Document:

<PAGE>
                                                             Exhibit 10.1

                             CHESAPEAKE FUNDING LLC,
                                    as Issuer
                                       and
                              JPMORGAN CHASE BANK,
                              as Indenture Trustee
                       SERIES 2004-1 INDENTURE SUPPLEMENT
                            dated as of July 29, 2004
                                       to
                                 BASE INDENTURE
                            dated as of June 30, 1999
                                  $500,000,000
                                       of
               Floating Rate Callable Asset Backed Investor Notes

<PAGE>
                                Table of Contents

                                                                            PAGE
PRELIMINARY  STATEMENT-------------------------------------------------------1

DESIGNATION------------------------------------------------------------------1

ARTICLE  I  DEFINITIONS------------------------------------------------------1

ARTICLE  II  ARTICLE  5  OF  THE  BASE  INDENTURE---------------------------19
     Section  5A.1  Establishment  of  Series  2004-1  Subaccounts.---------19
     Section  5A.2  Allocations with Respect to the Series 2004-1
                    Investor Notes.-----------------------------------------20
     Section  5A.3  Determination  of  Interest.----------------------------22
     Section  5A.4  Monthly  Application  of  Collections.------------------22
     Section  5A.5  Payment  of  Monthly  Interest  Payment.----------------25
     Section  5A.6  Payment  of  Principal.---------------------------------25
     Section  5A.7  The Administrator's Failure to Instruct the Indenture
                    Trusteeto  Make  a  Deposit  or  Payment.---------------26
     Section  5A.8  Series  2004-1  Reserve  Account.-----------------------27
     Section  5A.9  Series  2004-1  Yield  Supplement  Account.-------------28
     Section  5A.10 Series  2004-1  Distribution  Account.------------------30
     Section  5A.11 Lease  Rate  Caps.--------------------------------------31

ARTICLE  III  AMORTIZATION  EVENTS------------------------------------------32

ARTICLE  IV  OPTIONAL  PREPAYMENT-------------------------------------------34

ARTICLE  V  SERVICING  AND  ADMINISTRATOR  FEES-----------------------------35
     Section  5.1  Servicing  Fees------------------------------------------35
     Section  5.2  Administrator  Fee---------------------------------------35

ARTICLE  VI  FORM  OF  SERIES  2004-1  NOTES--------------------------------35
     Section  6.1  Initial  Issuance  of  Series  2004-1 Investor  Notes.---35
     Section  6.2  Restricted  Global  Notes.-------------------------------36
     Section  6.3  Temporary  Global  Notes  and Permanent Global Notes.----36
     Section  6.4  Definitive  Notes.---------------------------------------36
     Section  6.5  Transfer  Restrictions.----------------------------------36

ARTICLE  VII  INFORMATION---------------------------------------------------41

ARTICLE  VIII  MISCELLANEOUS------------------------------------------------41
     Section  8.1  Ratification  of  Indenture------------------------------41
     Section  8.2  Obligations  Unaffected----------------------------------41
     Section  8.3  Governing  Law-------------------------------------------42
     Section  8.4  Further  Assurances--------------------------------------42
     Section  8.5  Exhibits-------------------------------------------------42

                                       -i-
<PAGE>

     Section  8.6  No  Waiver;  Cumulative  Remedies------------------------42
     Section  8.7  Amendments-----------------------------------------------43
     Section  8.8  Severability---------------------------------------------43
     Section  8.9  Counterparts---------------------------------------------43
     Section  8.10 No  Bankruptcy  Petition---------------------------------43
     Section  8.11 SUBIs----------------------------------------------------43
     Section  8.12 Notice  to  Rating  Agencies-----------------------------44
     Section  8.13 Conflict  of  Instructions-------------------------------44

EXHIBITS

Exhibit  A-1-1:       Form of Restricted  Global  Class  A-1  Investor  Note
Exhibit  A-1-2:       Form of Temporary  Global  Class  A-1  Investor  Note
Exhibit  A-1-3:       Form of Permanent  Global  Class  A-1  Investor  Note
Exhibit  A-2-1:       Form of Restricted  Global  Class  A-2  Investor  Note
Exhibit  A-2-2:       Form of Temporary  Global  Class  A-2  Investor  Note
Exhibit  A-2-3:       Form of Permanent  Global  Class  A-2  Investor  Note
Exhibit  B-1:         Form of Transfer  Certificate
Exhibit  B-2:         Form of Transfer  Certificate
Exhibit  B-3:         Form of Transfer  Certificate
Exhibit  B-4:         Form of Clearing  System  Certificate
Exhibit  B-5:         Form of Certificate  of  Beneficial  Ownership
Exhibit  C:           Form of Monthly  Settlement  Statement
Exhibit  D:           Form of Series  2004-1  Lease  Rate  Cap
Exhibit  E:           Form of Amendment  to  Base  Indenture

                                       -ii-

<PAGE>

     SERIES  2004-1  SUPPLEMENT,  dated  as  of  July  29,  2004  (as  amended,
supplemented,  restated or otherwise modified from time to time, this "Indenture
                                                                       ---------
Supplement") between CHESAPEAKE FUNDING LLC, a special purpose limited liability
----------
company  established  under  the  laws  of Delaware (the "Issuer"), and JPMORGAN
                                                          ------
CHASE  BANK  ("JPMorgan Chase"), a New York banking corporation, in its capacity
               --------------
as  Indenture  Trustee  (together  with  its  successors  in trust thereunder as
provided  in  the Base Indenture referred to below, the "Indenture Trustee"), to
                                                         -----------------
the  Base  Indenture,  dated  as  of  June  30, 1999, between the Issuer and the
Indenture  Trustee  (as amended, modified, restated or supplemented from time to
time,  exclusive of Indenture Supplements creating new Series of Investor Notes,
the  "Base  Indenture").
      ---------------
                              PRELIMINARY STATEMENT
                              ---------------------
     WHEREAS,  Sections  2.2 and 12.1 of the Base Indenture provide, among other
               -------------     ----
things,  that the Issuer and the Indenture Trustee may at any time and from time
to time enter into an Indenture Supplement to the Base Indenture for the purpose
of  authorizing  the  issuance  of  one  or  more  Series  of  Investor  Notes.

NOW,  THEREFORE,  the  parties  hereto  agree  as  follows:

                                   DESIGNATION
                                   -----------
     There is hereby created a Series of Investor Notes to be issued pursuant to
the  Base  Indenture  and  this Indenture Supplement and such Series of Investor
Notes  shall  be  designated  generally  as Series 2004-1 Floating Rate Callable
Asset  Backed  Investor  Notes.

     The  Series  2004-1  Investor  Notes shall be issued in two classes: one of
which  shall  be designated as Series 2004-1 Floating Rate Callable Asset Backed
Investor  Notes,  Class  A-1,  and  referred to herein as the Class A-1 Investor
Notes  and  the other of which shall be designated as the Series 2004-1 Floating
Rate  Callable Asset Backed Investor Notes, Class A-2, and referred to herein as
the  Class  A-2  Investor  Notes. The Class A-1 Investor Notes and the Class A-2
Investor  Notes  are  referred  to  herein  collectively  as  the "Series 2004-1
Investor  Notes."  The  Series  2004-1 Investor Notes shall be issued in minimum
denominations  of  $200,000  and integral multiples of $1,000 in excess thereof.

     The  net  proceeds  from  the  sale of the Series 2004-1 Investor Notes (as
defined  herein)  shall  be  applied  in accordance with Section 5A.2(b) and the
                                                         ---------------
portion  thereof  deposited in the Series 2004-1 Principal Collection Subaccount
shall  be  used  by  the Issuer to fund the maintenance of the SUBI Certificates
under  the  Transfer  Agreement  and/or  to reduce the Invested Amounts of other
Series  of  Investor  Notes.

                                    ARTICLE I

                                   DEFINITIONS
     (a)  All  capitalized terms not otherwise defined herein are defined in the
Definitions  List  attached  to  the  Base  Indenture as Schedule 1 thereto. All
                                                         ----------
Article,  Section  or

<PAGE>

Subsection references herein shall refer to Articles, Sections or Subsections of
this Indenture Supplement, except as otherwise provided herein. Unless otherwise
stated  herein,  as  the context otherwise requires or if such term is otherwise
defined  in  the  Base  Indenture,  each capitalized term used or defined herein
shall  relate  only  to  the  Series  2004-1 Investor Notes and not to any other
Series  of  Investor  Notes  issued  by  the  Issuer.

     (b) The following words and phrases shall have the following meanings with
respect  to  the  Series 2004-1 Investor Notes and the definitions of such terms
are  applicable  to the singular as well as the plural form of such terms and to
the  masculine  as  well  as  the  feminine  and  neuter  genders of such terms:

               "Additional Interest" is defined in Section 5A.3(b).
               --------------------                ----------------

               "Amendment  Effective  Date"  means  the  first  date on which an
               --------------------------
     amendment to the Base Indenture substantially in the form of Exhibit E
                                                                  ---------
     is in effect in accordance with its terms.

               "Amortization  Event"  is  defined  in  Article  3.
                -------------------

               "Applicable  Option"  means,  on  any  date,  (a)  prior  to  the
                ------------------
     Amendment  Effective  Date,  Option  1  on  the  Enhancement Matrix and (b)
     thereafter  (i)  Option  1 on the Enhancement Matrix during any period when
     Overconcentration Option 1 is in effect in accordance with Section 13.18 of
                                                                --------------
     the  Base  Indenture,  (ii)  Option  2 on the Enhancement Matrix during any
     period  when  Overconcentration  Option  2  is in effect in accordance with
     Section  13.18  of  the Base Indenture or (iii) Option 3 on the Enhancement
     --------------
     Matrix  during  any  period when Overconcentration Option 3 is in effect in
     accordance  with  Section  13.18  of  the  Base  Indenture.
                       --------------

               "Applicable  Procedures"  is  defined  in  Section  6.5(c).
               ----------------------                     ---------------

               "Assumed  Lease  Term"  means,  with respect to any Series 2004-1
               --------------------
     Yield Shortfall Lease, the number of months over which the Capitalized Cost
     of the related - Leased Vehicle is being depreciated thereunder.

               "AGH"  means  Avis  Group  Holdings,  Inc. and its successors and
                ---
     assigns.

               "Calculation Agent" means JPMorgan Chase Bank, in its capacity as
               ------------------
     calculation agent with respect to the Series 2004-1 Note Rates.

               "Car"  means  an  automobile  or  a  Light-Duty  Truck.
                ---

               "Cendant"  means  Cendant  Corporation  and  its  successors  and
               -------
     assigns.

               "Class A-1 Final Maturity Date" means the July 2009 Payment Date.
               ------------------------------

               "Class  A-1  Initial Invested Amount" means the aggregate initial
               ------------------------------------
     principal amount of the Class A-1 Investor Notes, which is $230,000,000.

                                                                               2
<PAGE>

               "Class  A-1  Interest  Shortfall  Amount"  is  defined in Section
               ---------------------------------------                   -------
     5A.3(b).
     -------

               "Class  A-1  Invested  Amount"  means  as  of  any  date  of
               ----------------------------
     determination, an amount equal to (a) the Class A-1 Initial Invested Amount
     minus  (b)  the  amount  of  principal  payments made to Class A-1 Investor
     Noteholders on or prior to such date.

               "Class  A-1 Investor Noteholder" means the Person in whose name a
               --------------------------------
     Class A-1 Investor Note is registered in the Note Register.

               "Class  A-1  Investor  Notes"  means any one of the Series 2004-1
               ---------------------------
     Floating  Rate Callable Asset Backed Investor Notes, Class A-1, executed by
     the  Issuer  and  authenticated  by  or on behalf of the Indenture Trustee,
     substantially  in  the  form  of  Exhibit A-1-1, A-1-2 or A-1-3. Definitive
                                       -------------  -----    -----
     Class  A-1  Investor  Notes shall have such insertions and deletions as are
     necessary  to  give  effect  to  the provisions of Section 2.11 of the Base
                                                       -------------
     Indenture.

               "Class  A-1  Monthly  Interest" means, with respect to any Series
               ----------------------------
     2004-1 Interest Period, an amount equal to the product of (i) the Class A-1
     Note  Rate  for  such  Series  2004-1  Interest  Period, (ii) the Class A-1
     Invested  Amount  on  the  first day of such Series 2004-1 Interest Period,
     after giving effect to any principal payments made on such date, or, in the
     case  of  the  initial Series 2004-1 Interest Period, the Class A-1 Initial
     Invested  Amount and (iii) a fraction, the numerator of which is the number
     of  days in such Series 2004-1 Interest Period and the denominator of which
     is  360.

               "Class  A-1  Note  Rate"  means,  (i) with respect to the initial
               ------------------------
     Series  2004-1  Interest  Period,  1.58% per annum and (ii) with respect to
     each  Series  2004-1  Interest Period thereafter, a rate per annum equal to
     One-Month  LIBOR  for  such  Series  2004-1  Interest Period plus 0.11% per
     annum.

               "Class A-2 Final Maturity Date" means the July 2016 Payment Date.
               ------------------------------

               "Class  A-2  Initial Invested Amount" means the aggregate initial
               ------------------------------------
     principal amount of the Class A-2 Investor Notes, which is $270,000,000.

               "Class  A-2  Interest  Shortfall  Amount"  is  defined in Section
               ----------------------------------------                  -------
     5A.3(b).
     -------

               "Class  A-2  Invested  Amount"  means,  as  of  any  date  of
               ----------------------------
     determination, an amount equal to (a) the Class A-2 Initial Invested Amount
     minus  (b)  the  amount  of  principal  payments made to Class A-2 Investor
     Noteholders  on  or  prior  to  such  date.

               "Class  A-2 Investor Noteholder" means the Person in whose name a
               -------------------------------
     Class  A-2  Investor  Note  is  registered  in  the  Note  Register.

               "Class  A-2  Investor  Notes"  means any one of the Series 2004-1
                ---------------------------
     Floating  Rate Callable Asset Backed Investor Notes, Class A-2, executed by
     the  Issuer  and  authenticated  by  or on behalf of the Indenture Trustee,
     substantially  in  the  form  of  Exhibit A-2-1, A-2-2 or A-2-3. Definitive
                                       -------------  -----   -----
     Class A-2 Investor Notes shall have such

                                                                               3
<PAGE>

     insertions  and deletions as are necessary to give effect to the provisions
     of  Section  2.11  of  the  Base  Indenture.
         -------------

               "Class  A-2  Monthly  Interest" means, with respect to any Series
               ----------------------------
     2004-1 Interest Period, an amount equal to the product of (i) the Class A-2
     Note  Rate  for  such  Series  2004-1  Interest  Period, (ii) the Class A-2
     Invested  Amount  on  the  first day of such Series 2004-1 Interest Period,
     after giving effect to any principal payments made on such date, or, in the
     case  of  the  initial Series 2004-1 Interest Period, the Class A-2 Initial
     Invested  Amount and (iii) a fraction, the numerator of which is the number
     of  days in such Series 2004-1 Interest Period and the denominator of which
     is  360.

               "Class  A-2  Note  Rate"  means,  (i) with respect to the initial
                ----------------------
     Series  2004-1  Interest  Period,  1.63% per annum and (ii) with respect to
     each  Series  2004-1  Interest Period thereafter, a rate per annum equal to
     One-Month  LIBOR  for  such  Series  2004-1  Interest Period plus 0.16% per
     annum.

               "Clearstream" is defined in Section 6.3.
                -----------                ------------

               "Deficiency"  is  defined  in  Section  5A.4(b)(i).
               -----------                    ------------------

               "Dividend  Amount"  means,  with respect to any Payment Date, the
               ----------------
     aggregate  amount  of  dividends  payable  to  the  Series 2004-1 Preferred
     Members  in  respect  of their Series 2004-1 Preferred Membership Interests
     pursuant  to  the  LLC  Agreement.

               "Dollar",  "US$"  and  "$"  means  lawful  currency of the United
               ------
     States.

               "DTC" means The Depository Trust Company or its successor, as the
                ---
     Clearing  Agency  for  the  Series  2004-1  Investor  Notes.

               "Enhancement  Matrix"  means  the  following  matrix:
               -------------------

<TABLE>
<CAPTION>
                                                    Option 1   Option 2   Option 3
                                                    ---------  ---------  --------
<S>                                                  <C>        <C>        <C>
         Level 1 Required Enhancement Percentage     12.36%     12.68%     12.99%
         Level 2 Required Enhancement Percentage     13.19%     13.52%     13.86%
         Level 3 Required Enhancement Percentage     14.01%     14.37%     14.73%
         Required Reserve Account
         Amount Percentage . . . . . . . . . . .    2.2032%    2.4794%    2.6214%
</TABLE>

               "Equipment"  means  any  Vehicle that is not a Car, a Forklift, a
               ---------
     Heavy-Duty  Truck,  a  Medium-Duty  Truck,  a  Truck  Body  or  a  Trailer.

               "Euroclear"  is  defined  in  Section  6.3.
               ---------                     ------------

               "Excess  Alternative  Vehicle  Amount"  means,  on any Settlement
               ------------------------------------
     Date,  an  amount  equal  to  the  excess,  if  any,  of  (a)  the  sum  of

                                                                               4
<PAGE>

                         (i)  the aggregate Lease Balance of all Eligible Leases
                    the  related  Leased Vehicle of which is not a Car allocated
                    to  the  Lease SUBI as of the last day of the Monthly Period
                    immediately  preceding  such  Settlement  Date  plus

                         (ii)  an  amount  equal  to the aggregate for each Unit
                    Vehicle  which  is  not  a Car subject to a Closed-End Lease
                    allocated  to  the  Lease  SUBI  as  of the last day of such
                    Monthly  Period  of  the  lesser  of (A) the Stated Residual
                    Value  of  such  Unit  Vehicle and (B) the Net Book Value of
                    such Unit Vehicle as of the last day of such Monthly Period;

     over  (b)  an  amount  equal  to  31.5%  of  the  Aggregate  Unit  Balance
     as  of  such  Settlement  Date.

               "Excess  Equipment  Amount"  means,  on  any  Settlement Date, an
               --------------------------
     amount  equal  to  the  excess,  if  any,  of  (a)  the  sum  of

                         (i)  the aggregate Lease Balance of all Eligible Leases
                    the  related  Leased Vehicle of which is Equipment allocated
                    to  the  Lease SUBI as of the last day of the Monthly Period
                    immediately  preceding  such  Settlement  Date  plus

                         (ii)  an  amount  equal  to the aggregate for each Unit
                    Vehicle  which  is  Equipment  subject to a Closed-End Lease
                    allocated  to  the  Lease  SUBI  as  of the last day of such
                    Monthly  Period  of  the  lesser  of (A) the Stated Residual
                    Value  of  such  Unit  Vehicle and (B) the Net Book Value of
                    such Unit Vehicle as of the last day of such Monthly Period;

     over  (b)  an  amount  equal to 5% of the Aggregate Unit Balance as of such
     Settlement  Date.

               "Excess Forklift Amount" means, on any Settlement Date, an amount
               -----------------------
     equal  to  the  excess,  if  any,  of  (a)  the  sum  of

                         (i)  the aggregate Lease Balance of all Eligible Leases
                    the  related Leased Vehicle of which is a Forklift allocated
                    to  the  Lease SUBI as of the last day of the Monthly Period
                    immediately  preceding  such  Settlement  Date  plus

                         (ii)  an  amount  equal  to the aggregate for each Unit
                    Vehicle  which  is  a Forklift subject to a Closed-End Lease
                    allocated  to  the  Lease  SUBI  as  of the last day of such
                    Monthly  Period  of  the  lesser  of (A) the Stated Residual
                    Value  of  such  Unit  Vehicle and (B) the Net Book Value of
                    such Unit Vehicle as of the last day of such Monthly Period;

     over  (b)  an  amount  equal to 2% of the Aggregate Unit Balance as of such
     Settlement  Date.

               "Excess  Heavy-Duty  Truck Amount" means, on any Settlement Date,
                --------------------------------
    an amount  equal  to  the  excess,  if  any,  of  (a)  the  sum  of

                                                                               5
<PAGE>

                         (i)  the aggregate Lease Balance of all Eligible Leases
                    the  related  Leased  Vehicle of which is a Heavy-Duty Truck
                    allocated  to  the  Lease  SUBI  as  of  the last day of the
                    Monthly  Period  immediately  preceding such Settlement Date
                    plus

                         (ii)  an  amount  equal  to the aggregate for each Unit
                    Vehicle  which is a Heavy-Duty Truck subject to a Closed-End
                    Lease allocated to the Lease SUBI as of the last day of such
                    Monthly  Period  of  the  lesser  of (A) the Stated Residual
                    Value  of  such  Unit  Vehicle and (B) the Net Book Value of
                    such Unit Vehicle as of the last day of such Monthly Period;

     over  (b)  an amount equal to 7.5% of the Aggregate Unit Balance as of such
     Settlement  Date.

               "Excess  Medium-Duty Truck Amount" means, on any Settlement Date,
               --------------------------------
     an  amount  equal  to  the  excess,  if  any,  of  (a)  the  sum  of

                         (i)  the aggregate Lease Balance of all Eligible Leases
                    the  related  Leased Vehicle of which is a Medium-Duty Truck
                    allocated  to  the  Lease  SUBI  as  of  the last day of the
                    Monthly  Period  immediately  preceding such Settlement Date
                    plus

                         (ii)  an  amount  equal  to the aggregate for each Unit
                    Vehicle which is a Medium-Duty Truck subject to a Closed-End
                    Lease allocated to the Lease SUBI as of the last day of such
                    Monthly  Period  of  the  lesser  of (A) the Stated Residual
                    Value  of  such  Unit  Vehicle and (B) the Net Book Value of
                    such Unit Vehicle as of the last day of such Monthly Period;

     over  (b) an amount equal to 15.0% of the Aggregate Unit Balance as of such
     Settlement  Date.

               "Excess  Trailer Amount" means, on any Settlement Date, an amount
                -----------------------
     equal  to  the  excess,  if  any,  of  (a)  the  sum  of

                         (i)  the aggregate Lease Balance of all Eligible Leases
                    the  related  Leased Vehicle of which is a Trailer allocated
                    to  the  Lease SUBI as of the last day of the Monthly Period
                    immediately  preceding  such  Settlement  Date  plus

                         (ii)  an  amount  equal  to the aggregate for each Unit
                    Vehicle  which  is  a  Trailer subject to a Closed-End Lease
                    allocated  to  the  Lease  SUBI  as  of the last day of such
                    Monthly  Period  of  the  lesser  of (A) the Stated Residual
                    Value  of  such  Unit  Vehicle and (B) the Net Book Value of
                    such Unit Vehicle as of the last day of such Monthly Period;

     over  (b)  an  amount  equal to 3% of the Aggregate Unit Balance as of such
     Settlement  Date.

               "Excess  Truck  Amount"  means, on any Settlement Date, an amount
               ----------------------
     equal  to  the  greater  of  (a) the sum of (i) the Excess Heavy-Duty Truck
     Amount  on  such  Settlement
                                                                               6
<PAGE>

     Date  and  (ii) the Excess Medium-Duty Truck Amount on such Settlement Date
     and  (b)  an  amount  equal  to  the  excess,  if  any,  of  (x) the sum of

                         (i)  the aggregate Lease Balance of all Eligible Leases
                    the  related  Leased Vehicle of which is a Medium-Duty Truck
                    or  a Heavy-Duty Truck allocated to the Lease SUBI as of the
                    last  day  of  the Monthly Period immediately preceding such
                    Settlement  Date  plus

                         (ii)  an  amount  equal  to the aggregate for each Unit
                    Vehicle  which  is a Medium-Duty Truck or a Heavy-Duty Truck
                    subject to a Closed-End Lease allocated to the Lease SUBI as
                    of  the last day of such Monthly Period of the lesser of (A)
                    the  Stated  Residual Value of such Unit Vehicle and (B) the
                    Net  Book  Value  of such Unit Vehicle as of the last day of
                    such  Monthly  Period;

     over  (y) an amount equal to 21.5% of the Aggregate Unit Balance as of such
     Settlement  Date.

               "Excess  Truck  Body  Amount"  means,  on any Settlement Date, an
               ----------------------------
     amount  equal  to  the  excess,  if  any,  of  (a)  the  sum  of

                         (i)  the aggregate Lease Balance of all Eligible Leases
                    the  related  Leased  Vehicle  of  which  is  a  Truck  Body
                    allocated  to  the  Lease  SUBI  as  of  the last day of the
                    Monthly  Period  immediately  preceding such Settlement Date
                    plus

                         (ii)  an  amount  equal  to the aggregate for each Unit
                    Vehicle  which is a Truck Body subject to a Closed-End Lease
                    allocated  to  the  Lease  SUBI  as  of the last day of such
                    Monthly  Period  of  the  lesser  of (A) the Stated Residual
                    Value  of  such  Unit  Vehicle and (B) the Net Book Value of
                    such Unit Vehicle as of the last day of such Monthly Period;

     over  (b)  an  amount  equal to 2% of the Aggregate Unit Balance as of such
     Settlement  Date.

               "Final  Maturity Date" means the Class A-1 Final Maturity Date or
               --------------------
     the  Class  A-2  Final  Maturity  Date.

               "Forklift"  means  a  high-lift,  self-loading  mobile  vehicle,
                --------
     equipped  with load carriage and forks, for transporting and tiering loads.

               "Gross Vehicle Weight" means the maximum manufacturer recommended
               ----------------------
     weight  that the axels of a Truck or Tractor can carry including the weight
     of  the  Truck  or Tractor.

               "Heavy-Duty  Truck"  means  a  Truck  or  Tractor  having a Gross
               -----------------
     Vehicle  Weight  of  over  33,000  pounds.

               "Indenture Supplement" has the meaning set forth in the preamble.
               ---------------------

                                                                               7
<PAGE>

               "Interest  Shortfall  Amount"  is  defined  in  Section  5A.3(b)
               ---------------------------                     ----------------

               "Level  1  Required Enhancement Percentage" means on any date the
               -----------------------------------------
     percentage  set forth in the Enhancement Matrix on the line titled "Level 1
     Required  Enhancement  Percentage"  for  the  Applicable  Option.

               "Level  2  Required Enhancement Percentage" means on any date the
               -----------------------------------------
     percentage  set forth in the Enhancement Matrix on the line titled "Level 2
     Required  Enhancement  Percentage"  for  the  Applicable  Option.

               "Level  3  Required Enhancement Percentage" means on any date the
               -----------------------------------------
     percentage  set forth in the Enhancement Matrix on the line titled "Level 3
     Required  Enhancement  Percentage"  for  the  Applicable  Option.

               "LIBOR  Determination  Date"  means,  with  respect to any Series
               --------------------------
     2004-1  Interest  Period, the second London Business Day next preceding the
     first  day  of  such  Series  2004-1  Interest  Period.

               "Light-Duty Truck" means a Truck having a Gross Vehicle Weight of
               -----------------
     under 16,001  pounds.

               "London Business Day" means any day on which dealings in deposits
               -------------------
     in  Dollars  aretransacted  in  the  London  interbank  market  and banking
     institutions in London are not authorized or obligated by law or regulation
     to  close.

               "Medium-Duty  Truck"  means  a  Truck  or  Tractor having a Gross
               ------------------
     Vehicle  Weight  of  between  16,001  pounds  and  33,000  pounds.

               "Monthly  Interest  Payment"  is  defined  in Section 5A.4(c)(v)
               --------------------------                    ------------------

               "One-Month  LIBOR" means, for each Series 2004-1 Interest Period,
               ----------------
     the  rate  per  annum determined on the related LIBOR Determination Date by
     the  Calculation Agent to be the rate for Dollar deposits having a maturity
     equal  to  one  month  that  appears on Telerate Page 3750 at approximately
     11:00  a.m.,  London  time,  on  such  LIBOR  Determination Date; provided,
     however, that if such rate does not appear on Telerate Page 3750, One-Month
     LIBOR  will mean, for such 2004-1 Interest Period, the rate per annum equal
     to  the  arithmetic mean (rounded to the nearest one-one-hundred-thousandth
     of  one  percent)  of  the  rates  quoted  by  the  Reference  Banks to the
     Calculation  Agent as the rates at which deposits in Dollars are offered by
     the  Reference Banks at approximately 11:00 a.m., London time, on the LIBOR
     Determination  Date  to  prime  banks  in the London interbank market for a
     period  equal  to  one  month;  provided,  further,  that if fewer than two
     quotations  are  provided  as  requested by the Reference Banks, "One-Month
     LIBOR" for such Series 2004-1 Interest Period will mean the arithmetic mean
     (rounded  to  the nearest one-one-hundred-thousandth of one percent) of the
     rates  quoted  by  major  banks  in  New  York,  New  York  selected by the
     Calculation  Agent, at approximately 10:00 a.m., New York City time, on the
     first  day  of  such  Series 2004-1 Interest Period for loans in Dollars to
     leading  European banks for a period equal to one month; provided, finally,
     that  if  no  such  quotes  are  provided,  "One-Month  LIBOR"  for

                                                                               8
<PAGE>

     such  Series  2004-1 Interest Period will mean One-Month LIBOR as in effect
     with  respect  to  the  preceding  Series  2004-1  Interest  Period.

               "Outstanding"  means,  with respect to the Series 2004-1 Investor
               -----------
     Notes,  all  Series  2004-1  Investor  Notes  theretofore authenticated and
     delivered  under  the  Indenture,  except  (a) Series 2004-1 Investor Notes
                                        ------
     theretofore  canceled  or delivered to the Transfer Agent and Registrar for
     cancellation,  (b)  Series  2004-1  Investor  Notes  which  have  not  been
     presented  for payment but funds for the payment of which are on deposit in
     the  Series  2004-1  Distribution  Account and are available for payment of
     such  Series  2004-1 Investor Notes, and Series 2004-1 Investor Notes which
     are  considered paid pursuant to Section 11.1 of the Base Indenture, or (c)
                                      ------------
     Series  2004-1  Investor  Notes  in exchange for or in lieu of other Series
     2004-1  Investor Notes which have been authenticated and delivered pursuant
     to  the  Indenture  unless  proof  satisfactory to the Indenture Trustee is
     presented  that  any  such  Series  2004-1  Investor  Notes  are  held by a
     purchaser  for  value.

               "Payment  Date"  means the 7th day of each month, or if such date
               -------------
     is  not  a  Business  Day,  the  next  succeeding  Business Day, commencing
     September  7,  2004.

               "Permanent  Global  Notes"  is  defined  in  Section  6.3.
               ------------------------                     ------------

               "PHH"  means  PHH  Corporation  and  its  successors and assigns.
                ---

               "Prepayment  Date"  is  defined  in  Article  4.
               ----------------                     ----------

               "QIBs"  is  defined  in  Section  6.1.
                ----                    ------------

               "Rating  Agencies"  means,  with  respect  to  the  Series 2004-1
               ----------------
     Investor  Notes,  Standard  &  Poor's,  Moody's  and  any  other nationally
     recognized  rating  agency  rating  the Series 2004-1 Investor Notes at the
     request  of  the  Issuer.

               "Rating  Agency  Condition"  means,  with  respect  to any action
               ------------------------
     specified  herein as requiring satisfaction of the Rating Agency Condition,
     that  each  Rating  Agency  shall have been given 10 days' (or such shorter
     period  as  shall be acceptable to each Rating Agency) prior notice thereof
     and that each of the Rating Agencies shall have notified the Issuer and the
     Indenture  Trustee  in  writing  that  such  action  will  not  result in a
     reduction  or  withdrawal  of  the then current rating of the Series 2004-1
     Investor  Notes  or  of  any  Series 2004-1 Preferred Membership Interests.

               "Record  Date" means, with respect to each Payment Date, the last
                ------------
     day  of  the  immediately  preceding  calendar  month.

               "Reference  Banks" means four major banks in the London interbank
                ---------------
     market  selected  by  the  Calculation  Agent.

               "Regulation  S"  means  Regulation  S  promulgated  under  the
                -------------
     Securities  Act.
                                                                               9
<PAGE>

               "Required  Reserve  Account  Amount Percentage" means on any date
               ---------------------------------------------
     the  percentage  set  forth  in  the  Enhancement Matrix on the line titled
     "Required  Reserve  Account  Amount  Percentage" for the Applicable Option.

               "Restricted  Global  Notes"  is  defined  in  Section  6.2.
               -------------------------                     ------------

               "Restricted  Notes"  means  the  Restricted  Global Notes and all
                 ----------------
     other  Series  2004-1Investor  Notes  evidencing  the  obligations,  or any
     portion  of  the  obligations, initially evidenced by the Restricted Global
     Notes,  other than certificates transferred or exchanged upon certification
     as  provided  in  Section  6.5.
                       ------------

               "Restricted  Period"  means  the  period commencing on the Series
               ------------------
     2004-1  Closing  Date  and  ending  on the 40th day after the Series 2004-1
     Closing  Date.

               "Rule 144A" means Rule 144A promulgated under the Securities Act.
               ----------

               "Series 2004-1" means Series 2004-1, the Principal Terms of which
               --------------
     are  set  forth  in  this  Indenture  Supplement.

               "Series  2004-1  Administrator  Fee"  is  defined in Section 5.2.
               ----------------------------------                   ------------

               "Series  2004-1 Allocated Adjusted Aggregate Unit Balance" means,
               --------------------------------------------------------
     as  of any date of determination, the product of (a) the Adjusted Aggregate
     Unit  Balance and (b) the percentage equivalent of a fraction the numerator
     of which is the Series 2004-1 Required Asset Amount as of such date and the
     denominator  of  which  is  the sum of (x) the Series 2004-1 Required Asset
     Amount  and  (y)  the aggregate Required Asset Amounts with respect to each
     other  Series  of  Investor  Notes as of such date, including all Series of
     Investor Notes that have been paid in full but as to which the Amortization
     Period  shall  have  not  ended.

               "Series  2004-1  Allocated  Asset Amount Deficiency" means, as of
               ----------------------------------------------------
     any  date  of determination, the amount, if any, by which the Series 2004-1
     Allocated  Adjusted  Aggregate  Unit Balance is less than the Series 2004-1
     Required  Asset  Amount  as  of  such  date.

               "Series 2004-1 Amortization Period" means the period beginning at
               ---------------------------------
     the  earlier  of  (a) the close of business on the Business Day immediately
     preceding the day on which an Amortization Event is deemed to have occurred
     with  respect  to  the  Series  2004-1  Investor Notes and (b) the close of
     business on the Period End Date in January 2006 and ending on the date when
     (i)  the  Series  2004-1  Investor Notes are fully paid, (ii) all dividends
     accrued and accumulated on the Series 2004-1 Preferred Membership Interests
     shall  have  been  declared  and  paid  in  full,  (iii)  the Series 2004-1
     Preferred  Membership Interests shall have been redeemed in accordance with
     their  terms  and  (iv)  all  amounts owing in respect of the Series 2004-1
     Preferred Membership Interests under the Series 2004-1 Preferred Membership
     Interest  Purchase  Agreement  shall  have been paid in full by the Issuer.

                                                                              10
<PAGE>

               "Series 2004-1 Available Excess Collections Amount" means, on any
               ---------------------------------------------------
     Business  Day  during  the  period  commencing  on a Period End Date to but
     excluding  the  next  succeeding  Settlement  Date,  an amount equal to the
     excess,  if  any,  of (a) the amount deposited in the Series 2004-1 General
     Collection  Subaccount  during  the  immediately  preceding  Monthly Period
     pursuant  to  Section  5A.2(a)  over  (b)  the sum of (i) the amounts to be
                   ---------------
     distributed  from  the  Series  2004-1  Settlement  Collection  Subaccount
     pursuant  to  paragraphs  (i)  through  (xii)  of  Section  5A.4(c) on such
                                                        ---------------
     Settlement Date, and (ii) any amounts owing in respect of the Series 2004-1
     Preferred Membership Interests under the Series 2004-1 Preferred Membership
     Interest  Purchase  Agreement  on  such  Settlement  Date.

               "Series  2004-1  Basic  Servicing Fee" is defined in Section 5.1.
                ------------------------------------                ------------

               "Series  2004-1  Closing  Date"  means  July  29,  2004.
               -----------------------------

               "Series  2004-1  Collateral"  means  the  Collateral,  the Series
               --------------------------
     2004-1  Reserve  Account,  the  Series 2004-1 Yield Supplement Account, the
     Series  2004-1  Distribution Account and the Series 2004-1 Lease Rate Caps.

               "Series  2004-1  Collection  Subaccount"  is  defined  in Section
               --------------------------------------                    -------
          5A.1(a).
          ------

               "Series  2004-1  Distribution  Account"  is  defined  in  Section
               -------------------------------------                     -------
          5A.10(a).
          --------

               "Series  2004-1  Eligible  Counterparty"  means  a  financial
               --------------------------------------
     institution  having  on  the  date  of  any acquisition of a Lease Rate Cap
     short-term debt ratings of at least "A-1" by Standard & Poor's and "P-1" by
     Moody's and long-term unsecured debt ratings of at least "A+" by Standard &
     Poor's  and  "Aa3"  by  Moody's.

               "Series  2004-1  Excess  Fleet  Receivable Amount" means, for any
               -------------------------------------------------
     Settlement  Date,  an  amount equal to the product of (a) the average daily
     Series  2004-1 Invested Percentage during the immediately preceding Monthly
     Period and (b) the Excess Fleet Receivable Amount for such Settlement Date.

               "Series  2004-1  Gain  on  Sale  Account  Percentage"  means 10%.
               -----------------------------------------------------

               "Series  2004-1  Global  Notes"  means a Temporary Global Note, a
               ------------------------------
     Restricted  Global  Note  or  a  Permanent  Global  Note.

               "Series  2004-1  Hypothetical  Yield Shortfall Amount" means, for
                ----------------------------------------------------
     any  Settlement  Date, an amount equal to the product of (x) the excess, if
     any,  of the Series 2004-1 Minimum Yield Rate for such Settlement Date over
     the CP Rate as of the last day of the immediately preceding Monthly Period,
     (y)  the  Series  2004-1 Invested Percentage on such Settlement Date of the
     aggregate  Lease  Balance of all Floating Rate Leases as of the last day of
     the  immediately  preceding  Monthly  Period  and  (z)  2.75.

               "Series  2004-1  Initial  Invested  Amount"  means the sum of the
                -----------------------------------------
     Class  A-1  Initial  Invested  Amount  and  the  Class A-2 Initial Invested
     Amount.

                                                                              11
<PAGE>

               "Series  2004-1 Interest Period" means a period commencing on and
               --------------------------------
     including  a Payment Date and ending on and including the day preceding the
     next  succeeding  Payment  Date; provided, however, that the initial Series
                                      --------  -------
     2004-1  Interest  Period  shall  commence  on and include the Series 2004-1
     Closing  Date  and  end  on  and  include  September  6,  2004.

               "Series  2004-1  Invested  Amount"  means,  as  of  any  date  of
               ---------------------------------
     determination,  the  sum of the Class A-1 Invested Amount and the Class A-2
     Invested  Amount  as  of  such  date.

               "Series  2004-1  Invested  Percentage" means, with respect to any
               -------------------------------------
     Business  Day  (i)during the Series 2004-1 Revolving Period, the percentage
     equivalent  (which  percentage  shall  never exceed 100%) of a fraction the
     numerator  of  which shall be equal to the Series 2004-1 Allocated Adjusted
     Aggregate  Unit Balance as of the end of the immediately preceding Business
     Day  and  the  denominator  of  which  is the sum of the numerators used to
     determine  invested  percentages for allocations for all Series of Investor
     Notes  (and  all  classes  of such Series of Investor Notes), including all
     Series  of  Investor  Notes that have been paid in full but as to which the
     Amortization  Period  has  not  ended,  as  of  the end of such immediately
     preceding  Business  Day  or  (ii)  during  the  Series 2004-1 Amortization
     Period,  the  percentage  equivalent  (which  percentage shall never exceed
     100%)  of  a  fraction  the numerator of which shall be equal to the Series
     2004-1  Allocated  Adjusted  Aggregate  Unit  Balance  as of the end of the
     Series  2004-1 Revolving Period, and the denominator of which is the sum of
     the  numerators  used to determine invested percentages for allocations for
     all  Series  of  Investor Notes (and all classes of such Series of Investor
     Notes),  including all Series of Investor Notes that have been paid in full
     but as to which the Amortization Period has not ended, as of the end of the
     immediately  preceding  Business  Day.

               "Series  2004-1  Investor  Noteholder"  means,  collectively, the
               -------------------------------------
     Class  A-1  Investor  Noteholders  and  the Class A-2 Investor Noteholders.

               "Series  2004-1  Investor  Note  Owner"  means, with respect to a
               -------------------------------------
     Series  2004-1  Global  Note,  the Person who is the beneficial owner of an
     interest  in  such  Series 2004-1 Global Note, as reflected on the books of
     DTC,  or on the books of a Person maintaining an account with DTC (directly
     as  a  Clearing  Agency  Participant or as an indirect participant, in each
     case  in  accordance  with  the  rules  of  DTC).

               "Series 2004-1 Investor Notes" means, collectively, the Class A-1
               -----------------------------
     Investor  Notes  and  the  Class  A-2  Investor  Notes.

               "Series  2004-1  Junior Preferred Membership Interests" means the
               -----------------------------------------------------
     Junior  Preferred  Membership  Interests  relating  to  the  Series  2004-1
     Investor Notes, if any, issued by the Issuer pursuant to the LLC Agreement.

               "Series  2004-1  Lease  Rate Cap" means one or more interest rate
               --------------------------------
     caps  whether  now  or hereafter existing or acquired, substantially in the
     form  of  Exhibit  D,  from  a  Series  2004-1  Eligible  Counterparty.
               ---------

                                                                              12
<PAGE>

               "Series  2004-1  Liquid  Credit Enhancement Deficiency" means, on
               -------------------------------------------------------
     any  date  of  determination, the amount by which the Series 2004-1 Reserve
     Account  Amount  is  less  than  the Series 2004-1 Required Reserve Account
     Amount.

               "Series  2004-1  Minimum  Yield  Rate"  means, for any Settlement
               --------------------------------------
     Date,  a  rate per annum equal to the sum of (i) the Series 2004-1 Weighted
     Average  Cost  of  Funds  for  such  Settlement Date, (ii) 0.225% and (iii)
     0.48%.

               "Series  2004-1  Monthly  Interest"  means,  with  respect to any
               ---------------------------------
     Series  2004-1  Interest  Period, the sum of Class A-1 Monthly Interest and
     Class  A-2  Monthly  Interest  for  such  Series  2004-1  Interest  Period.

               "Series  2004-1  Monthly  Residual  Value  Gain"  means,  for any
               -----------------------------------------------
     Settlement  Date,  an  amount equal to the product of (a) the average daily
     Series  2004-1 Invested Percentage during the immediately preceding Monthly
     Period  and  (b)  the Monthly Residual Value Gain for such Settlement Date.

               "Series  2004-1  Note  Rate" means the Class A-1 Note Rate or the
               ----------------------------
     Class  A-2  Note  Rate,  as  the  context  may  require.

               "Series 2004-1 Note Termination Date" means the date on which the
               ------------------------------------
     Series  2004-1  Investor  Notes  are  fully  paid.

               "Series  2004-1  Preferred Member Distribution Account" means the
               -------------------------------------------------------
     account  established  in  respect of the Series 2004-1 Preferred Membership
     Interests  pursuant  to  the  LLC  Agreement.

               "Series 2004-1 Preferred Members" means the registered holders of
               ----------------------------------
     the  Series  2004-1  Preferred  Membership  Interests.

               "Series  2004-1 Preferred Membership Interest Purchase Agreement"
               -----------------------------------------------------------------
     means,  collectively, one or more purchase agreements among the Issuer, one
     or  more  purchasers  of  the  Series  2004-1  Senior  Preferred Membership
     Interests  thereunder,  any  agents  of such purchasers, any banks or other
     financial  institutions  providing liquidity funding to such purchasers and
     the  Administrator,  as  the  same  may  from  time  to  time  be  amended,
     supplemented or otherwise modified in accordance with its terms, and one or
     more  purchase  agreements  relating  to the Series 2004-1 Junior Preferred
     Membership Interests among the Issuer, one or more purchasers of the Series
     2004-1  Junior Preferred Membership Interests and the Administrator, as the
     same  may  from time to time be amended, supplemented or otherwise modified
     in  accordance  with  its  terms.

               "Series  2004-1  Preferred Membership Interests" means the Series
               -----------------------------------------------
     2004-1  Senior  Preferred Membership Interests and the Series 2004-1 Junior
     Preferred  Membership  Interests,  if  any.

               "Series  2004-1  Principal  Collection  Subaccount" is defined in
                -------------------------------------------------
     Section  5A.1(a).
     ---------------

                                                                              13
<PAGE>

               "Series  2004-1  Principal  Payment  Amount"  means,  for  any
               ------------------------------------------
     Settlement  Date,  an  amount equal to the product of (a) the average daily
     Series  2004-1 Invested Percentage during the immediately preceding Monthly
     Period  and  (b)  the  Principal  Payment  Amount for such Settlement Date.

               "Series  2004-1  Required  Asset Amount" means, as of any date of
               --------------------------------------
     determination,  the sum of the Series 2004-1 Invested Amount and the Series
     2004-1  Required  Overcollateralization  Amount  as  of  such  date.

               "Series  2004-1  Required Enhancement Amount" means, on any date,
               -------------------------------------------
     the  sum  of  (a) the Series 2004-1 Required Percentage on such date of the
     Series  2004-1  Initial  Invested  Amount  plus  (b)  the  sum  of:

                         (i)  if  the  Three-Month  Average  Residual Value Loss
                    Ratio  with  respect  to  the  most  recent  Settlement Date
                    exceeded  12.50%,  an amount equal to the product of (A) the
                    Series  2004-1 Invested Percentage as of the last day of the
                    Monthly  Period  immediately  preceding such Settlement Date
                    and  (B)  90%  of the amount by which the Aggregate Residual
                    Value  Amount  exceeded the Excess Residual Value Amount, in
                    each  case,  as  of  that  date;  plus

                         (ii)  the  greater  of

                              (A)  the  sum  of:

                              (1)  an  amount  equal  to  the product of (x) the
                         Series 2004-1 Invested Percentage as of the last day of
                         the  Monthly  Period  immediately  preceding  the  most
                         recent  Settlement  Date  and  (y) the Excess Equipment
                         Amount  on  such  Settlement  Date;

                              (2)  an  amount  equal  to  the product of (x) the
                         Series 2004-1 Invested Percentage as of the last day of
                         the  Monthly  Period  immediately  preceding  the  most
                         recent  Settlement  Date  and  (y)  the Excess Forklift
                         Amount  on  such  Settlement  Date;

                              (3)  an  amount  equal  to  the product of (x) the
                         Series 2004-1 Invested Percentage as of the last day of
                         the  Monthly  Period  immediately  preceding  the  most
                         recent  Settlement Date and (y) the Excess Truck Amount
                         on  such  Settlement  Date;

                              (4)  an  amount  equal  to  the product of (x) the
                         Series 2004-1 Invested Percentage as of the last day of
                         the  Monthly  Period  immediately  preceding  the  most
                         recent  Settlement  Date  and  (y)  the  Excess Trailer
                         Amount  on  such  Settlement  Date;  and

                              (5)  an  amount  equal  to  the product of (x) the
                         Series 2004-1 Invested Percentage as of the last day of
                         the  Monthly  Period  immediately  preceding  the  most
                         recent  Settlement  Date  and (y) the Excess Truck Body
                         Amount  on  such  Settlement  Date;  or

                                                                              14
<PAGE>

                              (B)  an  amount  equal  to  the product of (x) the
                         Series 2004-1 Invested Percentage as of the last day of
                         the  Monthly  Period  immediately  preceding  such
                         Settlement  Date and (y) the Excess Alternative Vehicle
                         Amount  on  such  Settlement  Date.

     ;  provided,  however,  that,  after  the  declaration  or occurrence of an
     Amortization  Event,  the  Series  2004-1 Required Enhancement Amount shall
     equal  the  Series  2004-1  Required  Enhancement Amount on the date of the
     declaration  or  occurrence  of  such  Amortization  Event.

               "Series 2004-1 Required Investor Noteholders" means Series 2004-1
               --------------------------------------------
     Investor  Noteholders  holding  more than 50% of the Series 2004-1 Invested
     Amount  (excluding  any  Series 2004-1 Investor Notes held by the Issuer or
     any  Affiliate  of  the  Issuer).

               "Series  2004-1 Required Lease Rate Cap" means one or more Series
               ----------------------------------------
     2004-1  Lease Rate Caps having, in the aggregate, a notional amount on each
     Payment  Date  equal  to  the lesser of (x) the average daily Series 2004-1
     Invested  Percentage  during  the Monthly Period immediately preceding such
     Payment  Date  of  the  aggregate  Lease  Balance  of all Fixed Rate Leases
     allocated to the Lease SUBI Portfolio as of the last day of the immediately
     preceding  Monthly  Period  that  were not Fixed Rate Leases when initially
     allocated to the Lease SUBI Portfolio or on the Series 2004-1 Closing Date,
     plus, in the case of all such Fixed Rate Leases that are Closed-End Leases,
     the aggregate Stated Residual Values of the related Leased Vehicles and (y)
     the  sum  of  the  Series  2004-1  Invested Amount and the aggregate stated
     liquidation  preference of the Series 2004-1 Preferred Membership Interests
     on  such  Payment Date and an effective strike rate based on the eurodollar
     rate set forth therein in effect on the dates set forth therein at the most
     equal  to  the  weighted  average fixed rate of interest on such Fixed Rate
     Leases  minus  0.705%  per  annum.

               "Series  2004-1  Required Overcollateralization Amount" means, on
               -------------------------------------------------------
     any date of determination during an Accrual Period, the amount by which the
     Series 2004-1 Required Enhancement Amount exceeds the sum of (a) the Series
     2004-1  Reserve  Account Amount and (b) the amount on deposit in the Series
     2004-1  Principal Collection Subaccount on such date (excluding any amounts
     deposited  therein  pursuant  to  Section 5A.2(d) during the Monthly Period
                                       ----------------
     commencing  after  the  first  day  of  such  Accrual  Period).

               "Series  2004-1  Required  Percentage"  means,  on  any  date  of
               ------------------------------------
     determination,  the Level 2 Required Enhancement Percentage as of such date
     unless:

               (a) for the most recent Settlement Date all of the following were
          true:

               (i)  the  Three Month Average Charge-Off Ratio was 0.50% or less;

               (ii) the Twelve Month Average Charge-Off Ratio was 0.25% or less;

               (iii)  the  Three  Month  Average  Residual  Value Loss Ratio was
          10.00%  or  less;

                                                                              15
<PAGE>

               (iv) the Twelve Month Average Residual Value Loss Ratio was 5.00%
          or  less;

               (v)  the Three Month Average Paid-In Advance Loss Ratio was 1.00%
          or  less;

               (vi)  the  Twelve  Month  Average  Paid-In Advance Loss Ratio was
          0.50%  or  less; and

               (vii)  the  Three  Month  Average  Delinquency Ratio was 4.50% or
          less;

     in  which  case,  the  Series  2004-1 Required Percentage on such date will
     equal  the  Level  1  Required  Enhancement  Percentage  as of such date or

               (b)  for the most recent Settlement Date any one of the following
          was  true:

               (i)  the  Three  Month  Average  Charge-Off Ratio exceeded 0.75%;

               (ii)  the  Twelve  Month Average Charge-Off Ratio exceeded 0.50%;

               (iii)  the Three Month Average Residual Value Loss Ratio exceeded
          12.50%;

               (iv)  the Twelve Month Average Residual Value Loss Ratio exceeded
          10.00%;

               (v)  the Twelve Month Average Paid-In Advance Loss Ratio exceeded
          0.75%;  or

               (vi)  the  Three  Month Average Delinquency Ratio exceeded 6.00%;

     in  which  case,  the  Series  2004-1 Required Percentage on such date will
     equal  the Level  3  Required  Enhancement  Percentage  as  of  such  date.

               "Series  2004-1  Required  Reserve  Account Amount" means, on any
               --------------------------------------------------
     date,  an amount equal to the Required Reserve Account Amount Percentage as
     of  such  date  of  the  Series  2004-1  Initial  Invested  Amount.

               "Series  2004-1  Required  Yield Supplement Amount" means, on any
               --------------------------------------------------
     Settlement  Date,  the  excess,  if  any,  of  (a)  the Series 2004-1 Yield
     Shortfall  Amount  for  such Settlement Date over (b) 70% of the product of
     (x)  the  Series 2004-1 Invested Percentage on such Settlement Date and (y)
     the  Class  X  1999-1B  Invested  Amount  as of such Settlement Date (after
     giving  effect  to any increase thereof on such Settlement Date); provided,
     however  that  upon  the  occurrence  of  a Receivable Purchase Termination
     Event, the Series 2004-1 Required Yield Supplement Amount on any Settlement
     Date  will  equal  the  Series  2004-1  Yield  Shortfall  Amount  for  such
     Settlement  Date.

               "Series  2004-1  Reserve  Account" is defined in Section 5A.8(a).
               --------------------------------                 --------------

               "Series  2004-1  Reserve  Account  Amount"  means, on any date of
               -----------------------------------------
     determination,  the  amount on deposit in the Series 2004-1 Reserve Account
     and  available  for  withdrawal  therefrom.

                                                                              16
<PAGE>

               "Series  2004-1  Reserve  Account  Surplus" means, on any date of
               ------------------------------------------
     determination,  the  amount,  if  any,  by  which the Series 2004-1 Reserve
     Account  Amount  exceeds the Series 2004-1 Required Reserve Account Amount.

               "Series  2004-1  Revolving  Period"  means  the  period  from and
               ----------------------------------
     including  the Series 2004-1 Closing Date to but excluding the commencement
     of  the  Series  2004-1  Amortization  Period.

               "Series  2004-1 Senior Preferred Membership Interests" means each
               ------------------------------------------------------
     series  of  Senior  Preferred  Membership  Interests relating to the Series
     2004-1  Investor  Notes issued by the Issuer pursuant to the LLC Agreement.

               "Series  2004-1  Series  Servicing  Fee Percentage" is defined in
               --------------------------------------------------
     Section  5.1.
     ------------

               "Series  2004-1  Settlement  Collection Subaccount" is defined in
               --------------------------------------------------
     Section  5A.1(a).
     ---------------

               "Series  2004-1  Subaccounts"  is  defined  in  Section  5A.1(a).
               ---------------------------                      ----------------

               "Series  2004-1 Supplemental Servicing Fee" is defined in Section
               --------------------------------------------              -------
     5.1.
     ---
               "Series  2004-1  Weighted  Average  Cost of Funds" means, for any
               -------------------------------------------------
     the  product  of (a) the quotient of the sum of (i) the aggregate amount of
     interest  payable  on  the  Series 2004-1 Investor Notes on such Settlement
     Date  and  (ii)  the  aggregate  amount  of dividends payable on the Series
     2004-1  Preferred  Membership Interests on such Settlement Date, divided by
     the sum of (i) the Series 2004-1 Invested Amount as of the first day of the
     immediately  preceding Series 2004-1 Interest Period and (ii) the aggregate
     stated  liquidation  preference  of  the Series 2004-1 Preferred Membership
     Interests  as of such day and (b) a fraction, the numerator of which is 360
     and  the  denominator  of  which is the number of days in the Series 2004-1
     Interest  Period  ending  on  such  Settlement  Date.

               "Series  2004-1  Weighted Average Yield Shortfall" means, for any
               ------------------------------------------------
     Settlement Date, the excess, if any, of (a) the Series 2004-1 Minimum Yield
     Rate  for  such Settlement Date over (b) the Series 2004-1 Weighted Average
     Yield  Shortfall  Lease  Yield  for  such  Settlement  Date.

               "Series  2004-1  Weighted  Average  Yield  Shortfall Lease Yield"
               ---------------------------------------------------------------
     means, for any Settlement Date, the quotient of the sum of the product with
     respect  to  each  Series 2004-1 Yield Shortfall Lease of (a) the actual or
     implicit  finance  charge  rate  applicable  to  such  Series  2004-1 Yield
     Shortfall Lease and (b) the Net Book Value of the Leased Vehicle subject to
     such  Series  2004-1  Yield  Shortfall  Lease  as  of  the  last day of the
     immediately  preceding  Monthly  Period  divided  by the aggregate Net Book
     Value  of  the  Leased  Vehicles  subject to all of the Series 2004-1 Yield
     Shortfall  Leases  as  of the last day of the immediately preceding Monthly
     Period.

               "Series  2004-1 Weighted Average Yield Shortfall Life" means, for
               ----------------------------------------------------
     any Settlement Date, 50% of the weighted (on the basis of Net Book Value of
     the related Leased Vehicle) average Assumed Lease Term of the Series 2004-1
     Yield  Shortfall

                                                                              17
<PAGE>

     Leases,  assuming  that  all scheduled lease payments are made thereon when
     scheduled  and  that  the  Obligors thereunder do not elect to convert such
     Series  2004-1  Yield Shortfall Leases to Fixed Rate Leases, as of the last
     day  of  the  immediately  preceding  Monthly  Period.

               "Series  2004-1 Yield Shortfall Amount" means, for any Settlement
               ---------------------------------------
     Date, (i) if the Series 2004-1 Hypothetical Yield Shortfall Amount for such
     Settlement  Date  is  less  than  70%  of  the product of the Series 2004-1
     Invested  Percentage  and  the  Class  X 1999-1B Invested Amount as of such
     Settlement  Date  (after  giving  effect  to  any  increase thereof on such
     Settlement  Date),  an amount equal to the Series 2004-1 Hypothetical Yield
     Shortfall  Amount and (ii) otherwise, an amount equal to the product of (x)
     the  Series  2004-1  Weighted  Average  Yield Shortfall for such Settlement
     Date,  (y) the Series 2004-1 Invested Percentage on such Settlement Date of
     the  aggregate Lease Balance of all Series 2004-1 Yield Shortfall Leases as
     of  the  last  day  of the immediately preceding Monthly Period and (z) the
     Series  2004-1  Weighted  Average  Yield Shortfall Life for such Settlement
     Date.

               "Series 2004-1 Yield Shortfall Lease" means, as of any Settlement
               ---------------------------------------
     Date,  each  Unit  Lease  that  is  a Floating Rate Lease with an actual or
     implicit  finance  charge rate of less than the Series 2004-1 Minimum Yield
     Rate  as  of  the  last  day  of  the immediately preceding Monthly Period.

               "Series  2004-1  Yield  Supplement Account" is defined in Section
               ------------------------------------------                -------
     5A.9(a).
     -------

               "Series  2004-1  Yield  Supplement  Account Amount" means, on any
               --------------------------------------------------
     date  of  determination,  the  amount on deposit in the Series 2004-1 Yield
     Supplement  Account  and  available  for  withdrawal  therefrom.

               "Series  2004-1  Yield  Supplement Account Surplus" means, on any
               ---------------------------------------------------
     date of determination, the amount, if any, by which the Series 2004-1 Yield
     Supplement  Account  Amount  exceeds  the  Series  2004-1  Required  Yield
     Supplement  Amount.

               "Series 2004-1 Yield Supplement Deficiency" means, on any date of
               -----------------------------------------
     determination,  the  amount  by  which  the  Series 2004-1 Yield Supplement
     Account  Amount  is  less  than the Series 2004-1 Required Yield Supplement
     Amount.

               "Telerate  Page  3750"  has  the  meaning  set  forth  in  the
               --------------------
     International  Swaps  Derivatives  Association, Inc. 1991 Interest Rate and
     Currency  Exchange  Definitions.

               "Temporary  Global  Notes"  is  defined  in  Section  6.3.
               -------------------------                    ------------

               "Total  Cash  Available"  means,  for  any  Settlement  Date, the
               ----------------------
     excess,  if  any, of (a) the sum of (i) the aggregate amount of Collections
     allocated  to  the  Series 2004-1 General Collection Subaccount pursuant to
     Section  5A.2(a)  during  the immediately preceding Monthly Period, (ii) an
     ---------------
     amount  equal  to  the  product of the average daily Series 2004-1 Invested
     Percentage during such Monthly Period and the amount of the Unit Repurchase
     Payments  paid by the Servicer and/or SPV on such Settlement Date, (iii) an
     amount  equal  to  the  product of the average daily Series 2004-1 Invested
     Percentage  during  such

                                                                              18
<PAGE>

     Monthly  Period  and the amount of the Monthly Servicer Advance made by the
     Servicer  on  such  Settlement Date, (iv) an amount equal to the product of
     the  average  daily  Series  2004-1 Invested Percentage during such Monthly
     Period  and  the amount withdrawn from the Gain on Sale Account pursuant to
     Section  5.2(e)  of  the  Base  Indenture  on the Transfer Date immediately
     --------------
     preceding  such Settlement Date and (v) the investment income on amounts on
     deposit in the Series 2004-1 Principal Collection Subaccount and the Series
     2004-1  General  Collection  Subaccount  transferred  to  the Series 2004-1
     Settlement  Collection  Subaccount  on  such  Settlement  Date  pursuant to
     Section  5A.1(b)  over  (b)  the  amount  withdrawn  from the Series 2004-1
     ---------------
     General Collection Subaccount pursuant to Section 5A.2(f) during the period
                                                --------------
     commencing  on  the  Period  End Date immediately preceding such Settlement
     Date  to  but  excluding  such  Settlement  Date.

               "Tractor"  means a vehicle designed to pull a Trailer by means of
               ---------
     a  fifth  wheel  mounted  over  its  rear  axel.

               "Trailer"  means a truck trailer supported at the rear by its own
               --------
     wheels  and  at  the  front  by  a  fifth  wheel  mounted  to  a  Tractor.

               "Truck"  means  a vehicle that carries cargo in a body mounted to
               ------
      its  chassis  rather  than  in  a  Trailer  towed  by  the  vehicle.

               "Truck  Body"  means  the  outer shell of a motor vehicle that is
               -----------
     mounted  to a cab chassis and that covers that chassis from the back of the
     cab  to the end of the body. A Vehicle shall not be a Truck Body if it also
     includes  the  cab.

                                   ARTICLE II

                         ARTICLE 5 OF THE BASE INDENTURE

               Sections  5.1  through  5.4  of the Base Indenture and each other
               -------------           ---
Section  of  Article 5 of the Indenture relating to another Series shall read in
their  entirety  as  provided  in the Base Indenture or any applicable Indenture
Supplement.  Article  5  of  the  Indenture (except for Sections 5.1 through 5.4
             ----------                                 ------------         ---
thereof  and  any  portion thereof relating to another Series) shall read in its
entirety  as  follows  and  shall be exclusively applicable to the Series 2004-1
Investor  Notes:

          Section  5A.1  Establishment  of  Series  2004-1  Subaccounts.
          -------------  -----------------------------------------------

     (a)  The  Indenture Trustee shall establish and maintain in the name of the
Indenture  Trustee for the benefit of the Series 2004-1 Investor Noteholders (i)
a  subaccount  of  the  Collection  Account  (the  "Series  2004-1  Collection
                                                    --------------------------
Subaccount");  and  (ii)  three  subaccounts  of  the  Series  2004-1 Collection
-----------
Subaccount:  (1) the Series 2004-1 General Collection Subaccount, (2) the Series
2004-1  Principal  Collection  Subaccount  and  (3) the Series 2004-1 Settlement
Collection  Subaccount  (respectively,  the  "Series  2004-1  General Collection
                                              ----------------------------------
Subaccount," the "Series 2004-1 Principal Collection Subaccount" and the "Series
----------        ---------------------------------------------          -------
2004-1  Settlement Collection Subaccount"); the accounts established pursuant to
----------------------------------------
this  Section  5A.1(a),  collectively,  the  "Series  2004-1 Subaccounts"), each
      ---------------                         ---------------------------
Series  2004-1  Subaccount  to  bear  a  designation  indicating  that the funds
deposited  therein  are  held  for  the  benefit  of  the Series 2004-1 Investor
Noteholders.  The  Indenture Trustee shall possess all right, title and interest
in  all  moneys, instruments, securities and other property on deposit from time
to  time  in  the  Series  2004-1  Subaccounts  and the proceeds thereof for the
benefit  of  the  Series  2004-

                                                                              19
<PAGE>

1  Investor  Noteholders.  The Series 2004-1 Subaccounts shall be under the sole
dominion  and  control  of  the  Indenture Trustee for the benefit of the Series
2004-1  Investor  Noteholders.

     (b)  The  Issuer  shall instruct the institution maintaining the Collection
Account  in  writing to invest funds on deposit in the Series 2004-1 Subaccounts
at  all  times  in  Permitted  Investments  selected  by the Issuer (by standing
instructions or otherwise); provided, however, that funds on deposit in a Series
2004-1  Subaccount may be invested together with funds held in other subaccounts
of  the  Collection  Account. Amounts on deposit and available for investment in
the  Series  2004-1  General  Collection  Subaccount  shall  be  invested by the
Indenture  Trustee  at  the  written  direction  of  the  Issuer  in  Permitted
Investments  that  mature,  or that are payable or redeemable upon demand of the
holder  thereof,  on or prior to the Business Day immediately preceding the next
Payment  Date.  Amounts  on  deposit  and available for investment in the Series
2004-1  Principal  Collection  Subaccount  shall  be  invested  by the Indenture
Trustee  at  the  written  direction of the Issuer in Permitted Investments that
mature, or that are payable or redeemable upon demand of the holder thereof, (i)
in  the  case  of  any  such  investment made during the Series 2004-1 Revolving
Period,  on  or  prior to the next Business Day and (ii) in the case of any such
investment  made  on any day during the Series 2004-1 Amortization Period, on or
prior  to  the Business Day immediately preceding the next Payment Date. On each
Settlement  Date,  all interest and other investment earnings (net of losses and
investment  expenses)  on  funds  deposited  in  the  Series  2004-1  Principal
Collection  Subaccount and the Series 2004-1 General Collection Subaccount shall
be  deposited in the Series 2004-1 Settlement Collection Subaccount.  The Issuer
shall not direct the Indenture Trustee to dispose of (or permit the disposal of)
any  Permitted  Investments  prior  to  the  maturity thereof to the extent such
disposal  would  result in a loss of principal of such Permitted Investment.  In
the  absence of written direction as provided hereunder, all funds on deposit in
the  Collection  Account  shall  remain  uninvested.

     Section  5A.2     Allocations  with  Respect  to the Series 2004-1 Investor
     -------------     ---------------------------------------------------------
                       Notes.
                       -----

     (a)  Prior  to  1:00  P.M.,  New  York City time, on each Deposit Date, the
Administrator  shall  direct the Indenture Trustee in writing to allocate to the
Series  2004-1  Investor  Noteholders  and  deposit in the Series 2004-1 General
Collection  Subaccount  an  amount  equal  to  the  product of the Series 2004-1
Invested  Percentage on such Deposit Date and the Collections deposited into the
Collection  Account  on  such  Deposit  Date.

     (b)  On  the  Series  2004-1  Closing Date, the Indenture Trustee shall (i)
deposit  $11,016,000  of  the  net  proceeds  from the sale of the Series 2004-1
Investor  Notes  in  the  Series  2004-1  Reserve  Account  and (ii) deposit the
remainder  of the net proceeds from the sale of the Series 2004-1 Investor Notes
in  the  Series  2004-1  Principal  Collection  Subaccount.

     (c)  On  each  Determination  Date,  the  Administrator  shall  direct  the
Indenture  Trustee  in  writing  to  allocate  to  the  Series  2004-1  Investor
Noteholders and deposit in the Series 2004-1 Settlement Collection Subaccount on
the immediately succeeding Transfer Date amounts withdrawn from the Gain on Sale
Account  on such Transfer Date, in an amount equal to the product of the average
daily  Series  2004-1  Invested  Percentage  during  the  immediately

                                                                              20
<PAGE>

preceding  Monthly Period and the amount withdrawn from the Gain on Sale Account
pursuant  to  Section  5.2(e)  of the  Base  Indenture  on  such  Transfer  Date
             ---------------

     (d)  On  each  Determination  Date,  the  Administrator  shall  direct  the
Indenture  Trustee  in  writing  to  allocate  to  the  Series  2004-1  Investor
Noteholders and deposit in the Series 2004-1 Settlement Collection Subaccount on
the  immediately  succeeding  Settlement  Date  the  following  amounts:

     (i)  any  Unit  Repurchase  Payments made by the Servicer and/or SPV, in an
     amount  equal  to  the  product of the average daily Series 2004-1 Invested
     Percentage  during  the immediately preceding Monthly Period and the amount
     of  such  Unit  Repurchase  Payments;

     (ii)  the Monthly Servicer Advance made by the Servicer, in an amount equal
     to  the  product  of  the  average  daily Series 2004-1 Invested Percentage
     during  the  immediately  preceding  Monthly  Period and the amount of such
     Monthly  Servicer  Advance;

     (iii)  payments  made  under  the  Lease Rate Caps maintained by the Issuer
     pursuant to Sections 5A.11(a) and (b), in an amount equal to the product of
                -----------------      ---
     the  average daily Series 2004-1 Invested Percentage during the immediately
     preceding  Monthly  Period  and  the  amount  of  such  payments;  and

     (iv)  all  payments  made  to the Indenture Trustee under the Series 2004-1
     Lease  Rate  Cap.

     (e)  During  the  Series  2004-1  Revolving  Period,  the Administrator may
direct  the Indenture Trustee in writing on any Business Day to withdraw amounts
on  deposit  in the Series 2004-1 Principal Collection Subaccount for any of the
following  purposes:

     (i)  if  such Business Day is an Additional Closing Date, to remit all or a
     portion  of  the  Transferred  Asset Payment due on such Additional Closing
     Date  pursuant  to  the  Transfer  Agreement;

     (ii)  to  reduce  the  Invested  Amount of any Series of Investor Notes; or

     (iii)  on  the August 2004 Payment Date, in an amount equal to $88,536,603,
     to  the  Issuer  for  the redemption of the series 2001-1A senior preferred
     membership  interests  held  by Terrapin Funding LLC; provided, that, after
     giving  effect  to  the  withdrawal  of  those funds from the Series 2004-1
     Principal  Collection  Subaccount and application thereof to the redemption
     of  the  series  2001-1A  senior  preferred  membership  interests  and the
     issuance  by the Issuer of any Series 2004-1 Senior Membership Interests on
     that  date, no Series 2004-1 Allocated Asset Amount Deficiency shall exist.

     (f)  Prior  to  the  occurrence  of  a  Potential  Amortization Event or an
Amortization Event, on any Business Day during the period commencing on a Period
End  Date  to  but  excluding  the  next succeeding Settlement Date on which the
Administrator is able to determine the amounts to be distributed from the Series
2004-1 Settlement Collection Subaccount pursuant

                                                                              21
<PAGE>

to paragraphs (i) through (xii)of Section 5A.4(c)on such Settlement Date and any
                                  --------------
amounts  owing  in  respect  of the Series 2004-1 Preferred Membership Interests
under the Series 2004-1 Preferred Membership Interest Purchase Agreement on such
Settlement  Date,  the Administrator may direct the Indenture Trustee in writing
to  withdraw  from  the Series 2004-1 General Collection Subaccount and remit to
the  Issuer  the  Series  2004-1  Available  Excess  Collections Amount for such
Business  Day.

     Section  5A.3     Determination  of  Interest.
     -------------     ----------------------------

     (a)  JPMorgan  Chase  is hereby appointed Calculation Agent for the purpose
of  determining  the  Series  2004-1  Note Rates for each Series 2004-1 Interest
Period.  On each LIBOR Determination Date, the Calculation Agent shall determine
the  Series  2004-1 Note Rate for each Class of Series 2004-1 Investor Notes for
the  next  succeeding  Series  2004-1 Interest Period and deliver notice of such
Series  2004-1 Note Rates to the Indenture Trustee.  On each LIBOR Determination
Date,  the  Indenture  Trustee  shall deliver to the Administrator notice of the
Series  2004-1  Note Rate for each Class of Series 2004-1 Investor Notes for the
next  succeeding  Series  2004-1  Interest  Period.

     (b)  On  each  Determination  Date,  the  Administrator shall determine the
excess,  if  any  (the  "Interest  Shortfall Amount"), of (i) the sum of (A) the
                        ---------------------------
Series  2004-1  Monthly Interest for the Series 2004-1 Interest Period ending on
the  next  succeeding  Payment  Date  and  (B) the amount of any unpaid Interest
Shortfall Amount, as of the preceding Payment Date (together with any Additional
Interest  on  such Interest Shortfall Amount) over (ii) the amount which will be
                                              ----
available to pay interest on the Series 2004-1 Investor Notes in accordance with
Section  5A.4(c)  on  such  Payment  Date. If the Interest Shortfall Amount with
----------------
respect  to  any  Payment Date is greater than zero, payments of interest to the
Series 2004-1 Investor Noteholders will be reduced on a pro rata basis, based on
                                                        --- ----
the  amount  of interest payable to each such Series 2004-1 Investor Noteholder,
by  the  Interest Shortfall Amount. The portion of the Interest Shortfall Amount
allocable  to each Class of Series 2004-1 Investor Notes shall be referred to as
the  "Class A-1 Interest Shortfall Amount" and the "Class A-2 Interest Shortfall
      -----------------------------------           ---------------------------
Amount",  respectively. An additional amount of interest ("Additional Interest")
-------                                                    --------------------
shall  accrue  on  the  Class  A-1  Interest  Shortfall Amount and the Class A-2
Interest  Shortfall  Amount  for  each  Series  2004-1  Interest  Period  at the
applicable  Series  2004-1  Note  Rate  for  such Series 2004-1 Interest Period.

     Section  5A.4     Monthly  Application  of  Collections.
     -------------     --------------------------------------

     (a)  On  each Settlement Date, the Administrator shall direct the Indenture
Trustee  in  writing  to  withdraw  from  the  Series  2004-1 General Collection
Subaccount and allocate to the Series 2004-1 Settlement Collection Subaccount an
amount  equal  to  Total Cash Available for such Settlement Date (less an amount
equal  to  the  investment  income  from  the  Series  2004-1 General Collection
Subaccount  and the Series 2004-1 Principal Collection Subaccount transferred to
the Series 2004-1 Settlement Collection Subaccount pursuant to Section 5A.1(b)).
                                                               ---------------
(b)    If  the  Administrator determines that the aggregate amount distributable
from  the  Series 2004-1 Settlement Collection Subaccount pursuant to paragraphs
(i)  through  (ix) of Section 5A.4(c) on any Payment Date exceeds the Total Cash
                      ---------------
Available  for  such  Payment  Date  (the "Deficiency"), the Administrator shall
                                           ----------
notify  the  Indenture  Trustee  thereof in writing at

                                                                              22
<PAGE>

or  before  10:00  a.m.,  New  York  City  time, on the Business Day immediately
preceding such Payment Date, and the Indenture Trustee shall, in accordance with
such  notice,  by 11:00 a.m., New York City time, on such Payment Date, withdraw
from  the  Series  2004-1  Reserve  Account  and  deposit  in  the Series 2004-1
Settlement  Collection  Subaccount  an  amount  equal  to  the least of (x) such
Deficiency,  (y)  the  product  of  the  average  daily  Series  2004-1 Invested
Percentage  during  the  immediately  preceding Monthly Period and Aggregate Net
Lease  Losses  for such Monthly Period and (z) the Series 2004-1 Reserve Account
Amount and, to the extent that such amount is less than the Deficiency, withdraw
from the Series 2004-1 Yield Supplement Account and deposit in the Series 2004-1
Settlement  Collection Subaccount an amount equal to the lesser of the amount of
such insufficiency and the Series 2004-1 Yield Supplement Account Amount. If the
Deficiency  with respect to any Payment Date exceeds the amounts to be withdrawn
from  the  Series  2004-1 Reserve Account and the Series 2004-1 Yield Supplement
Account  pursuant to the immediately preceding sentence, the Administrator shall
instruct the Indenture Trustee in writing at or before 10:00 a.m., New York City
time,  on  the  Business  Day  immediately  preceding such Payment Date, and the
Indenture Trustee shall, in accordance with such notice, by 11:00 a.m., New York
City time, on such Payment Date, withdraw from the Series 2004-1 Reserve Account
and  deposit  in  the  Series  2004-1 Settlement Collection Subaccount an amount
equal  to  the lesser of (x) the remaining portion of the Deficiency and (y) the
Series  2004-1  Reserve  Account  Amount  (after giving effect to the withdrawal
described  in  the  immediately  preceding  sentence).

     (ii)     If  the  Administrator  determines  that  (A)  the  amount  to  be
deposited  in  the Series 2004-1 Distribution Account in accordance with Section
                                                                         -------
5A.4(c)(ix)  and  paid to the Class A-1 Investor Noteholders pursuant to Section
----------                                                               -------
5A.6  on  the  Class A-1 Final Maturity Date is less than the Class A-1 Invested
----
Amount  or  (B)  the  amount  to  be deposited in the Series 2004-1 Distribution
Account  in  accordance  with  Section  5A.4(c)(ix)  and  paid  to the Class A-2
                                        ----------
Investor  Noteholders  pursuant  to Section 5A.6 on the Class A-2 Final Maturity
                                    ------------
Date  is less than the Class A-2 Invested Amount, the Administrator shall notify
the  Indenture Trustee thereof in writing at or before 10:00 a.m., New York City
time,  on  the  Business Day immediately preceding such Final Maturity Date, and
the  Indenture Trustee shall, in accordance with such notice, by 11:00 a.m., New
York  City  time,  on  such Final Maturity Date, withdraw from the Series 2004-1
Reserve  Account and deposit in the Series 2004-1 Distribution Account an amount
equal  to the lesser of such insufficiency and the Series 2004-1 Reserve Account
Amount  (after  giving  effect  to  any withdrawal therefrom pursuant to Section
                                                                         -------
5A.4(b)(i)  on  such  Final  Maturity  Date).  In addition, if the Series 2004-1
---------
Reserve  Account  Amount  is less than such insufficiency on the Class A-2 Final
Maturity  Date,  the Administrator shall notify the Indenture Trustee thereof in
writing  at  or  before  10:00  a.m.,  New  York  City time, on the Business Day
immediately  preceding  the  Class  A-2  Final  Maturity Date, and the Indenture
Trustee  shall,  in  accordance  with  such notice, by 11:00 a.m., New York City
time,  on  the  Class  A-2  Final Maturity Date, withdraw from the Series 2004-1
Yield  Supplement  Account and deposit in the Series 2004-1 Distribution Account
an  amount  equal  to  the lesser of such remaining insufficiency and the Series
2004-1  Yield  Supplement  Account Amount (after giving effect to any withdrawal
therefrom  pursuant to Section 5A.4(b)(i) on the Class A-2 Final Maturity Date).
                       ------------------
     (c)  On each Payment Date, based solely on the information contained in the
Monthly  Settlement  Statement with respect to Series 2004-1 Investor Notes, the
Indenture

                                                                              23
<PAGE>

Trustee  shall  apply  the  following amounts allocated to, or deposited in, the
Series  2004-1  Settlement  Collection  Subaccount  on  such Payment Date in the
following  order  of  priority:

     (i)  to  SPV,  an amount equal to the Series 2004-1 Excess Fleet Receivable
     Amount,  if  any,  for  such  Payment  Date;

     (ii)  to  the  Gain  On  Sale Account, an amount equal to the Series 2004-1
     Monthly  Residual  Value  Gain,  if  any,  for  such  Payment  Date;

     (iii)  to  the  Servicer,  an  amount  equal  to the product of the Monthly
     Servicer Advance Reimbursement Amount for such Payment Date and the average
     daily  Series  2004-1  Invested Percentage during the immediately preceding
     Monthly  Period;

     (iv)  if  VMS  is not the Servicer, to the Servicer, an amount equal to the
     Series  2004-1  Basic  Servicing  Fee for the Series 2004-1 Interest Period
     ending  on  such Payment Date plus, on the first Payment Date following the
     transfer  of  the  servicing  from  VMS to a successor Servicer pursuant to
     Section  9.1  of the Series 1999-1 SUBI Servicing Supplement, to the extent
     -----------
     not  reimbursed  by VMS, the reasonable costs and expenses of the successor
     Servicer  incurred  in connection with the transfer of the servicing, in an
     amount  up  to  $250,000;

     (v)  to  the  Series  2004-1  Distribution  Account, an amount equal to the
     Series 2004-1 Monthly Interest payable on such Payment Date plus the amount
     of  any unpaid Interest Shortfall Amount, as of the preceding Payment Date,
     together  with  any  Additional  Interest on such Interest Shortfall Amount
     (such  amount,  the "Monthly Interest Payment");
                         --------------------------

     (vi) if VMS is the Servicer, to the Servicer, an amount equal to the Series
     2004-1  Basic Servicing Fee for the Series 2004-1 Interest Period ending on
     such  Payment  Date;

     (vii)  to  the  Administrator,  an  amount  equal to the Series 2004-1
     Administrator  Fee  for  the  Series  2004-1 Interest Period ending on such
     Payment  Date;

     (viii)  other  than  during  a  Lockout  Period,  to the Series 2004-1
     Preferred  Member  Distribution  Account,  an  amount equal to the Dividend
     Amount  for  such  Payment  Date;

     (ix)  (A)  on any Payment Date immediately succeeding a Monthly Period
     falling  in  the  Series  2004-1  Revolving Period,  to  the  Series 2004-1
     Principal  Collection  Subaccount,  an  amount  equal  to the Series 2004-1
     Allocated Asset Amount Deficiency, if any, on such Payment Date, (B) on the
     earlier  of  (x)  the second Payment Date following the January 2006 Period
     End  Date  or  (y)  the  first  Payment Date following the occurrence of an
     Amortization  Event,  to  the Series 2004-1 Distribution Account, an amount
     equal  to the lesser of the Series 2004-1 Principal Payment Amount for such
     Payment Date and the Series 2004-1 Invested Amount on such Payment Date and
     (C)  if  any  Series  2004-1  Preferred Membership Interests are issued and
     outstanding,  on  any  Payment  Date  on  and  after the Series 2004-1 Note
     Termination  Date,  to  the  Series  2004-1  Preferred  Member Distribution
     Account,  an amount equal to the Series 2004-1 Principal Payment Amount for
     such  Payment  Date  (or,  on  the Series 2004-1 Note Termination Date, the
     portion

                                                                              24
<PAGE>

     thereof  not  deposited  into  the  Series  2004-1  Distribution  Account);
     provided,  however that on or after the Series 2004-1 Note Termination Date
     during  a  Lockout  Period,  the Series 2004-1 Principal Payment Amount for
     such  Payment  Date  (or,  on  the Series 2004-1 Note Termination Date, the
     portion  thereof not deposited into the Series 2004-1 Distribution Account)
     shall be applied by the Indenture Trustee in accordance with Section 5.4(d)
                                                                  --------------
     of  the  Base  Indenture;

     (x)  to the Series 2004-1 Reserve Account, to the extent that a Series
     2004-1  Liquid Credit Enhancement Deficiency exists or, on any Payment Date
     immediately  succeeding  a  Monthly  Period  falling  in  the Series 2004-1
     Amortization  Period,  to  the  extent that a Series 2004-1 Allocated Asset
     Amount  Deficiency  exists,  an  amount  equal  to  the  greater  of  such
     deficiencies;

     (xi) to the Series 2004-1 Yield Supplement Account, to the extent that
     a  Series  2004-1  Yield Supplement Deficiency exists (or, will exist after
     giving  effect  to  any reduction in the Class X 1999-1B Invested Amount on
     such  Payment  Date),  an  amount  equal  to  such  deficiency;

     (xii)  if  VMS is not the Servicer, to the Servicer, an amount equal to any
     Series  2004-1  Supplemental  Servicing  Fee for the Series 2004-1 Interest
     Period  ending  on  such  Payment  Date;

     (xiii)  if  any Series 2004-1 Preferred Membership Interests are issued and
     outstanding, to the Series 2004-1 Preferred Member Distribution Account, an
     amount  equal  to  the  balance  remaining  in the Series 2004-1 Settlement
     Collection  Subaccount;

     (xiv)  if  no  Series  2004-1 Preferred Membership Interests are issued and
     outstanding,  to,  or  at  the  written direction of, the Issuer, an amount
     equal  to  the balance remaining in the Series 2004-1 Settlement Collection
     Subaccount.

     Section  5A.5     Payment  of  Monthly  Interest  Payment.
     -------------     ----------------------------------------

     On  each  Payment  Date,  based  solely on the information contained in the
Monthly  Settlement  Statement with respect to the Series 2004-1 Investor Notes,
the  Indenture  Trustee  shall,  in  accordance  with  Section  6.1  of the Base
                                                       ------------
Indenture, distribute to the Series 2004-1 Investor Noteholders, from the Series
2004-1  Distribution  Account  the Monthly Interest Payment to the extent of the
amount  deposited  in  the Series 2004-1 Distribution Account for the payment of
interest  pursuant  to  Section  5A.4(c)(v).
                        -------------------

     Section  5A.6     Payment  of  Principal.
     -------------     -----------------------

     (a)  The principal amount of each Class of the Series 2004-1 Investor Notes
shall  be due and payable on the Final Maturity Date with respect to such Class.

     (b)  On  each  Payment  Date  on which a deposit is made to the Series
2004-1  Distribution  Account  pursuant  to  Section 5A.4(c)(ix) or an amount is
                                             ------------------
deposited  in  the  Series  2004-1  Distribution  Account  pursuant  to  Section
                                                                        --------
5A.4(b)(ii), based solely on the information contained in the Monthly Settlement
----------
Statement  with  respect  to  Series  2004-1  Investor  Notes,  the

                                                                              25
<PAGE>

Indenture  Trustee  shall, in accordance with Section 6.1 of the Base Indenture,
                                               -----------
distribute  during the Series 2004-1 Amortization Period, pro rata to each Class
                                                          --- ----
A-1  Investor  Noteholder from the Series 2004-1 Distribution Account the amount
deposited  therein  pursuant  to  Section 5A.4(c)(ix) and Section 5A.4(b)(ii) in
                                  ------------------      ------------------
order  to  pay  the  Class  A-1 Invested Amount, and thereafter pro rata to each
Class  A-2  Investor  Noteholder from the Series 2004-1 Distribution Account the
amount deposited therein pursuant to Section 5A.4(c)(ix) and Section 5A.4(b)(ii)
                                      ------------------      ------------------
in  order  to  pay  the  Class A-2 Invested Amount; provided however that on any
Payment  Date  falling  after  the occurrence of an Amortization Event resulting
from  the  occurrence of an Event of Default described in Section 9.1(a), (b) or
                                                           -------------  ---
(f)  of  the  Base  Indenture the Indenture Trustee shall distribute pro rata to
---                                                                  --- ----
each  Series  2004-1  Investor  Noteholder  from  the Series 2004-1 Distribution
Account  the  amounts  deposited  therein  pursuant  to  Section 5A.4(c)(ix) and
                                                         -------------------
Section  5A.4(b)(ii) in order to pay the Class A-1 Invested Amount and the Class
-------------------
A-2  Invested  Amount.

     (c)  The  Indenture  Trustee shall notify the Person in whose name a Series
2004-1  Investor  Note is registered at the close of business on the Record Date
preceding  the  Payment  Date  on  which  the  Issuer  expects  that  the  final
installment  of  principal  of  and interest on such Series 2004-1 Investor Note
will  be paid. Such notice shall be made at the expense of the Administrator and
shall  be  mailed  within  three  (3)  Business  Days  of  receipt  of a Monthly
Settlement  Statement  indicating that such final payment will be made and shall
specify  that  such final installment will be payable only upon presentation and
surrender  of such Series 2004-1 Investor Note and shall specify the place where
such Series 2004-1 Investor Note may be presented and surrendered for payment of
such  installment.  Notices  in  connection  with  redemptions  of Series 2004-1
Investor  Notes  shall be (i) transmitted by facsimile to Series 2004-1 Investor
Noteholders  holding  Global  Notes  and  (ii) sent by registered mail to Series
2004-1 Investor Noteholders holding Definitive Notes and shall specify that such
final  installment  will be payable only upon presentation and surrender of such
Series 2004-1 Investor Note and shall specify the place where such Series 2004-1
Investor  Note may be presented and surrendered for payment of such installment.

     Section  5A.7     The  Administrator's  Failure  to  Instruct the Indenture
     -------------     ---------------------------------------------------------
Trustee  to  Make  a  Deposit  or  Payment.
------------------------------------------

     When  any  payment  or  deposit  hereunder  or  under any other Transaction
Document  is  required  to  be  made  by  the Indenture Trustee at or prior to a
specified  time,  the  Administrator  shall  deliver  any  applicable  written
instructions  with respect thereto reasonably in advance of such specified time.
If  the  Administrator  fails to give notice or instructions to make any payment
from  or  deposit into the Collection Account or any subaccount thereof required
to  be  given by the Administrator, at the time specified herein or in any other
Transaction  Document  (after  giving  effect  to applicable grace periods), the
Indenture Trustee shall make such payment or deposit into or from the Collection
Account  or  such  subaccount  without  such  notice  or  instruction  from  the
Administrator;  provided  that  the Administrator, upon request of the Indenture
                --------
Trustee,  promptly provides the Indenture Trustee with all information necessary
to  allow  the  Indenture Trustee to make such a payment or deposit in the event
that  the Indenture Trustee shall take or refrain from taking action pursuant to
this Section 5A.7, the Administrator shall, by 5:00 p.m., New York City time, on
     ------- ----
any day the Indenture Trustee makes a payment or deposit based on information or
direction  from  the Administrator, provide (i) written

                                                                              26
<PAGE>

confirmation  of  any  such  direction  and  (ii)  written  confirmation  of all
information  used  by  the  Administrator  in  giving  any  such  direction.

     Section  5A.8     Series  2004-1  Reserve  Account.
     -------------     ---------------------------------

     (a)  The  Indenture Trustee shall establish and maintain in the name of the
Indenture  Trustee  for the benefit of the Series 2004-1 Investor Noteholders an
account  (the  "Series  2004-1  Reserve Account"), bearing a designation clearly
                -------------------------------
indicating  that  the  funds  deposited  therein are held for the benefit of the
Series  2004-1 Investor Noteholders.  The Series 2004-1 Reserve Account shall be
an  Eligible  Deposit Account; provided that, if at any time such account is not
                               --------
an Eligible Deposit Account, then the Indenture Trustee shall, within 30 days of
obtaining  knowledge  of  such  reduction, establish a new Series 2004-1 Reserve
Account  that  is  an  Eligible  Deposit  Account.  If  the  Indenture  Trustee
establishes  a new Series 2004-1 Reserve Account, it shall transfer all cash and
investments  from  the non-qualifying Series 2004-1 Reserve Account into the new
Series 2004-1 Reserve Account. Initially, the Series 2004-1 Reserve Account will
be  established  with  JPMorgan  Chase  Bank.

     (b)  The  Issuer may instruct the institution maintaining the Series 2004-1
Reserve  Account  in  writing  to  invest  funds on deposit in the Series 2004-1
Reserve  Account  from  time  to  time  in Permitted Investments selected by the
Issuer (by standing instructions or otherwise); provided, however, that any such
                                                --------  -------
investment  shall  mature  not  later than the Business Day prior to the Payment
Date  following  the date on which such funds were received.  All such Permitted
Investments  will  be credited to the Series 2004-1 Reserve Account and any such
Permitted  Investments  that  constitute (i)  Physical Property (and that is not
either  a United States Security Entitlement or a Security Entitlement) shall be
delivered  to  the  Indenture  Trustee  in  accordance with paragraph (a) of the
definition  of  "Delivery"  and  shall  be held by the Indenture Trustee pending
maturity  or  disposition;  (ii) United States Security Entitlements or Security
Entitlements  shall  be  Controlled by the Indenture Trustee pending maturity or
disposition; and (iii) Uncertificated Securities (and not United States Security
Entitlements)  shall  be  delivered  to the Indenture Trustee in accordance with
paragraph  (b)  of  the  definition of "Delivery" and shall be maintained by the
Indenture Trustee pending maturity or disposition.  The Indenture Trustee shall,
at  the  direction and expense of the Administrator, take such additional action
as  is  required  to  maintain  the Indenture Trustee's security interest in the
Permitted Investments credited to the Series 2004-1 Reserve Account.  In absence
of  written  direction  as  provided  hereunder,  funds on deposit in the Series
2004-1  Reserve  Account  shall  remain  uninvested.

     (c)  All interest and earnings (net of losses and investment expenses) paid
on  funds  on deposit in the Series 2004-1 Reserve Account shall be deemed to be
on  deposit  and  available  for  distribution.

     (d)  If  there is a Series 2004-1 Reserve Account Surplus on any Settlement
Date,  the Administrator may notify the Indenture Trustee thereof in writing and
instruct  the  Indenture  Trustee  to  withdraw  from  the Series 2004-1 Reserve
Account  and deposit in the Series 2004-1 Preferred Member Distribution Account,
and  the Indenture Trustee shall withdraw from the Series 2004-1 Reserve Account
and  deposit in the Series 2004-1 Preferred Member Distribution Account, so long
as  no  Series  2004-1  Allocated Asset Amount Deficiency exists or would result

                                                                              27
<PAGE>

therefrom,  an amount up to the lesser of (i) such Series 2004-1 Reserve Account
Surplus  on  such Business Day and (ii) the Series 2004-1 Reserve Account Amount
on  such  Business  Day.

     (e)  Amounts  will  be  withdrawn from the Series 2004-1 Reserve Account in
accordance  with  Section  5A.4(b).
                  ----------------

     (f)  In  order  to  secure and provide for the repayment and payment of the
Issuer  Obligations with respect to the Series 2004-1 Investor Notes, the Issuer
hereby grants a security interest in and assigns, pledges, grants, transfers and
sets  over  to  the  Indenture  Trustee,  for  the  benefit of the Series 2004-1
Investor  Noteholders,  all  of the Issuer's right, title and interest in and to
the  following  (whether  now or hereafter existing or acquired): (i) the Series
2004-1  Reserve  Account,  including  any security entitlement thereto; (ii) all
funds  on  deposit  therein  from  time  to  time;  (iii)  all  certificates and
instruments,  if any, representing or evidencing any or all of the Series 2004-1
Reserve  Account  or  the  funds  on deposit therein from time to time; (iv) all
investments  made  at  any  time and from time to time with monies in the Series
2004-1  Reserve  Account,  whether constituting securities, instruments, general
intangibles,  investment  property,  financial assets or other property; (v) all
interest,  dividends,  cash,  instruments  and  other property from time to time
received,  receivable  or otherwise distributed in respect of or in exchange for
the  Series  2004-1  Reserve  Account, the funds on deposit therein from time to
time  or  the investments made with such funds; and (vi) all proceeds of any and
all of the foregoing, including, without limitation, cash. The Indenture Trustee
shall possess all right, title and interest in all funds on deposit from time to
time  in the Series 2004-1 Reserve Account and in all proceeds thereof and shall
be  the only person authorized to originate entitlement orders in respect of the
Series  2004-1  Reserve  Account.  The  Indenture  Trustee and the Series 2004-1
Investor  Noteholders  shall  have no interest in any amounts withdrawn from the
Series  2004-1  Reserve  Account  and  deposited  in the Series 2004-1 Preferred
Member  Distribution  Account.

     (g) On the first Payment Date after the Series 2004-1 Note Termination Date
on which the sum of (a) the Series 2004-1 Reserve Account Amount, (b) the Series
2004-1  Yield  Supplement  Account  Amount  and  (c)  the amount available to be
deposited  in  the  Series  2004-1  Preferred  Member  Distribution  Account  in
accordance  with  Section  5A.4(c)(ix) is at least equal to the aggregate stated
                  --------------------
liquidation  preference  of the Series 2004-1 Preferred Membership Interests and
on any Payment Date thereafter, the Indenture Trustee, acting in accordance with
the  written  instructions  of  the Administrator shall withdraw from the Series
2004-1  Reserve Account all amounts on deposit therein for deposit in the Series
2004-1  Preferred  Member  Distribution  Account.

     Section  5A.9     Series  2004-1  Yield  Supplement  Account.
     -------------     -------------------------------------------

     (a)  The  Indenture Trustee shall establish and maintain in the name of the
Indenture  Trustee  for the benefit of the Series 2004-1 Investor Noteholders an
account  (the  "Series  2004-1 Yield Supplement Account"), bearing a designation
                ---------------------------------------
clearly  indicating that the funds deposited therein are held for the benefit of
the  Series  2004-1  Investor  Noteholders.  The  Series 2004-1 Yield Supplement
Account shall be an Eligible Deposit Account; provided that, if at any time such
                                              --------
account  is  not  an Eligible Deposit Account, then the Indenture Trustee shall,
within  30 days of obtaining knowledge of such reduction, establish a new Series
2004-1  Yield  Supplement  Account  that  is an Eligible Deposit Account. If the
Indenture  Trustee  establishes a

                                                                              28
<PAGE>

new  Series  2004-1  Yield  Supplement  Account,  it shall transfer all cash and
investments  from the non-qualifying Series 2004-1 Yield Supplement Account into
the  new  Series  2004-1  Yield Supplement Account. Initially, the Series 2004-1
Yield  Supplement  Account  will  be  established  with  JPMorgan  Chase  Bank.

     (b)  The  Issuer may instruct the institution maintaining the Series 2004-1
Yield  Supplement  Account  in  writing to invest funds on deposit in the Series
2004-1  Yield  Supplement  Account  from  time  to time in Permitted Investments
selected  by  the  Issuer  (by  standing  instructions  or otherwise); provided,
                                                                       --------
however,  that  any such investment shall mature not later than the Business Day
-------
prior  to the Payment Date following the date on which such funds were received.
All  such  Permitted  Investments  will  be  credited to the Series 2004-1 Yield
Supplement  Account  and  any  such  Permitted  Investments  that constitute (i)
Physical  Property  (and that is not either a United States Security Entitlement
or  a  Security  Entitlement)  shall  be  delivered  to the Indenture Trustee in
accordance  with paragraph (a) of the definition of "Delivery" and shall be held
by  the  Indenture  Trustee  pending maturity or disposition; (ii) United States
Security  Entitlements  or  Security  Entitlements  shall  be  Controlled by the
Indenture  Trustee  pending  maturity  or  disposition; and (iii) Uncertificated
Securities  (and  not United States Security Entitlements) shall be delivered to
the  Indenture  Trustee  in  accordance  with paragraph (b) of the definition of
"Delivery"  and shall be maintained by the Indenture Trustee pending maturity or
disposition.  The  Indenture  Trustee shall, at the direction and expense of the
Administrator,  take  such  additional  action  as  is  required to maintain the
Indenture  Trustee's  security interest in the Permitted Investments credited to
the  Series  2004-1 Yield Supplement Account. In absence of written direction as
provided  hereunder,  funds  on  deposit  in  the Series 2004-1 Yield Supplement
Account  shall  remain  uninvested.

     (c)  All interest and earnings (net of losses and investment expenses) paid
on  funds  on  deposit  in  the  Series 2004-1 Yield Supplement Account shall be
deemed  to  be  on  deposit  and  available  for  distribution.

     (d)  If  there  is  a Series 2004-1 Yield Supplement Account Surplus on any
Settlement  Date,  the Administrator may notify the Indenture Trustee thereof in
writing  and  request  the  Indenture Trustee to withdraw from the Series 2004-1
Yield  Supplement  Account  and  deposit  in  the Series 2004-1 Preferred Member
Distribution  Account,  and the Indenture Trustee shall withdraw from the Series
2004-1  Yield  Supplement  Account  and  deposit  in the Series 2004-1 Preferred
Member Distribution Account an amount up to the lesser of (i) such Series 2004-1
Yield Supplement Account Surplus on such Business Day and (ii) the Series 2004-1
Yield  Supplement  Account  Amount  on  such  Business  Day.

     (e)  Amounts  will  be  withdrawn  from  the Series 2004-1 Yield Supplement
Account in  accordance  with  Section  5A.4(b).
                              ----------------

     (f)  In  order  to  secure and provide for the repayment and payment of the
Issuer  Obligations with respect to the Series 2004-1 Investor Notes, the Issuer
hereby grants a security interest in and assigns, pledges, grants, transfers and
sets  over  to  the  Indenture  Trustee,  for  the  benefit of the Series 2004-1
Investor  Noteholders,  all  of the Issuer's right, title and interest in and to
the  following  (whether  now or hereafter existing or acquired): (i) the Series
2004-1  Yield  Supplement  Account,  including any security entitlement thereto;
(ii)  all  funds  on  deposit  therein

                                                                              29
<PAGE>

from  time to time; (iii) all certificates and instruments, if any, representing
or  evidencing  any  or all of the Series 2004-1 Yield Supplement Account or the
funds  on  deposit  therein  from time to time; (iv) all investments made at any
time  and  from  time  to time with monies in the Series 2004-1 Yield Supplement
Account,  whether  constituting  securities,  instruments,  general intangibles,
investment  property,  financial  assets  or  other  property; (v) all interest,
dividends,  cash,  instruments  and  other  property from time to time received,
receivable  or otherwise distributed in respect of or in exchange for the Series
2004-1  Yield Supplement Account, the funds on deposit therein from time to time
or the investments made with such funds; and (vi) all proceeds of any and all of
the  foregoing, including, without limitation, cash. The Indenture Trustee shall
possess  all right, title and interest in all funds on deposit from time to time
in  the  Series  2004-1 Yield Supplement Account and in all proceeds thereof and
shall  be  the only person authorized to originate entitlement orders in respect
of  the  Series  2004-1  Yield Supplement Account. The Indenture Trustee and the
Series  2004-1  Investor  Noteholders  shall  have  no  interest  in any amounts
withdrawn  from  the Series 2004-1 Yield Supplement Account and deposited in the
Series  2004-1  Preferred  Member  Distribution  Account.

     (g) On the first Payment Date after the Series 2004-1 Note Termination Date
on which the sum of (a) the Series 2004-1 Reserve Account Amount, (b) the Series
2004-1  Yield  Supplement  Account  Amount  and  (c)  the amount available to be
deposited  in  the  Series  2004-1  Preferred  Member  Distribution  Account  in
accordance  with  Section  5A.4(c)(ix) is at least equal to the aggregate stated
                  --------------------
liquidation  preference  of the Series 2004-1 Preferred Membership Interests and
on any Payment Date thereafter, the Indenture Trustee, acting in accordance with
the  written  instructions  of  the Administrator shall withdraw from the Series
2004-1  Yield  Supplement  Account all amounts on deposit therein for deposit in
the  Series  2004-1  Preferred  Member  Distribution  Account.

     Section  5A.10     Series  2004-1  Distribution  Account.
     --------------     --------------------------------------

     (a)  The  Indenture Trustee shall establish and maintain in the name of the
Indenture  Trustee  for the benefit of the Series 2004-1 Investor Noteholders an
account  (the  "Series  2004-1  Distribution  Account"),  bearing  a designation
                -------------------------------------
clearly  indicating that the funds deposited therein are held for the benefit of
the  Series 2004-1 Investor Noteholders.  The Series 2004-1 Distribution Account
shall be an Eligible Deposit Account; provided that, if at any time such account
                                      --------
is  not an Eligible Deposit Account, then the Indenture Trustee shall, within 30
days  of  obtaining  knowledge  of such reduction, establish a new Series 2004-1
Distribution  Account  that  is  an  Eligible  Deposit Account. If the Indenture
Trustee  establishes a new Series 2004-1 Distribution Account, it shall transfer
all  cash  and  investments  from  the non-qualifying Series 2004-1 Distribution
Account  into  the new Series 2004-1 Distribution Account. Initially, the Series
2004-1  Distribution  Account  will  be  established  with  JPMorgan Chase Bank.

     (b)  In  order  to  secure and provide for the repayment and payment of the
Issuer  Obligations with respect to the Series 2004-1 Investor Notes, the Issuer
hereby grants a security interest in and assigns, pledges, grants, transfers and
sets  over  to  the  Indenture  Trustee,  for  the  benefit of the Series 2004-1
Investor  Noteholders,  all  of the Issuer's right, title and interest in and to
the  following  (whether  now or hereafter existing or acquired): (i) the Series
2004-1  Distribution  Account,  including any security entitlement thereto; (ii)
all  funds  on  deposit  therein  from  time to time; (iii) all certificates and
instruments,  if  any,  representing  or  evidencing  any  or

                                                                              30
<PAGE>

all  of  the  Series 2004-1 Distribution Account or the funds on deposit therein
from  time  to  time;  (iv) all interest, dividends, cash, instruments and other
property  from  time  to  time  received, receivable or otherwise distributed in
respect  of  or  in  exchange  for the Series 2004-1 Distribution Account or the
funds  on deposit therein from time to time; and (v) all proceeds of any and all
of  the  foregoing,  including,  without limitation, cash. The Indenture Trustee
shall possess all right, title and interest in all funds on deposit from time to
time  in  the Series 2004-1 Distribution Account and in all proceeds thereof and
shall  be  the only person authorized to originate entitlement orders in respect
of  the  Series  2004-1  Distribution  Account.

     Section  5A.11     Lease  Rate  Caps.
     --------------     ------------------

     (a)  The  Issuer  shall have obtained on the Series 2004-1 Closing Date and
shall  thereafter  maintain  one  or more interest rate caps, each from a Series
2004-1 Eligible Counterparty, having, in the aggregate, a notional amount on the
Series  2004-1 Closing Date at least equal to the aggregate Lease Balance of all
Fixed  Rate Leases allocated to the Lease SUBI Portfolio as of the Series 2004-1
Closing  Date,  plus,  in  the  case  of  all  such  Fixed  Rate Leases that are
Closed-End  Leases,  the  aggregate Stated Residual Values of the related Leased
Vehicles  and  on  each  Payment Date thereafter at least equal to the aggregate
scheduled  Lease Balance of all such Fixed Rate Leases as of the last day of the
Monthly Period immediately preceding such Payment Date, plus, in the case of all
such Fixed Rate Leases that are Closed-End Leases, the aggregate Stated Residual
Values of the related Leased Vehicles, and an effective strike rate based on the
eurodollar  rate  set  forth therein in effect on the dates set forth therein at
the most equal to the weighted average fixed rate of interest on such Fixed Rate
Leases  minus  0.705%  per  annum.

     (b)  On  or prior to the date that any Fixed Rate Lease is allocated to the
Lease  SUBI  Portfolio  on  or  after the Series 2004-1 Closing Date, the Issuer
shall  have  obtained  and shall thereafter maintain an interest rate cap from a
Series  2004-1  Eligible  Counterparty  having  a  notional  amount equal to the
initial  Lease  Balance  of  such  Fixed  Rate  Lease,  plus,  in  the case of a
Closed-End Lease, the Stated Residual Value of the related Leased Vehicle and on
each  Payment  Date  thereafter at least equal to the scheduled Lease Balance of
such  Fixed  Rate  Lease  as  of  the last day of the Monthly Period immediately
preceding such Payment Date, plus, in the case of a Closed-End Lease, the Stated
Residual  Value of the related Leased Vehicle and an effective strike rate based
on  the  eurodollar  rate  set  forth  therein  in effect on the dates set forth
therein at the most equal to the fixed rate of interest on such Fixed Rate Lease
minus  0.705%  per  annum.

     (c)  The  Issuer  may  obtain  an  interest  rate  cap from a Series 2004-1
Eligible  Counterparty in respect of any Fixed Rate Lease allocated to the Lease
SUBI  Portfolio  that was not a Fixed Rate Lease when initially allocated to the
Lease  SUBI  Portfolio  or  on  the Series 2004-1 Closing Date having a notional
amount equal to the Lease Balance of such Fixed Rate Lease as of the last day of
the  Monthly Period immediately preceding the date as of which such Lease became
a Fixed Rate Lease, plus, in the case of a Closed-End Lease, the Stated Residual
Value of the related Leased Vehicle and on each Payment Date thereafter at least
equal to the scheduled Lease Balance of such Fixed Rate Lease as of the last day
of the Monthly Period immediately preceding such Payment Date, plus, in the case
of  a  Closed-End Lease, the Stated Residual Value of the related Leased Vehicle
and  an  effective  strike  rate  based  on  the  eurodollar

                                                                              31
<PAGE>

rate  set  forth  therein  in  effect on the dates set forth therein at the most
equal  to  the  fixed rate of interest on such Fixed Rate Lease minus 0.705% per
annum.  If  the Issuer obtains an interest rate cap in respect of any Fixed Rate
Lease  satisfying  the  requirements of this Section 5A.11(c), it shall maintain
                                             ----------------
such  interest  rate  cap.

     (d)  The  Issuer  shall have obtained on the Series 2004-1 Closing Date and
shall thereafter  maintain  the  Series  2004-1  Required  Lease  Rate  Cap.

     (e) If the short-term credit rating of any provider of an interest rate cap
required  to  be  obtained and maintained by the Issuer pursuant to this Section
                                                                         -------
5A.11  falls  below  "A-1"  by  Standard  &  Poor's  or  "P-1" by Moody's or the
-----
long-term  unsecured  credit  rating  of  any  such provider falls below "A+" by
Standard  &  Poor's  or  "Aa3" by Moody's, the Issuer shall obtain an equivalent
interest  rate  cap from a Series 2004-1 Eligible Counterparty within 30 days of
such  decline  in  credit  rating  unless  such  provider  provides some form of
collateral for its obligations under its interest rate cap and the Rating Agency
Condition  is  satisfied  with respect to such arrangement.  The Issuer will not
permit  any  interest  rate  cap  required  to be obtained and maintained by the
Issuer  pursuant  to this Section 5A.11 to be terminated or transferred in whole
                          -------------
or  in part unless a replacement interest rate cap therefor has been provided as
described  in  the  immediately  preceding  sentence  and,  after  giving effect
thereto,  the  Issuer  has  the  interest  rate caps required to be obtained and
maintained  by  the  Issuer  pursuant  to  this  Section  5A.11.
                                                 --------------

     (f)  In  order  to  secure and provide for the repayment and payment of the
Issuer  Obligations with respect to the Series 2004-1 Investor Notes, the Issuer
hereby grants a security interest in and assigns, pledges, grants, transfers and
sets  over  to  the  Indenture  Trustee,  for  the  benefit of the Series 2004-1
Investor  Noteholders,  all  of the Issuer's right, title and interest in and to
the Series 2004-1 Lease Rate Cap and any and all payments thereunder and any and
all  proceeds  thereof  (including  as  a  result  of  the termination thereof).

                                  ARTICLE III

                               AMORTIZATION EVENTS

     If  any  one of the following events shall occur with respect to the Series
2004-1  Investor  Notes:

     (a)  the  Series  2004-1  Reserve  Account  shall have become subject to an
injunction,  estoppel  or  other  stay  or a Lien (other than a Permitted Lien);

     (b) the Series 2004-1 Yield Supplement Account shall have become subject to
an injunction, estoppel or other  stay  or a Lien (other than a Permitted Lien);

     (c)  a  Series  2004-1 Liquid Credit Enhancement Deficiency shall occur and
continue  for  at  least  two  Business  Days;

     (d)  a  Series  2004-1  Allocated  Asset  Amount Deficiency shall occur and
continue for  at  least  two  Business  Days;

                                                                              32
<PAGE>

     (e)  a  Series  2004-1 Yield Supplement Deficiency shall occur and continue
for  at least  two  Business  Days;

     (f) the Three Month Average Charge-Off Ratio with respect to any Settlement
Date  exceeds  1.00%;

     (g)  the Three Month Average Paid-In Advance Loss Ratio with respect to any
Settlement  Date  exceeds  1.50%;

     (h)  the  Three  Month  Average  Delinquency  Ratio  with  respect  to  any
Settlement Date  exceeds  7.00%;

     (i)  the  failure on the part of the Issuer to declare and pay dividends on
the  Series  2004-1  Senior  Preferred Membership Interests or the Series 2004-1
Junior  Preferred  Membership  Interests  on any Payment Date in accordance with
their  terms;

     (j)  any  Servicer  Termination  Event  shall  occur;

     (k)  any  Termination  Event  shall  occur;

     (l)  an  Event  of Default with respect to the Series 2004-1 Investor Notes
shall occur;

     (m) there is at least $10,000,000 on deposit in the Series 2004-1 Principal
Collection  Subaccount  on  two  consecutive  Settlement Dates during the Series
2004-1  Revolving  Period;

     (n)  an  Insolvency  Event shall occur with respect to SPV, the Origination
Trust, AGH,  PHH,  Cendant  or  VMS;

     (o)  all principal and interest of the Class A-1 Investor Notes is not paid
in  full  on or before the Class A-1 Maturity Date or all principal and interest
of  the  Class A-2 Investor Notes is not paid in full on or before the Class A-2
Maturity  Date;

     (p)  failure  on  the part of the Issuer (i) to make any payment or deposit
required  by  the  terms of the Indenture (or within the applicable grace period
which  shall not exceed two Business Days after the date such payment or deposit
is  required  to  be  made)  or  (ii) duly to observe or perform in any material
respect  any  covenants  or  agreements  of  the  Issuer  set  forth in the Base
Indenture or this Indenture Supplement, which failure continues unremedied for a
period  of  45  days  after  there  shall  have  been given to the Issuer by the
Indenture  Trustee  or the Issuer and the Indenture Trustee by the Series 2004-1
Required  Investor  Noteholders,  written  notice  specifying  such  default and
requiring  it  to  be  remedied;

     (q) any representation or warranty made by the Issuer in the Base Indenture
or this Indenture Supplement, or any information required to be delivered by the
Issuer  to  the  Indenture  Trustee  shall  prove  to have been incorrect in any
material respect when made or when delivered, which continues to be incorrect in
any  material  respect  for  a  period  of  45  days  after

                                                                              33
<PAGE>

there shall have been given to the Issuer by the Indenture Trustee or the Issuer
and  the  Indenture  Trustee by the Series 2004-1 Required Investor Noteholders,
written  notice  thereof;

     (r)  the  Indenture  Trustee shall for any reason cease to have a valid and
perfected  first priority security interest in the Collateral or any of VMS, the
Issuer  or  any  Affiliate  of  either  thereof  shall  so  assert;

     (s)  there shall have been filed against Cendant, PHH, VMS, the Origination
Trust,  SPV  or  the  Issuer  (i) a notice of federal tax Lien from the Internal
Revenue Service, (ii) a notice of Lien from the PBGC under Section 412(n) of the
Internal  Revenue  Code  or  Section  302(f)  of  ERISA  for a failure to make a
required installment or other payment to a plan to which either of such sections
applies  or  (iii)  a  notice  of  any  other  Lien the existence of which could
reasonably  be  expected  to  have  a  material  adverse effect on the business,
operations  or  financial  condition  of such Person, and, in each case, 40 days
shall have elapsed without such notice having been effectively withdrawn or such
Lien  having  been  released  or  discharged;

     (t)  one  or  more judgments or decrees shall be entered against the Issuer
involving  in the aggregate a liability (not paid or fully covered by insurance)
of  $100,000  or more and such judgments or decrees shall not have been vacated,
discharged,  stayed  or  bonded  pending  appeal  within  30 days from the entry
thereof;  or

     (u)  any of the Transaction Documents shall cease, for any reason, to be in
full  force  and  effect,  other than in accordance with its terms;

then,  in  the  case  of any event described in clause (p) through (u) above, an
Amortization  Event  will  be deemed to have occurred with respect to the Series
2004-1  Investor  Notes  only,  if after the applicable grace period, either the
Indenture  Trustee  or  Series 2004-1 Investor Noteholders holding a Majority in
Interest of the Series 2004-1 Investor Notes, declare that an Amortization Event
has  occurred  with  respect to the Series 2004-1 Investor Notes. In the case of
any event described in clauses (a) through (o) above, an Amortization Event with
respect  to  the  Series  2004-1  Investor Notes will be deemed to have occurred
without  notice  or  other  action  on  the part of the Indenture Trustee or the
Series  2004-1  Investor  Noteholders.

                                   ARTICLE IV

                               OPTIONAL PREPAYMENT

     The Issuer shall have the option to prepay the Series 2004-1 Investor Notes
in full on any Payment Date after the Payment Date in February 2006.  The Issuer
shall  give  the  Indenture  Trustee  at  least ten Business Days' prior written
notice  of  the Payment Date on which the Issuer intends to exercise such option
to  prepay  (the "Prepayment Date").  The prepayment price for the Series 2004-1
                  ---------------
Investor  Notes  shall  equal the aggregate outstanding principal balance of the
Series  2004-1 Investor Notes (determined after giving effect to any payments of
principal  and  interest on such Payment Date), plus accrued and unpaid interest
on such outstanding principal balance.  Not later than 11:00 a.m., New York City
time,  on  such  Prepayment  Date, the Issuer shall deposit in the Series 2004-1
Distribution  Account  an  amount  equal  to the prepayment price in immediately
available  funds.  The  funds  deposited  into  the  Series  2004-1 Distribution

                                                                              34
<PAGE>

Account  will  be  paid  by  the Indenture Trustee to the Series 2004-1 Investor
Noteholders  on  such  Prepayment  Date.

                                    ARTICLE V

                        SERVICING AND ADMINISTRATOR FEES

     Section  5.1  Servicing  Fees. A periodic servicing fee (the "Series 2004-1
     ------------   --------------                                 -------------
Basic  Servicing Fee") shall be payable to the Servicer on each Payment Date for
--------------------
the Series 2004-1 Interest Period ending on such Payment Date in an amount equal
to  the  product of (a) 0.215% (the "Series Servicing Fee Percentage") times (b)
the  Series 2004-1 Allocated Adjusted Aggregate Unit Balance as of the first day
of  such  Series  2004-1  Interest  Period  times (c) the number of days in such
Series  2004-1  Interest  Period  divided  by  365 (or 366, as applicable) days;
provided,  however that if VMS is not the Servicer, the servicing fee payable to
the  Servicer  on each Payment Date hereunder may be increased such that the sum
of  the  Series  2004-1  Basic  Servicing  Fee  and the additional servicing fee
payable  to  the  Servicer  hereunder (the "Series 2004-1 Supplemental Servicing
                                            ------------------------------------
Fee")  for  each  Series  2004-1 Interest Period equals 110% of the costs to the
---
successor  Servicer  of  servicing  the  portion  of  the  Lease  SUBI Portfolio
allocated  to  Series 2004-1 during such Series 2004-1 Interest Period. For this
purpose,  the portion of the Lease SUBI Portfolio allocated to Series 2004-1 for
each  Series  2004-1  Interest  Period  shall  equal  the  average Series 2004-1
Invested Percentage during such Series 2004-1 Interest Period. The Series 2004-1
Basic  Servicing  Fee  and any Series 2004-1 Supplemental Servicing Fee shall be
payable  to  the  Servicer  on  each  Payment  Date pursuant to Section 5A.4(c).
                                                                ---------------
     Section  5.2  Administrator  Fee.  A  periodic  fee  (the  "Series  2004-1
     ------------  -----------------                             --------------
Administrator  Fee")  shall be payable to the Administrator on each Payment Date
------------------
for  the  Series 2004-1 Interest Period ending on such Payment Date in an amount
equal to the product of (a) 0.01% times (b) the Series 2004-1 Allocated Adjusted
Aggregate  Unit Balance as of the first day of the immediately preceding Monthly
Period  times  (c)  the  number  of  days  in such Series 2004-1 Interest Period
divided by 365 (or 366, as applicable) days. The Series 2004-1 Administrator Fee
shall  be  payable to the Administrator on each Payment Date pursuant to Section
                                                                        --------
5A.4(c)(vii).
-----------
                                   ARTICLE VI

                           FORM OF SERIES 2004-1 NOTES

     Section  6.1  Initial  Issuance  of  Series  2004-1  Investor  Notes.
     ------------  -------------------------------------------------------

     The  Series  2004-1 Investor Notes are being offered and sold by the Issuer
pursuant  to  a  Purchase Agreement, dated July 15, 2004, among the Issuer, VMS,
PHH  and  J.P.  Morgan  Securities  Inc.  and  Barclays  Capital  Inc.,  as  the
representatives of the initial purchasers. The Series 2004-1 Investor Notes will
be  resold  initially  only to (1) qualified institutional buyers (as defined in
Rule  144A)  ("QIBs")  in  reliance  on  Rule 144A and (2) in the case of offers
               ----
outside  the  United  States,  to Persons other than U.S. Persons (as defined in
Regulation S of the Securities Act) in accordance with Rule 903 of Regulation S.

     Section  6.2  Restricted  Global  Notes.
     ------------  --------------------------

                                                                              35
<PAGE>

     The  Series  2004-1  Investor Notes of each Class offered and sold in their
initial  distribution  in  reliance upon Rule 144A will be issued in the form of
one  or  more  Global  Notes  in  fully  registered  form,  without  coupons,
substantially  in the forms set forth in Exhibits A-1-1 and A-2-1, registered in
                                         --------------     -----
the name of Cede & Co., as nominee of DTC, and deposited with JPMorgan Chase, as
custodian  of  DTC (collectively, the "Restricted Global Notes").  The aggregate
                                       -----------------------
initial principal amount of the Restricted Global Notes may from time to time be
increased  or decreased by adjustments made on the records of JPMorgan Chase, as
custodian  for  DTC,  in connection with a corresponding decrease or increase in
the  aggregate  initial  principal  amount  of  the  corresponding  Class of the
Temporary  Global  Notes or the Permanent Global Notes, as hereinafter provided.

     Section  6.3  Temporary  Global  Notes  and  Permanent  Global  Notes.
     ----------------------------------------------------------------------

     Series  2004-1  Investor Notes of each Class offered and sold on the Series
2004-1  Closing Date in reliance upon Regulation S will be issued in the form of
one  or  more  Global  Notes  in  fully  registered  form,  without  coupons,
substantially in the forms set forth in Exhibits A-1-2 and A-2-2, which shall be
                                         --------------    -----
deposited  on  behalf  of  the  purchasers  of  the Series 2004-1 Investor Notes
represented  thereby  with  a  custodian  for,  and  registered in the name of a
nominee  of DTC, for the account of Euroclear Bank S.A./N.V., as operator of the
Euroclear  System  ("Euroclear")  or  for  Clearstream  Banking, societe anonyme
                     ---------
("Clearstream"),  duly executed by the Issuer and authenticated by the Indenture
  ------------
Trustee  in  the  manner  set forth in Section 2.3 of the Base Indenture.  Until
                                       -----------
such  time  as  the  Restricted Period shall have terminated, such Series 2004-1
Investor Notes shall be referred to herein collectively as the "Temporary Global
                                                                ----------------
Notes".  After  such  time  as the Restricted Period shall have terminated, such
-----
Series  2004-1  Investor  Notes,  as to which the Indenture Trustee has received
from  Euroclear  or Clearstream, as the case may be, a certificate substantially
in  the  form  of  Exhibit  B-4  to the effect that Euroclear or Clearstream, as
-                  ------------
applicable, has received a certificate substantially in the form of Exhibit B-5,
                                                                   ------------
shall  be exchanged, in whole or in part, for interests in one or more permanent
global  notes  in registered form without interest coupons, substantially in the
form  of  Exhibits  A-1-3  and A-2-3, as hereinafter provided (collectively, the
          ---------------      -----
"Permanent  Global  Notes").  The  aggregate  principal amount of a Class of the
 ------------------------
Temporary  Global  Notes  or the Permanent Global Notes may from time to time be
increased  or decreased by adjustments made on the records of JPMorgan Chase, as
custodian  for  DTC,  in connection with a corresponding decrease or increase of
aggregate  principal  amount  of  the  corresponding  Class of Restricted Global
Notes,  as  hereinafter  provided.

     Section  6.4  Definitive  Notes.
     ------------  -----------------

     No  Series  2004-1  Note  Owner will receive a Definitive Note representing
such  Series  2004-1  Note  Owner's interest in the Series 2004-1 Investor Notes
other  than  in  accordance  with  Section  2.11  of  the  Base  Indenture.
                                   -------------

     Section  6.5  Transfer  Restrictions.
     -------------------------------------

     (a)  A  Series  2004-1  Global  Note may not be transferred, in whole or in
part, to any Person other than DTC or a nominee thereof, and no such transfer to
any  such  other  Person may be registered; provided, however, that this Section
                                                                         -------
6.5(a)  shall not prohibit any transfer of a Series 2004-1 Investor Note that is
----
issued  in  exchange  for a Series 2004-1 Global Note but is not

                                                                              36
<PAGE>

itself  a  Series  2004-1  Global  Note and shall not prohibit any transfer of a
beneficial  interest  in a Series 2004-1 Global Note effected in accordance with
the  other  provisions  of  this  Section  6.5.
                                   ------------

     (b)  The  transfer  by  an  owner  of a beneficial interest in a Restricted
Global  Note  to  a  Person who wishes to take delivery thereof in the form of a
beneficial  interest  in  the same Restricted Global Note shall be made upon the
deemed  representation  of  the  transferee  that  it  is purchasing for its own
account  or  an  account  with  respect  to  which  it exercises sole investment
discretion and that it and any such account is a QIB, and is aware that the sale
to  it  is  being  made  in  reliance  on Rule 144A and acknowledges that it has
received  such information regarding the Issuer as such transferee has requested
pursuant to Rule 144A or has determined not to request such information and that
it is aware that the transferor is relying upon its foregoing representations in
order  to  claim  the  exemption  from  registration  provided  by  Rule  144A.

     (c)  If  the  owner  of  a  beneficial interest in a Restricted Global Note
wishes  at  any time to exchange its interest in such Restricted Global Note for
an  interest  in  the  corresponding  Temporary Global Note, or to transfer such
interest  to  a  Person  who  wishes  to  take delivery thereof in the form of a
beneficial interest in the corresponding Temporary Global Note, such exchange or
transfer may be effected, subject to the applicable rules and procedures of DTC,
Euroclear and Clearstream (the "Applicable Procedures"), only in accordance with
                                ----------------------
the  provisions  of  this Section 6.5(c). Upon receipt by the Transfer Agent and
                         ---------------
Registrar,  at  the  office  of the Transfer Agent and Registrar, of (i) written
instructions  given in accordance with the Applicable Procedures from a Clearing
Agency Participant directing the Transfer Agent and Registrar to credit or cause
to be credited to a specified Clearing Agency Participant's account a beneficial
interest  in  the  Temporary Global Note, in a principal amount equal to that of
the  beneficial  interest  in  such Restricted Global Note to be so exchanged or
transferred,  (ii)  a  written  order  given  in  accordance with the Applicable
Procedures  containing  information regarding the account of the Clearing Agency
Participant (and the Euroclear or Clearstream account, as the case may be) to be
credited  with, and the account of the Clearing Agency Participant to be debited
for,  such beneficial interest and (iii) a certificate in substantially the form
set forth in Exhibit B-1 given by the holder of such beneficial interest in such
             -----------
Restricted  Global Note, the Transfer Agent and Registrar, if it is not JPMorgan
Chase,  shall  instruct  JPMorgan  Chase,  as  custodian  of  DTC, to reduce the
principal  amount  of  the Restricted Global Note, and to increase the principal
amount  of  the Temporary Global Note, by the principal amount of the beneficial
interest  in  such Restricted Global Note to be so exchanged or transferred, and
to credit or cause to be credited to the account of the Person specified in such
instructions  (which  shall  be the Clearing Agency Participant for Euroclear or
Clearstream  or both, as the case may be) a beneficial interest in the Temporary
Global Note having a principal amount equal to the amount by which the principal
amount  of  such  Restricted  Global  Note  was  reduced  upon  such exchange or
transfer.

     (d)  If  the  owner  of  a  beneficial interest in a Restricted Global Note
wishes  at  any time to exchange its interest in such Restricted Global Note for
an  interest  in  the  corresponding  Permanent Global Note, or to transfer such
interest  to  a  Person  who  wishes  to  take delivery thereof in the form of a
beneficial interest in the corresponding Permanent Global Note, such exchange or
transfer  may  be  effected,  subject  to  the  Applicable  Procedures,  only in
accordance  with  the  provisions  of  this  Section 6.5(d). Upon receipt by the
                                             --------------
Transfer Agent and Registrar, at the office of the Transfer Agent and Registrar,
of  (A)  written  instructions  given  in  accordance

                                                                              37
<PAGE>

with  the Applicable Procedures from a Clearing Agency Participant directing the
Transfer  Agent  and  Registrar to credit or cause to be credited to a specified
Clearing  Agency  Participant's  account  a beneficial interest in the Permanent
Global  Note  in  a principal amount equal to that of the beneficial interest in
such  Restricted  Global  Note to be so exchanged or transferred, (ii) a written
order  given in accordance with the Applicable Procedures containing information
regarding  the  account of the Clearing Agency Participant (and the Euroclear or
Clearstream account, as the case may be) to be credited with, and the account of
the  Clearing Agency Participant to be debited for, such beneficial interest and
(iii) a certificate in substantially the form of Exhibit B-2 given by the holder
                                                 ------------
of  such  beneficial interest in such Restricted Global Note, the Transfer Agent
and  Registrar,  if  it is not JPMorgan Chase, shall instruct JPMorgan Chase, as
custodian of DTC, to reduce the principal amount of such Restricted Global Note,
and  to  increase  the  principal  amount  of  the Permanent Global Note, by the
principal amount of the beneficial interest in such Restricted Global Note to be
so  exchanged  or  transferred,  and  to  credit  or cause to be credited to the
account  of  the  Person  specified  in  such  instructions  (which shall be the
Clearing  Agency  Participant  for Euroclear or Clearstream or both, as the case
may  be)  a  beneficial interest in the Permanent Global Note having a principal
amount  equal  to  the  amount  by which the principal amount of such Restricted
Global  Note  was  reduced  upon  such  exchange  or  transfer.

     (e)  If  the owner of a beneficial interest in a Temporary Global Note or a
Permanent  Global  Note  wishes  at  any  time  to exchange its interest in such
Temporary  Global  Note  or  such  Permanent  Global Note for an interest in the
corresponding  Restricted  Global Note, or to transfer such interest to a Person
who  wishes to take delivery thereof in the form of a beneficial interest in the
corresponding Restricted Global Note, such exchange or transfer may be effected,
subject  to the Applicable Procedures, only in accordance with the provisions of
this  Section  6.5(e).  Upon receipt by the Transfer Agent and Registrar, at the
      ---------------
office of the Transfer Agent and Registrar, of (i) written instructions given in
accordance  with  the  Applicable  Procedures from a Clearing Agency Participant
directing  the Transfer Agent and Registrar to credit or cause to be credited to
a  specified  Clearing Agency Participant's account a beneficial interest in the
Restricted  Global  Note  in  a principal amount equal to that of the beneficial
interest  in  such  Temporary  Global Note or such Permanent Global Note, as the
case  may  be,  to be so exchanged or transferred, (ii) a written order given in
accordance  with  the Applicable Procedures containing information regarding the
account  of  the  Clearing  Agency Participant (and the Euroclear or Clearstream
account,  as  the  case  may  be)  to  be  credited with, and the account of the
Clearing  Agency  Participant  to  be  debited for, such beneficial interest and
(iii)  with  respect  to  a  transfer of a beneficial interest in such Temporary
Global Note (but not such Permanent Global Note), a certificate in substantially
the  form  set  forth  in  Exhibit  B-3  given  by the holder of such beneficial
                           ------------
interest  in such Temporary Global Note, the Transfer Agent and Registrar, if it
is  not  JPMorgan  Chase, shall instruct JPMorgan Chase, as custodian of DTC, to
reduce  the  principal  amount  of  such Temporary Global Note or such Permanent
Global  Note,  as  the  case may be, and to increase the principal amount of the
Restricted  Global  Note,  by the principal amount of the beneficial interest in
such  Temporary  Global Note or such Permanent Global Note to be so exchanged or
transferred,  and to credit or cause to be credited to the account of the Person
specified  in  such instructions (which shall be the Clearing Agency Participant
for  DTC) a beneficial interest in the Restricted Global Note having a principal
amount  equal  to  the  amount  by  which the principal amount of such Temporary
Global  Note or such Permanent Global Note, as the case may be, was reduced upon
such  exchange  or  transfer.

                                                                              38
<PAGE>

     (f) In the event that a Series 2004-1 Global Note or any portion thereof is
exchanged  for  Series  2004-1  Investor  Notes  other than Series 2004-1 Global
Notes,  such  other  Series 2004-1 Investor Notes may in turn be exchanged (upon
transfer  or  otherwise)  for  Series  2004-1 Investor Notes that are not Series
2004-1  Global Notes or for a beneficial interest in a Series 2004-1 Global Note
(if  any  is  then  outstanding)  only in accordance with such procedures, which
shall be substantially consistent with the provisions of Sections 6.5(a) through
                                                         ---------------
Section  6.5(e)  and  Section  6.5(g)  (including  the certification requirement
---------------       ---------------
intended  to  ensure  that  transfers and exchanges of beneficial interests in a
Series  2004-1  Global  Note  comply  with  Rule  144A or Regulation S under the
Securities  Act,  as  the  case may be) and any Applicable Procedures, as may be
adopted  from  time  to time by the Issuer and the Transfer Agent and Registrar.

     (g)  Until  the  termination  of  the  Restricted  Period, interests in the
Temporary  Global  Notes  may  be held only through Clearing Agency Participants
acting  for  and  on  behalf  of  Euroclear and Clearstream; provided, that this
Section  6.5(g)  shall  not  prohibit  any  transfer  in accordance with Section
--------------                                                           -------
6.5(e).  After  the  expiration  of  the  Restricted  Period,  interests  in the
-----
Permanent  Global Notes may be transferred without requiring any certifications.

     (h)  The  Series  2004-1 Investor Notes shall bear the following legends to
the extent  indicated:

     (i)     The  Restricted  Notes  shall  bear  the  following  legend:

          THIS  NOTE  HAS  NOT  BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
     1933,  AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. THE
     HOLDER  OF  THIS  NOTE  BY  ITS  ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
     OTHERWISE  TRANSFER  SUCH  NOTE, PRIOR TO THE DATE (THE "RESALE RESTRICTION
     TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE
     DATE  HEREOF  AND  THE  LAST  DATE  ON  WHICH  CHESAPEAKE  FUNDING LLC (THE
     "ISSUER") OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS NOTE (OR ANY
     PREDECESSOR  OF  SUCH  NOTE),  ONLY  (A)  TO  THE ISSUER, (B) PURSUANT TO A
     REGISTRATION  STATEMENT  THAT  HAS  BEEN  DECLARED  EFFECTIVE  UNDER  THE
     SECURITIES  ACT,  (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE
     PURSUANT  TO  RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON
     IT  REASONABLY  BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN
     RULE  144A  (A "QIB") THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
     OF  A  QIB  TO  WHOM  NOTICE  IS  GIVEN  THAT THE TRANSFER IS BEING MADE IN
     RELIANCE  ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE
     THE  UNITED  STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES
     ACT  OR  (E)  PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
     REQUIREMENTS  OF  THE  SECURITIES  ACT, SUBJECT TO THE RIGHT OF THE ISSUER,
     PRIOR  TO  ANY  SUCH  OFFER,  SALE  OR  TRANSFER PURSUANT TO CLAUSE (E), TO
     REQUIRE  THE  DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
     INFORMATION  SATISFACTORY  TO  IT.  THIS  LEGEND  WILL  BE REMOVED UPON THE
     REQUEST  OF  THE  HOLDER  AFTER
                                                                              39
<PAGE>

     THE  RESALE  RESTRICTION  TERMINATION DATE IN ACCORDANCE WITH THE INDENTURE
     SUPPLEMENT.

     (ii)     The  Temporary  Global  Notes  shall  bear  the  following legend:

          THIS  NOTE  HAS  NOT  BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
     1933,  AS  AMENDED  (THE  "SECURITIES  ACT"),  OR ANY SECURITIES REGULATORY
     AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. UNTIL 40
     DAYS  AFTER  THE LATER OF THE COMMENCEMENT OF THE OFFERING AND THE ORIGINAL
     ISSUE  DATE  OF  THE NOTES (THE "RESTRICTED PERIOD") IN CONNECTION WITH THE
     OFFERING  OF  THE  NOTES  IN  THE  UNITED  STATES AND OUTSIDE OF THE UNITED
     STATES,  THE  SALE,  PLEDGE  OR TRANSFER OF THIS NOTE IS SUBJECT TO CERTAIN
     CONDITIONS  AND RESTRICTIONS. THE HOLDER HEREOF, BY PURCHASING OR OTHERWISE
     ACQUIRING  THIS  NOTE,  ACKNOWLEDGES THAT THIS NOTE HAS NOT BEEN REGISTERED
     UNDER  THE  SECURITIES ACT AND AGREES FOR THE BENEFIT OF CHESAPEAKE FUNDING
     LLC  (THE  "ISSUER")  THAT  THIS  NOTE MAY BE REOFFERED, RESOLD, PLEDGED OR
     OTHERWISE  TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
     APPLICABLE  LAWS  OF  THE STATES, TERRITORIES AND POSSESSIONS OF THE UNITED
     STATES  GOVERNING  THE  OFFER  AND  SALE  OF  SECURITIES,  AND PRIOR TO THE
     EXPIRATION OF THE RESTRICTED PERIOD, ONLY (1) IN AN OFFSHORE TRANSACTION IN
     ACCORDANCE  WITH REGULATION S UNDER THE SECURITIES ACT, (2) PURSUANT TO AND
     IN ACCORDANCE WITH RULE 144A UNDER THE SECURITIES ACT OR (3) TO THE ISSUER.

     (iii)     The  Series 2004-1 Global Notes shall bear the following legends:

          THIS  NOTE  IS  A  GLOBAL  NOTE  WITHIN  THE  MEANING OF THE INDENTURE
     HEREINAFTER  REFERRED  TO  AND  IS REGISTERED IN THE NAME OF THE DEPOSITORY
     TRUST  COMPANY  ("DTC"), A NEW YORK CORPORATION, 55 WATER STREET, NEW YORK,
     NEW  YORK  10004,  OR  A NOMINEE THEREOF. THIS NOTE MAY NOT BE EXCHANGED IN
     WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS NOTE IN
     WHOLE  OR  IN  PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN
     DTC  OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
     THE  INDENTURE.

          UNLESS  THIS  NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
     TO  THE  ISSUER OR THE TRANSFER AGENT AND REGISTRAR, AND ANY NOTE ISSUED IS
     REGISTERED  IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
     BY  AN  AUTHORIZED REPRESENTATIVE OF DTC, AND ANY PAYMENT IS MADE TO CEDE &
     CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
     OF  DTC, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
     OR  TO  ANY  PERSON  IS  WRONGFUL

                                                                              40
<PAGE>

     BECAUSE  THE  REGISTERED  OWNER,  CEDE  &  CO.,  HAS  AN  INTEREST  HEREIN.

     (iv)     The required legends set forth above shall not be removed from the
applicable  Series  2004-1 Investor Notes except as provided herein.  The legend
required for a Restricted Note may be removed from such Restricted Note if there
is  delivered  to  the  Issuer  and  the  Transfer  Agent  and  Registrar  such
satisfactory  evidence,  which  may  include  an  Opinion  of  Counsel as may be
reasonably  required by the Issuer that neither such legend nor the restrictions
on  transfer  set  forth  therein  are required to ensure that transfers of such
Series  2004-1  Investor  Note will not violate the registration requirements of
the Securities Act.  Upon provision of such satisfactory evidence, the Indenture
Trustee  at  the  direction  of  the  Issuer  shall  authenticate and deliver in
exchange for such Restricted Note a Series 2004-1 Investor Note or Series 2004-1
Investor  Notes  having  an  equal aggregate principal amount that does not bear
such  legend.

                                  ARTICLE VII

                                   INFORMATION

     The  Issuer  hereby  agrees  to  provide  to the Indenture Trustee and each
provider  of  the  Series  2004-1 Required Lease Rate Cap, on each Determination
Date,  a  Monthly  Settlement Statement, substantially in the form of Exhibit C,
                                                                      ---------
setting  forth as of the last day of the most recent Monthly Period and for such
Monthly  Period  the information set forth therein.  The Indenture Trustee shall
provide  to  the  Series 2004-1 Investor Noteholders, or their designated agent,
copies  of  each  Monthly  Settlement  Statement.

                                  ARTICLE VIII

                                  MISCELLANEOUS

          Section  8.1  Ratification  of  Indenture.  As  supplemented  by  this
          ------------  --------------------------
Indenture  Supplement,  the  Indenture is in all respects ratified and confirmed
and the Indenture as so supplemented by this Indenture Supplement shall be read,
taken  and  construed  as  one  and  the  same  instrument.

          Section  8.2  Obligations Unaffected. The obligations of the Issuer to
          ------------  ----------------------
the Series 2004-1 Investor Noteholders under this Indenture Supplement shall not
be  affected  by  reason of any invalidity, illegality or irregularity of any of
the  SUBI  Certificates,  the  Sold  Units  or  the  Fleet  Receivables.

          Section 8.3 Governing Law. THIS INDENTURE SUPPLEMENT SHALL BE GOVERNED
          ----------- --------------
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE  WITH  SUCH  LAWS.

                                                                              41
<PAGE>

          Section  8.4  Further Assurances. Each of the Issuer and the Indenture
          ------------ ------------------
Trustee  agrees,  at  the  Administrator's expense, from time to time, to do and
perform any and all acts and to execute any and all further instruments required
or  reasonably requested by the Series 2004-1 Required Investor Noteholders more
fully  to  effect  the purposes of this Indenture Supplement and the sale of the
Series  2004-1  Investor  Notes  hereunder.  The  Issuer  hereby  authorizes the
Indenture  Trustee  to  file  any  financing  statements or similar documents or
notices  or  continuation  statements  relating  to the Series 2004-1 Collateral
under  the  provisions  of  the  UCC  or  similar  legislation of any applicable
jurisdiction.

          Section  8.5  Exhibits.  The  following  exhibits  attached  hereto
          ------------  ---------
supplement  the exhibits  included  in  the  Base  Indenture:

<TABLE>
<CAPTION>
<S>             <C>
Exhibit A-1-1:  Form of Restricted Global Class A-1 Investor Note
Exhibit A-1-2:  Form of Temporary Global Class A-1 Investor Note
Exhibit A-1-3:  Form of Permanent Global Class A-1 Investor Note
Exhibit A-2-1:  Form of Restricted Global Class A-2 Investor Note
Exhibit A-2-2:  Form of Transfer Certificate
Exhibit A-2-3:  Form of Transfer Certificate
Exhibit B-1:    Form of Permanent Global Class A-2 Investor Note
Exhibit B-2:    Form of Temporary Global Class A-2 Investor Note
Exhibit B-3:    Form of Transfer Certificate
Exhibit B-4:    Form of Clearing System Certificate
Exhibit B-5:    Form of Certificate of Beneficial Ownership
Exhibit C:      Form of Monthly Settlement Statement
Exhibit D:      Form of Series 2004-1 Lease Rate Cap
Exhibit E:      Form of Amendment to Base Indenture
</TABLE>

          Section 8.6 No Waiver; Cumulative Remedies. No failure to exercise and
           ---------- ----------
no delay in exercising, on the part of the Indenture Trustee, any right, remedy,
power  or  privilege  hereunder shall operate as a waiver thereof; nor shall any
single  or  partial  exercise of any right, remedy, power or privilege hereunder
preclude  any  other  or  further  exercise thereof or the exercise of any other
right,  remedy,  power or privilege. The rights, remedies, powers and privileges
herein  provided  are  cumulative  and  not  exhaustive of any rights, remedies,
powers  and  privileges  provided  by  law.

          Section  8.7  Amendments. (a) This Indenture Supplement may be amended
          ------------  -----------
in writing from time to time in accordance with the terms of the Base Indenture.

          (b)  No  amendment specified in this Indenture Supplement as requiring
satisfaction  of the Rating Agency Condition shall be effective until the Rating
Agency  Condition  is  satisfied  with  respect  thereto.

          (c) The Issuer reserves the right, without any consent or other action
of  the Series 2004-1 Investor Noteholders, to consent to the termination of the
ARAC  Guaranty.

                                                                              42
<PAGE>

          (d) The Issuer reserves the right, without any consent or other action
of  the  Series  2004-1  Investor  Noteholders,  to  amend the Base Indenture by
entering  into  an  amendment to the Base Indenture substantially in the form of
Exhibit  E.
---------

          Section  8.8  Severability.  If  any  provision  hereof  is  void  or
          ------------  -------------
unenforceable  in  any jurisdiction, such voidness or unenforceability shall not
affect  the  validity  or  enforceability  of  (i)  such  provision in any other
jurisdiction  or  (ii)  any  other  provision  hereof  in  such  or  any  other
jurisdiction.

          Section 8.9 Counterparts. This Indenture Supplement may be executed in
          ----------- ------------
any  number  of  counterparts  and  by  the different 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.

          Section  8.10  No  Bankruptcy  Petition.  By acquiring a Series 2004-1
          -------------  -------------------------
Investor Note or an interest therein, each Series 2004-1 Investor Noteholder and
each  Series 2004-1 Investor Note Owner hereby covenants and agrees that it will
not  institute  against,  or  join  any other Person in instituting against, the
Issuer  any  bankruptcy,  reorganization, arrangement, insolvency or liquidation
proceedings,  or other similar proceedings under any federal or state bankruptcy
or  similar  law.

     (b)  The Issuer and the Indenture Trustee and, by acquiring a Series 2004-1
Investor Note or an interest therein, each Series 2004-1 Investor Noteholder and
each  Series 2004-1 Investor Note Owner, hereby covenants and agrees that, prior
to  the  date  which  is  one  year  and  one  day  after payment in full of all
obligations  under  each  Securitization, it will not institute against, or join
any  other  Person in instituting against, the Origination Trust, SPV, any other
Special  Purpose  Entity, or any general partner or single member of any Special
Purpose Entity that is a partnership or limited liability company, respectively,
any  bankruptcy,  reorganization,  arrangement,  insolvency  or  liquidation
proceeding or other proceedings under any federal or state bankruptcy or similar
law.

          Section  8.11  SUBIs. By acquiring a Series 2004-1 Investor Note or an
          -------------  -----
Interest  therein, each Series 2004-1 Investor Noteholder and each Series 2004-1
Investor  Note  Owner,  and the Issuer hereby represents, warrants and covenants
that  (a)  each  of  the  Lease SUBI and the Fleet Receivable SUBI is a separate
series  of the Origination Trust as provided in Section 3806(b)(2) of Chapter 38
of Title 12 of the Delaware Code, 12 Del.C. Sec. 3801 et seq., (b)(i) the debts,
liabilities,  obligations  and  expenses  incurred,  contracted for or otherwise
existing  with  respect to the Lease SUBI, the Lease SUBI Portfolio or the Fleet
Receivable  SUBI  shall  be  enforceable against the Lease SUBI Portfolio or the
Fleet  Receivable  SUBI  only,  as  applicable,  and  not against any other SUBI
Portfolio  or the UTI Portfolio and (ii) the debts, liabilities, obligations and
expenses  incurred,  contracted  for  or  otherwise existing with respect to any
other SUBI (used in this Section as defined in the Origination Trust Agreement),
any  other  SUBI  Portfolio  (used in this Section as defined in the Origination
Trust Agreement), the UTI or the UTI Portfolio shall be enforceable against such
other  SUBI  Portfolio or the UTI Portfolio only, as applicable, and not against
any  other  SUBI Assets, (c) except to the extent required by law, UTI Assets or
SUBI  Assets  with  respect to any SUBI (other than the Lease SUBI and the Fleet
Receivable  SUBI)  shall  not  be  subject  to  the  claims, debts, liabilities,
expenses  or  obligations
                                                                              43
<PAGE>

arising  from  or  with  respect  to  the  Lease  SUBI or Fleet Receivable SUBI,
respectively,  in respect of such claim, (d)(i) no creditor or holder of a claim
relating  to  the  Lease SUBI, the Fleet Receivable SUBI or the Lease Receivable
SUBI  Portfolio  shall be entitled to maintain any action against or recover any
assets allocated to the UTI or the UTI Portfolio or any other SUBI or the assets
allocated  thereto,  and  (ii)  no creditor or holder of a claim relating to the
UTI,  the  UTI  Portfolio  or  any  SUBI  other than the Lease SUBI or the Fleet
Receivable  SUBI  or  any SUBI Assets other than the Lease SUBI Portfolio or the
Fleet  Receivables  shall  be entitled to maintain any action against or recover
any assets allocated to the Lease SUBI or the Fleet Receivable SUBI, and (e) any
purchaser,  assignee or pledgee of an interest in the Lease SUBI, the Lease SUBI
Certificate,  the  Fleet  Receivable SUBI, the Lease SUBI Certificate, the Fleet
Receivable SUBI Certificate, any other SUBI, any other SUBI Certificate (used in
this  Section as defined in the Origination Trust Agreement), the UTI or the UTI
Certificate  must,  prior  to  or  contemporaneously  with the grant of any such
assignment,  pledge  or  security  interest, (i) give to the Origination Trust a
non-petition  covenant substantially similar to that set forth in Section 6.9 of
                                                                  ------------
the Origination Trust Agreement, and (ii) execute anagreement for the benefit of
each holder, assignee or pledgee from time to time of the UTI or UTI Certificate
and  any  other  SUBI or SUBI Certificate to release all claims to the assets of
the  Origination Trust allocated to the UTI and each other SUBI Portfolio and in
the event that such release is not given effect, to fully subordinate all claims
it  may  be deemed to have against the assets of the Origination Trust allocated
to  the  UTI  Portfolio  and  each  other  SUBI  Portfolio.

          Section  8.12  Notice to Rating Agencies. The Indenture Trustee shall
          ------------   ------------------------
provide to each Rating Agency a copy of each notice delivered to, or required to
be  provided  by, the Indenture Trustee pursuant to this Indenture Supplement or
any  other  Transaction  Document.

          Section 8.13 Conflict of Instructions. In the event the Issuer and the
         ------------- -----------------------
Administrator  shall  have  delivered  conflicting instructions to the Indenture
Trustee  to  take or refrain from taking action hereunder, the Indenture Trustee
shall  follow  the  instructions  of  the  Issuer.

                                                                              44
<PAGE>

     IN  WITNESS  WHEREOF, the Issuer and the Indenture Trustee have caused this
Indenture  Supplement  to be duly executed by their respective officers hereunto
duly  authorized  as  of  the  day  and  year  first  above  written.

                                        CHESAPEAKE FUNDING LLC
                                        By:  /s/  Joseph  W. Weikel
                                             -----------------------
                                             Name:  Joseph  W.  Weikel
                                             Title:  Manager

                                        JPMORGAN  CHASE  BANK,  as
                                        Indenture Trustee

                                        By:  /s/  Melissa  Wilman
                                             --------------------
                                             Name:  Melissa  Wilman
                                             Title:  Vice  President

<PAGE>

                                                                   EXHIBIT A-1-1
                                                                TO SERIES 2004-1
                                                            INDENTURE SUPPLEMENT

                FORM OF RESTRICTED GLOBAL CLASS A-1 INVESTOR NOTE

No.                                                          $[_______________]

                       SEE REVERSE FOR CERTAIN CONDITIONS

                                                      CUSIP (CINS) NO. 165182AK2
                                                           ISIN NO. US165182AK23

     THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED  (THE  "SECURITIES  ACT"),  OR ANY STATE SECURITIES LAWS.  THE HOLDER OF
THIS  NOTE  BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER
SUCH  NOTE,  PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH
IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE
ON  WHICH  CHESAPEAKE  FUNDING LLC (THE "ISSUER") OR ANY AFFILIATE OF THE ISSUER
WAS  THE  OWNER  OF THIS NOTE (OR ANY PREDECESSOR OF SUCH NOTE), ONLY (A) TO THE
ISSUER,  (B)  PURSUANT  TO  A  REGISTRATION  STATEMENT  THAT  HAS  BEEN DECLARED
EFFECTIVE  UNDER  THE  SECURITIES  ACT,  (C)  FOR  SO LONG AS THE SECURITIES ARE
ELIGIBLE  FOR  RESALE  PURSUANT  TO  RULE  144A  UNDER THE SECURITIES ACT ("RULE
144A"),  TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
AS  DEFINED IN RULE 144A (A "QIB") THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT  OF  A  QIB  TO  WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE  ON  RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE
UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR (E)
PURSUANT  TO  ANOTHER  AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT, SUBJECT TO THE RIGHT OF THE ISSUER, PRIOR TO ANY SUCH OFFER,
SALE  OR  TRANSFER PURSUANT TO CLAUSE (E), TO REQUIRE THE DELIVERY OF AN OPINION
OF  COUNSEL,  CERTIFICATION  AND/OR  OTHER INFORMATION SATISFACTORY TO IT.  THIS
LEGEND  WILL  BE  REMOVED  UPON  THE  REQUEST  OF  THE  HOLDER  AFTER THE RESALE
RESTRICTION  TERMINATION  DATE  IN  ACCORDANCE  WITH  THE  INDENTURE SUPPLEMENT.

     THIS  NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED  TO  AND  IS  REGISTERED  IN  THE  NAME OF THE DEPOSITORY TRUST COMPANY
("DTC"), A NEW YORK CORPORATION, 55

                                    A-1-1-1
<PAGE>

WATER  STREET, NEW YORK, NEW YORK 10004, OR A NOMINEE THEREOF. THIS NOTE MAY NOT
BE  EXCHANGED  IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF
THIS NOTE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER
THAN  DTC OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE  INDENTURE.

     UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO THE
ISSUER OR THE TRANSFER AGENT AND REGISTRAR, AND ANY NOTE ISSUED IS REGISTERED IN
THE  NAME  OF  CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE  OF  DTC,  AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY  AS  IS  REQUESTED  BY AN AUTHORIZED REPRESENTATIVE OF DTC, ANY TRANSFER,
PLEDGE  OR  OTHER  USE  HEREOF  FOR  VALUE  OR  OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL  BECAUSE  THE  REGISTERED  OWNER,  CEDE  & CO., HAS AN INTEREST HEREIN.

     THE PRINCIPAL OF THIS CLASS A-1 INVESTOR NOTE IS PAYABLE IN INSTALLMENTS AS
SET  FORTH  HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS
A-1  INVESTOR  NOTE  AT  ANY  TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE
HEREOF.

                             CHESAPEAKE FUNDING LLC

        SERIES 2004-1 FLOATING RATE CALLABLE ASSET BACKED INVESTOR NOTES,
                                    CLASS A-1

     CHESAPEAKE  FUNDING  LLC, a limited liability company formed under the laws
of  the  State  of  Delaware  (herein  referred  to  as the "Issuer"), for value
                                                             ------
received,  hereby  promises  to  pay  to  Cede & Co., or registered assigns, the
principal  sum  of  [_________]  Dollars,  which  amount shall be payable in the
amounts  and at the times set forth in the Indenture described herein, provided,
however, that the entire unpaid principal amount of this Class A-1 Investor Note
shall  be  due  on  the  Class  A-1 Final Maturity Date. However, principal with
respect  to  the  Class  A-1  Investor  Notes  may be paid earlier under certain
limited  circumstances described in the Indenture.  The Issuer will pay interest
on  this  Class  A-1  Investor  Note  for each Series 2004-1 Interest Period, in
accordance  with the terms of the Indenture, at the Class A-1 Note Rate for such
Interest  Period.  Each  "Series  2004-1  Interest  Period"  will  be  a  period
                          --------------------------------
commencing  on  and including a Payment Date and ending on and including the day
preceding  the next succeeding Payment Date; provided, however, that the initial
                                             --------  -------
Series  2004-1  Interest  Period shall commence on and include the Series 2004-1
Closing  Date  and  end on and include September 6, 2004.  Such principal of and
interest  on  this Class A-1 Investor Note shall be paid in the manner specified
on  the  reverse  hereof  and  in  the  Indenture.

     The  principal  of and interest on this Class A-1 Investor Note are payable
In  such  coin  or  currency  of  the United States of America as at the time of
payment  is  legal  tender for payment of public and private debts. All payments
made by the Issuer with respect to this Class A-1 Investor Note shall be applied
as  provided  in  the  Indenture.  This  Class  A-1  Investor  Note

                                    A-1-1-2
<PAGE>

does  not  represent an interest in, or an obligation of, PHH Vehicle Management
Services,  LLC  ("VMS")  or  any  affiliate  of  VMS  other  than  the  Issuer.
                  ---

     Reference is made to the further provisions of this Class A-1 Investor Note
Set  forth  on  the  reverse  hereof, which shall have the same effect as though
fully  set forth on the face of this Class A-1 Investor Note. Although a summary
of  certain  provisions  of  the Indenture is set forth below and on the reverse
hereof  and made a part hereof, this Class A-1 Investor Note does not purport to
summarize  the  Indenture and reference is made to the Indenture for information
with  respect  to  the  interests,  rights,  benefits, obligations, proceeds and
duties evidenced hereby and the rights, duties and obligations of the Issuer and
the  Indenture  Trustee.  A  copy  of  the  Indenture  may be requested from the
Indenture Trustee by writing to the Indenture Trustee at: JPMorgan Chase Bank, 4
New  York  Plaza, 6th Floor, New York, New York, 10004, Attention: Institutional
Trust  Services/Global  Debt.  To the extent not defined herein, the capitalized
terms  used  herein  have the meanings ascribed to them in the Indenture. Unless
the  certificate  of  authentication  hereon  has been executed by the Indenture
Trustee  whose  name  appears below by manual signature, this Class A-1 Investor
Note shall not be entitled to any benefit under the Indenture referred to on the
reverse  hereof,  or  be  valid  or  obligatory  for  any  purpose.

                                    A-1-1-3
<PAGE>

     IN  WITNESS  WHEREOF,  the  Issuer has caused this instrument to be signed,
manually or  in  facsimile,  by  its  Authorized  Officer.

Date:  __________

                                        CHESAPEAKE  FUNDING  LLC

                                        By:___________________________
                                             Name:
                                             Title:

                INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION

     This  is  one  of  the  Class  A-1  Investor  Notes  issued  under  the
within-mentioned  Indenture.

                                        JPMORGAN  CHASE  BANK, as Indenture
                                        Trustee

                                        By:___________________________
                                             Authorized  Signatory

                                    A-1-1-4
<PAGE>

                      [REVERSE OF CLASS A-1 INVESTOR NOTE]

     This Class A-1 Investor Note is one of a duly authorized issue of Class A-1
Investor Notes of the Issuer designated its Series 2004-1 Floating Rate Callable
Asset  Backed Investor Notes (herein called the "Class A-1 Investor Notes"), all
                                                 ------------------------
issued  under  (i)  a  Base  Indenture  dated  as  of  June  30, 1999 (such Base
Indenture,  as  amended  or  modified,  is  herein called the "Base Indenture"),
                                                               --------------
between the Issuer and JPMorgan Chase Bank, as Indenture Trustee (the "Indenture
                                                                       ---------
Trustee",  which  term  includes  any successor Indenture Trustee under the Base
-------
Indenture),  and (ii) a Series 2004-1 Indenture Supplement dated as of  July 29,
---------
2004  (the  "Series  2004-1  Indenture  Supplement")  between the Issuer and the
             -------------------------------------
Indenture Trustee. The Base Indenture and the Series 2004-1 Indenture Supplement
are  referred  to  herein  as  the "Indenture". The Class A-1 Investor Notes are
                                    ---------
subject to all terms of the Indenture. All terms used in this Class A-1 Investor
Note  that  are  defined in the Indenture, as supplemented, modified or amended,
shall  have the meanings assigned to them in or pursuant to the Indenture, as so
supplemented,  modified  or  amended.

     The Class A-1 Investor Notes are and will be equally and ratably secured by
the  Series  2004-1  Collateral  pledged as security therefor as provided in the
Indenture  and  the  Series  2004-1  Indenture  Supplement.

     Principal  of  the Class A-1 Investor Notes will be payable on each Payment
Date  specified in and in the amounts described in the Indenture. "Payment Date"
                                                                    ------------
means the 7th day of each month, or if such date is not a Business Day, the next
succeeding  Business  Day,  commencing  September  7,  2004.

     The entire unpaid principal amount of this Class A-1 Investor Note shall be
Due  and  payable  on  the  Class  A-1  Final Maturity Date. Notwithstanding the
foregoing, principal on the Class A-1 Investor Notes will be paid earlier during
the  Series  2004-1  Amortization  Period  as  described  in  the Indenture. All
principal payments on the Class A-1 Investor Notes shall be made pro rata to the
Class  A-1  Investor  Noteholders  entitled  thereto.

     The Issuer will have the option to prepay the Series 2004-1 Investor Notes,
in whole but not in part, on any Payment Date after the Payment Date in February
2006. The prepayment price for the Series 2004-1 Investor Notes will be equal to
the  amount  set  forth  in  the  Indenture.

     Interest  will  accrue  on  this  Class  A-1 Investor Notes for each Series
2004-1 Interest Period at a rate equal to (i) with respect to the initial Series
2004-1  Interest  Period,  1.58%  per annum and (ii) with respect to each Series
2004-1 Interest Period thereafter, a rate per annum equal to One-Month LIBOR for
such  Series  2004-1  Interest  Period plus 0.11% per annum (the "Class A-1 Note
                                                                  --------------
Rate").  "One-Month  LIBOR"  means,  for each Series 2004-1 Interest Period, the
-----     ---------------
rate  per  annum  determined  on  the  related  LIBOR  Determination Date by the
Calculation  Agent to be the rate for Dollar deposits having a maturity equal to
one month that appears on Telerate Page 3750 at approximately 11:00 a.m., London
time,  on  such  LIBOR  Determination Date; provided, however, that if such rate
does  not  appear  on  Telerate  Page  3750, One-Month LIBOR will mean, for such
2004-1 Interest Period, the rate per annum equal to the arithmetic mean (rounded
to  the  nearest  one-one-hundred-thousandth  of  one  percent)  of  the  rates

                                    A-1-1-5
<PAGE>

quoted  by  the  Reference  Banks to the Calculation Agent as the rates at which
deposits  in  Dollars  are offered by the Reference Banks at approximately 11:00
a.m.,  London time, on the LIBOR Determination Date to prime banks in the London
interbank  market  for  a  period equal to one month; provided, further, that if
fewer  than  two  quotations  are  provided as requested by the Reference Banks,
"One-Month  LIBOR"  for  such  Series  2004-1  Interest  Period  will  mean  the
arithmetic  mean  (rounded  to  the  nearest  one-one-hundred-thousandth  of one
percent)  of  the  rates quoted by major banks in New York, New York selected by
the  Calculation  Agent, at approximately 10:00 a.m., New York City time, on the
first  day of such Series 2004-1 Interest Period for loans in Dollars to leading
European  banks  for  a period equal to one month; provided, finally, that if no
such  quotes  are  provided,  "One-Month  LIBOR" for such Series 2004-1 Interest
Period  will  mean  One-Month  LIBOR  as in effect with respect to the preceding
Series  2004-1  Interest  Period.

     The  Issuer  shall  pay interest on overdue installments of interest at the
Class A-1  Note  Rate  to  the  extent  lawful.

     As  provided  in the Indenture and subject to certain limitations set forth
therein,  the  transfer of this Class A-1 Investor Note may be registered on the
Note Register upon surrender of this Class A-1 Investor Note for registration of
transfer  at  the  office  or  agency  designated  by the Issuer pursuant to the
Indenture,  duly endorsed by, or accompanied by a written instrument of transfer
in  form  satisfactory  to  the  Indenture  Trustee duly executed by, the Holder
hereof or his attorney duly authorized in writing, and thereupon one or more new
Class  A-1  Investor  Notes  of  authorized  denominations in the same aggregate
principal  amount will be issued to the designated transferee or transferees. No
service  charge  will be charged for any registration of transfer or exchange of
this  Class  A-1  Investor Note, but the transferor may be required to pay a sum
sufficient  to cover any tax or other governmental charge that may be imposed in
connection  with  any  such  registration  of  transfer  or  exchange.

     The  Issuer  and  the  Indenture  Trustee  covenant and agree in the Series
2004-1  Indenture  Supplement  and, by acquiring a Class A-1 Investor Note or an
interest therein, each Class A-1 Investor Noteholder and each Class A-1 Investor
Note Owner hereby covenants and agrees that, prior to the date which is one year
and  one day after payment in full of all obligations under each Securitization,
it  will not institute against, or join any other Person in instituting against,
the  Origination  Trust,  SPV,  any other Special Purpose Entity, or any general
partner  or single member of any Special Purpose Entity that is a partnership or
limited  liability  company,  respectively,  any  bankruptcy,  reorganization,
arrangement, insolvency or liquidation proceeding or other proceedings under any
federal  or  state  bankruptcy  or  similar  law.

     Each  Class  A-1 Investor Noteholder, by acceptance of a Class A-1 Investor
Note  or,  in the case of a Class A-1 Investor Note Owner, a beneficial interest
in a Class A-1 Investor Note, hereby represents, warrants and covenants that (a)
each of the Lease SUBI and the Fleet Receivable SUBI is a separate series of the
Origination Trust as provided in Section 3806(b)(2) of Chapter 38 of Title 12 of
                                 ------------------
the  Delaware  Code, 12 Del.C. Sec. 3801 et seq., (b)(i) the debts, liabilities,
                        -----            -- ---
obligations  and  expenses  incurred,  contracted for or otherwise existing with
respect to the Lease SUBI, the Lease SUBI Portfolio or the Fleet Receivable SUBI
shall  be  enforceable  against the Lease SUBI Portfolio or the Fleet Receivable
SUBI  only,  as  applicable, and not against any other SUBI Portfolio or the UTI
Portfolio  and  (ii)  the  debts,  liabilities,  obligations

                                    A-1-1-6
<PAGE>

and  expenses incurred, contracted for or otherwise existing with respect to any
other  SUBI  (used  in  this  paragraph  as  defined  in  the  Origination Trust
Agreement),  any  other SUBI Portfolio (used in this paragraph as defined in the
Origination  Trust Agreement), the UTI or the UTI Portfolio shall be enforceable
against  such other SUBI Portfolio or the UTI Portfolio only, as applicable, and
not against any other SUBI Assets, (c) except to the extent required by law, UTI
Assets  or  SUBI  Assets with respect to any SUBI (other than the Lease SUBI and
the  Fleet  Receivable  SUBI)  shall  not  be  subject  to  the  claims,  debts,
liabilities,  expenses  or obligations arising from or with respect to the Lease
SUBI or Fleet Receivable SUBI, respectively, in respect of such claim, (d)(i) no
creditor  or  holder of a claim relating to the Lease SUBI, the Fleet Receivable
SUBI  or  the  Lease  SUBI  Portfolio  shall  be entitled to maintain any action
against  or  recover any assets allocated to the UTI or the UTI Portfolio or any
other  SUBI or the assets allocated thereto, and (ii) no creditor or holder of a
claim  relating  to  the UTI, the UTI Portfolio or any SUBI other than the Lease
SUBI  or  the Fleet Receivable SUBI or any SUBI Assets other than the Lease SUBI
Portfolio  or  the  Fleet  Receivables  shall be entitled to maintain any action
against  or  recover  any  assets  allocated  to  the  Lease  SUBI  or the Fleet
Receivable  SUBI,  and  (e) any purchaser, assignee or pledgee of an interest in
the Lease SUBI, the Lease SUBI Certificate, the Fleet Receivable SUBI, the Lease
SUBI  Certificate,  the  Fleet  Receivable SUBI Certificate, any other SUBI, any
other SUBI Certificate (used in this Section as defined in the Origination Trust
Agreement),  the  UTI or the UTI Certificate must, prior to or contemporaneously
with  the grant of any such assignment, pledge or security interest, (i) give to
the  Origination Trust a non-petition covenant substantially similar to that set
forth  in  Section  6.9  of the Origination Trust Agreement, and (ii) execute an
           ------------
agreement  for the benefit of each holder, assignee or pledgee from time to time
of  the UTI or UTI Certificate and any other SUBI or SUBI Certificate to release
all  claims to the assets of the Origination Trust allocated to the UTI and each
other  SUBI Portfolio and in the event that such release is not given effect, to
fully  subordinate all claims it may be deemed to have against the assets of the
Origination  Trust allocated to the UTI Portfolio and each other SUBI Portfolio.

     Each  Class  A-1  Investor  Noteholder or Class A-1 Investor Note Owner, by
acceptance  of a Class A-1 Investor Note or, in the case of a Class A-1 Investor
Note  Owner,  a  beneficial interest in a Class A-1 Investor Note, covenants and
agrees  that  by  accepting  the  benefits  of the Indenture that such Class A-1
Investor Noteholder or Class A-1 Investor Note Owner will not institute against,
or join with any other Person in instituting against, the Issuer any bankruptcy,
reorganization,  arrangement,  insolvency  or  liquidation proceedings, or other
proceedings,  under  any  federal  or  state  bankruptcy  or  similar  law.

     It is the intent of the Issuer, each Class A-1 Investor Noteholder and each
Class  A-1  Investor  Note  Owner  that, for federal, state and local income and
franchise  tax  purposes  only,  the  Class  A-1  Investor  Notes  will evidence
indebtedness  of the Issuer secured by the Series 2004-1 Collateral.  Each Class
A-1  Investor  Noteholder  and  each  Class  A-1  Investor  Note  Owner,  by the
acceptance  of  this  Class  A-1  Investor  Note, agrees to treat this Class A-1
Investor  Note  for  purposes  of  federal, state and local income and franchise
taxes and any other tax imposed on or measured by income, as indebtedness of the
Issuer.

     The  Indenture  permits,  with  certain exceptions as therein provided, the
amendment  thereof  and  the  modification  of the rights and obligations of the
Issuer  and  the rights of the Holders of the Series 2004-1 Investor Notes under
the  Indenture  at  any  time by the Issuer with the consent of the Holders of a
Majority  in  Interest  of  the  Series  2004-1  Investor Notes

                                    A-1-1-7
<PAGE>

affected  by  such  amendment  or  modification.  The  Indenture  also  contains
provisions  permitting  the Holders of Series 2004-1 Investor Notes representing
specified  percentages  of the aggregate outstanding amount of the Series 2004-1
Investor  Notes,  on  behalf  of  the  Holders of all the Series 2004-1 Investor
Notes,  to  waive  compliance  by  the  Issuer  with  certain  provisions of the
Indenture  and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Class A-1 Investor Note (or any
one  or  more  predecessor  Class  A-1  Investor  Notes) shall be conclusive and
binding  upon such Holder and upon all future Holders of this Class A-1 Investor
Note and of any Class A-1 Investor Note issued upon the registration of transfer
hereof  or  in exchange hereof or in lieu hereof whether or not notation of such
consent  or waiver is made upon this Class A-1 Investor Note. The Indenture also
permits the Indenture Trustee to amend or waive certain terms and conditions set
forth  in  the  Indenture  without  the  consent of Holders of the Series 2004-1
Investor  Notes  issued  thereunder.

     The  term  "Issuer"  as  used  in this Class A-1 Investor Note includes any
Successor to  the  Issuer  under  the  Indenture.

     The  Class  A-1  Investor  Notes  are  issuable  only in registered form in
denominations  as  provided in the Indenture, subject to certain limitations set
forth  therein.

     This  Class  A-1  Investor Note and the Indenture shall be governed by, and
construed  in  accordance  with,  the  law  of  the  State  of New York, and the
obligations,  rights  and remedies of the parties hereunder and thereunder shall
be  determined  in  accordance  with  such  law.

     No  reference  herein  to  the Indenture and no provision of this Class A-1
Investor  Note  or  of the Indenture shall alter or impair the obligation of the
Issuer,  which  is  absolute  and  unconditional,  to  pay  the principal of and
interest  on  this  Class A-1 Investor Note at the times, place and rate, and in
the  coin  or  currency  herein  prescribed.

     Interests  in  this  Restricted  Global  Class  A-1  Investor  Note  are
exchangeable  or  transferable  in whole or in part for interests in a Temporary
Global  Class  A-1  Investor  Note or a Permanent Global Class A-1 Investor Note
provided  that such transfer or exchange complies with Section 6.5 of the Series
                                                       -----------
2004-1  Indenture  Supplement.  Interests  in  this  Restricted Global Class A-1
Investor  Note  may be exchanged for Definitive Notes, subject to the provisions
of  the  Indenture.

                                    A-1-1-8
<PAGE>
                                   ASSIGNMENT

Social  Security  or  taxpayer  I.D.  or  other  identifying number of assignee:
___________________

FOR  VALUE  RECEIVED,  the  undersigned hereby sells, assigns and transfers unto

___________________________________________________________________________
                         (name and address of assignee)

the  within  Class  A-1  Investor  Note  and  all  rights thereunder, and hereby
irrevocably constitutes and appoints ____________________, attorney, to transfer
said  Class  A-1  Investor Note on the books kept for registration thereof, with
full  power  of  substitution  in  the  premises.

Dated:__________________          By:_______________________(1)

                                        Signature  Guaranteed:

                                        __________________________________
                                        __________________________________

-----------------------------
(1)  NOTE: The signature to this assignment must correspond with the name of the
     registered owner as it appears on the face of the within Class A-1 Investor
     Note,  without  alteration,  enlargement  or  any  change  whatsoever.

                                    A-1-1-9
<PAGE>

                                                                   EXHIBIT A-1-2
                                                                TO SERIES 2004-1
                                                            INDENTURE SUPPLEMENT

                FORM OF TEMPORARY GLOBAL CLASS A-1 INVESTOR NOTE

No.                                                        $[_______________]

                       SEE REVERSE FOR CERTAIN CONDITIONS

                                                      CUSIP (CINS) NO. U16492AA5
                                                           ISIN NO. USU16492AA51

     THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED  (THE  "SECURITIES  ACT"), OR ANY SECURITIES REGULATORY AUTHORITY OF ANY
STATE OR OTHER JURISDICTION OF THE UNITED STATES.  UNTIL 40 DAYS AFTER THE LATER
OF  THE  COMMENCEMENT  OF  THE OFFERING AND THE ORIGINAL ISSUE DATE OF THE NOTES
(THE  "RESTRICTED  PERIOD")  IN CONNECTION WITH THE OFFERING OF THE NOTES IN THE
UNITED  STATES AND OUTSIDE OF THE UNITED STATES, THE SALE, PLEDGE OR TRANSFER OF
THIS NOTE IS SUBJECT TO CERTAIN CONDITIONS AND RESTRICTIONS.  THE HOLDER HEREOF,
BY  PURCHASING OR OTHERWISE ACQUIRING THIS NOTE, ACKNOWLEDGES THAT THIS NOTE HAS
NOT  BEEN  REGISTERED  UNDER  THE  SECURITIES  ACT AND AGREES FOR THE BENEFIT OF
CHESAPEAKE  FUNDING  LLC (THE "ISSUER") THAT THIS NOTE MAY BE REOFFERED, RESOLD,
PLEDGED  OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND
OTHER  APPLICABLE  LAWS OF THE STATES, TERRITORIES AND POSSESSIONS OF THE UNITED
STATES  GOVERNING  THE OFFER AND SALE OF SECURITIES, AND PRIOR TO THE EXPIRATION
OF THE RESTRICTED PERIOD, ONLY (1) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
REGULATION  S  UNDER  THE SECURITIES ACT, (2) PURSUANT TO AND IN ACCORDANCE WITH
RULE  144A  UNDER  THE  SECURITIES  ACT  OR  (3)  TO  THE  ISSUER.

          THIS  NOTE  IS  A  GLOBAL  NOTE  WITHIN  THE  MEANING OF THE INDENTURE
HEREINAFTER  REFERRED  TO  AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST
COMPANY  ("DTC"),  A  NEW  YORK CORPORATION, 55 WATER STREET, NEW YORK, NEW YORK
10004,  OR A NOMINEE THEREOF. THIS NOTE MAY NOT BE EXCHANGED IN WHOLE OR IN PART
FOR  A SECURITY REGISTERED, AND NO TRANSFER OF THIS NOTE IN WHOLE OR IN PART MAY
BE  REGISTERED,  IN  THE NAME OF ANY PERSON OTHER THAN DTC OR A NOMINEE THEREOF,
EXCEPT  IN  THE  LIMITED  CIRCUMSTANCES  DESCRIBED  IN  THE  INDENTURE.

                                    A-1-2-1
<PAGE>

UNLESS  THIS  NOTE  IS  PRESENTED  BY AN AUTHORIZED REPRESENTATIVE OF DTC TO THE
ISSUER OR THE TRANSFER AGENT AND REGISTRAR, AND ANY NOTE ISSUED IS REGISTERED IN
THE  NAME  OF  CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE  OF  DTC,  AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY  AS  IS  REQUESTED  BY AN AUTHORIZED REPRESENTATIVE OF DTC, ANY TRANSFER,
PLEDGE  OR  OTHER  USE  HEREOF  FOR  VALUE  OR  OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL  BECAUSE  THE  REGISTERED  OWNER,  CEDE  & CO., HAS AN INTEREST HEREIN.
THE  PRINCIPAL OF THIS CLASS A-1 INVESTOR NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH  HEREIN.  ACCORDINGLY,  THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS A-1
INVESTOR  NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

                             CHESAPEAKE FUNDING LLC

        SERIES 2004-1 FLOATING RATE CALLABLE ASSET BACKED INVESTOR NOTES,
                                    CLASS A-1

     CHESAPEAKE  FUNDING  LLC, a limited liability company formed under the laws
of  the  State  of  Delaware  (herein  referred  to  as the "Issuer"), for value
                                                             ------
received,  hereby  promises  to  pay  to  Cede & Co., or registered assigns, the
principal sum of [_______] Dollars, which amount shall be payable in the amounts
and at the times set forth in the Indenture described herein, provided, however,
that the entire unpaid principal amount of this Class A-1 Investor Note shall be
due on the Class A-1 Final Maturity Date. However, principal with respect to the
Class A-1 Investor Notes may be paid earlier under certain limited circumstances
described  in  the  Indenture.  The  Issuer  will pay interest on this Class A-1
Investor  Note  for  each  Series 2004-1 Interest Period, in accordance with the
terms  of  the  Indenture,  at the Class A-1 Note Rate for such Interest Period.
Each  "Series  2004-1  Interest  Period"  will  be  a  period  commencing on and
       --------------------------------
including  a Payment Date and ending on and including the day preceding the next
succeeding  Payment  Date;  provided,  however,  that  the initial Series 2004-1
                            --------   -------
Interest Period shall commence on and include the Series 2004-1 Closing Date and
end  on  and  include September 6, 2004.  Such principal of and interest on this
Class  A-1  Investor  Note  shall be paid in the manner specified on the reverse
hereof  and  in  the  Indenture.

          The  principal  of  and  interest  on this Class A-1 Investor Note are
payable  in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts. All payments
made by the Issuer with respect to this Class A-1 Investor Note shall be applied
as provided in the Indenture. This Class A-1 Investor Note does not represent an
interest  in,  or an obligation of, PHH Vehicle Management Services, LLC ("VMS")
                                                                           ---
or  any  affiliate  of  VMS  other  than  the  Issuer.

          Reference is made to the further provisions of this Class A-1 Investor
Note set forth on the reverse hereof, which shall have the same effect as though
fully  set forth on the face of this Class A-1 Investor Note. Although a summary
of  certain  provisions  of  the Indenture is set forth below and on the reverse
hereof  and  made  a  part  hereof,  this  Class  A-1  Investor  Note  does

                                    A-1-2-2
<PAGE>

not  purport  to  summarize the Indenture and reference is made to the Indenture
for  information  with  respect to the interests, rights, benefits, obligations,
proceeds  and  duties evidenced hereby and the rights, duties and obligations of
the  Issuer  and the Indenture Trustee. A copy of the Indenture may be requested
from  the  Indenture  Trustee  by  writing to the Indenture Trustee at: JPMorgan
Chase  Bank,  4 New York Plaza, 6th Floor, New York, New York, 10004, Attention:
Institutional  Trust Services/Global Debt. To the extent not defined herein, the
capitalized  terms  used  herein  have  the  meanings  ascribed  to  them in the
Indenture.

          Unless  the  certificate of authentication hereon has been executed by
the  Indenture  Trustee whose name appears below by manual signature, this Class
A-1  Investor  Note  shall  not  be  entitled to any benefit under the Indenture
referred  to  on  the reverse hereof, or be valid or obligatory for any purpose.

                                    A-1-2-3
<PAGE>

          IN  WITNESS  WHEREOF,  the  Issuer  has  caused  this instrument to be
signed,  manually or  in  facsimile,  by  its  Authorized  Officer.

Date:  __________

                                        CHESAPEAKE  FUNDING  LLC

                                        By:___________________________
                                             Name:
                                             Title:

                INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION

     This  is  one  of  the  Class  A-1  Investor  Notes  issued  under  the
within-mentioned  Indenture.

                                        JPMORGAN  CHASE  BANK,  as  Indenture
                                        Trustee

                                        By:___________________________
                                             Authorized  Signatory

                                    A-1-2-4
<PAGE>

                      [REVERSE OF CLASS A-1 INVESTOR NOTE]

     This Class A-1 Investor Note is one of a duly authorized issue of Class A-1
Investor Notes of the Issuer designated its Series 2004-1 Floating Rate Callable
Asset  Backed Investor Notes (herein called the "Class A-1 Investor Notes"), all
                                                 ------------------------
issued  under  (i)  a  Base  Indenture  dated  as  of  June  30, 1999 (such Base
Indenture,  as  amended  or  modified,  is  herein called the "Base Indenture"),
                                                               --------------
between the Issuer and JPMorgan Chase Bank, as Indenture Trustee (the "Indenture
                                                                       ---------
Trustee", which  term  includes  any successor Indenture Trustee under the Base
-------
Indenture),  and  (ii) a Series 2004-1 Indenture Supplement dated as of July 29,
2004  (the  "Series  2004-1  Indenture  Supplement")  between the Issuer and the
            -------------------------------------
Indenture Trustee. The Base Indenture and the Series 2004-1 Indenture Supplement
are  referred  to  herein  as  the "Indenture". The Class A-1 Investor Notes are
                                    ---------
subject to all terms of the Indenture. All terms used in this Class A-1 Investor
Note  that  are  defined in the Indenture, as supplemented, modified or amended,
shall  have the meanings assigned to them in or pursuant to the Indenture, as so
supplemented,  modified  or  amended.

     The Class A-1 Investor Notes are and will be equally and ratably secured by
the  Series  2004-1  Collateral  pledged as security therefor as provided in the
Indenture  and  the  Series  2004-1  Indenture  Supplement.

     Principal  of  the Class A-1 Investor Notes will be payable on each Payment
Date  specified in and in the amounts described in the Indenture. "Payment Date"
                                                                   ------------
means the 7th day of each month, or if such date is not a Business Day, the next
succeeding  Business  Day,  commencing  September  7,  2004.  The  entire unpaid
principal amount of this Class A-1 Investor Note shall be due and payable on the
Class  A-1  Final Maturity Date. Notwithstanding the foregoing, principal on the
Class  A-1  Investor  Notes  will  be  paid  earlier  during  the  Series 2004-1
Amortization Period as described in the Indenture. All principal payments on the
Class  A-1  Investor  Notes  shall  be  made  pro rata to the Class A-1 Investor
Noteholders  entitled  thereto.

     The Issuer will have the option to prepay the Series 2004-1 Investor Notes,
in whole but not in part, on any Payment Date after the Payment Date in February
2006. The prepayment price for the Series 2004-1 Investor Notes will be equal to
the  amount  set  forth  in  the  Indenture.

     Interest  will  accrue  on  this  Class  A-1 Investor Notes for each Series
2004-1 Interest Period at a rate equal to (i) with respect to the initial Series
2004-1  Interest  Period,  1.58%  per annum and (ii) with respect to each Series
2004-1 Interest Period thereafter, a rate per annum equal to One-Month LIBOR for
such  Series  2004-1  Interest  Period plus 0.11% per annum (the "Class A-1 Note
                                                                  --------------
Rate").  "One-Month  LIBOR"  means,  for each Series 2004-1 Interest Period, the
----     ---------------
rate  per  annum  determined  on  the  related  LIBOR  Determination Date by the
Calculation  Agent to be the rate for Dollar deposits having a maturity equal to
one month that appears on Telerate Page 3750 at approximately 11:00 a.m., London
time,  on  such  LIBOR  Determination Date; provided, however, that if such rate
does  not  appear  on  Telerate  Page  3750, One-Month LIBOR will mean, for such
2004-1 Interest Period, the rate per annum equal to the arithmetic mean (rounded
to  the  nearest  one-one-hundred-thousandth  of  one  percent)  of  the  rates

                                    A-1-2-5
<PAGE>

quoted  by  the  Reference  Banks to the Calculation Agent as the rates at which
deposits  in  Dollars  are offered by the Reference Banks at approximately 11:00
a.m.,  London time, on the LIBOR Determination Date to prime banks in the London
interbank  market  for  a  period equal to one month; provided, further, that if
fewer  than  two  quotations  are  provided as requested by the Reference Banks,
"One-Month  LIBOR"  for  such  Series  2004-1  Interest  Period  will  mean  the
arithmetic  mean  (rounded  to  the  nearest  one-one-hundred-thousandth  of one
percent)  of  the  rates quoted by major banks in New York, New York selected by
the  Calculation  Agent, at approximately 10:00 a.m., New York City time, on the
first  day of such Series 2004-1 Interest Period for loans in Dollars to leading
European  banks  for  a period equal to one month; provided, finally, that if no
such  quotes  are  provided,  "One-Month  LIBOR" for such Series 2004-1 Interest
Period  will  mean  One-Month  LIBOR  as in effect with respect to the preceding
Series  2004-1  Interest  Period.

     The  Issuer  shall  pay interest on overdue installments of interest at the
Class A-1  Note  Rate  to  the  extent  lawful.

     As  provided  in the Indenture and subject to certain limitations set forth
therein,  the  transfer of this Class A-1 Investor Note may be registered on the
Note Register upon surrender of this Class A-1 Investor Note for registration of
transfer  at  the  office  or  agency  designated  by the Issuer pursuant to the
Indenture,  duly endorsed by, or accompanied by a written instrument of transfer
in  form  satisfactory  to  the  Indenture  Trustee duly executed by, the Holder
hereof or his attorney duly authorized in writing, and thereupon one or more new
Class  A-1  Investor  Notes  of  authorized  denominations in the same aggregate
principal  amount will be issued to the designated transferee or transferees. No
service  charge  will be charged for any registration of transfer or exchange of
this  Class  A-1  Investor Note, but the transferor may be required to pay a sum
sufficient  to cover any tax or other governmental charge that may be imposed in
connection  with  any  such  registration  of  transfer  or  exchange.

     The  Issuer  and  the  Indenture  Trustee  covenant and agree in the Series
2004-1  Indenture  Supplement  and, by acquiring a Class A-1 Investor Note or an
interest therein, each Class A-1 Investor Noteholder and each Class A-1 Investor
Note Owner hereby covenants and agrees that, prior to the date which is one year
and  one day after payment in full of all obligations under each Securitization,
it  will not institute against, or join any other Person in instituting against,
the  Origination  Trust,  SPV,  any other Special Purpose Entity, or any general
partner  or single member of any Special Purpose Entity that is a partnership or
limited  liability  company,  respectively,  any  bankruptcy,  reorganization,
arrangement, insolvency or liquidation proceeding or other proceedings under any
federal  or  state  bankruptcy  or  similar  law.

     Each  Class  A-1 Investor Noteholder, by acceptance of a Class A-1 Investor
Note  or,  in the case of a Class A-1 Investor Note Owner, a beneficial interest
in a Class A-1 Investor Note, hereby represents, warrants and covenants that (a)
each of the Lease SUBI and the Fleet Receivable SUBI is a separate series of the
Origination Trust as provided in Section 3806(b)(2) of Chapter 38 of Title 12 of
                                 ------------------
the  Delaware  Code, 12 Del.C. Sec. 3801 et seq., (b)(i) the debts, liabilities,
                        -----           -- ---
obligations  and  expenses  incurred,  contracted for or otherwise existing with
respect to the Lease SUBI, the Lease SUBI Portfolio or the Fleet Receivable SUBI
shall  be  enforceable  against the Lease SUBI Portfolio or the Fleet Receivable
SUBI  only,  as  applicable, and not against any other SUBI Portfolio or the UTI
Portfolio  and  (ii)  the  debts,  liabilities,  obligations

                                    A-1-2-6
<PAGE>

and  expenses incurred, contracted for or otherwise existing with respect to any
other  SUBI  (used  in  this  paragraph  as  defined  in  the  Origination Trust
Agreement),  any  other SUBI Portfolio (used in this paragraph as defined in the
Origination  Trust Agreement), the UTI or the UTI Portfolio shall be enforceable
against  such other SUBI Portfolio or the UTI Portfolio only, as applicable, and
not against any other SUBI Assets, (c) except to the extent required by law, UTI
Assets  or  SUBI  Assets with respect to any SUBI (other than the Lease SUBI and
the  Fleet  Receivable  SUBI)  shall  not  be  subject  to  the  claims,  debts,
liabilities,  expenses  or obligations arising from or with respect to the Lease
SUBI or Fleet Receivable SUBI, respectively, in respect of such claim, (d)(i) no
creditor  or  holder of a claim relating to the Lease SUBI, the Fleet Receivable
SUBI  or  the  Lease  SUBI  Portfolio  shall  be entitled to maintain any action
against  or  recover any assets allocated to the UTI or the UTI Portfolio or any
other  SUBI or the assets allocated thereto, and (ii) no creditor or holder of a
claim  relating  to  the UTI, the UTI Portfolio or any SUBI other than the Lease
SUBI  or  the Fleet Receivable SUBI or any SUBI Assets other than the Lease SUBI
Portfolio  or  the  Fleet  Receivables  shall be entitled to maintain any action
against  or  recover  any  assets  allocated  to  the  Lease  SUBI  or the Fleet
Receivable  SUBI,  and  (e) any purchaser, assignee or pledgee of an interest in
the Lease SUBI, the Lease SUBI Certificate, the Fleet Receivable SUBI, the Lease
SUBI  Certificate,  the  Fleet  Receivable SUBI Certificate, any other SUBI, any
other SUBI Certificate (used in this Section as defined in the Origination Trust
Agreement),  the  UTI or the UTI Certificate must, prior to or contemporaneously
with  the grant of any such assignment, pledge or security interest, (i) give to
the  Origination Trust a non-petition covenant substantially similar to that set
forth  in  Section  6.9  of the Origination Trust Agreement, and (ii) execute an
agreement  for the benefit of each holder, assignee or pledgee from time to time
of  the UTI or UTI Certificate and any other SUBI or SUBI Certificate to release
all  claims to the assets of the Origination Trust allocated to the UTI and each
other  SUBI Portfolio and in the event that such release is not given effect, to
fully  subordinate all claims it may be deemed to have against the assets of the
Origination  Trust allocated to the UTI Portfolio and each other SUBI Portfolio.

     Each  Class  A-1  Investor  Noteholder or Class A-1 Investor Note Owner, by
acceptance  of a Class A-1 Investor Note or, in the case of a Class A-1 Investor
Note  Owner,  a  beneficial interest in a Class A-1 Investor Note, covenants and
agrees  that  by  accepting  the  benefits  of the Indenture that such Class A-1
Investor Noteholder or Class A-1 Investor Note Owner will not institute against,
or join with any other Person in instituting against, the Issuer any bankruptcy,
reorganization,  arrangement,  insolvency  or  liquidation proceedings, or other
proceedings,  under  any  federal  or  state  bankruptcy  or  similar  law.

     It is the intent of the Issuer, each Class A-1 Investor Noteholder and each
Class  A-1  Investor  Note  Owner  that, for federal, state and local income and
franchise  tax  purposes  only,  the  Class  A-1  Investor  Notes  will evidence
indebtedness  of the Issuer secured by the Series 2004-1 Collateral.  Each Class
A-1  Investor  Noteholder  and  each  Class  A-1  Investor  Note  Owner,  by the
acceptance  of  this  Class  A-1  Investor  Note, agrees to treat this Class A-1
Investor  Note  for  purposes  of  federal, state and local income and franchise
taxes and any other tax imposed on or measured by income, as indebtedness of the
Issuer.

     Each  Holder of this Class A-1 Investor Note shall provide to the Indenture
Trustee  at least annually an appropriate statement (on Internal Revenue Service
Form  W-8  or suitable substitute), with respect to United States federal income
tax  and withholding tax, signed under penalties of perjury, certifying that the
beneficial  owner  of  this  Class  A-1  Investor  Note is

                                    A-1-2-7
<PAGE>

a  non-U.S.  person  and  providing  the  Holder's  name  and  address.  If  the
information  provided  in  the  statement  changes, the Holder of this Class A-1
Investor  Note  shall  so  inform  the  Indenture Trustee within 30 days of such
change.

     The  Indenture  permits,  with  certain exceptions as therein provided, the
amendment  thereof  and  the  modification  of the rights and obligations of the
Issuer  and  the rights of the Holders of the Series 2004-1 Investor Notes under
the  Indenture  at  any  time by the Issuer with the consent of the Holders of a
Majority  in  Interest  of  the  Series  2004-1  Investor Notes affected by such
amendment  or  modification.  The  Indenture also contains provisions permitting
the  Holders  of Series 2004-1 Investor Notes representing specified percentages
of  the  aggregate  outstanding  amount  of the Series 2004-1 Investor Notes, on
behalf  of  the  Holders  of  all  the  Series  2004-1  Investor Notes, to waive
compliance  by  the  Issuer with certain provisions of the Indenture and certain
past  defaults  under  the Indenture and their consequences. Any such consent or
waiver  by  the  Holder  of  this  Class  A-1  Investor Note (or any one or more
predecessor  Class A-1 Investor Notes) shall be conclusive and binding upon such
Holder  and  upon  all future Holders of this Class A-1 Investor Note and of any
Class  A-1  Investor  Note issued upon the registration of transfer hereof or in
exchange  hereof  or  in  lieu hereof whether or not notation of such consent or
waiver is made upon this Class A-1 Investor Note. The Indenture also permits the
Indenture  Trustee  to  amend or waive certain terms and conditions set forth in
the Indenture without the consent of Holders of the Series 2004-1 Investor Notes
issued  thereunder.

     The  term  "Issuer"  as  used  in this Class A-1 Investor Note includes any
Successor to  the  Issuer  under  the  Indenture.

     The  Class  A-1  Investor  Notes  are  issuable  only in registered form in
denominations  as  provided in the Indenture, subject to certain limitations set
forth  therein.

     This  Class  A-1  Investor Note and the Indenture shall be governed by, and
construed  in  accordance  with,  the  law  of  the  State  of New York, and the
obligations,  rights  and remedies of the parties hereunder and thereunder shall
be  determined  in  accordance  with  such  law.

     No  reference  herein  to  the Indenture and no provision of this Class A-1
Investor  Note  or  of the Indenture shall alter or impair the obligation of the
Issuer,  which  is  absolute  and  unconditional,  to  pay  the principal of and
interest  on  this  Class A-1 Investor Note at the times, place and rate, and in
the  coin  or  currency  herein  prescribed.

     During  the Restricted Period (as defined below), payments (if any) on this
Temporary  Global  Class  A-1 Investor Note will only be paid to the extent that
there  is presented by Clearstream Banking, societe  anonyme ("Clearstream"), or
                                                               -----------
Euroclear  Bank S.A./N.V., as operator of the Euroclear System ("Euroclear"), to
                                                                 ---------
the  Indenture  Trustee a certificate to the effect that it has received from or
in  respect  of  persons  entitled to a Class A-1 Investor Note (as shown by its
records)  certification in form reasonably satisfactory to the Indenture Trustee
from  such  persons  that  their beneficial ownership interests in the Temporary
Global  Class  A-1  Investor  Note  are owned either by non-U.S. persons or U.S.
persons  who  purchased  such  interests  in  a transaction that did not require
registration  under the Securities Act.  After the Restricted Period, the holder
of this Temporary Global Class A-1 Investor Note will not be entitled to receive
any

                                    A-1-2-8
<PAGE>

payment hereon, until this Temporary Global Class A-1 Investor Note is exchanged
in  full  for  a Permanent Global Class A-1 Investor Note. This Temporary Global
Class  A-1  Investor  Note  shall  in all other respects be entitled to the same
benefits  as  a  Permanent  Global  Class A-1 Investor Note under the Indenture.

     After  the  end  of the period commencing on the Series 2004-1 Closing Date
And ending on the date that is the 40th day after the Series 2004-1 Closing Date
(the "Restricted Period"), interests in this Temporary Global Class A-1 Investor
      -----------------
Note may be exchanged (free of charge) for interests in a Permanent Global Class
A-1  Investor  Note  in the form of Exhibit A-1-3 to the Series 2004-1 Indenture
                                    -------------
Supplement upon presentation of this Temporary Global Class A-1 Investor Note to
the  Indenture Trustee. The Permanent Global Class A-1 Investor Note shall be so
issued  and delivered in exchange for only that portion of this Temporary Global
Class  A-1  Investor Note in respect of which there shall have been presented to
the  Indenture  Trustee  by Euroclear or Clearstream a certificate to the effect
that  it  has  received  from  or  in respect of persons entitled to a Class A-1
Investor  Note  (as  shown  by  its  records)  certification  in form reasonably
satisfactory  to  the  Indenture Trustee from such persons that their beneficial
ownership  interests  in  the Temporary Global Class A-1 Investor Note are owned
either  by  non-U.S.  persons  or U.S. persons who purchased such interests in a
transaction  that  did  not require registration under the Securities Act.

     On  an  exchange  of  the whole of this Temporary Global Class A-1 Investor
Note,  this Temporary Global Class A-1 Investor Note shall be surrendered to the
Indenture  Trustee.  On  an exchange of part only of this Temporary Global Class
A-1  Investor Note, details of such exchange shall be entered by or on behalf of
the  Issuer  in  Schedule  A  hereto and the relevant space in Schedule A hereto
recording  such  exchange  shall  be  signed  by or on behalf of the Issuer. If,
following the issuance of a Permanent Global Class A-1 Investor Note in exchange
for  some  of  the Class A-1 Investor Notes represented by this Temporary Global
Class  A-1  Investor  Note, further Class A-1 Investor Notes are to be exchanged
pursuant  to this paragraph, such exchange may be effected, without the issuance
of  a  new  Permanent Global Class A-1 Investor Note, by the Issuer or its agent
endorsing  Schedule A of the Permanent Global Class A-1 Investor Note previously
issued  to  reflect  an  increase  in  the  aggregate  principal  amount of such
Permanent  Global  Class  A-1  Investor Note by an amount equal to the aggregate
principal  amount  of  the  additional Class A-1 Investor Notes to be exchanged.

     Interests  in  this  Temporary  Global  Class  A-1  Investor  Note  will be
transferable  in  accordance with the rules and procedures for the time being of
Euroclear  or  Clearstream.  For  purposes  of  this  Temporary Global Class A-1
Investor Note, the securities account records of Euroclear or Clearstream shall,
in  the absence of manifest error, be conclusive evidence of the identity of the
holders  of  Class  A-1  Investor Notes and of the principal amount of Class A-1
Investor  Notes  represented  by  this  Temporary Global Class A-1 Investor Note
credited to the securities accounts of such holders of Class A-1 Investor Notes.
Any  statement  issued  by  Euroclear or Clearstream to any holder relating to a
specified  Class  A-1  Investor Note or Class A-1 Investor Notes credited to the
securities account of such holder and stating the principal amount of such Class
A-1  Investor  Note  or  Class  A-1 Investor Notes and certified by Euroclear or
Clearstream to be a true record of such securities account shall, in the absence
of  manifest  error,  be  conclusive  evidence  of  the  records of Euroclear or
Clearstream for the purposes of the preceding sentence (but without prejudice to
any  other  means  of  producing  such  records  in

                                    A-1-2-9
<PAGE>

evidence).  Notwithstanding  any  provision  to  the  contrary contained in this
Temporary Global Class A-1 Investor Note, the Issuer irrevocably agrees, for the
benefit  of  such  holder  and  its successors and assigns, that, subject to the
provisions  of  the Indenture, each holder or its successors or assigns may file
any  claim,  take  any  action  or institute any proceeding to enforce, directly
against the Issuer, the obligation of the Issuer hereunder to pay any amount due
in  respect of each Class A-1 Investor Note represented by this Temporary Global
Class  A-1  Investor  Note which is credited to such holder's securities account
with  Euroclear  or  Clearstream without the production of this Temporary Global
Class  A-1  Investor  Note.

     Interests in this Temporary Global Class A-1 Investor Note are exchangeable
or  transferable  in whole or in part for interests in a Restricted Global Class
A-1  Investor Note provided that such transfer or exchange complies with Section
                                                                         -------
6.5  of  the  Series  2004-1  Indenture  Supplement. Interests in this Temporary
---
Global Class A-1 Investor Note may be exchanged for Definitive Notes, subject to
the  provisions  of  the  Indenture.

                                    A-1-2-10
<PAGE>

                                   ASSIGNMENT

Social  Security  or  taxpayer  I.D.  or  other  identifying number of assignee:
___________________

FOR  VALUE  RECEIVED,  the  undersigned hereby sells, assigns and transfers unto

___________________________________________________________________________
                         (name and address of assignee)

the  within  Class  A-1  Investor  Note  and  all  rights thereunder, and hereby
irrevocably constitutes and appoints ____________________, attorney, to transfer
said  Class  A-1  Investor Note on the books kept for registration thereof, with
full  power  of  substitution  in  the  premises.

Dated:__________________            By:_______________________(2)

                                             Signature  Guaranteed:

                                             __________________________________
                                             __________________________________

-----------------------------
(2)  NOTE:  The  signature to this assignment must correspond with the name
     of  the  registered owner as it appears on the face of the within Class A-1
     Investor  Note,  without  alteration, enlargement or any change whatsoever.

                                    A-1-2-11
<PAGE>

                                                                   EXHIBIT A-1-3
                                                                TO SERIES 2004-1
                                                            INDENTURE SUPPLEMENT

                FORM OF PERMANENT GLOBAL CLASS A-1 INVESTOR NOTE

No.                                                         $[___________]

                       SEE REVERSE FOR CERTAIN CONDITIONS

                                                   CUSIP (CINS) NO. [          ]
                                                           ISIN NO. [          ]

     THIS  NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED  TO  AND  IS  REGISTERED  IN  THE  NAME OF THE DEPOSITORY TRUST COMPANY
("DTC"), A NEW YORK CORPORATION, 55 WATER STREET, NEW YORK, NEW YORK 10004, OR A
NOMINEE  THEREOF.  THIS  NOTE  MAY  NOT  BE  EXCHANGED IN WHOLE OR IN PART FOR A
SECURITY  REGISTERED,  AND  NO  TRANSFER OF THIS NOTE IN WHOLE OR IN PART MAY BE
REGISTERED,  IN  THE  NAME  OF  ANY  PERSON OTHER THAN DTC OR A NOMINEE THEREOF,
EXCEPT  IN  THE  LIMITED  CIRCUMSTANCES  DESCRIBED  IN  THE  INDENTURE.

     UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO THE
ISSUER OR THE TRANSFER AGENT AND REGISTRAR, AND ANY NOTE ISSUED IS REGISTERED IN
THE  NAME  OF  CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE  OF  DTC,  AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY  AS  IS  REQUESTED  BY AN AUTHORIZED REPRESENTATIVE OF DTC, ANY TRANSFER,
PLEDGE  OR  OTHER  USE  HEREOF  FOR  VALUE  OR  OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL  BECAUSE  THE  REGISTERED  OWNER,  CEDE  & CO., HAS AN INTEREST HEREIN.

     THE PRINCIPAL OF THIS CLASS A-1 INVESTOR NOTE IS PAYABLE IN INSTALLMENTS AS
SET  FORTH  HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS
A-1  INVESTOR  NOTE  AT  ANY  TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE
HEREOF.

                             CHESAPEAKE FUNDING LLC

        SERIES 2004-1 FLOATING RATE CALLABLE ASSET BACKED INVESTOR NOTES,
                                    CLASS A-1

<PAGE>

CHESAPEAKE FUNDING LLC, a limited liability company formed under the laws of the
State  of  Delaware  (herein  referred  to as the "Issuer"), for value received,
                                                   -------
hereby  promises  to pay to Cede & Co., or registered assigns, the principal sum
of  [____________]  Dollars, which amount shall be payable in the amounts and at
the  times  set forth in the Indenture described herein, provided, however, that
the  entire unpaid principal amount of this Class A-1 Investor Note shall be due
on  the  Class  A-1  Final Maturity Date. However, principal with respect to the
Class A-1 Investor Notes may be paid earlier under certain limited circumstances
described  in  the  Indenture.  The  Issuer  will pay interest on this Class A-1
Investor  Note  for  each  Series 2004-1 Interest Period, in accordance with the
                           ----------------------------
terms  of  the  Indenture,  at the Class A-1 Note Rate for such Interest Period.
Each  "Series  2004-1  Interest  Period"  will  be  a  period  commencing on and
including  a Payment Date and ending on and including the day preceding the next
succeeding  Payment  Date;  provided,  however,  that  the initial Series 2004-1
                            --------   -------
Interest Period shall commence on and include the Series 2004-1 Closing Date and
end  on  and  include September 6, 2004.  Such principal of and interest on this
Class  A-1  Investor  Note  shall be paid in the manner specified on the reverse
hereof  and  in  the  Indenture.

     The  principal  of and interest on this Class A-1 Investor Note are payable
in  such  coin  or  currency  of  the United States of America as at the time of
payment  is  legal  tender for payment of public and private debts. All payments
made by the Issuer with respect to this Class A-1 Investor Note shall be applied
as  provided  in the Indenture.  This Class A-1 Investor Note does not represent
an  interest  in,  or  an  obligation  of,  PHH Vehicle Management Services, LLC
("VMS")  or  any  affiliate  of  VMS  other  than  the  Issuer.

     Reference is made to the further provisions of this Class A-1 Investor Note
set  forth  on  the  reverse  hereof, which shall have the same effect as though
fully  set forth on the face of this Class A-1 Investor Note. Although a summary
of  certain  provisions  of  the Indenture is set forth below and on the reverse
hereof  and made a part hereof, this Class A-1 Investor Note does not purport to
summarize  the  Indenture and reference is made to the Indenture for information
with  respect  to  the  interests,  rights,  benefits, obligations, proceeds and
duties evidenced hereby and the rights, duties and obligations of the Issuer and
the  Indenture  Trustee.  A  copy  of  the  Indenture  may be requested from the
Indenture Trustee by writing to the Indenture Trustee at: JPMorgan Chase Bank, 4
New  York  Plaza, 6th Floor, New York, New York, 10004, Attention: Institutional
Trust  Services/Global  Debt.  To the extent not defined herein, the capitalized
terms  used  herein  have  the  meanings  ascribed  to  them  in  the Indenture.

     Unless  the  certificate  of authentication hereon has been executed by the
Indenture  Trustee  whose name appears below by manual signature, this Class A-1
Investor  Note shall not be entitled to any benefit under the Indenture referred
to  on  the  reverse  hereof,  or  be  valid  or  obligatory  for  any  purpose.

                                    A-1-3-2
<PAGE>

     IN  WITNESS  WHEREOF,  the  Issuer has caused this instrument to be signed,
Manually or  in  facsimile,  by  its  Authorized  Officer.

Date:  __________

                                        CHESAPEAKE  FUNDING  LLC

                                        By:___________________________
                                             Name:
                                             Title:

                INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION

     This  is  one  of  the  Class  A-1  Investor  Notes  issued  under  the
within-mentioned  Indenture.

                                        JPMORGAN  CHASE  BANK,  as  Indenture
                                        Trustee
                                        By:___________________________
                                             Authorized  Signatory

                                    A-1-3-3
<PAGE>

                      [REVERSE OF CLASS A-1 INVESTOR NOTE]

     This Class A-1 Investor Note is one of a duly authorized issue of Class A-1
Investor Notes of the Issuer designated its Series 2004-1 Floating Rate Callable
Asset  Backed Investor Notes (herein called the "Class A-1 Investor Notes"), all
                                                 ------------------------
issued  under  (i)  a  Base  Indenture  dated  as  of  June  30, 1999 (such Base
Indenture,  as  amended  or  modified,  is  herein called the "Base Indenture"),
                                                               --------------
between the Issuer and JPMorgan Chase Bank, as Indenture Trustee (the "Indenture
                                                                       ---------
Trustee",  which  term  includes  any successor Indenture Trustee under the Base
-------
Indenture),  and  (ii) a Series 2004-1 Indenture Supplement dated as of July 29,
---
2004  (the  "Series  2004-1  Indenture  Supplement")  between the Issuer and the
-            -------------------------------------
Indenture Trustee. The Base Indenture and the Series 2004-1 Indenture Supplement
are  referred  to  herein  as  the "Indenture". The Class A-1 Investor Notes are
                                    ---------
subject to all terms of the Indenture. All terms used in this Class A-1 Investor
Note  that  are  defined in the Indenture, as supplemented, modified or amended,
shall  have the meanings assigned to them in or pursuant to the Indenture, as so
supplemented,  modified  or  amended.

     The Class A-1 Investor Notes are and will be equally and ratably secured by
the  Series  2004-1  Collateral  pledged as security therefor as provided in the
Indenture  and  the  Series  2004-1  Indenture  Supplement.

     Principal  of  the Class A-1 Investor Notes will be payable on each Payment
Date  specified in and in the amounts described in the Indenture. "Payment Date"
                                                                   ------------
means the 7th day of each month, or if such date is not a Business Day, the next
succeeding  Business  Day,  commencing  September  7,  2004.

     The entire unpaid principal amount of this Class A-1 Investor Note shall be
due  and  payable  on  the  Class  A-1  Final Maturity Date. Notwithstanding the
foregoing, principal on the Class A-1 Investor Notes will be paid earlier during
the  Series  2004-1  Amortization  Period  as  described  in  the Indenture. All
principal payments on the Class A-1 Investor Notes shall be made pro rata to the
Class  A-1  Investor  Noteholders  entitled  thereto.

     The Issuer will have the option to prepay the Series 2004-1 Investor Notes,
in whole but not in part, on any Payment Date after the Payment Date in February
2006. The prepayment price for the Series 2004-1 Investor Notes will be equal to
the  amount  set  forth  in  the  Indenture.

     Interest  will  accrue  on  this  Class  A-1 Investor Notes for each Series
2004-1 Interest Period at a rate equal to (i) with respect to the initial Series
2004-1  Interest  Period,  1.58%  per annum and (ii) with respect to each Series
2004-1 Interest Period thereafter, a rate per annum equal to One-Month LIBOR for
such  Series  2004-1  Interest  Period plus 0.11% per annum (the "Class A-1 Note
                                                                  --------------
Rate").  "One-Month  LIBOR"  means,  for each Series 2004-1 Interest Period, the
----      ----------------
rate  per  annum  determined  on  the  related  LIBOR  Determination Date by the
Calculation  Agent to be the rate for Dollar deposits having a maturity equal to
one month that appears on Telerate Page 3750 at approximately 11:00 a.m., London
time,  on  such  LIBOR  Determination Date; provided, however, that if such rate
does  not  appear  on  Telerate  Page  3750, One-Month LIBOR will mean, for such
2004-1 Interest Period, the rate per annum equal to the arithmetic mean (rounded
to  the  nearest  one-one-hundred-thousandth  of  one  percent)  of  the  rates

                                    A-1-3-4
<PAGE>

quoted  by  the  Reference  Banks to the Calculation Agent as the rates at which
deposits  in  Dollars  are offered by the Reference Banks at approximately 11:00
a.m.,  London time, on the LIBOR Determination Date to prime banks in the London
interbank  market  for  a  period equal to one month; provided, further, that if
fewer  than  two  quotations  are  provided as requested by the Reference Banks,
"One-Month  LIBOR"  for  such  Series  2004-1  Interest  Period  will  mean  the
arithmetic  mean  (rounded  to  the  nearest  one-one-hundred-thousandth  of one
percent)  of  the  rates quoted by major banks in New York, New York selected by
the  Calculation  Agent, at approximately 10:00 a.m., New York City time, on the
first  day of such Series 2004-1 Interest Period for loans in Dollars to leading
European  banks  for  a period equal to one month; provided, finally, that if no
such  quotes  are  provided,  "One-Month  LIBOR" for such Series 2004-1 Interest
Period  will  mean  One-Month  LIBOR  as in effect with respect to the preceding
Series  2004-1  Interest  Period.

     The  Issuer  shall  pay interest on overdue installments of interest at the
Class A-1  Note  Rate  to  the  extent  lawful.

     As  provided  in the Indenture and subject to certain limitations set forth
therein,  the  transfer of this Class A-1 Investor Note may be registered on the
Note Register upon surrender of this Class A-1 Investor Note for registration of
transfer  at  the  office  or  agency  designated  by the Issuer pursuant to the
Indenture,  duly endorsed by, or accompanied by a written instrument of transfer
in  form  satisfactory  to  the  Indenture  Trustee duly executed by, the Holder
hereof or his attorney duly authorized in writing, and thereupon one or more new
Class  A-1  Investor  Notes  of  authorized  denominations in the same aggregate
principal  amount will be issued to the designated transferee or transferees. No
service  charge  will be charged for any registration of transfer or exchange of
this  Class  A-1  Investor Note, but the transferor may be required to pay a sum
sufficient  to cover any tax or other governmental charge that may be imposed in
connection  with  any  such  registration  of  transfer  or  exchange.

     The  Issuer  and  the  Indenture  Trustee  covenant and agree in the Series
2004-1  Indenture  Supplement  and, by acquiring a Class A-1 Investor Note or an
interest therein, each Class A-1 Investor Noteholder and each Class A-1 Investor
Note Owner hereby covenants and agrees that, prior to the date which is one year
and  one day after payment in full of all obligations under each Securitization,
it  will not institute against, or join any other Person in instituting against,
the  Origination  Trust,  SPV,  any other Special Purpose Entity, or any general
partner  or single member of any Special Purpose Entity that is a partnership or
limited  liability  company,  respectively,  any  bankruptcy,  reorganization,
arrangement, insolvency or liquidation proceeding or other proceedings under any
federal  or  state  bankruptcy  or  similar  law.

     Each  Class  A-1 Investor Noteholder, by acceptance of a Class A-1 Investor
Note  or,  in the case of a Class A-1 Investor Note Owner, a beneficial interest
in a Class A-1 Investor Note, hereby represents, warrants and covenants that (a)
each of the Lease SUBI and the Fleet Receivable SUBI is a separate series of the
Origination Trust as provided in Section 3806(b)(2) of Chapter 38 of Title 12 of
                                 ------------------
the  Delaware  Code, 12 Del.C. Sec. 3801 et seq., (b)(i) the debts, liabilities,
                        -----            -- ---
obligations  and  expenses  incurred,  contracted for or otherwise existing with
respect to the Lease SUBI, the Lease SUBI Portfolio or the Fleet Receivable SUBI
shall  be  enforceable  against the Lease SUBI Portfolio or the Fleet Receivable
SUBI  only,  as  applicable, and not against any other SUBI Portfolio or the UTI
Portfolio  and  (ii)  the  debts,  liabilities,  obligations

                                    A-1-3-5
<PAGE>

and  expenses incurred, contracted for or otherwise existing with respect to any
other  SUBI  (used  in  this  paragraph  as  defined  in  the  Origination Trust
Agreement),  any  other SUBI Portfolio (used in this paragraph as defined in the
Origination  Trust Agreement), the UTI or the UTI Portfolio shall be enforceable
against  such other SUBI Portfolio or the UTI Portfolio only, as applicable, and
not against any other SUBI Assets, (c) except to the extent required by law, UTI
Assets  or  SUBI  Assets with respect to any SUBI (other than the Lease SUBI and
the  Fleet  Receivable  SUBI)  shall  not  be  subject  to  the  claims,  debts,
liabilities,  expenses  or obligations arising from or with respect to the Lease
SUBI or Fleet Receivable SUBI, respectively, in respect of such claim, (d)(i) no
creditor  or  holder of a claim relating to the Lease SUBI, the Fleet Receivable
SUBI  or  the  Lease  SUBI  Portfolio  shall  be entitled to maintain any action
against  or  recover any assets allocated to the UTI or the UTI Portfolio or any
other  SUBI or the assets allocated thereto, and (ii) no creditor or holder of a
claim  relating  to  the UTI, the UTI Portfolio or any SUBI other than the Lease
SUBI  or  the Fleet Receivable SUBI or any SUBI Assets other than the Lease SUBI
Portfolio  or  the  Fleet  Receivables  shall be entitled to maintain any action
against  or  recover  any  assets  allocated  to  the  Lease  SUBI  or the Fleet
Receivable  SUBI,  and  (e) any purchaser, assignee or pledgee of an interest in
the Lease SUBI, the Lease SUBI Certificate, the Fleet Receivable SUBI, the Lease
SUBI  Certificate,  the  Fleet  Receivable SUBI Certificate, any other SUBI, any
other SUBI Certificate (used in this Section as defined in the Origination Trust
Agreement),  the  UTI or the UTI Certificate must, prior to or contemporaneously
with  the grant of any such assignment, pledge or security interest, (i) give to
the  Origination Trust a non-petition covenant substantially similar to that set
forth  in  Section  6.9  of the Origination Trust Agreement, and (ii) execute an
           ------------
agreement  for the benefit of each holder, assignee or pledgee from time to time
of  the UTI or UTI Certificate and any other SUBI or SUBI Certificate to release
all  claims to the assets of the Origination Trust allocated to the UTI and each
other  SUBI Portfolio and in the event that such release is not given effect, to
fully  subordinate all claims it may be deemed to have against the assets of the
Origination  Trust allocated to the UTI Portfolio and each other SUBI Portfolio.

     Each  Class  A-1  Investor  Noteholder or Class A-1 Investor Note Owner, by
acceptance  of a Class A-1 Investor Note or, in the case of a Class A-1 Investor
Note  Owner,  a  beneficial interest in a Class A-1 Investor Note, covenants and
agrees  that  by  accepting  the  benefits  of the Indenture that such Class A-1
Investor Noteholder or Class A-1 Investor Note Owner will not institute against,
or join with any other Person in instituting against, the Issuer any bankruptcy,
reorganization,  arrangement,  insolvency  or  liquidation proceedings, or other
proceedings,  under  any  federal  or  state  bankruptcy  or  similar  law.

     It is the intent of the Issuer, each Class A-1 Investor Noteholder and each
Class  A-1  Investor  Note  Owner  that, for federal, state and local income and
franchise  tax  purposes  only,  the  Class  A-1  Investor  Notes  will evidence
indebtedness  of the Issuer secured by the Series 2004-1 Collateral.  Each Class
A-1  Investor  Noteholder  and  each  Class  A-1  Investor  Note  Owner,  by the
acceptance  of  this  Class  A-1  Investor  Note, agrees to treat this Class A-1
Investor  Note  for  purposes  of  federal, state and local income and franchise
taxes and any other tax imposed on or measured by income, as indebtedness of the
Issuer.

     Each  Holder of this Class A-1 Investor Note shall provide to the Indenture
Trustee  at least annually an appropriate statement (on Internal Revenue Service
Form  W-8  or suitable substitute), with respect to United States federal income
tax  and withholding tax, signed under penalties of perjury, certifying that the
beneficial  owner  of  this  Class  A-1  Investor  Note is

                                    A-1-3-6
<PAGE>

a  non-U.S.  person  and  providing  the  Holder's  name  and  address.  If  the
information  provided  in  the  statement  changes, the Holder of this Class A-1
Investor  Note  shall  so  inform  the  Indenture Trustee within 30 days of such
change.

     The  Indenture  permits,  with  certain exceptions as therein provided, the
amendment  thereof  and  the  modification  of the rights and obligations of the
Issuer  and  the rights of the Holders of the Series 2004-1 Investor Notes under
the  Indenture  at  any  time by the Issuer with the consent of the Holders of a
Majority  in  Interest  of  the  Series  2004-1  Investor Notes affected by such
amendment  or  modification.  The  Indenture also contains provisions permitting
the  Holders  of Series 2004-1 Investor Notes representing specified percentages
of  the  aggregate  outstanding  amount  of the Series 2004-1 Investor Notes, on
behalf  of  the  Holders  of  all  the  Series  2004-1  Investor Notes, to waive
compliance  by  the  Issuer with certain provisions of the Indenture and certain
past  defaults  under  the Indenture and their consequences. Any such consent or
waiver  by  the  Holder  of  this  Class  A-1  Investor Note (or any one or more
predecessor  Class A-1 Investor Notes) shall be conclusive and binding upon such
Holder  and  upon  all future Holders of this Class A-1 Investor Note and of any
Class  A-1  Investor  Note issued upon the registration of transfer hereof or in
exchange  hereof  or  in  lieu hereof whether or not notation of such consent or
waiver is made upon this Class A-1 Investor Note. The Indenture also permits the
Indenture  Trustee  to  amend or waive certain terms and conditions set forth in
the Indenture without the consent of Holders of the Series 2004-1 Investor Notes
issued  thereunder.

     The  term  "Issuer"  as  used  in this Class A-1 Investor Note includes any
Successor to  the  Issuer  under  the  Indenture.

     The  Class  A-1  Investor  Notes  are  issuable  only in registered form in
denominations  as  provided in the Indenture, subject to certain limitations set
forth  therein.

     This  Class  A-1  Investor Note and the Indenture shall be governed by, and
construed  in  accordance  with,  the  law  of  the  State  of New York, and the
obligations,  rights  and remedies of the parties hereunder and thereunder shall
be  determined  in  accordance  with  such  law.

     No  reference  herein  to  the Indenture and no provision of this Class A-1
Investor  Note  or  of the Indenture shall alter or impair the obligation of the
Issuer,  which  is  absolute  and  unconditional,  to  pay  the principal of and
interest  on  this  Class A-1 Investor Note at the times, place and rate, and in
the  coin  or  currency  herein  prescribed.

     Interests  in  this  Permanent  Global  Class  A-1  Investor  Note  will be
transferable  in  accordance with the rules and procedures for the time being of
Clearstream  Banking,  societe  anonyme  ("Clearstream"),  or  Euroclear  Bank
                                           -----------
S.A./N.V.,  as  operator  of  the Euroclear System ("Euroclear").  Euroclear and
                                                     ---------
Clearstream will be treated by the Indenture Trustee and any paying agent as the
holder  of  the Class A-1 Investor Notes.  For purposes of this Permanent Global
Class  A-1  Investor  Note,  the  securities  account  records  of  Euroclear or
Clearstream  shall,  in the absence of manifest error, be conclusive evidence of
the  identity  of  the  holders of Class A-1 Investor Notes and of the principal
amount  of  Class  A-1 Investor Notes represented by this Permanent Global Class
A-1  Investor  Note credited to the securities accounts of such holders of Class
A-1  Investor  Notes.  Any  statement  issued by Euroclear or Clearstream to any
holder

                                    A-1-3-7
<PAGE>

relating  to  a  specified  Class  A-1 Investor Note or Class A-1 Investor Notes
credited  to  the  securities  account  of such holder and stating the principal
amount of such Class A-1 Investor Note or Class A-1 Investor Notes and certified
by  Euroclear  or  Clearstream  to  be  a true record of such securities account
shall,  in  the absence of manifest error, be conclusive evidence of the records
of  Euroclear  or  Clearstream  for  the purposes of the preceding sentence (but
without  prejudice  to  any  other means of producing such records in evidence).
Notwithstanding any provision to the contrary contained in this Permanent Global
Class  A-1 Investor Note, the Issuer irrevocably agrees, for the benefit of such
holder  and  its  successors and assigns, that, subject to the provisions of the
Indenture, each holder or its successors or assigns may file any claim, take any
action  or institute any proceeding to enforce, directly against the Issuer, the
obligation  of  the  Issuer  hereunder  to pay any amount due in respect of each
Class  A-1 Investor Note represented by this Permanent Global Class A-1 Investor
Note  which  is  credited  to such holder's securities account with Euroclear or
Clearstream  without  the production of this Permanent Global Class A-1 Investor
Note.

     Interests in this Permanent Global Class A-1 Investor Note are exchangeable
or  transferable  in whole or in part for interests in a Restricted Global Class
A-1  Investor Note provided that such transfer or exchange complies with Section
                                                                         -------
6.5  of  the  Series  2004-1  Indenture Supplement.  Interests in this Permanent
---
Global Class A-1 Investor Note may be exchanged for Definitive Notes, subject to
---
the  provisions  of  the  Indenture.

                                    A-1-3-8
<PAGE>

                                   ASSIGNMENT

Social  Security  or  taxpayer  I.D.  or  other  identifying number of assignee:
___________________

FOR  VALUE  RECEIVED,  the  undersigned hereby sells, assigns and transfers unto

___________________________________________________________________________
                         (name and address of assignee)

the  within  Class  A-1  Investor  Note  and  all  rights thereunder, and hereby
irrevocably constitutes and appoints ____________________, attorney, to transfer
said  Class  A-1  Investor Note on the books kept for registration thereof, with
full  power  of  substitution  in  the  premises.

Dated:__________________          By:_______________________(3)

                                        Signature  Guaranteed:

                                        __________________________________
                                        __________________________________

-----------------------------
(3)  NOTE: The signature to this assignment must correspond with the name of the
     registered owner as it appears on the face of the within Class A-1 Investor
     Note,  without  alteration,  enlargement  or  any  change  whatsoever.

                                        A-1-3-9
<PAGE>

                                                                   EXHIBIT A-2-1
                                                                TO SERIES 2004-1
                                                            INDENTURE SUPPLEMENT

                FORM OF RESTRICTED GLOBAL CLASS A-2 INVESTOR NOTE

No.                                                          $[_____________]

                       SEE REVERSE FOR CERTAIN CONDITIONS

                                                      CUSIP (CINS) NO. 165182AL0
                                                           ISIN NO. US165182AL06

     THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED  (THE  "SECURITIES  ACT"),  OR ANY STATE SECURITIES LAWS.  THE HOLDER OF
THIS  NOTE  BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER
SUCH  NOTE,  PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH
IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE
ON  WHICH  CHESAPEAKE  FUNDING LLC (THE "ISSUER") OR ANY AFFILIATE OF THE ISSUER
WAS  THE  OWNER  OF THIS NOTE (OR ANY PREDECESSOR OF SUCH NOTE), ONLY (A) TO THE
ISSUER,  (B)  PURSUANT  TO  A  REGISTRATION  STATEMENT  THAT  HAS  BEEN DECLARED
EFFECTIVE  UNDER  THE  SECURITIES  ACT,  (C)  FOR  SO LONG AS THE SECURITIES ARE
ELIGIBLE  FOR  RESALE  PURSUANT  TO  RULE  144A  UNDER THE SECURITIES ACT ("RULE
144A"),  TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
AS  DEFINED IN RULE 144A (A "QIB") THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT  OF  A  QIB  TO  WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE  ON  RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE
UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR (E)
PURSUANT  TO  ANOTHER  AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT, SUBJECT TO THE RIGHT OF THE ISSUER, PRIOR TO ANY SUCH OFFER,
SALE  OR  TRANSFER PURSUANT TO CLAUSE (E), TO REQUIRE THE DELIVERY OF AN OPINION
OF  COUNSEL,  CERTIFICATION  AND/OR  OTHER INFORMATION SATISFACTORY TO IT.  THIS
LEGEND  WILL  BE  REMOVED  UPON  THE  REQUEST  OF  THE  HOLDER  AFTER THE RESALE
RESTRICTION  TERMINATION  DATE  IN  ACCORDANCE  WITH  THE  INDENTURE SUPPLEMENT.

     THIS  NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED  TO  AND  IS  REGISTERED  IN  THE  NAME OF THE DEPOSITORY TRUST COMPANY
("DTC"), A NEW YORK CORPORATION, 55 WATER STREET, NEW YORK, NEW YORK 10004, OR A
NOMINEE  THEREOF.  THIS  NOTE  MAY  NOT  BE  EXCHANGED IN WHOLE OR IN PART FOR A
SECURITY

                                    A-2-1-1
<PAGE>

REGISTERED,  AND NO TRANSFER OF THIS NOTE IN WHOLE OR IN PART MAY BE REGISTERED,
IN  THE  NAME  OF  ANY  PERSON OTHER THAN DTC OR A NOMINEE THEREOF,EXCEPT IN THE
LIMITED  CIRCUMSTANCES  DESCRIBED  IN  THE  INDENTURE.

     UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO THE
ISSUER OR THE TRANSFER AGENT AND REGISTRAR, AND ANY NOTE ISSUED IS REGISTERED IN
THE  NAME  OF  CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE  OF  DTC,  AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY  AS  IS  REQUESTED  BY AN AUTHORIZED REPRESENTATIVE OF DTC, ANY TRANSFER,
PLEDGE  OR  OTHER  USE  HEREOF  FOR  VALUE  OR  OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL  BECAUSE  THE  REGISTERED  OWNER,  CEDE  & CO., HAS AN INTEREST HEREIN.

     THE PRINCIPAL OF THIS CLASS A-2 INVESTOR NOTE IS PAYABLE IN INSTALLMENTS AS
SET  FORTH  HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS
A-2  INVESTOR  NOTE  AT  ANY  TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE
HEREOF.

                             CHESAPEAKE FUNDING LLC

          SERIES 2004-1 FLOATING RATE CALLABLE ASSET BACKED INVESTOR NOTES,
                                    CLASS A-2

     CHESAPEAKE  FUNDING  LLC, a limited liability company formed under the laws
of  the  State  of  Delaware  (herein  referred  to  as the "Issuer"), for value
                                                             ------
received,  hereby  promises  to  pay  to  Cede & Co., or registered assigns, the
principal  sum of [______________] Dollars, which amount shall be payable in the
amounts  and at the times set forth in the Indenture described herein, provided,
however, that the entire unpaid principal amount of this Class A-2 Investor Note
shall  be  due  on  the  Class  A-2 Final Maturity Date. However, principal with
respect  to  the  Class  A-2  Investor  Notes  may be paid earlier under certain
limited  circumstances described in the Indenture.  The Issuer will pay interest
on  this  Class  A-2  Investor  Note  for each Series 2004-1 Interest Period, in
accordance  with the terms of the Indenture, at the Class A-2 Note Rate for such
Interest  Period.  Each  "Series  2004-1  Interest  Period"  will  be  a  period
                          --------------------------------
commencing  on  and including a Payment Date and ending on and including the day
preceding  the next succeeding Payment Date; provided, however, that the initial
                                             --------  -------
Series  2004-1  Interest  Period shall commence on and include the Series 2004-1
Closing  Date  and  end on and include September 6, 2004.  Such principal of and
interest  on  this Class A-2 Investor Note shall be paid in the manner specified
on  the  reverse  hereof  and  in  the  Indenture.

     The  principal  of and interest on this Class A-2 Investor Note are payable
in  such  coin  or  currency  of  the United States of America as at the time of
payment  is  legal  tender for payment of public and private debts. All payments
made by the Issuer with respect to this Class A-2 Investor Note shall be applied
as provided in the Indenture. This Class A-2 Investor Note does not represent an
interest  in,  or an obligation of, PHH Vehicle Management Services, LLC ("VMS")
                                                                           ---
or  any  affiliate  of  VMS  other  than  the  Issuer.

                                    A-2-1-2
<PAGE>

     Reference is made to the further provisions of this Class A-2 Investor Note
set  forth  on  the  reverse  hereof, which shall have the same effect as though
fully  set forth on the face of this Class A-2 Investor Note. Although a summary
of  certain  provisions  of  the Indenture is set forth below and on the reverse
hereof  and made a part hereof, this Class A-2 Investor Note does not purport to
summarize  the  Indenture and reference is made to the Indenture for information
with  respect  to  the  interests,  rights,  benefits, obligations, proceeds and
duties evidenced hereby and the rights, duties and obligations of the Issuer and
the  Indenture  Trustee.  A  copy  of  the  Indenture  may be requested from the
Indenture Trustee by writing to the Indenture Trustee at: JPMorgan Chase Bank, 4
New  York  Plaza, 6th Floor, New York, New York, 10004, Attention: Institutional
Trust  Services/Global  Debt.  To the extent not defined herein, the capitalized
terms  used  herein  have  the  meanings  ascribed  to  them  in  the Indenture.

     Unless  the  certificate  of authentication hereon has been executed by the
Indenture  Trustee  whose name appears below by manual signature, this Class A-2
Investor  Note shall not be entitled to any benefit under the Indenture referred
to  on  the  reverse  hereof,  or  be  valid  or  obligatory  for  any  purpose.

                                    A-2-1-3
<PAGE>

     IN  WITNESS  WHEREOF,  the  Issuer has caused this instrument to be signed,
Manually or  in  facsimile,  by  its  Authorized  Officer.

Date:  __________

                                        CHESAPEAKE  FUNDING  LLC

                                        By:___________________________
                                             Name:
                                             Title:

                INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION

     This  is  one  of  the  Class  A-2  Investor  Notes  issued  under  the
within-mentioned  Indenture.

                                        JPMORGAN  CHASE  BANK, as Indenture
                                        Trustee

                                        By:___________________________
                                             Authorized  Signatory

                                    A-2-1-4
<PAGE>

                      [REVERSE OF CLASS A-2 INVESTOR NOTE]

     This Class A-2 Investor Note is one of a duly authorized issue of Class A-2
Investor Notes of the Issuer designated its Series 2004-1 Floating Rate Callable
Asset  Backed Investor Notes (herein called the "Class A-2 Investor Notes"), all
                                                 ------------------------
issued  under  (i)  a  Base  Indenture  dated  as  of  June  30, 1999 (such Base
Indenture,  as  amended  or  modified,  is  herein called the "Base Indenture"),
                                                               --------------
between the Issuer and JPMorgan Chase Bank, as Indenture Trustee (the "Indenture
                                                                       ---------
Trustee",  which  term  includes  any successor Indenture Trustee under the Base
-------
Indenture),  and  (ii) a Series 2004-1 Indenture Supplement dated as of July 29,
---
2004  (the  "Series  2004-1  Indenture  Supplement")  between the Issuer and the
-            -------------------------------------
Indenture Trustee. The Base Indenture and the Series 2004-1 Indenture Supplement
are  referred  to  herein  as  the "Indenture". The Class A-2 Investor Notes are
                                    ---------
subject to all terms of the Indenture. All terms used in this Class A-2 Investor
Note  that  are  defined in the Indenture, as supplemented, modified or amended,
shall  have the meanings assigned to them in or pursuant to the Indenture, as so
supplemented,  modified  or  amended.

     The Class A-2 Investor Notes are and will be equally and ratably secured by
the  Series  2004-1  Collateral  pledged as security therefor as provided in the
Indenture  and  the  Series  2004-1  Indenture  Supplement.

     Principal  of  the  Class  A-2  Investor  Notes  will  be  payable  on each
Payment  Date  specified  in  and  in  the  amounts  described in the Indenture.
"Payment  Date"  means  the  7th  day  of  each  month, or if such date is not a
 -------------
Business  Day,  the  next succeeding Business Day, commencing September 7, 2004.

     The  entire  unpaid  principal  amount  of  this  Class  A-2  Investor Note
shall  be  due and payable on the Class A-2 Final Maturity Date. Notwithstanding
the  foregoing,  principal  on the Class A-2 Investor Notes will be paid earlier
during  the Series 2004-1 Amortization Period as described in the Indenture. All
principal payments on the Class A-2 Investor Notes shall be made pro rata to the
Class  A-2  Investor  Noteholders  entitled  thereto.

     The Issuer will have the option to prepay the Series 2004-1 Investor Notes,
in whole but not in part, on any Payment Date after the Payment Date in February
2006. The prepayment price for the Series 2004-1 Investor Notes will be equal to
the  amount  set  forth  in  the  Indenture.

     Interest  will  accrue  on  this  Class  A-2 Investor Notes for each Series
2004-1 Interest Period at a rate equal to (i) with respect to the initial Series
2004-1  Interest  Period,  1.63%  per annum and (ii) with respect to each Series
2004-1 Interest Period thereafter, a rate per annum equal to One-Month LIBOR for
such  Series  2004-1  Interest  Period plus 0.16% per annum (the "Class A-2 Note
                                                                  --------------
Rate").  "One-Month  LIBOR"  means,  for each Series 2004-1 Interest Period, the
----      ---------------
rate  per  annum  determined  on  the  related  LIBOR  Determination Date by the
Calculation  Agent to be the rate for Dollar deposits having a maturity equal to
one month that appears on Telerate Page 3750 at approximately 11:00 a.m., London
time,  on  such  LIBOR  Determination Date; provided, however, that if such rate
does  not  appear  on  Telerate  Page  3750, One-Month LIBOR will mean, for such
2004-1 Interest Period, the rate per annum equal to the arithmetic mean (rounded
to  the  nearest  one-one-hundred-thousandth  of  one  percent)  of  the  rates

                                    A-2-1-5
<PAGE>

quoted  by  the  Reference  Banks to the Calculation Agent as the rates at which
deposits  in  Dollars  are offered by the Reference Banks at approximately 11:00
a.m.,  London time, on the LIBOR Determination Date to prime banks in the London
interbank  market  for  a  period equal to one month; provided, further, that if
fewer  than  two  quotations  are  provided as requested by the Reference Banks,
"One-Month  LIBOR"  for  such  Series  2004-1  Interest  Period  will  mean  the
arithmetic  mean  (rounded  to  the  nearest  one-one-hundred-thousandth  of one
percent)  of  the  rates quoted by major banks in New York, New York selected by
the  Calculation  Agent, at approximately 10:00 a.m., New York City time, on the
first  day of such Series 2004-1 Interest Period for loans in Dollars to leading
European  banks  for  a period equal to one month; provided, finally, that if no
such  quotes  are  provided,  "One-Month  LIBOR" for such Series 2004-1 Interest
Period  will  mean  One-Month  LIBOR  as in effect with respect to the preceding
Series  2004-1  Interest  Period.

     The  Issuer  shall  pay interest on overdue installments of interest at the
Class A-2  Note  Rate  to  the  extent  lawful.

     As  provided  in the Indenture and subject to certain limitations set forth
therein,  the  transfer of this Class A-2 Investor Note may be registered on the
Note Register upon surrender of this Class A-2 Investor Note for registration of
transfer  at  the  office  or  agency  designated  by the Issuer pursuant to the
Indenture,  duly endorsed by, or accompanied by a written instrument of transfer
in  form  satisfactory  to  the  Indenture  Trustee duly executed by, the Holder
hereof or his attorney duly authorized in writing, and thereupon one or more new
Class  A-2  Investor  Notes  of  authorized  denominations in the same aggregate
principal  amount will be issued to the designated transferee or transferees. No
service  charge  will be charged for any registration of transfer or exchange of
this  Class  A-2  Investor Note, but the transferor may be required to pay a sum
sufficient  to cover any tax or other governmental charge that may be imposed in
connection  with  any  such  registration  of  transfer  or  exchange.

     The  Issuer  and  the  Indenture  Trustee  covenant and agree in the Series
2004-1  Indenture  Supplement and,  by acquiring a Class A-2 Investor Note or an
interest therein, each Class A-2 Investor Noteholder and each Class A-2 Investor
Note Owner hereby covenants and agrees that, prior to the date which is one year
and  one day after payment in full of all obligations under each Securitization,
it  will not institute against, or join any other Person in instituting against,
the  Origination  Trust,  SPV,  any other Special Purpose Entity, or any general
partner  or single member of any Special Purpose Entity that is a partnership or
limited  liability  company,  respectively,  any  bankruptcy,  reorganization,
arrangement, insolvency or liquidation proceeding or other proceedings under any
federal  or  state  bankruptcy  or  similar  law.

     Each  Class  A-2 Investor Noteholder, by acceptance of a Class A-2 Investor
Note  or,  in the case of a Class A-2 Investor Note Owner, a beneficial interest
in a Class A-2 Investor Note, hereby represents, warrants and covenants that (a)
each of the Lease SUBI and the Fleet Receivable SUBI is a separate series of the
Origination Trust as provided in Section 3806(b)(2) of Chapter 38 of Title 12 of
                                 ------------------
the  Delaware  Code, 12 Del.C. Sec. 3801 et seq., (b)(i) the debts, liabilities,
                        -----            -- ---
obligations  and  expenses  incurred,  contracted for or otherwise existing with
respect to the Lease SUBI, the Lease SUBI Portfolio or the Fleet Receivable SUBI
shall  be  enforceable  against the Lease SUBI Portfolio or the Fleet Receivable
SUBI  only,  as  applicable, and not against any other SUBI Portfolio or the UTI
Portfolio  and  (ii)  the debts, liabilities, obligations

                                    A-2-1-6

<PAGE>

and expenses incurred, contracted for or otherwise existing with respect to any
other  SUBI  (used  in  this  paragraph  as  defined  in  the  Origination Trust
Agreement),  any  other SUBI Portfolio (used in this paragraph as defined in the
Origination  Trust Agreement), the UTI or the UTI Portfolio shall be enforceable
against  such other SUBI Portfolio or the UTI Portfolio only, as applicable, and
not against any other SUBI Assets, (c) except to the extent required by law, UTI
Assets  or  SUBI  Assets with respect to any SUBI (other than the Lease SUBI and
the  Fleet  Receivable  SUBI)  shall  not  be  subject  to  the  claims,  debts,
liabilities,  expenses  or obligations arising from or with respect to the Lease
SUBI or Fleet Receivable SUBI, respectively, in respect of such claim, (d)(i) no
creditor  or  holder of a claim relating to the Lease SUBI, the Fleet Receivable
SUBI  or  the  Lease  SUBI  Portfolio  shall  be entitled to maintain any action
against  or  recover any assets allocated to the UTI or the UTI Portfolio or any
other  SUBI or the assets allocated thereto, and (ii) no creditor or holder of a
claim  relating  to  the UTI, the UTI Portfolio or any SUBI other than the Lease
SUBI  or  the Fleet Receivable SUBI or any SUBI Assets other than the Lease SUBI
Portfolio  or  the  Fleet  Receivables  shall be entitled to maintain any action
against  or  recover  any  assets  allocated  to  the  Lease  SUBI  or the Fleet
Receivable  SUBI,  and  (e) any purchaser, assignee or pledgee of an interest in
the Lease SUBI, the Lease SUBI Certificate, the Fleet Receivable SUBI, the Lease
SUBI  Certificate,  the  Fleet  Receivable SUBI Certificate, any other SUBI, any
other SUBI Certificate (used in this Section as defined in the Origination Trust
Agreement),  the  UTI or the UTI Certificate must, prior to or contemporaneously
with  the grant of any such assignment, pledge or security interest, (i) give to
the  Origination Trust a non-petition covenant substantially similar to that set
forth  in  Section  6.9  of the Origination Trust Agreement, and (ii) execute an
           -----------
agreement  for the benefit of each holder, assignee or pledgee from time to time
of  the UTI or UTI Certificate and any other SUBI or SUBI Certificate to release
all  claims to the assets of the Origination Trust allocated to the UTI and each
other  SUBI Portfolio and in the event that such release is not given effect, to
fully  subordinate all claims it may be deemed to have against the assets of the
Origination  Trust allocated to the UTI Portfolio and each other SUBI Portfolio.

     Each  Class  A-2  Investor  Noteholder or Class A-2 Investor Note Owner, by
acceptance  of a Class A-2 Investor Note or, in the case of a Class A-2 Investor
Note  Owner,  a  beneficial interest in a Class A-2 Investor Note, covenants and
agrees  that  by  accepting  the  benefits  of the Indenture that such Class A-2
Investor Noteholder or Class A-2 Investor Note Owner will not institute against,
or join with any other Person in instituting against, the Issuer any bankruptcy,
reorganization,  arrangement,  insolvency  or  liquidation proceedings, or other
proceedings,  under  any  federal  or  state  bankruptcy  or  similar  law.

     It is the intent of the Issuer, each Class A-2 Investor Noteholder and each
Class  A-2  Investor  Note  Owner  that, for federal, state and local income and
franchise  tax  purposes  only,  the  Class  A-2  Investor  Notes  will evidence
indebtedness  of the Issuer secured by the Series 2004-1 Collateral.  Each Class
A-2  Investor  Noteholder  and  each  Class  A-2  Investor  Note  Owner,  by the
acceptance  of  this  Class  A-2  Investor  Note, agrees to treat this Class A-2
Investor  Note  for  purposes  of  federal, state and local income and franchise
taxes and any other tax imposed on or measured by income, as indebtedness of the
Issuer.

     The  Indenture  permits,  with  certain exceptions as therein provided, the
amendment  thereof  and  the  modification  of the rights and obligations of the
Issuer  and  the rights of the Holders of the Series 2004-1 Investor Notes under
the  Indenture  at  any  time by the Issuer with the consent of the Holders of a
Majority  in  Interest  of  the  Series  2004-1  Investor Notes

                                    A-2-1-7

<PAGE>

affected  by  such  amendment  or  modification.  The  Indenture  also  contains
provisions  permitting  the Holders of Series 2004-1 Investor Notes representing
specified  percentages  of the aggregate outstanding amount of the Series 2004-1
Investor  Notes,  on  behalf  of  the  Holders of all the Series 2004-1 Investor
Notes,  to  waive  compliance  by  the  Issuer  with  certain  provisions of the
Indenture  and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Class A-2 Investor Note (or any
one  or  more  predecessor  Class  A-2  Investor  Notes) shall be conclusive and
binding  upon such Holder and upon all future Holders of this Class A-2 Investor
Note and of any Class A-2 Investor Note issued upon the registration of transfer
hereof  or  in exchange hereof or in lieu hereof whether or not notation of such
consent  or waiver is made upon this Class A-2 Investor Note. The Indenture also
permits the Indenture Trustee to amend or waive certain terms and conditions set
forth  in  the  Indenture  without  the  consent of Holders of the Series 2004-1
Investor  Notes  issued  thereunder.

     The  term  "Issuer"  as  used  in this Class A-2 Investor Note includes any
successor to  the  Issuer  under  the  Indenture.

     The  Class  A-2  Investor  Notes  are  issuable  only in registered form in
denominations  as  provided in the Indenture, subject to certain limitations set
forth  therein.

     This  Class  A-2  Investor Note and the Indenture shall be governed by, and
construed  in  accordance  with,  the  law  of  the  State  of New York, and the
obligations,  rights  and remedies of the parties hereunder and thereunder shall
be  determined  in  accordance  with  such  law.

     No  reference  herein  to  the Indenture and no provision of this Class A-2
Investor  Note  or  of the Indenture shall alter or impair the obligation of the
Issuer,  which  is  absolute  and  unconditional,  to  pay  the principal of and
interest  on  this  Class A-2 Investor Note at the times, place and rate, and in
the  coin  or  currency  herein  prescribed.

     Interests  in  this  Restricted  Global  Class  A-2  Investor  Note  are
exchangeable  or  transferable  in whole or in part for interests in a Temporary
Global  Class  A-2  Investor  Note or a Permanent Global Class A-2 Investor Note
provided  that such transfer or exchange complies with Section 6.5 of the Series
                                                       -----------
2004-1  Indenture  Supplement.  Interests  in  this  Restricted Global Class A-2
Investor  Note  may be exchanged for Definitive Notes, subject to the provisions
of  the  Indenture.

                                    A-2-1-8

<PAGE>
                                   ASSIGNMENT

Social  Security  or  taxpayer  I.D.  or  other  identifying number of assignee:
___________________

FOR  VALUE  RECEIVED,  the  undersigned hereby sells, assigns and transfers unto

___________________________________________________________________________
                         (name and address of assignee)

the  within  Class  A-2  Investor  Note  and  all  rights thereunder, and hereby
irrevocably constitutes and appoints ____________________, attorney, to transfer
said  Class  A-2  Investor Note on the books kept for registration thereof, with
full  power  of  substitution  in  the  premises.

Dated:__________________          By:_______________________(4)

                                        Signature  Guaranteed:

                                        __________________________________
                                        __________________________________

-----------------------------
(4)  NOTE: The signature to  this  assignment must correspond with the name of
     the  registered  owner  as  it  appears on the face of the within Class A-2
     Investor  Note,  without  alteration, enlargement or any change whatsoever.

                                    A-2-1-9
<PAGE>

                                                                   EXHIBIT A-2-2
                                                                TO SERIES 2004-1
                                                            INDENTURE SUPPLEMENT

                FORM OF TEMPORARY GLOBAL CLASS A-2 INVESTOR NOTE

No.                                                         $[_______________]

                       SEE REVERSE FOR CERTAIN CONDITIONS

                                                      CUSIP (CINS) NO. U16492AB3
                                                           ISIN NO. USU16492AB35

     THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED  (THE  "SECURITIES  ACT"), OR ANY SECURITIES REGULATORY AUTHORITY OF ANY
STATE OR OTHER JURISDICTION OF THE UNITED STATES.  UNTIL 40 DAYS AFTER THE LATER
OF  THE  COMMENCEMENT  OF  THE OFFERING AND THE ORIGINAL ISSUE DATE OF THE NOTES
(THE  "RESTRICTED  PERIOD")  IN CONNECTION WITH THE OFFERING OF THE NOTES IN THE
UNITED  STATES AND OUTSIDE OF THE UNITED STATES, THE SALE, PLEDGE OR TRANSFER OF
THIS NOTE IS SUBJECT TO CERTAIN CONDITIONS AND RESTRICTIONS.  THE HOLDER HEREOF,
BY  PURCHASING OR OTHERWISE ACQUIRING THIS NOTE, ACKNOWLEDGES THAT THIS NOTE HAS
NOT  BEEN  REGISTERED  UNDER  THE  SECURITIES  ACT AND AGREES FOR THE BENEFIT OF
CHESAPEAKE  FUNDING  LLC (THE "ISSUER") THAT THIS NOTE MAY BE REOFFERED, RESOLD,
PLEDGED  OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND
OTHER  APPLICABLE  LAWS OF THE STATES, TERRITORIES AND POSSESSIONS OF THE UNITED
STATES  GOVERNING  THE OFFER AND SALE OF SECURITIES, AND PRIOR TO THE EXPIRATION
OF THE RESTRICTED PERIOD, ONLY (1) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
REGULATION  S  UNDER  THE SECURITIES ACT, (2) PURSUANT TO AND IN ACCORDANCE WITH
RULE  144A  UNDER  THE  SECURITIES  ACT  OR  (3)  TO  THE  ISSUER.

     THIS  NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED  TO  AND  IS  REGISTERED  IN  THE  NAME OF THE DEPOSITORY TRUST COMPANY
("DTC"), A NEW YORK CORPORATION, 55 WATER STREET, NEW YORK, NEW YORK 10004, OR A
NOMINEE  THEREOF.  THIS  NOTE  MAY  NOT  BE  EXCHANGED IN WHOLE OR IN PART FOR A
SECURITY  REGISTERED,  AND  NO  TRANSFER OF THIS NOTE IN WHOLE OR IN PART MAY BE
REGISTERED,  IN  THE  NAME  OF  ANY  PERSON OTHER THAN DTC OR A NOMINEE THEREOF,
EXCEPT  IN  THE  LIMITED  CIRCUMSTANCES  DESCRIBED  IN  THE  INDENTURE.

                                    A-2-2-1

<PAGE>

     UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO THE
ISSUER OR THE TRANSFER AGENT AND REGISTRAR, AND ANY NOTE ISSUED IS REGISTERED IN
THE  NAME  OF  CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE  OF  DTC,  AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY  AS  IS  REQUESTED  BY AN AUTHORIZED REPRESENTATIVE OF DTC, ANY TRANSFER,
PLEDGE  OR  OTHER  USE  HEREOF  FOR  VALUE  OR  OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL  BECAUSE  THE  REGISTERED  OWNER,  CEDE  & CO., HAS AN INTEREST HEREIN.

     THE PRINCIPAL OF THIS CLASS A-2 INVESTOR NOTE IS PAYABLE IN INSTALLMENTS AS
SET  FORTH  HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS
A-2  INVESTOR  NOTE  AT  ANY  TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE
HEREOF.

                             CHESAPEAKE FUNDING LLC

          SERIES 2004-1 FLOATING RATE CALLABLE ASSET BACKED INVESTOR NOTES,
                                    CLASS A-2

     CHESAPEAKE  FUNDING  LLC, a limited liability company formed under the laws
of  the  State  of  Delaware  (herein  referred  to  as the "Issuer"), for value
                                                             ------
received,  hereby  promises  to  pay  to  Cede & Co., or registered assigns, the
principal  sum  of  [____________] Dollars, which amount shall be payable in the
amounts  and at the times set forth in the Indenture described herein, provided,
however, that the entire unpaid principal amount of this Class A-2 Investor Note
shall  be  due  on  the  Class  A-2 Final Maturity Date. However, principal with
respect  to  the  Class  A-2  Investor  Notes  may be paid earlier under certain
limited  circumstances described in the Indenture.  The Issuer will pay interest
on  this  Class  A-2  Investor  Note  for each Series 2004-1 Interest Period, in
accordance  with the terms of the Indenture, at the Class A-2 Note Rate for such
Interest  Period.  Each  "Series  2004-1  Interest  Period"  will  be  a  period
                          --------------------------------
commencing  on  and including a Payment Date and ending on and including the day
preceding  the next succeeding Payment Date; provided, however, that the initial
                                             --------  -------
Series  2004-1  Interest  Period shall commence on and include the Series 2004-1
Closing  Date  and  end on and include September 6, 2004.  Such principal of and
interest  on  this Class A-2 Investor Note shall be paid in the manner specified
on  the  reverse  hereof  and  in  the  Indenture.

     The  principal  of and interest on this Class A-2 Investor Note are payable
in  such  coin  or  currency  of  the United States of America as at the time of
payment  is  legal  tender for payment of public and private debts. All payments
made by the Issuer with respect to this Class A-2 Investor Note shall be applied
as provided in the Indenture. This Class A-2 Investor Note does not represent an
interest  in,  or an obligation of, PHH Vehicle Management Services, LLC ("VMS")
                                                                           ---
or  any  affiliate  of  VMS  other  than  the  Issuer.

     Reference is made to the further provisions of this Class A-2 Investor Note
set  forth  on  the  reverse  hereof, which shall have the same effect as though
fully  set forth on the face of this Class A-2 Investor Note. Although a summary
of  certain  provisions  of  the Indenture is set forth below and on the reverse
hereof  and  made  a  part  hereof,  this  Class  A-2  Investor  Note  does

                                    A-2-2-2
<PAGE>

not  purport  to  summarize the Indenture and reference is made to the Indenture
for  information  with  respect to the interests, rights, benefits, obligations,
proceeds  and  duties evidenced hereby and the rights, duties and obligations of
the  Issuer  and the Indenture Trustee. A copy of the Indenture may be requested
from  the  Indenture  Trustee  by  writing to the Indenture Trustee at: JPMorgan
Chase  Bank,  4 New York Plaza, 6th Floor, New York, New York, 10004, Attention:
Institutional  Trust Services/Global Debt. To the extent not defined herein, the
capitalized  terms  used  herein  have  the  meanings  ascribed  to  them in the
Indenture.

     Unless  the  certificate  of  authentication  hereon  has  been executed by
the  Indenture  Trustee whose name appears below by manual signature, this Class
A-2  Investor  Note  shall  not  be  entitled to any benefit under the Indenture
referred  to  on  the reverse hereof, or be valid or obligatory for any purpose.

                                    A-2-2-3
<PAGE>

     IN  WITNESS  WHEREOF,  the  Issuer has caused this instrument to be signed,
Manually or  in  facsimile,  by  its  Authorized  Officer.

Date:  __________

                                   CHESAPEAKE  FUNDING  LLC

                                   By:___________________________
                                        Name:
                                        Title:

                INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION

     This  is  one  of  the  Class  A-2  Investor  Notes  issued  under  the
within-mentioned  Indenture.

                                   JPMORGAN  CHASE  BANK,  as  Indenture
                                   Trustee

                                   By:___________________________
                                        Authorized  Signatory

                                    A-2-2-4
<PAGE>
                      [REVERSE OF CLASS A-2 INVESTOR NOTE]

     This Class A-2 Investor Note is one of a duly authorized issue of Class A-2
Investor Notes of the Issuer designated its Series 2004-1 Floating Rate Callable
Asset  Backed Investor Notes (herein called the "Class A-2 Investor Notes"), all
                                                 ------------------------
issued  under  (i)  a  Base  Indenture  dated  as  of  June  30, 1999 (such Base
Indenture,  as  amended  or  modified,  is  herein called the "Base Indenture"),
                                                               --------------
between the Issuer and JPMorgan Chase Bank, as Indenture Trustee (the "Indenture
                                                                       ---------
Trustee",  which  term  includes  any successor Indenture Trustee under the Base
-------
Indenture),  and  (ii) a Series 2004-1 Indenture Supplement dated as of July 29,
---
2004  (the  "Series  2004-1  Indenture  Supplement")  between the Issuer and the
-            -------------------------------------
Indenture Trustee. The Base Indenture and the Series 2004-1 Indenture Supplement
are  referred  to  herein  as  the "Indenture". The Class A-2 Investor Notes are
                                    ---------
subject to all terms of the Indenture. All terms used in this Class A-2 Investor
Note  that  are  defined in the Indenture, as supplemented, modified or amended,
shall  have the meanings assigned to them in or pursuant to the Indenture, as so
supplemented,  modified  or  amended.

     The Class A-2 Investor Notes are and will be equally and ratably secured by
the  Series  2004-1  Collateral  pledged as security therefor as provided in the
Indenture  and  the  Series  2004-1  Indenture  Supplement.

     Principal  of  the Class A-2 Investor Notes will be payable on each Payment
Date  specified in and in the amounts described in the Indenture. "Payment Date"
                                                                   ------------
means the 7th day of each month, or if such date is not a Business Day, the next
succeeding  Business  Day,  commencing  September  7,  2004.

     The entire unpaid principal amount of this Class A-2 Investor Note shall be
Due  and  payable  on  the  Class  A-2  Final Maturity Date. Notwithstanding the
foregoing, principal on the Class A-2 Investor Notes will be paid earlier during
the  Series  2004-1  Amortization  Period  as  described  in  the Indenture. All
principal payments on the Class A-2 Investor Notes shall be made pro rata to the
Class  A-2  Investor  Noteholders  entitled  thereto.

     The Issuer will have the option to prepay the Series 2004-1 Investor Notes,
in whole but not in part, on any Payment Date after the Payment Date in February
2006. The prepayment price for the Series 2004-1 Investor Notes will be equal to
the  amount  set  forth  in  the  Indenture.

     Interest  will  accrue  on  this  Class  A-2 Investor Notes for each Series
2004-1 Interest Period at a rate equal to (i) with respect to the initial Series
2004-1  Interest  Period,  1.63%  per annum and (ii) with respect to each Series
2004-1 Interest Period thereafter, a rate per annum equal to One-Month LIBOR for
such  Series  2004-1  Interest  Period plus 0.16% per annum (the "Class A-2 Note
Rate").  "One-Month  LIBOR"  means,  for each Series 2004-1 Interest Period, the
rate  per  annum  determined  on  the  related  LIBOR  Determination Date by the
Calculation  Agent to be the rate for Dollar deposits having a maturity equal to
one month that appears on Telerate Page 3750 at approximately 11:00 a.m., London
time,  on  such  LIBOR  Determination Date; provided, however, that if such rate
does  not  appear  on  Telerate  Page  3750, One-Month LIBOR will mean, for such
2004-1 Interest Period, the rate per annum equal to the arithmetic mean (rounded
to  the  nearest  one-one-hundred-thousandth  of  one  percent)  of  the  rates

                                    A-2-2-5
<PAGE>

quoted  by  the  Reference  Banks to the Calculation Agent as the rates at which
deposits  in  Dollars  are offered by the Reference Banks at approximately 11:00
a.m.,  London time, on the LIBOR Determination Date to prime banks in the London
interbank  market  for  a  period equal to one month; provided, further, that if
fewer  than  two  quotations  are  provided as requested by the Reference Banks,
"One-Month  LIBOR"  for  such  Series  2004-1  Interest  Period  will  mean  the
arithmetic  mean  (rounded  to  the  nearest  one-one-hundred-thousandth  of one
percent)  of  the  rates quoted by major banks in New York, New York selected by
the  Calculation  Agent, at approximately 10:00 a.m., New York City time, on the
first  day of such Series 2004-1 Interest Period for loans in Dollars to leading
European  banks  for  a period equal to one month; provided, finally, that if no
such  quotes  are  provided,  "One-Month  LIBOR" for such Series 2004-1 Interest
Period  will  mean  One-Month  LIBOR  as in effect with respect to the preceding
Series  2004-1  Interest  Period.

     The  Issuer  shall  pay interest on overdue installments of interest at the
Class A-2  Note  Rate  to  the  extent  lawful.

     As  provided  in the Indenture and subject to certain limitations set forth
therein,  the  transfer of this Class A-2 Investor Note may be registered on the
Note Register upon surrender of this Class A-2 Investor Note for registration of
transfer  at  the  office  or  agency  designated  by the Issuer pursuant to the
Indenture,  duly endorsed by, or accompanied by a written instrument of transfer
in  form  satisfactory  to  the  Indenture  Trustee duly executed by, the Holder
hereof or his attorney duly authorized in writing, and thereupon one or more new
Class  A-2  Investor  Notes  of  authorized  denominations in the same aggregate
principal  amount will be issued to the designated transferee or transferees. No
service  charge  will be charged for any registration of transfer or exchange of
this  Class  A-2  Investor Note, but the transferor may be required to pay a sum
sufficient  to cover any tax or other governmental charge that may be imposed in
connection  with  any  such  registration  of  transfer  or  exchange.

     The  Issuer  and  the  Indenture  Trustee  covenant and agree in the Series
2004-1  Indenture  Supplement  and, by acquiring a Class A-2 Investor Note or an
interest therein, each Class A-2 Investor Noteholder and each Class A-2 Investor
Note Owner hereby covenants and agrees that, prior to the date which is one year
and  one day after payment in full of all obligations under each Securitization,
it  will not institute against, or join any other Person in instituting against,
the  Origination  Trust,  SPV,  any other Special Purpose Entity, or any general
partner  or single member of any Special Purpose Entity that is a partnership or
limited  liability  company,  respectively,  any  bankruptcy,  reorganization,
arrangement, insolvency or liquidation proceeding or other proceedings under any
federal  or  state  bankruptcy  or  similar  law.

     Each  Class  A-2 Investor Noteholder, by acceptance of a Class A-2 Investor
Note  or,  in the case of a Class A-2 Investor Note Owner, a beneficial interest
in a Class A-2 Investor Note, hereby represents, warrants and covenants that (a)
each of the Lease SUBI and the Fleet Receivable SUBI is a separate series of the
Origination Trust as provided in Section 3806(b)(2) of Chapter 38 of Title 12 of
                                 ------------------
the  Delaware  Code, 12 Del.C. Sec. 3801 et seq., (b)(i) the debts, liabilities,
                        -----            -- ---
obligations  and  expenses  incurred,  contracted for or otherwise existing with
respect to the Lease SUBI, the Lease SUBI Portfolio or the Fleet Receivable SUBI
shall  be  enforceable  against the Lease SUBI Portfolio or the Fleet Receivable
SUBI  only,  as  applicable, and not against any other SUBI Portfolio or the UTI
Portfolio  and  (ii)  the debts, liabilities, obligations

                                    A-2-2-6

<PAGE>

and  expenses incurred, contracted for or otherwise existing with respect to any
other  SUBI  (used  in  this  paragraph  as  defined  in  the  Origination Trust
Agreement),  any  other SUBI Portfolio (used in this paragraph as defined in the
Origination  Trust Agreement), the UTI or the UTI Portfolio shall be enforceable
against  such other SUBI Portfolio or the UTI Portfolio only, as applicable, and
not against any other SUBI Assets, (c) except to the extent required by law, UTI
Assets  or  SUBI  Assets with respect to any SUBI (other than the Lease SUBI and
the  Fleet  Receivable  SUBI)  shall  not  be  subject  to  the  claims,  debts,
liabilities,  expenses  or obligations arising from or with respect to the Lease
SUBI or Fleet Receivable SUBI, respectively, in respect of such claim, (d)(i) no
creditor  or  holder of a claim relating to the Lease SUBI, the Fleet Receivable
SUBI  or  the  Lease  SUBI  Portfolio  shall  be entitled to maintain any action
against  or  recover any assets allocated to the UTI or the UTI Portfolio or any
other  SUBI or the assets allocated thereto, and (ii) no creditor or holder of a
claim  relating  to  the UTI, the UTI Portfolio or any SUBI other than the Lease
SUBI  or  the Fleet Receivable SUBI or any SUBI Assets other than the Lease SUBI
Portfolio  or  the  Fleet  Receivables  shall be entitled to maintain any action
against  or  recover  any  assets  allocated  to  the  Lease  SUBI  or the Fleet
Receivable  SUBI,  and  (e) any purchaser, assignee or pledgee of an interest in
the Lease SUBI, the Lease SUBI Certificate, the Fleet Receivable SUBI, the Lease
SUBI  Certificate,  the  Fleet  Receivable SUBI Certificate, any other SUBI, any
other SUBI Certificate (used in this Section as defined in the Origination Trust
Agreement),  the  UTI or the UTI Certificate must, prior to or contemporaneously
with  the grant of any such assignment, pledge or security interest, (i) give to
the  Origination Trust a non-petition covenant substantially similar to that set
forth  in  Section  6.9  of the Origination Trust Agreement, and (ii) execute an
           -----------
agreement  for the benefit of each holder, assignee or pledgee from time to time
of  the UTI or UTI Certificate and any other SUBI or SUBI Certificate to release
all  claims to the assets of the Origination Trust allocated to the UTI and each
other  SUBI Portfolio and in the event that such release is not given effect, to
fully  subordinate all claims it may be deemed to have against the assets of the
Origination  Trust allocated to the UTI Portfolio and each other SUBI Portfolio.

     Each  Class  A-2  Investor  Noteholder or Class A-2 Investor Note Owner, by
acceptance  of a Class A-2 Investor Note or, in the case of a Class A-2 Investor
Note  Owner,  a  beneficial interest in a Class A-2 Investor Note, covenants and
agrees  that  by  accepting  the  benefits  of the Indenture that such Class A-2
Investor Noteholder or Class A-2 Investor Note Owner will not institute against,
or join with any other Person in instituting against, the Issuer any bankruptcy,
reorganization,  arrangement,  insolvency  or  liquidation proceedings, or other
proceedings,  under  any  federal  or  state  bankruptcy  or  similar  law.

     It is the intent of the Issuer, each Class A-2 Investor Noteholder and each
Class  A-2  Investor  Note  Owner  that, for federal, state and local income and
franchise  tax  purposes  only,  the  Class  A-2  Investor  Notes  will evidence
indebtedness  of the Issuer secured by the Series 2004-1 Collateral.  Each Class
A-2  Investor  Noteholder  and  each  Class  A-2  Investor  Note  Owner,  by the
acceptance  of  this  Class  A-2  Investor  Note, agrees to treat this Class A-2
Investor  Note  for  purposes  of  federal, state and local income and franchise
taxes and any other tax imposed on or measured by income, as indebtedness of the
Issuer.

     Each  Holder of this Class A-2 Investor Note shall provide to the Indenture
Trustee  at least annually an appropriate statement (on Internal Revenue Service
Form  W-8  or suitable substitute), with respect to United States federal income
tax  and withholding tax, signed under penalties of perjury, certifying that the
beneficial  owner  of  this  Class  A-2  Investor  Note is

                                    A-2-2-7
<PAGE>

a  non-U.S.  person  and  providing  the  Holder's  name  and  address.  If  the
information  provided  in  the  statement  changes, the Holder of this Class A-2
Investor  Note  shall  so  inform  the  Indenture Trustee within 30 days of such
change.

     The  Indenture  permits,  with  certain exceptions as therein provided, the
amendment  thereof  and  the  modification  of the rights and obligations of the
Issuer  and  the rights of the Holders of the Series 2004-1 Investor Notes under
the  Indenture  at  any  time by the Issuer with the consent of the Holders of a
Majority  in  Interest  of  the  Series  2004-1  Investor Notes affected by such
amendment  or  modification.  The  Indenture also contains provisions permitting
the  Holders  of Series 2004-1 Investor Notes representing specified percentages
of  the  aggregate  outstanding  amount  of the Series 2004-1 Investor Notes, on
behalf  of  the  Holders  of  all  the  Series  2004-1  Investor Notes, to waive
compliance  by  the  Issuer with certain provisions of the Indenture and certain
past  defaults  under  the Indenture and their consequences. Any such consent or
waiver  by  the  Holder  of  this  Class  A-2  Investor Note (or any one or more
predecessor  Class A-2 Investor Notes) shall be conclusive and binding upon such
Holder  and  upon  all future Holders of this Class A-2 Investor Note and of any
Class  A-2  Investor  Note issued upon the registration of transfer hereof or in
exchange  hereof  or  in  lieu hereof whether or not notation of such consent or
waiver is made upon this Class A-2 Investor Note. The Indenture also permits the
Indenture  Trustee  to  amend or waive certain terms and conditions set forth in
the Indenture without the consent of Holders of the Series 2004-1 Investor Notes
issued  thereunder.

     The  term  "Issuer"  as  used  in this Class A-2 Investor Note includes any
Successor to  the  Issuer  under  the  Indenture.

     The  Class  A-2  Investor  Notes  are  issuable  only in registered form in
denominations  as  provided in the Indenture, subject to certain limitations set
forth  therein.

     This  Class  A-2  Investor Note and the Indenture shall be governed by, and
construed  in  accordance  with,  the  law  of  the  State  of New York, and the
obligations,  rights  and remedies of the parties hereunder and thereunder shall
be  determined  in  accordance  with  such  law.

     No  reference  herein  to  the Indenture and no provision of this Class A-2
Investor  Note  or  of the Indenture shall alter or impair the obligation of the
Issuer,  which  is  absolute  and  unconditional,  to  pay  the principal of and
interest  on  this  Class A-2 Investor Note at the times, place and rate, and in
the  coin  or  currency  herein  prescribed.

     During  the Restricted Period (as defined below), payments (if any) on this
Temporary  Global  Class  A-2 Investor Note will only be paid to the extent that
there  is  presented by Clearstream Banking, soci t  anonyme ("Clearstream"), or
                                                               -----------
Euroclear  Bank S.A./N.V., as operator of the Euroclear System ("Euroclear"), to
                                                                 ---------
the  Indenture  Trustee a certificate to the effect that it has received from or
in  respect  of  persons  entitled to a Class A-2 Investor Note (as shown by its
records)  certification in form reasonably satisfactory to the Indenture Trustee
from  such  persons  that  their beneficial ownership interests in the Temporary
Global  Class  A-2  Investor  Note  are owned either by non-U.S. persons or U.S.
persons  who  purchased  such  interests  in  a transaction that did not require
registration  under the Securities Act.  After the Restricted Period, the holder
of this Temporary Global Class A-2 Investor Note will not be entitled to receive
any

                                    A-2-2-8

<PAGE>

payment hereon, until this Temporary Global Class A-2 Investor Note is exchanged
in  full  for  a Permanent Global Class A-2 Investor Note. This Temporary Global
Class  A-2  Investor  Note  shall  in all other respects be entitled to the same
benefits  as  a  Permanent  Global  Class A-2 Investor Note under the Indenture.

     After  the  end  of the period commencing on the Series 2004-1 Closing Date
and ending on the date that is the 40th day after the Series 2004-1 Closing Date
(the "Restricted Period"), interests in this Temporary Global Class A-2 Investor
      -----------------
Note may be exchanged (free of charge) for interests in a Permanent Global Class
A-2  Investor  Note  in the form of Exhibit A-2-3 to the Series 2004-1 Indenture
                                    -------------
Supplement upon presentation of this Temporary Global Class A-2 Investor Note to
the Indenture Trustee.  The Permanent Global Class A-2 Investor Note shall be so
issued  and delivered in exchange for only that portion of this Temporary Global
Class  A-2  Investor Note in respect of which there shall have been presented to
the  Indenture  Trustee  by Euroclear or Clearstream a certificate to the effect
that  it  has  received  from  or  in respect of persons entitled to a Class A-2
Investor  Note  (as  shown  by  its  records)  certification  in form reasonably
satisfactory  to  the  Indenture Trustee from such persons that their beneficial
ownership  interests  in  the Temporary Global Class A-2 Investor Note are owned
either  by  non-U.S.  persons  or U.S. persons who purchased such interests in a
transaction  that  did  not  require  registration  under  the  Securities  Act.

     On  an  exchange  of  the whole of this Temporary Global Class A-2 Investor
Note,  this Temporary Global Class A-2 Investor Note shall be surrendered to the
Indenture  Trustee.  On  an exchange of part only of this Temporary Global Class
A-2  Investor Note, details of such exchange shall be entered by or on behalf of
the  Issuer  in  Schedule  A  hereto and the relevant space in Schedule A hereto
recording  such  exchange  shall  be  signed  by or on behalf of the Issuer. If,
following the issuance of a Permanent Global Class A-2 Investor Note in exchange
for  some  of  the Class A-2 Investor Notes represented by this Temporary Global
Class  A-2  Investor  Note, further Class A-2 Investor Notes are to be exchanged
pursuant  to this paragraph, such exchange may be effected, without the issuance
of  a  new  Permanent Global Class A-2 Investor Note, by the Issuer or its agent
endorsing  Schedule A of the Permanent Global Class A-2 Investor Note previously
issued  to  reflect  an  increase  in  the  aggregate  principal  amount of such
Permanent  Global  Class  A-2  Investor Note by an amount equal to the aggregate
principal  amount  of  the  additional Class A-2 Investor Notes to be exchanged.

     Interests  in  this  Temporary  Global  Class  A-2  Investor  Note  will be
Transferable  in  accordance with the rules and procedures for the time being of
Euroclear  or  Clearstream.  For  purposes  of  this  Temporary Global Class A-2
Investor Note, the securities account records of Euroclear or Clearstream shall,
in  the absence of manifest error, be conclusive evidence of the identity of the
holders  of  Class  A-2  Investor Notes and of the principal amount of Class A-2
Investor  Notes  represented  by  this  Temporary Global Class A-2 Investor Note
credited to the securities accounts of such holders of Class A-2 Investor Notes.
Any  statement  issued  by  Euroclear or Clearstream to any holder relating to a
specified  Class  A-2  Investor Note or Class A-2 Investor Notes credited to the
securities account of such holder and stating the principal amount of such Class
A-2  Investor  Note  or  Class  A-2 Investor Notes and certified by Euroclear or
Clearstream to be a true record of such securities account shall, in the absence
of  manifest  error,  be  conclusive  evidence  of  the  records of Euroclear or
Clearstream for the purposes of the preceding sentence (but without prejudice to
any  other  means  of  producing  such  records  in

                                    A-2-2-9

<PAGE>

evidence).  Notwithstanding  any  provision  to  the  contrary contained in this
Temporary Global Class A-2 Investor Note, the Issuer irrevocably agrees, for the
benefit  of  such  holder  and  its successors and assigns, that, subject to the
provisions  of  the Indenture, each holder or its successors or assigns may file
any  claim,  take  any  action  or institute any proceeding to enforce, directly
against the Issuer, the obligation of the Issuer hereunder to pay any amount due
in  respect of each Class A-2 Investor Note represented by this Temporary Global
Class  A-2  Investor  Note which is credited to such holder's securities account
with  Euroclear  or  Clearstream without the production of this Temporary Global
Class  A-2  Investor  Note.

     Interests in this Temporary Global Class A-2 Investor Note are exchangeable
or  transferable  in whole or in part for interests in a Restricted Global Class
A-2  Investor Note provided that such transfer or exchange complies with Section
                                                                         -------
6.5  of  the  Series  2004-1  Indenture  Supplement. Interests in this Temporary
---
Global Class A-2 Investor Note may be exchanged for Definitive Notes, subject to
the  provisions  of  the  Indenture.

                                    A-2-2-10
<PAGE>

                                   ASSIGNMENT

Social  Security  or  taxpayer  I.D.  or  other  identifying number of assignee:
___________________

FOR  VALUE  RECEIVED,  the  undersigned hereby sells, assigns and transfers unto

___________________________________________________________________________
                         (name and address of assignee)

the  within  Class  A-2  Investor  Note  and  all  rights thereunder, and hereby
irrevocably constitutes and appoints ____________________, attorney, to transfer
said  Class  A-2  Investor Note on the books kept for registration thereof, with
full  power  of  substitution  in  the  premises.

Dated:__________________          By:_______________________(5)

                                             Signature  Guaranteed:

                                             __________________________________
                                             __________________________________

-----------------------------
(5)  NOTE: The signature to this assignment must correspond with the name of the
     registered owner as it appears on the face of the within Class A-2 Investor
     Note,  without alteration,  enlargement  or  any  change  whatsoever.

                                    A-2-2-11

<PAGE>

                                                                   EXHIBIT A-2-3
                                                                TO SERIES 2004-1
                                                            INDENTURE SUPPLEMENT

                FORM OF PERMANENT GLOBAL CLASS A-2 INVESTOR NOTE

No.                                                         $[_____________]

                       SEE REVERSE FOR CERTAIN CONDITIONS

                                                   CUSIP (CINS) NO. [          ]
                                                           ISIN NO. [          ]

     THIS  NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED  TO  AND  IS  REGISTERED  IN  THE  NAME OF THE DEPOSITORY TRUST COMPANY
("DTC"), A NEW YORK CORPORATION, 55 WATER STREET, NEW YORK, NEW YORK 10004, OR A
NOMINEE  THEREOF.  THIS  NOTE  MAY  NOT  BE  EXCHANGED IN WHOLE OR IN PART FOR A
SECURITY  REGISTERED,  AND  NO  TRANSFER OF THIS NOTE IN WHOLE OR IN PART MAY BE
REGISTERED,  IN  THE  NAME  OF  ANY  PERSON OTHER THAN DTC OR A NOMINEE THEREOF,
EXCEPT  IN  THE  LIMITED  CIRCUMSTANCES  DESCRIBED  IN  THE  INDENTURE.

     UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO THE
ISSUER OR THE TRANSFER AGENT AND REGISTRAR, AND ANY NOTE ISSUED IS REGISTERED IN
THE  NAME  OF  CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE  OF  DTC,  AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY  AS  IS  REQUESTED  BY AN AUTHORIZED REPRESENTATIVE OF DTC, ANY TRANSFER,
PLEDGE  OR  OTHER  USE  HEREOF  FOR  VALUE  OR  OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL  BECAUSE  THE  REGISTERED  OWNER,  CEDE  & CO., HAS AN INTEREST HEREIN.

     THE PRINCIPAL OF THIS CLASS A-2 INVESTOR NOTE IS PAYABLE IN INSTALLMENTS AS
SET  FORTH  HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS
A-2  INVESTOR  NOTE  AT  ANY  TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE
HEREOF.

                             CHESAPEAKE FUNDING LLC

        SERIES 2004-1 FLOATING RATE CALLABLE ASSET BACKED INVESTOR NOTES,
                                    CLASS A-2

                                    A-2-3-1
<PAGE>

     CHESAPEAKE  FUNDING  LLC, a limited liability company formed under the laws
of  the  State  of  Delaware  (herein  referred  to  as the "Issuer"), for value
                                                             ------
received,  hereby  promises  to  pay  to  Cede & Co., or registered assigns, the
principal  sum  of  [___________]  Dollars, which amount shall be payable in the
amounts  and at the times set forth in the Indenture described herein, provided,
however, that the entire unpaid principal amount of this Class A-2 Investor Note
shall  be  due  on  the  Class  A-2 Final Maturity Date. However, principal with
respect  to  the  Class  A-2  Investor  Notes  may be paid earlier under certain
limited  circumstances described in the Indenture.  The Issuer will pay interest
on  this  Class  A-2  Investor  Note  for each Series 2004-1 Interest Period, in
accordance  with the terms of the Indenture, at the Class A-2 Note Rate for such
Interest  Period.  Each  "Series  2004-1  Interest  Period"  will  be  a  period
                          --------------------------------
commencing  on  and including a Payment Date and ending on and including the day
preceding  the next succeeding Payment Date; provided, however, that the initial
                                             --------  -------
Series  2004-1  Interest  Period shall commence on and include the Series 2004-1
Closing  Date  and  end on and include September 6, 2004.  Such principal of and
interest  on  this Class A-2 Investor Note shall be paid in the manner specified
on  the  reverse  hereof  and  in  the  Indenture.

     The  principal  of and interest on this Class A-2 Investor Note are payable
in  such  coin  or  currency  of  the United States of America as at the time of
payment  is  legal  tender for payment of public and private debts. All payments
made by the Issuer with respect to this Class A-2 Investor Note shall be applied
as provided in the Indenture. This Class A-2 Investor Note does not represent an
interest  in,  or an obligation of, PHH Vehicle Management Services, LLC ("VMS")
                                                                           ---
or  any  affiliate  of  VMS  other  than  the  Issuer.

     Reference is made to the further provisions of this Class A-2 Investor Note
set  forth  on  the  reverse  hereof, which shall have the same effect as though
fully  set forth on the face of this Class A-2 Investor Note. Although a summary
of  certain  provisions  of  the Indenture is set forth below and on the reverse
hereof  and made a part hereof, this Class A-2 Investor Note does not purport to
summarize  the  Indenture and reference is made to the Indenture for information
with  respect  to  the  interests,  rights,  benefits, obligations, proceeds and
duties evidenced hereby and the rights, duties and obligations of the Issuer and
the  Indenture  Trustee.  A  copy  of  the  Indenture  may be requested from the
Indenture Trustee by writing to the Indenture Trustee at: JPMorgan Chase Bank, 4
New  York  Plaza, 6th Floor, New York, New York, 10004, Attention: Institutional
Trust  Services/Global  Debt.  To the extent not defined herein, the capitalized
terms  used  herein  have  the  meanings  ascribed  to  them  in  the Indenture.

     Unless  the  certificate  of authentication hereon has been executed by the
Indenture  Trustee  whose name appears below by manual signature, this Class A-2
Investor  Note shall not be entitled to any benefit under the Indenture referred
to  on  the  reverse  hereof,  or  be  valid  or  obligatory  for  any  purpose.

                                    A-2-3-2
<PAGE>

     IN  WITNESS  WHEREOF,  the  Issuer has caused this instrument to be signed,
Manually or  in  facsimile,  by  its  Authorized  Officer.

Date:  __________

                                        CHESAPEAKE  FUNDING  LLC

                                        By:___________________________
                                             Name:
                                             Title:

                INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION

     This  is  one  of  the  Class  A-2  Investor  Notes  issued  under  the
within-mentioned  Indenture.

                                        JPMORGAN  CHASE  BANK,  as  Indenture
                                        Trustee

                                        By:___________________________
                                             Authorized  Signatory

                                    A-2-3-3

<PAGE>
                      [REVERSE OF CLASS A-2 INVESTOR NOTE]

     This Class A-2 Investor Note is one of a duly authorized issue of Class A-2
Investor Notes of the Issuer designated its Series 2004-1 Floating Rate Callable
Asset  Backed Investor Notes (herein called the "Class A-2 Investor Notes"), all
                                                 ------------------------
issued  under  (i)  a  Base  Indenture  dated  as  of  June  30, 1999 (such Base
Indenture,  as  amended  or  modified,  is  herein called the "Base Indenture"),
                                                               --------------
between the Issuer and JPMorgan Chase Bank, as Indenture Trustee (the "Indenture
                                                                       ---------
Trustee",  which  term  includes  any successor Indenture Trustee under the Base
-------
Indenture),  and  (ii) a Series 2004-1 Indenture Supplement dated as of July 29,
---
2004  (the  "Series  2004-1  Indenture  Supplement")  between the Issuer and the
-            -------------------------------------
Indenture Trustee. The Base Indenture and the Series 2004-1 Indenture Supplement
are  referred  to  herein  as  the "Indenture". The Class A-2 Investor Notes are
                                    ---------
subject to all terms of the Indenture. All terms used in this Class A-2 Investor
Note  that  are  defined in the Indenture, as supplemented, modified or amended,
shall  have the meanings assigned to them in or pursuant to the Indenture, as so
supplemented,  modified  or  amended.

     The Class A-2 Investor Notes are and will be equally and ratably secured by
the  Series  2004-1  Collateral  pledged as security therefor as provided in the
Indenture  and  the  Series  2004-1  Indenture  Supplement.

     Principal  of  the Class A-2 Investor Notes will be payable on each Payment
Date  specified in and in the amounts described in the Indenture. "Payment Date"
means the 7th day of each month, or if such date is not a Business Day, the next
succeeding  Business  Day,  commencing  September  7,  2004.

     The entire unpaid principal amount of this Class A-2 Investor Note shall be
due  and  payable  on  the  Class  A-2  Final Maturity Date. Notwithstanding the
foregoing, principal on the Class A-2 Investor Notes will be paid earlier during
the  Series  2004-1  Amortization  Period  as  described  in  the Indenture. All
principal payments on the Class A-2 Investor Notes shall be made pro rata to the
Class  A-2  Investor  Noteholders  entitled  thereto.

     The Issuer will have the option to prepay the Series 2004-1 Investor Notes,
in whole but not in part, on any Payment Date after the Payment Date in February
2006. The prepayment price for the Series 2004-1 Investor Notes will be equal to
the  amount  set  forth  in  the  Indenture.

     Interest  will  accrue  on  this  Class  A-2 Investor Notes for each Series
2004-1 Interest Period at a rate equal to (i) with respect to the initial Series
2004-1  Interest  Period,  1.63%  per annum and (ii) with respect to each Series
2004-1 Interest Period thereafter, a rate per annum equal to One-Month LIBOR for
such  Series  2004-1  Interest  Period plus 0.16% per annum (the "Class A-2 Note
                                                                  -------------
Rate").  "One-Month  LIBOR"  means,  for each Series 2004-1 Interest Period, the
----      ----------------
rate  per  annum  determined  on  the  related  LIBOR  Determination Date by the
Calculation  Agent to be the rate for Dollar deposits having a maturity equal to
one month that appears on Telerate Page 3750 at approximately 11:00 a.m., London
time,  on  such  LIBOR  Determination Date; provided, however, that if such rate
does  not  appear  on  Telerate  Page  3750, One-Month LIBOR will mean, for such
2004-1 Interest Period, the rate per annum equal to the arithmetic mean (rounded
to  the  nearest  one-one-hundred-thousandth  of  one  percent)  of  the  rates

                                    A-2-3-4

<PAGE>

quoted  by  the  Reference  Banks to the Calculation Agent as the rates at which
deposits  in  Dollars  are offered by the Reference Banks at approximately 11:00
a.m.,  London time, on the LIBOR Determination Date to prime banks in the London
interbank  market  for  a  period equal to one month; provided, further, that if
fewer  than  two  quotations  are  provided as requested by the Reference Banks,
"One-Month  LIBOR"  for  such  Series  2004-1  Interest  Period  will  mean  the
arithmetic  mean  (rounded  to  the  nearest  one-one-hundred-thousandth  of one
percent)  of  the  rates quoted by major banks in New York, New York selected by
the  Calculation  Agent, at approximately 10:00 a.m., New York City time, on the
first  day of such Series 2004-1 Interest Period for loans in Dollars to leading
European  banks  for  a period equal to one month; provided, finally, that if no
such  quotes  are  provided,  "One-Month  LIBOR" for such Series 2004-1 Interest
Period  will  mean  One-Month  LIBOR  as in effect with respect to the preceding
Series  2004-1  Interest  Period.

     The  Issuer  shall  pay interest on overdue installments of interest at the
Class A-2  Note  Rate  to  the  extent  lawful.

     As  provided  in the Indenture and subject to certain limitations set forth
therein,  the  transfer of this Class A-2 Investor Note may be registered on the
Note Register upon surrender of this Class A-2 Investor Note for registration of
transfer  at  the  office  or  agency  designated  by the Issuer pursuant to the
Indenture,  duly endorsed by, or accompanied by a written instrument of transfer
in  form  satisfactory  to  the  Indenture  Trustee duly executed by, the Holder
hereof or his attorney duly authorized in writing, and thereupon one or more new
Class  A-2  Investor  Notes  of  authorized  denominations in the same aggregate
principal  amount will be issued to the designated transferee or transferees. No
service  charge  will be charged for any registration of transfer or exchange of
this  Class  A-2  Investor Note, but the transferor may be required to pay a sum
sufficient  to cover any tax or other governmental charge that may be imposed in
connection  with  any  such  registration  of  transfer  or  exchange.

     The  Issuer  and  the  Indenture  Trustee  covenant and agree in the Series
2004-1  Indenture  Supplement  and, by acquiring a Class A-2 Investor Note or an
interest therein, each Class A-2 Investor Noteholder and each Class A-2 Investor
Note Owner hereby covenants and agrees that, prior to the date which is one year
and  one day after payment in full of all obligations under each Securitization,
it  will not institute against, or join any other Person in instituting against,
the  Origination  Trust,  SPV,  any other Special Purpose Entity, or any general
partner  or single member of any Special Purpose Entity that is a partnership or
limited  liability  company,  respectively,  any  bankruptcy,  reorganization,
arrangement, insolvency or liquidation proceeding or other proceedings under any
federal  or  state  bankruptcy  or  similar  law.

     Each  Class  A-2 Investor Noteholder, by acceptance of a Class A-2 Investor
Note  or,  in the case of a Class A-2 Investor Note Owner, a beneficial interest
in a Class A-2 Investor Note, hereby represents, warrants and covenants that (a)
each of the Lease SUBI and the Fleet Receivable SUBI is a separate series of the
Origination Trust as provided in Section 3806(b)(2) of Chapter 38 of Title 12 of
                                 ------------------
the  Delaware  Code, 12 Del.C. Sec. 3801 et seq., (b)(i) the debts, liabilities,
                        -----            -- ---
obligations  and  expenses  incurred,  contracted for or otherwise existing with
respect to the Lease SUBI, the Lease SUBI Portfolio or the Fleet Receivable SUBI
shall  be  enforceable  against the Lease SUBI Portfolio or the Fleet Receivable
SUBI  only,  as  applicable, and not against any other SUBI Portfolio or the UTI
Portfolio  and  (ii)  the debts, liabilities, obligations

                                    A-2-3-5
<PAGE>

and  expenses incurred, contracted for or otherwise existing with respect to any
other  SUBI  (used  in  this  paragraph  as  defined  in  the  Origination Trust
Agreement),  any  other SUBI Portfolio (used in this paragraph as defined in the
Origination  Trust Agreement), the UTI or the UTI Portfolio shall be enforceable
against  such other SUBI Portfolio or the UTI Portfolio only, as applicable, and
not against any other SUBI Assets, (c) except to the extent required by law, UTI
Assets  or  SUBI  Assets with respect to any SUBI (other than the Lease SUBI and
the  Fleet  Receivable  SUBI)  shall  not  be  subject  to  the  claims,  debts,
liabilities,  expenses  or obligations arising from or with respect to the Lease
SUBI or Fleet Receivable SUBI, respectively, in respect of such claim, (d)(i) no
creditor  or  holder of a claim relating to the Lease SUBI, the Fleet Receivable
SUBI  or  the  Lease  SUBI  Portfolio  shall  be entitled to maintain any action
against  or  recover any assets allocated to the UTI or the UTI Portfolio or any
other  SUBI or the assets allocated thereto, and (ii) no creditor or holder of a
claim  relating  to  the UTI, the UTI Portfolio or any SUBI other than the Lease
SUBI  or  the Fleet Receivable SUBI or any SUBI Assets other than the Lease SUBI
Portfolio  or  the  Fleet  Receivables  shall be entitled to maintain any action
against  or  recover  any  assets  allocated  to  the  Lease  SUBI  or the Fleet
Receivable  SUBI,  and  (e) any purchaser, assignee or pledgee of an interest in
the Lease SUBI, the Lease SUBI Certificate, the Fleet Receivable SUBI, the Lease
SUBI  Certificate,  the  Fleet  Receivable SUBI Certificate, any other SUBI, any
other SUBI Certificate (used in this Section as defined in the Origination Trust
Agreement),  the  UTI or the UTI Certificate must, prior to or contemporaneously
with  the grant of any such assignment, pledge or security interest, (i) give to
the  Origination Trust a non-petition covenant substantially similar to that set
forth  in  Section  6.9  ofthe  Origination Trust Agreement, and (ii) execute an
           -----------
agreement  for the benefit of each holder, assignee or pledgee from time to time
of  the UTI or UTI Certificate and any other SUBI or SUBI Certificate to release
all  claims to the assets of the Origination Trust allocated to the UTI and each
other  SUBI Portfolio and in the event that such release is not given effect, to
fully  subordinate all claims it may be deemed to have against the assets of the
Origination  Trust allocated to the UTI Portfolio and each other SUBI Portfolio.

     Each  Class  A-2  Investor  Noteholder or Class A-2 Investor Note Owner, by
acceptance  of a Class A-2 Investor Note or, in the case of a Class A-2 Investor
Note  Owner,  a  beneficial interest in a Class A-2 Investor Note, covenants and
agrees  that  by  accepting  the  benefits  of the Indenture that such Class A-2
Investor Noteholder or Class A-2 Investor Note Owner will not institute against,
or join with any other Person in instituting against, the Issuer any bankruptcy,
reorganization,  arrangement,  insolvency  or  liquidation proceedings, or other
proceedings,  under  any  federal  or  state  bankruptcy  or  similar  law.

     It is the intent of the Issuer, each Class A-2 Investor Noteholder and each
Class  A-2  Investor  Note  Owner  that, for federal, state and local income and
franchise  tax  purposes  only,  the  Class  A-2  Investor  Notes  will evidence
indebtedness  of the Issuer secured by the Series 2004-1 Collateral.  Each Class
A-2  Investor  Noteholder  and  each  Class  A-2  Investor  Note  Owner,  by the
acceptance  of  this  Class  A-2  Investor  Note, agrees to treat this Class A-2
Investor  Note  for  purposes  of  federal, state and local income and franchise
taxes and any other tax imposed on or measured by income, as indebtedness of the
Issuer.

     Each  Holder of this Class A-2 Investor Note shall provide to the Indenture
Trustee  at least annually an appropriate statement (on Internal Revenue Service
Form  W-8  or suitable substitute), with respect to United States federal income
tax  and withholding tax, signed under penalties of perjury, certifying that the
beneficial  owner  of  this  Class  A-2  Investor  Note is

                                    A-2-3-6
<PAGE>

a  non-U.S.  person  and  providing  the  Holder's  name  and  address.  If  the
information  provided  in  the  statement  changes, the Holder of this Class A-2
Investor  Note  shall  so  inform  the  Indenture Trustee within 30 days of such
change.

     The  Indenture  permits,  with  certain exceptions as therein provided, the
amendment  thereof  and  the  modification  of the rights and obligations of the
Issuer  and  the rights of the Holders of the Series 2004-1 Investor Notes under
the  Indenture  at  any  time by the Issuer with the consent of the Holders of a
Majority  in  Interest  of  the  Series  2004-1  Investor Notes affected by such
amendment  or  modification.  The  Indenture also contains provisions permitting
the  Holders  of Series 2004-1 Investor Notes representing specified percentages
of  the  aggregate  outstanding  amount  of the Series 2004-1 Investor Notes, on
behalf  of  the  Holders  of  all  the  Series  2004-1  Investor Notes, to waive
compliance  by  the  Issuer with certain provisions of the Indenture and certain
past  defaults  under  the Indenture and their consequences. Any such consent or
waiver  by  the  Holder  of  this  Class  A-2  Investor Note (or any one or more
predecessor  Class A-2 Investor Notes) shall be conclusive and binding upon such
Holder  and  upon  all future Holders of this Class A-2 Investor Note and of any
Class  A-2  Investor  Note issued upon the registration of transfer hereof or in
exchange  hereof  or  in  lieu hereof whether or not notation of such consent or
waiver is made upon this Class A-2 Investor Note. The Indenture also permits the
Indenture  Trustee  to  amend or waive certain terms and conditions set forth in
the Indenture without the consent of Holders of the Series 2004-1 Investor Notes
issued  thereunder.

     The  term  "Issuer"  as  used  in this Class A-2 Investor Note includes any
Successor to  the  Issuer  under  the  Indenture.

     The  Class  A-2  Investor  Notes  are  issuable  only in registered form in
denominations  as  provided in the Indenture, subject to certain limitations set
forth  therein.

     This  Class  A-2  Investor Note and the Indenture shall be governed by, and
construed  in  accordance  with,  the  law  of  the  State  of New York, and the
obligations,  rights  and remedies of the parties hereunder and thereunder shall
be  determined  in  accordance  with  such  law.

     No  reference  herein  to  the Indenture and no provision of this Class A-2
Investor  Note  or  of the Indenture shall alter or impair the obligation of the
Issuer,  which  is  absolute  and  unconditional,  to  pay  the principal of and
interest  on  this  Class A-2 Investor Note at the times, place and rate, and in
the  coin  or  currency  herein  prescribed.

     Interests  in  this  Permanent  Global  Class  A-2  Investor  Note  will be
Transferable  in  accordance with the rules and procedures for the time being of
Clearstream  Banking,  societe  anonyme  ("Clearstream"),  or  Euroclear  Bank
                                           -----------
S.A./N.V.,  as  operator  of  the  Euroclear System ("Euroclear"). Euroclear and
                                                      ---------
Clearstream will be treated by the Indenture Trustee and any paying agent as the
holder  of  the  Class A-2 Investor Notes. For purposes of this Permanent Global
Class  A-2  Investor  Note,  the  securities  account  records  of  Euroclear or
Clearstream  shall,  in the absence of manifest error, be conclusive evidence of
the  identity  of  the  holders of Class A-2 Investor Notes and of the principal
amount  of  Class  A-2 Investor Notes represented by this Permanent Global Class
A-2  Investor  Note credited to the securities accounts of such holders of Class
A-2  Investor  Notes.  Any  statement  issued by Euroclear or Clearstream to any
holder

                                    A-2-3-7

<PAGE>

relating  to  a  specified  Class  A-2 Investor Note or Class A-2 Investor Notes
credited  to  the  securities  account  of such holder and stating the principal
amount of such Class A-2 Investor Note or Class A-2 Investor Notes and certified
by  Euroclear  or  Clearstream  to  be  a true record of such securities account
shall,  in  the absence of manifest error, be conclusive evidence of the records
of  Euroclear  or  Clearstream  for  the purposes of the preceding sentence (but
without  prejudice  to  any  other means of producing such records in evidence).
Notwithstanding any provision to the contrary contained in this Permanent Global
Class  A-2 Investor Note, the Issuer irrevocably agrees, for the benefit of such
holder  and  its  successors and assigns, that, subject to the provisions of the
Indenture, each holder or its successors or assigns may file any claim, take any
action  or institute any proceeding to enforce, directly against the Issuer, the
obligation  of  the  Issuer  hereunder  to pay any amount due in respect of each
Class  A-2 Investor Note represented by this Permanent Global Class A-2 Investor
Note  which  is  credited  to such holder's securities account with Euroclear or
Clearstream  without  the production of this Permanent Global Class A-2 Investor
Note.

     Interests in this Permanent Global Class A-2 Investor Note are exchangeable
or  transferable  in whole or in part for interests in a Restricted Global Class
A-2  Investor Note provided that such transfer or exchange complies with Section
                                                                         -------
6.5  of  the  Series  2004-1  Indenture Supplement.  Interests in this Permanent
---
Global Class A-2 Investor Note may be exchanged for Definitive Notes, subject to
the  provisions  of  the  Indenture.

                                    A-2-3-8
<PAGE>

                                   ASSIGNMENT

Social  Security  or  taxpayer  I.D.  or  other  identifying number of assignee:
___________________

FOR  VALUE  RECEIVED,  the  undersigned hereby sells, assigns and transfers unto

___________________________________________________________________________
                         (name and address of assignee)

the  within  Class  A-2  Investor  Note  and  all  rights thereunder, and hereby
irrevocably constitutes and appoints ____________________, attorney, to transfer
said  Class  A-2  Investor Note on the books kept for registration thereof, with
full  power  of  substitution  in  the  premises.

Dated:__________________          By:_______________________(6)

                                             Signature  Guaranteed:

                                             __________________________________
                                             __________________________________

-----------------------------
(6)  NOTE: The signature to this assignment must correspond with the name of the
     registered owner as it appears on the face of the within Class A-2 Investor
     Note,  without  alteration,  enlargement  or  any  change  whatsoever.

                                    A-2-3-9
<PAGE>

                                                                     EXHIBIT B-1

                  [FORM OF CERTIFICATE FOR EXCHANGE OR TRANSFER
                           FROM RESTRICTED GLOBAL NOTE
                            TO TEMPORARY GLOBAL NOTE]
                   (exchanges or transfers pursuant to Section
                6.5(c) of the Series 2004-1 Indenture Supplement)

JPMorgan  Chase  Bank,
as  Transfer  Agent  and  Registrar
4  New  York  Plaza,  6th  Floor
New  York,  New  York  10004
Attention:  Institutional  Trust  Services/Global Debt-Chesapeake Funding 2004-1

Re:     Chesapeake  Funding  LLC
Series  2004-1  Floating  Rate  Callable  Asset  Backed  Investor  Notes

Reference  is hereby made to the Series 2004-1 Indenture Supplement, dated as of
July  29, 2004 (as from time to time amended, supplemented or otherwise modified
in  accordance with the terms thereof, the "Indenture Supplement"; terms defined
therein  being  used  herein as therein defined), between Chesapeake Funding LLC
(the  "Issuer")  and  JPMorgan  Chase Bank, as Indenture Trustee (the "Indenture
Trustee"),  to  the  Base  Indenture,  dated  as of June 30, 1999 (as amended or
modified  from  time  to  time,  the  "Base  Indenture"  and,  together with the
Indenture  Supplement,  the  "Indenture"),  between the Issuer and the Indenture
Trustee.  Capitalized  terms used but not defined herein shall have the meanings
given  to  them  in  the  Indenture.

This  letter  relates  to  US$______________  principal amount of the Restricted
Global  Note  (the  "Restricted Global Note") of the Series 2004-1 Floating Rate
Callable  Asset Backed Notes, [Class A-1] [Class A-2] (the "Notes") (CUSIP No. [
]),  held  with  DTC  in  the  name  of  [transferor]  (the  "Transferor").  The
Transferor  has  requested  an  exchange  or  transfer  of  such interest for an
interest  in  the  Temporary  Global  Note  of  the  Series 2004-1 Floating Rate
Callable  Asset  Backed Notes, [Class A-1] [Class A-2](ISIN No. [             ])
to be held with [Euroclear] [Clearstream] (Common Code No. [          ]) through
DTC.  If  this  is  a  partial  transfer,  a minimum amount of US$200,000 or any
integral  multiple  of  US$1,000 in excess thereof of the Restricted Global Note
will  remain  outstanding.

In  connection  with  such  request and in respect of such Notes, the Transferor
does  hereby  certify  that  such  exchange  or  transfer  has  been effected in
accordance  with  the  transfer  restrictions  set  forth  in  the Indenture and
pursuant to and in accordance with Rule 904 of Regulation S under the Securities
Act  of  1933, as amended (the "Securities Act"), and accordingly the Transferor
does  hereby  certify  that:

                                      B-1-1
<PAGE>

(1)     the  offer  of  the Notes was not made to a person in the United States;

(2)     either  (a)  at the time the buy order was originated the transferee was
outside  the  United  States  or  the  Transferor  or  any  person acting on the
Transferor's  behalf  reasonably  believed  that  the transferee was outside the
United  States  or  (b)  the  transaction  was  executed  in,  on or through the
facilities of a designated offshore securities market and neither the Transferor
nor any person acting on behalf of the Transferor knows that the transaction was
pre-arranged  with  a  buyer  in  the  United  States;

(3)     no  directed  selling  efforts  have  been  made in contravention of the
requirements  of  Rule 903(b) or Rule 904(b) of Regulation S, as applicable; and

(4)     the  transaction  is  not  part  of  a  plan  or  scheme  to  evade  the
registration  requirements  of  the  Securities  Act.

This  certificate  and the statements contained herein are made for your benefit
and  for  the  benefit  of  the  Issuer  and  the  Indenture  Trustee.

                                   [Insert  name  of  Transferor]

                                   By:  ________________________________
                                          Name:
                                          Title:

Dated:  _________________

cc:  Chesapeake  Funding  LLC
     940  Ridgebrook  Road
     Sparks,  Maryland  21152
     Attention:  [General  Counsel]

                                      B-1-2
<PAGE>

                                                                     EXHIBIT B-2

                  [FORM OF CERTIFICATE FOR EXCHANGE OR TRANSFER
                           FROM RESTRICTED GLOBAL NOTE
                            TO PERMANENT GLOBAL NOTE]
                   (exchanges or transfers pursuant to Section
                6.5(d) of the Series 2004-1 Indenture Supplement)

JPMorgan  Chase  Bank,
as  Transfer  Agent  and  Registrar
4  New  York  Plaza,  6th  Floor
New  York,  New  York  10004
Attention:  Institutional  Trust  Services/Global Debt-Chesapeake Funding 2004-1

Re:     Chesapeake  Funding  LLC
Series  2004-1  Floating  Rate  Callable  Asset  Backed  Investor  Notes

Reference  is hereby made to the Series 2004-1 Indenture Supplement, dated as of
July  29, 2004 (as from time to time amended, supplemented or otherwise modified
in  accordance with the terms thereof, the "Indenture Supplement"; terms defined
therein  being  used  herein as therein defined), between Chesapeake Funding LLC
(the  "Issuer")  and  JPMorgan  Chase Bank, as Indenture Trustee (the "Indenture
Trustee"),  to  the  Base  Indenture,  dated  as of June 30, 1999 (as amended or
modified  from  time  to  time,  the  "Base  Indenture"  and,  together with the
Indenture  Supplement,  the  "Indenture"),  between the Issuer and the Indenture
Trustee.  Capitalized  terms used but not defined herein shall have the meanings
given  to  them  in  the  Indenture.

This  letter  relates  to  US$______________  principal amount of the Restricted
Global  Note  (the  "Restricted Global Note") of the Series 2004-1 Floating Rate
Callable  Asset Backed Notes, [Class A-1] [Class A-2] (the "Notes") (CUSIP No. [
]),  held  with  DTC  in  the  name  of  [transferor]  (the  "Transferor").  The
Transferor  has  requested  an  exchange  or  transfer  of  such interest for an
interest  in  the  Permanent  Global  Note  of  the  Series 2004-1 Floating Rate
Callable  Asset  Backed  Notes,  [Class  A-1]  [Class  A-2](ISIN  No.  [
])  to  be  held  with  [Euroclear]  [Clearstream]  (Common  Code  No.  [
])  through  DTC.  If this is a partial transfer, a minimum amount of US$200,000
or  any integral multiple of US$1,000 in excess thereof of the Restricted Global
Note  will  remain  outstanding.

In  connection  with  such  request and in respect of such Notes, the Transferor
does  hereby  certify  that  such  exchange  or  transfer  has  been effected in
accordance  with  the  transfer  restrictions set forth in the Indenture and (i)
with  respect  to transfers made in reliance upon Rule 904 of Regulation S under
the  Securities  Act  of 1933, as amended (the "Securities Act"), the Transferor
does  hereby  certify  that:

                                      B-2-1
<PAGE>

(1)     the  offer  of  the Notes was not made to a person in the United States;

(2)     either  (a)  at the time the buy order was originated the transferee was
outside  the  United  States  or  the  Transferor  or  any  person acting on the
Transferor's  behalf  reasonably  believed  that  the transferee was outside the
United  States  or  (b)  the  transaction  was  executed  in,  on or through the
facilities of a designated offshore securities market and neither the Transferor
nor any person acting on behalf of the Transferor knows that the transaction was
pre-arranged  with  a  buyer  in  the  United  States;

(3)     no  directed  selling  efforts  have  been  made in contravention of the
requirements  of  Rule 903(b) or Rule 904(b) of Regulation S, as applicable; and

(4)     the  transaction  is  not  part  of  a  plan  or  scheme  to  evade  the
registration  requirements  of  the  Securities  Act;

and  (ii)  with  respect  to  transfers made in reliance upon Rule 144 under the
Securities  Act,  the  Transferor  hereby  certifies  that  the  Notes are being
transferred  in  a  transaction  permitted by Rule 144 under the Securities Act.

This  certificate  and the statements contained herein are made for your benefit
and  for  the  benefit  of  the  Issuer  and  the  Indenture  Trustee.

                                   [Insert  name  of  Transferor]

                                   By:  ________________________________
                                          Name:
                                          Title:

Dated:  _________________

cc:  Chesapeake  Funding  LLC
     940  Ridgebrook  Road
     Sparks,  Maryland  21152
     Attention:  [General  Counsel]

                                      B-2-2
<PAGE>

                                                                     EXHIBIT B-3

                      [FORM OF CERTIFICATE FOR TRANSFER OR
                                  EXCHANGE FROM
                              TEMPORARY GLOBAL NOTE
                           TO RESTRICTED GLOBAL NOTE]
                       (exchanges or transfers pursuant to
            Section 6.5(e) of the Series 2004-1 Indenture Supplement)

JPMorgan  Chase  Bank,
as  Transfer  Agent  and  Registrar
4  New  York  Plaza,  6th  Floor
New  York,  New  York  10004
Attention:  Institutional  Trust  Services/Global Debt-Chesapeake Funding 2004-1

Re:     Chesapeake  Funding  LLC
Series  2004-1  Floating  Rate  Callable  Asset  Backed  Investor  Notes

Reference  is hereby made to the Series 2004-1 Indenture Supplement, dated as of
July  29, 2004 (as from time to time amended, supplemented or otherwise modified
in  accordance with the terms thereof, the "Indenture Supplement"; terms defined
therein  being  used  herein as therein defined), between Chesapeake Funding LLC
(the  "Issuer")  and  JPMorgan  Chase Bank, as Indenture Trustee (the "Indenture
Trustee"),  to  the  Base  Indenture,  dated  as of June 30, 1999 (as amended or
modified  from  time  to  time,  the  "Base  Indenture"  and,  together with the
Indenture  Supplement,  the  "Indenture"),  between the Issuer and the Indenture
Trustee.  Capitalized  terms used but not defined herein shall have the meanings
given  to  them  in  the  Indenture.

This  letter  relates  to  US$______________  principal  amount of the Temporary
Global  Note  (the  "Temporary  Global Note") of the Series 2004-1 Floating Rate
Callable  Asset  Backed Notes, [Class A-1] [Class A-2] (the "Notes") (ISIN No. [
])  held  with [Euroclear] [Clearstream] (Common Code No. [                   ])
through  DTC in the name of [transferor] (the "Transferor").  The Transferor has
requested  an  exchange  or  transfer  of  such  interest for an interest in the
Restricted  Global Note of the Series 2004-1 Floating Rate Callable Asset Backed
Notes, [Class A-1] [Class A-2] (CUSIP No. [                   ]) to be held with
DTC.  If  this  is  a  partial  transfer,  a minimum amount of US$200,000 or any
integral  multiple  of  US$1,000  in excess thereof of the Temporary Global Note
will  remain  outstanding.

In  connection  with  such request, and in respect of such Notes, the Transferor
does  hereby  certify  that  such Notes are being transferred in accordance with
Rule 144A under the Securities Act of 1933, as amended, to a transferee that the
Transferor  reasonably  believes  is  purchasing  the  Certificates  for its own
account  or  an  account  with  respect  to  which the transferee exercises sole

                                      B-3-1

<PAGE>

investment  discretion  and  the transferee and any such account is a "qualified
institutional  buyer"  within  the  meaning  of  Rule  144A,  in  each case in a
transaction  meeting  the  requirements  of Rule 144A and in accordance with any
applicable  securities  laws  of  any  state  of  the United States or any other
jurisdiction.

This  certificate  and the statements contained herein are made for your benefit
and  for  the  benefit  of  the  Issuer  and  the  Indenture  Trustee.

                                   [Insert  name  of  Transferor]

                                   By:  ________________________________
                                          Name:
                                          Title:

Dated:  _________________

cc:  Chesapeake  Funding  LLC
     940  Ridgebrook  Road
     Sparks,  Maryland  21152
     Attention:  [General  Counsel]

                                      B-3-2
<PAGE>

                                                                     EXHIBIT B-4

                   [FORM OF CLEARING HOUSE SYSTEM CERTIFICATE]
                       (exchanges pursuant to Section 6.3
                   of the Series 2004-1 Indenture Supplement)

Chesapeake  Funding  LLC
940  Ridgebrook  Road
Sparks,  Maryland  21152
Attention:  [General  Counsel]

JPMorgan  Chase  Bank,
as  Transfer  Agent  and  Registrar
4  New  York  Plaza,  6th  Floor
New  York,  New  York  10004
Attention:  Institutional  Trust  Services/Global Debt-Chesapeake Funding 2004-1

Re:     Chesapeake  Funding  LLC
Series  2004-1  Floating  Rate  Callable  Asset  Backed  Investor  Notes

Reference  is hereby made to the Series 2004-1 Indenture Supplement, dated as of
July  29, 2004 (as from time to time amended, supplemented or otherwise modified
in  accordance with the terms thereof, the "Indenture Supplement"; terms defined
therein  being  used  herein as therein defined), between Chesapeake Funding LLC
(the  "Issuer")  and  JPMorgan  Chase Bank, as Indenture Trustee (the "Indenture
Trustee"),  to  the  Base  Indenture,  dated  as of June 30, 1999 (as amended or
modified  from  time  to  time,  the  "Base  Indenture"  and,  together with the
Indenture  Supplement,  the  "Indenture"),  between the Issuer and the Indenture
Trustee.  Capitalized  terms used but not defined herein shall have the meanings
given  to  them  in  the  Indenture.

This  is  to  certify  that  we  have received certificates substantially to the
effect  set  forth  in  Exhibit  B-5  to the Indenture Supplement in writing, by
tested  telex  or electronic transmissions from Persons appearing in our records
as  being  entitled  to a portion of the original principal amount of the Series
2004-1  Investor  Notes  equal  to,  as of the date hereof, U.S. $[_______] (our
"Noteholders").  Series  2004-1  Investor  Noteholders  of  such  portion of the
original  principal  amount  of  the Series 2004-1 Investor Notes have requested
that their beneficial interest in such Series 2004-1 Investor Notes be exchanged
from  Temporary  Global  Notes  to  Permanent  Global  Notes.

We  further  certify  (i) that we are not making available herewith for exchange
any  portion  of  the  Temporary  Global  Note  except  as  set  forth  in  such
certificates  and  (ii)  that  as  of  the  date hereof we have not received any
notification  from any of our Noteholders to the effect that the statements made
by  such  Noteholder  with respect to any portion of the part submitted herewith

                                      B-4-1
<PAGE>

for exchange are no longer true and cannot be relied upon as of the date hereof.
We  understand  that  this  certification is required in connection with certain
securities  laws  of  the  United  States.  In  connection  therewith,  if
administrative  or  legal  proceedings are commenced or threatened in connection
with  which  this  certificate is or would be relevant, we irrevocably authorize
you  to  produce this certification to any interested party in such proceedings.

Dated:  [_________]

                                   [EUROCLEAR BANK S.A./N.V., as
                                   operator  of  the  Eurclear  System]

                                   By:  ________________________________
                                          Name:
                                          Title:

                                   [CLEARSTREAM  BANKING,  societe
                                   anonyme]

                                   By:  ________________________________
                                          Name:
                                          Title:

                                      B-4-2
<PAGE>

                                                                     EXHIBIT B-5

                      [FORM OF CERTIFICATE FOR TRANSFER OR
                                  EXCHANGE FROM
                              TEMPORARY GLOBAL NOTE
                            TO PERMANENT GLOBAL NOTE]
                       (exchanges pursuant to Section 6.3
                   of the Series 2004-1 Indenture Supplement)

Re:     Chesapeake  Funding  LLC
Series  2004-1  Floating  Rate  Callable  Asset  Backed  Investor  Notes

If  the Series 2004-1 Investor Notes are of the category contemplated in Section
230.903(b)(3)  of Regulation S under the Securities Act of 1933, as amended (the
"Act"),  then  this  is  to  certify that, except as set forth below, the Series
2004-1 Investor Notes are beneficially owned by (a) non-U.S. persons or (b) U.S.
persons who purchased the Series 2004-1 Investor Notes in transactions which did
not  require  registration  under the Act.  As used in this paragraph, the terms
"U.S.  person"  has  the  meaning  given  to  it  by Regulation S under the Act.

As  used  herein,  "United States" means the United States of America (including
the  States  and the District of Columbia); and its "possessions" include Puerto
Rico,  the  U.S.  Virgin  Islands,  Guam,  American  Samoa,  Wake Island and the
Northern  Mariana  Islands.

We  undertake  to advise you promptly by tested telex on or prior to the date on
which  you  intend  to  submit  your certification relating to the Series 2004-1
Investor  Notes  held  by  you for our account in accordance with your operating
procedures  if  any applicable statement herein is not correct on such date, and
in  the  absence  of  any  such  notification  it  may  be  assumed  that  this
certification  applies  as  of  such  date.

This  certification  excepts  and  does  not  relate  to  U.S.$[_______] of such
interest  in  the  above Series 2004-1 Investor Notes in respect of which we are
not  able  to  certify  and  as  to which we understand exchange and delivery of
interests in the Permanent Global Notes (or, if relevant, exercise of any rights
or  collection  of  any  interest)  cannot  be  made  until  we  do  so certify.

We  hereby  request that with the exception of the interests stated in the prior
paragraph,  our  beneficial  interest  in  the  Series  2004-1 Investor Notes be
exchanged  from  Temporary  Global  Notes  to  Permanent  Global  Notes.

We understand that this certification is required in connection with certain tax
laws  and,  if  applicable,  certain  securities  laws of the United States.  In
connection  therewith,  if  administrative or legal proceedings are commenced or
threatened  in connection with which this certification is

                                      B-5-1
<PAGE>

or would be relevant, we irrevocably authorize you to produce this certification
to  any  interested  party  in  such  proceedings.

Date:  [_______________](7)

                                        By:  ________________________________
                                        As,  or  as  agent  for,  the beneficial
                                        owner(s)  of  the Series 2004-1 Investor
                                        Notes to which this certificate relates.

-----------------------------
(7)  Not earlier than fifteen (15) days prior to the certification event to
     which  the  certification  relates.

                                      B-5-2
<PAGE>

                                                                       EXHIBIT E

                             CHESAPEAKE FUNDING LLC,
                                    as Issuer

                                       and

                              JPMORGAN CHASE BANK,
                              as Indenture Trustee

                        SUPPLEMENTAL INDENTURE NO. [___]

                              Dated as of [______]

                                       to

                                 BASE INDENTURE

                            Dated as of June 30, 1999

                               Asset Backed Notes
                              (Issuable in Series)

                                                                            Page
SECTION 1:   CERTAIN DEFINED TERMS-------------------------------------------E-1
SECTION 2:   AMENDMENT TO BASE INDENTURE-------------------------------------E-1
Section 2.1  Amendment to Article 13-----------------------------------------E-1
Section 2.2  Amendment to Schedule 1-----------------------------------------E-2
SECTION 3:   REPRESENTATIONS AND WARRANTIES----------------------------------E-3
Section 3.1  Affirmation of Representations and Warranties-------------------E-4
Section 3.2  LLC Agreement---------------------------------------------------E-4
Section 3.3  Binding Effect--------------------------------------------------E-4
Section 3.4  No Consent------------------------------------------------------E-4
SECTION 4:   CONDITIONS PRECEDENT--------------------------------------------E-4
SECTION 5:   MISCELLANEOUS---------------------------------------------------E-6
Section 5.1  Duplicate Originals---------------------------------------------E-6
Section 5.2  Ratification and Effect-----------------------------------------E-6
Section 5.3  Severability of Provisions--------------------------------------E-6
Section 5.4  Counterparts----------------------------------------------------E-6
Section 5.5  Table of Contents, Headings, etc.-------------------------------E-6
Section 5.6  Choice of Law---------------------------------------------------E-6

                                       E-(i)
<PAGE>

     SUPPLEMENTAL  INDENTURE  No.  [__],  dated  as  of  [_______],  [___]
("Supplemental  Indenture"),  to  BASE  INDENTURE, dated as of June 30, 1999, as
  -----------------------
amended  by  Supplemental Indenture No. 1 thereto, dated as of October 28, 1999,
Supplemental  Indenture  No.  2  thereto, dated as of May 27, 2003, Supplemental
Indenture  No.  3 thereto, dated as of June 18, 2003, and Supplemental Indenture
No.  4,  dated  as  of  July 31, 2003, between CHESAPEAKE FUNDING LLC, a special
purpose,  limited  liability company established under the laws of Delaware (the
"Issuer"),  and  JPMORGAN  CHASE BANK, a New York banking corporation ("JPMorgan
 ------                                                                 --------
Chase"),  as  trustee  (in  such  capacity,  the  "Indenture  Trustee").
 ----                                              ------------------

                              W I T N E S S E T H:

     WHEREAS,  the  Issuer  and  JPMorgan Chase are parties to a Base Indenture,
dated  as  of  June  30,  1999,  as supplemented by Supplemental Indenture No. 1
thereto,  dated  as  of  October  28, 1999, Supplemental Indenture No. 2 thereto
dated as of May 27, 2003, Supplemental Indenture No. 3 thereto, dated as of June
18,  2003,  and  Supplemental Indenture No. 4 thereto, dated as of July 31, 2003
(the  "Base  Indenture");
       ---------------

     WHEREAS,  the  Issuer  desires to amend Schedule 1 to the Base Indenture to
Amend the  definition  of  "Overconcentration  Amount;"

     WHEREAS,  the Issuer has duly authorized the execution and delivery of this
Supplemental  Indenture;  and

     WHEREAS,  JPMorgan  Chase,  as  Indenture Trustee, is willing to enter into
This Supplemental  Indenture.

     NOW,  THEREFORE,  for  and in consideration of the premises, and other good
and  valuable  consideration  the  receipt  and  sufficiency  of  which  are
acknowledged,  it  is mutually covenanted and agreed, that the Base Indenture be
amended  and  supplemented  as  follows:

     SECTION  1:  CERTAIN  DEFINED  TERMS

     Certain  capitalized  terms used herein, and not defined herein, shall have
the  respective meanings assigned to such terms in the Definitions List attached
as  Schedule  1  (the  "Definitions  List")  to  the  Base  Indenture,  as  such
                         ----------------
Definitions List may be hereafter further amended or modified from time to time.

     SECTION  2:  AMENDMENT  TO  BASE  INDENTURE

     Section  2.1  Amendment  to Article 13. Article 13 of the Base Indenture is
                   -------------------------
hereby  amended  by  adding  the  following  new  Section  13.18:

     "Section  13.18.  Election  of  Overconcentration  Option.
     --------------    ---------------------------------------

     Overconcentration  Option  [_]  shall  remain  in  effect until a different
Overconcentration  Option  shall  become  effective  upon  satisfaction  of  the
following  terms  and  conditions:

                                       E1
<PAGE>

          (a)  the Issuer shall have given prior written notice to the Indenture
     Trustee of its selection of a different Overconcentration Option specifying
     in  such  notice  the  proposed effective date of such selection which date
     shall  be  no  less  than  sixty  (60)  days after the date of such notice;

          (b)  the  Issuer  shall have given prior written notice to the Ratings
     Agencies  with  respect to each Outstanding Series of Investor Notes of its
     selection of a different Overconcentration Option specifying in such notice
     the  proposed  effective date of such selection which date shall be no less
     than  sixty  (60)  days  after  the  date  of  such  notice;

          (c)  the  proposed  effective date of such selection shall be at least
     twelve  (12)  months  from  the  date hereof, in the case of the first such
     selection,  or,  in  any  other  case,  from  the  effective  date  of  the
     Overconcentration  Option  then  in  effect;  provided,  however,  that  if
     Overconcentration  Option  1  is  in  effect  on  the  date hereof then the
     effective  date  of  the initial selection of a different Overconcentration
     Option  may  be  prior  to  twelve  (12)  months following the date hereof;

          (d)  on the proposed effective date of such selection, both before and
     after  giving effect to such selection, (i) no Asset Deficiency would exist
     and  (ii)  the amount on deposit in the Series Reserve Account with respect
     to each Outstanding Series of Investor Notes would be at least equal to the
     amount  required  to  be on deposit therein in accordance with the terms of
     the  applicable  Indenture  Supplement;

          (e)  no  Amortization Event shall have occurred and is continuing with
     respect  to any  Outstanding  Series  of  Investor  Notes;

          (f) the Indenture Trustee shall have provided a copy of such notice to
     each Investor  Noteholder  affected  by  the  selection;  and

          (g)  each  condition  to  the  effectiveness of such Overconcentration
     Option  set  forth  in any Indenture Supplement relating to any Outstanding
     Series  of  Investor  Notes  shall  have  been  satisfied."

     Section  2.2     Amendment  to  Schedule  1.
                      --------------------------
     Schedule  1  is  hereby  by  amended  by  (a)  deleting  the  definition of
"Overconcentration  Amount" in its entirety and substituting in lieu thereof the
following  new  definition  of  Overconcentration  Amount:

     "'Overconcentration  Amount'  means, as of any date of determination during
       -------------------------
an  Accrual  Period,  an  amount  equal to the greatest of (a) (i) the aggregate
Lease  Balance  of  the  Eligible  Leases  to which the Obligors having the five
largest  aggregate Lease Balances of Eligible Leases allocated to the Lease SUBI
Portfolio  are  a  party  as  of  the last day of the Monthly Period immediately
preceding  the first day of such Accrual Period over (ii) an amount equal to the
Specified  Top Five Obligors Maximum

                                       E2
<PAGE>

Percentage  as  of such date of the Aggregate Lease Balance as of such date, (b)
(i)  the  aggregate  Lease  Balance of the Eligible Leases to which the Obligors
having  the ten largest aggregate Lease Balances of Eligible Leases allocated to
the  Lease  SUBI  Portfolio are a party as of the last day of the Monthly Period
immediately  preceding  the first day of such Accrual Period over (ii) an amount
equal  to  the  Specified Top Ten Obligors Maximum Percentage as of such date of
the  Aggregate  Lease Balance as of such date and (c) the excess, if any, of (i)
the  aggregate  Lease Balance of the Eligible Leases to which the Obligor having
the  largest  aggregate  Lease Balance of Eligible Leases allocated to the Lease
SUBI  Portfolio  is a party as of the last day of the Monthly Period immediately
preceding  the first day of such Accrual Period over (ii) an amount equal to the
Specified  Top Obligor Maximum Percentage as of such date of the Aggregate Lease
Balance  as  of  such  date;  provided,  however  that  if  the  long-term  debt
obligations  of such Obligor are not rated at least "Baa3" by Moody's as of such
date,  the  amount  in  this  clause  (ii) shall equal the Specified Top Obligor
Maximum Percentage as of that date minus 1% of the Aggregate Lease Balance as of
such  date."

and  (b)  adding  the  following  new  definitions  in  alphabetical  order:

     "'Overconcentration  Option'  means  Overconcentration  Option  1,
       -------------------------
Overconcentration  Option  2  or  Overconcentration  Option  3.

     'Overconcentration Option 1' means the percentages used in clauses (a)(ii),
     ----------------------------
(b)(ii)  and  (c)(ii)  of  the  definition  of  the Overconcentration Amount are
15.00%,  25.00%  and  4.00%,  respectively.

     'Overconcentration Option 2' means the percentages used in clauses (a)(ii),
     ----------------------------
(b)(ii)  and  (c)(ii)  of  the  definition  of  the Overconcentration Amount are
17.50%,  28.00%  and  4.50%,  respectively.

     'Overconcentration Option 3' means the percentages used in clauses (a)(ii),
     ----------------------------
(b)(ii)  and  (c)(ii)  of  the  definition  of  the Overconcentration Amount are
18.75%,  30.00%  and  4.75%,  respectively.

     'Series  Reserve  Account'  means  each account designated as a "Series [ ]
     ----------------------
Reserve Account in an Indenture Supplement with respect to an Outstanding Series
of  Investor  Notes.

     'Specified  Top  Five  Obligors Maximum Percentage' means (a) 15.00% on any
      ------------------------------------------------
date  during any period when Overconcentration Option 1 is in effect, (b) 17.50%
on  any  date  during any period when Overconcentration Option 2 is in effect or
(c)  18.75%  on any date during any period when Overconcentration Option 3 is in
effect.

     'Specified  Top  Obligor  Maximum  Percentage'  means (a) 4.00% on any date
      -------------------------------------------
during any period when Overconcentration Option 1 is in effect, (b) 4.50% on any
date during any period when Overconcentration Option 2 is in effect or (c) 4.75%
on  any  date  during  any  period when Overconcentration Option 3 is in effect.

                                       E3
<PAGE>

     'Specified  Top  Ten  Obligors  Maximum  Percentage'  means  (a)  25.00% on
       ------------------------------------------------
any  date  during  any  period when Overconcentration Option 1 is in effect, (b)
28.00%  on  any  date  during  any  period when Overconcentration Option 2 is in
effect or (c) 30.00% on any date during any period when Overconcentration Option
3  is  in  effect."

     SECTION  3:     REPRESENTATIONS  AND  WARRANTIES

     In  order  to  induce  the  Indenture Trustee to agree to this Supplemental
Indenture,  the  Issuer  hereby  represents  and  warrants,  as follows, for the
benefit  of  the  Indenture Trustee and the Investor Noteholders, as of the date
hereof:

     Section  3.1     Affirmation  of  Representations  and  Warranties.
                      -------------------------------------------------
     Each  representation  and  warranty  of  the  Issuer  set forth in the Base
Indenture and in each other Transaction Document to which it is a party, is true
and  correct  as  of  the  date  of  this  Supplemental Indenture as though such
representation  or  warranty were being made on and as of the date hereof and is
hereby  deemed  repeated  as  though  fully  set  forth  herein.

Section  3.2     LLC  Agreement.
                 --------------

     The  execution, delivery and performance by the Issuer of this Supplemental
Indenture  (a) is within the Issuer's power, (b) has been duly authorized by all
necessary action and (c) does not contravene, or constitute a default under, any
Requirement  of  Law  or  any  provision  of  applicable law, its certificate of
formation  or  the LLC Agreement or of any law or governmental regulation, rule,
contract,  agreement,  judgment,  injunction,  order, decree or other instrument
binding upon the Issuer or any of the Issuer Assets or result in the creation or
imposition  of  any  Lien  on  any  Issuer  Asset except for Liens created by or
permitted  under  the  Indenture  or  the  other  Transaction  Documents.  This
Supplemental  Indenture  has  been  executed  and delivered by a duly authorized
manager  of  the  Issuer.

     Section  3.3  Binding  Effect.
                 ---------------
     This Supplemental Indenture is a legal, valid and binding obligation of the
Issuer  enforceable  against  the Issuer in accordance with its terms (except as
such  enforceability  may  be  limited  by  bankruptcy,  insolvency,  fraudulent
conveyance,  reorganization,  moratorium  and  other  similar  laws  affecting
creditors'  rights  generally  or  by  general  equitable  principles,  whether
considered  in  a  proceeding  at law or in equity and by an implied covenant of
good  faith  and  fair  dealing).

     Section  3.4  No  Consent.
                 -----------
     No consent, action by or in respect of, approval or other authorization of,
or registration, declaration or filing with, any Governmental Authority or other
Person  is  required  for  the valid execution and delivery of this Supplemental
Indenture  or  for  the performance of any of the Issuer's obligations hereunder
other  than  such  consents,  actions, approvals, authorizations, registrations,
declarations or filings as were obtained by the Issuer prior to the date hereof.

     SECTION  4:  CONDITIONS  PRECEDENT
                                       E4
<PAGE>

     This  Supplemental Indenture shall become effective and shall be binding on
     each  of  the parties hereto upon the satisfaction or due waiver of each of
     the  following  conditions  precedent:

               (i)  The  Indenture  Trustee  shall  have  received  evidence
                    satisfactory  to  it  that  each  Manager  of the Issuer has
                    approved  this  Supplemental  Indenture.

               (ii) The Indenture Trustee shall have received a Manager's or an
                    Officer's  Certificate  of  the Issuer, dated as of the date
                    hereof,  to  the  effect  that  (i)  no  Amortization Event,
                    Potential  Amortization Event, Event of Default or Potential
                    Event  of  Default with respect to any Series of Outstanding
                    Investor  Notes  is  continuing or will occur as a result of
                    the  execution  and  delivery of this Supplemental Indenture
                    and  (ii)  the  execution  and delivery of this Supplemental
                    Indenture will not result in any breach of any of the terms,
                    conditions  or  provisions  of or constitute a default under
                    any indenture, mortgage, deed of trust or other agreement or
                    instrument,  including,  without limitation, any Transaction
                    Document,  to  which the Issuer is a party or by which it or
                    its  property  is  bound  or  any  order  of  any  court  or
                    administrative  agency  entered in any suit, action or other
                    judicial or administrative proceeding to which the Issuer is
                    a  party  or  by which it or its property may be bound or to
                    which  it  or  its  property  may  be  subject.

               (iii)The Indenture Trustee shall have received a Manager's or an
                    Officer's  Certificate  of  the Issuer, dated as of the date
                    hereof, to the effect that all conditions precedent provided
                    for  in the Base Indenture with respect to the execution and
                    delivery  of  this Supplemental Indenture have been complied
                    with  in  all  material  respects.

               (iv) The  Indenture  Trustee  shall  have received an Opinion of
                    Counsel,  subject  to  the  assumptions  and  qualifications
                    stated  therein,  and  in a form substantially acceptable to
                    the  Indenture Trustee, dated the date hereof, substantially
                    to  the  effect  that:

                    (a)  all  conditions  precedent  provided  for  in  the Base
                         Indenture with respect to the execution and delivery of
                         this  Supplemental Indenture have been complied with in
                         all  material  respects;

                    (b)  the  Issuer is duly organized under the jurisdiction of
                         its  formation  and  has  the  power  and  authority to
                         execute  and  deliver  this  Supplemental  Indenture;

                    (c)  this  Supplemental  Indenture has been duly authorized,
                         executed  and  delivered  by  the  Issuer;

                    (d) this Supplemental Indenture constitutes the legal, valid
                        and  binding  obligation  of  the  Issuer,  enforceable
                        against the Issuer in accordance with its terms, except
                        as  the  enforceability  thereof  may  be  limited  by
                        bankruptcy,  insolvency, reorganization, moratorium and
                        other  similar  laws  affecting  the  enforcement  of
                        creditors'  rights  generally  and  by  general

                                       E5
<PAGE>

                         principles  of  equity (regardless of whether the issue
                         of  enforceability  is  considered  in  a proceeding in
                         equity  or  at  law);  and

                    (e)  such  other  matters  as  the  Indenture  Trustee  may
                         reasonably  require.

               (v) The  Indenture  Trustee  shall  have  received  such  other
                   documents,  instruments, certifications, agreements or other
                   items  as  the  Indenture  Trustee  may  reasonably  require.

     SECTION  5:     MISCELLANEOUS

               Section  5.1  Duplicate  Originals.
                             --------------------

     The  parties  may sign any number of copies of this Supplemental Indenture.
One  signed  copy  is  enough  to  prove  this  Supplemental  Indenture.

               Section  5.2  Ratification  and  Effect.
                              -------------------------
     The  Base  Indenture,  as  amended  and  supplemented  by this Supplemental
Indenture,  is  in  all respects ratified and confirmed, shall continue to be in
full  force  and  effect,  and shall be read, taken and construed as one and the
same  instrument.

               Section  5.3  Severability  of  Provisions.
                             ----------------------------
     If  any  one  or  more of the covenants, agreements, provisions or terms of
this  Supplemental  Indenture  shall  for any reason whatsoever be held invalid,
then  such  covenants, agreements, provisions or terms shall be deemed severable
from  the  remaining  covenants,  agreements,  provisions  or  terms  of  this
Supplemental Indenture and shall in no way affect the validity or enforceability
of  the  other  provisions  of  this  Supplemental  Indenture.

Section  5.4     Counterparts.
                 ------------
     This  Supplemental  Indenture  may  be executed in two or more counterparts
(and  by  different parties on separate counterparts), each of which shall be an
original,  but  all  of  which  together  shall  constitute  one  and  the  same
instrument.

Section  5.5     Table  of  Contents,  Headings,  etc.
                 -------------------------------------
     The  table  of  contents  and headings of the Sections of this Supplemental
Indenture  have  been  inserted for convenience of reference only, are not to be
considered  a  part  hereof,  and  shall in no way modify or restrict any of the
terms  or  provisions  hereof.

Section  5.6     Choice  of  Law.
                 ---------------

     THIS  SUPPLEMENTAL  INDENTURE  SHALL  BE  GOVERNED  BY,  AND  CONSTRUED AND
INTERPRETED IN  ACCORDANCE  WITH,  THE  LAW  OF  THE  STATE  OF  NEW  YORK.

                                       E6
<PAGE>

     IN  WITNESS  WHEREOF, the Indenture Trustee and the Issuer have caused this
Supplemental  Indenture  to be duly executed by their respective duly authorized
officers  or  managers  as  of  the  day  and  year  first  written  above.

                                   CHESAPEAKE  FUNDING  LLC,
                                   as  Issuer

                                   By:  _/s/  Joseph  W.  Weikel
                                        -----------------------
                                        Name:  Joseph  W.  Weikel
                                        Title:  Manager

                                    JPMORGAN  CHASE  BANK,
                                    as  Indenture  Trustee

                                   By:  _/s/  Melissa  Wilman
                                        ----------------------
                                        Name:  Melissa  Wilman
                                        Title:  Vice  President

                                       E7<PAGE>

                                                                     Exhibit 4.1

                                                                  EXECUTION COPY

================================================================================

                               Henry Schein, Inc.

                                       TO

                              The Bank of New York,
                                            Trustee

                               -----------------

                                    INDENTURE

                           Dated as of August 9, 2004

                                -----------------

                                  $ 240,000,000

               3.00% Convertible Contingent Senior Notes due 2034

================================================================================

<PAGE>

     CERTAIN SECTIONS OF THIS INDENTURE RELATING TO SECTIONS 310 THROUGH 318
                       OF THE TRUST INDENTURE ACT OF 1939:

<TABLE>
<CAPTION>
TRUST INDENTURE
  ACT SECTION                                                                   INDENTURE SECTION
  -----------                                                                   -----------------
<S>                                                                             <C>
Section 310(a)(1)   .......................................................        609
           (a)(2)   .......................................................        609
           (a)(3)   .......................................................        Not Applicable
           (a)(4)   .......................................................        Not Applicable
           (b)      .......................................................        608
                                                                                   610
Section 311(a)      .......................................................        613
           (b)      .......................................................        613
Section 312(a)      .......................................................        701
                                                                                   702
           (b)      .......................................................        702
           (c)      .......................................................        702
Section 313(a)      .......................................................        703
           (b)      .......................................................        703
           (c)      .......................................................        703
           (d)      .......................................................        703
Section 314(a)      .......................................................        704
           (a)(4)   .......................................................        101
                                                                                   1004
           (b)      .......................................................        Not Applicable
           (c)(1)   .......................................................        104
           (c)(2)   .......................................................        104
           (c)(3)   .......................................................        Not Applicable
           (d)      .......................................................        Not Applicable
           (e)      .......................................................        104
Section 315(a)      .......................................................        601
           (b)      .......................................................        602
           (c)      .......................................................        601
           (d)      .......................................................        601
           (e)      .......................................................        514
Section 316(a)      .......................................................        101
           (a)(1)(A).......................................................        502
                                                                                   512
           (a)(1)(B).......................................................        513
           (a)(2)   .......................................................        Not Applicable
           (b)      .......................................................        508
           (c)      .......................................................        106
Section 317(a)(1)   .......................................................        503
           (a)(2)   .......................................................        504
           (b)      .......................................................        1003
Section 318(a)      .......................................................        103
</TABLE>

-------------------
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<PAGE>

                                TABLE OF CONTENTS

<TABLE>
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PARTIES..........................................................................................         1

RECITALS OF THE COMPANY..........................................................................         1

ARTICLE ONE  DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION.............................         1

SECTION 101.          Definitions................................................................         1
                         144A Global Security....................................................         2
                         Additional Interest.....................................................         2
                         Affiliate; control......................................................         2
                         Applicable Procedures...................................................         2
                         Authenticating Agent....................................................         2
                         Average Conversion Value................................................         2
                         Board of Directors......................................................         2
                         Board Resolution........................................................         2
                         Business Day............................................................         2
                         Capital Stock...........................................................         2
                         Certified Securities....................................................         2
                         Closing Price...........................................................         2
                         Commission..............................................................         3
                         Common Stock............................................................         3
                         Company.................................................................         3
                         Company Request; Company Order..........................................         3
                         Conversion Agent........................................................         3
                         Conversion Date.........................................................         3
                         Conversion Price........................................................         3
                         Conversion Value........................................................         3
                         Corporate Trust Office..................................................         3
                         Corporation.............................................................         3
                         Exchange Act............................................................         4
                         Ex-Dividend Time........................................................         4
                         Fundamental Change......................................................         4
                         Global Securities.......................................................         4
                         Holder..................................................................         4
                         Indebtedness............................................................         4
                         Indenture...............................................................         4
                         Initial Purchaser.......................................................         4
                         Institutional Accredited Investor.......................................         4
                         Interest................................................................         4
                         Interest Payment Date...................................................         5
                         Record Date.............................................................         5
                         Issue Date..............................................................         5
                         Issue Price.............................................................         5
                         Officers' Certificate...................................................         5
                         Opinion of Counsel......................................................         5
                         Outstanding.............................................................         5
                         Paying Agent............................................................         6
</TABLE>

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                         Person..................................................................         6
                         Predecessor Security....................................................         6
                         Purchase Agreement......................................................         6
                         Redemption Date.........................................................         6
                         Registration Rights Agreement...........................................         6
                         Responsible Officer.....................................................         6
                         Restricted Security.....................................................         6
                         Rule 144A...............................................................         6
                         Securities Act..........................................................         6
                         Security Register; Security Registrar...................................         7

ERROR! NOT A VALID HEADING LEVEL IN TOC ENTRY ON PAGE............................................         7
                         Subsidiary..............................................................         7
                         Trading Day.............................................................         7
                         Trading Price...........................................................         7
                         Trustee.................................................................         7
                         Trust Indenture Act.....................................................         7
                         Vice President..........................................................         8
                         Voting Stock............................................................         8
SECTION 102.          Other Definitions..........................................................         8
SECTION 103.          Trust Indenture Act........................................................         9
SECTION 104.          Compliance Certificates and Opinions.......................................         9
SECTION 105.          Form of Documents Delivered to Trustee.....................................        10
SECTION 106.          Acts of Holders; Record Dates..............................................        10
SECTION 107.          Notices, Etc., to Trustee and Company......................................        11
SECTION 108.          Notice to Holders; Waiver..................................................        12
SECTION 109.          Effect of Headings and Table of Contents...................................        12
SECTION 110.          Successors and Assigns.....................................................        12
SECTION 111.          Separability Clause........................................................        12
SECTION 112.          Benefits of Indenture......................................................        12
SECTION 113.          Governing Law..............................................................        12
SECTION 114.          Legal Holidays.............................................................        13

ARTICLE TWO SECURITY FORMS.......................................................................        13

SECTION 201.          Forms Generally............................................................        13

ARTICLE THREE THE SECURITIES.....................................................................        15

SECTION 301.          Title and Terms............................................................        15
SECTION 302.          Denominations..............................................................        15
SECTION 303.          Execution, Authentication, Delivery and Dating.............................        15
SECTION 304.          Temporary Securities.......................................................        16
SECTION 305.          Registration, Registration of Transfer and Exchange........................        16
SECTION 306.          Mutilated, Destroyed, Lost and Stolen Securities...........................        17
SECTION 307.          Persons Deemed Owners......................................................        18
SECTION 308.          Cancellation...............................................................        18
SECTION 309.          Computation of Interest....................................................        18
</TABLE>

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                                      -ii-

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SECTION 310.          Global Securities..........................................................        18
SECTION 311.          CUSIP Numbers..............................................................        23
SECTION 312.          Ranking....................................................................        23
SECTION 313.          Paying Agent and Conversion Agent..........................................        23

ARTICLE FOUR SATISFACTION AND DISCHARGE..........................................................        24

SECTION 401.          Satisfaction and Discharge of Indenture....................................        24
SECTION 402.          Application of Trust Money.................................................        24

ARTICLE FIVE REMEDIES............................................................................        25

SECTION 501.          Events of Default..........................................................        25
SECTION 502.          Acceleration of Maturity; Rescission and Annulment.........................        26
SECTION 503.          Collection of Indebtedness and Suits for Enforcement by Trustee............        27
SECTION 504.          Trustee May File Proofs of Claim...........................................        28
SECTION 505.          Trustee May Enforce Claims Without Possession of Securities................        28
SECTION 506.          Application of Money Collected.............................................        28
SECTION 507.          Limitation on Suits........................................................        29
SECTION 508.          Unconditional Right of Holders to Receive Payment and to Convert...........        29
SECTION 509.          Restoration of Rights and Remedies.........................................        30
SECTION 510.          Rights and Remedies Cumulative.............................................        30
SECTION 511.          Delay or Omission Not Waiver...............................................        30
SECTION 512.          Control by Holders.........................................................        30
SECTION 513.          Waiver of Past Defaults....................................................        31
SECTION 514.          Undertaking for Costs......................................................        31
SECTION 515.          Waiver of Stay or Extension Laws...........................................        31

ARTICLE SIX THE TRUSTEE..........................................................................        32

SECTION 601.          Certain Duties and Responsibilities........................................        32
SECTION 602.          Notice of Defaults.........................................................        32
SECTION 603.          Certain Rights of Trustee..................................................        32
SECTION 604.          Not Responsible for Recitals or Issuance of Securities.....................        33
SECTION 605.          May Hold Securities........................................................        33
SECTION 606.          Money Held in Trust........................................................        34
SECTION 607.          Compensation and Reimbursement.............................................        34
SECTION 608.          Disqualification; Conflicting Interests....................................        34
SECTION 609.          Corporate Trustee Required; Eligibility....................................        34
SECTION 610.          Resignation and Removal; Appointment of  Successor.........................        35
SECTION 611.          Acceptance of Appointment by Successor.....................................        36
SECTION 612.          Merger, Conversion, Consolidation or Succession to Business................        36
SECTION 613.          Preferential Collection of Claims Against Company..........................        36
SECTION 614.          Appointment of Authenticating Agent........................................        37

ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY..................................        38

SECTION 701.          Company to Furnish Trustee Names and Addresses of Holders..................        38
SECTION 702.          Preservation of Information; Communications to Holders.....................        38
SECTION 703.          Reports by Trustee.........................................................        39
</TABLE>

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                                      -iii-

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SECTION 704.          Reports by Company.........................................................        39

ARTICLE EIGHT CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE...............................        39

SECTION 801.          Company May Consolidate, Etc., Only on Certain Terms.......................        39
SECTION 802.          Successor Substituted......................................................        40

ARTICLE NINE SUPPLEMENTAL INDENTURES.............................................................        41

SECTION 901.          Supplemental Indentures Without Consent of Holders.........................        41
SECTION 902.          Supplemental Indentures with Consent of Holders............................        42
SECTION 903.          Execution of Supplemental Indentures.......................................        42
SECTION 904.          Effect of Supplemental Indentures..........................................        43
SECTION 905.          Conformity with Trust Indenture Act........................................        43
SECTION 906.          Reference in Securities to Supplemental Indentures.........................        43

ARTICLE TEN COVENANTS............................................................................        43

SECTION 1001.         Payment of the Securities..................................................        43
SECTION 1002.         Maintenance of Office or Agency............................................        44
SECTION 1003.         Money for Security Payments to Be Held in Trust............................        44
SECTION 1004.         Statement by Officers as to Default........................................        45
SECTION 1005.         Existence..................................................................        45
SECTION 1006.         Maintenance of Properties..................................................        45
SECTION 1007.         Payment of Taxes and Other Claims..........................................        46
SECTION 1008.         Commission and Other Reports...............................................        46
SECTION 1009.         Further Instruments and Acts...............................................        46
SECTION 1010.         Delivery of Certain Information............................................        46
SECTION 1011.         Tax Treatment of Securities................................................        47

ARTICLE ELEVEN REDEMPTION OF SECURITIES; REPURCHASE OF SECURITIES AT THE OPTION OF THE HOLDER....        47

SECTION 1101.         Right to Redeem; Notices to Trustee........................................        47
SECTION 1102.         Selection of Securities to Be Redeemed.....................................        47
SECTION 1103.         Notice of Redemption.......................................................        48
SECTION 1104.         Effect of Notice of Redemption.............................................        49
SECTION 1105.         Deposit of Redemption Price................................................        49
SECTION 1106.         Securities Redeemed in Part................................................        49
SECTION 1107.         Purchase of Securities at Option of the Holder.............................        49
SECTION 1108.         Purchase of Securities at Option of the Holder upon Fundamental Change.....        52
SECTION 1109.         Effect of Purchase Notice or Repurchase Notice.............................        53
SECTION 1110.         Deposit of Purchase Price..................................................        54
SECTION 1111.         Securities Purchased in Part...............................................        55
SECTION 1112.         Covenant to Comply With Securities Laws Upon Purchase of Securities........        55
SECTION 1113.         Repayment to the Company...................................................        55

ARTICLE TWELVE CONVERSIONS.......................................................................        56

SECTION 1201.         Conversion Privilege.......................................................        56
</TABLE>

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                                      -iv-

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SECTION 1202.         Conversion Procedure; Conversion Price; Fractional Shares..................        58
SECTION 1203.         Adjustments of Conversion Rate for Common Stock............................        59
SECTION 1204.         Consolidation or Merger of the Company.....................................        67
SECTION 1205.         Notice of Adjustment.......................................................        68
SECTION 1206.         Notice in Certain Events...................................................        69
SECTION 1207.         Company to Reserve Stock; Registration; Listing............................        69
SECTION 1208.         Taxes on Conversion........................................................        70
SECTION 1209.         Conversion After Interest Payment Record Date..............................        70
SECTION 1210.         Payment Upon Conversion....................................................        71
SECTION 1211.         Company Determination Final................................................        72
SECTION 1212.         Responsibility of Trustee for Conversion Provisions........................        72

ARTICLE THIRTEEN  MAKE WHOLE PREMIUM.............................................................        72

SECTION 1301.         Make Whole Premium.........................................................        72
SECTION 1302.         Adjustments Relating to Make Whole Premium.................................        75

TESTIMONIUM......................................................................................        97

SIGNATURES AND SEALS.............................................................................        98
</TABLE>

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of the Indenture.

                                       -v-
<PAGE>

      INDENTURE, dated as of August 9, 2004, between Henry Schein, Inc., a
corporation duly organized and existing under the laws of the State of Delaware
(herein called the "Company"), having its principal office at 135 Duryea Road,
Melville, New York 11747, and The Bank of New York, a banking corporation duly
organized and existing under the laws of the State of New York, as Trustee
(herein called the "Trustee").

                             RECITALS OF THE COMPANY

      The Company has duly authorized the creation of an issue of its 3.00%
Convertible Contingent Senior Notes due 2034 (herein called the "Securities") of
substantially the tenor and amount hereinafter set forth, and to provide
therefor the Company has duly authorized the execution and delivery of this
Indenture.

      All things necessary to make the Securities, when executed by the Company
and authenticated and delivered hereunder and duly issued by the Company, the
valid obligations of the Company, and to make this Indenture a valid agreement
of the Company, in accordance with their and its terms, have been done.

      NOW, THEREFORE, THIS INDENTURE WITNESSETH:

      For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities, as follows:

                                   ARTICLE ONE

             Definitions and Other Provisions of General Application

            SECTION 101. Definitions.

      For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:

            (1) the terms defined in this Article have the meanings assigned to
      them in this Article and include the plural as well as the singular;

            (2) all other terms used herein which are defined in the Trust
      Indenture Act, either directly or by reference therein, have the meanings
      assigned to them therein;

            (3) all accounting terms not otherwise defined herein have the
      meanings assigned to them in accordance with generally accepted accounting
      principles as in effect from time to time;

            (4) the words "herein", "hereof" and "hereunder" and other words of
      similar import refer to this Indenture as a whole and not to any
      particular Article, Section or other subdivision.;

            (5) "or" is not exclusive; and

<PAGE>

            (6) "including" means including, without limitation.

      "144A Global Security" means a permanent Global Security in the form of
the Security attached hereto as Exhibit A-1, and that is deposited with and
registered in the name of the Depositary, representing Securities sold in
reliance on Rule 144A under the Securities Act.

      "Additional Interest" shall have the meaning specified in the Registration
Rights Agreement.

      "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

      "Applicable Procedures" means, with respect to any transfer or transaction
involving a Global Security or beneficial interest therein, the rules and
procedures of the Depositary for such Security, in each case to the extent
applicable to such transaction and as in effect from time to time.

      "Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 614 to act on behalf of the Trustee to authenticate Securities.

      "Average Conversion Value" means, with respect to any period, the sum of
the Conversion Values for each Trading Day during the relevant period divided by
the number of Trading Days in the period.

      "Board of Directors" means either the board of directors of the Company or
any duly authorized committee of that board.

      "Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.

      "Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in the City of New York,
Borough of Manhattan are authorized or obligated by law or executive order to
close.

      "Capital Stock" for any Corporation means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) stock or other equity interests issued by that
Corporation.

      "Certificated Securities" means Securities that are in the form of the
Securities attached hereto as Exhibit A-2.

      "Closing Price" of the shares of Common Stock on any date means the
closing per share sale price (or, if no closing sale price is reported, the
average of the bid and ask prices or, if more than one in either case, the
average of the average bid and average ask prices) on such date as

                                       -2-
<PAGE>

reported on the Nasdaq National Market or, if the shares of Common Stock are not
traded on the Nasdaq National Market, as reported on the principal securities
exchange or inter-dealer quotation system on which the shares of Common Stock
are then quoted. In the absence of such quotations, the Company shall be
entitled to determine the sales price on the basis of such quotations as it
considers applicable.

      "Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, or, if at
any time after the execution of this instrument such Commission is not existing
and performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties at such time.

      "Common Stock" means the shares of common stock, $0.01 par value per
share, of the Company as they exist on the date of this Indenture or any other
shares of Capital Stock of the Company into which such common stock shall be
reclassified or changed.

      "Company" means the Person named as the "Company" in the first paragraph
of this instrument until a successor Person shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person. The foregoing sentence shall likewise apply to any such
subsequent successor or successors.

      "Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President or a Vice President, and by its Treasurer,
an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.

      "Conversion Agent" and "the Conversion Agent" means any Person authorized
by the Company, in compliance with the terms hereof, to whom the Securities may
be presented for conversion..

      "Conversion Date" means, with respect to any Holder, the date on which
such Holder has satisfied all the requirements to convert such Holder's
Securities.

      "Conversion Price", with respect to a Security as of any date, shall mean
the quotient of (x) the principal amount of the Security, divided by (y) the
Conversion Rate then in effect.

      "Conversion Value" means, at any time, the product of (x) the Closing
Price at such time and (y) the then-current Conversion Rate.

      "Corporate Trust Office" means the office of the Trustee in the City of
New York at which at any particular time its corporate trust business shall be
principally administered which office at the date hereof is located at 101
Barclay Street, 8 West, New York, New York 10286, or such other address in the
City of New York as the Trustee may designate from time to time by notice to the
Holders and the Company, or the principal corporate trust office in the City of
New York of any successor Trustee (or such other address in the City of New York
as a successor Trustee may designate from time to time by notice to the Holders
and the Company).

      "Corporation" means a corporation, association, company (whether a limited
liability company or other), joint-stock company or business or statutory trust.

                                       -3-
<PAGE>

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

      "Ex-Dividend Time" means, with respect to any issuance or distribution on
shares of Common Stock, the first date on which the shares of Common Stock trade
regular way on the principal inter-dealer quotation system or securities market
on which the shares of Common Stock are then traded without the right to receive
such issuance or distribution.

      "Fundamental Change" means any transaction or event (whether by means of
an exchange offer, liquidation, tender offer, consolidation, merger,
combination, reclassification, recapitalization or otherwise) in connection with
which 50% or more of the Common Stock is exchanged for, converted into, acquired
for or constitutes solely the right to receive, consideration which is not at
least 90% common stock that is: (a) listed on, or immediately after such
transaction or event, will be listed on, a United States national securities
exchange or (b) approved, or immediately after such transaction or event will be
approved, for quotation on the Nasdaq National Market or any similar United
States system of automated dissemination of quotations of securities prices.

      "Global Securities" means Securities that are in the form of the
Securities attached hereto as Exhibit A-1, and to the extent that such
Securities are required to bear the Legend required by Section 201(e), such
Securities will be in the form of a 144A Global Security.

      "Holder" means a Person in whose name a Security is registered in the
Security Register.

      "Indebtedness" means, without duplication, the principal or face amount of
(i) all obligations for borrowed money, (ii) all obligations evidenced by
debentures, notes or other similar instruments, (iii) all obligations in respect
of letters of credit or bankers acceptances or similar instruments (or
reimbursement obligations with respect thereto), (iv) all obligations to pay the
deferred purchase price of property or services, except trade accounts payable
arising in the ordinary course of business, (v) all obligations as lessee which
are capitalized in accordance with generally accepted accounting principles, and
(vi) all Indebtedness of others guaranteed by the Company or any of its
Subsidiaries or for which the Company or any of its Subsidiaries is legally
responsible or liable (whether by agreement to purchase indebtedness of, or to
supply funds or to invest in, others).

      "Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, including, for
all purposes of this instrument and any such supplemental indenture, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this instrument and any such supplemental indenture, respectively.

      "Initial Purchasers" means Lehman Brothers Inc. and J.P. Morgan Securities
Inc., as representatives of the initial purchasers under the Purchase Agreement.

      "Institutional Accredited Investor" means an institutional "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D
under the Securities Act.

      "Interest" means Regular Interest, Contingent Interest, Additional
Interest and Default Rate Interest.

                                       -4-
<PAGE>

      "Interest Payment Date" means the Stated Maturity of an installment of
Interest on the Securities.

      "Interest Payment Record Date" for the Interest payable on any Interest
Payment Date means the February 1 or August 1 (whether or not a Business Day),
as the case may be, next preceding such Interest Payment Date.

      "Issue Date" of any Security means the date on which the Security was
originally issued or deemed issued as set forth on the face of the Security.

      "Issue Price" of any Security means, in connection with the original
issuance of such Security, the initial issue price at which the Security is sold
as set forth on the face of the Security.

      "Officers' Certificate" means a certificate signed by the Chairman of the
Board, a Vice Chairman of the Board, the President or a Vice President, and by
the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary,
of the Company, and delivered to the Trustee. One of the officers signing an
Officers' Certificate given pursuant to Section 1004 shall be the principal
executive, financial or accounting officer of the Company.

      "Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be acceptable to the Trustee and, for
purposes of Article Two hereof, the Company.

      "Outstanding", when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:

                  (i) Securities theretofore cancelled by the Trustee or
            delivered to the Trustee for cancellation;

                  (ii) Securities for whose payment or redemption money in the
            necessary amount has been theretofore deposited with the Trustee or
            any Paying Agent (other than the Company) in trust or set aside and
            segregated in trust by the Company (if the Company shall act as its
            own Paying Agent) for the Holders of such Securities; provided that,
            if such Securities are to be redeemed, notice of such redemption has
            been duly given pursuant to this Indenture; and

                  (iii) Securities which have been paid pursuant to Section 306
            or in exchange for or in lieu of which other Securities have been
            authenticated and delivered pursuant to this Indenture, other than
            any such Securities in respect of which there shall have been
            presented to the Trustee proof satisfactory to it that such
            Securities are held by a bona fide purchaser in whose hands such
            Securities are valid obligations of the Company;

provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected

                                       -5-
<PAGE>

in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which the Trustee knows to be so owned shall
be so disregarded. Securities so owned which have been pledged in good faith may
be regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor.

      "Paying Agent" and "the Paying Agent" means any Person authorized by the
Company, in compliance with the terms hereof, to pay the principal of or
Interest on, or to purchase any Securities on behalf of the Company.

      "Person" means any individual, Corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.

      "Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.

      "Purchase Agreement" means the Purchase Agreement, dated as of August 4,
2004, between the Company and the Initial Purchaser relating to the offering and
sale of the Securities.

      "Redemption Date", means the date specified for the redemption of
securities in accordance with the terms of this Indenture and Section 4 of the
Securities.

      "Registration Rights Agreement" means the Resale Registration Rights
Agreement dated as of August 9, 2004 between the Company and the Initial
Purchasers.

      "Responsible Officer", when used with respect to the Trustee, means the
chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any trust officer or assistant trust officer, the controller
or any assistant controller or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.

      "Restricted Security" means a Security required to bear the restrictive
legend set forth in the form of Security set forth in Exhibits A-1 and A-2 of
this Indenture.

      "Rule 144A" means Rule 144A under the Securities Act (or any successor
provision), as it may be amended from time to time.

      "Securities Act" means the Securities Act of 1933, as amended.

                                       -6-
<PAGE>

      "Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.

      "Stated Maturity", when used with respect to any installment of Interest
on a Security, means the date specified in such Security as the fixed date on
which such installment of Interest is due and payable.

      "Subsidiary" means any Person of which at least a majority of the
outstanding Voting Stock shall at the time directly or indirectly be owned or
controlled by the Company or by one or more Subsidiaries or by the Company and
one or more Subsidiaries.

      "Trading Day" means a day during which trading in securities generally
occurs on the Nasdaq National Market or, if the Common Stock is not quoted on
the Nasdaq National Market, on the principal other national or regional
securities exchange or quotation system on which the Common Stock then is listed
or quoted or, if the Common Stock is not listed or quoted on a national or
regional securities exchange, on the principal other market or inter-dealer
quotation system on which the Common Stock is then listed or quoted.

      "Trading Price" of the Securities on any date of determination means the
average of the secondary market bid quotations per Security obtained by the
Company or the Conversion Agent for $10,000,000 aggregate principal amount of
the Securities at approximately 3:30 p.m., New York City time, on such
determination date from three independent nationally recognized securities
dealers selected by the Company; provided, however, that if

      (1) at least three such bids cannot reasonably be obtained by the Company
or the Conversion Agent, but two such bids are obtained, then the average of the
two bids shall be used; and

      (2) only one such bid can reasonably be obtained by the Company or the
Conversion Agent, this one bid shall be used; and

      (3) the Company or the Conversion Agent cannot reasonably obtain at least
one bid for $10,000,000 aggregate principal amount of the Securities from a
nationally recognized securities dealer or in the Company's reasonable judgment,
the bid quotations are not indicative of the secondary market value of the
Securities, then the Trading Price of the Securities will equal less than 98% of
(i) the then-applicable Conversion Rate of the Securities multiplied by (ii) the
Closing Price of the Company's Common Stock on such determination date,
appropriately adjusted.

      "Trustee" means the Person named as the "Trustee" in the first paragraph
of this instrument until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Trustee.

      "Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.

                                       -7-
<PAGE>

      "Vice President", when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president".

      "Voting Stock" of a Person means Capital Stock of such Person of the class
or classes pursuant to which the holders thereof have the general voting power
under ordinary circumstances to elect at least a majority of the board of
directors, managers or trustees of such Person (irrespective of whether or not
at the time Capital Stock of any other class or classes shall have or might have
voting power by reason of the happening of any contingency).

            SECTION 102. Other Definitions.

<TABLE>
<CAPTION>
Term Section:                                                                                  Defined in:
<S>                                                                                            <C>
"Act".................................................................................         SECTION 1046
"Agent Members".......................................................................         SECTION 310(e)(5)
"cash"................................................................................         SECTION 1107(c)
"Cash Settlement Averaging Period"....................................................         SECTION 1210(a)
"Change in Control Purchase Price"....................................................         EXHIBIT A-1
"Common Stock Record Date"............................................................         SECTION 1203(g)(2)
"Company Purchase Notice".............................................................         SECTION 1107(d)
"Company Notice Date".................................................................         SECTION 1107(c)
"Company Repurchase Notice"...........................................................         SECTION 1108(b)
"Contingent Interest".................................................................         EXHIBIT A-1
"Contingent Payment Debt Regulations".................................................         SECTION 1011
"Conversion Obligation"...............................................................         SECTION 1201(b)(2)
"Conversion Retraction Period"........................................................         SECTION 1210(a)
"Conversion Rate".....................................................................         SECTION 1201(b)(2)
"Conversion Settlement Distribution"..................................................         SECTION 1210(a)
"Current Market Price"................................................................         SECTION 1203(g)
"Default Rate Interest"...............................................................         EXHIBIT A-1
"Depositary"..........................................................................         SECTION 1201(a)
"distributed assets"..................................................................         SECTION 1203(d)
"Event of Default"....................................................................         SECTION 501
"ex" date ............................................................................         SECTION 1203(g)(3)
"Excess Amount".......................................................................         SECTION 1203(f)(2)
"Expiration Time".....................................................................         SECTION 1203(f)(2)
"Fair Market Value....................................................................         SECTION 1203(g)(1)
"Final Notice Date"...................................................................         SECTION 1210(a)
"Fundamental Change Repurchase Date...................................................         SECTION 1108
"Legal Holiday".......................................................................         SECTION 114
"Legend"..............................................................................         SECTION 201(e)
"Maturity Date........................................................................         EXHIBIT A-1
"Non-Electing Share"..................................................................         SECTION 1204(3)
"Notice of Default"...................................................................         SECTION 501(6)
"Purchase Date".......................................................................         EXHIBIT A-1
"Purchase Notice".....................................................................         SECTION 1107(a)(1)
"Purchase Price"......................................................................         EXHIBIT A-1
"QIBs"................................................................................         SECTION 201(a)
"Redemption Price"....................................................................         EXHIBIT A-1
</TABLE>

                                       -8-
<PAGE>

<TABLE>
<S>                                                                                            <C>
"Reference Period"....................................................................         SECTION 1203(d)(2)
"Regular Interest"....................................................................         EXHIBIT A-1
"Repurchase Price"....................................................................         SECTION 1108
"Rule 144A Information"...............................................................         SECTION 1010
"Spin-Off"............................................................................         SECTION 1203(d)(2)
"Trigger Event".......................................................................         SECTION 1203(d)(2)
"Trustee".............................................................................         PREAMBLE
</TABLE>

            SECTION 103. Trust Indenture Act.

      Whenever this Indenture refers to a provision of the Trust Indenture Act,
the provision is incorporated by reference in and made a part of this Indenture.
The following Trust Indenture Act terms used in this Indenture have the
following meanings:

      "indenture securities" means the Securities.

      "indenture security holder" means a Holder.

      "indenture to be qualified" means this Indenture.

      "indenture trustee" or "institutional trustee" means the Trustee.

      "obligor" on the indenture securities means the Company.

      All other Trust Indenture Act terms used in this Indenture that are
defined by the Trust Indenture Act, defined by Trust Indenture Act reference to
another statute or defined by Commission rule have the meanings assigned to them
by such definitions.

      If any provision hereof limits, qualifies or conflicts with a provision of
the Trust Indenture Act that is required under such Act to be a part of and
govern this Indenture, the latter provision shall control. If any provision of
this Indenture modifies or excludes any provision of the Trust Indenture Act
that may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or to be excluded, as the case may be.

            SECTION 104. Compliance Certificates and Opinions.

            (a) Upon any application or request by the Company to the Trustee to
take any action under any provision of this Indenture, the Company shall furnish
to the Trustee such certificates and opinions as may be required hereunder or
under the Trust Indenture Act. Each such certificate or opinion shall be given
in the form of an Officers' Certificate, if to be given by an officer of the
Company, or an Opinion of Counsel, if to be given by counsel, and shall comply
with the requirements of the Trust Indenture Act and any other requirement set
forth in this Indenture.

            (b) Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than the Officers'
Certificate required by Section 1004) shall include

                                       -9-
<PAGE>

            (1) a statement that each individual signing such certificate or
      opinion has read such covenant or condition and the definitions herein
      relating thereto;

            (2) a brief statement as to the nature and scope of the examination
      or investigation upon which the statements or opinions contained in such
      certificate or opinion are based;

            (3) a statement that, in the opinion of each such individual, he has
      made such examination or investigation as is necessary to enable him to
      express an informed opinion as to whether or not such covenant or
      condition has been complied with; and

            (4) a statement as to whether, in the opinion of each such
      individual, such condition or covenant has been complied with.

            SECTION 105. Form of Documents Delivered to Trustee.

      In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.

      Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.

      Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.

            SECTION 106. Acts of Holders; Record Dates.

            (a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of

                                      -10-
<PAGE>

execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and (subject to Section 601)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.

            (b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.

            (c) The Company may, in the circumstances permitted by the Trust
Indenture Act, fix any day as the record date for the purpose of determining the
Holders entitled to give or take any request, demand, authorization, direction,
notice, consent, waiver or other action, or to vote on any action, authorized or
permitted to be given or taken by Holders. If not set by the Company prior to
the first solicitation of a Holder made by any Person in respect of any such
action, or, in the case of any such vote, prior to such vote, the record date
for any such action or vote shall be the 30th day (or, if later, the date of the
most recent list of Holders required to be provided pursuant to Section 701)
prior to such first solicitation or vote, as the case may be. With regard to any
record date, only the Holders on such date (or their duly designated proxies)
shall be entitled to give or take, or vote on, the relevant action.

            (d) The ownership of Securities shall be proved by the Security
Register.

            (e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Security.

            SECTION 107. Notices, Etc., to Trustee and Company.

      Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,

            (1) the Trustee by any Holder or by the Company shall be sufficient
      for every purpose hereunder if made, given, furnished or filed in writing
      to or with the Trustee at its Corporate Trust Office, Attention: Corporate
      Trust Administration, or

            (2) the Company by the Trustee or by any Holder shall be sufficient
      for every purpose hereunder (unless otherwise herein expressly provided)
      if in writing and mailed, first-class postage prepaid, to the Company
      addressed to it at the address of its principal office specified in the
      first paragraph of this

                                      -11-
<PAGE>

      instrument, Attention: Michael Ettinger, General Counsel, or at any other
      address previously furnished in writing to the Trustee by the Company.

            SECTION 108. Notice to Holders; Waiver.

      Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register, not later
than the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders is
given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Where this Indenture provides for notice
in any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.

      In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impracticable to give such notice by mail, then
such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.

            SECTION 109. Effect of Headings and Table of Contents.

      The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.

            SECTION 110. Successors and Assigns.

      All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.

            SECTION 111. Separability Clause.

      In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

            SECTION 112. Benefits of Indenture.

      Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto and their successors hereunder
and the Holders of Securities, any benefit or any legal or equitable right,
remedy or claim under this Indenture.

            SECTION 113. Governing Law.

      This Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of New York.

                                      -12-
<PAGE>

            SECTION 114. Legal Holidays.

      A "Legal Holiday" is any day other than a Business Day. If any specified
date (including a date for giving notice) is a Legal Holiday, the action shall
be taken on the next succeeding day that is not a Legal Holiday, and, if the
action to be taken on such date is a payment in respect of the Securities, no
Interest, if any, shall accrue on the payment so deferred for the intervening
period.

                                   ARTICLE TWO

                                 Security Forms

            SECTION 201. Forms Generally.

      The Securities and the Trustee's certificates of authentication shall be
in substantially the forms set forth in Exhibits A-1 and A-2, which are a part
of this Indenture. The Securities shall have such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture, and may have such notations, letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution of the Securities.

      The definitive Securities shall be printed, lithographed or engraved or
produced by any combination of these methods on steel engraved borders or may be
produced in any other manner permitted by the rules of any securities exchange
or quotation system on which the Securities may be listed or quoted, all as
determined by the officers executing such Securities, as evidenced by their
execution of such Securities.

            (a) 144A Global Securities. Securities offered and sold within the
United States to qualified institutional buyers as defined in Rule 144A ("QIBs")
in reliance on Rule 144A shall be issued initially in the form of a 144A Global
Security, which shall be deposited with the Trustee at its Corporate Trust
Office, as custodian for the Depositary and registered in the name of The
Depository Trust Company or the nominee thereof (such depositary, or any
successor thereto, and any such nominee being hereinafter referred to as the
"Depositary"), duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of the 144A Global
Securities may from time to time be increased or decreased by adjustments made
on the records of the Trustee and the Depositary as hereinafter provided.

            (b) Global Securities in General. Each Global Security shall
represent such of the Outstanding Securities as shall be specified therein and
each shall provide that it shall represent the aggregate amount of Outstanding
Securities from time to time endorsed thereon and that the aggregate amount of
Outstanding Securities represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges, redemptions and conversions.

            Any adjustment of the aggregate principal amount of a Global
Security to reflect the amount of any increase or decrease in the amount of
Outstanding Securities represented thereby shall be made by the Trustee in
accordance with instructions given by the Holder thereof

                                      -13-
<PAGE>

as required by Section 310 hereof and shall be made on the records of the
Trustee and the Depositary.

            (c) Book-Entry Provisions. This Section 201(c) shall apply only to
Global Securities deposited with or on behalf of the Depositary.

            The Company shall execute and the Trustee shall, in accordance with
this Section 201(c), authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depositary, (b) shall
be delivered by the Trustee to the Depositary or pursuant to the Depositary's
instructions and (c) shall bear legends substantially to the following effect:

"UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. TRANSFERS OF THIS
GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS TO NOMINEES OF THE DEPOSITORY
TRUST COMPANY OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND
TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE
IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON
THE REVERSE HEREOF."

            (d) Certificated Securities. Securities not issued as interests in
the Global Securities will be issued in certificated form substantially in the
form of Exhibit A-2 attached hereto.

            (e) If Securities are issued upon the transfer, exchange or
replacement of Securities subject to restrictions on transfer and bearing the
legends set forth on the form of Security attached hereto as Exhibits A-1 and
A-2 setting forth such restrictions (collectively, the "Legend"), or if a
request is made to remove the Legend on a Security, the Securities so issued
shall bear the Legend, or the Legend shall not be removed, as the case may be,
unless there is delivered to the Company and the Trustee such satisfactory
evidence, which shall include an Opinion of Counsel, as may be reasonably
required by the Company and the Trustee, that neither the Legend nor the
restrictions on transfer set forth therein are required to ensure that transfers
thereof comply with the provisions of Rule 144A or Rule 144 under the Securities
Act or that such Securities are not "restricted" within the meaning of Rule 144
under the Securities Act. Upon (i) provision of such satisfactory evidence, or
(ii) notification by the Company to the Trustee of the sale of such Security
pursuant to a registration statement that is effective at the time of such sale,
the Trustee, at the written direction of the Company, shall authenticate and
deliver a Security that does not bear the Legend. If the Legend is removed from
the face of a Security and the Security is subsequently held by an Affiliate of
the Company, the Legend shall be reinstated.

                                      -14-
<PAGE>

            (f) Upon any sale or transfer of a Security to an Institutional
Accredited Investor (other than pursuant to a registration statement that has
been declared effective under the Securities Act), such Institutional Accredited
Investor shall, prior to such sale or transfer, furnish to the Company and the
Trustee a signed letter containing representations and agreements relating to
restrictions on transfer substantially in the form set forth in Exhibit B-2 to
this Indenture.

                                  ARTICLE THREE

                                 The Securities

            SECTION 301. Title and Terms.

      The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is limited to $240,000,000, except for
Securities authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Securities pursuant to Section 304, 305, 306,
906, 1108 or 1202.

      The Securities shall be known and designated as the "3.00% Convertible
Contingent Senior Notes due 2034" of the Company. Their Maturity Date shall be
August 15, 2034, and they shall bear Interest at the rates set forth in the
Security.

      The Securities shall be redeemable as provided in Article Eleven.

      The Securities shall be convertible as provided in Article Twelve.

            SECTION 302. Denominations.

      The Securities shall be issuable only in registered form without coupons
and only in denominations of $1,000 of principal amount and any integral
multiple thereof.

            SECTION 303. Execution, Authentication, Delivery and Dating.

      The Securities shall be executed on behalf of the Company by its Chairman
of the Board, its Vice Chairman of the Board, its President or one of its Vice
Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities may be manual or facsimile.

      Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.

      At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities executed by the Company to the
Trustee for authentication, together with a Company Order for the authentication
and delivery of such Securities; and the Trustee in accordance with such Company
Order shall authenticate and deliver such Securities as in this Indenture
provided and not otherwise.

      Each Security shall be dated the date of its authentication.

                                      -15-
<PAGE>

      No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature of an authorized signatory thereof,
and such certificate upon any Security shall be conclusive evidence, and the
only evidence, that such Security has been duly authenticated and delivered
hereunder.

            SECTION 304. Temporary Securities.

      Pending the preparation of definitive Securities, the Company may execute,
and upon Company Order the Trustee shall authenticate and deliver, temporary
Securities which are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized denomination, substantially of the tenor
of the definitive Securities in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Securities may determine, as evidenced by their
execution of such Securities.

      If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at any office
or agency of the Company designated pursuant to Section 1002, without charge to
the Holder. Upon surrender for cancellation of any one or more temporary
Securities the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a like principal amount of definitive Securities of
authorized denominations. Until so exchanged the temporary Securities shall in
all respects be entitled to the same benefits under this Indenture as definitive
Securities.

            SECTION 305. Registration, Registration of Transfer and Exchange.

      The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office or in any other
office or agency designated pursuant to Section 1002 being herein sometimes
referred to as the "Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of Securities and of transfers of Securities. The Trustee is hereby appointed
"Security Registrar" for the purpose of registering Securities and transfers of
Securities as herein provided. If and so long as the Trustee is not the Security
Registrar, the Trustee shall have the right to inspect the Security Register
during normal business hours.

      Subject to Section 311 hereof, upon surrender for registration of transfer
of any Security at an office or agency of the Company designated pursuant to
Section 1002 for such purpose, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of any authorized denominations and of a
like aggregate principal amount.

      At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denominations and of a like aggregate principal
amount, upon surrender of the Securities to be exchanged at such office or
agency. Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive.

                                      -16-
<PAGE>

      All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.

      Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed, by the Holder thereof
or his attorney duly authorized in writing.

      Other than as expressly set forth herein or in the Securities, no service
charge shall be made for any registration of transfer or exchange of Securities,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Securities.

      The Company shall not be required to make, and the Trustee need not
register, transfers or exchanges of (i) Securities selected for redemption
(except, in the case of Securities to be redeemed in part, the portion thereof
not to be redeemed), (ii) any Securities in respect of which a Purchase Notice
or Repurchase Notice has been given and not withdrawn by the Holder thereof in
accordance with the terms of this Indenture (except, in the case of Securities
to be purchased in part, the portion thereof not to be purchased) or (iii) any
Securities for a period of 15 days before the mailing of a notice of redemption
of Securities to be redeemed.

            SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.

      If any mutilated Security is surrendered to the Trustee, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
new Security of like tenor and principal amount and bearing a number not
contemporaneously Outstanding.

      If there shall be delivered to the Company and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Security and (ii)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of like tenor and principal amount and bearing a number not contemporaneously
Outstanding.

      In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, or is about to be purchased by the
Company pursuant to Article 11 hereof, the Company in its discretion may,
instead of issuing a new Security, pay or purchase such Security, as the case
may be.

      Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.

      Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be

                                      -17-
<PAGE>

entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.

      The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.

            SECTION 307. Persons Deemed Owners.

      Prior to due presentment of a Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name such Security is registered as the owner of such Security
for the purpose of receiving payment of principal of the Security or the payment
of any Redemption Price, Purchase Price, Repurchase Price in respect thereof and
Interest on such Security, for the purpose of conversion and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.

            SECTION 308. Cancellation.

      All Securities surrendered for payment, purchase by the Company pursuant
to Article 11, redemption, registration of transfer or exchange or conversion
shall, if surrendered to any Person other than the Trustee, be delivered to the
Trustee and shall be promptly cancelled by it. The Company may at any time
deliver to the Trustee for cancellation any Securities previously authenticated
and delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Securities so delivered shall be promptly cancelled by the
Trustee. The Company may not issue new Securities to replace Securities it has
paid or delivered to the Trustee for cancellation or that any Holder has
converted pursuant to Article 12. No Securities shall be authenticated in lieu
of or in exchange for any Securities cancelled as provided in this Section,
except as expressly permitted by this Indenture. All cancelled Securities held
by the Trustee shall be disposed of as directed by a Company Order.

            SECTION 309. Computation of Interest.

      Interest on the Securities shall be computed on the basis of a 360-day
year of twelve 30-day months.

            SECTION 310. Global Securities.

            (a) Notwithstanding any other provisions of this Indenture or the
Securities, to the contrary (A) transfers of a Global Security, in whole or in
part, shall be made only in accordance with Section 305 and Section 310(a)(i),
(B) transfers of a beneficial interest in a Global Security for a Certificated
Security shall comply with Section 305 and Section 310(a)(ii), and (C) transfers
of a Certificated Security shall comply with Section 305 and Section 310(a)(iii)
and (iv). None of the Company, the Trustee nor any agent of the Company or the
Trustee will have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests of a
Global Security or maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.

                                      -18-
<PAGE>

                  (i) Transfer of Global Security. A Global Security may not be
      transferred, in whole or in part, to any Person other than the Depositary
      or a nominee or any successor thereof, and no such transfer to any such
      other Person may be registered; provided that this clause (i) shall not
      prohibit any transfer of a Security that is issued in exchange for a
      Global Security but is not itself a Global Security. No transfer of a
      Security to any Person shall be effective under this Indenture or the
      Securities unless and until such Security has been registered in the name
      of such Person. Nothing in this Section 310(a)(i) shall prohibit or render
      ineffective any transfer of a beneficial interest in a Global Security
      effected in accordance with the other provisions of this Section 310(a).

                  (ii) Restrictions on Transfer of a Beneficial Interest in a
      Global Security for a Certificated Security. A beneficial interest in a
      Global Security may not be exchanged for a Certificated Security except
      upon satisfaction of the requirements set forth below. Upon receipt by the
      Trustee for a transfer of a beneficial interest in a Global Security in
      accordance with Applicable Procedures for a Certificated Security in the
      form satisfactory to the Trustee, together with:

                  (A) so long as the Securities are Restricted Securities,
            certification in the form set forth in Exhibit B-1;

                  (B) written instructions to the Trustee from the Company to
            make an adjustment on its books and records with respect to such
            Global Security to reflect a decrease in the aggregate principal
            amount of the Securities represented by the Global Security, such
            instructions to contain information regarding the Depositary account
            to be credited with such decrease; and

                  (C) an Opinion of Counsel (if the Company or Trustee so
            request) or other evidence reasonably satisfactory to them as to the
            compliance with the restrictions set forth in the Legend, then the
            Trustee shall cause the aggregate principal amount of Securities
            represented by the Global Security to be decreased by the aggregate
            principal amount of the Certificated Security to be issued, shall
            issue such Certificated Security and shall debit or cause to be
            debited to the account of the Person specified in such instructions
            a beneficial interest in the Global Security equal to the principal
            amount of the Certificated Security so issued.

                  (iii) Transfer and Exchange of Certificated Securities. When
      Certificated Securities are presented by a Holder to the Trustee with a
      request:

                  (y) to register the transfer of such Certificated Securities;
      or

                  (z) to exchange such Certificated Securities for an equal
      principal amount of Certificated Securities of other authorized
      denominations,

the Trustee shall register the transfer or make the exchange as requested if its
reasonable requirements for such transaction are met; provided, however, that
the Certificated Securities surrendered for transfer or exchange:

                                      -19-
<PAGE>

                        (1)   shall be duly endorsed or accompanied by a written
                              instrument of transfer in form reasonably
                              satisfactory to the Company and the Trustee, duly
                              executed by the Holder thereof or his attorney
                              duly authorized in writing; and

                        (2)   so long as such Securities are Restricted
                              Securities, such Securities are being transferred
                              or exchanged pursuant to an effective registration
                              statement under the Securities Act or pursuant to
                              clause (A), (B) or (C) below, and are accompanied
                              by the following additional information and
                              documents, as applicable:

                              (A) if such Certificated Securities are being
                        delivered to the Trustee by a Holder for registration in
                        the name of such Holder, without transfer, a
                        certification from such Holder to that effect; or

                              (B) if such Certificated Securities are being
                        transferred to the Company, a certification to that
                        effect; or

                              (C) if such Certificated Securities are being
                        transferred pursuant to an exemption from registration
                        (i) a certification to that effect (in the form set
                        forth in Exhibit B-1, if applicable) and (ii) an Opinion
                        of Counsel (if the Company or Trustee so request) or
                        other evidence reasonably satisfactory to them as to the
                        compliance with the restrictions set forth in the
                        Legend.

                  (iv) Restrictions on Transfer of a Certificated Security for a
      Beneficial Interest in a Global Security. A Certificated Security may not
      be exchanged for a beneficial interest in a Global Security except upon
      satisfaction of the requirements set forth below.

            Upon receipt by the Trustee of a Certificated Security, duly
endorsed or accompanied by appropriate instruments of transfer, in form
satisfactory to the Trustee, together with:

            (I) so long as the Securities are Restricted Securities,
            certification, in the form set forth in Exhibit B-1, that such
            Certificated Security is being transferred to a QIB in accordance
            with Rule 144A; and

            (II) written instructions directing the Trustee to make an
            adjustment on its books and records with respect to such Global
            Security to reflect an increase in the aggregate principal amount of
            the Securities represented by the Global Security, such instructions
            to contain information regarding the Depositary account to be
            credited with such increase, then the Trustee shall

                                       -20
<PAGE>

            cancel such Certificated Security and cause the aggregate principal
            amount of Securities represented by the Global Security to be
            increased by the aggregate principal amount of the Certificated
            Security to be exchanged, and shall credit or cause to be credited
            to the account of the Person specified in such instructions a
            beneficial interest in the Global Security equal to the principal
            amount of the Certificated Security so cancelled. If no Global
            Securities are then Outstanding, the Company shall issue and the
            Trustee shall authenticate, upon written order of the Company in the
            form of an Officers' Certificate, a new Global Security in the
            appropriate principal amount.

            (b) Subject to the succeeding paragraph, every Security shall be
subject to the restrictions on transfer provided in the Legend including the
delivery of an Opinion of Counsel, if so provided. Whenever any Restricted
Security is presented or surrendered for registration of transfer or for
exchange for a Security registered in a name other than that of the Holder, such
Security must be accompanied by a certificate in substantially the form set
forth in Exhibit B-1, dated the date of such surrender and signed by the Holder
of such Security, as to compliance with such restrictions on transfer. The
Trustee shall not be required to accept for such registration of transfer or
exchange any Security not so accompanied by a properly completed certificate.

            (c) The restrictions imposed by the Legend upon the transferability
of any Security shall cease and terminate when such Security has been sold
pursuant to an effective registration statement under the Securities Act or
transferred in compliance with Rule 144 under the Securities Act (or any
successor provision thereto) or, if earlier, upon the expiration of the holding
period applicable to sales thereof under Rule 144(k) under the Securities Act
(or any successor provision). Any Security as to which such restrictions on
transfer shall have expired in accordance with their terms or shall have
terminated may, upon a surrender of such Security for exchange to the Trustee in
accordance with the provisions of this Section 310 (accompanied, in the event
that such restrictions on transfer have terminated by reason of a transfer in
compliance with Rule 144 or any successor provision, by an Opinion of Counsel
having substantial experience in practice under the Securities Act and otherwise
reasonably acceptable to the Company and the Trustee, addressed to the Company
and the Trustee, and in form acceptable to the Company, to the effect that the
transfer of such Security has been made in compliance with Rule 144 or such
successor provision), be exchanged for a new Security, of like tenor and
aggregate principal amount, which shall not bear the restrictive Legend. The
Company shall inform the Trustee of the effective date of any registration
statement registering the Securities under the Securities Act. The Trustee shall
not be liable for any action taken or omitted to be taken by it in good faith in
accordance with the aforementioned Opinion of Counsel or registration statement.

            (d) As used in the preceding two paragraphs of this Section 310, the
term "transfer" encompasses any sale, pledge, transfer, hypothecation or other
disposition of any Security.

            (e) The provisions of clauses (1), (2), (3), (4) and (5) below shall
apply only to Global Securities:

                                      -21-
<PAGE>

            (1) Notwithstanding any other provisions of this Indenture or the
      Securities, except as provided in Section 310(a)(ii), a Global Security
      shall not be exchanged in whole or in part for a Security registered in
      the name of any Person other than the Depositary or one or more nominees
      thereof, provided that a Global Security may be exchanged for Securities
      registered in the names of any Person designated by the Depositary in the
      event that (i) the Depositary has notified the Company that it is
      unwilling or unable to continue as Depositary for such Global Security or
      such Depositary has ceased to be a "clearing agency" registered under the
      Exchange Act, and a successor Depositary is not appointed by the Company
      within 90 days or (ii) an Event of Default has occurred and is continuing
      with respect to the Securities. Any Global Security exchanged pursuant to
      clause (i) above shall be so exchanged in whole and not in part, and any
      Global Security exchanged pursuant to clause (ii) above may be exchanged
      in whole or from time to time in part as directed by the Depositary. Any
      Security issued in exchange for a Global Security or any portion thereof
      shall be a Global Security; provided that any such Security so issued that
      is registered in the name of a Person other than the Depositary or a
      nominee thereof shall not be a Global Security.

            (2) Securities issued in exchange for a Global Security or any
      portion thereof shall be issued in definitive, fully registered form,
      without interest coupons, shall have an aggregate principal amount equal
      to that of such Global Security or portion thereof to be so exchanged,
      shall be registered in such names and be in such authorized denominations
      as the Depositary shall designate and shall bear the applicable legends
      provided for herein. Any Global Security to be exchanged in whole shall be
      surrendered by the Depositary to the Trustee. With regard to any Global
      Security to be exchanged in part, either such Global Security shall be so
      surrendered for exchange or, if the Trustee is acting as custodian for the
      Depositary or its nominee with respect to such Global Security, the
      principal amount thereof shall be reduced, by an amount equal to the
      portion thereof to be so exchanged, by means of an appropriate adjustment
      made on the records of the Trustee. Upon any such surrender or adjustment,
      the Trustee shall authenticate and deliver the Security issuable on such
      exchange to or upon the order of the Depositary or an authorized
      representative thereof.

            (3) Subject to the provisions of clause (5) below, the registered
      Holder may grant proxies and otherwise authorize any Person, including
      Agent Members and Persons that may hold interests through Agent Members,
      to take any action which a Holder is entitled to take under this Indenture
      or the Securities.

            (4) In the event of the occurrence of any of the events specified in
      clause (1) above, the Company will promptly make available to the Trustee
      a reasonable supply of Certificated Securities in definitive, fully
      registered form, without interest coupons.

            (5) Neither any members of, or participants in, the Depositary
      (collectively, the "Agent Members") nor any other Persons on whose behalf
      Agent Members may act shall have any rights under this Indenture with
      respect

                                      -22-
<PAGE>

      to any Global Security registered in the name of the Depositary or any
      nominee thereof, or under any such Global Security, and the Depositary or
      such nominee, as the case may be, may be treated by the Company, the
      Trustee and any agent of the Company or the Trustee as the absolute owner
      and holder of such Global Security for all purposes whatsoever.
      Notwithstanding the foregoing, nothing herein shall prevent the Company,
      the Trustee or any agent of the Company or the Trustee from giving effect
      to any written certification, proxy or other authorization furnished by
      the Depositary or such nominee, as the case may be, or impair, as between
      the Depositary, its Agent Members and any other Person on whose behalf an
      Agent Member may act, the operation of customary practices of such Persons
      governing the exercise of the rights of a holder of any Security.

            SECTION 311. CUSIP Numbers.

      The Company may issue the Securities with one or more "CUSIP" numbers (if
then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption as a convenience to Holders; provided that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company will promptly, and in
any event within 10 Business Days, notify the Trustee of any change in the CUSIP
numbers.

            SECTION 312. Ranking.

      The Indebtedness of the Company arising under or in connection with this
Indenture and every Outstanding Security issued under this Indenture from time
to time constitutes and will constitute a senior unsecured general obligation of
the Company, ranking equally with other existing and future senior unsecured
Indebtedness of the Company and ranking senior in right of payment to any future
Indebtedness of the Company that is expressly made subordinate to the Securities
by the terms of such Indebtedness.

            SECTION 313. Paying Agent and Conversion Agent.

      The Company shall enter into an appropriate agency agreement with any
Paying Agent or Conversion Agent (in each case, if such Person is a Person other
than the Trustee). The agreement shall implement the provisions of this
Indenture that relate to such agent. The Company shall notify the Trustee of the
name and address of any such agent. If the Company fails to maintain a Paying
Agent or Conversion Agent, the Trustee shall act as such and shall be entitled
to appropriate compensation therefor pursuant to Section 607. The Company or any
Subsidiary or an Affiliate of either of them may act as Paying Agent. The
Conversion Agent may not be an Affiliate of the Company or any Subsidiary
thereof.

      The Company initially appoints the Trustee as Conversion Agent and Paying
Agent in connection with the Securities. The Trustee may resign from any or all
of such appointments upon 30 days' written notice to the Company.

                                      -23-
<PAGE>

                                  ARTICLE FOUR

                           Satisfaction and Discharge

            SECTION 401. Satisfaction and Discharge of Indenture.

      This Indenture shall cease to be of further effect (except as to any
surviving rights of conversion, registration of transfer or exchange of
Securities herein expressly provided for), and the Trustee, on demand of and at
the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when

            (1) either

                  (A) all Securities theretofore authenticated and delivered
            (other than (i) Securities which have been destroyed, lost or stolen
            and which have been replaced or paid as provided in Section 306 and
            (ii) Securities for whose payment money has theretofore been
            deposited in trust or segregated and held in trust by the Company
            and thereafter repaid to the Company or discharged from such trust,
            as provided in Section 1003) have been delivered to the Trustee for
            cancellation; or

                  (B) all such Securities not theretofore delivered to the
            Trustee for cancellation have become due and payable and the Company
            has deposited or caused to be deposited with the Trustee, in trust
            for the purpose, an amount sufficient to pay and discharge all
            amounts owing on all Securities not theretofore delivered to the
            Trustee for cancellation;

            (2) the Company has paid or caused to be paid all other sums payable
      hereunder by the Company; and

            (3) the Company has delivered to the Trustee an Officers'
      Certificate and an Opinion of Counsel, each stating that all conditions
      precedent herein provided for relating to the satisfaction and discharge
      of this Indenture have been complied with.

Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the obligations of
the Company to any Authenticating Agent under Section 614 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.

            SECTION 402. Application of Trust Money.

      Subject to the provisions of the last paragraph of Section 1003, all money
deposited with the Trustee pursuant to Section 401 shall be held in trust and
applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the amounts in respect of the
Securities for whose payment such money has been deposited with the Trustee. All
moneys deposited with the Trustee

                                      -24-
<PAGE>

pursuant to Section 401 (and held by it or any Paying Agent) for the payment of
Securities subsequently converted which are not required to be paid by the terms
of this Indenture on such converted Securities shall be returned to the Company
upon Company Request.

                                  ARTICLE FIVE

                                    Remedies

            SECTION 501. Events of Default.

      "Event of Default", wherever used herein, means any one of the following
events (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):

            (1) default in the payment of any Interest, when it becomes due and
      payable, and continuance of such default for a period of 30 days; or

            (2) default in the payment of the principal amount, Redemption
      Price, Purchase Price, any Make Whole Premium, Repurchase Price or
      Conversion Settlement Distribution pursuant to Section 1201(a)(2), (a)(3)
      or (a)(4) on any Security when the same becomes due and payable on the
      Maturity Date, upon redemption, upon declaration, when due for purchase or
      payment by the Company or otherwise; or

            (3) default in the performance, or breach, of any covenant, warranty
      or agreement of the Company in this Indenture (other than those referred
      to in clause (1) or (2) above) and such failure continues for 60 days
      after receipt by the Company of a Notice of Default; or

            (4) default under any Indebtedness by the Company, any of its
      Subsidiaries that is a "significant subsidiary" (within the meaning of
      Regulation S-X under the Exchange Act) or any group of two or more
      Subsidiaries that, taken as a whole, would constitute a "significant
      subsidiary", the aggregate outstanding principal amount of which is in an
      amount in excess of $25.0 million, for a period of 30 days after the
      receipt by the Company of a Notice of Default, which default (i) is caused
      by failure to pay when due principal or interest on such Indebtedness by
      the end of the applicable grace period, if any, unless such Indebtedness
      is discharged or (ii) results in the acceleration of such Indebtedness
      because of a default with respect to such Indebtedness without such
      Indebtedness having been discharged or such non-payment or acceleration
      having been cured, waived, rescinded or annulled; or

            (5) the entry by a court having jurisdiction in the premises of (A)
      a decree or order for relief in respect of the Company in an involuntary
      case or proceeding under any applicable Federal or State bankruptcy,
      insolvency, reorganization or other similar law or (B) a decree or order
      adjudging the Company a bankrupt or insolvent, or approving as properly
      filed a petition seeking reorganization, arrangement, adjustment or
      composition of or in respect

                                      -25-
<PAGE>

      of the Company under any applicable Federal or State law, or appointing a
      custodian, receiver, liquidator, assignee, trustee, sequestrator or other
      similar official of the Company or of any substantial part of its
      property, or ordering the winding up or liquidation of its affairs, and
      the continuance of any such decree or order for relief or any such other
      decree or order unstayed and in effect for a period of 60 consecutive
      days; or

            (6) the commencement by the Company of a voluntary case or
      proceeding under any applicable Federal or State bankruptcy, insolvency,
      reorganization or other similar law or of any other case or proceeding to
      be adjudicated a bankrupt or insolvent, or the consent by it to the entry
      of a decree or order for relief in respect of the Company in an
      involuntary case or proceeding under any applicable Federal or State
      bankruptcy, insolvency, reorganization or other similar law or to the
      commencement of any bankruptcy or insolvency case or proceeding against
      it, or the filing by it of a petition or answer or consent seeking
      reorganization or relief under any applicable Federal or State law, or the
      consent by it to the filing of such petition or to the appointment of or
      taking possession by a custodian, receiver, liquidator, assignee, trustee,
      sequestrator or other similar official of the Company or of any
      substantial part of its property, or the making by it of an assignment for
      the benefit of creditors, or the admission by it in writing of its
      inability to pay its debts generally as they become due, or the taking of
      corporate action by the Company in furtherance of any such action.

      A default under clause (3) or (4) above is not an Event of Default until
the Trustee notifies the Company, or the Holders of at least 25% in aggregate
principal amount of the Securities at the time Outstanding notify the Company
and the Trustee, of the default and the Company does not cure such default (and
such default is not waived) within the time specified in clause (3) or (4) above
after actual receipt of such notice. Any such notice must specify the default,
demand that it be remedied and state that such notice is a "Notice of Default".

      The Company shall deliver to the Trustee, within 30 days after it becomes
aware of the occurrence thereof, written notice of any event which with the
giving of notice or the lapse of time, or both, would become an Event of Default
under clauses (3) or (4) above, its status and what action the Company is taking
or proposes to take with respect thereto. The Trustee shall not be deemed to
have notice of any such Event of Default unless either (A) a Responsible Officer
shall have actual knowledge of such Event of Default or (B) the Trustee shall
have received written notice thereof from the Company, from any Holder, from the
holder of any Indebtedness referred to in Section 501(4) or from the trustee
under any Indebtedness referred to in Section 501(4).

            SECTION 502. Acceleration of Maturity; Rescission and Annulment.

      If an Event of Default (other than an Event of Default specified in
Section 501(5) or 501(6)) occurs and is continuing, then in every such case the
Trustee, or the Holders of not less than 25% in the aggregate principal amount
of the Outstanding Securities, may declare the principal of all the Securities
to be due and payable immediately, by a notice in writing to the Company (and to
the Trustee if given by Holders), and upon any such declaration such principal
shall become immediately due and payable. If an Event of Default specified in
Section 501(5) or 501(6) occurs, the aggregate principal amount of all the
Securities shall automatically, and

                                      -26-
<PAGE>

without any declaration or other action on the part of the Trustee or any
Holder, become immediately due and payable.

      At any time after such a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this Article provided, the Holders of a majority
in principal amount of the Outstanding Securities, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if

            (1) the Company has paid or deposited with the Trustee a sum
      sufficient to pay

                  (A) all overdue Interest on all Securities,

                  (B) all amounts in respect of any Securities which have become
            due otherwise than by such declaration of acceleration and Interest
            thereon at the rate borne by the Securities,

                  (C) to the extent that payment of such interest is lawful,
            interest upon overdue Interest at the rate borne by the Securities,
            and

                  (D) all sums paid or advanced by the Trustee hereunder and the
            reasonable compensation, expenses, disbursements and advances of the
            Trustee, its agents and counsel;

            and

            (2) all Events of Default, other than the non-payment of the
      principal of Securities which have become due solely by such declaration
      of acceleration, have been cured or waived as provided in Section 513.

No such rescission shall affect any subsequent default or impair any right
consequent thereon.

            SECTION 503. Collection of Indebtedness and Suits for Enforcement by
                         Trustee.

      The Company covenants that if

            (1) default is made in the payment of any Interest on any Security
      when such Interest becomes due and payable and such default continues for
      a period of 30 days, or

            (2) default is made in any payment referred to in Section 501(2),

the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, all amounts then due and payable on such Securities,
and, to the extent that payment of such interest shall be legally enforceable,
interest on any overdue amounts (including any overdue Interest), at the rate
borne by the Securities, and, in addition thereto, such further amount as shall
be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.

                                      -27-
<PAGE>

      If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.

            SECTION 504. Trustee May File Proofs of Claim.

      In case of any judicial proceeding relative to the Company (or any other
obligor upon the Securities), its property or its creditors, the Trustee shall
be entitled and empowered, by intervention in such proceeding or otherwise, to
take any and all actions authorized under the Trust Indenture Act in order to
have claims of the Holders and the Trustee allowed in any such proceeding. In
particular, the Trustee shall be authorized to collect and receive any moneys or
other property payable or deliverable on any such claims and to distribute the
same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator
or other similar official in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.

      No provision of this Indenture shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding; provided, however,
that the Trustee may, on behalf of the Holders, vote for the election of a
trustee in bankruptcy or similar official and be a member of a creditors' or
other similar committee.

            SECTION 505. Trustee May Enforce Claims Without Possession of
                         Securities.

      All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Securities in respect of which such judgment has been
recovered.

            SECTION 506. Application of Money Collected.

      Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution to Holders upon presentation of the Securities and
the notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:

            FIRST: To the payment of all amounts due the Trustee under Section
      607; and

                                      -28-
<PAGE>

            SECOND: To the payment of the amounts then due and unpaid on the
      Securities in respect of which or for the benefit of which such money has
      been collected, ratably, without preference or priority of any kind,
      according to the amounts due and payable on such Securities.

            SECTION 507. Limitation on Suits.

      No Holder of any Security shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless

            (1) such Holder has previously given written notice to the Trustee
      of a continuing Event of Default;

            (2) the Holders of not less than 25% in principal amount of the
      Outstanding Securities shall have made written request to the Trustee to
      institute proceedings in respect of such Event of Default in its own name
      as Trustee hereunder;

            (3) such Holder or Holders have offered to the Trustee reasonable
      indemnity against the costs, expenses and liabilities to be incurred in
      compliance with such request;

            (4) the Trustee for 60 days after its receipt of such notice,
      request and offer of indemnity has failed to institute any such
      proceeding; and

            (5) no direction inconsistent with such written request has been
      given to the Trustee during such 60-day period by the Holders of a
      majority in principal amount of the Outstanding Securities;

it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.

            SECTION 508. Unconditional Right of Holders to Receive Payment and
                         to Convert.

      Notwithstanding any other provision in this Indenture, the right of any
Holder to receive payment of the principal amount, Redemption Price, Purchase
Price, Repurchase Price or Interest, if any, in respect of the Securities held
by such Holder, on or after the respective due dates expressed in the Securities
or any Redemption Date, Purchase Date, Fundamental Change Repurchase Date, and
to convert the Securities in accordance with Article 12 or to bring suit for the
enforcement of any such payment on or after such respective dates or the right
to convert, shall not be impaired or affected adversely without the consent of
such Holder.

                                      -29-
<PAGE>

            SECTION 509. Restoration of Rights and Remedies.

      If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.

            SECTION 510. Rights and Remedies Cumulative.

      Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in the last paragraph of Section
306, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.

            SECTION 511. Delay or Omission Not Waiver.

      No delay or omission of the Trustee or of any Holder of any Security to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.

            SECTION 512. Control by Holders.

      The Holders of a majority in principal amount of the Outstanding
Securities shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee, provided that

            (1) such direction shall not be in conflict with any rule of law or
      with this Indenture,

            (2) the Trustee may take any other action deemed proper by the
      Trustee which is not inconsistent with such direction and

            (3) subject to the provisions of Section 601, the Trustee shall have
      the right to decline to follow any such direction if the Trustee in good
      faith shall, by a Responsible Officer or Officers of the Trustee,
      determine that the proceeding so directed would involve the Trustee in
      personal liability.

                                      -30-
<PAGE>

            SECTION 513. Waiver of Past Defaults.

      The Holders of not less than a majority in principal amount of the
Outstanding Securities may on behalf of the Holders of all the Securities waive
any past default hereunder and its consequences, except a default

            (1) in the payment of the principal amount, Redemption Price,
      Purchase Price or Repurchase Price of or Interest on any Security;

            (2) in respect of a covenant or provision hereof which under Article
      Nine cannot be modified or amended without the consent of the Holder of
      each Outstanding Security affected; or

            (3) a default which constitutes a failure to convert any Security in
      accordance with the terms of Article 12.

      Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.

      This Section 513 shall be in lieu of Section 316(a)(1)(B) of the Trust
Indenture Act and such Section 316(a)(1)(B) of the Trust Indenture Act is hereby
expressly excluded from this Indenture and the Securities, as permitted by the
Trust Indenture Act.

            SECTION 514. Undertaking for Costs.

      In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken or suffered
or omitted by it as Trustee, a court may require any party litigant in such suit
to file an undertaking to pay the costs of such suit, and may assess costs
against any such party litigant, in the manner and to the extent provided in the
Trust Indenture Act; provided, that neither this Section nor the Trust Indenture
Act shall be deemed to authorize any court to require such an undertaking or to
make such an assessment in any suit instituted by the Company.

            SECTION 515. Waiver of Stay or Extension Laws.

      The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.

                                      -31-
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                                   ARTICLE SIX

                                   The Trustee

            SECTION 601. Certain Duties and Responsibilities.

      The duties and responsibilities of the Trustee shall be as provided by the
Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it. Whether or not therein
expressly so provided, every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.

      The rights, privileges, protections, immunities and benefits given to the
Trustee under this Indenture including, without limitation, its rights to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and each Paying Agent or Conversion Agent acting
hereunder.

            SECTION 602. Notice of Defaults.

      Promptly after obtaining actual knowledge of the occurrence of a default
hereunder, the Trustee shall give the Holders notice of such default in the
manner and to the extent provided by Section 313 of the Trust Indenture Act,
unless such default has been cured or waived in the accordance with the terms of
this Indenture; provided, however, that in the case of any default of the
character specified in Section 501(3), no such notice to Holders shall be given
until at least 30 days after the occurrence thereof. For the purpose of this
Section, the term "default" means any event which is, or after notice or lapse
of time or both would become, an Event of Default.

            SECTION 603. Certain Rights of Trustee.

      Subject to the provisions of Section 601:

                  (1) the Trustee may rely and shall be protected in acting or
            refraining from acting upon any resolution, certificate, statement,
            instrument, opinion, report, notice, request, direction, consent,
            order, bond, debenture, note, other evidence of Indebtedness or
            other paper or document believed by it to be genuine and to have
            been signed or presented by the proper party or parties;

                  (2) any request or direction of the Company mentioned herein
            shall be sufficiently evidenced by a Company Request or Company
            Order and any resolution of the Board of Directors may be
            sufficiently evidenced by a Board Resolution;

                  (3) whenever in the administration of this Indenture the
            Trustee shall deem it desirable that a matter be proved or
            established prior to taking, suffering or omitting any action
            hereunder, the Trustee (unless other evidence be herein

                                      -32-
<PAGE>

            specifically prescribed) may, in the absence of bad faith on its
            part, rely upon an Officers' Certificate;

                  (4) the Trustee may consult with counsel and the written
            advice of such counsel or any Opinion of Counsel shall be full and
            complete authorization and protection in respect of any action
            taken, suffered or omitted by it hereunder in good faith and in
            reliance thereon;

                  (5) the Trustee shall be under no obligation to exercise any
            of the rights or powers vested in it by this Indenture at the
            request or direction of any of the Holders pursuant to this
            Indenture, unless such Holders shall have offered to the Trustee
            reasonable security or indemnity against the costs, expenses and
            liabilities which might be incurred by it in compliance with such
            request or direction;

                  (6) the Trustee shall not be bound to make any investigation
            into the facts or matters stated in any resolution, certificate,
            statement, instrument, opinion, report, notice, request, direction,
            consent, order, bond, debenture, note, other evidence of
            Indebtedness or other paper or document, but the Trustee, in its
            discretion, may make such further inquiry or investigation into such
            facts or matters as it may see fit, and, if the Trustee shall
            determine to make such further inquiry or investigation, it shall be
            entitled to examine the books, records and premises of the Company,
            personally or by agent or attorney; and

                  (7) the Trustee may execute any of the trusts or powers
            hereunder or perform any duties hereunder either directly or by or
            through agents or attorneys and the Trustee shall not be responsible
            for any misconduct or negligence on the part of any agent or
            attorney appointed with due care by it hereunder.

            SECTION 604. Not Responsible for Recitals or Issuance of Securities.

      Any recitals contained herein or in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee assumes no responsibility for their correctness. The Trustee
shall not be responsible for and makes no representations as to the validity or
sufficiency of this Indenture or of the Securities. The Trustee shall not be
accountable for the use or application by the Company of Securities or the
proceeds thereof and it shall not be responsible for the use or application of
any money received by any Paying Agent other than the Trustee. Further, the
Trustee shall not be responsible for any statement in the Securities or any
other document in connection with the sale of the Securities other than its
certificate of authentication.

            SECTION 605. May Hold Securities.

      The Trustee, any Authenticating Agent, any Paying Agent, any Conversion
Agent or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
608 and 613, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Conversion
Agent or such other agent.

                                      -33-
<PAGE>

            SECTION 606. Money Held in Trust.

      Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with the Company.

            SECTION 607. Compensation and Reimbursement.

      The Company agrees

            (1) to pay to the Trustee from time to time reasonable compensation
      for all services rendered by it hereunder (which compensation shall not be
      limited by any provision of law in regard to the compensation of a trustee
      of an express trust);

            (2) except as otherwise expressly provided herein, to reimburse the
      Trustee upon its request for all reasonable expenses, disbursements and
      advances incurred or made by the Trustee in accordance with any provision
      of this Indenture (including the reasonable compensation and the expenses
      and disbursements of its agents and counsel), except any such expense,
      disbursement or advance as may be attributable to its negligence, bad
      faith or willful misconduct; and

            (3) to indemnify the Trustee for, and to hold it harmless against,
      any loss, liability or expense incurred without negligence, bad faith or
      willful misconduct on its part, arising out of or in connection with the
      acceptance or administration of this trust, including the reasonable costs
      and expenses of defending itself against any claim or liability in
      connection with the exercise or performance of any of its powers or duties
      hereunder.

            SECTION 608. Disqualification; Conflicting Interests.

      If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.

            SECTION 609. Corporate Trustee Required; Eligibility.

      There shall at all times be a Trustee hereunder which shall be a Person
that is eligible pursuant to the Trust Indenture Act to act as such and has a
combined capital and surplus of at least $50,000,000 and its Corporate Trust
Office in New York, New York. If such Person publishes reports of condition at
least annually, pursuant to law or to the requirements of its supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such Person shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.

                                      -34-
<PAGE>

            SECTION 610. Resignation and Removal; Appointment of Successor.

            (a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 611.

            (b) The Trustee may resign at any time by giving written notice
thereof to the Company. If an instrument of acceptance by a successor Trustee
shall not have been delivered to the Trustee within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.

            (c) The Trustee may be removed at any time by Act of the Holders of
a majority in principal amount of the Outstanding Securities, delivered to the
Trustee and to the Company.

            (d) If at any time:

            (1) the Trustee shall fail to comply with Section 608 after written
      request therefor by the Company or by any Holder who has been a bona fide
      Holder of a Security for at least six months, or

            (2) the Trustee shall cease to be eligible under Section 609 and
      shall fail to resign after written request therefor by the Company or by
      any Holder who has been a bona fide Holder of a Security for at least six
      months, or

            (3) the Trustee shall become incapable of acting or shall be
      adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
      property shall be appointed or any public officer shall take charge or
      control of the Trustee or of its property or affairs for the purpose of
      rehabilitation, conservation or liquidation,

then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 514, any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.

            (e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment, become the
successor Trustee and supersede the successor Trustee appointed by the Company.
If no successor Trustee shall have been so appointed by the Company or the
Holders and accepted appointment in the manner hereinafter provided, any Holder
who has been a bona fide Holder of a Security for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee.

                                      -35-
<PAGE>

            (f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee to all
Holders in the manner provided in Section 106. Each notice shall include the
name of the successor Trustee and the address of its Corporate Trust Office.

            (g) If a Trustee is removed with or without cause, all fees and
expenses (including the reasonable fees and expenses of counsel) of the Trustee
incurred in the administration of the trust or in performing of the duties
hereunder shall be paid to the Trustee.

            SECTION 611. Acceptance of Appointment by Successor.

      Every successor Trustee appointed hereunder shall execute, acknowledge and
deliver to the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee and shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder. Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts.

      No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.

            SECTION 612. Merger, Conversion, Consolidation or Succession to
                         Business.

      Any Corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any Corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
Corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, such Corporation shall be otherwise qualified and eligible under
this Article. In case any Securities shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger, conversion or
consolidation to such authenticating Trustee may adopt such authentication and
deliver the Securities so authenticated with the same effect as if such
successor Trustee had itself authenticated such Securities.

            SECTION 613. Preferential Collection of Claims Against Company.

      If and when the Trustee shall be or become a creditor of the Company (or
any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).

                                      -36-
<PAGE>

            SECTION 614. Appointment of Authenticating Agent.

      The Trustee may appoint an Authenticating Agent or Agents which shall be
authorized to act on behalf of the Trustee to authenticate Securities issued
upon original issue and upon exchange, registration of transfer, partial
conversion or partial redemption or pursuant to Section 306, and Securities so
authenticated shall be entitled to the benefits of this Indenture and shall be
valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. Wherever reference is made in this Indenture to the authentication
and delivery of Securities by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company and shall at all
times be a Corporation organized and doing business under the laws of the United
States of America, any State thereof or the District of Columbia, authorized
under such laws to act as Authenticating Agent, having a combined capital and
surplus of not less than $50,000,000 and subject to supervision or examination
by Federal or State authority. If such Authenticating Agent publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Authenticating Agent shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section, such Authenticating
Agent shall resign immediately in the manner and with the effect specified in
this Section.

      Any Corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any Corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent provided that such
Corporation shall be otherwise eligible under this Section.

      An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent, and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders as their
names and addresses appear in the Security Register. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor hereunder, with
like effect as if originally named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible under the provisions of
this Section.

      The Company agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section.

                                      -37-
<PAGE>

      If an appointment is made pursuant to this Section, the Securities may
have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternative certificate of authentication in the following
form:

      This is one of the Securities described in the within-mentioned Indenture.

                                      THE BANK OF NEW YORK

                                      _________________________________________,
                                                                      As Trustee

                                      By_______________________________________,
                                                         As Authenticating Agent

                                      By________________________________________
                                                            Authorized Signatory

                                 ARTICLE SEVEN

                Holders' Lists and Reports by Trustee and Company

            SECTION 701. Company to Furnish Trustee Names and Addresses of
                         Holders.

      The Company will furnish or cause to be furnished to the Trustee

                  (a) semi-annually, not more than 15 days after each Interest
            Payment Record Date, a list, in such form as the Trustee may
            reasonably require, of the names and addresses of the Holders as of
            such Interest Payment Record Date, and

                  (b) at such other times as the Trustee may request in writing,
            within 30 days after the receipt by the Company of any such request,
            a list of similar form and content as of a date not more than 15
            days prior to the time such list is furnished;

excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.

            SECTION 702. Preservation of Information; Communications to Holders.

            (a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the most
recent list furnished to the Trustee as provided in Section 701 and the names
and addresses of Holders received by the

                                      -38-
<PAGE>

Trustee in its capacity as Security Registrar. The Trustee may destroy any list
furnished to it as provided in Section 701 upon receipt of a new list so
furnished.

            (b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.

            (c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.

            SECTION 703. Reports by Trustee.

            (a) The Trustee shall transmit to Holders such reports concerning
the Trustee and its actions under this Indenture as may be required pursuant to
the Trust Indenture Act at the times and in the manner provided pursuant
thereto. If required by Section 313(a) of the Trust Indenture Act, the Trustee
shall, within 60 days after each May 15 following the date of this Indenture,
deliver to Holders a brief report, dated as of such May 15, which complies with
the provisions of such Section 313(a).

            (b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange or
quotation system on which the Securities are listed or quoted, with the
Commission and with the Company. The Company will promptly, and in any event
within 10 Business Days, notify the Trustee when the Securities are listed or
quoted on any stock exchange or quotation system.

            SECTION 704. Reports by Company.

      The Company shall file with the Trustee and the Commission, and transmit
to Holders, such information, documents and other reports, and such summaries
thereof, as may be required pursuant to the Trust Indenture Act at the times and
in the manner provided pursuant to such Act; provided that any such information,
documents or reports required to be filed with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act shall be filed with the Trustee within
15 days after the same is so required to be filed with the Commission.

                                 ARTICLE EIGHT

              Consolidation, Merger, Conveyance, Transfer or Lease

            SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.

      The Company shall not consolidate with or merge into any other Person or
convey, transfer or lease its properties and assets substantially as an entirety
to any Person, and the Company shall not permit any Person to consolidate with
or merge into the Company or convey, transfer or lease its properties and assets
substantially as an entirety to the Company, unless:

            (1) in case the Company shall consolidate with or merge into another
      Person or convey, transfer or lease its properties and assets
      substantially

                                      -39-
<PAGE>

      as an entirety to any Person, the Person formed by such consolidation or
      into which the Company is merged or the Person which acquires by
      conveyance or transfer, or which leases, the properties and assets of the
      Company substantially as an entirety shall be a Corporation, partnership
      or trust, shall be organized and validly existing under the laws of the
      United States of America, any State thereof or the District of Columbia
      and shall expressly assume, by an indenture supplemental hereto, executed
      and delivered to the Trustee, in form satisfactory to the Trustee, the due
      and punctual payment of all of the obligations of the Company under the
      Securities and this Indenture, including due and punctual payment of the
      principal amount, Redemption Price, Purchase Price or Repurchase Price of,
      and all Interest on, all the Securities and the performance or observance
      of every covenant of this Indenture on the part of the Company to be
      performed or observed, including with regards to the conversion rights
      accorded by Article 12 hereof;

            (2) immediately after giving effect to such transaction, no Event of
      Default, and no event which, after notice or lapse of time or both, would
      become an Event of Default, shall have occurred and be continuing;

            (3) if, as a result of any such consolidation or merger or such
      conveyance, transfer or lease, properties or assets of the Company would
      become subject to a mortgage, pledge, lien, security interest or other
      encumbrance which would not be permitted by this Indenture, the Company or
      such successor Person, as the case may be, shall take such steps as shall
      be necessary effectively to secure the Securities equally and ratably with
      (or prior to) all Indebtedness secured thereby; and

            (4) the Company has delivered to the Trustee an Officers'
      Certificate and an Opinion of Counsel, each stating that such
      consolidation, merger, conveyance, transfer or lease and, if a
      supplemental indenture is required in connection with such transaction,
      such supplemental indenture comply with this Article and that all
      conditions precedent herein provided for relating to such transaction have
      been complied with.

      For purposes of the foregoing, the transfer (by lease, assignment, sale or
otherwise) of the properties and assets of one or more Subsidiaries (other than
to the Company or another Subsidiary), which, if such assets were owned by the
Company, would constitute all or substantially all of the properties and assets
of the Company, shall be deemed to be the transfer of all or substantially all
of the properties and assets of the Company.

            SECTION 802. Successor Substituted.

      Upon any consolidation of the Company with, or merger of the Company into,
any other Person or any conveyance, transfer or lease of the properties and
assets of the Company substantially as an entirety in accordance with Section
801, the successor Person formed by such consolidation or into which the Company
is merged or to which such conveyance, transfer or lease is made shall succeed
to, and be substituted for, and may exercise every right and power of, the
Company under this Indenture with the same effect as if such successor Person
had been

                                      -40-
<PAGE>

named as the Company herein, and thereafter, except in the case of a lease, the
predecessor Person shall be relieved of all obligations and covenants under this
Indenture and the Securities.

                                  ARTICLE NINE

                             Supplemental Indentures

            SECTION 901. Supplemental Indentures Without Consent of Holders.

      Without the consent of any Holders, the Company and the Trustee, at any
time and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:

            (1) to evidence the succession, pursuant to a transaction permitted
      by Article 8, of another Person to the Company and the assumption by any
      such successor of the covenants and other obligations of the Company
      herein and in the Securities; or

            (2) to add to the covenants of the Company for the benefit of the
      Holders, or to surrender any right or power herein conferred upon the
      Company; or

            (3) to secure the Company's obligations under the Securities and
      this Indenture; or

            (4) to add any additional Events of Default for the benefit of the
      Holders; or

            (5) reduce the Conversion Price; provided, however, that such
      reduction in the Conversion Price shall not adversely affect the interest
      of the Holders (after taking into account tax and other consequences of
      such reduction); or

            (6) add guarantees with respect to the Securities; or

            (7) to cure any ambiguity or omission, or to correct or supplement
      any defective provision, defect or inconsistency contained in this
      Indenture or the Securities, provided that such modification or amendment
      does not, in the good faith opinion of the Board of Directors and the
      Trustee, adversely affect the interests of the Holders in any material
      respect; or

            (8) to evidence and provide for the acceptance of appointment
      hereunder by a successor Trustee with respect to the Securities, pursuant
      to the requirements of Section 611;

            (9) to make any change necessary for the registration of the
      Securities under the Securities Act or to comply with the Trust Indenture
      Act, or any amendment thereto, or to comply with any requirement of the
      Commission in connection with the qualification of the Indenture under the
      Trust Indenture Act,

                                      -41-
<PAGE>

      provided that such modification or amendment does not, in the good faith
      opinion of the Board of Directors and the Trustee, adversely affect the
      interests of the Holders in any material respect; or

            (10) add or modify any provision of this Indenture; provided that
      such addition or modification does not, in the good faith opinion of the
      Company's board of directors and the Trustee, adversely affect the
      interests of the Holders.

            SECTION 902. Supplemental Indentures with Consent of Holders.

      With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Securities, by Act of said Holders delivered to the
Company and the Trustee, the Company, when authorized by a Board Resolution, and
the Trustee may enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or the Securities or of modifying in any
manner the rights of the Holders under this Indenture or the Securities;
provided, however, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Security affected thereby

            (1) change the Maturity Date, or the Stated Maturity of any
      installment of Interest on, any Security, or reduce the principal amount,
      the Redemption Price, Purchase Price, Make Whole Premium or Repurchase
      Price thereof or the calculation or rate of any Interest thereon, or
      change the place of payment where, or the coin or currency in which, the
      principal amount, or the Redemption Price, Purchase Price, Make Whole
      Premium or Repurchase Price, of any Security, or any installment of
      Interest thereon, is payable, or impair the right to institute suit for
      the enforcement of any such payment or redemption thereof, or impair the
      right to institute suit for the enforcement of the right to convert any
      Security; or

            (2) modify any of the provisions of this Section, Section 513 or
      Section 1001, except to increase any such percentage or to provide that
      certain other provisions of this Indenture or the Securities cannot be
      modified or waived without the consent of the Holder of each Outstanding
      Security affected thereby; or

            (3) except as otherwise permitted or contemplated by the Indenture,
      adversely affect the Purchase Right of the Holders as provided in Article
      11 or the right of the Holders to convert any Security as provided in
      Article 12.

      It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.

            SECTION 903. Execution of Supplemental Indentures.

      In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying

                                      -42-
<PAGE>

conclusively upon, an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture. The Trustee
may, but shall not be obligated to, enter into any such supplemental indenture
which affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.

            SECTION 904. Effect of Supplemental Indentures.

      Upon the execution of any supplemental indenture under this Article, this
Indenture and the Securities shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes; and
every Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.

            SECTION 905. Conformity with Trust Indenture Act.

      Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.

            SECTION 906. Reference in Securities to Supplemental Indentures.

      Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.

                                  ARTICLE TEN

                                    Covenants

            SECTION 1001. Payment of the Securities.

      The Company shall promptly make all payments in respect of the Securities
on the dates and in the manner provided in the Securities or pursuant to this
Indenture. Principal, Redemption Price, Purchase Price, Repurchase Price and
Interest, if any, shall be considered paid on the applicable date due if on such
date (or, in the case of a Purchase Price or Repurchase Price, on the Business
Day following the applicable Purchase Date or Fundamental Change Repurchase
Date, as the case may be) the Trustee or the Paying Agent holds, in accordance
with this Indenture, money or securities, if permitted hereunder, sufficient to
pay all such amounts then due.

      The Company shall, to the extent permitted by law, pay Interest on overdue
amounts at the rate per annum set forth in Section 1 of the Securities,
compounded semiannually, which Interest shall accrue from the date such overdue
amount was originally due to the date payment of such amount, including Interest
thereon, has been made or duly provided for. All such Interest shall be payable
on demand. The accrual of such Interest on overdue amounts shall be in addition
to the continued accrual of all other Interest.

                                      -43-
<PAGE>

            SECTION 1002. Maintenance of Office or Agency.

      The Company will maintain in the City of New York, Borough of Manhattan,
an office or agency where Securities may be presented or surrendered for
purchase or payment, where Securities may be surrendered for registration of
transfer or exchange, where Securities may be surrendered for conversion and
where notices and demands to or upon the Company in respect of the Securities
and this Indenture may be served. The Company will give prompt written notice to
the Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.

      The Company may also from time to time designate one or more other offices
or agencies where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the City of New
York, Borough of Manhattan, for such purposes. The Company will give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.

            SECTION 1003. Money for Security Payments to Be Held in Trust.

      If the Company shall at any time act as its own Paying Agent, it will, on
or before each due date of any payment in respect of any of the Securities,
segregate and hold in trust for the benefit of the Persons entitled thereto
money and Common Stock sufficient to make the payment so becoming due until such
money and Common Stock shall be paid to such Persons or otherwise disposed of as
herein provided and will promptly notify the Trustee of its action or failure so
to act.

      Whenever the Company shall have one or more Paying Agents, it will, prior
to each due date of any payment in respect of any Securities, deposit with a
Paying Agent money and Common Stock sufficient to pay such amount, such money
and Common Stock to be held as provided by the Trust Indenture Act, and (unless
such Paying Agent is the Trustee) the Company will promptly notify the Trustee
of its action or failure so to act.

      The Company will cause each Paying Agent other than the Trustee to execute
and deliver to the Trustee an instrument in which such Paying Agent shall agree
with the Trustee, subject to the provisions of this Section, that such Paying
Agent will (i) hold in trust for the benefit of Holders or the Trustee all money
and Common Stock held by the Paying Agent for the making of payments in respect
of the Securities and shall notify the Trustee of any default by the Company in
making any such payment, (ii) comply with the provisions of the Trust Indenture
Act applicable to it as a Paying Agent and (iii) during the continuance of any
default by the Company (or any other obligor upon the Securities) in the making
of any payment in respect of the Securities, upon the written request of the
Trustee, forthwith pay to the Trustee all money and Common Stock held in trust
by such Paying Agent as such.

      The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying

                                      -44-
<PAGE>

Agent to pay, to the Trustee all money and Common Stock held in trust by the
Company or such Paying Agent, such money and Common Stock to be held by the
Trustee upon the same trusts as those upon which such money and Common Stock
were held by the Company or such Paying Agent; and, upon such payment by any
Paying Agent to the Trustee, such Paying Agent shall be released from all
further liability with respect to such money.

      Any money or Common Stock deposited with the Trustee or any Paying Agent,
or then held by the Company, in trust for payment in respect of any Security and
remaining unclaimed for two years after such money or Common Stock has become
due and payable shall be paid to the Company on Company Request, or (if then
held by the Company) shall be discharged from such trust; and the Holder of such
Security shall thereafter, as an unsecured general creditor, look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money or Common Stock, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in a newspaper
published in the English language, customarily published on each Business Day
and of general circulation in the City of New York, Borough of Manhattan, notice
that such money or Common Stock remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication, any unclaimed balance of such money or Common Stock then remaining
will be repaid to the Company.

            SECTION 1004. Statement by Officers as to Default.

      The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year of the Company ending after the date hereof, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and, if the Company shall be
in default, specifying all such defaults and the nature and status thereof of
which they may have knowledge.

            SECTION 1005. Existence.

      Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its and its
Subsidiaries' existence, rights (charter and statutory) and franchises;
provided, however, that the Company shall not be required to preserve any such
right or franchise if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and that the loss thereof is not disadvantageous in any material
respect to the Holders.

            SECTION 1006. Maintenance of Properties.

      The Company will cause all properties used or useful in the conduct of its
business or the business of any Subsidiary to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that
nothing in this Section shall prevent the Company from discontinuing the
operation or maintenance of any of

                                      -45-
<PAGE>

such properties if such discontinuance is, in the judgment of the Company,
desirable in the conduct of its business or the business of any Subsidiary and
not disadvantageous in any material respect to the Holders.

            SECTION 1007. Payment of Taxes and Other Claims.

      The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary, and (2)
all lawful claims for labor, materials and supplies which, if unpaid, might by
law become a lien upon the property of the Company or any Subsidiary; provided,
however, that the Company shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings.

            SECTION 1008. Commission and Other Reports.

      In the event the Company is at any time no longer subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, it shall provide the
Trustee with annual and quarterly reports, information, documents and other
reports containing substantially the same information as would have been
required to be filed with the Commission had the Company continued to have been
subject to such reporting requirements. In such event, such reports shall be
provided at the times the Company would have been required to provide reports
had it continued to have been subject to such reporting requirements. The
Company also shall comply with the other provisions of Trust Indenture Act
Section 314(a). Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely conclusively on Officers' Certificates).

            SECTION 1009. Further Instruments and Acts.

      Upon request of the Trustee, the Company will execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purposes of this Indenture.

            SECTION 1010. Delivery of Certain Information.

      At any time when the Company is not subject to Section 13 or 15(d) of the
Exchange Act, upon the request of a Holder or any beneficial owner of Securities
or holder or beneficial owner of shares of Common Stock issued upon conversion
thereof, the Company will promptly furnish or cause to be furnished Rule 144A
Information (as defined below) to such Holder or any beneficial owner of
Securities or holder or beneficial owner of shares of Common Stock, or to a
prospective purchaser of any such security designated by any such holder, as the
case may be, to the extent required to permit compliance by any such holder with
Rule 144A under the Securities Act in connection with the resale of any such
security. "Rule 144A Information" shall be such information as is specified
pursuant to Rule 144A(d)(4) under the Securities Act. Whether a person is a
beneficial owner shall be determined by the Company to the Company's reasonable
satisfaction.

                                      -46-
<PAGE>

            SECTION 1011. Tax Treatment of Securities.

      The Company agrees, and by acceptance of a beneficial ownership interest
in the Securities each Holder of Securities will be deemed to have agreed, for
United States federal income tax purposes, (i) to treat the Securities as
indebtedness that is subject to United States Treasury Regulation Section
1.1275-4 (the "Contingent Payment Debt Regulations") and, for purposes of the
Contingent Payment Debt Regulations, to treat the Fair Market Value of any stock
beneficially received by a Holder upon any conversion of the Securities as a
contingent payment and (ii) to be bound by the Company's determination of the
comparable yield and projected payment schedule, within the meaning of the
Contingent Payment Debt Regulations, with respect to the Securities. A Holder of
Securities may obtain the Issue Price, Issue Date, comparable yield and
projected payment schedule by submitting a written request to the Company at the
following address: Henry Schein, Inc., 135 Duryea Road, Melville, New York
11747, Attention: Investor Relations.

                                 ARTICLE ELEVEN

      Redemption of Securities; Repurchase of Securities at the Option of the
Holder

            SECTION 1101. Right to Redeem; Notices to Trustee.

      The Company, at its option, may redeem the Securities in accordance with
the provisions of Section 4 of the Securities and this Article 11. If the
Company elects to so redeem Securities, it shall notify the Trustee in writing
of the Redemption Date, the principal amount of Securities to be redeemed and
the Redemption Price.

      The election of the Company to redeem any Securities pursuant to this
Section 1101 shall be evidenced by a Board Resolution. The Company shall give
the notice to the Trustee provided for in this Section 1101 by a Company Order,
at least 45 days before the Redemption Date (unless a shorter notice shall be
satisfactory to the Trustee).

            SECTION 1102. Selection of Securities to Be Redeemed.

      If less than all the Outstanding Securities are to be redeemed, unless the
procedures of the Depositary provide otherwise, the Trustee shall select the
Securities to be redeemed on a pro rata basis (so long as such method is not
prohibited by the rules of any stock exchange or quotation system on which the
Securities are then listed or quoted, otherwise by lot). The Trustee shall make
the selection at least 15 days but not more than 60 days before the Redemption
Date from Outstanding Securities not previously called for redemption. The
Trustee may select for redemption portions of the principal amount of Securities
that have denominations larger than $1,000.

      Securities and portions of them the Trustee selects shall be in principal
amounts of $1,000 or an integral multiple of $1,000. Provisions of this
Indenture that apply to Securities called for redemption also apply to portions
of Securities called for redemption. The Trustee shall notify the Company
promptly of the Securities or portions of Securities to be redeemed.

      If any Security selected for partial redemption is converted in part
before termination of the conversion right with respect to the portion of the
Security so selected, the converted portion

                                      -47-
<PAGE>

of such Security shall be deemed (so far as may be) to be the portion selected
for redemption. Securities which have been converted during a selection of
Securities to be redeemed may be treated by the Trustee as Outstanding for the
purpose of such selection.

            SECTION 1103. Notice of Redemption.

      At least 20 days but not more than 60 days before a Redemption Date, the
Company shall mail a notice of redemption by first-class mail, postage prepaid,
to each Holder of Securities to be redeemed, at its address appearing in the
Security Register.

      The notice shall identify the Securities to be redeemed (including the
CUSIP number(s)) and shall state:

            (1) the Redemption Date;

            (2) the manner of calculating the Redemption Price;

            (3) the Conversion Rate;

            (4) the name and address of the Paying Agent and Conversion Agent;

            (5) that Securities called for redemption may be converted at any
      time before the close of business on the date that is two Business Days
      prior to the Redemption Date;

            (6) that Holders who want to convert Securities must satisfy the
      requirements set forth in Section 7 of the Securities;

            (7) that Securities called for redemption must be surrendered to the
      Paying Agent to collect the Redemption Price;

            (8) if fewer than all the Outstanding Securities are to be redeemed,
      the certificate numbers, if any, and principal amounts of the particular
      Securities to be redeemed;

            (9) that, unless the Company defaults in making payment of such
      Redemption Price, Interest on Securities called for redemption will cease
      to accrue from and after the Redemption Date; and

            (10) the CUSIP number(s) of the Securities.

      At the Company's request, the Trustee shall give to each Holder the notice
of redemption in the Company's name and at the Company's expense, provided that
the Company makes such request in writing at least 15 Business Days prior to the
date by which such notice of redemption must be given to Holders in accordance
with this Section 1103.

                                      -48-
<PAGE>

            SECTION 1104. Effect of Notice of Redemption.

      Once notice of redemption is given, Securities called for redemption
become due and payable on the Redemption Date and at the Redemption Price stated
in the notice except for Securities which are converted in accordance with the
terms of this Indenture. Upon surrender to the Paying Agent (together with all
necessary endorsements) at the offices of the Paying Agent, such Securities
shall be paid at the Redemption Price stated in the notice.

      If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal shall, until paid, bear Interest from the
Redemption Date at the rates borne by the Security.

            SECTION 1105. Deposit of Redemption Price.

      Prior to 10:00 a.m. (New York City Time), on the Redemption Date, the
Company shall deposit with the Paying Agent (or if the Company or a Subsidiary
or an Affiliate of either of them is the Paying Agent, shall segregate and hold
in trust) money sufficient to pay the Redemption Price of all Securities to be
redeemed on that date other than Securities or portions of Securities called for
redemption which on or prior thereto have been delivered by the Company to the
Trustee for cancellation or have been converted. Promptly after the calculation
of the Redemption Price, the Company will give the Trustee and the Paying Agent
written notice thereof. The Paying Agent shall as promptly as practicable return
to the Company any money not required for that purpose because of conversion of
Securities pursuant to Article 12. If such money is then held by the Company in
trust and is not required for such purpose it shall be discharged from such
trust.

            SECTION 1106. Securities Redeemed in Part.

      Any Security which is to be redeemed only in part shall be surrendered at
an office or agency of the Company designated for that purpose pursuant to
Section 1002 (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or his attorney duly authorized
in writing), and the Company shall execute, and the Trustee shall authenticate
and deliver to the Holder of such Security without service charge, a new
Security or Securities, of any authorized denomination as requested by such
Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered.

            SECTION 1107. Purchase of Securities at Option of the Holder.

            (a) General. Securities shall be purchased by the Company pursuant
to Section 5 of the Securities and this Article 11 at the option of the Holder
on any of the Purchase Dates at a price equal to the Purchase Price on the
applicable Purchase Date.

      Purchases of Securities hereunder shall be made, at the option of the
Holder thereof, upon:

            (1) delivery to the Paying Agent by the Holder of a written notice
      of purchase (a "Purchase Notice") at any time from the opening of business
      on the

                                      -49-
<PAGE>

      date that is 20 Business Days prior to a Purchase Date until the close of
      business on the Business Day prior to such Purchase Date stating:

                  (A) if a Holder holds a Certificated Security, the certificate
            number of the Security which the Holder will deliver to be
            purchased, or the appropriate Depositary information, in accordance
            with appropriate Depositary procedures, if the Security which the
            Holder will deliver to be purchased is represented by a Global
            Security;

                  (B) the portion of the principal amount of the Security which
            the Holder will deliver to be purchased, which portion must be in
            principal amounts of $1,000 or an integral multiple thereof;

                  (C) that such Security shall be purchased as of the Purchase
            Date pursuant to the terms and conditions specified in this
            Indenture and in Section 5 of the Securities; and

            (2) delivery of such Security to the Paying Agent prior to, on or
      after the Purchase Date (together with all necessary endorsements) at the
      offices of the Paying Agent, such delivery being a condition to receipt by
      the Holder of the Purchase Price therefor; provided, however, that such
      Purchase Price shall be so paid pursuant to this Section 1107 only if the
      Security so delivered to the Paying Agent shall conform in all respects to
      the description thereof in the related Purchase Notice, as determined by
      the Company.

      If a Holder holds a beneficial interest in a Global Security, the Purchase
Notice shall comply with the applicable Depositary procedures.

      The Company shall purchase from the Holder thereof, pursuant to this
Section 1107, a portion of a Security, if the principal amount of such portion
is $1,000 or an integral multiple of $1,000. Provisions of this Indenture that
apply to the purchase of all of a Security also apply to the purchase of such
portion of such Security.

      Any purchase by the Company contemplated pursuant to the provisions of
this Section 1107 shall be consummated by the delivery of the Purchase Price by
the Holder promptly following the later of the Purchase Date and the time of
delivery of the Security to the Paying Agent (together with all necessary
endorsements) at the offices of the Paying Agent; provided, however, that such
Purchase Price shall be not paid pursuant to this Section 1107 only if the
Security so delivered to the Paying Agent shall conform in all respects to the
description thereof set forth in the related Purchase Notice.

      Notwithstanding anything herein to the contrary, any Holder delivering to
the Paying Agent the Purchase Notice contemplated by this Section 1107(a) shall
have the right to withdraw such Purchase Notice at any time prior to the close
of business on the Purchase Date by delivery of a written notice of withdrawal
to the Paying Agent in accordance with Section 1109.

      The Paying Agent shall promptly notify the Company of the receipt by it of
any Purchase Notice or written notice of withdrawal thereof.

                                      -50-
<PAGE>

            (b) Certificate to Trustee. At least three Business Days before each
Company Notice Date, the Company shall deliver an Officers' Certificate to the
Trustee specifying:

                  (i) the information required by Section 1107(d); and

                  (ii) whether the Company desires the Trustee to give the
            Company Purchase Notice required by Section 1107(d).

            (c) Purchase Price. The Purchase Price of Securities in respect of
which a Purchase Notice has been given shall be paid by the Company in U.S.
legal tender ("cash") equal to the aggregate Purchase Price of such Securities.
The Company Purchase Notice, as provided in Section 1107(d), shall be sent to
Holders at their addresses as shown in the Security Register (and to beneficial
owners as required by applicable law) not less than 20 Business Days prior to
each Purchase Date (each, a "Company Notice Date").

            (d) Company Purchase Notice. In connection with any purchase of
Securities pursuant to Section 5 of the Securities and this Section 1107, the
Company shall give notice to Holders setting forth information specified in this
Section 1107(d) (the "Company Purchase Notice").

      Each Company Purchase Notice shall include a form of Purchase Notice to be
completed by a Holder and shall state:

                  (i) the Purchase Price and the Conversion Rate;

                  (ii) the name and address of the Paying Agent and the
            Conversion Agent;

                  (iii) that Securities as to which a Purchase Notice has been
            given may be converted if they are otherwise convertible only in
            accordance with Article 12 hereof and Section 7 of the Securities if
            the applicable Purchase Notice has been withdrawn in accordance with
            the terms of this Indenture;

                  (iv) that Securities must be surrendered to the Paying Agent
            to collect payment;

                  (v) that the Purchase Price for any Security as to which a
            Purchase Notice has been given and not withdrawn will be paid
            promptly following the later of the Purchase Date and the time of
            surrender of such Security as described in (iv);

                  (vi) the procedures the Holder must follow to exercise rights
            under Section 1107 and a brief description of those rights;

                  (vii) briefly, the conversion rights of the Securities;

                  (viii) the procedures for withdrawing a Purchase Notice;

                                      -51-
<PAGE>

                  (ix) that, unless the Company defaults in making payment on
            Securities for which a Purchase Notice has been submitted, all
            Interest on such Securities will cease to accrue immediately after
            the Purchase Date; and

                  (x) the CUSIP number(s) of the Securities.

      At the Company's request, the Trustee shall give such Company Purchase
Notice in the Company's name and at the Company's expense; provided, however,
that, in all cases, the text of such Company Purchase Notice shall be prepared
by the Company.

            (e) Procedure upon Purchase. The Company shall deposit cash, at the
time and in the manner as provided in Section 1110, sufficient to pay the
aggregate Purchase Price of all Securities to be purchased pursuant to this
Section 1107.

            SECTION 1108. Purchase of Securities at Option of the Holder upon
                          Fundamental Change.

            (a) If there shall occur a Fundamental Change at any time prior to
maturity of the Securities, then each Holder shall have the right, at such
Holder's option, to require the Company to repurchase all of such Holder's
Securities, or any portion thereof that is a multiple of $1,000 principal
amount, on a date (the "Fundamental Change Repurchase Date") specified by the
Company, that is not less than 20 Business Days nor more than 35 Business Days
after the date of the Company Repurchase Notice related to such Fundamental
Change (or, if such day is not a Business Day, the next succeeding Business Day)
at a repurchase price (the "Repurchase Price") equal to 100% of the principal
amount of the Securities being repurchased, plus accrued and unpaid Interest to,
but excluding, the Fundamental Change Repurchase Date and a Make Whole Premium,
if any, calculated in accordance with the provisions of Section 1301, in each
case, subject to the satisfaction by the Holder of the requirements set forth in
Section 1108(c); provided that if such Fundamental Change Repurchase Date falls
after a Record Date and on or prior to the corresponding Interest Payment Date,
then the Interest payable on such Interest Payment Date shall be paid to the
Holders of record of the Securities on the applicable Record Date instead of the
Holders surrendering the Securities for repurchase on such date.

            (b) On or before the tenth Business Day after the occurrence of a
Fundamental Change, the Company shall mail or cause to be mailed to all Holders
of record on the date of the Fundamental Change (and to beneficial owners as
required by applicable law) a Company Purchase Notice as set forth in Section
1107(d) but also including a description of the event causing the Fundamental
Change (the "Company Repurchase Notice"). The Company shall also deliver a copy
of the Company Repurchase Notice to the Trustee and the Paying Agent at such
time as it is mailed to Holders. Concurrently with the mailing of such Company
Repurchase Notice, the Company shall issue a press release announcing such
Fundamental Change referred to in the Company Repurchase Notice, the form and
content of which press release shall be determined by the Company in its sole
discretion. The failure to issue any such press release or any defect therein
shall not affect the validity of the Company Repurchase Notice or any
proceedings for the repurchase of any Security which any Holder may elect to
have the Company redeem as provided in this Section 1108.

                                      -52-
<PAGE>

      No failure of the Company to give the foregoing notices and no defect
therein shall limit the Holders' repurchase rights or affect the validity of the
proceedings for the repurchase of the Securities pursuant to this Section 1108.

            (c) For a Security to be so repurchased at the option of the holder,
the holder must deliver to the Paying Agent, prior to 5:00 p.m., New York City
time, on the Business Day immediately preceding the Fundamental Change
Repurchase Date, (i) a written notice of repurchase (the "Repurchase Notice") in
the form set forth on the reverse of the Security duly completed (if the
Security is certificated) or stating the following (if the Security is
represented by a Global Security): (A) if a Holder holds a Certificated
Security, the certificate number of the Security which the holder will deliver
to be repurchased or the appropriate Depositary procedures, (B) the portion of
the principal amount of the Security which the holder will deliver to be
repurchased, which portion must be in principal amounts of $1,000 or an integral
multiple of $1,000 and (C) that such Security shall be repurchased as of the
Fundamental Change Repurchase Date pursuant to the terms and conditions
specified in the Security and in this Indenture. If a Holder holds a beneficial
interest in a Global Security, the Repurchase Notice shall comply with the
applicable Depositary procedures. The delivery of such Security to the Paying
Agent with, or at any time after delivery of, the Repurchase Notice (together
with all necessary endorsements) at the office of the Paying Agent or book-entry
transfer of such Security (if such Security is represented by a Global Security)
shall be a condition to the receipt by the holder of the Repurchase Price
therefore; provided, however, that such Repurchase Price shall be so paid
pursuant to this Section 1108 only if the Securities so delivered to the Paying
Agent shall conform in all respects to the description thereof in the Repurchase
Notice. All questions as to the validity, eligibility (including time of
receipt) and acceptance of any Security for repurchase shall be determined by
the Company, whose determination shall be final and binding absent manifest
error.

            (d) The Company shall repurchase from the holder thereof, pursuant
to this Section 1108, a portion of a Security, if the principal amount of such
portion is $1,000 or a whole multiple of $1,000. Provisions of this Indenture
that apply to the repurchase of all of a Security also apply to the repurchase
of such portion of such Security.

            (e) The Paying Agent shall promptly notify the Company of the
receipt by it of any Repurchase Notice or written notice of withdrawal thereof.

      Any repurchase by the Company contemplated pursuant to the provisions of
this Section 1108 shall be consummated by the delivery of the consideration to
be received by the holder promptly following the later of the Fundamental Change
Repurchase Date and the time of the book-entry transfer or delivery of the
Security. Payment of the Repurchase Price for a Security for which a Repurchase
Notice has been delivered and not withdrawn is conditioned upon book-entry
transfer or delivery of the Securities, together with necessary endorsements, to
the Paying Agent.

            SECTION 1109. Effect of Purchase Notice or Repurchase Notice.

      Upon receipt by the Paying Agent of the Purchase Notice or Repurchase
Notice specified in Section 1107(a) or Section 1108(c), as applicable, the
Holder of the Security in respect of which such Purchase Notice or Repurchase
Notice, as the case may be, was given shall (unless such Purchase Notice or
Repurchase Notice is withdrawn as specified in the following two

                                      -53-
<PAGE>

paragraphs) thereafter be entitled to receive solely the Purchase Price or
Repurchase Price, as the case may be, with respect to such Security (unless the
Company shall default in the payment of the Purchase Price or Repurchase Price,
as the case may be). Such Purchase Price or Repurchase Price shall be paid to
such Holder, subject to receipt of funds and/or securities by the Paying Agent,
promptly following the later of (x) the Purchase Date or the Fundamental Change
Repurchase Date, as the case may be, with respect to such Security (provided the
conditions in Section 1107(a) or Section 1108(c), as applicable, have been
satisfied) and (y) the time of delivery of such Security to the Paying Agent by
the Holder thereof in the manner required by Section 1107(a) or Section 1108(c),
as applicable. Securities in respect of which a Purchase Notice or Repurchase
Notice, as the case may be, has been given by the Holder thereof may not be
converted pursuant to Article 12 hereof on or after the date of the delivery of
such Purchase Notice or Repurchase Notice, as the case may be, unless such
Purchase Notice or Repurchase Notice, as the case may be, has first been validly
withdrawn as specified in the following two paragraphs.

      A Purchase Notice or Repurchase Notice, as the case may be, may be
withdrawn by means of a written notice of withdrawal delivered to the office of
the Paying Agent in accordance with the Purchase Notice or Repurchase Notice, as
the case may be, at any time prior to the close of business on the Business Day
preceding the Purchase Date or the Fundamental Change Repurchase Date, as the
case may be, specifying:

            (1) if a Holder holds a Certificated Security, the certificate
      number, if any, of the Security in respect of which such notice of
      withdrawal is being submitted, or the appropriate Depositary information,
      in accordance with appropriate Depositary procedures, if the Security in
      respect of which such notice of withdrawal is being submitted is
      represented by a Global Security,

            (2) the principal amount of the Security with respect to which such
      notice of withdrawal is being submitted, and

            (3) the principal amount, if any, of such Security which remains
      subject to the original Purchase Notice or Repurchase Notice, as the case
      may be, and which has been or will be delivered for purchase by the
      Company.

      There shall be no purchase of any Securities pursuant to Section 1107 if
there has occurred (prior to, on or after, as the case may be, the giving, by
the Holders of such Securities, of the required Purchase Notice) and is
continuing an Event of Default (other than a default in the payment of the
Purchase Price with respect to such Securities). The Paying Agent will promptly
return to the respective Holders thereof any Securities (x) with respect to
which a Purchase Notice has been withdrawn in compliance with this Indenture, or
(y) held by it during the continuance of an Event of Default (other than a
default in the payment of the Purchase Price with respect to such Securities) in
which case, upon such return, the Purchase Notice with respect thereto shall be
deemed to have been withdrawn.

            SECTION 1110. Deposit of Purchase Price.

      Prior to 10:00 a.m. (local time in the City of New York) on the Business
Day following the Purchase Date or the Fundamental Change Repurchase Date, as
the case may be, the Company shall deposit with the Trustee or with the Paying
Agent (or, if the Company or a

                                      -54-
<PAGE>

Subsidiary or an Affiliate of either of them is acting as the Paying Agent,
shall segregate and hold in trust as provided in Section 1003) an amount of cash
(in immediately available funds if deposited on such Business Day) sufficient to
pay the aggregate Purchase Price or Repurchase Price, as the case may be, of all
the Securities or portions thereof which are to be purchased as of the Purchase
Date or Fundamental Change Repurchase Date, as the case may be.

            SECTION 1111. Securities Purchased in Part.

      Any Certificated Security which is to be purchased only in part shall be
surrendered at the office of the Paying Agent (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or such Holder's attorney duly authorized in writing) and the Company
shall execute and the Trustee shall authenticate and deliver to the Holder of
such Security, without service charge, a new Security or Securities, of any
authorized denomination as requested by such Holder in aggregate principal
amount equal to, and in exchange for, the portion of the principal amount of the
Security so surrendered which is not purchased.

            SECTION 1112. Covenant to Comply With Securities Laws Upon Purchase
                          of Securities.

      When complying with the provisions of Section 1107 or 1108 hereof
(provided that such offer or purchase constitutes an "issuer tender offer" for
purposes of Rule 13e-4 (which term, as used herein, includes any successor
provision thereto) under the Exchange Act at the time of such offer or
purchase), the Company shall (i) comply with Rule 13e-4, Rule 14e-1 and any
other tender offer rules under the Exchange Act which may then be applicable,
(ii) if necessary, file the related Schedule TO (or any successor schedule, form
or report) or any other required schedule or form under the Exchange Act, and
(iii) otherwise comply with all Federal and state securities laws so as to
permit the rights and obligations under Sections 1107 and 1108 to be exercised
in the time and in the manner specified in Sections 1107 and 1108.

            SECTION 1113. Repayment to the Company.

      The Trustee and the Paying Agent shall return to the Company any cash that
remains unclaimed as provided in Section 11 of the Securities, together with
Interest thereon (subject to the provisions of Section 606), held by them for
the payment of the Purchase Price or Repurchase Price, as the case may be;
provided, however, that to the extent that the aggregate amount of cash
deposited by the Company pursuant to Section 1110 exceeds the aggregate Purchase
Price or Repurchase Price, as the case may be, of the Securities or portions
thereof which the Company is obligated to purchase as of the Purchase Date or
Fundamental Change Repurchase Date, as the case may be, then, unless otherwise
agreed in writing with the Company, promptly after the Business Day following
the Purchase Date or Fundamental Change Repurchase Date, as the case may be, the
Trustee shall return any such excess to the Company together with interest, if
any, thereon (subject to the provisions of Section 606).

                                      -55-
<PAGE>

                                 ARTICLE TWELVE

                                   Conversions

            SECTION 1201. Conversion Privilege.

            (a) Subject to and upon compliance with the provisions of this
Article 12, at the option of the Holder, any Securities or any portion of the
principal amount thereof which is an integral multiple of $1,000 may be
converted at the principal amount thereof, or of such portion thereof, into duly
authorized, fully paid and nonassessable shares of Common Stock, at the
Conversion Rate in effect at the time of conversion:

            (1) during any fiscal quarter, if the Closing Price of the Common
      Stock for a period of at least 20 Trading Days in the period of 30
      consecutive Trading Days ending on the last Trading Day of the preceding
      fiscal quarter is more than 130% of the Conversion Price on that 30th
      Trading Day;

            (2) during the five Business Day period following any 10 consecutive
      Trading-Day period in which the average of the Trading Prices for the
      Securities for that 10 Trading-Day period was less than 98% of the Average
      Conversion Value of the Securities during that period; provided, however,
      that after August 15, 2029, if, on the date of any conversion pursuant to
      this Section 1201(a)(2), the Securities are not otherwise convertible and
      the Closing Price of the Common Stock is between the Conversion Price and
      130% of the Conversion Price, the Company shall satisfy its Conversion
      Obligation, with respect to the principal amount of the Securities being
      converted in cash with any remaining amount to be satisfied in shares of
      Common Stock;

            (3) if the Company has called the Securities for redemption;

            (4) if a Fundamental Change occurs, at any time beginning 15
      calendar days prior to the date announced by the Company as the
      anticipated effective date of the Fundamental Change and until and
      including the date which is 15 calendar days after the date that is the
      Effective Date; or

            (5) upon the occurrence of the corporate transactions specified in
      clause (b) of this Section 1201.

      Subject to the next succeeding paragraph, the Conversion Agent shall, on
behalf of the Company, determine on a daily basis whether the Securities shall
be convertible as a result of the occurrence of an event specified in clauses
(1) or (2) above and, if the Securities shall be so convertible, the Company
shall promptly deliver to the Trustee written notice thereof. Whenever the
Securities shall become convertible pursuant to Section 1201, the Company or, at
the Company's written request, the Trustee in the name and at the expense of the
Company, shall notify the Trustee and the Holders of the event triggering such
convertibility in the manner provided in Section 105, and the Company shall also
publicly announce such information and publish it on the Company's web site.

                                      -56-
<PAGE>

      Notwithstanding the foregoing, pursuant to an event specified in clause
(2) above, the Conversion Agent shall have no obligation to determine the
Trading Price of the Securities unless the Company has requested that it make
such determination; and the Company has no obligation to make such request
unless so requested by a Holder. At such time as a written request is made by a
Holder, the Company shall instruct the Conversion Agent to determine the Trading
Price per Security beginning on the next Trading Day and on each successive
Trading Day until the Trading Price per Security is greater than or equal to 98%
of the Average Conversion Value for 10 consecutive Trading Days.

      Any notice so given shall be conclusively presumed to have been duly
given, whether or not the Holder receives such notice. Except as expressly set
forth in this paragraph, the Trustee (in any of its capacities hereunder) shall
have no duty to determine the convertibility of any of the Securities.

            (b) In addition, in the event that:

            (1) (A) the Company makes a distribution of rights or warrants
      described in Section 1203(c), which rights or warrants are exercisable for
      a period expiring within 60 days of the date of distribution or (B) the
      Company makes a distribution described in Section 1203(d) and the Fair
      Market Value per share of such distribution exceeds 5% of the Closing
      Price of a share of Common Stock on the Business Day immediately preceding
      the date of declaration of such distribution, then, in each case, the
      Securities may be surrendered for conversion at any time on and after the
      date that the Company gives notice to the Holders of such right, which
      shall be not less than 20 days prior to the Ex-Dividend Time for such
      distribution, until the earlier of the close of business on the Business
      Day immediately preceding the Ex-Dividend Time or the date the Company
      announces that such distribution will not take place, or

            (2) the Company consolidates with or merges into another
      Corporation, or is a party to a binding share exchange pursuant to which
      the shares of Common Stock would be converted into cash, securities or
      other property as set forth in Section 1204 hereof, then the Securities
      may be surrendered for conversion at any time from and after the date
      which is 15 days prior to the date announced by the Company as the
      anticipated effective time of such transaction until 15 days after the
      actual effective date of such transaction.

      The "Conversion Rate" means the number of shares of Common Stock issuable
upon conversion of a Security per $1,000 of principal amount thereof, which
shall be as set forth initially in Section 7 of the Securities, subject to
adjustment as herein set forth. The Company shall provide the Trustee and the
Conversion Agent with the initial Conversion Rate and shall notify each of them
of any change in the Conversion Rate, in writing, on or before the date such new
Conversion Rate becomes effective.

      Notwithstanding any other provision of the Securities or this Indenture,
all Holders' rights with respect to conversion of the Securities and the
Company's obligation to deliver with any remaining amount to be satisfied in
shares of Common Stock upon such conversion (the "Conversion Obligation"), are
subject, in their entirety, to the Company's right, in its sole and

                                      -57-
<PAGE>

absolute discretion, to elect to satisfy such Conversion Obligation in any
manner permitted pursuant to Section 1210.

            SECTION 1202. Conversion Procedure; Conversion Price; Fractional
                          Shares.

            (a) Each Security shall be convertible at the office of the
Conversion Agent into fully paid and nonassessable shares (calculated to the
nearest 1/100th of a share) of Common Stock. The number of shares of Common
Stock issuable upon conversion of a Security per $1,000 principal amount thereof
shall be equal to the Conversion Rate. No payment or adjustment shall be made in
respect of dividends on the Common Stock or Interest on a converted Security,
except as described in Section 1209 hereof. The Company shall not issue any
fraction of a share of Common Stock in connection with any conversion of
Securities, but instead shall, subject to Section 1203(h) hereof, make a cash
payment (calculated to the nearest cent) equal to such fraction multiplied by
the Closing Price of the Common Stock on the last Trading Day prior to the date
of conversion. Notwithstanding the foregoing, a Security in respect of which a
Holder has delivered a Purchase Notice or a Repurchase Notice exercising such
Holder's option to require the Company to repurchase such Securities may be
converted only if such notice of exercise is withdrawn in accordance with
Section 1109 hereof.

            (b) Before any Holder of a Securities shall be entitled to convert
the same into Common Stock, such Holder shall, in the case of Global Securities,
comply with the procedures of the Depositary in effect at that time, and in the
case of Certificated Securities, surrender such Securities, duly endorsed to the
Company or in blank, at the office of the Conversion Agent, and shall complete
the conversion notice on the back of such Securities (or a facsimile thereof) or
provide such other written notice as is acceptable to the Company, and deliver
such notice to the Company at said office or place that such Holder elects to
convert the same and shall state in writing therein the principal amount of
Securities to be converted and the name or names (with addresses) in which such
Holder wishes the certificate or certificates for Common Stock to be issued.

      Before any such conversion, a Holder also shall pay all funds required, if
any, relating to Interest on the Securities, as provided in Section 1209, and
all taxes or duties, if any, as provided in Section 1208.

      If more than one Security shall be surrendered for conversion at one time
by the same Holder, the number of full shares of Common Stock which shall be
deliverable upon conversion shall be computed on the basis of the total
principal amount of the Securities (or specified portions thereof to the extent
permitted thereby) so surrendered. Subject to the next succeeding sentence, the
Company will, as soon as practicable thereafter, issue and deliver at said
office or place to such Holder, or to such Holder's nominee or nominees,
certificates for the number of full shares of Common Stock to which such Holder
shall be entitled as aforesaid, together with cash in lieu of any fraction of a
share to which such Holder would otherwise be entitled. The Company shall not be
required to deliver certificates for shares of Common Stock while the stock
transfer books for such stock or the Security Register are duly closed for any
purpose, but certificates for shares of Common Stock shall be issued and
delivered as soon as practicable after the opening of such books or Security
Register.

            (c) A Security shall be deemed to have been converted as of the
close of business on the date on which all of the requirements referred to in
Section 1202(b) required to be

                                      -58-
<PAGE>

performed by the Holder have been satisfied, and the Person or Persons entitled
to receive the Common Stock issuable upon such conversion shall be treated for
all purposes as the record Holder or Holders of such Common Stock as of the
close of business on such date.

            (d) In case any Securities shall be surrendered for partial
conversion, the Company shall execute and the Trustee shall authenticate and
deliver to or upon the written order of the Holder of the Securities so
surrendered, without charge to such Holder (subject to the provisions of Section
1208 hereof), new Securities in authorized denominations in an aggregate
principal amount equal to the unconverted portion of the surrendered Securities.

            SECTION 1203. Adjustments of Conversion Rate for Common Stock.

      The Conversion Rate shall be adjusted from time to time as follows:

            (a) In case the Company shall hereafter pay a dividend or make a
distribution to all holders of its outstanding Common Stock in shares of Common
Stock, the Conversion Rate in effect at the opening of business on the date
following the date fixed for the determination of shareholders entitled to
receive such dividend or other distribution shall be adjusted by multiplying
such Conversion Rate by a fraction:

            (1) the numerator of which shall be the sum of (i) the number of
      shares of Common Stock outstanding at the close of business on the Common
      Stock Record Date (as defined in Section 1203(g)) fixed for such
      determination plus (ii) the total number of shares of Common Stock
      constituting such dividend or other distribution; and

            (2) the denominator of which shall be the number of shares of Common
      Stock outstanding at the close of business on such Common Stock Record
      Date.

      Such adjustment shall become effective immediately after the opening of
business on the day following the Common Stock Record Date. If any dividend or
distribution of the type described in this Section 1203(a) is declared but not
so paid or made, the Conversion Rate shall again be adjusted to the Conversion
Rate which would then be in effect if such dividend or distribution had not been
declared.

            (b) In case the outstanding Common Stock shall be subdivided into a
greater number of shares of Common Stock, the Conversion Rate in effect at the
opening of business on the day following the day upon which such subdivision
becomes effective shall be proportionately increased, and conversely, in case
the outstanding Common Stock shall be combined into a smaller number of shares
of Common Stock, the Conversion Rate in effect at the opening of business on the
day following the day upon which such combination becomes effective shall be
proportionately reduced, such increase or reduction, as the case may be, to
become effective after the opening of business on the day following the day upon
which such subdivision or combination becomes effective.

            (c) In case the Company shall issue rights or warrants (other than
any rights or warrants referred to in Section 1203(d)) to all holders of its
outstanding Common Stock entitling them to subscribe for or purchase Common
Stock (or securities convertible into

                                      -59-
<PAGE>

Common Stock) at a price per share (or having a conversion price per share) less
than the Current Market Price (as defined in Section 1203(g)) on the Common
Stock Record Date fixed for the determination of shareholders entitled to
receive such rights or warrants, the Conversion Rate shall be adjusted so that
the same shall equal the rate determined by multiplying the Conversion Rate in
effect at the opening of business on the date after such Common Stock Record
Date by a fraction:

            (1) the numerator of which shall be the sum of (i) the number of
      shares of Common Stock outstanding at the close of business on the Common
      Stock Record Date, plus (ii) the total number of additional shares of
      Common Stock so offered for subscription or purchase (or into which the
      convertible securities so offered are convertible); and

            (2) the denominator of which shall be the sum of (i) the number of
      shares of Common Stock outstanding on the close of business on the Common
      Stock Record Date, plus (ii) the total number of shares of Common Stock
      which the aggregate offering price of the total number of shares of Common
      Stock so offered for subscription or purchase (or the aggregate conversion
      price of the convertible securities so offered) would purchase at such
      Current Market Price.

      Such adjustment shall become effective immediately after the opening of
business on the day following the Common Stock Record Date fixed for
determination of shareholders entitled to receive such rights or warrants. To
the extent that shares of Common Stock (or securities convertible into shares of
Common Stock) are not delivered pursuant to such rights or warrants, upon the
expiration or termination of such rights or warrants, the Conversion Rate shall
be readjusted to the Conversion Rate which would then be in effect had the
adjustments made upon the issuance of such rights or warrants been made on the
basis of the delivery of only the number of shares of Common Stock (or
securities convertible into shares of Common Stock) actually delivered. In the
event that such rights or warrants are not so issued, the Conversion Rate shall
again be adjusted to be the Conversion Rate which would then be in effect if
such date fixed for the determination of shareholders entitled to receive such
rights or warrants had not been fixed. In determining whether any rights or
warrants entitle the holders to subscribe for or purchase shares of Common Stock
at less than such Current Market Price, and in determining the aggregate
offering price of such shares of Common Stock, there shall be taken into account
any consideration received for such rights or warrants, the value of such
consideration if other than cash, to be determined by the Board of Directors.

            (d) In case the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock any class of Capital Stock of the Company or
evidences of its Indebtedness, cash or other assets, including securities, but
excluding (1) any rights or warrants referred to in Section 1203(c), (2)
dividends or distributions of Common Stock, securities or other property or
assets (including cash) in connection with a reclassification, change, merger,
consolidation, statutory share exchange, combination, sale or conveyance to
which Section 1204 applies, (3) dividends and distributions paid exclusively in
cash and (4) dividends or distributions to which Section 1203(a) applies (such
capital stock, evidence of its Indebtedness, cash, dividends, other assets or
securities being distributed hereinafter in this Section 1203(d) called the
"distributed assets"), then, in each such case, subject to the second succeeding
paragraph of this Section 1203(d), the Conversion Rate shall be adjusted so that
the same shall be equal to the rate determined by multiplying the Conversion
Rate in effect immediately prior to the close of

                                      -60-
<PAGE>

business on the Common Stock Record Date (as defined in Section 1203(g)) with
respect to such distribution by a fraction:

            (1) the numerator of which shall be the Current Market Price
      (determined as provided in Section 1203(g)) on such date; and

            (2) the denominator of which shall be (i) such Current Market Price,
      less (ii) the Fair Market Value on such date of the portion of the
      distributed assets so distributed applicable to one share of Common Stock
      (determined on the basis of the number of shares of Common Stock
      outstanding on the Common Stock Record Date).

      Such adjustment shall become effective immediately prior to the opening of
business on the day following the Common Stock Record Date. However, in the
event that (i) the then Fair Market Value of the portion of the distributed
assets so distributed applicable to one share of Common Stock is equal to or
greater than the Current Market Price on the Common Stock Record Date or (ii)
the Current Market Price exceeds the Fair Market Value of the distributed assets
by less than $1.00, then, in lieu of the foregoing adjustment, adequate
provision shall be made so that each Holder shall have the right to receive upon
conversion of a Security (or any portion thereof), in addition to the shares of
Common Stock due upon such conversion, the kind and amount of distributed assets
such Holder would have received had such Holder converted such Security (or
portion thereof) immediately prior to such Common Stock Record Date. In the
event that such dividend or distribution is not so paid or made, the Conversion
Rate shall again be adjusted to be the Conversion Rate, which would then be in
effect if such dividend or distribution had not been declared.

      If the Board of Directors determines the Fair Market Value of any
distribution for purposes of this Section 1203(d) by reference to the actual or
when-issued trading market for any distributed assets comprising all or part of
such distribution, it must in doing so consider the prices in such market over
the same period (the "Reference Period") used in computing the Current Market
Price pursuant to Section 1203(g) to the extent possible, unless the Board of
Directors in a Board Resolution determines in good faith that determining the
Fair Market Value during the Reference Period would not be in the best interest
of the Holders.

      In the event any such dividend or distribution consists of shares of
capital stock of, or similar equity interests in, one or more of the Company's
Subsidiaries (a "Spin-Off"), the Fair Market Value of the securities to be
distributed shall equal the average of the closing sale prices of such
securities on the principal securities market on which such securities are
traded for the 10 consecutive Trading Days commencing on and including the fifth
day of trading of those securities after the date on which "ex dividend" trading
commences for such dividend or distribution, and the Current Market Price shall
be measured for the same period.

      Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of the
Company's Common Stock (either initially or under certain circumstances), which
rights or warrants, until the occurrence of a specified event or events
("Trigger Event"):

            (1) are deemed to be transferred with such Common Stock;

                                      -61-
<PAGE>

            (2) are not exercisable; and

            (3) are also issued in respect of future issuances of Common Stock;

shall be deemed not to have been distributed for purposes of this Section
1203(d) (and no adjustment to the Conversion Rate under this Section 1203(d)
will be required) until the occurrence of the earliest Trigger Event. If such
right or warrant is subject to subsequent events, upon the occurrence of which
such right or warrant shall become exercisable to purchase different distributed
assets, evidences of Indebtedness or other assets or entitle the holder to
purchase a different number or amount of the foregoing or to purchase any of the
foregoing at a different purchase price, then the occurrence of each such event
shall be deemed to be the date of issuance and record date with respect to a new
right or warrant (and a termination or expiration of the existing right or
warrant without exercise by the holder thereof).

      In addition, in the event of any distribution (or deemed distribution) of
rights or warrants, or any Trigger Event or other event (of the type described
in the preceding sentence) with respect thereto, that resulted in an adjustment
to the Conversion Rate under this Section 1203(d):

            (1) in the case of any such rights or warrants which shall all have
      been redeemed or repurchased without exercise by any holders thereof, the
      Conversion Rate shall be readjusted upon such final redemption or
      repurchase to give effect to such distribution or Trigger Event, as the
      case may be, as though it were a cash distribution, equal to the per share
      redemption or Repurchase Price received by a holder of Common Stock with
      respect to such rights or warrants (assuming such holder had retained such
      rights or warrants), made to all holders of Common Stock as of the date of
      such redemption or repurchase; and

            (2) in the case of such rights or warrants which shall have expired
      or been terminated without exercise, the Conversion Rate shall be
      readjusted as if such rights and warrants had never been issued.

      For purposes of this Section 1203(d) and Sections 1203(a), 1203(b) and
1203(c), any dividend or distribution to which this Section 1203(d) is
applicable that also includes Common Stock, a subdivision or combination of
Common Stock to which Section 1203(b) applies, or rights or warrants to
subscribe for or purchase Common Stock to which Section 1203(c) applies (or any
combination thereof), shall be deemed instead to be:

            (1) a dividend or distribution of the evidences of Indebtedness,
      assets, shares of capital stock, rights or warrants, other than such
      Common Stock, such subdivision or combination or such rights or warrants
      to which Sections 1203(a), 1203(b) and 1203(c) apply, respectively (and
      any Conversion Rate increase required by this Section 1203(d) with respect
      to such dividend or distribution shall then be made), immediately followed
      by

            (2) a dividend or distribution of such Common Stock, such
      subdivision or combination or such rights or warrants (and any further
      Conversion Rate increase required by Sections 1203(a), 1203(b) and 1203(c)
      with respect to such dividend or distribution shall then be made), except:

                                      -62-
<PAGE>

                  (A) the Common Stock Record Date of such dividend or
            distribution shall be substituted as (x) "the date fixed for the
            determination of shareholders entitled to receive such dividend or
            other distribution", "Common Stock Record Date fixed for such
            determinations" and "Common Stock Record Date" within the meaning of
            Section 1203(a); (y) "the day upon which such subdivision becomes
            effective" and "the day upon which such combination becomes
            effective" within the meaning of Section 1203(b); and (z) as "the
            date fixed for the determination of shareholders entitled to receive
            such rights or warrants", "the Common Stock Record Date fixed for
            the determination of the shareholders entitled to receive such
            rights or warrants" and such "Common Stock Record Date" within the
            meaning of Section 1203(c); and

                  (B) any Common Stock included in such dividend or distribution
            shall not be deemed "outstanding at the close of business on the
            date fixed for such determination" within the meaning of Section
            1203(a) and any reduction or increase in the number of shares of
            Common Stock resulting from such subdivision or combination shall be
            disregarded in connection with such dividend or distribution.

            (e) In case the Company shall, by dividend or otherwise, make a
distribution to all holders of its Common Stock of cash (excluding any cash that
is distributed upon a reclassification, change, merger, consolidation, statutory
share exchange, combination, sale or conveyance to which Section 1204 applies or
as part of a distribution referred to in Section 1203(d)), the Conversion Rate
shall be adjusted so that the same shall equal the price determined by
multiplying the Conversion Rate in effect immediately prior to the close of
business on such Common Stock Record Date by a fraction:

            (1) the numerator of which shall be equal to the Current Market
      Price on the Common Stock Record Date, and

            (2) the denominator of which shall be equal to (i) the Current
      Market Price on such date, less (ii) an amount equal to such dividend or
      distribution.

In the event that such dividend or distribution is not so paid or made, the
Conversion Rate shall again be adjusted to be the Conversion Rate that would
then be in effect if such dividend or distribution had not been declared.

            (f) In case a tender offer made by the Company or any of its
Subsidiaries for all or any portion of the shares of Common Stock shall expire
and such tender offer (as amended upon the expiration thereof) shall require the
payment to shareholders (based on the acceptance (up to any maximum specified in
the terms of the tender offer) of shares tendered) of an aggregate consideration
having a Fair Market Value that combined together with:

            (1) the aggregate of the cash plus the Fair Market Value, as of the
      expiration of such tender offer, of consideration payable in respect of
      any other tender offers, by the Company or any of its Subsidiaries for all
      or any portion of the Common Stock expiring within the 12 months preceding
      the expiration of

                                      -63-
<PAGE>

      such tender offer and in respect of which no adjustment pursuant to this
      Section 1203(f) has been made; and

            (2) the aggregate amount of any distributions referred to in Section
      1203(e) to all holders of shares of Common Stock made exclusively in cash
      within 12 months preceding the expiration of such tender offer and in
      respect of which no adjustment pursuant to Section 1203(e) has been made;

exceeds 5% of the product of the Current Market Price of the Common Stock
(determined as provided in Section 1203(g)) as of the last time (the "Expiration
Time") tenders could have been made pursuant to such tender offer (as it may be
amended) times the number of shares of Common Stock outstanding on the
Expiration Time (such excess, the "Excess Amount"), then, and in each such case,
immediately prior to the opening of business on the day after the date of the
Expiration Time, the Conversion Rate shall be adjusted so that the same shall
equal the number determined by multiplying the Conversion Rate in effect
immediately prior to close of business on the date of the Expiration Time by a
fraction:

            (3) the numerator of which shall be the product of (i) the number of
      shares of Common Stock outstanding (including any tendered shares of
      Common Stock) at the Expiration Time and (ii) the Current Market Price of
      the Common Stock at the Expiration Time; and

            (4) the denominator shall be (x) the product of (1) the number of
      shares of Common Stock outstanding (including any tendered shares of
      Common Stock) at the Expiration Time and (2) the Current Market Price of
      the Common Stock at the Expiration Time less (y) the Excess Amount.

      Such increase (if any) shall become effective immediately prior to the
opening of business on the day following the Expiration Time. In the event that
the Company is obligated to purchase Common Stock pursuant to any such tender
offer, but the Company is permanently prevented by applicable law from effecting
any such purchases or all or a portion of such purchases are rescinded, the
Conversion Rate shall again be adjusted to be the Conversion Rate that would
then be in effect if such (or such portion of the) tender offer had not been
made. If the application of this Section 1203(f) to any tender offer would
result in a reduction in the Conversion Rate, no adjustment shall be made for
such tender offer under this Section 1203(f).

            (g) For purposes of this Section 1203, the following terms shall
have the meanings indicated:

      "Current Market Price" of a share of Common Stock shall mean the average
of the daily Closing Prices per share of Common Stock for the ten (10)
consecutive Trading Days immediately prior to the date in question; provided,
however, that if:

            (1) the "ex" date (as hereinafter defined) for any event (other than
      the issuance or distribution requiring such computation) that requires an
      adjustment to the Conversion Rate pursuant to Section 1203(a), (b), (c),
      (d), (e) or (f) occurs during such 10 consecutive Trading Days, the
      Closing Price for each Trading Day prior to the "ex" date for such other
      event shall be adjusted by

                                      -64-
<PAGE>

      dividing such Closing Price by the same fraction by which the Conversion
      Rate is so required to be adjusted as a result of such other event;

            (2) the "ex" date for any event (other than the issuance or
      distribution requiring such computation) that requires an adjustment to
      the Conversion Rate pursuant to Section 1203(a), (b), (c), (d), (e) or (f)
      occurs on or after the "ex" date for the issuance or distribution
      requiring such computation and prior to the day in question, the Closing
      Price for each Trading Day on and after the "ex" date for such other event
      shall be adjusted by dividing such Closing Price by the reciprocal of the
      fraction by which the Conversion Rate is so required to be adjusted as a
      result of such other event; and

            (3) the "ex" date for the issuance or distribution requiring such
      computation is prior to the day in question, after taking into account any
      adjustment required pursuant to clause (1) or (2) of this proviso, the
      Closing Price for each Trading Day on or after such "ex" date shall be
      adjusted by adding thereto the amount of any cash and the Fair Market
      Value (as determined in a manner consistent with any determination of such
      value for purposes of Section 1203(d) or (f)) of the evidences of
      Indebtedness, cash or assets applicable to one share of Common Stock as of
      the close of business on the day before such "ex" date.

For purposes of any computation under Section 1203(f), if the "ex" date for any
event (other than the tender offer requiring such computation) that requires an
adjustment to the Conversion Rate pursuant to Section 1203(a), (b), (c), (d),
(e) or (f) occurs on or after the Expiration Time for the tender or exchange
offer requiring such computation and prior to the day in question, the Closing
Price for each Trading Day on and after the "ex" date for such other event shall
be adjusted by dividing such Closing Price by the reciprocal of the fraction by
which the Conversion Rate is so required to be adjusted as a result of such
other event. For purposes of this paragraph, the term "ex" date, when used:

            (1) with respect to any issuance or distribution, means the first
      date on which the shares of Common Stock trade regular way on the relevant
      exchange or in the relevant market from which the Closing Price was
      obtained without the right to receive such issuance or distribution;

            (2) with respect to any subdivision or combination of shares of
      Common Stock, means the first date on which the shares of Common Stock
      trade regular way on such exchange or in such market after the time at
      which such subdivision or combination becomes effective; and

            (3) with respect to any tender or exchange offer, means the first
      date on which the shares of Common Stock trade regular way on such
      exchange or in such market after the Expiration Time of such offer.

Notwithstanding the foregoing, whenever successive adjustments to the Conversion
Rate are called for pursuant to this Section 1203, such adjustments shall be
made to the Current Market Price as may be necessary or appropriate to
effectuate the intent of this Section 1203 and to avoid unjust or inequitable
results as determined in good faith by the Board of Directors.

                                      -65-
<PAGE>

            (1) "Fair Market Value" shall mean the amount which a willing buyer
      would pay a willing seller in an arm's length transaction, as determined
      by the Board of Directors, whose determination shall be conclusive and set
      forth in a Board Resolution.

            (2) "Common Stock Record Date" shall mean, with respect to any
      dividend, distribution or other transaction or event in which the holders
      of Common Stock have the right to receive any cash, securities or other
      property or in which the Common Stock (or other applicable security) is
      exchanged for or converted into any combination of cash, securities or
      other property, the date fixed for determination of shareholders entitled
      to receive such cash, securities or other property (whether such date is
      fixed by the Board of Directors or by statute, contract or otherwise).

            (h) The Company shall be entitled to make such additional increases
in the Conversion Rate, in addition to those required by Sections 1203(a), (b),
(c), (d), (e) and (f), as the Board of Directors deems advisable in order to
avoid or diminish any United States federal income tax to holders of Common
Stock that may result from any dividend or distribution of Common Stock, any
subdivision, reclassification or combination of shares of Common Stock or any
issuance of rights or warrants referred to above.

            (i) To the extent permitted by applicable law, the Company from time
to time may increase the Conversion Rate by any amount for any period of time if
the period is at least 20 days and the increase is irrevocable during the period
and the Board of Directors determines in good faith that such increase would be
in the best interests of Holders, which determination shall be conclusive and
set forth in a Board Resolution. Whenever the Conversion Rate is increased
pursuant to the preceding sentence, the Company shall mail to the Trustee and
each Holder at the address of such Holder as it appears in the Securities
Register at least 15 days prior to the date the increased Conversion Rate takes
effect, and such notice shall state the increased Conversion Rate and the period
during which it will be in effect.

            (j) No adjustment in the Conversion Rate shall be required unless
such adjustment would require an increase or decrease of at least 1% in the
Conversion Rate; provided, however, that any adjustments which by reason of this
Section 1203(j) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment and provided, further, that all
adjustments carried forward shall be made no later than the earlier of (x) the
one year anniversary of the date of the first such adjustment carried forward
and (y) the date, if any, on which the Company has delivered a notice to Holders
pursuant to Section 1103 of this Indenture, regardless of whether the aggregate
amount is less than 1%.

            (k) In any case in which this Section 1203 shall require that any
adjustment be made effective as of or retroactive immediately following a Common
Stock Record Date, the Company may elect to defer (but only for five Trading
Days following the filing of the statement referred to in Section 1205) issuing
to the Holder of any Securities converted after such Common Stock Record Date
the shares of Common Stock issuable upon such conversion over and above the
shares of Common Stock issuable upon such conversion on the basis of the
Conversion Rate prior to adjustment; provided, however, that the Company shall
deliver to such Holder a due bill or other appropriate instrument evidencing
such Holder's right to receive such additional shares upon the occurrence of the
event requiring such adjustment.

                                      -66-
<PAGE>

            (l) For purposes of this Section 1203, the number of shares of
Common Stock at any time outstanding shall not include Common Stock held in the
treasury of the Company but shall include Common Stock issuable in respect of
certificates issued in lieu of fractions of Common Stock. All calculations under
this Section 1203 shall be made to the nearest cent or one-hundredth of a share,
with one-half cent and 0.005 of a share, respectively, being rounded upward.

            (m) If a distribution date for rights issued pursuant to a Company
shareholders rights agreement occurs prior to the date a Security is converted
and the Holders of Securities that convert such Securities after the
distribution date are not entitled to receive the rights that would otherwise be
attached (but for the date of conversion) to the Common Stock received upon such
conversion, then an adjustment shall be made to the Conversion Rate pursuant to
clause 1203(c) as if the rights were being distributed to the holders of the
Common Stock immediately prior to such conversion. If such an adjustment is made
and the rights are later redeemed, invalidated or terminated, then a
corresponding reversing adjustment shall be made to the Conversion Rate, on an
equitable basis, to take account of such event.

            (n) In no event will the Company take any action that would require
adjustment to the Conversion Rate, nor will the Company adjust the Conversion
Rate, if such Conversion Rate adjustment would require the Company to issue,
upon conversion of the Securities, a number of shares of Common Stock that would
require the Company to obtain prior shareholder approval under the rules and
regulations of the Nasdaq National Market, and, if applicable, the rules of the
exchange or quotation system on which the Company's Common Stock is then traded,
without obtaining such prior shareholder approval.

            SECTION 1204. Consolidation or Merger of the Company.

      If any of the following events occur, namely:

            (1) any reclassification or change of the outstanding Common Stock
      (other than a change in par value, or from par value to no par value, or
      from no par value to par value, or as a result of a subdivision or
      combination);

            (2) any merger, consolidation, statutory share exchange or
      combination of the Company with another Corporation as a result of which
      holders of Common Stock shall be entitled to receive stock, securities or
      other property or assets (including cash) with respect to or in exchange
      for such Common Stock; or

            (3) any sale or conveyance of the properties and assets of the
      Company as, or substantially as, an entirety to any other Corporation as a
      result of which holders of Common Stock shall be entitled to receive
      stock, securities or other property or assets (including cash) with
      respect to or in exchange for such Common Stock;

the Company or the successor or purchasing Corporation, as the case may be,
shall execute with the Trustee a supplemental indenture (which shall comply with
the Trust Indenture Act as in force at the date of execution of such
supplemental indenture, if such supplemental indenture is then required to so
comply) providing that such Securities shall be convertible into the kind and

                                      -67-
<PAGE>

amount of shares of stock and other securities or property or assets (including
cash) which such Holder would have been entitled to receive upon such
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance had such Securities been converted into Common
Stock immediately prior to such reclassification, change, merger, consolidation,
statutory share exchange, combination, sale or conveyance assuming such holder
of Common Stock did not exercise its rights of election, if any, as to the kind
or amount of securities, cash or other property receivable upon such merger,
consolidation, statutory share exchange, sale or conveyance (provided, that if
the kind or amount of securities, cash or other property receivable upon such
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance is not the same for each share of Common Stock
in respect of which such rights of election shall not have been exercised
("Non-Electing Share"), then for the purposes of this Section 1204, the kind and
amount of securities, cash or other property receivable upon such
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance for each Non-Electing Share shall be deemed to
be the kind and amount so receivable per share by a plurality of the
Non-Electing Shares). Such supplemental indenture shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Article 12. If, in the case of any such reclassification,
change, merger, consolidation, statutory share exchange, combination, sale or
conveyance, the stock or other securities and assets receivable thereupon by a
holder of Common Stock includes shares of stock or other securities and assets
of a Corporation other than the successor or purchasing Corporation, as the case
may be, in such reclassification, change, merger, consolidation, statutory share
exchange, combination, sale or conveyance, then such supplemental indenture
shall also be executed by such other Corporation and shall contain such
additional provisions to protect the interests of the Holders of the Securities
as the Board of Directors shall reasonably consider necessary by reason of the
foregoing, including to the extent practicable the provisions providing for the
repurchase rights set forth in Article 12 hereof.

      The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each Holder, at the address of such Holder as it
appears on the Securities Register, within 20 days after execution thereof.
Failure to deliver such notice shall not affect the legality or validity of such
supplemental indenture.

      The above provisions of this Section 1204 shall similarly apply to
successive reclassifications, mergers, consolidations, statutory share
exchanges, combinations, sales and conveyances.

      If this Section 1204 applies to any event or occurrence, Section 1203
shall not apply.

            SECTION 1205. Notice of Adjustment.

      Whenever an adjustment in the Conversion Rate with respect to the
Securities is required:

            (1) the Company shall forthwith place on file with the Trustee and
      any Conversion Agent for such Securities a certificate of the Treasurer of
      the Company, stating the adjusted Conversion Rate determined as provided
      herein and setting forth in reasonable detail such facts as shall be
      necessary to show the reason for and the manner of computing such
      adjustment; and

                                      -68-
<PAGE>

            (2) a notice stating that the Conversion Rate has been adjusted and
      setting forth the adjusted Conversion Rate shall forthwith be given by the
      Company or, at the Company's written request, by the Trustee in the name
      and at the expense of the Company, to each Holder in the manner provided
      in Section 107. Any notice so given shall be conclusively presumed to have
      been duly given, whether or not the Holder receives such notice.

            SECTION 1206. Notice in Certain Events.

      In case:

            (1) of a consolidation or merger to which the Company is a party and
      for which approval of any shareholders of the Company is required, or of
      the sale or conveyance to another Person or entity or group of Persons or
      entities acting in concert as a partnership, limited partnership,
      syndicate or other group (within the meaning of Rule 13d-3 under the
      Exchange Act) of all or substantially all of the property and assets of
      the Company; or

            (2) of the voluntary or involuntary dissolution, liquidation or
      winding up of the Company; or

            (3) of any action triggering an adjustment of the Conversion Rate
      referred to in clauses (x) or (y) below;

then, in each case, the Company shall cause to be filed with the Trustee and the
Conversion Agent, and shall cause to be given, to the Holders of the Securities
in the manner provided in Section 107, at least 15 days prior to the applicable
date hereinafter specified, a notice stating (x) the date on which a record is
to be taken for the purpose of any distribution or grant of rights or warrants
triggering an adjustment to the Conversion Rate pursuant to this Article 12, or,
if a record is not to be taken, the date as of which the holders of record of
Common Stock entitled to such distribution, rights or warrants are to be
determined, or (y) the date on which any reclassification, consolidation,
merger, sale, conveyance, dissolution, liquidation or winding up triggering an
adjustment to the Conversion Rate pursuant to this Article 12 is expected to
become effective, and the date as of which it is expected that holders of Common
Stock of record shall be entitled to exchange their Common Stock for securities
or other property deliverable upon such reclassification, consolidation, merger,
sale, conveyance, dissolution, liquidation or winding up.

      Failure to give such notice or any defect therein shall not affect the
legality or validity of the proceedings described in clause (1), (2) or (3) of
this Section 1206.

            SECTION 1207. Company to Reserve Stock; Registration; Listing.

            (a) The Company shall, in accordance with the laws of the State of
Delaware, at all times reserve and keep available, free from preemptive rights,
out of its authorized but unissued shares of Common Stock, for the purpose of
effecting the conversion of the Securities, such number of its duly authorized
shares of Common Stock as shall from time to time be sufficient to effect the
conversion of all Securities then Outstanding into such Common Stock at any time
(assuming that, at the time of the computation of such number of shares or
securities, all such Securities would be held by a single Holder); provided,
however, that nothing

                                      -69-
<PAGE>

contained herein shall preclude the Company from satisfying its obligations in
respect of the conversion of the Securities by delivery of purchased shares of
Common Stock which have been repurchased by the Company. The Company covenants
that all shares of Common Stock which may be issued upon conversion of
Securities will upon issue be fully paid and nonassessable and free from all
liens and charges and, except as provided in Section 1208, taxes with respect to
the issue thereof.

            (b) If any shares of Common Stock which would be issuable upon
conversion of Securities hereunder require registration with or approval of any
governmental authority before such shares or securities may be issued upon such
conversion, the Company will in good faith and as expeditiously as possible
endeavor to cause such shares or securities to be duly registered or approved,
as the case may be. The Company further covenants that so long as the Common
Stock shall be quoted on the Nasdaq National Market, the Company will, if
permitted by the rules of the National Association of Securities Dealers, Inc.,
list and keep listed all Common Stock issuable upon conversion of the
Securities, and the Company will endeavor to list the shares of Common Stock
required to be delivered upon conversion of the Securities prior to such
delivery upon any other primary national securities exchange upon which the
outstanding Common Stock is listed at the time of such delivery.

            SECTION 1208. Taxes on Conversion.

      The issue of stock certificates on conversion of Securities shall be made
without charge to the converting Holder for any documentary, stamp or similar
issue or transfer taxes in respect of the issue thereof, and the Company shall
pay any and all documentary, stamp or similar issue or transfer taxes that may
be payable in respect of the issue or delivery of shares of Common Stock on
conversion of Securities pursuant hereto. The Company shall not, however, be
required to pay any such tax which may be payable in respect of any transfer
involved in the issue or delivery of shares of Common Stock or the portion, if
any, of the Securities which are not so converted in a name other than that in
which the Securities so converted were registered, and no such issue or delivery
shall be made unless and until the Person requesting such issue has paid to the
Company the amount of such tax or has established to the satisfaction of the
Company that such tax has been paid.

            SECTION 1209. Conversion After Interest Payment Record Date.

      Except as provided below, if any Securities are surrendered for conversion
on any day other than an Interest Payment Date, the Holder of such Securities
shall not be entitled to receive any Interest that has accrued on such
Securities since the prior Interest Payment Date. By delivery to the Holder of
the number of shares of Common Stock or other consideration issuable upon
conversion in accordance with this Article 12, any accrued and unpaid Interest
on such Securities will be deemed to have been paid in full.

      If any Securities are surrendered for conversion subsequent to the
Interest Payment Record Date preceding an Interest Payment Date but on or prior
to such Interest Payment Date, the Holder of such Securities at the close of
business on such Interest Payment Record Date shall receive any Interest payable
on such Securities on such Interest Payment Date notwithstanding the conversion
thereof. Securities surrendered for conversion during the period from the close
of business on any Interest Payment Record Date preceding any Interest Payment
Date to the opening of business on such Interest Payment Date shall be
accompanied by payment by Holders,

                                     - 70 -
<PAGE>

for the account of the Company, in New York Clearing House funds or other funds
of an amount equal to all Interest payable on such interest payment date on the
Securities being surrendered for conversion; provided, however, that any such
Holder that surrenders for conversion any Security after an Interest Payment
Record Date for an Interest payment, but prior to the Interest Payment Date,
that has been called for redemption by the Company pursuant to Article 11 of
this Indenture and Section 4 of the Securities prior to such conversion, where
such Redemption Date is on or prior to the third Business Day after such
Interest Payment Date, shall be entitled to receive (and retain) such Interest
to the Redemption Date and need not pay the Company an amount equal to the
Interest on such Security so converted at the time such Holder surrenders such
Security for conversion. Except as provided in this Section 1209, no adjustments
in respect of payments of Interest on Securities surrendered for conversion or
any dividends or distributions or Interest on the Common Stock issued upon
conversion shall be made upon the conversion of any Securities.

            SECTION 1210. Payment Upon Conversion.

            (a) If a Holder elects to convert all or any portion of a Security
into shares of Common Stock as set forth in Section 1201 and the Company
receives such Holder's Notice of Conversion on or prior to the day that is 20
days prior to the Maturity Date (the "Final Notice Date"), the Company shall
satisfy its Conversion Obligation with respect to the principal amount of the
Securities to be converted in cash, with any remaining amount to be satisfied in
shares of Common Stock.

      The "Conversion Settlement Distribution" amount shall be computed as
follows:

                  (i) a cash amount equal to the lesser of (i) the aggregate
            principal amount of the Securities to be converted and (ii) the
            applicable stock price (as defined below) multiplied by the
            conversion rate then in effect; and

                  (ii) if the product of the Applicable Stock Price and the
            conversion rate then in effect exceeds the aggregate principal
            amount of the Securities to be converted, a number of shares equal
            to (i) the aggregate principal amount of Securities to be converted
            divided by 1,000 and multiplied by (ii) (a) the conversion rate then
            in effect minus (b) $1,000 divided by the applicable stock price.

      The Company shall settle its Conversion Obligation in cash and/or shares
of Common Stock on the second Trading Day following the final Trading Day of the
Cash Settlement Average Period (as defined below). Such day will be the 22nd
Trading Day following the Company's receipt of a Holder's Notice of Conversion
(if such Holder does not retract such Notice of Conversion and assuming the
Holder has satisfied all other conversion requirements), unless such conversion
is:

                  (i) in connection with a redemption, in which case such day
            will be the Redemption Date; or

                  (ii) during the period beginning twenty-five Trading Days
            preceding the Maturity Date and ending one Trading Day preceding the
            Maturity Date, in which case such day will be the Maturity Date.

                                     - 71 -
<PAGE>

      The "Applicable Stock Price" means, in respect of a conversion date, the
average Closing Price of the Common Stock over the twenty Trading Day period
(the "Cash Settlement Average Period");

                  (i) beginning on the Trading Day following the Company's
            receipt of a Holder's Notice of Conversion; provided, however, that
            if a Holder submits a Notice of Conversion during the period
            beginning twenty-five Trading Days preceding the Maturity Date and
            ending one Trading Day preceding the Maturity Date, the Cash
            Settlement Averaging Period will end on the second Trading Day
            preceding the Maturity Date;

                  (ii) ending on the second Trading Day preceding the Redemption
            Date, if the Company has called the Securities for redemption; and

                  (iii) ending on the second Trading Day preceding the Maturity
            Date, with respect to Notices of Conversion received during the
            period beginning twenty-five Trading Days preceding the Maturity
            Date and ending one Trading Day preceding the Maturity Date.

            SECTION 1211. Company Determination Final.

      Any determination that the Company or the Board of Directors must make
pursuant to this Article 12 shall be conclusive if made in good faith and in
accordance with the provisions of this Article 12, absent manifest error, and
set forth in a resolution of the Board of Directors.

            SECTION 1212. Responsibility of Trustee for Conversion Provisions.

      The Trustee has no duty to determine when an adjustment under this Article
12 should be made, how it should be made or what it should be, or whether any
Securities have become convertible pursuant to this Article 12. The Trustee
makes no representation as to the validity or value of any securities or assets
issued upon conversion of Securities. The Trustee shall not be responsible for
any failure of the Company to comply with this Article 12. Each Conversion Agent
other than the Company shall have the same protection under this Section 1212 as
the Trustee.

                                ARTICLE THIRTEEN

                               Make Whole Premium

            SECTION 1301. Make Whole Premium.

            (a) On or prior to August 20, 2010, upon the occurrence of a
Fundamental Change, the Company shall pay, on the Fundamental Change Repurchase
Date, the Make Whole Premium, if any, to holders of the Securities who surrender
their Securities for repurchase in connection with such Fundamental Change
pursuant to Section 1108 or convert their Securities pursuant to Section
1201(a)(4).

                                     - 72 -
<PAGE>

            (b) The "Make Whole Premium" will be determined as follows:

                  (i) if the Effective Date is after August 20, 2010, no Make
            Whole Premium shall be paid;

                  (ii) if the Stock Price is less than $65.73 (subject to
            adjustment pursuant to Section 1302) (the "Stock Price Threshold"),
            no Make Whole Premium shall be paid;

                  (iii) if the Stock Price is more than $164.00 per share
            (subject to adjustment pursuant to Section 1302) (the "Stock Price
            Cap"), no Make Whole Premium shall be paid; and

                  (iv) in all other cases, the Make Whole Premium shall equal
            the applicable Make Whole Percentage multiplied by $1,000.

            (c) For purposes of this Section 1301(c), the following terms shall
have the respective meanings indicated:

                  (i) "Effective Date" means the date that a Fundamental Change
            becomes effective.

                  (ii) "Stock Price" means the price paid per share of Common
            Stock in the transaction constituting the Fundamental Change,
            determined as follows:

                        (A) if holders of Common Stock receive only cash in the
            transaction constituting the Fundamental Change, the Stock Price
            shall equal the cash amount paid per share of Common Stock;

                        (B) in all other cases, the Stock Price shall equal the
            average Closing Sale Price of a share of Common Stock over the ten
            Trading-Day period ending on the Trading Day immediately preceding
            the Effective Date; and

                  (iii) "Make Whole Percentage" means the percentage set forth
            on the table below (the "Make Whole Table") for the Stock Price and
            the Effective Date:

<TABLE>
<CAPTION>
EFFECTIVE DATE                                          STOCK PRICE
--------------     -------------------------------------------------------------------------------------
<S>                <C>        <C>       <C>       <C>         <C>         <C>         <C>        <C>
                   $65.73     $80.00    $94.00    $108.00     $122.00     $136.00     $150.00    $164.00
 08/09/2004          0.00      12.41     21.81      18.66       16.29       14.48       13.06      11.92
 08/15/2005          0.00       9.80     19.05      15.89       13.60       11.92       10.65       9.66
 08/15/2006          0.00       7.74     16.67      13.40       11.14        9.56        8.43       7.58
 08/15/2007          0.00       5.79     14.22      10.78        8.55        7.10        6.14       5.47
 08/15/2008          0.00       3.76     11.43       7.76        5.62        4.39        3.68       3.26
 08/15/2009          0.00       1.50      7.80       3.89        2.13        1.43        1.16       1.04
 08/20/2010          0.00       0.00      0.00       0.00        0.00        0.00        0.00       0.00
</TABLE>

      If the Stock Price is between two "Stock Price" amounts on the Make Whole
Table or the Effective Date is between two Effective Dates on the Make Whole
Table, the Make Whole

                                     - 73 -
<PAGE>

Percentage will be determined by straight-line interpolation between Make Whole
Percentage amounts set forth for the higher and lower Stock Price amounts and
the two Effective Dates, as applicable, based on a 365 day year.

            (d) The Company will pay the Make Whole Premium in the same form of
consideration into which all or substantially all of the Common Stock has been
converted or exchanged in connection with the transaction constituting the
Fundamental Change. If holders of the Common Stock have the right to elect the
form of consideration received in the transaction constituting a Fundamental
Change, then for purposes of determining the form of consideration to be
delivered in respect of the Make Whole Premium, the consideration into which a
share of Common Stock has been converted or exchanged shall be deemed to equal
(x) the aggregate consideration distributed in respect of all shares of Common
Stock divided by (y) the total number of shares of Common Stock participating in
the distribution.

            (e) For purposes of determining the value of the consideration to be
delivered in respect of the Make Whole Premium, the value will be calculated as
follows:

                  (i) securities that are traded on a United States national
            securities exchange or approved for quotation on the Nasdaq National
            Market or any similar system of automated dissemination of
            quotations of securities prices will be valued based on the average
            Closing Sale Price or last sale price, as applicable, over the ten
            Trading- Day period ending on the Trading Day immediately preceding
            the Fundamental Change Repurchase Date,

                  (ii) other securities, assets or property (other than cash)
            will be valued based on 98% of the average of the fair market value
            of such securities, assets or property (other than cash) as
            determined by two independent nationally recognized investment banks
            selected by the Trustee, and

                  (iii) 100% of any cash.

      A calculation agent (the "Calculation Agent") appointed from time to time
by the Company shall, on behalf of and on request by the Company or the Trustee,
calculate (A) the Stock Price and (B) the Make Whole Premium with respect to
such Stock Price, based on the Effective Date specified by the Company or the
Trustee, and shall deliver its calculation of the Stock Price and Make Whole
Premium to the Company and the Trustee within three Business Days of the request
by the Company or the Trustee. In addition, the Calculation Agent shall, on
behalf of and upon request by the Company or the Trustee made no less than three
Business Days prior to a Fundamental Change Repurchase Date, make the
determinations described in Section 1301(e)(i) above and deliver its
calculations to the Company or the Trustee by 5:00 p.m., New York City time, on
the Trading Day preceding the Fundamental Change Repurchase Date. The Company,
or at the Company's request, the Trustee in the name and at the expense of the
Company, (X) shall notify the holders of the Stock Price and Make Whole Premium
per $1,000 principal amount of Securities with respect to a Fundamental Change
as part of the Company Repurchase Notice in connection with the Fundamental
Change and (Y) shall notify the holders prior to 9:00 a.m., New York City time,
on the Fundamental Change Repurchase Date of the number or amount of such
securities, assets or property to be paid in respect of the Make Whole Premium
in connection with such Fundamental Change, in the manner provided in Section
108, and the Company shall also publicly announce such information and publish
it on the Company's

                                     - 74 -
<PAGE>

web site. Any notice so given shall be conclusively presumed to have been duly
given, whether or not the holder receives such notice.

            (f) On or prior to the Fundamental Change Repurchase Date, the
Company shall deposit with the Paying Agent a number or an amount of securities,
assets or property sufficient to pay the Make Whole Premium with respect to all
the Securities to be repurchased on such date and all the Securities converted
in connection with such Fundamental Change; provided that if such payment is
made on the Fundamental Change Repurchase Date, it must be received by the
Paying Agent by 11:00 a.m., New York City time, on such date.

            SECTION 1302. Adjustments Relating to Make Whole Premium.

      Whenever the Conversion Rate shall be adjusted from time to time by the
Company pursuant to Section 1203, the Stock Price Threshold and the Stock Price
Cap shall be adjusted and each of the Stock Prices set forth in the Make Whole
Table will be adjusted by multiplying each such amount by a fraction, the
numerator of which is the Conversion Rate immediately prior to such adjustment
and the denominator of which is the Conversation Rate as so adjusted.

      This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.

                                     - 75 -
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.

                                               HENRY SCHEIN, INC.

                                               By: _____________________________

Attest:

__________________________

                                               THE BANK OF NEW YORK

                                               By: _____________________________

Attest:

__________________________

                                     - 76 -
<PAGE>

                                   EXHIBIT A-1

                        [FORM OF FACE OF GLOBAL SECURITY]

            THIS SECURITY IS SUBJECT TO THE RULES FOR DEBT INSTRUMENTS WITH
CONTINGENT PAYMENTS UNDER TREASURY REGULATIONS SECTION 1.1275-4(b). FOR
INFORMATION REGARDING THE ISSUE PRICE, ISSUE DATE, THE "COMPARABLE YIELD" AND
PROJECTED PAYMENT SCHEDULE FOR THIS SECURITY, YOU SHOULD SUBMIT A WRITTEN
REQUEST TO THE COMPANY AT THE FOLLOWING ADDRESS: HENRY SCHEIN, INC., 135 DURYEA
ROAD, MELVILLE, NEW YORK 11747, ATTENTION: INVESTOR RELATIONS.

            UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

            TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS TO
NOMINEES OF THE DEPOSITORY TRUST COMPANY, OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.

            THE SECURITY EVIDENCED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES
OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY ACQUISITION HEREOF, THE HOLDER:

            (1)   REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" AS
                  DEFINED IN RULE 144A UNDER THE SECURITIES ACT OR (B) IT IS AN
                  INSTITUTIONAL "ACCREDITED INVESTOR" AS DEFINED IN RULE
                  501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT (AN
                  "INSTITUTIONAL ACCREDITED INVESTOR");

            (2)   AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL
                  ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER THE
                  SECURITY EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE UPON
                  CONVERSION OF

<PAGE>

                  SUCH SECURITY EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY
                  THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE
                  WITH RULE 144A UNDER THE SECURITIES ACT, (C) PURSUANT TO AN
                  EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT TO AN
                  INSTITUTIONAL ACCREDITED INVESTOR, (D) PURSUANT TO THE
                  EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
                  SECURITIES ACT (IF AVAILABLE) OR (E) PURSUANT TO A
                  REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER
                  THE SECURITIES ACT AND WHICH CONTINUES TO BE EFFECTIVE AT THE
                  TIME OF SUCH TRANSFER; AND

            (3)   AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE
                  SECURITY EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A
                  TRANSFER PURSUANT TO CLAUSE 2(E) ABOVE) A NOTICE SUBSTANTIALLY
                  TO THE EFFECT OF THIS LEGEND.

            THE FOREGOING LEGEND MAY BE REMOVED FROM THIS SECURITY ON
SATISFACTION OF THE CONDITIONS SPECIFIED IN THE INDENTURE.

                               HENRY SCHEIN, INC.

               3.00% CONVERTIBLE CONTINGENT SENIOR NOTES DUE 2034

No. __________                                                         $________
CUSIP No. __________

      Henry Schein, Inc., a corporation duly organized and existing under the
laws of Delaware (herein called the "Company", which term includes any successor
Person under the Indenture hereinafter referred to), for value received, hereby
promises to pay to __________________, or registered assigns, the principal sum
of _____________________ Dollars on ____________, 2034 (the "Maturity Date"),
and to pay Interest thereon on the terms set forth on the reverse hereof.

      The Securities are general unsecured obligations of the Company limited to
$240,000,000 aggregate principal amount (subject to Section 306 of the
Indenture). The Indenture does not limit other Indebtedness of the Company,
secured or unsecured.

      Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

      Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

                                     - 2 -
<PAGE>

      IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.

Dated:

                                               _________________________________

                                               By ______________________________

Attest:

______________________________

                                     - 3 -
<PAGE>

                       [FORM OF REVERSE SIDE OF SECURITY]

      This Security is one of a duly authorized issue of Securities of the
Company designated as its 3.00% Convertible Contingent Senior Notes due 2034
(herein called the "Securities"), limited in aggregate principal amount to
$240,000,000, issued and to be issued under an Indenture, dated as of August 9,
2004 (herein called the "Indenture"), between the Company and The Bank of New
York, as Trustee (herein called the "Trustee", which term includes any successor
trustee under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. All terms used in
this Security which are not defined herein but are defined in the Indenture
shall have the meanings assigned to them in the Indenture.

1. INTEREST

Regular Interest

      Interest will accrue on this Security at the rate of 3.00% per year during
any six-month period from and including February 15 to but excluding August 15
and from and including August 15 to but excluding February 15, commencing August
9, 2004 (such interest, "Regular Interest"). Regular Interest will be payable on
February 15 and August 15 of each year (provided, however, that if such date is
not a Business Day, interest will be payable on the next succeeding Business
Day, and no additional interest will accrue therefor), beginning February 15,
2005, to the Holder of record at the close of business on the preceding February
1 and August 1, respectively.

      The Company will not pay Regular Interest accrued and unpaid on this
Security upon conversion into Common Stock, except under certain limited
circumstances described below.

Contingent Interest

      Interest will accrue on this Security during any six-month period from and
including February 15 to but excluding August 15 and from and including August
15 to but excluding February 15 (provided that the first six-month period, if
Contingent Interest is due, shall commence on August 20, 2010) if the average
Trading Price of the Security for the five consecutive Trading Days ending on
(if the second Business Day is not a Trading Day, then on the last Trading Day
prior to) the second Trading Day immediately preceding the beginning of the
relevant six-month period equals 120% or more of the principal amount of this
Security (such interest, "Contingent Interest").

      The "Trading Price" of a Security means: (i) the average of the secondary
market bid quotations per Security obtained by the Company or the Conversion
Agent for $10,000,000 aggregate principal amount of Securities at approximately
3:30 p.m., New York City time, on such determination date from three independent
nationally recognized securities dealers selected by the Company; (ii) if at
least three such bids cannot reasonably be obtained by the Company or the
Conversion Agent, but two such bids are obtained, then the average of the two
bids shall be used; (iii) if only one such bid can reasonably be obtained by the
Company or the Conversion Agent, this one bid shall be used; or (iv) if the
Company or the Conversion Agent cannot

<PAGE>

reasonably obtain at least one bid for $10,000,000 aggregate principal amount of
the Securities from a nationally recognized securities dealer or in the
Company's reasonable judgment, the bid quotations are not indicative of the
secondary market value of the Securities, then the trading price of the
Securities will equal 98% of (x) the then-applicable conversion rate of the
Securities multiplied by (y) the Closing Price of the Common Stock on such
determination date, appropriately adjusted.

      The Conversion Agent shall solicit bids from securities dealers that are
believed by the Company to be willing to bid for the Securities.

      The rate of Contingent Interest payable on this Security in respect of any
six-month period, if any, will be equal to 0.25% of the average Trading Price of
the Security over the measuring period triggering the Contingent Interest
payment.

      Contingent Interest, if any, will be payable to the Holder of this
Security on February 15 and August 15 of each year to the Holder of record at
the close of business on the preceding February 1 and August 1, respectively.

      Upon determination that the Holder of this Security is entitled to receive
Contingent Interest which may become payable during a relevant six-month period,
on or prior to the start of such six-month period, the Company will issue a
press release announcing such determination and publish such determination on
the Company's website.

      The Company will not pay Contingent Interest accrued and unpaid on this
Security upon conversion into Common Stock, except under certain limited
circumstances described below.

Interest and Principal Payments Generally

      In the event that any Interest becomes payable on the Securities, a Holder
of any Security at the close of business on an Interest Payment Record Date
shall be entitled to receive such Interest on the corresponding Interest Payment
Date; provided, however, that (1) any Holder that surrenders any such Security
for conversion during the period between the close of business on such Interest
Payment Record Date and ending with the opening of business on the corresponding
Interest Payment Date shall be required to pay the Company an amount equal to
the Interest on such Security so converted, that is payable by the Company to
such Holder on such Interest Payment Date, at the time such Holder surrenders
such Security for conversion; provided, further, that any such Holder that
surrenders for conversion any Security after an Interest Payment Record Date for
an Interest payment, but prior to the Interest Payment Date, that has been
called for redemption by the Company pursuant to Article 11 of the Indenture and
Section 4 of this Security prior to such conversion, where such Redemption Date
is on or prior to the third Business Day after such Interest Payment Date, shall
be entitled to receive (and retain) such Interest to the Redemption Date and
need not pay the Company an amount equal to the Interest on such Security so
converted at the time such Holder surrenders such Security for conversion and
(2) all Interest will be paid to a Person other than the Holder of a Security on
an Interest Payment Record Date if the Company redeems, or such Holder elects to
require the Company to repurchase, the Security on a date that is after such
Interest Payment Record Date and on or prior to the corresponding Interest
Payment Date, in which case accrued and unpaid Interest on the Security being
redeemed to, but excluding, the Redemption Date to the same Person to whom the
principal amount of such Security is paid.

                                     - 2 -
<PAGE>

      Except as provided below, all Interest will be paid (i) on Global
Securities to the Depositary by wire transfer in immediately available funds,
(ii) on Certificated Securities having an aggregate principal amount Outstanding
of $5,000,000 or less, by check mailed to the Holders of such Securities, and
(iii) on Certificated Securities having an aggregate principal amount
Outstanding of more than $5,000,000, by wire transfer in immediately available
funds at the election of the Holders of such Securities.

      All Interest will be computed on the basis of a 360-day year comprised of
twelve 30-day months.

      At maturity, all Interest on Certificated Securities will be paid at the
Company's office or agency in the City of New York, Borough of Manhattan (the
"Company New York Office"), which initially will be the office or agency of the
Trustee in the City of New York, Borough of Manhattan.

      The principal amount of this Security (i) if a Global Security, shall be
paid to the Depositary in immediately available funds and (ii) if a Certificated
Security at the Company New York Office.

      If the principal amount hereof or any portion of such principal amount is
not paid when due (whether upon acceleration pursuant to Section 502 of the
Indenture, upon the date set for payment of the Redemption Price pursuant to
Section 4 hereof, upon the date set for payment of the Purchase Price or
Repurchase Price pursuant to Section 5 hereof or upon the maturity of this
Security), then in each such case the overdue amount shall continue to accrue
Regular Interest, along with Contingent Interest and Additional Interest (if
any), and, to the extent permitted by law, shall also bear interest at the rate
of 1% per annum ("Default Rate Interest"), compounded semiannually; Default Rate
Interest shall accrue from the date any overdue amount was originally due to the
date payment of such amount, including Regular Interest, Contingent Interest and
Additional Interest thereon, has been made or duly provided for. All such
Default Rate Interest shall be payable on demand.

2. METHOD OF PAYMENT

      Subject to the terms and conditions of the Indenture, the Company will
make payments in respect of Redemption Prices, Purchase Prices, Repurchase
Prices and at maturity to Holders who surrender Securities to the Paying Agent
to collect such payments in respect of the Securities.

3. PAYING AGENT, CONVERSION AGENT AND SECURITY REGISTRAR

         The Trustee shall act as Security Registrar. Initially, the Trustee
will also act as Paying Agent and Conversion Agent. The Company may appoint and
change any Paying Agent or Conversion Agent without notice, other than notice to
the Trustee; provided that the Company will maintain at least one Paying Agent
in the City of New York, Borough of Manhattan, which shall initially be an
office or agency of the Trustee. The Company or any of its Subsidiaries or any
of their Affiliates may act as Paying Agent. However, the Conversion Agent will
not be an Affiliate of the Company.

                                     - 3 -
<PAGE>

4. REDEMPTION AT THE OPTION OF THE COMPANY

      No sinking fund is provided for the Securities. Subject to the terms and
conditions of the Indenture, the Securities are redeemable for cash as a whole,
or from time to time in part, in integral multiples of $1,000 principal amount
at any time at the option of the Company at a price equal to 100% of the
aggregate principal amount being redeemed plus all accrued and unpaid Interest,
if any, to the Redemption Date (the "Redemption Price"), provided that the
Securities are not redeemable prior to August 20, 2010.

      Notice of redemption will be mailed at least 20 days but not more than 60
days before the Redemption Date to each Holder of Securities to be redeemed at
the Holder's registered address. If money sufficient to pay the Redemption Price
of all Securities (or portions thereof) to be redeemed on the Redemption Date
has been deposited with the Paying Agent on or prior to the Redemption Date,
immediately after such Redemption Date, all Interest shall cease to accrue on
such Securities or portions thereof.

5. PURCHASE BY THE COMPANY AT THE OPTION OF THE HOLDER

      At the option of the Holder and subject to the terms and conditions of the
Indenture, the Company shall become obligated to purchase all or any portion of
the Securities held by such Holder on August 15, 2010, August 15, 2014, August
15, 2019, August 15, 2024 and August 15, 2029 (each, a "Purchase Date") at a
price equal to 100% of the aggregate principal amount being redeemed plus, in
each case, all accrued and unpaid Interest, if any, to the applicable Purchase
Date (the "Purchase Price"), which Purchase Price shall be paid by the Company
in cash.

      At the option of the Holder and subject to the terms and conditions of the
Indenture, the Company shall become obligated to purchase all or any portion of
the Securities held by such Holder no later than 35 Business Days after the
occurrence of a Fundamental Change at a price equal to 100% of the aggregate
principal amount being redeemed plus all accrued and unpaid Interest, if any, to
the Fundamental Change Repurchase Date (the "Repurchase Price"), which
Repurchase Price shall be paid in cash.

      Holders have the right to withdraw any Purchase Notice or Repurchase
Notice, as the case may be, by delivering to the Paying Agent a written notice
of withdrawal in accordance with the provisions of the Indenture.

      If cash sufficient to pay the Purchase Price or Repurchase Price, as the
case may be, of all Securities or portions thereof to be purchased as of the
Purchase Date or Fundamental Change Repurchase Date, as the case may be, has
been deposited with the Paying Agent on or prior to the Business Day following
the Purchase Date or the Fundamental Change Repurchase Date, all Interest shall
cease to accrue on such Securities (or portions thereof) immediately after such
Purchase Date or Fundamental Change Repurchase Date, and the Holder thereof
shall have no other rights as such other than the right to receive the Purchase
Price or Repurchase Price upon surrender of such Security.

6. TAX TREATMENT

      The Company agrees, and by acceptance of a beneficial ownership interest
in the Securities each Holder of Securities will be deemed to have agreed, for
United States federal

                                     - 4 -
<PAGE>

income tax purposes, (i) to treat the Securities as indebtedness that is subject
to United States Treasury regulation section 1.1275-4 (the "Contingent Payment
Debt Regulations") and, for purposes of the Contingent Payment Debt Regulations,
to treat the Fair Market Value of any stock beneficially received by a Holder
upon any conversion of the Securities as a contingent payment and (ii) to be
bound by the Company's determination of the comparable yield and projected
payment schedule, within the meaning of the Contingent Payment Debt Regulations,
with respect to the Securities. A Holder of Securities may obtain the Issue
Price, Issue Date, comparable yield and projected payment schedule by submitting
a written request to the Company at the following address: Henry Schein, Inc.,
135 Duryea Road, Melville, New York 11747, Attention: Investor Relations.

7. CONVERSION

      Subject to the terms and conditions of the Indenture (including, without
limitation, the conditions to conversion of this Security set forth in Section
1201 thereof), a Holder is entitled, at such Holder's option, to convert the
Holder's Security (or any portion of the principal amount thereof that is $1,000
or an integral multiple of $1,000), into a number of fully paid and
nonassessable shares of Common Stock equal to the Conversion Rate in effect at
the time of conversion.

      The Company shall notify Holders of any event triggering the right to
convert the Securities as specified above in accordance with the Indenture.

      A Security in respect of which a Holder has delivered a Purchase Notice or
Repurchase Notice exercising the option of such Holder to require the Company to
purchase such Security may be converted only if such notice of exercise is
withdrawn in accordance with the terms of the Indenture.

      The initial Conversion Rate is 10.7898 shares of Common Stock per $1,000
principal amount, subject to adjustment from time to time as set forth in the
Indenture.

      To surrender a Security for conversion, a Holder must (1) complete and
manually sign the conversion notice below (or complete and manually sign a
facsimile of such notice) and deliver such notice to the Conversion Agent, (2)
surrender the Security to the Conversion Agent, (3) furnish appropriate
endorsements and transfer documents, (4) pay all funds required, if any,
relating to Interest on the Securities to be converted to which the Holder is
not entitled and (5) pay any transfer or similar tax, if required.

      A Holder may convert a portion of a Security if the principal amount of
such portion is $1,000 or an integral multiple of $1,000. No payment or
adjustment will be made for dividends on the shares of Common Stock except as
provided in the Indenture. On conversion of a Security, that portion of Interest
attributable to the period from the Issue Date through the Conversion Date with
respect to the converted Security shall not be cancelled, extinguished or
forfeited, but rather shall be deemed to be paid in full to the Holder thereof
through the delivery of the Common Stock (together with the cash payment, if
any, in lieu of fractional shares) in exchange for the Security being converted
pursuant to the terms hereof; and the Fair Market Value of such shares of Common
Stock (together with any such cash payment in lieu of fractional shares) shall
be treated as issued, to the extent thereof, first in exchange for Interest
accrued and unpaid through the Conversion Date, and the balance, if any, of such
Fair Market Value of such

                                     - 5 -
<PAGE>

Common Stock (and any such cash payment) shall be treated as issued in exchange
for the principal amount of the Security being converted pursuant to the
provisions hereof.

      No fractional shares of Common Stock shall be issued upon conversion of
any Security. Instead of any fractional share of Common Stock that would
otherwise be issued upon conversion of such Security, the Company shall pay a
cash adjustment as provided in the Indenture.

      The Company from time to time may voluntarily increase the Conversion Rate
as set forth in the Indenture.

8. CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION

      Any Securities called for redemption, unless surrendered for conversion
before the close of business on the day that is two Business Days prior to the
Redemption Date, may be deemed to be purchased from the Holders of such
Securities at an amount not less than the Redemption Price, by one or more
investment bank or other purchasers who may agree with the Company to purchase
such Securities from the Holders, to convert them into shares of Common Stock
and to make payment for such Securities to the Trustee in trust for such
Holders.

9. DENOMINATIONS; TRANSFER; EXCHANGE

      The Securities are in fully registered form, without coupons, in
denominations of $1,000 of principal amount and integral multiples of $1,000. A
Holder may transfer or exchange Securities in accordance with the Indenture. The
Trustee may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Trustee need not transfer or exchange any
Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) or any
Securities in respect of which a Purchase Notice or Repurchase Notice has been
given and not withdrawn (except, in the case of a Security to be purchased in
part, the portion of the Security not to be purchased) or any Securities for a
period of 15 days before the mailing of a notice of redemption of Securities to
be redeemed.

10. PERSONS DEEMED OWNERS

      Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

11. UNCLAIMED MONEY OR SECURITIES

      The Trustee and the Paying Agent shall return to the Company upon written
request any money or securities held by them for the payment of any amount with
respect to the Securities that remains unclaimed for two years, subject to
applicable unclaimed property law. After return to the Company, Holders entitled
to the money or securities must look to the Company for payment as general
creditors unless an applicable abandoned property law designates another Person.

                                     - 6 -
<PAGE>

12. AMENDMENT; WAIVER

      Subject to certain exceptions and limitations set forth in the Indenture,
(i) the Indenture or the Securities may be amended with the written consent of
the Holders of at least a majority in aggregate principal amount of the
Securities at the time Outstanding and (ii) defaults may be waived with the
written consent of the Holders of a majority in aggregate principal amount of
the Securities at the time Outstanding.

13. DEFAULTS AND REMEDIES

      If any Event of Default with respect to Securities shall occur and be
continuing, the principal of all the Securities may be declared due and payable
in the manner and with the effect provided in the Indenture.

14. TRUSTEE DEALINGS WITH THE COMPANY

      Subject to certain limitations imposed by the Trust Indenture Act, the
Trustee, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.

15. CALCULATIONS IN RESPECT OF SECURITIES

      The Company or its agents will be responsible for making all calculations
called for under the Securities including, but not limited to, determination of
the Trading Prices for the Securities and the Closing Prices of the Common Stock
and the amounts of any Interest payments. Any calculations made in good faith
and without manifest error will be final and binding on Holders of the
Securities. The Company will be required to deliver to the Trustee a schedule of
its calculations and the Trustee will be entitled to rely upon the accuracy of
such calculations without independent verification.

16. NO RECOURSE AGAINST OTHERS

      A director, officer, employee or shareholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or under the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Holder waives and releases all such liability. The waiver and release are part
of the consideration for the issue of the Securities.

17. ABBREVIATIONS

      Customary abbreviations may be used in the name of a Holder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with right of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).

                                     - 7 -
<PAGE>

18. GOVERNING LAW

      This Security shall be governed by and construed in accordance with the
laws of the State of New York.

      The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Request may be made to:

            Henry Schein, Inc.
            135 Duryea Road
            Melville, New York 11747
            Attn: Investor Relations

                                     - 8 -
<PAGE>

<TABLE>
<CAPTION>
                 ASSIGNMENT FORM                                           CONVERSION NOTICE
<S>                                                         <C>
To assign this Security, fill in the form below:            To convert this Security into Common Stock of
                                                            the Company, check the box [__]

I or we assign and transfer this Security to                To convert only part of this Security, state
_________________________________________________           the_principal amount to be converted (which
_________________________________________________           must be $1,000 or an integral multiple of
(Insert assignee's soc, sec. or tax ID no.)                 $1,000):

_________________________________________________           If you want the stock certificate made out
_________________________________________________           in another Person's name fill in the
_________________________________________________           form below:
(Print or type assignee's name, address and zip             _______________________________________________
code)                                                       _______________________________________________
                                                            (Insert the other Person's soc. sec./tax ID no.

and irrevocably appoint                                     _______________________________________________
_______________________ agent to transfer this              _______________________________________________
Security on the books of the Company.  The agent            _______________________________________________
may substitute another to act for him.                      _______________________________________________
                                                            _______________________________________________
                                                            (Print or type other person's name, address and
                                                            zip code)
</TABLE>

Date:  ____________  Your Signature:  __________________________________
________________________________________________________________________
(Sign exactly as your name appears on the other side of this Security)

Signature Guaranteed

_____________________________________
Participant in a Recognized Signature
Guarantee Medallion Program

By:  ________________________________
           Authorized Signatory

                                     - 9 -
<PAGE>

      This is one of the Securities referred to in the within-mentioned
Indenture.

                                                 ______________________________,
                                                                      as Trustee

                                                 By ____________________________
                                                          Authorized Signatory

                                     - 10 -
<PAGE>

                                   EXHIBIT A-2

                     [FORM OF FACE OF CERTIFICATED SECURITY]

      THIS SECURITY IS SUBJECT TO THE RULES FOR DEBT INSTRUMENTS WITH CONTINGENT
PAYMENTS UNDER TREASURY REGULATIONS SECTION 1.1275-4(b). FOR INFORMATION
REGARDING THE ISSUE PRICE, ISSUE DATE, THE "COMPARABLE YIELD" AND PROJECTED
PAYMENT SCHEDULE FOR THIS SECURITY, YOU SHOULD SUBMIT A WRITTEN REQUEST TO THE
COMPANY AT THE FOLLOWING ADDRESS: HENRY SCHEIN, INC., 135 DURYEA ROAD, MELVILLE,
NEW YORK 11747, ATTENTION: INVESTOR RELATIONS.

      THE SECURITY EVIDENCED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO,
OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY ACQUISITION HEREOF, THE HOLDER:

            (1)   REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" AS
                  DEFINED IN RULE 144A UNDER THE SECURITIES ACT; OR (B) IT IS AN
                  INSTITUTIONAL "ACCREDITED INVESTOR" AS DEFINED IN RULE
                  501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT (AN
                  "INSTITUTIONAL ACCREDITED INVESTOR");

            (2)   AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL
                  ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER THE
                  SECURITY EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE UPON
                  CONVERSION OF SUCH SECURITY EXCEPT (A) TO THE COMPANY OR ANY
                  SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN
                  COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C)
                  PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
                  SECURITIES ACT TO AN INSTITUTIONAL ACCREDITED INVESTOR, (D)
                  PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE
                  144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (E) PURSUANT TO
                  A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE
                  UNDER THE SECURITIES ACT AND WHICH CONTINUES TO BE EFFECTIVE
                  AT THE TIME OF SUCH TRANSFER; AND

            (3)   AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE
                  SECURITY EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A
                  TRANSFER PURSUANT TO CLAUSE 2(E)

<PAGE>

                  ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

      THE FOREGOING LEGEND MAY BE REMOVED FROM THIS SECURITY ON SATISFACTION OF
THE CONDITIONS SPECIFIED IN THE INDENTURE.

                               HENRY SCHEIN, INC.

               3.00% CONVERTIBLE CONTINGENT SENIOR NOTES DUE 2034

No. __________                                                         $________

      Henry Schein, Inc., a corporation duly organized and existing under the
laws of Delaware (herein called the "Company", which term includes any successor
Person under the Indenture hereinafter referred to), for value received, hereby
promises to pay to __________________, or registered assigns, the principal sum
of _____________________ Dollars on ____________, 2034, and to pay Interest
thereon on the terms set forth on the reverse hereof.

      The Securities are general unsecured obligations of the Company limited to
$240,000,000 aggregate principal amount (subject to Section 306 of the
Indenture). The Indenture does not limit other Indebtedness of the Company,
secured or unsecured.

      Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

      Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

      IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.

Dated:

                                                 _______________________________

                                                 By ____________________________

Attest:

______________________________

                                     - 2 -
<PAGE>

       [FORM OF REVERSE SIDE OF CERTIFICATED SECURITY IDENTICAL TO FORM OF
                        REVERSE SIDE OF GLOBAL SECURITY]

<PAGE>

      This is one of the Securities referred to in the within-mentioned
Indenture.

                                                 ______________________________,
                                                                      as Trustee

                                                 By ____________________________
                                                           Authorized Signatory

                                     - 2 -
<PAGE>

                                   EXHIBIT B-1

                              Transfer Certificate.

      In connection with any transfer of any of the Securities within the period
prior to the expiration of the holding period applicable to the sales thereof
under Rule 144(k) under the Securities Act of 1933, as amended (the "Securities
Act") (or any successor provision), the undersigned registered owner of this
Security hereby certifies with respect to $240,000,000 principal amount of the
above-captioned Securities presented or surrendered on the date hereof (the
"Surrendered Securities") for registration of transfer, or for exchange or
conversion where the securities issuable upon such exchange or conversion are to
be registered in a name other than that of the undersigned registered owner
(each such transaction being a "transfer"), that such transfer complies with the
restrictive legend set forth on the face of the Surrendered Securities for the
reason checked below:

      [_]   A transfer of the Surrendered Securities is made to the Company or
            subsidiary thereof; or

      [_]   The transfer of the Surrendered Securities is made to a "qualified
            institutional buyer" in compliance with Rule 144A under the
            Securities Act; or

      [_]   The transfer of the Surrendered Securities pursuant to an exemption
            from registration under the Securities Act to an institutional
            accredited investor (as defined in Rule 501(a)(1), (2), (3) or (7)
            under the Securities Act); or

      [_]   The transfer of the Surrendered Securities is pursuant to a
            registration statement which has been declared effective under the
            Securities Act and which continues to be effective at the time of
            such transfer; or

      [_]   The transfer of the Surrendered Securities is pursuant to the
            exemption from the registration provided by Rule 144 under the
            Securities Act.

      and unless the box below is checked, the undersigned confirms that, to the
undersigned's knowledge, such Securities are not being transferred to an
"affiliate" of the Company as defined in Rule 144 under the Securities Act (an
"Affiliate").

      [_]   The transferee is an Affiliate of the Company.

DATE:                        __________________________
                                     Signature(s)

      (If the registered owner is a corporation, company, partnership or other
entity or fiduciary, the title of the Person signing on behalf of such
registered owner must be stated.)

Signature Guaranteed

_____________________________________
Participant in a Recognized Signature
Guarantee Medallion Program

<PAGE>

By: _________________________
       Authorized Signatory

                                     - 2 -
<PAGE>

                                   EXHIBIT B-2

               [FORM OF INSTITUTIONAL ACCREDITED INVESTOR LETTER]

[Company]

[Address]

Ladies and Gentlemen:

            We are delivering this letter in connection with a transfer of 3.00%
Convertible Contingent Senior Notes due 2034 (the "Securities") which are
convertible into shares of Common Stock (the "Common Stock"), of Henry Schein,
Inc. (the "Company").

            We hereby confirm that:

            1. we are an "accredited investor" within the meaning of Rule
501(a)(1), (2) or (3) under the Securities Act of 1933, as amended (the
"Securities Act") or an entity in which all of the equity owners are accredited
investors within the meaning of Rule 501(a)(1), (2) or (3) under the Securities
Act (an "Institutional Accredited Investor"):

            2. any purchase of Securities by us will be for our own account or
for the account of one or more other Institutional Accredited Investors or as
fiduciary for the account of one or more trusts, each of which is an "accredited
investor" within the meaning of Rule 501(a)(7) under the Securities Act and for
each of which we exercise sole investment discretion;

            3. in the event that we purchase any Securities, we will acquire
Securities having a minimum principal amount of not less than $250,000 for our
own account or for any separate account for which we are acting;

            4. any Securities held by us will be certificated Securities in the
form of Exhibit A-2 to the Indenture relating to the Securities;

            5. we have such knowledge and experience in financial and business
matters that we are capable of evaluating the merits and risks of purchasing the
Securities; and

            6. we are not acquiring Securities with a view to distribution
thereof or with any present intention of offering or selling Securities or the
Common Stock issuable upon conversion thereof, except as permitted below;
provided that the disposition of our property and property of any accounts for
which we are acting as fiduciary shall remain at all times within our control.

            We understand that the Securities are being transferred in a
transaction not involving any public offering within the United States within
the meaning of the Securities Act and that the Securities and the shares of
Common Stock issuable upon conversion thereof have not been registered under the
Securities Act, and we agree, on our own behalf and on behalf of each account
for which we acquire any Securities, that if in the future we decide to resell
or otherwise transfer such Securities or the Common Stock issuable upon
conversion thereof, such Securities or Common Stock may be resold or otherwise
transferred only (i) to the Company or any subsidiary thereof, or (ii) to a
person who is a "qualified institutional buyer" (as defined in

<PAGE>

Rule 144A under the Securities Act) in a transaction meeting the requirements of
Rule 144A, or (iii) to an Institutional Accredited Investor that, prior to such
transfer, furnishes to the Trustee or transfer agent for such securities a
signed letter containing certain representations and agreements relating to the
restrictions on transfer of such securities (the form of which letter can be
obtained from such Trustee or transfer agent), or (iv) pursuant to the exemption
from registration provided by Rule 144 under the Securities Act (if available),
or (v) pursuant to a registration statement which has been declared effective
under the Securities Act (and which continues to be effective at the time of
such transfer), and in each case, in accordance with any applicable securities
laws of any State of the United States or any other applicable jurisdiction and
in accordance with the legends set forth on the Securities or the Common Stock
issuable upon conversion thereof, as the case may be. We further agree to
provide any person purchasing any of the Securities or the Common Stock issuable
upon conversion thereof other than pursuant to clause (v) above from us a notice
advising such purchaser that resales of such securities are restricted as stated
herein. We understand that the Trustee or transfer agent for the Securities and
the Common Stock will not be required to accept for registration of transfer any
Securities or any shares of Common Stock issued upon conversion of the
Securities except upon presentation of evidence satisfactory to the Company that
the foregoing restrictions on transfer have been complied with. We further
understand that any Securities and any certificates representing Common Stock
will be in the form of definitive physical certificates and that such
certificates will bear a legend reflecting the substance of this paragraph other
than certificates representing Securities or Common Stock transferred pursuant
to clause (v) above.

            We acknowledge that the Company, others and you will rely upon our
confirmations, acknowledgments and agreements set forth herein, and we agree to
notify you promptly in writing if any of our representations or warranties
herein ceases to be accurate and complete.

                                           _____________________________________
                                           (Name of Purchaser)

                                           By: _________________________________
                                           Name: _______________________________
                                           Title: ______________________________
                                           Address: ____________________________

                                      -2-

<PAGE>

                                                                     Exhibit 4.2

                                                                  EXECUTION COPY

                     $200,000,000 AGGREGATE PRINCIPAL AMOUNT

                               HENRY SCHEIN, INC.

                    3.00% CONVERTIBLE CONTINGENT SENIOR NOTES
                                    DUE 2034

                               PURCHASE AGREEMENT

                                                                  August 4, 2004

LEHMAN BROTHERS INC
J.P. MORGAN SECURITIES INC.
as representatives of the initial purchasers
c/o Lehman Brothers Inc.
745 Seventh Avenue
New York, New York 10019

Ladies and Gentlemen:

      Henry Schein, Inc., a Delaware corporation (the "COMPANY"), proposes,
subject to the terms and conditions stated herein, to issue and sell $200
million aggregate principal amount of its 3.00% Convertible Contingent Senior
Notes due 2034 (the "FIRM SECURITIES") to the initial purchasers listed on
Schedule I hereto (the "INITIAL PURCHASERS"), for whom Lehman Brothers Inc. and
J.P. Morgan Securities Inc. are acting as representatives (the
"REPRESENTATIVES"). In addition, the Company proposes to grant to the Initial
Purchasers an option to purchase up to an additional $40 million aggregate
principal amount of its 3.00% Convertible Contingent Senior Notes due 2034 on
the terms set forth in Section 2 (the "OPTION SECURITIES" and, together with the
Firm Securities, the "SECURITIES"). This is to confirm the agreement between the
Company and the Initial Purchasers concerning the offer, issue and sale of the
Securities.

      The Securities will be issued pursuant to an indenture (the "INDENTURE")
to be dated as of the First Delivery Date (as defined in Section 2(a)), between
the Company and The Bank of New York, as Trustee (the "TRUSTEE"). The Securities
will be convertible into duly and validly issued, fully paid and nonassessable
shares of common stock, par value $0.01 per share (the "COMMON STOCK"), of the
Company (such shares of Common Stock into which the Securities are convertible,
the "CONVERSION SHARES") on the terms, and subject to the conditions, set forth
in the Indenture.

      The Securities will be offered and sold to the Initial Purchasers without
being registered under the Securities Act of 1933, as amended, and the rules and
regulations of the Securities and Exchange Commission (the "COMMISSION")
thereunder (collectively, the "SECURITIES ACT"), in reliance upon an exemption
therefrom.

<PAGE>

                                                                               2

      Holders of the Securities (including the Initial Purchasers and their
direct and indirect transferees) will be entitled to the benefits of a Resale
Registration Rights Agreement, dated as of the First Delivery Date, between the
Company and the Representatives (the "REGISTRATION RIGHTS AGREEMENT"), the form
of which is contained in Annex A hereof, pursuant to which the Company will
agree, among other things, to file with the Commission a shelf registration
statement pursuant to Rule 415 under the Securities Act (the "REGISTRATION
STATEMENT") covering the resale of the Securities and the Conversion Shares, and
to use its reasonable best efforts to cause the Registration Statement to be
declared effective within the time periods specified therein.

      This Agreement, the Indenture and the Registration Rights Agreement are
referred to herein collectively as the "TRANSACTION DOCUMENTS".

            1. Representations, Warranties and Agreements of the Company The
Company represents, warrants to and agrees with, the Initial Purchasers that:

                  (a) The Company has prepared a preliminary offering memorandum
      dated August 3, 2004 (the "PRELIMINARY OFFERING MEMORANDUM") and will
      prepare an offering memorandum dated the date hereof (the "OFFERING
      MEMORANDUM") setting forth information concerning the Company, the
      Securities, the Common Stock and the Registration Rights Agreement, in
      form and substance reasonably satisfactory to you. Copies of the
      Preliminary Offering Memorandum have been, and copies of the Offering
      Memorandum will be, delivered by the Company to you. As used in this
      Agreement, "PRELIMINARY OFFERING MEMORANDUM" or "OFFERING MEMORANDUM"
      means the Preliminary Memorandum or Offering Memorandum, as the case may
      be, including the documents incorporated by reference therein. Each of the
      Preliminary Offering Memorandum and the Offering Memorandum, or any
      amendment or supplement thereto, will not as of its respective date, and
      the Offering Memorandum will not as of the applicable Delivery Date (as
      defined in Section 2(b)), contain any 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; provided that, the Company makes no representation or warranty
      as to information contained in or omitted from the Preliminary Offering
      Memorandum or the Offering Memorandum in reliance upon and in conformity
      with the written information furnished to the Company by the
      Representatives specifically for inclusion therein.

                  (b) The documents incorporated by reference in the Offering
      Memorandum (the "INCORPORATED DOCUMENTS"), when they became effective or
      were filed with the Commission, as the case may be, conformed in all
      material respects to the requirements of the Securities Exchange Act of
      1934, as amended, and the rules and regulations of the Commission
      thereunder (collectively, the "EXCHANGE ACT"), as applicable, and none of
      such documents contained any untrue statement of a material fact or
      omitted to state any material fact required to be stated therein or
      necessary to make the statements therein not misleading; and any further
      documents so filed and incorporated by reference in the Offering
      Memorandum, when such documents are filed with the Commission will conform
      in all material respects to the requirements of the Exchange Act and will
      not contain any untrue statement of a material fact or omit to state any

<PAGE>

                                                                               3

      material fact required to be stated therein or necessary to make the
      statements therein, in light of the circumstances in which they were made,
      not misleading.

                  (c) The Company and each of its subsidiaries has been duly
      incorporated and is validly existing as a corporation in good standing
      under the laws of its jurisdiction of incorporation, is duly qualified to
      do business and is in good standing as foreign corporations in each
      jurisdiction in which its ownership or lease of property or the conduct of
      its businesses requires such qualification except where the failure to be
      so qualified or in good standing would not have a material adverse effect
      on the business prospects, financial condition, stockholders' equity or
      results of operations of the Company or its subsidiaries taken as a whole
      (a "Material Adverse Effect"), and has all power and authority necessary
      to own, lease or hold its properties and to conduct the businesses in
      which it is engaged; and none of the subsidiaries of the Company other
      than Henry Schein Europe, Inc., Dentrix Dental Systems, Inc. and Henry
      Schein Holding GmbH is a "significant subsidiary", as such term is defined
      in Rule 405 of the Securities Act.

                  (d) The Company has an authorized and issued capitalization,
      as of the respective date, as set forth in the Offering Memorandum, and
      all of the issued shares of capital stock of the Company have been duly
      and validly authorized and issued, are fully paid and non-assessable and
      conform to the description thereof contained in the Offering Memorandum
      and all of the issued shares of capital stock of each subsidiary of the
      Company have been duly and validly authorized and issued and are fully
      paid and non-assessable and (except for directors' qualifying shares) are
      owned directly or indirectly by the Company, free and clear of all liens,
      encumbrances, equities, claims or adverse interests (collectively,
      "LIENS") of any nature. There has been no change in the authorized or
      issued capitalization of the Company or any of its subsidiaries since the
      date indicated in the Offering Memorandum except with respect to (i)
      changes occurring in the ordinary course of business and (ii) changes in
      outstanding Common Stock resulting from transactions relating to the
      Company's stock option, stock purchase and incentive plans as described in
      the Offering Memorandum.

                  (e) No relationship, direct or indirect, exists between or
      among the Company, on the one hand, and the directors, officers,
      stockholders, customers or suppliers of the Company, on the other hand,
      which would be required to be set forth in the Offering Memorandum if the
      Offering Memorandum were a prospectus included in a registration statement
      on Form S-4 that has not been so set forth or incorporated by reference
      therein.

                  (f) Except as set forth in the Offering Memorandum, there are
      no legal or governmental proceedings pending to which the Company or any
      of its subsidiaries is a party or of which any property or assets of the
      Company or any of its subsidiaries is subject which, if determined
      adversely to the Company or any of its subsidiaries, could reasonably be
      expected to have a Material Adverse Effect; and, to the Company's
      knowledge, no such proceedings are threatened or contemplated by
      governmental authorities or threatened by others.

<PAGE>

                                                                               4

                  (g) Except as set forth in the Offering Memorandum and except
      with respect to the rights contained in the Registration Rights Agreement,
      there are no contracts, agreements or other documents between the Company
      and any person granting such person the right to require the Company to
      file a registration statement under the Securities Act with respect to any
      securities of the Company as part or on account of, or otherwise in
      connection with, the offering of the Securities or any of the other
      transactions contemplated by the Transaction Documents.

                  (h) Neither the Company nor any of its subsidiaries (i) is in
      violation of its charter or by-laws, (ii) is in default in any respect,
      and no event has occurred which, with notice or lapse of time or both,
      would constitute such a default, in the due performance or observance of
      any term, covenant or condition contained in any indenture, mortgage, deed
      of trust, loan agreement or other agreement or instrument to which it is a
      party or by which it is bound or to which any of its properties or assets
      is subject or (iii) is in violation in any respect of any law, ordinance,
      governmental rule, regulation or court decree to which it or its property
      or assets may be subject or has failed to obtain any material license,
      permit, certificate, franchise or other governmental authorization or
      permit necessary to the ownership of its property or to the conduct of its
      business, which, in the cases of clauses (ii) or (iii) herein,
      individually or in the aggregate, could reasonably be expected to have a
      Material Adverse Effect.

                  (i) Neither the Company nor any of its subsidiaries has
      sustained, since the date of the latest financial statements incorporated
      by reference in the Offering Memorandum, any material loss or interference
      with its business from fire, explosion, flood or other calamity, whether
      or not covered by insurance, or from any labor dispute or court or
      governmental action, order or decree, otherwise than as set forth or
      contemplated in the Offering Memorandum (a "MATERIAL LOSS"); and, since
      such date, there has not been any change in the capital stock or material
      change in the short-term debt 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, management, consolidated financial position,
      stockholders' equity, results of operations, business or prospects of the
      Company and its subsidiaries, taken as a whole, otherwise than as set
      forth or contemplated in the Offering Memorandum (a "MATERIAL ADVERSE
      CHANGE").

                  (j) The financial statements (including the related notes and
      supporting schedules) included or incorporated by reference in the
      Preliminary Offering Memorandum and Offering Memorandum present fairly in
      all material respects the financial condition, results of operations and
      changes in financial position of the Company and its subsidiaries on the
      basis stated therein at the respective dates or for the respective periods
      to which they apply; except as otherwise stated in the Offering
      Memorandum, such statements and related schedules and notes have been
      prepared in accordance with generally accepted accounting principles
      consistently applied throughout the periods involved; the supporting
      schedules, if any, included or incorporated by reference in the
      Preliminary Offering Memorandum or the Offering Memorandum present fairly
      in all material respects in accordance with generally accepted accounting

<PAGE>

                                                                               5

      principles the information required to be stated therein; and the other
      financial information and data set forth in the Preliminary Offering
      Memorandum and Offering Memorandum (and any amendment or supplement
      thereto) are, in all material respects, accurately presented and prepared
      on a basis consistent with such financial statements (including the
      related notes and supporting schedules) and the books and records of the
      Company.

                  (k) BDO Seidman, LLP (the "ACCOUNTANTS"), who have certified
      the financial statements of the Company, whose report is incorporated by
      reference in the Offering Memorandum and who have delivered the initial
      letter referred to in Section 5(e) hereof, are an independent registered
      public public accounting firm as required by the Securities Act; and the
      Accountants were independent accountants as required by the Securities Act
      during the periods covered by the financial statements on which they
      reported.

                  (l) The Company and each of its subsidiaries have good and
      marketable title in fee simple to all 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 those that (i)
      are set forth in the Offering Memorandum, (ii) do not materially affect
      the value of such property and do not materially interfere with the use
      made and proposed to be made of such property by the Company and its
      subsidiaries or (iii) could not reasonably be expected, individually or in
      the aggregate, to have a Material Adverse Effect; and all assets held
      under lease by the Company and its subsidiaries are held by them under
      valid, subsisting and enforceable leases, with such exceptions as are not
      material and do not interfere with the use made and proposed to be made of
      such property and buildings by the Company and its subsidiaries.

                  (m) The Company and each of its subsidiaries carry, or are
      covered by, insurance in such amounts and covering such risks as is
      adequate for the conduct of their respective businesses and the value of
      their respective properties from insurers of recognized financial
      responsibility and as is customary for companies engaged in similar
      businesses in similar industries. Neither the Company nor any of its
      subsidiaries (i) has received notice from any insurer or agent of such
      insurer that substantial capital improvements or other material
      expenditures will have to be made in order to continue such insurance or
      (ii) has any reason to believe that it will not be able to renew its
      existing insurance coverage as and when such coverage expires or to obtain
      similar coverage from similar insurers at a cost that would not have a
      Material Adverse Effect.

                  (n) The Company and each of its subsidiaries has such permits,
      licenses, consents, exemptions, franchises, authorizations and other
      approvals (each, an "AUTHORIZATION") of, and has made all filings with and
      notices to, all governmental or regulatory authorities and self-regulatory
      organizations and all courts and other tribunals, including, without
      limitation, under any applicable environmental law, ordinance, rule,
      regulation, order, judgment, decree or permit, as are necessary to own,
      lease, license and operate its respective properties and to conduct its
      business, except where the failure to have any such Authorization or to
      make any such filing or notice would not have a Material Adverse Effect;
      each such Authorization is valid and in full force and effect and

<PAGE>

                                                                               6

      the Company and each of its subsidiaries is in compliance with all the
      terms and conditions thereof and with the rules and regulations of the
      authorities and governing bodies having jurisdiction with respect thereto;
      and no event has occurred (including, without limitation, the receipt of
      any notice from any authority or governing body) which allows or, after
      notice or lapse of time or both, would allow, revocation, suspension or
      termination of any such Authorization or results or, after notice or lapse
      of time or both, would result in any other impairment of the rights of the
      holder of any such Authorization; and such Authorizations contain no
      restrictions that are burdensome to the Company or any of its
      subsidiaries, except where such failure to be valid and in full force and
      effect or to be in compliance, the occurrence of any such event or the
      presence of any such restriction would not individually or in the
      aggregate have a Material Adverse Effect.

                  (o) The Company and each of its subsidiaries own or possess
      adequate rights to use all material patents, patent rights, patent
      applications, trademarks, service marks, trade names, trademark
      registrations, service mark registrations, copyrights, inventions,
      know-how (including trade secrets and other unpatented and/or unpatentable
      proprietary or confidential information, systems or procedures) and
      licenses ("INTELLECTUAL PROPERTY") necessary for the conduct of their
      respective businesses and have no reason to believe that the conduct of
      their respective businesses will conflict with such Intellectual Property;
      and neither the Company nor any of its subsidiaries has received any
      notice of infringement of or conflict with asserted rights of others with
      respect to any of such Intellectual Property which, individually or in the
      aggregate, if the subject of an unfavorable decision, ruling or finding,
      would have a Material Adverse Effect.

                  (p) None of the Company and its subsidiaries is involved in
      any strike, job action or labor dispute with any group of employees that
      might reasonably be expected to have a Material Adverse Effect, and, to
      the Company's knowledge, no such action or dispute is threatened.

                  (q) The Company and each of its subsidiaries is in compliance
      in all material respects with all presently applicable provisions of the
      Employee Retirement Income Security Act of 1974, as amended, and the
      regulations and published interpretations thereunder (collectively,
      "ERISA"); no "reportable event" (as defined in ERISA) has occurred with
      respect to any "pension plan" (as defined in ERISA) for which the Company
      would have any material liability; the Company has not incurred and does
      not expect to incur material liability under (i) Title IV of ERISA with
      respect to termination of, or withdrawal from, any "pension plan" or (ii)
      Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended,
      including the regulations and published interpretations thereunder
      (collectively, the "INTERNAL REVENUE CODE"); and each "pension plan" for
      which the Company would have any liability that is intended to be
      qualified under Section 401(a) of the Internal Revenue Code is so
      qualified in all material respects and nothing has occurred, whether by
      action or by failure to act, which could reasonably be expected to cause
      the loss of such qualification.

<PAGE>

                                                                               7

                  (r) The Company and each of its subsidiaries has filed all
      federal, state and local income and franchise tax returns required to be
      filed through the date hereof and has paid all taxes (including
      withholding taxes, penalties and interest, assessments, fees and other
      charges) due thereon, other than those being contested in good faith and
      for which adequate reserves have been taken; and no tax deficiency has
      been determined adversely to the Company or any of its subsidiaries which
      has had (nor does the Company have any knowledge of any tax deficiency
      which, if determined adversely to the Company or any of its subsidiaries,
      might have) a Material Adverse Effect.

                  (s) Since the date as of which information is given in the
      Offering Memorandum through the date hereof and except as described in the
      Offering Memorandum, the Company has not (i) issued or granted any
      securities, except in those issued or granted in accordance with existing
      stock option plans consistent with past practices, (ii) incurred any
      liability or obligation, direct or contingent, other than liabilities and
      obligations which were incurred in the ordinary course of business, and
      which are not material (iii) entered into any material transaction not in
      the ordinary course of business or (iv) declared or paid any dividend on
      any of its capital stock.

                  (t) The Company (i) makes and keeps accurate books and records
      and (ii) maintains a system of internal accounting controls which provide
      reasonable assurance that (A) transactions are executed in accordance with
      management's authorization, (B) transactions are recorded and reported to
      the Company's management as necessary to permit preparation of its
      financial statements in conformity with United States generally accepted
      accounting principles and to maintain accountability for its assets, (C)
      access to its assets is permitted only in accordance with management's
      authorization and (D) the reported accountability for its assets is
      compared with existing assets at reasonable intervals and appropriate
      action is taken with respect to any differences.

                  (u) The Company has established and maintains disclosure
      controls and procedures (as such term is defined in Rule 13a-15(e) and
      15d-15(e) under the Exchange Act), which (i) are designed to ensure that
      material information relating to the Company, including its consolidated
      subsidiaries, is made known to the Company's principal executive officer
      and its principal financial officer by others within those entities,
      particularly during the periods in which the periodic reports required
      under the Exchange Act are being prepared; (ii) have been evaluated for
      effectiveness and (iii) are effective in all material respects to perform
      the functions for which they were established.

                  (v) Based on the evaluation of its disclosure controls and
      procedures, the Company is not aware of (i) any significant deficiency in
      the design or operation of internal controls which could reasonably be
      expected to adversely affect the Company's ability to record, process,
      summarize and report financial data or any material weaknesses in internal
      controls over financial reporting or (ii) any fraud, whether or not
      material, that involves management or other employees who have a
      significant role in the Company's internal controls.

<PAGE>

                                                                               8

                  (w) Neither the Company nor any of its subsidiaries, nor, to
      the Company's knowledge, any director, officer, agent, employee or other
      person associated with or acting on behalf of the Company or any of its
      subsidiaries, has used any corporate funds for any unlawful contribution,
      gift, entertainment or other unlawful expense relating to political
      activity; made any direct or indirect unlawful payment to any foreign or
      domestic government official or employee from corporate funds; violated or
      is in violation of any material provision of the Foreign Corrupt Practices
      Act of 1977, as amended, or made any bribe, rebate, payoff, influence
      payment, kickback or other unlawful payment.

                  (x) There has been no storage, disposal, generation,
      manufacture, refinement, transportation, handling or treatment of toxic
      wastes, medical wastes, hazardous wastes or hazardous substances by the
      Company or any of its subsidiaries (or, to the knowledge of the Company,
      any of their predecessors in interest) at, upon or from any of the
      property now or previously owned or leased by the Company or its
      subsidiaries in violation of any applicable law, ordinance, rule,
      regulation, order, judgment, decree or permit or which would require
      remedial action under any applicable law, ordinance, rule, regulation,
      order, judgment, decree or permit, except for any violation or remedial
      action which would not have, or could not be reasonably likely to have a
      Material Adverse Effect; there has been no material spill, discharge,
      leak, emission, injection, escape, dumping or release of any kind onto
      such property or into the environment surrounding such property of any
      toxic wastes, medical wastes, solid wastes, hazardous wastes or hazardous
      substances due to or caused by the Company or any of its subsidiaries or
      with respect to which the Company or any of its subsidiaries have
      knowledge, except for any such spill, discharge, leak, emission,
      injection, escape, dumping or release which would not have or would not be
      reasonably likely to have a Material Adverse Effect; and the terms
      "hazardous wastes", "toxic wastes", "hazardous substances" and "medical
      wastes" shall have the meanings specified in any applicable local, state,
      federal and foreign laws or regulations with respect to environmental
      protection.

                  (y) This Agreement has been duly authorized, executed and
      delivered by the Company.

                  (z) The Company has all necessary power and authority to
      execute and deliver the Indenture and perform its obligations thereunder;
      the Indenture has been duly authorized by the Company and, upon the
      effectiveness of the Registration Statement, will be qualified under the
      Trust Indenture Act of 1939, as amended, and the rules and regulations of
      the Commission thereunder (collectively, the "TRUST INDENTURE ACT"); when
      the Indenture is duly executed and delivered by the Company, assuming due
      authorization, execution and delivery of the Indenture by the Trustee, it
      will constitute a legally valid and binding agreement of the Company,
      enforceable against the Company in accordance with its terms, subject to
      the effects of bankruptcy, insolvency, fraudulent conveyance,
      reorganization, moratorium and other similar laws relating to or affecting
      creditors' rights generally, general equitable principles (whether
      considered in a proceeding in equity or at law) and an implied covenant of
      good faith and fair dealing;

<PAGE>

                                                                               9

      and the Indenture will conform, when executed, in all material respects to
      the description thereof contained in the Offering Memorandum.

                  (aa) The Company has all necessary power and authority to
      execute, issue and deliver the Securities and perform its obligations
      thereunder; the Securities have been duly authorized by the Company and
      when the Securities are executed, authenticated and issued in accordance
      with the terms of the Indenture and delivered to and paid for by the
      Initial Purchasers pursuant to this Agreement on the applicable Delivery
      Date, assuming due authentication of the Securities by the Trustee, such
      Securities will constitute legally valid and binding obligations of the
      Company entitled to the benefits of the Indenture, enforceable against the
      Company in accordance with their terms, subject to the effects of
      bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
      and other similar laws relating to or affecting creditors' rights
      generally, general equitable principles (whether considered in a
      proceeding in equity or at law) and an implied covenant of good faith and
      fair dealing; and the Securities will conform, when issued, in all
      material respects to the description thereof contained in the Offering
      Memorandum.

                  (bb) The Company has all necessary power and authority to
      execute, issue and deliver the Conversion Shares; the Conversion Shares
      have been duly and validly authorized and reserved for issuance upon
      conversion of the Securities and are free of preemptive rights; all
      Conversion Shares, when issued and delivered upon such conversion in
      accordance with the terms of the Indenture, will be duly and validly
      authorized and issued, fully paid and nonassessable and will be free and
      clear of any Liens; and the Conversion Shares will conform, if issued, in
      all material respects to the description thereof in the Offering
      Memorandum.

                  (cc) The Company has all necessary power and authority to
      execute and deliver the Registration Rights Agreement and perform its
      obligations thereunder; the Registration Rights Agreement and the
      transactions contemplated thereby have been duly authorized by the Company
      and, when the Registration Rights Agreement is duly executed and delivered
      by the Company, assuming due authorization, execution and delivery by the
      Representatives, it will be a legally valid and binding agreement of the
      Company, enforceable against the Company in accordance with its terms,
      except as the enforceability thereof may be limited by bankruptcy,
      insolvency, fraudulent conveyance, reorganization, moratorium and other
      similar laws relating to or affecting creditors' rights generally, subject
      to general principles of equity and to limitations on availability of
      equitable relief, including specific performance (whether considered in a
      proceeding in equity or at law) and an implied covenant of good faith and
      fair dealing, and except with respect to the rights of indemnification and
      contribution thereunder, where enforcement thereof may be limited by
      federal or state securities laws or the policies underlying such laws; and
      the Registration Rights Agreement will conform, when executed and
      delivered, in all material respects to the description thereof contained
      in the Offering Memorandum.

                  (dd) The execution, delivery and performance by the Company of
      the Transaction Documents, the issuance of the Securities and the
      Conversion Shares, the compliance by the Company with all the provisions
      hereof and thereof and the

<PAGE>

                                                                              10

      consummation of the transactions contemplated hereby and thereby will not
      (i) conflict with or result in a breach or violation of any of the terms
      or provisions of, or constitute a default under, any indenture, mortgage,
      deed of trust, loan agreement, lease 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
      property or assets of the Company or any of its subsidiaries is subject,
      (ii) result in any violation of the provisions of the charter or by-laws
      of the Company or any of its subsidiaries (iii) result in any violation of
      any statute or any order, rule or regulation of any court or governmental
      agency or body having jurisdiction over the Company or any of its
      subsidiaries or any of their properties or assets, (iv) result in the
      imposition or creation of (or the obligation to create or impose) a Lien
      under any 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
      or their respective properties or assets is bound or (v) result in the
      suspension, termination or revocation of any Authorization of the Company
      or any of its subsidiaries or any other impairment of the rights of the
      holder of any such Authorization; except, in the case of clauses (i),
      (iii), (iv) and (v) as could not reasonably be expected to have a Material
      Adverse Effect.

                  (ee) Except (i) with respect to the transactions contemplated
      by the Registration Rights Agreement as may be required under the
      Securities Act and the qualification of the Indenture under the Trust
      Indenture Act, (ii) as required by applicable state securities or "blue
      sky" laws and (iii) for such consents, approvals, authorizations, orders,
      filings or registrations which have been obtained or made, no consent,
      approval, authorization or order of, or filing or registration with, any
      court or governmental agency or body having jurisdiction over the Company
      or any of its subsidiaries or any of their respective properties or assets
      is required for the execution, delivery and performance of the Transaction
      Documents by the Company, the issuance of the Securities and the
      Conversion Shares and the consummation of the transactions contemplated
      hereby and thereby.

                  (ff) Neither the Company nor any subsidiary is or, as of the
      applicable Delivery Date, after giving effect to the issuance of the
      Securities and the application of the net proceeds therefrom as set forth
      in the Offering Memorandum, will be an "investment company" as defined,
      and subject to regulation, under the Investment Company Act of 1940, as
      amended, and the rules and regulations of the Commission thereunder
      (collectively, the "INVESTMENT COMPANY ACT").

                  (gg) Except as disclosed in the Offering Memorandum, (i) there
      are no outstanding securities convertible into or exchangeable for, or
      warrants, options or rights issued by the Company to purchase, any shares
      of the capital stock of the Company, (ii) there are no statutory,
      contractual, preemptive or other rights to subscribe for or to purchase
      any Common Stock and (iii) there are no restrictions upon transfer of the
      Common Stock pursuant to the Company's certificate of incorporation or
      bylaws.

                  (hh) Except as contemplated under the Registration Rights
      Agreement and assuming the accuracy of the representations and warranties
      of the Initial Purchasers contained in Section 6 and their compliance with
      the agreements set forth therein, it is not

<PAGE>

                                                                              11

      necessary, in connection with the issuance and sale of the Securities to
      the Initial Purchasers, the offer, resale and delivery of the Securities
      by the Initial Purchasers and the conversion of the Securities into
      Conversion Shares, in the manner contemplated by this Agreement, the
      Indenture and the Offering Memorandum, to register the Securities or the
      Conversion Shares under the Securities Act or to qualify the Indenture
      under the Trust Indenture Act.

                  (ii) No securities of the same class (within the meaning of
      Rule 144A(d)(3) under the Securities Act) as the Securities are listed on
      any national securities exchange registered under Section 6 of the
      Exchange Act or quoted on an automated inter-dealer quotation system.

                  (jj) None of the Company or any of its Affiliates (as defined
      in Rule 501(b) of Regulation D, an "AFFILIATE"), has, directly or through
      an agent (other than the Initial Purchasers, as to which no representation
      is made), engaged in any form of general solicitation or general
      advertising in connection with the offering of the Securities or the
      Conversion Shares (as those terms are used in Regulation D) under the
      Securities Act or in any manner involving a public offering within the
      meaning of Section 4(2) of the Securities Act; and the Company has not
      entered into any contractual arrangement with respect to the distribution
      of the Securities or the Conversion Shares, except for this Agreement and
      the Registration Rights Agreement, and the Company will not enter into any
      such arrangement.

                  (kk) None of the Company or any of its affiliates (other than
      the Initial Purchasers in connection with the transactions contemplated by
      this Agreement about which no representation is made by the Company) 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 will be integrated with the sale of the
      Securities or the Conversion Shares in a manner that would require the
      registration under the Securities Act of the Securities or the Conversion
      Shares.

                  (ll) Except as disclosed in the Offering Memorandum, the
      Company has not sold or issued any shares of Common Stock, any security
      convertible into shares of Common Stock, or any security of the same class
      as the Securities during the six-month period preceding the date of the
      Offering Memorandum, including any sales pursuant to Rule 144A under, or
      Regulations D of the Securities Act ("REGULATION D") or Regulation S of
      the Securities Act ("REGULATION S"), other than shares issued pursuant to
      employee benefit plans, qualified stock options plans or other employee
      compensation plans or pursuant to outstanding options, rights or warrants.

                  (mm) Neither the Company, nor to its knowledge, any of its
      Affiliates, has taken, directly or indirectly, any action (A) designed to
      cause or result in, or which has constituted or which might reasonably be
      expected to constitute, the stabilization or manipulation of the price of
      the Securities or Common Stock to facilitate the sale or resale of such
      securities or (B) prohibited by Regulation M under the Securities Act.

<PAGE>

                                                                              12

                  (nn) All indebtedness of the Company that may be repaid with
      the proceeds of the issuance and sale of the Securities was incurred, and
      the indebtedness represented by the Securities is being incurred, for
      proper purposes and in good faith and the Company was, at the time of the
      incurrence of such indebtedness that may be repaid with the proceeds of
      the issuance and sale of the Securities, and will be on the applicable
      Delivery Date (after giving effect to the application of the proceeds from
      the issuance of the Securities) solvent, and had at the time of the
      incurrence of such indebtedness that may be repaid with the proceeds of
      the issuance and sale of the Securities and will have on the applicable
      Delivery Date (after giving effect to the application of the proceeds from
      the issuance of the Securities) sufficient capital for carrying on its
      business and was, at the time of the incurrence of such indebtedness that
      may be repaid with the proceeds of the issuance and sale of the
      Securities, and will be on the applicable Delivery Date (after giving
      effect to the application of the proceeds from the issuance of the
      Securities) able to pay its debts as they mature.

                  (oo) There exists as of the date hereof no event or condition
      that constitutes or would constitute a default or an Event of Default
      under the Indenture that would result in a Material Adverse Effect.

                  (pp) Each certificate signed by any officer of the Company and
      delivered to the Initial Purchasers or counsel to the Initial Purchasers
      shall be deemed to be a representation and warranty by the Company to the
      Initial Purchasers as to the matters covered thereby.

                  (qq) Since July 30, 2002, the Company has not, directly or
      indirectly, including through any subsidiary, extended or maintained
      credit, or arranged for the extension of credit, renewed any extension of
      credit, in the form of a personal loan to or for any of its directors or
      executive officers in violation of the Sarbanes Oxley Act of 2002 and the
      rules and regulations promulgated in connection therewith (collectively,
      the "SARBANES-OXLEY ACT").

            2. Purchase, Sale and Delivery of Securities.

                  (a) Subject to the terms and conditions and in reliance upon
      the representations and warranties herein set forth, the Company agrees to
      sell to each Initial Purchaser, and each Initial Purchaser agrees,
      severally and not jointly, to purchase from the Company, at a purchase
      price of 97.75% of the principal amount thereof (the "PURCHASE PRICE") of
      the Firm Securities set forth opposite that Initial Purchaser's name in
      Schedule 1 hereto.

<PAGE>

                                                                              13

                  Delivery of and payment for the Firm Securities shall be made
      at the offices of Sullivan & Cromwell LLP, 125 Broad Street, New York, New
      York 10004, at 10:00 a.m., New York City time, on August 9, 2004, or such
      later date as the Representatives shall designate, which date and time may
      be postponed by agreement between the Representatives and the Company
      (such date and time of delivery and payment for the Firm Securities being
      referred to herein as the "FIRST DELIVERY DATE"). Delivery of the Firm
      Securities by the Company shall be made to the Initial Purchasers against
      payment of the purchase price by the Initial Purchasers; and payment for
      the Firm Securities by the Initial Purchasers shall be made against
      delivery to the Initial Purchasers of the Firm Securities as set forth
      below and effected either by wire transfer of immediately available funds
      to an account with a bank in The City of New York, the account number and
      the ABA number for such bank to be provided by the Company to the
      Representatives at least two business days in advance of the First
      Delivery Date, or by such other manner of payment as may be agreed by the
      Company and the Representatives.

                  (b) Subject to the terms and conditions and in reliance upon
      the representations and warranties herein set forth, the Company hereby
      grants the option to the Initial Purchasers to purchase, severally and not
      jointly, the Option Securities at the same purchase price as the Initial
      Purchasers will pay for the Firm Securities and the principal amount of
      the Option Securities to be sold to each Initial Purchaser will be that
      principal amount which bears the same ratio to the aggregate principal
      amount of Option Securities being purchased as the principal amount of
      Firm Securities set forth opposite the name of such Initial Purchaser in
      Schedule 1 hereto (or such number increased as set forth in Section 8).
      The option may be exercised in whole or in part at any time and from time
      to time not more than 13 days subsequent to the date of this Agreement
      upon notice in writing or by facsimile by Lehman Brothers Inc., on behalf
      of itself and the other Initial Purchasers, to the Company setting forth
      the amount (which shall be an integral multiple of $1,000 principal
      amount) of Option Securities as to which such option is being exercised.

                  The date for the delivery of and payment for the Option
      Securities, being herein referred to as an "OPTION DELIVERY DATE", which
      may be the First Delivery Date (the First Delivery Date and the Option
      Delivery Date, if any, being referred to as a "DELIVERY DATE"), shall be
      determined by the Representatives but shall not be later than five full
      business days after written notice of election to purchase Option
      Securities is given. Delivery of the Option Securities by the Company
      shall be made to the Initial Purchasers against payment of the purchase
      price therefor by the Initial Purchasers; and payment for the Option
      Securities by the Initial Purchasers shall be made against delivery to the
      Initial Purchasers of the Option Security as set forth below and effected
      either by wire transfer of immediately available funds to an account with
      a bank in The City of New York, the account number and the ABA number for
      such bank to be provided by the Company to the Representatives at least
      two business days in advance of the Option Delivery Date, or by such other
      manner of payment as may be agreed by the Company and the Representatives.

<PAGE>

                                                                              14

                  (c) The Company will deliver against payment of the purchase
      price the Securities initially sold to qualified institutional buyers
      ("QIBs"), as defined in Rule 144A under the Securities Act ("RULE 144A"),
      in the form of one or more permanent global certificates (the "GLOBAL
      SECURITIES"), registered in the name of Cede & Co., as nominee for The
      Depository Trust Company ("DTC"). Beneficial interests in the Securities
      initially sold to QIBs will be shown on, and transfers thereof will be
      effected only through, records maintained in book-entry form by DTC and
      its participants. The Global Securities will be made available, at the
      request of any Initial Purchaser, for checking at least 24 hours prior to
      such Delivery Date.

                  (d) Time shall be of the essence, and delivery at the time and
      place specified pursuant to this Agreement is a further condition of the
      obligations of each Initial Purchaser hereunder.

            3. Further Agreements of the Company. The Company agrees:

                  (a) To prepare the Offering Memorandum in a form approved by
      Lehman Brothers Inc.;

                  (b) To advise the Initial Purchasers promptly of any proposal
      to amend or supplement the Offering Memorandum and not to effect any such
      amendment or supplement without the consent of the Representatives. If, at
      any time prior to completion of the resale of the Securities by the
      Initial Purchasers, any event shall occur or condition exist as a result
      of which it is necessary to amend or supplement the Offering Memorandum in
      order that the Offering Memorandum 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 existing at
      the time it is delivered to a purchaser, not misleading, to promptly
      notify the Initial Purchasers and prepare, subject to the first sentence
      of this Section 3(b), such amendment or supplement as may be necessary to
      correct such untrue statement or omission;

                  (c) To furnish promptly to the Initial Purchasers and to
      Sullivan & Cromwell LLP, counsel to the Initial Purchasers, copies of the
      Preliminary Offering Memorandum and the Offering Memorandum (and all
      amendments and supplements thereto), as soon as available and in such
      quantities as the Initial Purchasers reasonably request for internal use
      and for distribution to prospective purchasers. The Company will pay the
      expenses of printing and distributing to the Initial Purchasers all such
      documents;

                  (d) Promptly from time to time, to take such action as Lehman
      Brothers Inc. may reasonably request, to qualify the Securities and the
      Conversion Shares for offering and sale under the securities laws of such
      United States jurisdictions as Lehman Brothers Inc. may request and to
      comply with such laws so as to permit the continuance of sales and
      dealings therein in such jurisdictions for as long as may be necessary to
      complete the resale of the Securities; provided that, in connection
      therewith, the Company shall not be required to qualify as a foreign

<PAGE>

                                                                              15

      corporation or to take any action that would subject it to general service
      of process or taxation in any jurisdiction in which the Company is not
      already so qualified or was not so subject;

                  (e) For a period of two years following the First Delivery
      Date, to furnish to the Initial Purchasers upon request copies of all
      materials furnished by the Company to its shareholders and all public
      reports and all reports and financial statements furnished by the Company
      to the principal national securities exchange upon which the Securities or
      Common Stock may be listed pursuant to requirements of or agreements with
      such exchange or to the Commission pursuant to the Exchange Act; provided,
      however, that the Company shall not be required to provide the Initial
      Purchasers with any such reports or similar forms that have been filed
      with the Commission by electronic submission pursuant to EDGAR;

                  (f) For a period of 90 days from the date hereof, not to,
      directly or indirectly, (1) announce an offering of, or file any
      registration statement with the Commission relating to, debt or equity
      securities of the Company (other than the offering contemplated by this
      Agreement) or offer for sale, sell, pledge or otherwise dispose of (or
      enter into any transaction or device which is designed to, or could be
      expected to, result in the disposition or purchase by any person at any
      time in the future of) any debt or equity securities of the Company (other
      than the Securities), any securities convertible into or exchangeable for
      Common Stock or substantially similar securities (other than the
      Securities, the Conversion Shares and Common Stock to be issued in the
      ordinary course under the Company's employee benefit plans, qualified
      stock option plans or other employee compensation plans existing on the
      date hereof or pursuant to currently outstanding options, warrants or
      rights) or sell or grant options, warrants or rights with respect to any
      shares of Common Stock or securities convertible into or exchangeable for
      Common Stock (other than the grant of options, warrants or rights pursuant
      to option or other employee compensation plans existing on the date
      hereof) or (2) enter into any swap or other derivatives transaction that
      transfers to another, in whole or in part, any of the economic benefits or
      risks of ownership of such shares of Common Stock, whether any such
      transaction described in clause (1) or (2) above is to be settled by
      delivery of Common Stock or other securities, in cash or otherwise,
      without the prior written consent of Lehman Brothers Inc. on behalf of the
      Initial Purchasers; and to cause each executive officer and director of
      the Company to furnish to the Initial Purchasers, on or prior to the date
      hereof, a letter substantially in the form of Annex B hereto;

                  (g) To assist the Initial Purchasers in arranging to cause the
      Securities to be accepted to trade in the PORTAL market ("PORTAL") of the
      National Association of Securities Dealers, Inc. ("NASD") and clearance
      and settlement through the facilities of DTC;

                  (h) To use its commercially reasonable best efforts to have
      the Conversion Shares approved by the National Market of the National
      Association of Securities Dealers, Inc. (the "NASDAQ NATIONAL MARKET") for
      listing prior to the

<PAGE>

                                                                              16

      effectiveness of the Registration Statement, if such approval is required
      in order for the Conversion Shares to be listed on the NASDAQ National
      Market;

                  (i) Not to take, directly or indirectly, any action which is
      designed to stabilize or manipulate, or which constitutes or which might
      reasonably be expected to cause or result in stabilization or
      manipulation, of the price of any security of the Company in connection
      with the offering of the Securities;

                  (j) To apply the proceeds from the sale of the Securities as
      set forth under "Use of Proceeds" in the Offering Memorandum;

                  (k) For so long as any of the Securities are "restricted
      securities" within the meaning of Rule 144(a)(3) under the Securities Act,
      to provide to any holder of the Securities or to any prospective purchaser
      of the Securities designated by any holder, upon request of such holder or
      prospective purchaser, information required to be provided by Rule
      144A(d)(4) of the Securities Act if, at the time of such request, the
      Company is not subject to the reporting requirements under Section 13 or
      15(d) of the Exchange Act;

                  (l) During the period of two years after the First Delivery
      Date or, if later, the Option Delivery Date, the Company will not, and
      will not permit any of its "affiliates" (as defined in Rule 144 under the
      Securities Act) to, resell any of the Securities which constitute
      "restricted securities" under Rule 144 that have been reacquired by any of
      them;

                  (m) To ensure that each of the Securities and the Conversion
      Shares will bear, to the extent applicable, the legend contained in the
      Offering Memorandum under the caption "Notice to Investors" for the time
      period and upon the other terms stated therein, except after the
      Securities are resold pursuant to a registration statement effective under
      the Securities Act;

                  (n) Except following the effectiveness of the Registration
      Statement, not to, and will cause its respective Affiliates not to,
      solicit any offer to buy or offer to sell the Securities by means of any
      form of general solicitation or general advertising (as those terms are
      used in Regulation D under the Securities Act) or in any manner involving
      a public offering within the meaning of Section 4(2) of the Securities
      Act;

                  (o) Not to, and will cause its respective affiliates 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) in a
      transaction that could be integrated with the sale of the Securities in a
      manner that would require the registration under the Securities Act of the
      Securities; and

            4. Expenses. The Company agrees to pay the following expenses,
whether or not the transactions contemplated by this Agreement are consummated
or this Agreement is terminated:

<PAGE>

                                                                              17

                  (a) the costs incident to the authorization, issuance, sale
      and delivery of the Securities and the Conversion Shares and any taxes
      payable in that connection;

                  (b) the costs incident to the preparation, printing and
      distribution of the Preliminary Offering Memorandum, the Offering
      Memorandum and any amendment or supplement to the Offering Memorandum, all
      as provided in this Agreement;

                  (c) the costs of producing and distributing the Transaction
      Documents;

                  (d) the costs of producing and distributing this agreement to
      members of the underwriting syndicate and selling group by mail, telex or
      other means of communication;

                  (e) the filing fees incident to securing the review by the
      NASD of the terms of sale of the Securities and any applicable listing or
      other fees, including all expenses and fees in connection with the
      application for inclusion of the Conversion Shares on the NASDAQ National
      Market;

                  (f) the fees and expenses of qualifying the Securities and the
      Conversion Shares under the securities laws of the several jurisdictions
      as provided in Section 3(d) and of preparing, printing and distributing a
      U.S. Blue Sky memorandum (including related fees and expenses of counsel
      to the Initial Purchasers);

                  (g) all reasonable costs and expenses incident to the
      preparation of the "road show" presentation or comparable marketing
      materials and the road show travelling expenses of the Company in
      connection with the offering of the Securities;

                  (h) all fees and expenses incurred in connection with any
      rating of the Securities;

                  (i) the fees and expenses (including fees and disbursements of
      counsel, if applicable) of Company, the Accountants, the Trustee and the
      costs and charges of any registrar, transfer agent, paying agent or
      conversion agent under the Indenture;

                  (j) the fees and expenses (including fees and disbursements of
      counsel) of the Company in connection with approval of the Securities by
      DTC for "book-entry" transfer;

                  (k) all expenses and fees in connection with the application
      for inclusion of the Securities in the PORTAL market; and

                  (l) all other costs and expenses incident to the performance
      of the obligations of the Company under this Agreement;

provided that, except as provided in this Section 4 and in Section 10, the
Initial Purchasers shall pay their own costs and expenses, including the costs
and expenses of their counsel.

<PAGE>

                                                                              18

            5. Conditions of the Initial Purchasers' Obligations. The several
obligations of the Initial Purchasers hereunder are subject to the accuracy,
when made and on the applicable Delivery Date, of the representations and
warranties of the Company contained herein, to the performance by the Company of
its obligations hereunder, and to each of the following additional terms and
conditions:

                  (a) No Initial Purchaser shall have discovered and disclosed
      to the Company prior to or on such Delivery Date that the Offering
      Memorandum or any amendment or supplement thereto, in the opinion of
      Sullivan & Cromwell LLP, counsel to the Initial Purchasers, contains an
      untrue statement of any material fact or omits 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.

                  (b) Proskauer Rose LLP, counsel to the Company, shall have
      furnished to the Initial Purchasers its written opinion addressed to the
      Representatives and dated such Delivery Date, in form and substance
      reasonably satisfactory to the Initial Purchasers, substantially in the
      form of Exhibit 1 hereto.

                  (c) Michael Ettinger, General Counsel of the Company shall
      have furnished to the Initial Purchasers his written opinion addressed to
      the Representatives and dated such Delivery Date, in form and substance
      reasonably satisfactory to the Initial Purchasers, substantially in the
      form of Exhibit 2 hereto.

                  (d) Sullivan & Cromwell LLP shall have furnished to the
      Initial Purchasers its written opinion, as counsel to the Initial
      Purchasers, addressed to the Representatives and dated such Delivery Date,
      in form and substance reasonably satisfactory to the Initial Purchasers.

                  (e) At the time of execution of this Agreement, the Initial
      Purchasers shall have received from Accountants a letter or letters, in
      form and substance reasonably satisfactory to the Initial Purchasers,
      addressed to the Representatives and dated the date hereof (i) confirming
      that they are independent public accountants within the meaning of the
      Securities Act and are in compliance with the applicable requirements
      relating to the qualification of accountants under Rule 2-01 of Regulation
      S-X of the Commission and (ii) stating, as of the date hereof (or, with
      respect to matters involving changes or developments since the respective
      dates as of which specified financial information is given in the Offering
      Memorandum, as of a date not more than five days prior to the date
      hereof), the conclusions and findings of such firm with respect to the
      financial information and other matters ordinarily covered by accountants'
      "comfort letters" to initial purchasers in connection with registered
      public offerings.

                  (f) With respect to the letter of the Accountants referred to
      in the preceding paragraph and delivered to the Initial Purchasers
      concurrently with the execution of this Agreement (the "INITIAL COMFORT
      LETTER"), the Company shall have furnished to the Initial Purchasers a
      letter (the "BRING-DOWN COMFORT LETTER") of such accountants, addressed to
      the Representatives and dated such Delivery Date (i)

<PAGE>

                                                                              19

      confirming that they are independent public accountants within the meaning
      of the Securities Act and are in compliance with the applicable
      requirements relating to the qualification of accountants under Rule 2-01
      of Regulation S-X of the Commission, (ii)stating, as of the date of the
      bring-down letter (or, with respect to matters involving changes or
      developments since the respective dates as of which specified financial
      information is given in the Offering Memorandum, as of a date not more
      than five days prior to the date of the bring-down letter), the
      conclusions and findings of such firm with respect to the financial
      information and other matters covered by the initial letters and (iii)
      confirming in all material respects the conclusions and findings set forth
      in the initial letters.

                  (g) The Company shall have furnished to the Initial Purchasers
      a certificate, dated the applicable Delivery Date, of its chief executive
      officer and its chief financial officer, in form and substance reasonably
      satisfactory to the Initial Purchasers, stating that:

                        (i) the representations, warranties and agreements of
            the Company in Section 1 of this Agreement are true and correct in
            all material respect as of such Delivery Date; and the Company has
            complied in all material respects with all its agreements contained
            herein to be performed prior to or on such Delivery Date and the
            conditions set forth in Sections 5(m) and (n) have been fulfilled;

                        (ii) since the respective dates as of which information
            is given in the Offering Memorandum, other than as set forth in the
            Offering Memorandum (exclusive of any amendments or supplements
            thereto subsequent to the date of this Agreement), (A) there has not
            occurred any change or any development that might have a Material
            Adverse Effect, (B) there has not been any change in the capital
            stock, the short-term debt, or the long-term debt of the Company or
            any of its subsidiaries that might have a Material Adverse Effect,
            (C) neither the Company nor any of its subsidiaries has incurred any
            material liability or obligation, direct or contingent outside of
            the ordinary course of business, (D) a Material Loss has not
            occurred, (E) the Company has not declared or paid any dividend on
            its capital stock, except for dividends declared in the ordinary
            course of business and consistent with past practice, and (F) except
            as set forth 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; and

                        (iii) each such officer has carefully examined the
            Offering Memorandum and, in such officer's opinion (A) the Offering
            Memorandum, as of its date and the applicable Delivery Date, did not
            and does not include any untrue statement of a material fact and did
            not and does not omit to state any material fact necessary to make
            the statements therein, in the light of the circumstances under
            which they were made, not misleading, and (B) since the date of the
            Offering Memorandum, no event has occurred which should have been
            set forth in a supplement or amendment to the Offering Memorandum.

<PAGE>

                                                                              20

                  (h) The Indenture (in form and substance reasonably
      satisfactory to the Initial Purchasers) shall have been duly executed and
      delivered by the Company and the Trustee, and the Securities shall have
      been duly executed and delivered by the Company and duly authenticated by
      the Trustee.

                  (i) The Company and the Representatives shall have executed
      and delivered the Registration Rights Agreement (in form and substance
      satisfactory to the Initial Purchasers), and the Registration Rights
      Agreement shall be in full force and effect.

                  (j) The Initial Purchasers shall have received from each
      executive officer and director of the Company an executed lock-up letter
      agreement contemplated by Section 3(f) hereof.

                  (k) The NASD shall have accepted the Securities for trading on
      PORTAL and the Securities shall be eligible for clearance and settlement
      through DTC.

                  (l) Subsequent to the execution and delivery of this
      Agreement, (i) no downgrading shall have occurred in the rating accorded
      the Company's debt securities or preferred stock by any "nationally
      recognized statistical rating organization", as that term is defined by
      the Commission for purposes of Rule 436(g)(2) of the Securities Act and
      (ii) no such organization shall have publicly announced or informed the
      Company that it has under surveillance or review, with possible negative
      implications, its rating of any of the Company's debt securities or
      preferred stock.

                  (m) Subsequent to the execution and delivery of this
      Agreement, there shall not have occurred any of the following: (i) trading
      in securities generally on the New York Stock Exchange or the American
      Stock Exchange or the NASDAQ or in the over-the-counter market, or trading
      in any securities of the Company on any exchange or in the
      over-the-counter market, shall have been suspended or the settlement of
      such trading generally shall have been materially disrupted or minimum
      prices shall have been established on any such exchange or such market by
      the Commission, by such exchange or by any other regulatory body or
      governmental authority having jurisdiction, (ii) a banking moratorium
      shall have been declared by Federal or state authorities of the United
      States, (iii) the United States shall have become engaged in hostilities,
      there shall have been an escalation in hostilities involving the United
      States, there shall have been a declaration of a national emergency or war
      by the United States or there shall have occurred any other substantial,
      national or international calamity or crisis, (iv) there shall have
      occurred such a material adverse change in general domestic or
      international economic, political or financial conditions, including
      without limitation as a result of terrorist activities, or the effect of
      international conditions on the financial markets in the United States
      shall be such, as to make it, in the judgment of Lehman Brothers Inc.,
      impracticable or inadvisable to proceed with the public offering or
      delivery of the

<PAGE>

                                                                              21

      Securities being delivered on such Delivery Date on the terms and in the
      manner contemplated in the Offering Memorandum.

                  (n) The Company shall have furnished to the Initial Purchasers
      such further information, certificates and documents as the Initial
      Purchasers may reasonably request to evidence compliance with the
      conditions set forth in this Section 5.

            All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel to the Initial Purchasers.

            6. Representations, Warranties and Agreements of Initial Purchasers.

                  (a) Each Initial Purchaser represents and warrants to,
      severally and not jointly, and agrees with the Company that it (i) is
      purchasing the Securities pursuant to a private sale exempt from
      registration under the Securities Act without the intent to distribute the
      Securities in violation of the Securities Act or the securities laws on
      any state of the United States or any other applicable jurisdiction, (ii)
      has not and will not solicit offers for, or offer or sell, the Securities
      by means of any form of general solicitation or general advertising or in
      any manner involving a public offering within the meaning of Section 4(2)
      of the Securities Act, and (iii) will solicit offers for the Securities
      only from, and will offer, sell or deliver the Securities, as part of its
      initial offering, only to persons whom it reasonably believe to be QIBs,
      or, if any such person is buying for one or more institutional accounts
      for which such person is acting as fiduciary or agent, only when such
      person has represented to it that each such account is a QIB, to whom
      notice has been given that such sale or delivery is being made in reliance
      on Rule 144A in transactions under Rule 144A.

                  (b) Each Initial Purchaser, severally and not jointly,
      represents, warrants and agrees with respect to offers and sales of
      Securities outside the United States that it understands that no action
      has been or will be taken in any jurisdiction by the Company that would
      permit a public offering of the Securities, or possession or distribution
      of either the Preliminary Memorandum or the Memorandum or any other
      offering or publicity material relating to the Securities, in any country
      or jurisdiction where action for that purpose is required; and such
      Initial Purchaser will comply with all applicable laws and regulations in
      each jurisdiction in which it acquires, offers, sells or delivers
      Securities or has in its possession or distributes either the Preliminary
      Memorandum or the Offering Memorandum or any such other material, in all
      cases at its own expense.

                  (c) Each Initial Purchaser acknowledges and agrees that the
      Company and, for purposes of the opinions to be delivered to the Initial
      Purchasers pursuant to Section 4(c) and 4(d), counsel for the Company may
      rely upon the accuracy of the representation and warranties of the Initial
      Purchasers, and compliance by the Initial Purchasers with their agreements
      and each Initial Purchaser hereby consents to such reliance.

<PAGE>

                                                                              22

            7. Indemnification and Contribution.

                  (a) The Company shall indemnify and hold harmless each Initial
      Purchaser, its directors, officers and employees and each person, if any,
      who controls any Initial Purchaser within the meaning of the Securities
      Act, from and against any loss, claim, damage or liability, joint or
      several, or any action in respect thereof (including, but not limited to,
      any loss, claim, damage, liability or action relating to purchases and
      sales of the Securities), to which that Initial Purchaser, director,
      officer, employee or controlling person may become subject, 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 (A) Preliminary Offering Memorandum, the Offering
      Memorandum or in any amendment or supplement thereto or (B) any blue sky
      application or other document prepared or executed by the Company (or
      based upon any written information furnished by the Company) filed in any
      jurisdiction specifically for the purpose of qualifying any or all of the
      Securities under the securities laws of any state or other jurisdiction
      (such application, document or information being hereinafter called a
      "BLUE SKY APPLICATION"), or (ii) the omission or alleged omission to state
      in the Preliminary Offering Memorandum, the Offering Memorandum or in any
      amendment or supplement thereto, in any Blue Sky Application any material
      fact necessary to make the statements therein not misleading in light of
      the circumstances under which they were made; 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,
      any untrue statement or alleged untrue statement or omission or alleged
      omission made in reliance upon and in conformity with the written
      information concerning such Initial Purchaser furnished to the Company
      through Lehman Brothers Inc. by or on behalf of any Initial Purchaser
      specifically for inclusion therein which information consists solely of
      the information specified in Section 7(e). The foregoing indemnity
      agreement is in addition to any liability which the Company may otherwise
      have to any Initial Purchaser or to any director, officer, employee or
      controlling person of that Initial Purchaser.

                  (b) Each Initial Purchaser, severally and not jointly, shall
      indemnify and hold harmless the Company, its directors, officers and
      employees and each person, if any, who controls the Company within the
      meaning of the Securities Act from and against any loss, claim, damage or
      liability, joint or several, or any action in respect thereof, to which
      the Company or any such director, officer, employee or controlling person
      may become subject, under the Securities Act 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 Preliminary Offering Memorandum or the Offering
      Memorandum or in any amendment or supplement thereto, or in any Blue Sky
      Application or (ii) the omission or alleged omission to state in any
      Preliminary Offering Memorandum or the Offering Memorandum or in any
      amendment or supplement thereto or in any Blue Sky Application, any
      material fact necessary to make the statements therein not misleading in
      light of the circumstances under which they were made, but in each

<PAGE>

                                                                              23

      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 the written information concerning such Initial Purchaser
      furnished to the Company through Lehman Brothers Inc. by or on behalf of
      that Initial Purchaser specifically for inclusion therein and set forth in
      Section 7(e), and shall reimburse the Company and any such director,
      officer, employee or controlling person promptly upon demand for any legal
      or other expenses reasonably incurred by the Company or any such director,
      officer, employee or controlling person in connection with investigating
      or defending or preparing to defend against any such loss, claim, damage,
      liability or action as such expenses are incurred. The foregoing indemnity
      agreement is in addition to any liability which any Initial Purchaser may
      otherwise have to the Company or any such director, officer, employee or
      controlling person.

                  (c) Promptly after receipt by an indemnified party under this
      Section 7 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 under this Section 7, 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 7 except to the extent it has been materially prejudiced 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 7. 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 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 7
      for any legal or other expenses subsequently incurred by the indemnified
      party in connection with the defense thereof other than reasonable costs
      of investigation; provided, however, that (i) if the Initial Purchasers
      are the indemnified parties, they shall have the right to employ separate
      counsel to represent jointly the Initial Purchasers and their respective
      officers, employees and controlling persons who may be subject to
      liability arising out of any claim in respect of which indemnity may be
      sought by the Initial Purchasers against the Company under this Section 7
      if, in the reasonable judgment of such Initial Purchasers it is advisable
      for such Initial Purchasers and such officers, employees and controlling
      persons to be jointly represented by separate counsel, and in that event
      the fees and expenses of such separate counsel shall be paid by the
      Company and (ii) an indemnified party shall have the right to employ
      separate counsel and be reimbursed for such costs in accordance with the
      provisions of this Section 7 in the event that (A) the indemnified person
      shall have reasonably concluded that there may be legal defenses available
      to it that are different from or in addition to those available to the
      indemnifying person; or (B) the named parties in any such proceeding
      (including any impleaded parties) include both the indemnifying person and
      the indemnified person and representation

<PAGE>

                                                                              24

      of both parties by the same counsel would be inappropriate due to actual
      or potential differing interests between them. No indemnifying party
      shall, (i) without the prior written consent of the indemnified parties
      (which consent shall not be unreasonably withheld), settle or compromise
      or consent to the entry of any judgment with respect to any pending or
      threatened claim, action, suit or proceeding in respect of which
      indemnification or contribution may be sought hereunder (whether or not
      the indemnified parties are actual or potential parties to such claim or
      action) unless such settlement, compromise or consent includes an
      unconditional release of each indemnified party from all liability arising
      out of such claim, action, suit or proceeding and does not include any
      statement as to any admission of fault, culpability of failure to act by
      or on behalf of any indemnified person, or (ii) 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 of 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.

                  (d) If the indemnification provided for in this Section 7
      shall for any reason be unavailable or insufficient to hold harmless an
      indemnified party under Section 7(a) or 7(b) in respect of any loss,
      claim, damage or liability, or any action in respect thereof, referred to
      therein, 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 on the one hand
      and the Initial Purchasers 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 the Initial
      Purchasers on the other with respect to the statements or omissions which
      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 the Initial
      Purchasers on the other with respect to such offering shall be deemed to
      be in the same proportion as the total net proceeds from the offering of
      the Securities purchased under this Agreement (before deducting expenses)
      received by the Company on the one hand, and the total discounts and
      commissions received by the Initial Purchasers with respect to the
      Securities purchased under this Agreement, on the other hand, bear to the
      total gross proceeds from the offering of the Securities under this
      Agreement. The relative fault shall be determined by reference to whether
      the untrue or alleged untrue statement of a material fact or omission or
      alleged omission to state a material fact relates to information supplied
      by the Company or the Initial Purchasers, the intent of the parties and
      their relative knowledge, access to information and opportunity to correct
      or prevent such statement or omission. The Company and the Initial
      Purchasers agree that it would not be just and equitable if contributions
      pursuant to this Section 7(d) were to be determined by pro rata allocation
      (even if the Initial Purchasers were treated as one entity for such
      purpose)

<PAGE>

                                                                              25

      or by any other method of allocation which 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 shall be
      deemed to include, for purposes of this Section 7(d), any legal or other
      expenses reasonably incurred by such indemnified party in connection with
      investigating or defending any such action or claim. Notwithstanding the
      provisions of this Section, no Initial Purchaser shall be required to
      contribute any amount in excess of the amount by which the total price at
      which the Securities resold by it in the initial placement of such
      Securities were offered to investors exceeds the amount of any damages
      which such Initial Purchaser has otherwise paid or become liable 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.
      The Initial Purchasers' obligations to contribute as provided in this
      Section 8(d) are several in proportion to their respective obligations and
      not joint.

                  (e) The Initial Purchasers severally confirm, and the Company
      acknowledges, that the statements with respect to the offering of the
      Securities by the Initial Purchasers that appear (i) in the first sentence
      of the third paragraph after the first use of the word "and" in such first
      sentence (concerning resales of the Securities by the Initial Purchasers),
      (ii) in the second sentence of the third paragraph (concerning resales of
      the Securities by the Initial Purchasers), (iii) in the eighth paragraph
      (concerning stabilization and short positions by the Initial Purchasers)
      and (iv) in the third sentence of the ninth paragraph (concerning
      market-making by the Initial Purchasers), each under the caption "Plan of
      Distribution" in the Offering Memorandum are correct and constitute the
      only information concerning the Initial Purchasers furnished in writing to
      the Company by or on behalf of the Initial Purchasers specifically for
      inclusion in the Offering Memorandum.

            8. Defaulting Initial Purchasers. If, on the applicable Delivery
Date, any Initial Purchaser defaults in the performance of its obligations under
this Agreement, the remaining non-defaulting Initial Purchaser shall be
obligated to purchase the principal amount of Firm Securities which the
defaulting Initial Purchaser agreed but failed to purchase on such Delivery
Date; provided, however, that the remaining non-defaulting Initial Purchaser
shall not be obligated to purchase any of the Firm Securities on such Delivery
Date if the aggregate principal amount of Firm Securities which the defaulting
Initial Purchaser agreed but failed to purchase on such date exceeds 9.09% of
the aggregate principal amount of Firm Securities to be purchased on such
Delivery Date, and any remaining non-defaulting Initial Purchaser shall not be
obligated to purchase more than 110% of the aggregate principal amount of Firm
Securities which it agreed to purchase on such Delivery Date pursuant to the
terms of Section 2. If the foregoing maximums are exceeded, you shall have the
right, within 48 hours thereafter, to make arrangements with the non-defaulting
Initial Purchaser, or those other purchasers satisfactory to the non-defaulting
Initial Purchaser who so agree, to purchase, in such proportion as may be agreed
upon among them, the aggregate principal amount of Firm Securities to be
purchased on such Delivery Date. The remaining Initial Purchaser shall have the
option, but not the

<PAGE>

                                                                              26

obligation, to elect to purchase the Firm Securities. If, within such 48 hour
time period, the remaining Initial Purchaser or other purchasers satisfactory to
the non-defaulting Initial Purchaser do not elect to purchase on such Delivery
Date the aggregate principal amount of Firm Securities which the defaulting
Initial Purchaser agreed but failed to purchase on such Delivery Date, this
Agreement (or, with respect to the Option Delivery Date, the obligation of the
Initial Purchasers to purchase, and of the Company to sell, the Option
Securities) shall terminate without liability on the part of any non-defaulting
Initial Purchaser or the Company, except that the Company will continue to be
liable for the payment of expenses to the extent set forth in Sections 4 and 10.
As used in this Agreement, the term "Initial Purchaser" includes, for all
purposes of this Agreement unless the context requires otherwise, any party not
listed in Schedule 1 hereto who, pursuant to this Section 8, purchases those
Firm Securities which a defaulting Initial Purchaser agreed but failed to
purchase.

            Nothing contained herein shall relieve a defaulting Initial
Purchaser of any liability it may have to the Company for damages caused by its
default. If other purchasers are obligated or agree to purchase the Securities
of a defaulting or withdrawing Initial Purchaser, either Lehman Brothers Inc. or
the Company may postpone the applicable Delivery Date for up to seven full
business days in order to effect any changes that, in the opinion of counsel to
the Company or counsel to the Initial Purchasers, may be necessary in the
Offering Memorandum or in any other document or arrangement.

            9. Termination. The obligations of the Initial Purchasers hereunder
may be terminated by the Initial Purchasers by notice given to and received by
the Company prior to delivery of and payment for the Securities if, prior to
that time, any of the events described in Sections 5(m), 5(n) or 5(o) shall have
occurred or if the Initial Purchasers shall decline to purchase the Firm
Securities for any reason permitted under this Agreement.

            10. Reimbursement of Initial Purchasers' Expenses. If (a) the
Company fails to tender the Securities for delivery to the Initial Purchasers by
reason of any failure, refusal or inability on the part of the Company to
perform any agreement on its part to be performed, or because any other
condition of the Initial Purchasers' obligations hereunder required to be
fulfilled by the Company is not fulfilled or (b) the Initial Purchasers decline
to purchase the Securities for any reason permitted under this Agreement
(including the termination of this Agreement pursuant to Section 9), the Company
shall reimburse the Initial Purchasers for all reasonable out-of-pocket expenses
(including reasonable fees and disbursements of counsel) incurred by the Initial
Purchasers in connection with this Agreement and the proposed purchase of the
Securities, and upon demand the Company shall pay the full amount thereof to the
Initial Purchasers. If this Agreement is terminated pursuant to Section 8 by
reason of the default of one or more Initial Purchasers, the Company will not be
obligated to reimburse any defaulting Initial Purchasers on account of any
expenses incurred.

            11. Notices, Etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:

                  (a) if to the Initial Purchasers, shall be delivered or sent
      by mail, telex or facsimile transmission to Lehman Brothers Inc., 745 7th
      Avenue, New York, New York 10019, Attention: Jed Brody (Fax: 646-758-3529;
      Telephone: 212-526-2206),

<PAGE>

                                                                              27

      and to J.P. Morgan Securities Inc., 277 Park Avenue, New York, New York
      10172, Attention: Paul O'Hern (Fax: 212-622-6037; Telephone: 212-622-5602)
      with a copy, in the case of any notice pursuant to Section 7(c), to the
      Director of Litigation, Office of the General Counsel, Lehman Brothers
      Inc., 399 Park Avenue, 10th Floor, New York, New York 10022, with a copy,
      in the case of any notice pursuant to Section 7(c), to J.P. Morgan
      Securities Inc., 277 Park Avenue, New York, New York 10172, Attention:
      Robert Vincent;

            with a copy to Sullivan & Cromwell LLP, 125 Broad Street, New York,
      New York 10004, Attention: Robert W. Downes (Fax: 212-558-3588; Telephone:
      212-558-4312);

                  (b) if to the Company, shall be delivered or sent by mail,
      telex or facsimile transmission to it at Henry Schein, Inc., 135 Duryea
      Road, Melville, New York 17747, Attention: Michael Ettinger, General
      Counsel (Fax: 631-843-5658, Telephone: 631-843-5993);

            with a copy to Proskauer Rose LLP, 1585 Broadway, New York, NY
      10036, Attention: Julie M. Allen, Esq. (Fax: 212-969-2900, Telephone:
      212-969-3295);

provided, however, that any notice to an Initial Purchaser pursuant to Section
7(c) shall be delivered or sent by mail, telex or facsimile transmission to each
Initial Purchaser, which address will be supplied to any other party hereto by
Lehman Brothers Inc. upon request. Any such statements, requests, notices or
agreements will take effect at the time of receipt thereof. The Company will be
entitled to act and rely upon any request, consent, notice or agreement given or
made on behalf of the Initial Purchasers by Lehman Brothers Inc. on behalf of
the Initial Purchasers.

            12. Persons Entitled to Benefit of Agreement. This Agreement will
inure to the benefit of and be binding upon the Initial Purchasers, the Company
and their respective successors. This Agreement and the terms and provisions
hereof are for the sole benefit of only those persons, except that (A) the
representations, warranties, indemnities and agreements of the Company contained
in this Agreement will also be deemed to be for the benefit of the officers and
employees of the Initial Purchasers and the person or persons, if any, who
control the Initial Purchasers within the meaning of Section 15 of the
Securities Act and (B) any indemnity agreement of the Initial Purchasers
contained in Section 7(b) of this Agreement will be deemed to be for the benefit
of directors, officers and employees of the Company and any person controlling
the Company within the meaning of Section 15 of the Securities Act. Nothing in
this Agreement is intended or shall be construed to give any person, other than
the persons referred to in this Section 12, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision contained
herein. No purchaser of the Securities shall be deemed to be a successor merely
by reason of such purchase.

            13. Survival. The respective indemnities, representations,
warranties and agreements of the Company and the Initial Purchasers contained in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, will survive the delivery of and payment for the Securities and will
remain in full force and effect, regardless of any termination

<PAGE>

                                                                              28

or cancellation of this Agreement or any investigation made by or on behalf of
any of them or any person controlling any of them.

            14. Definition of the Term "Business Day". For purposes of this
Agreement, "BUSINESS DAY" means any day on which the New York Stock Exchange,
Inc. is open for trading.

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

            16. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.

            17. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.

<PAGE>

                                                                              29

            If the foregoing correctly sets forth the agreement between the
Company and the Initial Purchasers, please indicate your acceptance in the space
provided for that purpose below.

                                             Very truly yours,

                                             HENRY SCHEIN, INC.

                                             By: _______________________________
                                                 Name:
                                                 Title:

Accepted and agreed by:

LEHMAN BROTHERS INC.

By: _________________________
    Authorized Representative

J.P. MORGAN SECURITIES INC.

By: _________________________
    Authorized Representative

As Representatives of the Initial Purchasers

<PAGE>

                                                                      SCHEDULE 1

<TABLE>
<CAPTION>
                                        AGGREGATE PRINCIPAL AMOUNT
                                         OF FIRM SECURITIES TO BE
INITIAL PURCHASER                                PURCHASED
-----------------                       --------------------------
<S>                                     <C>
Lehman Brothers Inc. ..............             $ 80,001,000
J.P. Morgan Securities Inc. .......             $ 80,000,000
Robert W. Baird & Co. Inc. ........             $ 13,333,000
William Blair & Company, LLC ......             $ 13,333,000
Morgan Stanley & Co. Inc. .........             $ 13,333,000
                                                ============
         Total.....................             $200,000,000
</TABLE>

<PAGE>

                                                                         ANNEX A

                     [FORM OF REGISTRATION RIGHTS AGREEMENT]

                                       A-1

<PAGE>

                                                                         ANNEX B

                            LOCK-UP LETTER AGREEMENT

LEHMAN BROTHERS INC.
J.P. MORGAN SECURITIES INC.
as representatives of the initial purchasers
c/o Lehman Brothers Inc.
745 Seventh Avenue
New York, New York 10019
Dear Ladies and Gentlemen:

      The undersigned understands that you and certain other firms propose to
enter into a purchase agreement (the "PURCHASE AGREEMENT") providing for the
purchase by you and such other firms (the "INITIAL PURCHASERS") of 3.00%
Convertible Contingent Senior Notes due 2034 (the "SECURITIES") of Henry Schein,
Inc., a Delaware corporation (the "COMPANY"), which are convertible into fully
paid, nonassessable shares of common stock of the Company, par value $0.01 per
share (the "COMMON STOCK"), and that the Initial Purchasers propose to reoffer
the Securities to certain qualified institutional buyers under Rule 144A of the
Securities Act of 1933, as amended (the "OFFERING").

      In consideration of the execution of the Purchase Agreement by the
Representatives, and for other good and valuable consideration, the undersigned
hereby irrevocably agrees that, without the prior written consent of Lehman
Brothers Inc., on behalf of the Initial Purchasers, the undersigned will not,
directly or indirectly, (1) offer for sale, sell, pledge or otherwise dispose of
(or enter into any transaction or device which is designed to, or could be
expected to, result in the disposition by any person at any time in the future
of) any Relevant Security (as defined below) or sell or grant options, warrants
or rights with respect to any Relevant Security or (2) enter into any swap or
other derivatives transaction that transfers to another, in whole or in part,
any of the economic benefits or risks of ownership of a Relevant Security,
whether any such transaction described in clause (1) or (2) above is to be
settled by delivery of a Relevant Security or other securities, in cash or
otherwise, for a period of 90 days after the date of the final Offering
Memorandum relating to the Offering. [Anything contained herein to the contrary
notwithstanding, after 30 days after the date of the final Offering Memorandum
relating to the Offering, the undersigned shall not be subject to any
restrictions hereunder, including, but not limited to, the restrictions
contained in paragraphs (1) and (2) above, with respect to [insert number of
shares equal to 15% of the total amount of the shares of Common Stock
beneficially owned by the undersigned on the date for which ownership is
expressed in the Company's proxy statement for its 2004 Annual Meeting of
Stockholders] shares of Common Stock (the "THRESHOLD RESTRICTIONS").]1 As used
herein, "RELEVANT SECURITY" shall mean the Common Stock or any other
substantially similar security and any security convertible into, or exercisable
or exchangeable for, the Common Stock or any substantially similar security.

--------------
1     Exception will not apply to Stanley M. Bergman.

                                       A-2

<PAGE>

      In furtherance of the foregoing, the Company and its transfer agent are
hereby authorized to decline to make any transfer of securities if such transfer
would constitute a violation or breach of this Lock-Up Letter Agreement.

      Notwithstanding the foregoing, the undersigned may (1) transfer Relevant
Securities by bona fide gift, will or intestate succession, provided that each
resulting transferee delivers to you an agreement satisfactory to you certifying
that such transferee is bound by the terms of this Agreement [and such transfer
pursuant to this clause (1) may be made without regard to the Threshold
Restrictions] and (2) make cash exercises of stock options, provided that, the
shares of Common Stock received upon such exercise shall be subject to the terms
of this Agreement[, including the Threshold Restrictions].

      The undersigned understands that the Company and the Initial Purchasers
will proceed with the Offering in reliance on this Lock-Up Letter Agreement.
Whether or not the Offering actually occurs depends on a number of factors,
including market conditions. Any Offering will only be made pursuant to a
Purchase Agreement, the terms of which are subject to negotiation between the
Company and the Initial Purchasers. In addition, it is understood that, if the
Company notifies you that it does not intend to proceed with the Offering, if
the Purchase Agreement is not executed, or if the Purchase Agreement (other than
the provisions thereof which survive termination) shall terminate or be
terminated prior to payment for and delivery of the Securities, the undersigned
will be released from its obligations under this Lock-Up Letter Agreement.

      This Agreement shall be governed by, and construed in accordance with, the
laws of New York.

                                       A-3

<PAGE>

      The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Lock-Up Letter Agreement and that,
upon request, the undersigned will execute any additional documents necessary in
connection with the enforcement hereof. Any obligations of the undersigned shall
be binding upon the heirs, personal representatives, successors and assigns of
the undersigned.

                                         Very truly yours,

                                         By: ______________________________
                                         Name:
                                         Title:

Dated: August __, 2004

                                      A-4

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