
          Regulation S-X under the Securities Act) of the Company; and the
          Company has full power and authority to authorize, issue and, in the
          case of the Securities, sell, the Securities, the Exchange Securities
          and the Private Exchange Securities as contemplated by this Agreement
          and any applicable Terms Agreement and the Registration Rights

<PAGE>

                                      -24-

          Agreement (it being understood that such counsel may assume with
          respect to each particular Security that the inclusion of any
          alternative or additional terms in such Security that are not
          currently specified in the form of Securities approved by the actions
          of the authorized officers will not cause the issuance, sale or
          delivery of such Security, the terms of such Security, or the
          compliance by the Company with such terms, to violate any of the
          statutes, rules, regulations or orders, or to result in a default
          under or a breach of any of the agreements, specified in this
          paragraph);

               (v)    such counsel have no reason to believe the Offering
          Memorandum relating to the Securities, as of its date, or any
          amendment thereto, as of its date, contained any untrue statement of a
          material fact or omitted to state any material fact necessary in order
          to make the statements therein, in the light of the circumstances
          under which they were made, not misleading; it being understood that
          such counsel need express no opinion as to the financial statements or
          other financial and statistical data contained in the Offering
          Memorandum;

               (vi)   this Agreement has been duly authorized, executed and
          delivered by the Company; the Registration Rights Agreement has been
          duly authorized, executed and delivered by the Company and constitutes
          a valid and legally binding obligation of the Company, enforceable
          against the Company in accordance with its terms, except that (i) the
          enforceability thereof may be subject to bankruptcy, insolvency,
          fraudulent transfer, reorganization, moratorium and similar laws of
          general applicability relating to or affecting creditors' rights, to
          public policy considerations and to general equity principles, (ii)
          any rights to indemnity and contribution thereunder may be limited by
          federal and state securities laws and public policy considerations and
          (iii) the enforceability of provisions imposing liquidated damages,
          penalties or an increase in interest rate upon the occurrence of
          certain events may be limited in certain circumstances;

               (vii)  each document filed pursuant to the Exchange Act (other
          than the financial statements, schedules and other financial and
          statistical data included therein, as to which such counsel need
          express no opinion) and incorporated or deemed to be incorporated by
          reference in the Offering Memorandum complied as to form in all
          material respects with the applicable requirements of the Exchange Act
          when so filed;

               (viii) the Securities satisfy the requirements set forth in Rule
          144A(d)(3) under the Securities Act; and

<PAGE>

                                      -25-

               (ix)   in reliance upon the representations and warranties made
          by the Company and the Agents in this Agreement and any applicable
          Terms Agreement, the offer and sale of the Securities by the Company
          and the initial resale of such Securities by the Agents in accordance
          with the provisions of this Agreement and any applicable Terms
          Agreement are exempt from the registration requirements of the
          Securities Act, assuming (i) that the purchasers who buy the
          Securities in the initial resales are qualified institutional buyers
          (as defined in Rule 144A under the Securities Act) or non-U.S. Persons
          (as defined in Rule 902 under the Securities Act) and (ii) the
          accuracy of the Agents' representations and agreements and those of
          the Company contained in this Agreement and the Terms Agreement
          regarding the absence of a general solicitation in connection with the
          sale of the Securities to the Agents and the initial resales thereof
          (it being understood that such counsel need express no opinion as to
          any subsequent resale of any Securities).

          Such counsel in rendering such opinion may rely as to certain matters
     of fact on certificates of officers of the Company and of public officials;
     provided, however, that such certificates shall have been delivered to the
     Agents on or prior to the Time of Delivery.

          (c)  In the case of a purchase of Securities by an Agent as principal
     pursuant to a Terms Agreement or otherwise, if called for by the applicable
     Terms Agreement or other agreement, at the corresponding Time of Delivery,
     John R. Welty, Vice President, General Counsel and Secretary of the
     Company, shall have furnished to the relevant Agent or Agents his written
     opinion, dated the Time of Delivery, in form and substance satisfactory to
     such Agent or Agents, to the effect that:

               (i)    no consent, approval or authorization of any third party
          is required for the consummation of the transactions contemplated by
          this Agreement and any applicable Terms Agreement, the Registration
          Rights Agreement or the Indenture in connection with the issuance or
          sale of the Securities by the Company, except such as have been
          obtained and made and are in full force and effect and such as may be
          required under state securities or Blue Sky laws;

               (ii)   the execution, delivery and performance of the Indenture,
          the Registration Rights Agreement and the applicable Terms Agreement
          (including the provisions of this Agreement) and the issuance and, in
          the case of the Securities, the sale of the Securities, the Exchange
          Securities and the Private Exchange Securities and compliance with the
          terms and provisions thereof will not result in a breach or violation
          of any of the terms and provisions of, or constitute a default under
          (including, without limitation, any event or condition

<PAGE>

                                      -26-

          which, with notice or lapse of time, or both, would constitute a
          default under), any material agreement or instrument known to such
          counsel to which the Company or any subsidiary is a party or by which
          the Company or any subsidiary is bound or to which any of the
          properties of the Company or any subsidiary is subject;

               (iii)  the Company has been duly incorporated and is validly
          existing as a corporation in good standing under the laws of its
          jurisdiction of incorporation, with corporate power and authority to
          own its properties and conduct its business as described in the
          Offering Memorandum;

               (iv)   the Company has been duly qualified as a foreign
          corporation for the transaction of business and is in good standing
          under the laws of each other jurisdiction in which it owns or leases
          properties, or conducts any business, so as to require such
          qualification, other than where the failure to be so qualified or in
          good standing would not have a Material Adverse Effect on the Company
          and its subsidiaries, taken as a whole;

               (v)    each of the Company's subsidiaries has been duly
          incorporated and is validly existing as a corporation under the laws
          of its jurisdiction of incorporation with corporate power and
          authority to own its properties and conduct its business as described
          in the Offering Memorandum and has been duly qualified as a foreign
          corporation for the transaction of business and is in good standing
          under the laws of each other jurisdiction in which it owns or leases
          properties, or conducts any business, so as to require such
          qualification, other than where the failure to be so qualified and in
          good standing would not have a Material Adverse Effect on the Company
          and its subsidiaries taken as a whole; and all of the outstanding
          shares of capital stock of each subsidiary have been duly and validly
          authorized and issued, are fully paid and non-assessable, and (except,
          in the case of foreign subsidiaries, for directors' qualifying shares)
          are owned directly or indirectly by the Company, free and clear of all
          liens, encumbrances, equities or claims;

               (vi)   this Agreement has been duly authorized, executed and
          delivered by the Company; the Registration Rights Agreement has been
          duly authorized, executed and delivered by the Company and constitutes
          a valid and legally binding obligation of the Company, enforceable
          against the Company in accordance with its terms, except that (i) the
          enforceability thereof may be subject to bankruptcy, insolvency,
          fraudulent transfer, reorganization, moratorium and similar laws of
          general applicability relating to or affecting creditors' rights, to
          public policy considerations and to general equity principles, (ii)
          any

<PAGE>

                                      -27-

          rights to indemnity and contribution thereunder may be limited by
          federal and state securities laws and public policy considerations and
          (iii) the enforceability of provisions imposing liquidated damages,
          penalties or an increase in interest rate upon the occurrence of
          certain events may be limited in certain circumstances;

               (vii)  the Securities to be issued and sold by the Company
          hereunder have been duly authorized, and when delivered to and paid
          for the by the Agents in accordance with the terms of this Agreement,
          will be validly issued, fully paid and non-assessable and the issuance
          of the Securities is not subject to any preemptive or similar rights;
          the Exchange Securities and the Private Exchange Securities to be
          issued by the Company under the Registration Rights Agreement have
          been duly authorized;

               (viii) except as set forth in the Offering Memorandum, there are
          no material pending legal proceedings known to such counsel to which
          the Company or any subsidiary is a party or of which the property of
          the Company or any subsidiary is the subject, and to the best
          knowledge of such counsel no such proceeding is contemplated;

               (ix)   neither the Company nor any of its subsidiaries is, or
          with the giving of notice or lapse of time or both would be, in
          violation of or in default under, its Certificate of Incorporation or
          By-Laws or any indenture, mortgage, deed of trust, loan agreement or
          other agreement or instrument known to such counsel to which the
          Company or any of its subsidiaries is a party or by which it or any of
          them or any of their respective properties is bound, except for
          violations and defaults which would not have a Material Adverse Effect
          on the Company or any of its subsidiaries; and the performance by the
          Company of its obligations under this Agreement and any applicable
          Terms Agreement, the Indenture and the Registration Rights Agreement
          and the consummation of the transactions contemplated herein and
          therein will not conflict with or result in a breach of any of the
          terms or provisions of, or constitute a default under, any indenture,
          mortgage, deed of trust, loan agreement or other agreement or
          instrument known to such counsel to which the Company or any of its
          subsidiaries is a party or by which the Company or any of its
          subsidiaries is bound or to which any of the property or assets of the
          Company or any of its subsidiaries is subject, nor will any such
          action result in any violation of the provisions of the Certificate of
          Incorporation or the By-Laws of the Company or any applicable law or
          statute or any order, rule or regulation of any court or governmental
          agency or body having jurisdiction over the Company, its subsidiaries
          or any of their respective properties;

<PAGE>

                                      -28-

               (x)    each of the Company and its subsidiaries owns, possesses
          or has obtained all licenses, permits, certificates, consents, orders,
          approvals and other authorizations from, and has made all declarations
          and filings with, all federal, state, local and other governmental
          authorities (including foreign regulatory agencies), all self-
          regulatory organizations and all courts and other tribunals, domestic
          or foreign, necessary to own or lease, as the case may be, and to
          operate its properties and to carry on its business as conducted as of
          the date hereof, except where the failure to do so, individually or in
          the aggregate, would not have a Material Adverse Effect on the Company
          and its subsidiaries, taken as a whole, and neither the Company nor
          any such subsidiary has received any actual notice of any proceeding
          relating to revocation or modification of any such license, permit,
          certificate, consent, order, approval or other authorization, except
          as described in the Final Memorandum; and each of the Company and its
          subsidiaries is in compliance with all laws and regulations relating
          to the conduct of its business as conducted as of the date of the
          Offering Memorandum, except where the failure to do so, individually
          or in the aggregate, would not have a Material Adverse Effect on the
          Company and its subsidiaries, taken as a whole;

               (xi)   to the best of such counsel's knowledge, each of the
          Company and its subsidiaries is in compliance with all applicable
          Environmental Laws, except, where noncompliance, individually or in
          the aggregate, would not reasonably be expected to have a Material
          Adverse Effect on the Company and its subsidiaries, taken as a whole;
          there are no legal or governmental proceedings pending or, to the best
          knowledge of such counsel, threatened against or affecting the Company
          or any of its subsidiaries under any Environmental Law which,
          individually or in the aggregate, could reasonably be expected to have
          a Material Adverse Effect on the Company and its subsidiaries, taken
          as a whole;

               (xii)  the Company is not, and after giving effect to the
          offering and sale of the Shares, will not be an "investment company"
          or entity "controlled" by an "investment company", as such terms are
          defined in the Investment Company Act; and

               (xiii) such counsel has no reason to believe that the Offering
          Memorandum relating to the Securities, as of its date, or any
          amendment thereto, as of its date, contained any untrue statement of a
          material fact or omitted or omits to state any material fact necessary
          in order to make the statements therein, in the light of the
          circumstances under which they were made, not misleading; it being
          understood that such counsel need express no opinion as

<PAGE>

                                      -29-

          to the financial statements or other financial or statistical data
          contained in the Offering Memorandum.

          Such counsel in rendering such opinion may rely as to certain matters
     of fact on certificates of officers of the Company and of public officials;
     provided, however, that such certificates shall have been delivered to the
     Agents on or prior to the Time of Delivery.

          (d) In the case of a purchase of Securities by an Agent as principal
     pursuant to a Terms Agreement or otherwise, if called for by the applicable
     Terms Agreement or other agreement, at the corresponding Time of Delivery,
     Cahill Gordon & Reindel, counsel to the Agents, shall have furnished to the
     relevant Agent or Agents such opinion or opinions, dated the Time of
     Delivery, with respect to the validity of the Indenture, the Securities,
     the Registration Rights Agreement, the Offering Memorandum as amended or
     supplemented and other related matters as such Agent or Agents may
     reasonably request, and in each case such counsel shall have received such
     papers and information as they may reasonably request to enable them to
     pass upon such matters.

          (e) In the case of a purchase of Securities by an Agent as principal
     pursuant to a Terms Agreement or otherwise, on the date of such Terms
     Agreement or other agreement and, if called for by the applicable Terms
     Agreement or other agreement, and at the corresponding Time of Delivery,
     the Company's independent certified public accountants who have certified
     the financial statements of the Company and its subsidiaries included or
     incorporated by reference in the Offering Memorandum, as then amended or
     supplemented, shall have furnished to the relevant Agent or Agents a
     letter, dated the Time of Delivery, in form and substance satisfactory to
     such Agent or Agents, containing statements and information of the type
     ordinarily included in accountants' "comfort letters" to underwriters with
     respect to the financial statements and certain financial information
     relating to the Company contained in or incorporated by reference in the
     Offering Memorandum, as then amended or supplemented.

          (f) In the case of a purchase of Securities by an Agent as principal
     pursuant to a Terms Agreement or otherwise, if called for by the applicable
     Terms Agreement or other agreement, at the corresponding Time of Delivery,
     the relevant Agent or Agents shall have received a certificate or
     certificates signed by two executive officers of the Company, dated the
     Time of Delivery, in which each such officer, to the best of his knowledge
     after reasonable investigation, shall state that (1) the representations
     and warranties of the Company contained herein are true and correct in all
     material respects on and as of the Time of Delivery as if made on and as of
     such date, (2) the Company has complied in all material respects with all
     agreements and satisfied in all material respects all conditions on its
     part to be performed or satisfied hereunder or

<PAGE>

                                      -30-

     under the applicable Terms Agreement or other agreement at or prior to the
     Time of Delivery, and (3) subsequent to the date of the most recent
     financial statements in the Offering Memorandum, there has not occurred any
     material adverse change in the financial condition or results of operations
     of the Company and its subsidiaries, taken as a whole, except as set forth
     in or contemplated by the Offering Memorandum or as described in such
     certificate and reasonably acceptable to such Agent or Agents.

          (g) In the case of a purchase of Securities by an Agent as principal
     pursuant to a Terms Agreement or otherwise, if called for by the applicable
     Terms Agreement or other agreement, at the corresponding Time of Delivery,
     the Company shall have executed and delivered in favor of the relevant
     Agent or Agents a Registration Rights Agreement, dated the Time of
     Delivery, in form and substance satisfactory to such Agent or Agents.

          (h) At each Time of Delivery, the Company shall have furnished to the
     relevant Agent or Agents such further relevant certificates, information
     and documents as such Agent or Agents may reasonably request.

          7.  Indemnification and Contribution.

          (a) The Company agrees to indemnify and hold harmless each Agent and
each person, if any, who controls such Agent within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages and liabilities (including without
limitation the legal fees and other expenses incurred in connection with any
suit, action or proceeding or any claim asserted) arising out of any untrue
statement or alleged untrue statement of a material fact contained in any
Offering Memorandum (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) or arising out of any omission
or alleged omission to state therein a material fact necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
information furnished to the Company in writing by such Agent expressly for use
therein; provided, however, that the foregoing indemnity with respect to any
untrue statement in or omission from any Preliminary Memorandum relating to an
offering of Securities shall not inure to the benefit of any Agent (or to the
benefit of any person controlling such Agent) from whom the person asserting any
such losses, claims, damages or liabilities purchased the Securities if (i) the
Company has complied with Section 4(a), (c) and (d) of this Agreement, and (ii)
a copy of the Final Memorandum had not been sent or given to such person at or
prior to the written confirmation of the sale of such Securities to such person
and the Final Memorandum would have cured the defect giving rise to such loss,
claim, damage or liability.  For purposes of the proviso to the immediately
preceding sentence, the term "Final Memoran-

<PAGE>

                                      -31-

dum" shall not be deemed to include the documents incorporated therein by
reference, and no Agent shall be obligated to send or give any supplement or
amendment to any document incorporated by reference in the Final Memorandum to
any person.

          (b) Each Agent agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers and each person who
controls the Company within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act, to the same extent as the foregoing indemnity
from the Company to each Agent, but only with reference to information furnished
to the Company in writing by such Agent expressly for use in the Offering
Memorandum or any amendment or supplement thereto.

          (c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such person (the "Indemnified Person") shall promptly
                                            ------------------
notify the person against whom such indemnity may be sought (the "Indemnifying
                                                                  ------------
Person") in writing, and the Indemnifying Person, upon request of the
------
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding.  In any such proceeding,
any Indemnified Person shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such Indemnified
Person unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary, (ii) the Indemnifying Person has failed within
a reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person or (iii) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them.  It
is understood that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall
be reimbursed as they are incurred.  Any such separate firm for the Agents and
such control persons of the Agents shall be designated in writing by Credit
Suisse First Boston Corporation and J.P. Morgan Securities Inc., or, if Credit
Suisse First Boston Corporation and J.P. Morgan Securities Inc. are not
Indemnified Persons, by the Agents that are Indemnified Persons, and any such
separate firm for the Company, its directors, its officers and such control
persons of the Company shall be designated in writing by the Company.  The
Indemnifying Person shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the Indemnifying Person agrees to
indemnify any Indemnified Person from and against any loss or liability by
reason of such settlement or judgment.  If at any time an In-

<PAGE>

                                      -32-

demnified Person shall have requested an Indemnifying Person to reimburse the
Indemnified Person for fees and expenses of counsel as contemplated by the third
sentence of this paragraph, such Indemnifying Person agrees that it shall be
liable for any settlement of any proceeding of the nature contemplated by
Sections 7(a) or 7(b) hereof effected without its written consent if (i) such
settlement is entered into more than 45 days after receipt by such Indemnifying
Person of the aforesaid request, (ii) such Indemnifying Person shall have
received notice of the terms of such settlement at least 30 days prior to such
settlement being entered into and (iii) such Indemnifying Person shall not have
reimbursed such Indemnified Person in accordance with such request prior to the
date of such settlement. Notwithstanding the immediately preceding sentence, if
at any time an Indemnified Person shall have requested an Indemnifying Person to
reimburse the Indemnified Person for fees and expenses of counsel, an
Indemnifying Person shall not be liable for any settlement of any proceeding of
the nature contemplated by Sections 7(a) or 7(b) hereof effected without its
consent if such Indemnifying Person (i) reimburses such Indemnified Person in
accordance with such request to the extent it reasonably considers such request
to be reasonable and (ii) provides written notice to the Indemnified Person
substantiating the unpaid balance as unreasonable, in each case prior to the
date of such settlement. No Indemnifying Person shall, without the prior written
consent of the Indemnified Person, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Person, unless such settlement includes an unconditional release of
such Indemnified Person from all liability on claims that are the subject matter
of such proceeding.

          (d) If the indemnification provided for in paragraph (a) or (b) of
this Section 7 is unavailable to an Indemnified Person or insufficient in
respect of any losses, claims, damages or liabilities referred to herein in
connection with any offering of Securities, then each Indemnifying Person under
such paragraph, in lieu of indemnifying such Indemnified Person thereunder,
shall contribute to the amount paid or payable by such Indemnified Person as a
result of such losses, claims, damages or liabilities (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and each Agent on the other from the offering of the Securities or (ii)
if the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company on the one hand and each Agent on the other in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations.  The
relative benefits received by the Company on the one hand and each Agent on the
other in connection with the offering of such Securities shall be deemed to be
in the same respective proportion as the net proceeds from the offering of such
Securities (before deducting expenses) received by the Company and the total
discounts and commissions received by each Agent in respect thereof bear to the
aggregate offering price of such

<PAGE>

                                      -33-

Securities. The relative fault of the Company on the one hand and of each Agent
on the other shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company on the one hand or by such Agent on the other and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.

          The Company and each Agent agree that it would not be just and
equitable if contribution pursuant to this subsection (d) were determined by pro
rata allocation (even if all Agents were treated as one entity for such purpose)
or by any other method of allocation that does not take account of the equitable
considerations referred to above in this subsection (d).  The amount paid or
payable by an Indemnified Person as a result of the losses, claims, damages and
liabilities referred to above in this Section 7 shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such Indemnified Person in connection with investigating
or defending any such action or claim.  Notwithstanding the provisions of this
Section 7, in no event shall an Agent be required to contribute any amount in
excess of the amount by which the total price at which the Securities referred
to in Section 7(d) hereof that were sold by or through such Agent exceeds the
amount of any damages that such Agent has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission.  No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.  The
obligation of each Agent to contribute pursuant to this subsection (d) is
several (in the proportion to the principal amount of the Securities the sale of
which by or through such Agent gave rise to such losses, claims, damages or
liabilities bears to the aggregate principal amount of the Securities the sale
of which by or through any Agent gave rise to such losses, claims, damages or
liabilities) and is not joint.

          (e) The indemnity and contribution agreements contained in this
Section 7 are in addition to any liability which the Indemnifying Persons may
otherwise have to the Indemnified Persons referred to above.

          8.  Termination.

          (a) This Agreement may be terminated at any time (i) by the Company
with respect to any or all of the Agents or (ii) by any Agent with respect to
itself only, in each case upon the giving of written notice of such termination
to each other party hereto.  Any Terms Agreement shall be subject to termination
in the absolute discretion of the Agent or Agents that are parties thereto on
the terms set forth or incorporated by reference therein.  The termination of
this Agreement shall not require termination of any agreement by an Agent to
purchase Securities as principal (whether pursuant to a Terms Agreement or
otherwise) and

<PAGE>

                                      -34-

the termination of such an agreement shall not require termination of this
Agreement. In the event this Agreement is terminated with respect to any Agent,
(x) this Agreement shall remain in full force and effect with respect to any
Agent as to which such termination has not occurred, (y) this Agreement shall
remain in full force and effect with respect to the rights and obligations of
any party which have previously accrued or which relate to Securities which are
already issued, agreed to be issued or the subject of a pending offer at the
time of such termination and (z) in any event, the provisions of the fourth
paragraph of Section 2(a), Section 2(c), the last sentence of Section 4(d) and
Sections 4(g), 5, 7, 9, 10, 12 and 15 hereof shall survive; provided that if at
the time of termination an offer to purchase Securities has been accepted by the
Company but the time of delivery to the purchaser or its agent of such
Securities has not yet occurred, the provisions of Sections 2(b), 2(d), 4(a)
through 4(f), 4(h) through 4(m), 4(q) through 4(t) and 6 hereof shall also
survive. If any Terms Agreement is terminated, the provisions of the last
sentence of Section 4(d) and Sections 2(b), 2(d), 4(a), 4(b), 4(e), 4(f), 4(g)
through 4(m), 4(q) through 4(t), 5, 6, 7, 9, 10, 12 and 15 hereof (which shall
have been incorporated by reference in such Terms Agreement) shall survive.

          (b) If this Agreement or any Terms Agreement shall be terminated by an
Agent or Agents because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of this Agreement or
any Terms Agreement or if for any reason the Company shall be unable to perform
its obligations under this Agreement or any Terms Agreement or any condition of
any Agent's obligations cannot be fulfilled, the Company agrees to reimburse
each Agent or such Agents as have so terminated this Agreement with respect to
themselves, severally, for all out-of-pocket expenses (including the  reasonable
fees and expenses of their counsel) reasonably incurred by such Agent or Agents
in connection with this Agreement or the offering of Securities.

          9.  Position of the Agents.  Each Agent, in soliciting offers to
purchase Securities from the Company and in performing the other obligations of
such Agent hereunder (other than in respect of any purchase by an Agent as
principal, pursuant to a Terms Agreement or otherwise), is acting solely as
agent for the Company and not as principal and does not assume any obligation
towards or relationship of agency or trust with any purchaser of Securities.
Each Agent will make reasonable efforts to assist the Company in obtaining
performance by each purchaser whose offer to purchase Securities from the
Company was solicited by such Agent and has been accepted by the Company, but
such Agent shall not have any liability to the Company in the event such
purchase is not consummated for any reason.  If the Company shall default on its
obligation to deliver Securities to a purchaser whose offer it has accepted, the
Company shall (i) hold the relevant Agent harmless against any loss, claim,
damage or liability arising from or as a result of such default by the Company
and (ii) notwithstanding such default, pay to the Agent that solicited such
offer any commission to which it would be entitled in connection with such sale.

<PAGE>

                                      -35-

          10.  Representations and Indemnities to Survive.  The respective
indemnities and contribution agreements, representations, warranties and other
statements of the Company, its officers and the Agents set forth in or made
pursuant to this Agreement or any agreement by an Agent to purchase Securities
as principal shall remain in full force and effect regardless of any termination
of this Agreement or any such agreement, any investigation made by or on behalf
of any Agent or any controlling person of any Agent, or the Company, or any
officer or director or any controlling person of the Company, and shall survive
each delivery of and payment for any of the Securities.

          11.  Notices.  Except as otherwise specifically provided herein or in
the Administrative Procedures, all statements, requests, notices and advices
hereunder shall be in writing, and effective only on receipt and will be
delivered by hand, by mail (postage prepaid), by telegram (charges prepaid) or
by telex.  Communications to the Agents will be sent, in the case of J.P. Morgan
Securities Inc., to 270 Park Avenue, 8th Floor, New York, New York 10017
(Telecopy: (212) 843-6081) Attention: Medium-Term Notes Desk; in the case of
Credit Suisse First Boston Corporation, Eleven Madison Avenue, New York, New
York 10010 (Telecopy:  (212) 743-5825) Attention:  Short Term Products Group;
and, if sent to the Company, to it at Carpenter Technology Corporation, 101 West
Bern Street, Reading, PA 19601 (Telecopy: (610) 208-3068); Attention: Vice
President, General Counsel and Secretary.

          12.  Successors.  This Agreement and any Terms Agreement shall be
binding upon, and inure solely to the benefit of, each Agent and the Company,
and their respective successors and the officers, directors and controlling
persons referred to in Section 7 hereof and (to the extent expressly provided in
Section 6 hereof) the purchasers of Securities, and no other person shall
acquire or have any right or obligation under or by virtue of this Agreement or
any Terms Agreement.

          13.  Amendments.  This Agreement may be amended or supplemented if,
but only if, such amendment or supplement is in writing and is signed by the
Company and each Agent; provided that the Company may from time to time, on
seven days prior written notice to the Agents but without the consent of any
Agent, amend this Agreement to add as a party hereto one or more additional
firms registered under the Exchange Act, whereupon each such firm shall become
an Agent hereunder on the same terms and conditions as the other Agents that are
parties hereto.  The Agents shall sign any amendment or supplement giving effect
to the addition of any such firm as an Agent under this Agreement.

          14.  Business Day.  Time shall be of the essence in this Agreement and
any Terms Agreement.  As used herein, the term "business day" shall mean any day
which is not a Saturday or Sunday or legal holiday or a day on which banks in
New York City are required or authorized by law or executive order to close.

<PAGE>

                                      -36-

          15.  Applicable Law.  This Agreement and any Terms Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York, without giving effect to the conflict of laws provisions thereof.

          16.  Counterparts.  This Agreement and any Terms Agreement may be
signed in counterparts, each of which shall be an original, and all of which
together shall constitute one and the same instrument.

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

<PAGE>

                                      -37-

          If the foregoing is in accordance with your understanding, please sign
and return to us counterparts hereof, whereupon this letter and the acceptance
by each of you thereof shall constitute a binding agreement between the Company
and each of you in accordance with its terms.

                                             Very truly yours,

                                             CARPENTER TECHNOLOGY
                                               CORPORATION

                                             By: /s/ Jaime Vasquez
                                                ---------------------------
                                                 Name: Jaime Vasquez
                                                 Title: V.P. and Treasurer

Accepted in New York, New York,
as of the date first above written:

J.P. Morgan Securities Inc.

By: /s/ J.C. Padilla
   ---------------------------
    Name: Jose C. Padilla
    Title: Vice President

Credit Suisse First Boston Corporation

By: /s/ Paul D. Scherzer
   ---------------------------
    Name: Paul D. Scherzer
    Title: Vice President

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