Document:

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                                                                   EXHIBIT 10.2

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                            CANADIAN CREDIT AGREEMENT

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

                          NORTHSTAR ENERGY CORPORATION

                                       and

                         DEVON ENERGY CANADA CORPORATION

                              as Canadian Borrowers

                             BANK OF AMERICA CANADA

                             as Administrative Agent

                         BANC OF AMERICA SECURITIES LLC

                                as Lead Arranger

                         BANC ONE CAPITAL MARKETS, INC.

                              as Syndication Agent

                            THE CHASE MANHATTAN BANK

                             as Documentation Agent

                            FIRST UNION NATIONAL BANK

                             as Documentation Agent

                       and CERTAIN FINANCIAL INSTITUTIONS

                                   as Lenders

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

                                 US $275,000,000

                                 August 29, 2000

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                                TABLE OF CONTENTS

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CREDIT AGREEMENT ...................................................................................................        1
      Section 1.1.     Commitments to Make Advances; Canadian Notes ................................................        1
      Section 1.2.     Requests for New Canadian Advances ..........................................................        2
      Section 1.3.     Continuations and Conversions of Existing Canadian Advances .................................        4
      Section 1.4.     Repayments ..................................................................................        5
      Section 1.5.     Interest Rates and Fees. ....................................................................        7
      Section 1.6.     Extension of Conversion Date. ...............................................................        9
      Section 1.7.     Conversion to Canadian Term Loan ............................................................        9
      Section 1.8.     Non-Accepting Lender ........................................................................        10
      Section 1.9.     Competitive Bid Loans .......................................................................        10
      Section 1.10.    Use of Proceeds .............................................................................        13
      Section 1.11.    Refinancings of Canadian Swing Loans ........................................................        14
      Section 1.12.    Re-allocation of Tranche B Maximum Credit Amount and Canadian Maximum Credit Amount .........        15

ARTICLE II - Bankers' Acceptances and Letters of Credit ............................................................        16
      Section 2.1.     Creation of Bankers' Acceptances ............................................................        16
      Section 2.2.     Terms of Acceptance by the Canadian Resident Lenders ........................................        17
      Section 2.3.     General Procedures for Bankers' Acceptances .................................................        19
      Section 2.4.     Execution of Bankers' Acceptances ...........................................................        21
      Section 2.5.     Escrowed Funds ..............................................................................        21
      Section 2.6.     Letters of Credit ...........................................................................        21
      Section 2.7.     Requesting Letters of Credit ................................................................        22
      Section 2.8.     Reimbursement and Participations ............................................................        23
      Section 2.9.     Letter of Credit Fees .......................................................................        23
      Section 2.10.    No Duty to Inquire ..........................................................................        23
      Section 2.11.    LC Collateral ...............................................................................        24

ARTICLE III - Payments to Lenders ..................................................................................        25
      Section 3.1.     General Procedures ..........................................................................        25
      Section 3.2.     Change in Law; Gross Up; Increased Cost and Reduced Return ..................................        27
      Section 3.3.     Limitation on Types of Canadian Loans .......................................................        29
      Section 3.4.     Illegality ..................................................................................        29
      Section 3.5.     Treatment of Affected Loans .................................................................        29
      Section 3.6.     Compensation ................................................................................        30
      Section 3.7.     Change of Applicable Lending Office .........................................................        31
      Section 3.8.     Replacement of Lenders ......................................................................        31
      Section 3.9.     Other Taxes .................................................................................        31
      Section 3.10.    Currency Conversion and Currency Indemnity ..................................................        32
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ARTICLE IV - Conditions Precedent to Advances ......................................................................        33
      Section 4.1.     Documents to be Delivered ...................................................................        33
      Section 4.2.     Additional Conditions Precedent to First Canadian Loan or First Letter of Credit ............        34
      Section 4.3.     Additional Conditions Precedent to all Canadian Loans and Letters of Credit .................        35

ARTICLE V - Representations and Warranties .........................................................................        35
      Section 5.1.     No Default ..................................................................................        35
      Section 5.2.     Organization and Good Standing ..............................................................        35
      Section 5.3.     Authorization ...............................................................................        36
      Section 5.4.     No Conflicts or Consents ....................................................................        36
      Section 5.5.     Enforceable Obligations .....................................................................        36
      Section 5.6.     Full Disclosure .............................................................................        36
      Section 5.7.     Litigation ..................................................................................        37
      Section 5.8.     Environmental and Other Laws ................................................................        37
      Section 5.9.     Names and Places of Business ................................................................        37
      Section 5.10.    Canadian Borrowers' Subsidiaries ............................................................        37
      Section 5.11.    Title to Properties; Licenses ...............................................................        38
      Section 5.12.    Solvency ....................................................................................        38

ARTICLE VI - Affirmative Covenants of Canadian Borrowers ...........................................................        38
      Section 6.1.     Payment and Performance .....................................................................        38
      Section 6.2.     Books, Financial Statements and Reports .....................................................        39
      Section 6.3.     Other Information and Inspections ...........................................................        40
      Section 6.4.     Notice of Material Events and Change of Address .............................................        40
      Section 6.5.     Maintenance of Properties ...................................................................        41
      Section 6.6.     Maintenance of Existence and Qualifications .................................................        41
      Section 6.7.     Payment of Trade Liabilities, Taxes, etc ....................................................        41
      Section 6.8.     Insurance ...................................................................................        41
      Section 6.9.     Performance on Canadian Borrowers' Behalf ...................................................        41
      Section 6.10.    Interest ....................................................................................        42
      Section 6.11.    Compliance with Law .........................................................................        42
      Section 6.12.    Environmental Matters .......................................................................        42
      Section 6.13.    Bank Accounts; Offset .......................................................................        42

ARTICLE VII - Negative Covenants of Canadian Borrowers .............................................................        43
      Section 7.1.     Indebtedness ................................................................................        43
      Section 7.2.     Limitation on Liens .........................................................................        44
      Section 7.3.     Limitation on Mergers .......................................................................        44
      Section 7.4.     Limitation on Issuance of Securities by Subsidiaries of US Borrower; Ownership of
                         certain Restricted Subsidiaries by US Borrower ............................................        44
      Section 7.5.     Limitation on Restricted Payments ...........................................................        45
      Section 7.6.     Transactions with Affiliates ................................................................        45
      Section 7.7.     Funded Debt to Total Capitalization .........................................................        45
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ARTICLE VIII - Events of Default and Remedies ......................................................................        45
      Section 8.1.     Events of Default ...........................................................................        45
      Section 8.2.     Remedies ....................................................................................        48

ARTICLE IX - Canadian Agent ........................................................................................        48
      Section 9.1.     Appointment, Powers, and Immunities .........................................................        48
      Section 9.2.     Reliance by Canadian Agent ..................................................................        49
      Section 9.3.     Defaults ....................................................................................        50
      Section 9.4.     Rights as Lender ............................................................................        50
      Section 9.5.     Indemnification .............................................................................        50
      Section 9.6.     Non-Reliance on Canadian Agent and Other Lenders ............................................        51
      Section 9.7.     Administrative Agent in its Individual Capacity .............................................        51
      Section 9.8.     Sharing of Set-Offs and Other Payments ......................................................        51
      Section 9.9.     Investments .................................................................................        52
      Section 9.10.    Benefit of Article IX .......................................................................        52
      Section 9.11.    Resignation .................................................................................        52
      Section 9.12.    Lenders to Remain Pro Rata ..................................................................        53
      Section 9.13.    Other Agents ................................................................................        53

ARTICLE X - Miscellaneous ..........................................................................................        53
      Section 10.1.    Waivers and Amendments; Acknowledgments .....................................................        53
      Section 10.2.    Survival of Agreements; Cumulative Nature ...................................................        55
      Section 10.3.    Notices .....................................................................................        55
      Section 10.4.    Payment of Expenses; Indemnity ..............................................................        56
      Section 10.5.    Parties in Interest .........................................................................        57
      Section 10.6.    Assignments and Participations ..............................................................        57
      Section 10.7.    Confidentiality .............................................................................        60
      Section 10.8.    Governing Law; Submission to Process ........................................................        61
      Section 10.9.    Waiver of Judgment Interest Act (Alberta ....................................................        61
      Section 10.10.   Deemed Reinvestment Not Applicable ..........................................................        61
      Section 10.11.   Limitation on Interest ......................................................................        61
      Section 10.12.   Termination; Limited Survival ...............................................................        62
      Section 10.13.   Severability ................................................................................        63
      Section 10.14.   Counterparts; Fax ...........................................................................        63
      Section 10.15.   Waiver of Jury Trial, Punitive Damages, etc .................................................        63
      Section 10.16.   Defined Terms ...............................................................................        63
      Section 10.17.   Annex I, Exhibits and Schedules; Additional Definitions .....................................        64
      Section 10.18.   Amendment of Defined Instruments ............................................................        64
      Section 10.19.   References and Titles .......................................................................        64
      Section 10.20.   Calculations and Determinations .............................................................        64
      Section 10.21.   Construction of Indemnities and Releases ....................................................        64
      Section 10.22.   Separate Obligations ........................................................................        65
      Section 10.23.   Termination of Existing Canadian Agreement ..................................................        65
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Schedules and Exhibits:

Annex I            -        Defined Terms
Annex II           -        Lenders Schedule

Schedule 1         -        Disclosure Schedule
Schedule 2         -        Surety Bonds & Letters of Credit

Exhibit A-1        -        Promissory Note
Exhibit A-2        -        Canadian Swing Promissory Note
Exhibit B          -        Borrowing Notice
Exhibit C          -        Continuation/Conversion Notice
Exhibit D          -        Certificate Accompanying Financial Statements
Exhibit E          -        Opinion of Counsel for Restricted Persons
Exhibit F          -        Assignment and Acceptance Agreement
Exhibit G          -        Re-allocation Notice
Exhibit H          -        [Reserved]
Exhibit I          -        Competitive Bid Request
Exhibit J          -        Invitation to Bid
Exhibit K          -        Competitive Bid
Exhibit L          -        Competitive Bid Accept/Reject Letter
Exhibit M          -        Competitive Bid Note

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                                CREDIT AGREEMENT

        THIS CREDIT AGREEMENT is made as of August 29, 2000, by and among
Northstar Energy Corporation, an Alberta corporation, and Devon Energy Canada
Corporation, an Alberta corporation (herein collectively, called "Canadian
Borrowers"), Bank of America Canada, individually and as administrative agent
(herein called "Canadian Agent") and the undersigned Lenders. In consideration
of the mutual covenants and agreements contained herein the parties hereto agree
as follows:

                          ARTICLE I - Canadian Advances

        Section 1.1. Commitments to Make Advances; Canadian Notes.

        (a) Canadian Loans. Subject to the terms and conditions hereof, each
Lender agrees to extend credit to each Canadian Borrower by advancing funds to
the applicable Canadian Borrower specified in a Borrowing Notice (herein called
such Lender's "Canadian Revolving Loans" and, with reference to Canadian
Resident Lenders only, accepting or purchasing drafts of Bankers' Acceptances
issued under this Agreement by the applicable Canadian Borrower specified in a
Borrowing Notice herein called such Lender's "Bankers' Acceptances"; each
Lender's Canadian Revolving Loans, Canadian Term Loans, and Bankers' Acceptances
are herein collectively called such Lender's "Canadian Advances") upon Canadian
Borrower's request from time to time during the Canadian Revolving Period,
provided that (i) subject to Sections 2.1, 2.2., 3.3, 3.4 and 3.5, all Lenders
are requested to make Canadian Advances of the same Type in accordance with
their respective Percentage Shares and as part of the same Borrowing and (ii)
such Lender's Percentage Share of the Canadian Facility Usage shall never exceed
such Lender's Percentage Share of the Canadian Maximum Credit Amount. The
aggregate amount of all Canadian Loans in any Borrowing must be an integral
multiple of $100,000 in the Applicable Currency which equals or exceeds
$1,000,000 in the Applicable Currency or must equal the unadvanced portion of
the Canadian Maximum Credit Amount. Each Canadian Borrower may have no more than
ten Borrowings of Eurodollar Loans outstanding at any time. The obligation of
each Canadian Borrower to repay to each Lender the aggregate amount of all
Canadian Loans (excluding Canadian Swing Loans) made by such Lender to such
Borrower, together with interest accruing in connection therewith, shall be
evidenced by a separate promissory note (herein called such Lender's "Canadian
Note") made, by each Canadian Borrower payable to the order of such Lender in
the form of Exhibit A-1 with appropriate insertions. The amount of principal
owing on any Lender's Canadian Note at any given time shall be the aggregate
amount of all Canadian Loans theretofore made by such Lender minus all payments
of principal theretofore received by such Lender on such Canadian Note. Interest
on each Canadian Note shall accrue and be due and payable as provided herein and
therein. Each Lender's Canadian Note shall be due and payable as provided herein
and therein and shall be due and payable in full on the Canadian Facility
Maturity Date.

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        (b) Swing Loans. Subject to the terms and conditions hereof, Canadian
Swing Lender agrees to make loans to each Canadian Borrower (herein called
"Canadian Swing Loans") upon the applicable Canadian Borrower's request from
time to time during the Canadian Revolving Period, provided that (i) the
Canadian Facility Usage shall never exceed the Canadian Maximum Credit Amount,
and (ii) the aggregate amount of Canadian Swing Loans outstanding shall never
exceed the Canadian Swing Sublimit. The aggregate amount of all Canadian Swing
Loans in any Borrowing must be an integral multiple of C $100,000 which equals
or exceeds C $1,000,000 or must equal the unadvanced portion of the Canadian
Maximum Credit Amount. The obligation of each Canadian Borrower to repay to
Canadian Swing Lender the aggregate amount of all Canadian Swing Loans made by
Canadian Swing Lender, together with interest accruing in connection therewith,
shall be evidenced by a separate promissory note (herein called each Canadian
Borrower's "Canadian Swing Note") made by each Canadian Borrower payable to the
order of Canadian Swing Lender in the form of Exhibit A-2 with appropriate
insertions. The amount of principal owing on each Canadian Swing Note at any
given time shall be the aggregate amount of all Canadian Swing Loans theretofore
made by Canadian Swing Lender minus all payments of principal theretofore
received by Canadian Swing Lender on such Canadian Swing Note (including as a
result of any refinancing pursuant to Section 1.11). Interest on each Canadian
Swing Note shall accrue and be due and payable as provided herein and therein.
Each Canadian Swing Note shall be due and payable as provided herein and
therein, and shall be due and payable in full on the Conversion Date. Subject to
the terms and conditions hereof, each Canadian Borrower may borrow, repay, and
reborrow Canadian Swing Loans under the Canadian Agreement during the Canadian
Revolving Period.

        Section 1.2. Requests for New Canadian Advances. The applicable Canadian
Borrower must give to Canadian Agent written notice (or telephonic notice
promptly confirmed in writing) of any requested Borrowing of new Canadian Loans
and any requested Borrowing by way of new Bankers' Acceptances. Each such notice
constitutes a "Borrowing Notice" hereunder and must:

        (a) specify (i) the aggregate amount of any such Borrowing of new
Canadian Base Rate Loans and the date on which such Canadian Base Rate Loans are
to be advanced, (ii) the aggregate amount of any such Borrowing of Canadian
Prime Rate Loans and the date on which such Canadian Prime Rate Loans are to be
advanced, (iii) the aggregate amount of any such Borrowing of new US Dollar
Eurodollar Loans, the date on which such US Dollar Eurodollar Loans are to be
advanced (which shall be the first day of the Eurodollar Interest Period which
is to apply thereto), and the length of the applicable Eurodollar Interest
Period, (iv) the aggregate amount of any such Borrowing of new Canadian Dollar
Eurodollar Loans, the date on which such Canadian Dollar Eurodollar Loans are to
be advanced (which shall be the first day of the Eurodollar Interest Period
which is to apply thereto), and the length of the applicable Eurodollar Interest
Period, (v) the aggregate amount of any such Borrowing by way of Bankers'
Acceptances (subject to Section 2.2(f)), and the date on which such Bankers'
Acceptances are to be accepted and the maturity of such Bankers' Acceptances, or
(vi) the aggregate amount of any such Borrowing of new Canadian Swing Loans and
the date on which such Canadian Swing Loans are to be advanced; and

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        (b) be received by Canadian Agent (i) in the case of Canadian Advances
other than Canadian Swing Loans, not later than 11:00 a.m., Toronto, Ontario
time, on (1) on the Business Day preceding the day on which any such Canadian
Base Rate Loans or Canadian Prime Rate Loans are to be made, (2) the third
Business Day preceding the day on which any such Eurodollar Loans are to be made
or (3) the third Business Day before such Bankers' Acceptances are to be issued
and (ii) in the case of Canadian Advances that are Canadian Swing Loans, not
later than 2:00 p.m., Toronto, Ontario time on the Business Day on which any
such Canadian Swing Loans are to be made.

Each such written request or confirmation must be made in the form and substance
of the "Borrowing Notice" attached hereto as Exhibit B, duly completed. Each
such telephonic request shall be deemed a representation, warranty,
acknowledgment and agreement by the applicable Canadian Borrower as to the
matters which are required to be set out in such written confirmation. Upon
receipt of any such Borrowing Notice, Canadian Agent shall give each Lender
prompt notice of the terms thereof (excluding Canadian Swing Loans) not later
than 5:00 p.m. Toronto, Ontario time on the day it receives such Borrowing
Notice from the applicable Canadian Borrower if it receives such Borrowing
Notice by 11:00 a.m., Toronto, Ontario time, otherwise on the next Business Day.
Each Borrowing Notice shall be irrevocable and binding on the applicable
Canadian Borrower. If all conditions precedent to such new Canadian Advances
have been met, (i) each Lender will on the date requested promptly remit to
Canadian Agent by 1:00 p.m. Toronto, Ontario time its Canadian Advances made in
Canadian Dollars to Canadian Agent's office in Toronto, Canada and its Canadian
Advances made in United States Dollars to the US Account in New York, New York)
in immediately available funds, and upon receipt of such funds, unless to its
actual knowledge any conditions precedent to such Canadian Advances have been
neither met nor waived as provided herein, Canadian Agent shall promptly make
such Canadian Advances available to the applicable Canadian Borrower or (ii)
each Canadian Resident Lender will accept drafts of Bankers' Acceptances on the
date requested in accordance with Sections 2.1 through 2.3. Unless Canadian
Agent shall have received prompt notice from a Lender that such Lender will not
make available to Canadian Agent such Lender's new Canadian Advance, Canadian
Agent may in its discretion assume that such Lender has made such Canadian
Advance available to Canadian Agent in accordance with this section and Canadian
Agent may if it chooses, in reliance upon such assumption, make such Canadian
Advance available to the applicable Canadian Borrower. If and to the extent such
Lender shall not so make its new Canadian Advance available to Canadian Agent,
such Lender and the applicable Canadian Borrower severally agree to pay or repay
to Canadian Agent within three days after demand the amount of such Canadian
Advance together with interest thereon, for each day from the date such amount
was made available to the applicable Canadian Borrower until the date such
amount is paid or repaid to Canadian Agent, with interest at (1) the Canadian
Prime Rate, if such Lender is making such payment and (2) the interest rate
applicable at the time to the other new Canadian Advances made on such date, if
a Canadian Borrower is making such repayment; provided that Canadian Agent gave
notice of the terms of the Borrowing Notice to such Lender in accordance with
the terms of this Section 1.2. If neither such Lender nor such Canadian Borrower
pays or repays to Canadian Agent such amount within such three-day period,
Canadian Agent shall in addition to such amount be entitled to recover from such
Lender and from the applicable Canadian Borrower, on demand, interest on such
Canadian Advance at the Default Rate

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applicable thereto, calculated from the date such amount was made available to
such Canadian Borrower. The failure of any Lender to make any new Canadian
Advance to be made by it hereunder shall not relieve any other Lender of its
obligation hereunder, if any, to make its new Canadian Advance, but no Lender
shall be responsible for the failure of any other Lender to make any new
Canadian Advance to be made by such other Lender.

        Section 1.3. Continuations and Conversions of Existing Canadian Advances
 . Subject to the terms of Section 2.3 with respect to Bankers' Acceptances, the
applicable Canadian Borrower may make the following elections with respect to
Canadian Advances and Canadian Swing Loans already outstanding under this
Agreement: (i) to convert any Type of Canadian Advance to any other Type of
Canadian Advance, provided that any such Conversion of any Eurodollar Loan must
be made on the last day of the Eurodollar Interest Period applicable thereto and
any such Conversion of a Bankers' Acceptance must be made on the date of
maturity thereof; (ii) to continue Eurodollar Loans beyond the expiration of
such Eurodollar Interest Period by designating a new Eurodollar Interest Period
to take effect at the time of such expiration, and to rollover any existing
Bankers' Acceptance by designating the new maturity date applicable thereto; and
(iii) to convert Canadian Swing Loans to any Type of Canadian Advances as a
refinancing of such Canadian Swing Loans pursuant to Section 1.11. In making
such elections, the applicable Canadian Borrower may combine existing Canadian
Advances made pursuant to separate Borrowings into one new Borrowing or divide
existing Canadian Advances made pursuant to one Borrowing into separate new
Borrowings, provided that Canadian Borrowers may have no more than ten
Borrowings of US Dollar Eurodollar Loans outstanding at any time and no more
than ten Borrowings of Canadian Dollar Eurodollar Loans outstanding at any time.
To make any such election, the applicable Canadian Borrower must give to
Canadian Agent written notice (or telephonic notice promptly confirmed in
writing) of any such Conversion or Continuation of existing Canadian Advances,
with a separate notice given for each new Borrowing. Each such notice
constitutes a "Continuation/Conversion Notice" hereunder and must:

        (a) specify the existing Canadian Advances made under this Agreement
which are to be continued or converted;

        (b) specify (i) the aggregate amount of any Borrowing of Canadian Base
Rate Loans or Canadian Prime Rate Loans into which such existing Canadian
Advances are to be continued or converted and the date on which such
Continuation or Conversion is to occur, or (ii) the aggregate amount of any
Borrowing of Eurodollar Loans into which such existing Canadian Advances are to
be continued or converted, the date on which such Continuation or Conversion is
to occur (which shall be the first day of the Eurodollar Interest Period which
is to apply to such Eurodollar Loans), and the length of the applicable
Eurodollar Interest Period, or (iii) the amount of any Borrowing of Bankers'
Acceptances into which such existing Canadian Advances are to be continued or
converted, the date on which such Continuation or Conversion is to occur, and
the maturity of such Bankers' Acceptances; and

        (c) be received by Canadian Agent not later than 11:00 a.m., Toronto,
Ontario time, on (i) the first Business Day preceding the day on which any such
Continuation or Conversion to

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Canadian Base Rate Loans or Canadian Prime Rate Loans is to occur, or (ii) the
third Business Day preceding the day on which any such Continuation or
Conversion to Eurodollar Loans is to occur, or (iii) on the third Business Day
preceding the day on which any such Continuation or Conversion to Bankers'
Acceptances is to occur.

Each such written request or confirmation must be made in the form and substance
of the "Continuation/Conversion Notice" attached hereto as Exhibit C, duly
completed. Each such telephonic request shall be deemed a representation,
warranty, acknowledgment and agreement by the applicable Canadian Borrower as to
the matters which are required to be set out in such written confirmation. Upon
receipt of any such Continuation/Conversion Notice, Canadian Agent shall give
each Lender prompt notice of the terms thereof. Each Continuation/Conversion
Notice shall be irrevocable and binding on the applicable Canadian Borrower.
During the continuance of any Default, Canadian Borrowers may not make any
election to convert existing Canadian Advances or Canadian Swing Loans made
under this Agreement into Eurodollar Loans or Bankers' Acceptances or continue
existing Eurodollar Loans made under this Agreement as Eurodollar Loans or to
rollover existing Bankers' Acceptances into new Bankers' Acceptances. If (due to
the existence of a Default or for any other reason) the applicable Canadian
Borrower fails to timely and properly give or are prevented hereunder from
giving any Continuation/Conversion Notice with respect to a Borrowing of
existing Eurodollar Loans or Bankers' Acceptances at least three days prior to
the end of the Eurodollar Interest Period applicable thereto or maturity of the
Bankers' Acceptance, such Eurodollar Loans and Bankers' Acceptances shall
automatically be converted into Canadian Base Rate Loans (in the case of US
Dollar Eurodollar Loans) or Canadian Prime Rate Loans (in the case of Canadian
Dollar Eurodollar Loans and Bankers' Acceptances) at the end of such Eurodollar
Interest Period. No new funds shall be repaid by the applicable Canadian
Borrower or advanced by any Lender in connection with any Continuation or
Conversion of existing Canadian Advances pursuant to this section, and no such
Continuation or Conversion shall be deemed to be a new advance of funds for any
purpose; such Continuations and Conversions merely constitute a change in terms
of already outstanding Advances and the interest rate applicable thereto.

        Section 1.4. Repayments .

        (a) During Canadian Revolving Period . Subject to the terms and
conditions hereof, either Canadian Borrower may borrow, repay, and reborrow
hereunder during the Canadian Revolving Period, so long as (i) the applicable
Canadian Borrower gives notice to Canadian Agent by 2:00 p.m., Toronto, Ontario
time on the Business Day immediately preceding the date of prepayment (and
Canadian Agent shall give each Lender notice thereof by 4:30 p.m. Toronto,
Ontario time on the date such notice is received from the applicable Borrower if
it receives such Borrowing Notice by 11:00 a.m., Toronto, Ontario time,
otherwise on the next Business Day) all partial prepayments of principal
concurrently paid on the Canadian Loans are increments of $100,000 in the
Applicable Currency and in an aggregate amount greater than or equal to
$1,000,000 in the Applicable Currency and (ii) the applicable Canadian Borrower
pays all amounts owing in connection with the prepayment of any Eurodollar Loan
owing under Section 3.6.

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        (b) During Canadian Term Period.

            (i) Optional Prepayments. Either Canadian Borrower may, upon giving
notice to Canadian Agent by 2:00 p.m., Toronto, Ontario time on the Business Day
immediately preceding the date of prepayment (and Canadian Agent shall give each
Lender notice thereof by 5:00 p.m. Toronto, Ontario time on the date such notice
is received from the applicable Canadian Borrower if it receives such notice by
11:00 a.m., Toronto, Ontario time, otherwise on the next Business Day), from
time to time during the Term Period and without premium or penalty, prepay the
Canadian Loans including Competitive Bid Notes, in whole or in part, so long as
all partial prepayments of principal concurrently paid on the Canadian Loans are
in increments of $100,000 in the Applicable Currency and in an aggregate amount
greater than or equal to $1,000,000 in the Applicable Currency and so long as
Canadian Borrowers pay all amounts owing in connection with the prepayment of
any Eurodollar Loan owing under Section 3.6, and provided that no Bankers'
Acceptance may be prepaid prior to its stated maturity date except in accordance
with Section 2.5. Each prepayment of principal under this section shall be
accompanied by all interest then accrued and unpaid on the principal so prepaid,
shall be in addition to, and not in lieu of, all payments otherwise required to
be paid under the Canadian Loan Documents at the time of such prepayment, and
shall first reduce the semi-annual scheduled installments (other than the final
installment) during the Term Period in respect of Canadian Loans that are not
Competitive Bid Loans, then reduce the final installment in respect of Canadian
Loans that are not Competitive Bid Loans, and then, unless otherwise designated
by Canadian Borrowers, reduce the outstanding Competitive Bid Loans in order of
shortest maturity.

            (ii) Scheduled Repayments of Principal. Subject to Section
1.4(b)(iii) during the Term Period, Borrower shall repay the principal of the
Canadian Loans that are not Competitive Bid Loans in equal semi-annual
installments, each in an amount equal to two and one-half percent (2.5%) of the
outstanding principal balance of the Canadian Advances on the Conversion Date.
Such installments shall be due and payable on each June 30 and December 31 each
year and in a final installment due and payable on the Canadian Facility
Maturity Date in an amount equal to the entire unpaid principal balance of such
Loans outstanding on the Canadian Facility Maturity Date.

            (iii) Income Tax Act (Canada). Except as otherwise provided in
Section 8.1, in no event shall either Canadian Borrower be required to repay
more than 25% of the principal amount (as defined in the Income Tax Act
(Canada)) of the Canadian Advances made to it prior to five years and a day
after the Conversion Date, including, but not limited to payments under
Section 1.4(b)(ii), 1.4(c) and 1.4(d).

        (c) Mandatory Prepayments. Except to the extent permitted by Section
1.4(d), and subject to Section 1.4(e), if the aggregate principal amount of the
outstanding Canadian Obligations ever exceeds the Canadian Maximum Credit
Amount, Canadian Borrowers shall immediately prepay the principal of the
Canadian Loans outstanding under the Canadian Agreement in an amount at least
equal to such excess. Each prepayment of principal under this

                                       6
<PAGE>   12

section shall be accompanied by all interest then accrued and unpaid on the
principal so prepaid. Any principal or interest prepaid pursuant to this section
shall be in addition to, and not in lieu of, all payments otherwise required to
be paid under the Canadian Loan Documents at the time of such prepayment.

        (d) Currency Fluctuations. Notwithstanding any other provision of this
Agreement, if any Canadian Loan outstanding is denominated in C$, Canadian Agent
shall have the right to calculate the outstanding Canadian Obligations for all
purposes including making a determination from time to time of the available
undrawn portion of the Canadian Maximum Credit Amount. If following such
calculation, Canadian Agent determines that the outstanding Canadian Obligations
are greater than 105% of the Canadian Advances permitted hereby to be
outstanding at such time, then Canadian Agent shall so advise Canadian Borrowers
and, subject to Section 1.4(e), Canadian Borrowers shall repay, on the later of
five Business Days after such advice and the next applicable Interest Payment
Date immediately following such date of calculation, an amount sufficient to
eliminate the excess over and above the aggregate amount of the Canadian Loans
permitted hereby to be outstanding at such time, together with all accrued
interest on the amount so paid.

        (e) Application of Prepayment. Any mandatory prepayment of any principal
amount (for the purposes of this Section, as defined in the Income Tax Act
(Canada)) made by a Canadian Borrower pursuant to Sections 1.4(c) and 1.4(d) or
otherwise in respect of a particular loan, shall reduce the semi-annual
scheduled installments (other than the final installment) during the Term Period
in respect of that loan in inverse order of maturity. Such mandatory prepayments
shall be applied to the Canadian Loans (other than Bankers' Acceptances and
Competitive Bid Loans) pro rata based on outstanding principal; provided that if
such prepayment of Canadian Loans does not eliminate such mandatory prepayment
obligation, the further repayments shall apply first to Competitive Bid Loans in
order of shortest maturity, and second to an escrow fund maintained in
accordance with Section 2.5.

        Section 1.5. Interest Rates and Fees.

        (a) Interest Rates. The Canadian Loans shall bear interest payable by
the applicable Canadian Borrower as follows and all accrued and unpaid interest
on the Canadian Loans shall be due and payable on the applicable Interest
Payment Date at the place set forth in the Canadian Notes:

                (i) Each Canadian Base Rate Loan shall bear interest on each day
        outstanding at the Canadian US Dollar Base Rate in effect on such day.

                (ii) Each Canadian Prime Rate Loan shall bear interest on each
        day outstanding at the Canadian Prime Rate in effect on such day.

                (iii) Each US Dollar Eurodollar Loan shall bear interest on each
        day during the related Eurodollar Interest Period at the related
        Adjusted US Dollar Eurodollar Rate in effect on such day.

                                       7
<PAGE>   13

                (iv) Each Canadian Dollar Eurodollar Loan shall bear interest on
        each day during the related Eurodollar Interest Period at the related
        Adjusted Canadian Dollar Eurodollar Rate in effect on such day.

                (v) Each Canadian Swing Loan shall bear interest on each day
        outstanding at the Canadian Swing Rate for such Canadian Swing Loan in
        effect on such day.

                (vi) Notwithstanding the foregoing, if an Event of Default has
        occurred and is continuing, each Canadian Loan shall bear interest on
        each day outstanding at the applicable Default Rate. Past due payments
        of principal and interest shall bear interest at the rates and in the
        manner set forth in the Canadian Notes.

        (b) Facility Fees. In consideration of each Lender's commitment to make
Canadian Advances under this Agreement, Canadian Borrowers will pay to Canadian
Agent for the account of each Lender a facility fee determined on a daily basis
by applying (i) the Facility Fee Rate to such Lender's Percentage Share of the
Canadian Maximum Credit Amount on each day during the Canadian Revolving Period
and (ii) the Facility Fee Rate to such Lender's Percentage Share of the Canadian
Facility Usage on each day from the Conversion Date until the Canadian Facility
Maturity Date. This facility fee shall be due and payable in arrears on the last
day of each Fiscal Quarter and on the Canadian Facility Maturity Date.

        (c) Utilization Fees. In consideration of each Lender's commitment to
make Canadian Advances under this Agreement, Canadian Borrowers will pay to
Canadian Agent for the account of each Lender a utilization fee determined on a
daily basis by applying (i) a rate of 7.5 Basis Points per annum to such
Lender's Percentage Share of the Canadian Facility Usage on each day during the
term of this Agreement that the Canadian Facility Usage exceeds thirty-three
percent (33%) of the Canadian Maximum Credit Amount, and (ii) a rate of 15 Basis
Points per annum to such Lender's Percentage Share of the Canadian Facility
Usage on each day during the term of this Agreement that the Canadian Facility
Usage exceeds sixty-six percent (66%) of the Canadian Maximum Credit Amount.
This utilization fee shall be due and payable in arrears on each Interest
Payment Date for Canadian US Dollar Base Rate Loans and on the date all Canadian
Obligations are repaid in full.

        (d) Stamping Fees. In consideration of each Canadian Resident Lender's
commitment to accept or participate in Bankers' Acceptances under this
Agreement, the applicable Canadian Borrower will pay to Canadian Agent for the
account of such Lender the Stamping Fee Rate multiplied by the face amount of
each Bankers' Acceptance accepted by such Lender under this Agreement calculated
for the number of days in the term of such Bankers' Acceptance. Such fee shall
be due and payable on the date on which such Bankers' Acceptances are accepted
and if such Canadian Resident Lender is purchasing such Bankers' Acceptance,
such fee shall be deducted from the Discount Proceeds paid to the applicable
Canadian Borrower.

        (e) Canadian Agent's Fees. In addition to all other amounts due to
Canadian Agent under the Canadian Loan Documents, Canadian Borrowers will pay
fees to Canadian Agent as described in a letter agreement dated as of August 1,
2000 between US Agent and US Borrower.

                                       8
<PAGE>   14

        Section 1.6. Extension of Conversion Date.

        (a) Canadian Borrowers may, at their option and from time to time during
the Canadian Revolving Period, request an offer to extend the Canadian Revolving
Period by delivering to Canadian Agent a Request for an Offer of Extension not
more than ninety days and not less than forty-five days prior to the then
current Conversion Date. Canadian Agent shall forthwith provide a copy of the
Request for an Offer of Extension to each of the Lenders. Upon receipt from
Canadian Agent of an executed Request for an Offer of Extension, each Lender
shall, within thirty days after the date of such Lender's receipt of such
request from Canadian Agent, either:

                (i) notify Canadian Agent of its acceptance of the Request for
        an Offer of Extension, and the terms and conditions, if any, upon which
        such Lender is prepared to extend the Conversion Date; or

                (ii) notify Canadian Agent that the Request for an Offer of
        Extension has been denied, such notice to forthwith be forwarded by
        Canadian Agent to Canadian Borrowers to allow Canadian Borrowers to seek
        a replacement lender pursuant to Section 1.8 (any Lender giving notice
        of such denial is herein called a "Non-Accepting Lender"). The failure
        of a Lender to so notify Canadian Agent within such thirty day period
        shall be deemed to be notification by such Lender to Canadian Agent that
        such Lender has denied Canadian Borrowers' Request for an Offer of
        Extension.

        (b) Provided that all Lenders provide notice to Canadian Agent under
Section 1.6(a) that they accept the Request for an Offer of Extension, or if
there are Non-Accepting Lenders, such Lenders shall have been repaid pursuant to
Section 1.8 or replacement lenders shall have become parties hereto pursuant to
Section 1.8 and shall have accepted the Request for an Offer of Extension, such
acceptance having common terms and conditions, Canadian Agent shall deliver to
Canadian Borrowers an Offer of Extension incorporating the said terms and
conditions. Such offer shall be open for acceptance by Canadian Borrowers until
the fifth Business Day immediately preceding the then current Conversion Date.
Upon written notice by Canadian Borrowers to Canadian Agent accepting an
outstanding Offer of Extension and agreeing to the terms and conditions, if any,
specified therein (the date of such notice of acceptance in Section 1.6 and 1.8
being called the "Extension Date"), the Conversion Date shall be extended to the
date 364 days from the Extension Date and the terms and conditions specified in
such Offer of Extension shall be immediately effective.

        (c) Canadian Borrowers understand that the consideration of any Request
for an Offer of Extension constitutes an independent credit decision which each
Lender retains the absolute and unfettered discretion to make and that no
commitment in this regard is hereby given by a Lender and that any offer to
extend the Conversion Date may be on such terms and conditions in addition to
those set out herein as the extending Lenders stipulate.

        Section 1.7. Conversion to Canadian Term Loan. Unless there is an
extension of the Canadian Revolving Period in accordance with Section 1.6,
effective at 11:59 p.m. Toronto,

                                       9
<PAGE>   15

Ontario time on the day immediately preceding the Conversion Date, and provided
that no Event of Default shall have occurred and be continuing, (i) each
Lender's obligation to make new Canadian Advances, Canadian Swing Lender's
obligation to make new Canadian Swing Loans, and Canadian LC Issuer's obligation
to issue Letters of Credit hereunder shall be canceled automatically, and (ii)
each Lender's Canadian Loans shall become term Canadian Loans ("Canadian Term
Loans") maturing on the Canadian Facility Maturity Date.

        Section 1.8. Non-Accepting Lender. Provided that Lenders whose
Percentage Shares represent more than 50% but less than 100% of the Canadian
Maximum Credit Amount provide notice to Agent under Section 1.6(a) that they
accept the Request for an Offer of Extension, on notice of Canadian Borrowers to
Agent, Canadian Borrowers shall be entitled to choose any of the following in
respect of each Non-Accepting Lender prior to the expiration of the Canadian
Revolving Period, provided that if Canadian Borrowers do not make an election
prior to the expiration of the Canadian Revolving Period, Canadian Borrowers
shall be deemed to have irrevocably elected to exercise the provisions of
Section 1.8(b)(ii):

        (a) (i) the Non-Accepting Lender's obligations to make Canadian Advances
shall be canceled as of the Extension Date, the Canadian Maximum Credit Amount
shall be reduced by the amount so canceled, and on or prior to the Extension
Date the Canadian Borrowers shall repay in full all Canadian Obligations then
outstanding to the Non-Accepting Lender (as defined in Section 1.6(a)(ii)), or
(ii) replace the Non-Accepting Lender by reaching satisfactory arrangements with
one or more existing Lenders or new Lenders, for the purchase, assignment and
assumption of all Canadian Obligations and US Obligations of the Non-Accepting
Lender, provided that any new Lender, with, if necessary, any Affiliate, shall
take a pro rata assignment of both Canadian Obligations and US Obligations, and
such Non-Accepting Lender shall be obligated to sell such Obligations in
accordance with such satisfactory arrangements; or

        (b) Canadian Borrowers may elect to revoke and cancel the Request for an
Offer of Extension by giving notice of such revocation and cancellation to Agent
(which shall promptly notify the Lenders thereof), and concurrently therewith,
shall have the option to (i) cancel the obligations of Lenders under the
Canadian Agreement and, subject to the notice requirements set forth in Section
1.6(a) and to the provisions of Article III, repay in full all Canadian
Obligations, or (ii) have the outstanding Canadian Loans that are not
Competitive Bid Loans on the Conversion Date become term loans as provided in
Section 1.7.

In connection with any such replacement of a Lender Party pursuant to this
Section 1.8, the applicable Canadian Borrower shall pay all costs that would
have been due to such Lender Party pursuant to Section 3.6 if such Lender
Party's Canadian Advances had been prepaid at the time of such replacement.

        Section 1.9. Competitive Bid Loans.

        (a) Either Canadian Borrower may request that each Canadian Resident
Lender submit Competitive Bids (on a several basis) for requested maturities of
thirty days or more to the applicable Canadian Borrower on any Business Day
during the Canadian Revolving Period,

                                       10
<PAGE>   16

provided that all Canadian Resident Lenders are requested to make a Competitive
Bid on the same basis at the same time. In order to request Competitive Bids,
the applicable Canadian Borrower shall deliver by hand or facsimile to Canadian
Agent a Competitive Bid Request, to be received by Canadian Agent not later than
9:00 a.m., Toronto, Ontario time one Business Day before the date specified for
a proposed Competitive Bid Loan. A Competitive Bid Request that does not conform
substantially to the format of Exhibit I may be rejected in Canadian Agent's
sole discretion, and Canadian Agent shall promptly notify the applicable
Canadian Borrower of such rejection by facsimile. After receiving an acceptable
Competitive Bid Request, Canadian Agent shall no later than 12:00 noon, Toronto,
Ontario time on the date such Competitive Bid Request is received by Canadian
Agent, by facsimile deliver to Canadian Resident Lenders an Invitation to Bid
substantially in the form of Exhibit J with respect thereto.

        (b) Each Canadian Resident Lender may, in its sole discretion, make one
or more Competitive Bids to Canadian Agent responsive to each Competitive Bid
Request given by the applicable Canadian Borrower. Each Competitive Bid by a
Canadian Resident Lender must be received by Canadian Agent by facsimile not
later than 9:00 a.m., Toronto, Ontario time on the date specified for a proposed
Competitive Bid Loan. Multiple bids may be accepted by Canadian Agent.
Competitive Bids that do not conform substantially to the format of Exhibit K
may be rejected by Canadian Agent after conferring with, and upon the
instruction of, the applicable Canadian Borrower, and Canadian Agent shall
notify the bidding Canadian Resident Lender of such rejection as soon as
practicable. If any Canadian Resident Lender shall elect not to make a
Competitive Bid, such Canadian Resident Lender shall so notify Canadian Agent by
facsimile not later than 9:00 a.m., Toronto, Ontario time, on the date specified
for a Competitive Bid Loan; provided, however, that failure by any Canadian
Resident Lender to give such notice shall not cause such Canadian Resident
Lender to be obligated to make any Competitive Bid Loan and by such failure such
Lender shall be deemed to have rejected such Competitive Bid. A Competitive Bid
submitted by a Canadian Resident Lender shall be irrevocable.

        (c) Promptly, and in no event later than 9:30 a.m., Toronto, Ontario
time, on the date specified for a proposed Competitive Bid Loan, Canadian Agent
shall notify the applicable Canadian Borrower by facsimile of all the
Competitive Bids made, the Competitive Bid Rate and the principal amount of each
Competitive Bid Loan in respect of which a Competitive Bid was made, and the
identity of each Canadian Resident Lender that made each Competitive Bid.
Canadian Agent shall send a copy of all Competitive Bids to the applicable
Canadian Borrower for its records as soon as practicable after completion of the
bidding process.

        (d) The applicable Canadian Borrower may, subject only to the provisions
hereof, accept or reject any Competitive Bid. The applicable Canadian Borrower
shall notify Canadian Agent by facsimile pursuant to a Competitive Bid
Accept/Reject Letter whether and to what extent the applicable Canadian Borrower
has decided to accept or reject any or all of the Competitive Bids, not later
than 10:00 a.m., Toronto, Ontario time, on the date specified for a proposed
Competitive Bid Loan; provided, however, that:

                                       11
<PAGE>   17

                (i) the failure by the applicable Canadian Borrower to accept or
        reject any Competitive Bid within the time period specified herein shall
        be deemed to be a rejection of such Competitive Bid,

                (ii) the aggregate amount of the Competitive Bids accepted by
        the applicable Canadian Borrower shall not exceed the principal amount
        specified in the Competitive Bid Request,

                (iii) the aggregate amount of all outstanding Canadian Loans and
        Canadian LC Obligations shall never exceed the Canadian Maximum Credit
        Amount,

                (iv) if the applicable Canadian Borrower shall accept a
        Competitive Bid or Competitive Bids made at a particular Competitive Bid
        Rate, but the amount of such Competitive Bid or Competitive Bids shall
        cause the total amount of Competitive Bids to be accepted by the
        applicable Canadian Borrower to exceed the amount specified in the
        Competitive Bid Request, then the applicable Canadian Borrower shall
        accept a portion of such Competitive Bid or Competitive Bids in an
        amount equal to the amount specified in the Competitive Bid Request less
        the amount of all other Competitive Bids accepted with respect to such
        Competitive Bid Request, which acceptance, in the case of multiple
        Competitive Bids at such Competitive Bid Rate, shall be made pro rata in
        accordance with the amount of each such Competitive Bid at such
        Competitive Bid Rate, and

                (v) no Competitive Bid shall be accepted for a Competitive Bid
        Loan unless such Competitive Bid Loan is in a minimum principal amount
        of C $ 5,000,000 or a higher integral multiple of C $1,000,000;
        provided, however, that if a Competitive Bid Loan must be in an amount
        less than C $5,000,000 because of the provisions of clause (iv) above,
        such Competitive Bid Loan may be for a minimum of C $1,000,000 or any
        higher integral multiple thereof, and in calculating the pro rata
        allocation of acceptances or portions of multiple bids at a particular
        Competitive Bid Rate pursuant to clause (iv), the amounts shall be
        rounded to integral multiples of C $1,000,000 in a manner which shall be
        in the sole and absolute discretion of the applicable Canadian Borrower.

        (e) Promptly on each date the applicable Canadian Borrower accepts a
Competitive Bid, Canadian Agent shall notify each Canadian Resident Lender
whether or not its Competitive Bid has been accepted (and if so, in what amount
and at what Competitive Bid Rate) by facsimile transmission sent by Canadian
Agent, and each successful bidder will thereupon become bound, subject to the
other applicable conditions hereof, to make the Competitive Bid Loan in respect
of which its Competitive Bid has been accepted. After completing the
notifications referred to in the immediately preceding sentence, Canadian Agent
shall notify each Canadian Resident Lender of the aggregate principal amount of
all Competitive Bids accepted. Each Canadian Resident Lender which is to make a
Competitive Bid Loan shall, before 11:00 a.m., Toronto, Ontario time, on the
borrowing date specified in the Competitive Bid Request applicable thereto, make
available to Canadian Agent in immediately available funds the amount of each
Competitive Bid Loan to be made by such Canadian Resident Lender, and Canadian
Agent shall promptly deposit such funds to an account designated by the
applicable Canadian Borrower. As soon as practicable thereafter,

                                       12
<PAGE>   18

Canadian Agent shall notify each Canadian Resident Lender of the aggregate
amount of Competitive Bid Loans advanced, the respective Competitive Bid
Interest Periods thereof and Competitive Bid Rate applicable thereto.

        (f) The obligation of the applicable Canadian Borrower to repay to each
Canadian Resident Lender the aggregate amount of all Competitive Bid Loans made
by such Canadian Resident Lender, together with interest accruing in connection
therewith, shall be evidenced by promissory notes (respectively, such Canadian
Resident Lender's "Competitive Bid Note") made by the applicable Canadian
Borrower payable to the order of such Canadian Resident Lender in the form of
Exhibit M, with appropriate insertions. The amount of principal owing on any
Canadian Resident Lender's Competitive Bid Note at any given time shall be the
aggregate amount of all Competitive Bid Loans theretofore made by such Canadian
Resident Lender thereunder minus all payments of principal theretofore received
by such Canadian Resident Lender thereon. Interest on each Competitive Bid Note
shall accrue and be due and payable as provided herein and therein. The
applicable Canadian Borrower shall repay on the final day of the Competitive Bid
Interest Period of each Competitive Bid Loan (such date being that specified by
the applicable Canadian Borrower for repayment of such Competitive Bid Loan in
the related Competitive Bid Request and such date being no later than six months
after the date of the Competitive Bid Loan) the then unpaid principal amount of
such Competitive Bid Loan. Subject to Section 1.4(b) and the payment of amounts
described in Section 3.6, the applicable Canadian Borrower shall have the right
to prepay any principal amount of any Competitive Bid Loan.

        (g) No Competitive Bid Loan shall be made within five Business Days
after the date of any other Competitive Bid Loan, unless the applicable Canadian
Borrower and Canadian Agent shall mutually agree otherwise. If Canadian Agent
shall at any time elect to submit a Competitive Bid in its capacity as a
Canadian Resident Lender, it shall submit such bid directly to the applicable
Canadian Borrower requesting such Competitive Bid one quarter of an hour earlier
than the latest time at which the other Canadian Resident Lenders are required
to submit their bids to Canadian Agent.

        Section 1.10. Use of Proceeds. Canadian Borrowers shall use all Canadian
Advances and Canadian Swing Loans to pay in full, contemporaneously with the
making of the first Canadian Loan or the issuance of the first Letter of Credit,
all indebtedness outstanding under the Existing Canadian Agreement and
thereafter (i) to finance capital expenditures, (ii) to refinance Matured
Canadian LC Obligations outstanding under this Agreement, and (iii) to provide
working capital for its operations and for other general business purposes.
Canadian Borrowers shall use all Letters of Credit for its general corporate
purposes. In no event shall the funds from any Canadian Loan or any Letter of
Credit be used directly or indirectly by any Person for personal, family,
household or agricultural purposes or for the purpose, whether immediate,
incidental or ultimate, of purchasing, acquiring or carrying any "margin stock"
(as such term is defined in Regulation U promulgated by the Board of Governors
of the Federal Reserve System) or to extend credit to others directly or
indirectly for the purpose of purchasing or carrying any such margin stock. Each
Canadian Borrower represents and warrants that such Canadian Borrower is not
engaged principally, or as one of such Canadian Borrower's important activities,
in the

                                       13
<PAGE>   19

business of extending credit to others for the purpose of purchasing or carrying
such margin stock.

        Section 1.11. Refinancings of Canadian Swing Loans. Canadian Agent, at
any time in its sole and absolute discretion may (and on the Conversion Date
Canadian Agent shall), upon notice given to each Lender by not later than 11:30
a.m., Toronto, Ontario time, on any Business Day, request that each Lender make
a Canadian Prime Rate Loan (or another Type of Canadian Advance if requested by
the applicable Canadian Borrower in accordance with Section 1.2) in an aggregate
amount equal to its Percentage Share of the aggregate unpaid principal amount of
any outstanding Canadian Swing Loans for the purpose of refinancing such
Canadian Swing Loans (in this section called a "Refinancing Advance"). In any
event, not later than 11:30 a.m., Toronto, Ontario time, on the penultimate
Business Day of each calendar month, Canadian Agent will notify each Lender of
the aggregate amount of Canadian Swing Loans which are then outstanding and the
amount of the Refinancing Advance required to be made by each Lender to
refinance such outstanding Canadian Swing Loans (the aggregate amount of such
Refinancing Advance to be made by each Lender shall equal such Lender's
Percentage Share of such outstanding Canadian Swing Loans). Upon the giving of
notices by Canadian Agent described above, each Lender shall promptly remit to
Canadian Agent such Refinancing Advance in the manner described above in Section
1.2, so long as (a) Canadian Agent believed in good faith that all conditions to
making the subject Canadian Swing Loan were satisfied at the time such Canadian
Swing Loan was made, or (b) if the conditions to such Canadian Swing Loan were
not satisfied, the satisfaction of such conditions have been waived in writing
by Canadian Required Lenders in accordance with the provisions of this Agreement
(collectively, the "Refinancing Conditions"). The proceeds of the Refinancing
Advances made pursuant to the preceding sentence shall be paid to Canadian Agent
(and not to either Canadian Borrower) and applied to the payment of principal of
the outstanding Canadian Swing Loans. If and to the extent any Lender shall not
so make its Refinancing Advance, such Lender and the applicable Canadian
Borrower severally agree to pay to Canadian Agent (for delivery to Canadian
Swing Lender) within three days after demand the amount of such Refinancing
Advance together with interest thereon, for each day from the date such
Refinancing Advance was required to be made until the date such amount is paid
to Canadian Agent, with interest at (1) the Canadian Prime Rate, if such Lender
is making such payment and (2) the interest rate applicable at the time to the
other new Refinancing Advances, if a Canadian Borrower is making such repayment;
provided that Canadian Agent gave notice of the terms of the refinancing to such
Lender in accordance with the terms of this Section 1.11. If neither such Lender
nor such Canadian Borrower pays to Canadian Agent (for delivery to Canadian
Swing Lender) such amount within such three-day period, Canadian Swing Lender
shall in addition to such amount be entitled to recover from such Lender and
from the applicable Canadian Borrower, on demand, interest on such Refinancing
Advance at the Default Rate applicable thereto, calculated from the date such
Refinancing Advance was required to be made. Each Lender's obligation to make
Refinancing Advances pursuant to this Section shall be absolute and
unconditional and shall not be affected by any circumstances, including, without
limitation, (1) any setoff, counterclaim, recoupment, defense or other right
which such Lender may have against Canadian Agent, Canadian Borrowers or anyone
else for any reason whatsoever; (2) the occurrence or continuance of an Event of
Default or Default; (3) any adverse change in the condition (financial or
otherwise) of either Canadian Borrower; (4) any breach of this Agreement

                                       14
<PAGE>   20

by either Canadian Borrower, Canadian Agent or any Lender, except with respect
to the Refinancing Conditions; or (5) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing; provided , that in
no event shall a Lender be obligated to make a Refinancing Advance pursuant to
this Section if, after giving effect thereto, the outstanding principal balance
of such Lender's Canadian Advances would exceed its Percentage Share of the
Canadian Maximum Credit Amount.

        Section 1.12. Re-allocation of Tranche B Maximum Credit Amount and
Canadian Maximum Credit Amount. Borrowers shall have the right (i) to
re-allocate up to US $100,000,000 of the unused Tranche B Maximum Credit Amount
to the Canadian Maximum Credit Amount (a "Tranche B Re-allocation") by reducing
the Tranche B Maximum Credit Amount and increasing the Canadian Maximum Credit
Amount by the same amount and (ii) to reallocate up to US $100,000,000 of the
unused Canadian Maximum Credit Amount to the Tranche B Maximum Credit Amount (a
"Canadian Re-allocation") by reducing the Canadian Maximum Credit Amount and
increasing the Tranche B Maximum Credit Amount by the same amount; provided that
the Tranche B Maximum Credit Amount shall never be greater than US $625,000,000,
the Canadian Maximum Credit Amount shall never be greater than US $375,000,000;
the aggregate amount of the Tranche B Maximum Credit Amount and the Canadian
Maximum Credit Amount shall never exceed US $800,000,000. A Re-allocation may be
made only on a Business Day which occurs during the Tranche B Revolving Period
and the Canadian Revolving Period, each Re-allocation shall remain in effect for
at least 90 days and thereafter until a subsequent Re-allocation is made in
accordance with the terms set forth in the Loan Documents, and no more than four
Re-allocations may be made during any Fiscal Year.

        (a) To make any Tranche B Re-allocation, US Borrower must give to US
Agent written notice (or telephonic notice promptly confirmed in writing) of
such Tranche B Reallocation. Each such notice must:

                (i) specify the amount by which the Tranche B Maximum Credit
        Amount will be reduced, which amount must be equal to US $25,000,000 or
        any higher integral multiple of US $1,000,000, and must also be equal to
        or less than the amount by which the Tranche B Maximum Credit Amount
        then in effect exceeds the Tranche B Facility Usage;

                (ii) specify that the Canadian Maximum Credit Amount will be
        increased by the same amount;

                (iii) specify the effective date of such Tranche B Re-allocation
        which must be at least 90 days after the effective date of the
        immediately preceding Re-allocation (whether a Tranche B Re-allocation
        or a Canadian Re-allocation); and

                (iv) be received by US Agent not later than 10:00 a.m., Dallas,
        Texas time, on or before the 10th Business Day preceding the day on
        which such Tranche B Re-allocation is to occur.

                                       15
<PAGE>   21

        (b) To make any Canadian Re-allocation, Borrowers must give to US Agent
written notice (or telephonic notice promptly confirmed in writing) of such
Canadian Re-allocation. Each such notice must:

                (i) specify the amount by which the Canadian Maximum Credit
        Amount will be reduced, which amount must be equal to US $25,000,000 or
        any higher integral multiple of US $1,000,000, and must also be equal to
        or less than the amount by which the Canadian Maximum Credit Amount then
        in effect exceeds the Canadian Facility Usage;

                (ii) specify that the Tranche B Maximum Credit Amount will be
        increased by the same amount;

                (iii) specify the effective date of such Canadian Re-allocation
        which must be at least 90 days after the effective date of the
        immediately preceding Re-allocation (whether a Tranche B Re-allocation
        or a Canadian Re-allocation); and

                (iv) be received by US Agent not later than 10:00 a.m., Dallas,
        Texas time, on or before the 10th Business Day preceding the day on
        which such Canadian Re-allocation is to occur.

        Each written request or confirmation described in this section
constitutes a "Re-allocation Notice" and must be made in the form and substance
of the "Re-allocation Notice" attached hereto as Exhibit G, duly completed. Each
such telephonic request shall be deemed a representation, warranty,
acknowledgment and agreement by Borrowers as to the matters which are required
to be set out in such written confirmation. Upon receipt of any such
Re-allocation Notice, US Agent shall give Canadian Agent, each Tranche B Lender
and each Canadian Lender prompt notice of the terms thereof. Each Re-allocation
Notice shall be irrevocable and binding on Borrowers.

             ARTICLE II - Bankers' Acceptances and Letters of Credit

        Section 2.1. Creation of Bankers' Acceptances. Upon receipt of a
Borrowing Notice and subject to the provisions of this Agreement, each Canadian
Resident Lender shall accept, in accordance with its Percentage Share of the
requested Borrowing from time to time such Bankers' Acceptances as Canadian
Borrowers shall request provided that:

        (a) Bankers' Acceptances shall be issued on a Business Day;

        (b) each Bankers' Acceptance shall have a term of 30, 60, 90 or 180 days
(excluding days of grace), as selected by Canadian Borrowers in the relevant
Borrowing Notice provided that each Bankers' Acceptance shall mature on a
Business Day;

        (c) the face amount of each Bankers' Acceptance shall be not less than
C$100,000 and in multiples of C$100,000 for any amounts in excess thereof; and

                                       16
<PAGE>   22

        (d) each Bankers' Acceptance shall be in a form acceptable to the
Canadian Resident Lenders.

        Section 2.2. Terms of Acceptance by the Canadian Resident Lenders.

        (a) Delivery and Payment. Subject to Sections 2.3 and 2.4 and only if a
valid appointment pursuant to Section 2.2(e) is not in place, Canadian Borrowers
shall pre-sign and deliver to each Canadian Resident Lender bankers' acceptance
drafts in sufficient quantity to meet Canadian Borrowers' requirements for
anticipated Borrowings by way of Bankers' Acceptances. The applicable Canadian
Borrower shall, at its option, provide for payment to Canadian Agent for the
benefit of Canadian Resident Lenders of each Bankers' Acceptance on the date on
which a Bankers' Acceptance matures, either by payment of the full face amount
thereof or through utilization of a Conversion to another Type of Borrowing in
accordance with this Agreement, or through a combination thereof. Each Canadian
Borrower waives presentment for payment of Bankers' Acceptances by Canadian
Resident Lenders and shall not claim from Canadian Resident Lenders any days of
grace for the payment at maturity of Bankers' Acceptances. Any amount owing by
Canadian Borrowers in respect of any Bankers' Acceptance which is not paid in
accordance with the foregoing, shall, as and from the date on which such
Bankers' Acceptance matures, be deemed to be outstanding hereunder as a Canadian
Prime Rate Loan.

        (b) No Liability. Canadian Agent and Canadian Resident Lenders shall not
be liable for any damage, loss or improper use of any bankers' acceptance draft
endorsed in blank except for any loss arising by reason of Canadian Agent or a
Canadian Resident Lender failing to use the same standard of care in the custody
of such bankers' acceptance drafts as Canadian Agent or such Canadian Resident
Lender use in the custody of their own property of a similar nature.

        (c) Bankers' Acceptances Purchased by Canadian Resident Lenders. Where
the applicable Canadian Borrower so elects in the Borrowing Notice or
Continuation/Conversion Notice, a Canadian Resident Lender shall purchase
Bankers' Acceptances accepted by it for an amount equal to the Discount
Proceeds.

        (d) Marketing. Where the applicable Canadian Borrower so elects in the
Borrowing Notice or Continuation/Conversion Notice, it shall be responsible for,
and shall make its own arrangements with respect to, the marketing of Bankers'
Acceptances.

        (e) Power of Attorney. To facilitate the procedures contemplated in this
Agreement, each Canadian Borrower appoints each Canadian Resident Lender from
time to time as the attorney-in-fact of such Canadian Borrower to execute,
endorse and deliver on behalf of such Canadian Borrower drafts or depository
bills in the form or forms prescribed by such Canadian Resident Lender for
Bankers' Acceptances denominated in Canadian Dollars. Each Bankers' Acceptance
executed and delivered by a Canadian Resident Lender on behalf of a Canadian
Borrower shall be as binding upon such Canadian Borrower as if it had been
executed and delivered by a duly authorized officer of such Canadian Borrower.
The foregoing appointment shall cease to be effective, in respect of any
Canadian Resident Lender regarding a Canadian Borrower, three Business Days
following receipt by such Canadian Resident Lender of a written

                                       17
<PAGE>   23

notice from such Canadian Borrower revoking such appointment (which notice shall
be copied to the Canadian Agent); provided that any such revocation shall not
affect Bankers' Acceptances previously executed and delivered by such Canadian
Resident Lender pursuant to such appointment.

        (f) Non-resident Lenders Participation in Borrowing of Bankers'
Acceptances by Making Canadian Dollar Eurodollar Loans. As part of each
Borrowing by way of Bankers' Acceptances from Canadian Resident Lenders, each
Non-resident Lender shall, with respect to its obligations to fund such
Borrowing, make a Canadian Dollar Eurodollar Loan by advancing Canadian Dollars
in the amount of its Percentage Share of such Borrowing having a Eurodollar
Interest Period that is substantially the same as the period to maturity of the
Bankers' Acceptances that are accepted in such Borrowing by Canadian Resident
Lenders in order that all Borrowings other than Competitive Bid Loans shall
remain pro rata during the term of this Agreement. Such Canadian Dollar
Eurodollar Loan shall otherwise be made on the terms set forth in Article I with
respect to such Type of Loan.

        (g) Canadian Dollars Unavailable to Non-resident Lenders. In the event
that (i) either Canadian Borrower has requested a Borrowing in Canadian Prime
Rate Loans or (ii) the Loans in any Borrowing are automatically converted to
Canadian Prime Rate Loans, and a Non-resident Lender is unable to obtain
Canadian Dollars with which to fund its Percentage Share of such Borrowing, such
Non-resident Lender may, with respect to its obligations to fund such Borrowing,
make a Canadian Base Rate Loan in an amount equal to the US Dollar Exchange
Equivalent of its Percentage Share of such Borrowing.

        (h) Pro-Rata Treatment of Canadian Advances .

                (i) Each Canadian Advance shall be made available by each Lender
        and all repayments and reductions in respect thereof shall be made and
        applied in a manner so that the Canadian Advances outstanding hereunder
        to each Lender will, to the extent possible, thereafter be pro rata in
        accordance with such Lender's Percentage Share. The Canadian Agent is
        authorized by each Canadian Borrower and each Lender to determine, in
        its sole and unfettered discretion, the portion of each Canadian Advance
        and each Type of Canadian Advance to be made available by each Lender
        and the application of repayments and reductions of Canadian Advances to
        give effect to the provisions of this Section, provided that no Lender
        shall, as a result of any such determination, have a Percentage Share of
        the Canadian Advances which is in excess of its Percentage Share of the
        Canadian Maximum Credit Amount.

                (ii) In the event it is not practicable to allocate Bankers'
        Acceptances to each Lender such that the aggregate amount of Bankers'
        Acceptances required to be purchased by such Lender hereunder is in a
        whole multiple of C $100,000, the Canadian Agent is authorized by each
        Canadian Borrower and each Lender to make such allocation as the
        Canadian Agent determines in its sole and unfettered discretion may be
        equitable in the circumstances and, if the aggregate amount of such
        Bankers' Acceptances is not a whole multiple of C $100,000, then the
        Canadian Agent may allocate (on a basis considered by it

                                       18
<PAGE>   24

        to be equitable) the excess of such Canadian Advance over the next
        lowest whole multiple of C $100,000 to one Lender, which shall purchase
        a Bankers' Acceptance with a face amount equal to the excess and having
        the same term as the corresponding Bankers' Acceptances. In no event
        shall the portion of the outstanding Borrowings by way of Bankers'
        Acceptances of a Lender exceed such Lenders' Percentage Share of the
        Aggregate Borrowings by way of Bankers' Acceptances by more than C
        $100,000 as a result of such exercise of discretion by the Canadian
        Agent.

                (iii) If during the term of any Bankers' Acceptance accepted by
        a Lender hereunder the Applicable Margin changes or an Event of Default
        occurs and is continuing, the fee paid to such Lender by the applicable
        Borrower pursuant to Section 1.5(d) (in this paragraph called the
        "Initial Fee") with respect to such Bankers' Acceptance shall be
        recalculated based upon such change in the Applicable Margin or the
        existence of such Event of Default for the number of days during the
        term of such Bankers' Acceptance that such change is applicable or such
        Event of Default exists. If such recalculated amount is in excess of the
        Initial Fee then such Canadian Borrower shall pay to such Lender the
        amount of such excess, and if such recalculated amount is less than the
        Initial Fee, then the amount of such reduction shall be credited to
        other amounts payable by such Canadian Borrower to such Lender.

                Section 2.3. General Procedures for Bankers' Acceptances.

        (a) Notice. Canadian Borrowers may in the Borrowing Notice or in a
Continuation/Conversion Notice request a Borrowing by way of Bankers'
Acceptances and, if the Canadian Borrower is responsible for marketing of such
Bankers' Acceptances under Section 2.2(d), by subsequent notice to Canadian
Agent provide Canadian Agent, which shall in turn notify each Canadian Resident
Lender, with information as to the discount proceeds payable by the purchasers
of the Bankers' Acceptances and the party to whom delivery of the Bankers'
Acceptances by each Canadian Resident Lender is to be made against delivery to
each Canadian Resident Lender of the applicable discount proceeds, but if it
does not do so, Canadian Borrowers shall initiate a telephone call to Canadian
Agent by 10:00 a.m. Toronto, Ontario time on the date of advance, or the date of
the Continuation or Conversion, as applicable, and provide such information to
Canadian Agent. Such discount proceeds less the fee calculated in accordance
with Section 1.5(d) shall promptly be delivered to the Canadian Agent. Any such
telephone advice shall be subject to Section 1.2 and shall be confirmed by a
written notice of Canadian Borrowers to Canadian Agent prior to 2:00 p.m.
Toronto, Ontario time on the same day.

        (b) Continuations. In the case of a Continuation of maturing Bankers'
Acceptances, issued by a Canadian Resident Lender, such Canadian Resident
Lender, in order to satisfy the continuing liability of Canadian Borrowers to
the Canadian Resident Lender for the face amount of the maturing Bankers'
Acceptances, shall retain for its own account the Net Proceeds of each new
Bankers' Acceptance issued by it in connection with such Continuation; and
Canadian Borrowers shall, on the maturity date of the maturing Bankers'
Acceptances, pay to Canadian Agent for the benefit of Canadian Resident Lenders
an amount equal to the difference between the

                                       19
<PAGE>   25

face amount of the maturing Bankers' Acceptances and the aggregate Net Proceeds
of the new Bankers' Acceptances.

        (c) Conversion from Canadian Prime Rate Loans and Canadian Dollar
Eurodollar Loans. In the case of a Conversion from a Borrowing of Canadian Prime
Rate Loans or Canadian Dollar Eurodollar Loans into a Borrowing by way of
Bankers' Acceptances to be accepted by a Canadian Resident Lender pursuant to
Sections 2.1, 2.2 and 2.3, such Canadian Resident Lender, in order to satisfy
the continuing liability of Canadian Borrowers to it for the principal amount of
the Canadian Prime Rate Loans or Canadian Dollar Eurodollar Loans being
converted, shall retain for its own account the Discount Proceeds of each new
Bankers' Acceptance issued by it in connection with such Conversion; and
Canadian Borrowers shall, on the date of issuance of the Bankers' Acceptances,
pay to Canadian Agent for the benefit of Canadian Resident Lenders an amount
equal to the difference between the aggregate principal amount of the Canadian
Prime Rate Loans or Canadian Dollar Eurodollar Loans being converted owing to
the Canadian Resident Lenders and the aggregate Discount Proceeds of such
Bankers' Acceptances.

        (d) Conversions to Canadian Loans in Canadian Dollars. In the case of a
Conversion of a Borrowing by way of Bankers' Acceptances into Canadian Loans,
each Canadian Resident Lender, in order to satisfy the liability of the
applicable Canadian Borrower to it for the face amount of the maturing Bankers'
Acceptances, shall record the obligation of the applicable Canadian Borrower to
it as a Canadian Prime Rate Loan, unless the applicable Canadian Borrower
provide for payment to Canadian Agent for the benefit of Canadian Resident
Lenders of the face amount of the maturing Bankers' Acceptance in some other
manner acceptable to Canadian Resident Lenders, including Conversion to another
Type of Canadian Loan pursuant to a Continuation/Conversion Notice.

        (e) Conversion from or to Canadian Loans in U.S. Dollars. In the case of
a conversion of Bankers' Acceptances from or to a Canadian Base Rate Loans or US
Dollar Eurodollar Loans, the parties to which this Section applies shall follow
the notice procedures set out in Section 1.3 and the funding procedures set out
in Section 2.3 (c) and (d) without netting of funds.

        (f) Authorization. Canadian Borrowers hereby authorize each Canadian
Resident Lender to complete, stamp, hold, sell, rediscount or otherwise dispose
of all Bankers' Acceptances accepted by it pursuant to this Section in
accordance with the instructions provided by Canadian Borrowers pursuant to
Section 1.3, as applicable.

        (g) Depository Notes. The parties agree that in the administering of
Bankers' Acceptances, each Lender may avail itself of the debt clearing services
offered by a clearing house for depository notes pursuant to the Depository
Bills and Notes Act (Canada) and that the procedures set forth in Article II be
deemed amended to the extent necessary to comply with the requirements of such
debt clearing services.

        Section 2.4. Execution of Bankers' Acceptances. The signatures of any
authorized signatory on Bankers' Acceptances may, at the option of Canadian
Borrowers, be reproduced in

                                       20
<PAGE>   26

facsimile and such Bankers' Acceptances bearing such facsimile signatures shall
be binding on Canadian Borrowers as if they had been manually signed by such
authorized signatory. Notwithstanding that any person whose signature appears on
any Bankers' Acceptance as a signatory may no longer be an authorized signatory
of Canadian Borrowers at the date of issuance of a Bankers' Acceptance, and
notwithstanding that the signature affixed may be a reproduction only, such
signature shall nevertheless be valid and sufficient for all purposes as if such
authority had remained in force at the time of such issuance and as if such
signature had been manually applied, and any such Bankers' Acceptance so signed
shall be binding on Canadian Borrowers.

        Section 2.5. Escrowed Funds. Upon the occurrence of an Event of Default
and an acceleration of the Canadian Obligations under Section 8.1 or upon a
prepayment permitted under Section 1.4, Canadian Borrowers shall forthwith pay
to Canadian Agent for deposit into an escrow account maintained by and in the
name of Canadian Agent for the benefit of Canadian Resident Lenders in
accordance with their Percentage Shares an amount equal to the Canadian Resident
Lenders' maximum potential liability (as determined by Canadian Agent) under
then outstanding Bankers' Acceptances (the "Escrow Funds"). The Escrow Funds
shall be held by Canadian Agent for set-off against future Canadian Obligations
of Canadian Borrowers and pending such application shall bear interest at the
rate declared by Canadian Agent from time to time as that payable by it in
respect of deposits for such amount and for such period relative to the maturity
date of the Bankers' Acceptances, as applicable. If such Event of Default is
either waived or cured in compliance with the terms of this Agreement, then the
Escrow Funds, together with any accrued interest to the date of release, shall
be forthwith released to Canadian Borrowers.

        Section 2.6. Letters of Credit. Subject to the terms and conditions
hereof, any Canadian Borrower may during the Canadian Revolving Period request
Canadian LC Issuer to issue one or more Letters of Credit denominated in either
Canadian Dollars or US Dollars, provided that, after taking such Letter of
Credit into account:

        (a) the Canadian Facility Usage does not exceed the Canadian Maximum
Credit Amount at such time;

        (b) the aggregate amount of Canadian LC Obligations arising from Letters
of Credit issued under this Agreement at such time does not exceed the Canadian
LC Sublimit;

        (c) the expiration date of such Letter of Credit is prior to the end of
the Canadian Revolving Period;

        (d) such Letter of Credit is to be used for general corporate purposes
of such Canadian Borrower;

        (e) such Letter of Credit is not directly or indirectly used to assure
payment of or otherwise support any Indebtedness of any Person other than
Indebtedness of any Restricted Person permitted by this Agreement;

                                       21
<PAGE>   27

        (f) the issuance of such Letter of Credit will be in compliance with all
applicable governmental restrictions, policies, and guidelines and will not
subject Canadian LC Issuer to any cost which is not reimbursable under Article
III;

        (g) the form and terms of such Letter of Credit are acceptable to
Canadian LC Issuer in its reasonable discretion; and

        (h) all other conditions in this Agreement to the issuance of such
Letter of Credit have been satisfied.

        Subject to the terms and conditions set forth herein, Canadian LC Issuer
will, in reliance upon the agreements of the other Lenders set forth in Section
2.8(a), honor any such request if the foregoing conditions (a) through (h) (in
this Section 2.6 called the "LC Conditions ") have been met as of the date of
issuance of such Letter of Credit. Canadian LC Issuer may choose to honor any
such request for any other Letter of Credit but has no obligation to do so and
may refuse to issue any other requested Letter of Credit for any reason which
Canadian LC Issuer in its sole discretion deems relevant.

        Section 2.7. Requesting Letters of Credit . The applicable Canadian
Borrower must make written application for any Letter of Credit at least three
Business Days before the date on which the applicable Canadian Borrower desires
for Canadian LC Issuer to issue such Letter of Credit. By making any such
written application the applicable Canadian Borrower shall be deemed to have
represented and warranted that the LC Conditions described in Section 2.6 will
be met as of the date of issuance of such Letter of Credit. Each such written
application for a Letter of Credit must be made in writing on Canadian LC
Issuer's standard form of Letter of Credit Application, the terms and provisions
of which are hereby incorporated herein by reference (or in such other form as
may mutually be agreed upon by Canadian LC Issuer and the applicable Canadian
Borrower). Three Business Days after the LC Conditions for a Letter of Credit
have been met as described in Section 2.6 (or if Canadian LC Issuer otherwise
desires to issue such Letter of Credit), Canadian LC Issuer will issue such
Letter of Credit at Canadian LC Issuer's office in Toronto, Ontario. If any
provisions of any LC Application conflict with any provisions of this Agreement,
the provisions of this Agreement shall govern and control.

        Section 2.8. Reimbursement and Participations .

        (a) Reimbursement by Canadian Borrowers. Each Matured Canadian LC
Obligation arising from a Letter of Credit issued under the Canadian Agreement
shall constitute Canadian Prime Rate Loans made by Canadian LC Issuer to the
applicable Canadian Borrower even if any condition precedent to the making of
such a Loan shall not have been satisfied. Each Lender shall (in all
circumstances and without set-off or counterclaim) purchase from Canadian LC
Issuer its Percentage Share of such Canadian Prime Rate Loans and pay to
Canadian LC Issuer on demand on the date on which such Matured LC Obligation
arises, in immediately available funds at Canadian LC Issuer's address for
notices hereunder, such Lender's Percentage Share of such Matured Canadian LC
Obligation. Each Lender's obligation to pay Canadian LC Issuer pursuant to the
terms of this subsection is irrevocable and unconditional. If any amount
required to be paid

                                       22
<PAGE>   28

by any Lender to Canadian LC Issuer pursuant to this subsection is paid by such
Lender to Canadian LC Issuer within three Business Days after the date such
payment is due, Canadian LC Issuer shall in addition to such amount be entitled
to recover from such Lender, on demand, interest thereon calculated from such
due date at the Canadian Prime Rate. If any amount required to be paid by any
Lender to Canadian LC Issuer pursuant to this subsection is not paid by such
Lender to Canadian LC Issuer within three Business Days after the date such
payment is due, Canadian LC Issuer shall in addition to such amount be entitled
to recover from such Lender, on demand, interest thereon calculated from such
due date at the Default Rate.

        (b) Calculations. A written advice setting forth in reasonable detail
the amounts owing under this section, submitted by Canadian LC Issuer to
Canadian Borrowers or any Lender from time to time, shall be conclusive, absent
manifest error, as to the amounts thereof.

        Section 2.9. Letter of Credit Fees. In consideration of Canadian LC
Issuer's issuance of any Letter of Credit, the applicable Canadian Borrower
agrees to pay (a) to Canadian LC Issuer for its own account, a letter of credit
fronting fee at a rate equal to 12.5 Basis Points per annum multiplied by the
face amount of such Letter of Credit, payable on the date of issuance, and (b)
to Canadian Agent, for the account of all Lenders in accordance with their
respective Percentage Shares, a letter of credit issuance fee calculated by
applying the Applicable Margin to the face amount of all Letters of Credit
outstanding on each day, payable in arrears on the last day of each Fiscal
Quarter. In addition, the applicable Canadian Borrower will pay to LC Issuer its
standard drawing and other processing fees upon any drawing under a Letter of
Credit.

        Section 2.10. No Duty to Inquire.

        (a) Drafts and Demands. Canadian LC Issuer is authorized and instructed
to accept and pay drafts and demands for payment under any Letter of Credit
without requiring, and without responsibility for, any determination as to the
existence of any event giving rise to said draft, either at the time of
acceptance or payment or thereafter. Canadian LC Issuer is under no duty to
determine the proper identity of anyone presenting such a draft or making such a
demand (whether by tested telex or otherwise) as the officer, representative or
agent of any beneficiary under any Letter of Credit, and payment by Canadian LC
Issuer to any such beneficiary when requested by any such purported officer,
representative or agent is hereby authorized and approved. Canadian Borrowers
release each Lender Party from, and agree to hold each Lender Party harmless and
indemnified against, any liability or claim in connection with or arising out of
the subject matter of this section, WHICH INDEMNITY SHALL APPLY WHETHER OR NOT
ANY SUCH LIABILITY OR CLAIM IS IN ANY WAY OR TO ANY EXTENT CAUSED, IN WHOLE OR
IN PART, BY ANY NEGLIGENT ACT OR OMISSION OF ANY KIND BY ANY LENDER PARTY,
provided only that no Lender Party shall be entitled to indemnification for that
portion, if any, of any liability or claim which is proximately caused by its
own individual gross negligence or willful misconduct, as determined in a final
judgment.

                                       23
<PAGE>   29

        (b) Extension of Maturity. If the maturity of any Letter of Credit is
extended by its terms or by Law or governmental action, if any extension of the
maturity or time for presentation of drafts or any other modification of the
terms of any Letter of Credit is made at the request of any Restricted Person,
or if the amount of any Letter of Credit is increased at the request of any
Restricted Person, this Agreement shall be binding upon all Restricted Persons
with respect to such Letter of Credit as so extended, increased or otherwise
modified, with respect to drafts and property covered thereby, and with respect
to any action taken by Canadian LC Issuer, Canadian LC Issuer's correspondents,
or any Lender Party in accordance with such extension, increase or other
modification.

        (c) Transferees of Letters of Credit. If any Letter of Credit provides
that it is transferable, Canadian LC Issuer shall have no duty to determine the
proper identity of anyone appearing as transferee of such Letter of Credit, nor
shall Canadian LC Issuer be charged with responsibility of any nature or
character for the validity or correctness of any transfer or successive
transfers, and payment by Canadian LC Issuer to any purported transferee or
transferees as determined by Canadian LC Issuer is hereby authorized and
approved, and Canadian Borrowers release each Lender Party from, and agree to
hold each Lender Party harmless and indemnified against, any liability or claim
in connection with or arising out of the foregoing, WHICH INDEMNITY SHALL APPLY
WHETHER OR NOT ANY SUCH LIABILITY OR CLAIM IS IN ANY WAY OR TO ANY EXTENT
CAUSED, IN WHOLE OR IN PART, BY ANY NEGLIGENT ACT OR OMISSION OF ANY KIND BY ANY
LENDER PARTY, provided only that no Lender Party shall be entitled to
indemnification for that portion, if any, of any liability or claim which is
proximately caused by its own individual gross negligence or willful misconduct,
as determined in a final judgment.

        Section 2.11. LC Collateral.

        (a) Canadian LC Obligations in Excess of Canadian Maximum Credit Amount.
If, after the making of all mandatory prepayments required under Section 1.4(c),
the outstanding Canadian LC Obligations will exceed Canadian Maximum Credit
Amount, then in addition to prepayment of the entire principal balance of the
Canadian Loans, Canadian Borrowers will immediately pay to Canadian LC Issuer an
amount equal to such excess. Canadian LC Issuer will hold such amount to apply
against the remaining Canadian LC Obligations outstanding under the Canadian
Agreement (all such amounts held for Canadian LC Obligations being herein
collectively called "LC Collateral ") and the other Canadian Obligations, and
such collateral may be applied from time to time to any Matured Canadian LC
Obligations or other Canadian Obligations which are due and payable. Neither
this subsection nor the following subsection shall, however, limit or impair any
rights which Canadian LC Issuer may have under any other document or agreement
relating to any Letter of Credit, LC Collateral or Canadian LC Obligation,
including any LC Application, or any rights which any Lender Party may have to
otherwise apply any payments by Canadian Borrowers and any LC Collateral under
Section 3.1.

        (b) Acceleration of Canadian LC Obligations. If the Canadian Obligations
or any part thereof become immediately due and payable pursuant to Section 8.1
then, unless Canadian

                                       24
<PAGE>   30

Required Lenders otherwise specifically elect to the contrary (which election
may thereafter be retracted by Canadian Required Lenders at any time), all
Canadian LC Obligations shall become immediately due and payable without regard
to whether or not actual drawings or payments on the Letters of Credit have
occurred, and the applicable Canadian Borrower in respect of such Canadian LC
Obligations shall be obligated to pay to Canadian LC Issuer immediately an
amount equal to the aggregate Canadian LC Obligations which are then
outstanding.

        (c) Investment of LC Collateral. Pending application thereof, all LC
Collateral shall be invested by Canadian LC Issuer in such Investments as
Canadian LC Issuer may choose in its sole discretion. All interest on (and other
proceeds of) such Investments shall be reinvested or applied to Matured Canadian
LC Obligations or other Canadian Obligations which are due and payable. When all
Canadian Obligations have been satisfied in full, including all Canadian LC
Obligations, all Letters of Credit have expired or been terminated, and all of
Canadian Borrowers's reimbursement obligations in connection therewith have been
satisfied in full, Canadian LC Issuer shall release any remaining LC Collateral.
Canadian Borrowers hereby assign and grant to Canadian LC Issuer a continuing
security interest in all LC Collateral paid by it to Canadian LC Issuer, all
Investments purchased with such LC Collateral, and all proceeds thereof to
secure its Matured Canadian LC Obligations and the other Canadian Obligations
hereunder, each Canadian Note, and the other US Loan Documents. Canadian
Borrowers further agree that Canadian LC Issuer shall have all of the rights and
remedies of a secured party under the Personal Property Security Act (Alberta)
with respect to such security interest and that an Event of Default under this
Agreement shall constitute a default for purposes of such security interest.
When Canadian Borrowers are required to provide LC Collateral for any reason and
fail to do so on the day when required, Canadian LC Issuer may without notice to
Canadian Borrowers or any other Restricted Person provide such LC Collateral
(whether by transfers from other accounts maintained with Canadian LC Issuer, or
otherwise) using any available funds of Canadian Borrowers or any other Person
also liable to make such payments.

                       ARTICLE III - Payments to Lenders

        Section 3.1. General Procedures. Each Canadian Borrower will make each
payment which it owes under the Canadian Loan Documents to Canadian Agent in
Toronto, Canada, if such payment is being made in Canadian Dollars, or to the US
Account, if such payment is being made in US Dollars, in each case for the
account of the Lender Party to whom such payment is owed, without set-off,
deduction or counterclaim, and in immediately available funds, provided that any
such payment may be made net of any deduction or withholding for or on account
of any withholding tax which such Canadian Borrower is required at Law to
withhold or deduct except as otherwise provided in Section 3.2(d). Each such
payment must be received by Canadian Agent not later than 11:00 a.m., Toronto,
Ontario time, on the date such payment becomes due and payable. Any payment
received by Canadian Agent after such time will be deemed to have been made on
the next following Business Day. Should any such payment become due and payable
on a day other than a Business Day, the maturity of such payment shall be
extended to the next succeeding Business Day, and, in the case of a payment of
principal or past due interest, interest shall accrue and be payable thereon for
the period of such extension as provided in the Canadian

                                       25
<PAGE>   31

Loan Document under which such payment is due. Each payment under a Canadian
Loan Document shall be due and payable at the place provided therein and, if no
specific place of payment is provided, shall be due and payable at the place of
payment of Canadian Agent's Canadian Note. When Canadian Agent collects or
receives money on account of the Canadian Obligations, Canadian Agent shall
distribute all money so collected or received by 2:00 p.m. Toronto, Ontario time
on the Business Day received, if received by 11:00 a.m. Toronto, Ontario time,
otherwise on the day of deemed receipt, and each Lender Party shall apply all
such money so distributed, as follows:

        (a) first, for the payment of all Canadian Obligations which are then
due (and if such money is insufficient to pay all such Canadian Obligations,
first to any reimbursements due Canadian Agent under Section 6.9 or 10.4, then
to any reimbursement due any other Lender Party under Section 10.4, and then to
the partial payment of all other Canadian Obligations then due in proportion to
the amounts thereof, or as Lender Parties shall otherwise agree);

        (b) then for the prepayment of amounts owing under the Canadian Loan
Documents (other than principal on the Canadian Notes) if so specified by
Canadian Borrowers;

        (c) then for the prepayment of principal on the Canadian Notes that are
not Competitive Bid Notes, together with accrued and unpaid interest on the
principal so prepaid; and

        (d) last, for the payment or prepayment of any other Canadian
Obligations.

        All payments applied to principal or interest on any Canadian Note shall
be applied first to any interest then due and payable, then to principal then
due and payable, and last to any prepayment of principal and interest in
compliance with Sections 1.4 and 2.8. All distributions of amounts described in
any of subsections (b), (c) or (d) above shall be made by Canadian Agent pro
rata to each Lender Party then owed Canadian Obligations described in such
subsection in proportion to all amounts owed to all Lender Parties which are
described in such subsection; provided that if any Lender then owes payments to
Canadian LC Issuer for the purchase of a participation under Section 2.8(a) or
to Canadian Agent under Section 9.8, any amounts otherwise distributable under
this section to such Lender shall be deemed to belong to Canadian LC Issuer, or
Canadian Agent, respectively, to the extent of such unpaid payments, and
Canadian Agent shall apply such amounts to make such unpaid payments rather than
distribute such amounts to such Lender.

        Section 3 .2. Change in Law; Gross Up; Increased Cost and Reduced Return
 .

        (a) If, after the date hereof, the adoption of any applicable Law, rule,
or regulation, or any change in any applicable Law, rule, or regulation, or any
change in the interpretation or administration thereof by any Governmental
Authority, central bank, or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender Party (or its Applicable
Lending Office) with any request or directive (whether or not having the force
of Law) of any such Governmental Authority, central bank, or comparable agency
(the occurrence of any of the foregoing events being herein referred to as a
"Change in Law"):

                                       26
<PAGE>   32

                (i) shall subject such Lender Party (or its Applicable Lending
        Office) to any tax, duty, deduction or any other charge (other than with
        respect to Withholding Tax as defined in Section 3.2(d)) with respect to
        any Eurodollar Loans, Bankers' Acceptances or Competitive Bid Loans, or
        its obligation to make Eurodollar Loans, accept Bankers' Acceptances or
        issue Letters of Credit, or change the basis of taxation of any amounts
        payable to such Lender Party (or its Applicable Lending Office) under
        this Agreement or its Canadian Note in respect of any Eurodollar Loans,
        Bankers' Acceptances or Competitive Bid Loans other than taxes
        (including franchise taxes) imposed on the overall net income or capital
        of such Lender Party by the jurisdiction under the Laws of which such
        Lender Party (or its Applicable Lending Office) is organized or is a
        resident for tax purposes or any political subdivision thereof;

                (ii) shall impose, modify, or deem applicable any reserve,
        special deposit, assessment, or similar requirement (other than the
        Reserve Requirement utilized in the determination of the Adjusted US
        Dollar Eurodollar Rate and Adjusted Canadian Dollar Eurodollar Rate)
        relating to any extensions of credit or other assets of, or any deposits
        with or other liabilities or commitments of, such Lender Party (or its
        Applicable Lending Office), including the commitment of such Lender
        Party hereunder; or

                (iii) shall impose on such Lender Party (or its Applicable
        Lending Office) or the London interbank market any other condition
        affecting this Agreement or its Canadian Notes or any of such extensions
        of credit or liabilities or commitments;

and the result of any of the foregoing is to increase the cost to such Lender
Party (or its Applicable Lending Office) of making, converting into, continuing,
or maintaining any Eurodollar Loans, Bankers' Acceptances or Competitive Bid
Loans or to reduce any sum received or receivable by such Lender Party (or its
Applicable Lending Office) under this Agreement or its Canadian Notes with
respect to any Eurodollar Loans, Bankers' Acceptances or Competitive Bid Loans,
then the applicable Canadian Borrower shall pay to such Lender Party on demand
such amount or amounts as will compensate such Lender Party for such increased
cost or reduction. If any Lender Party requests compensation by Canadian
Borrowers under this Section 3.2(a), Canadian Borrowers may, by notice to such
Lender Party (with a copy to Canadian Agent), suspend the obligation of such
Lender Party to make or continue Canadian Advances of the Type with respect to
which such compensation is requested, or to convert Canadian Advances of any
other Type into Canadian Advances of such Type, until the event or condition
giving rise to such request ceases to be in effect (in which case the provisions
of Section 3.5 shall be applicable); provided that such suspension shall not
affect the right of such Lender Party to receive the compensation so requested.

        (b) If, after the date hereof, Canadian LC Issuer or any Lender Party
shall have determined that the adoption of any applicable Law, rule, or
regulation regarding capital adequacy or any change therein or in the
interpretation or administration thereof by any Governmental Authority, central
bank, or comparable agency charged with the interpretation or administration
thereof, or any request or directive regarding capital adequacy (whether or not
having the force of Law) of any such Governmental Authority, central bank, or
comparable agency, has or would

                                       27
<PAGE>   33

have the effect of reducing the rate of return on the capital of such Lender
Party or any corporation controlling such Lender Party as a consequence of the
obligations of such Lender Party hereunder to a level below that which such
Lender Party or such corporation could have achieved but for such adoption,
change, request, or directive (taking into consideration its policies with
respect to capital adequacy), then from time to time upon demand the applicable
Canadian Borrower shall pay to such Lender Party such additional amount or
amounts as will compensate such Lender Party for such reduction, but only to the
extent that such Lender Party has not been compensated therefor by any increase
in the Adjusted US Dollar Eurodollar Rate or the Adjusted Canadian Dollar
Eurodollar Rate; provided that if such Lender Party fails to give notice to
Canadian Borrowers of any additional costs within ninety (90) days after it has
actual knowledge thereof, such Lender Party shall not be entitled to
compensation for such additional costs incurred more than ninety (90) days prior
to the date on which notice is given by such Lender Party.

        (c) Each Lender Party shall promptly notify Canadian Borrowers and
Canadian Agent of any event of which it has knowledge, occurring after the date
hereof, which will entitle such Lender Party to compensation pursuant to this
Section and will designate a different Applicable Lending Office if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the judgment of such Lender Party, be otherwise disadvantageous
to it. Any Lender Party claiming compensation under this Section shall furnish
to Canadian Borrowers and Canadian Agent a statement setting forth the
additional amount or amounts to be paid to it hereunder which shall be
conclusive in the absence of manifest error. In determining such amount, such
Lender Party shall act in good faith and may use any reasonable averaging and
attribution methods.

        (d) If by reason of a Change in Law, Canadian Borrowers shall be
required to withhold and remit withholding taxes in respect of any principal,
interest, or other amount paid or payable by it to or for the account of any
Lender Party hereunder or under any other Canadian Loan Document (a "Withholding
Tax"), (i) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section 3.2) such Lender Party receives an amount equal to
the sum it would have received had no such deductions been made, (ii) the
applicable Canadian Borrower shall make such deductions, and (iii) the
applicable Canadian Borrower shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable Law.

        (e) Except as provided in paragraph (d) of this Section 3.2, no Canadian
Borrower shall be required to compensate any Lender Party for any Withholding
Taxes which such Canadian Borrower is required to withhold and remit in respect
of any principal, interest, or other amount paid or payable by it to or for the
account of any Lender Party hereunder or under any other Canadian Loan Document.

        Section 3.3. Limitation on Types of Canadian Loans . If on or prior to
the first day of any Eurodollar Interest Period for any Eurodollar Loan:

        (a) Canadian Agent determines (which determination shall be conclusive)
that by reason of circumstances affecting the relevant market, adequate and
reasonable means do not

                                       28
<PAGE>   34

exist for ascertaining the US Dollar Eurodollar Rate or the Canadian Dollar
Eurodollar Rate, as applicable, for such Eurodollar Interest Period; or

        (b) the Canadian Required Lenders determine (which determination shall
be conclusive) and notify Canadian Agent that the Adjusted US Dollar Eurodollar
Rate or the Adjusted Canadian Dollar Eurodollar Rate, as applicable, will not
adequately and fairly reflect the cost to the Lenders of funding Eurodollar
Loans or for such Eurodollar Interest Period;

then Canadian Agent shall give Canadian Borrowers prompt notice thereof
specifying the relevant amounts or periods, and so long as such condition
remains in effect, the Lender Parties shall be under no obligation to make
additional Canadian Loans, continue Eurodollar Loans or convert Canadian Base
Rate Loans or Canadian Dollar Prime Rate Loans into Eurodollar Loans, and
Canadian Borrowers shall, on the last day(s) of the then current Eurodollar
Interest Period(s) for the outstanding Eurodollar Loans, either prepay such
Canadian Loans or convert such Canadian Loans into Canadian Base Rate Loans,
Canadian Prime Rate Loans, or Bankers' Acceptances in accordance with the terms
of this Agreement.

        Section 3.4. Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender Party or its
Applicable Lending Office to make, maintain, or fund Eurodollar Loans hereunder,
then such Lender Party shall promptly notify Canadian Borrowers thereof and such
Lender Party's obligation to make or continue Eurodollar Loans and to convert
BA's, Canadian Base Rate Loans, Canadian Prime Rate Loans, or Bankers'
Acceptances into Eurodollar Loans shall be suspended until such time as such
Lender Party may again make, maintain, and fund Eurodollar Loans (in which case
the provisions of Section 3.5 shall be applicable).

        Section 3.5. Treatment of Affected Loans. If the obligation of any
Lender Party to make a particular Type of Loan or to continue, or to convert
Canadian Loans of any other Type into, Canadian Loans of a particular Type shall
be suspended pursuant to Sections 3.2 and 3.4 hereof (Canadian Loans of such
Type being herein called "Affected Loans " and such Type being herein called the
"Affected Type"), such Lender Party's Affected Loans shall be automatically
converted into Canadian Base Rate Loans with respect to US $ Loans or to
Canadian Prime Rate Loans with respect to C $ Loans on the last day(s) of the
then current Interest Period(s) for Affected Loans (or, in the case of a
Conversion required by Section 3.4 hereof, on such earlier date as such Lender
Party may specify to Canadian Borrowers with a copy to Canadian Agent) and,
unless and until such Lender Party gives notice as provided below that the
circumstances specified in Sections 3.2 or 3.4 hereof that gave rise to such
Conversion no longer exist:

        (a) to the extent that such Lender Party's Affected Loans have been so
converted, all payments and prepayments of principal that would otherwise be
applied to such Lender Party's Affected Loans shall be applied instead to its
Canadian Base Rate Loans or Canadian Prime Rate Loans, as applicable; and

        (b) all Canadian Loans that would otherwise be made or continued by such
Lender Party as Canadian Loans of the Affected Type shall be made or continued
instead as Canadian

                                       29
<PAGE>   35

Base Rate Loans or Canadian Prime Rate Loans, as applicable, and all Canadian
Loans of such Lender Party that would otherwise be converted into Canadian Loans
of the Affected Type shall be converted instead into (or shall remain as)
Canadian Base Rate Loans or Canadian Prime Rate Loans, as applicable.

        If such Lender Party gives notice to Canadian Borrowers (with a copy to
Canadian Agent) that the circumstances specified in Section 3.2 or 3.4 hereof
that gave rise to the Conversion of such Lender Party's Affected Loans pursuant
to this Section no longer exist (which such Lender Party agrees to do promptly
upon such circumstances ceasing to exist) at a time when Canadian Loans of the
Affected Type made by other Lender Parties are outstanding, such Lender Party's
Canadian Base Rate Loans or Canadian Prime Rate Loans, as applicable, shall be
automatically converted, on the first day(s) of the next succeeding Interest
Period(s) for such outstanding Canadian Loans of the Affected Type, to the
extent necessary so that, after giving effect thereto, all Canadian Loans held
by the Lender Parties holding Canadian Loans of the Affected Type and by such
Lender Party are held pro rata (as to principal amounts, Types, and Interest
Periods) in accordance with their Percentage Shares of the Canadian Maximum
Credit Amount.

        Section 3.6. Compensation. Upon the request of any Lender Party,
Canadian Borrowers shall pay to such Lender Party such amount or amounts as
shall be sufficient (in the reasonable opinion of such Lender Party) to
compensate it for any loss, cost, or expense (including loss of anticipated
profits) incurred by it as a result of:

                (i) any payment, prepayment, or Conversion of a Canadian Loan
        (other than a Canadian Base Rate Loan or a Canadian Prime Rate Loan) for
        any reason, whether voluntary, mandatory, automatic, by reason of
        acceleration, or otherwise, on a date other than the last day of the
        Interest Period for such Loan; or

                (ii) any failure by Canadian Borrowers for any reason
        (including, without limitation, the failure of any condition precedent
        specified in Article IV to be satisfied) to borrow, convert, continue,
        or prepay a Canadian Loan (other than a Canadian Base Rate Loan or a
        Canadian Prime Rate Loan) on the date for such borrowing, Conversion,
        Continuation, or prepayment specified in the relevant notice of
        borrowing, prepayment, Continuation, or Conversion under this Agreement.

        Section 3.7. Change of Applicable Lending Office. Each Lender Party
agrees that, upon the occurrence of any event giving rise to the operation of
Sections 3.2 through 3.5 with respect to such Lender Party, it will, if
requested by Canadian Borrowers, use reasonable efforts (subject to overall
policy considerations of such Lender Party) to designate another Applicable
Lending Office, provided that such designation is made on such terms that such
Lender Party and its Applicable Lending Office suffer no economic, legal or
regulatory disadvantage, with the object of avoiding the consequence of the
event giving rise to the operation of any such section. Nothing in this section
shall affect or postpone any of the obligations of Canadian Borrowers or the
rights of any Lender Party provided in Sections 3.2 through 3.5.

                                       30
<PAGE>   36

        Section 3.8. Replacement of Lenders. If any Lender Party seeks
reimbursement for increased costs under Sections 3.2 through 3.5, or if a
Canadian Borrower is required to increase any sum payable under Section 3.2(d),
then within ninety (90) days thereafter -- provided no Event of Default then
exists -- Canadian Borrowers shall have the right (unless such Lender Party
withdraws its request for additional compensation) to replace such Lender Party
by requiring such Lender Party to assign its Canadian Advances, Canadian Notes,
Canadian LC Obligations, US Loans, US Notes, US LC Obligations and its
commitments hereunder and under the US Agreement to an Eligible Transferee
reasonably acceptable to all Borrowers, provided that: all Obligations of
Borrowers owing to such Lender Party being replaced (including such increased
costs, but excluding principal and accrued interest on the Canadian Notes and
the US Notes being assigned) shall be paid in full to such Lender Party
concurrently with such assignment, and the replacement Eligible Transferee shall
purchase the foregoing by paying to such Lender Party a price equal to the
principal amount thereof plus accrued and unpaid interest thereon. In connection
with any such assignment Canadian Borrowers, Canadian Agent, US Borrower, US
Agent, such Lender Party and the replacement Eligible Transferee shall otherwise
comply with Section 10.6. Notwithstanding the foregoing rights of Canadian
Borrowers under this section, however, Canadian Borrowers may not replace any
Lender Party which seeks reimbursement for increased costs under Section 3.2
through 3.5, or to which Canadian Borrowers are required to increase any sums
payable under Section 3.2(d), unless Canadian Borrowers are at the same time
replacing all Lender Parties which are then seeking such compensation or to
which such sums payable must be increased. In connection with any such
replacement of a Lender Party, the applicable Canadian Borrower shall pay all
costs that would have been due to such Lender Party pursuant to Section 3.6 if
such Lender Party's Canadian Advances had been prepaid at the time of such
replacement.

        Section 3.9. Other Taxes.

        (a) Canadian Borrowers agree to pay any and all present or future stamp
or documentary taxes and any other excise or property taxes or charges or
similar levies which arise from any payment made under this Agreement or any
other Canadian Loan Document or from the execution or delivery of, or otherwise
with respect to, this Agreement or any other Canadian Loan Document (hereinafter
referred to as "Other Taxes").

        (b) Canadian Borrowers agree to indemnify each Lender Party for the full
amount of Other Taxes (including, without limitation, any Other Taxes imposed or
asserted by any jurisdiction on amounts payable under this section) paid by such
Lender Party or Canadian Agent (as the case may be) and any liability (including
penalties, interest, and expenses) arising therefrom or with respect thereto.

        (c) If Canadian Borrowers are required to pay additional amounts to or
for the account of any Lender Party pursuant to this Section 3.9, then such
Lender Party will agree to use reasonable efforts to change the jurisdiction of
its Applicable Lending Office so as to eliminate or reduce any such additional
payment which may thereafter accrue if such change, in the judgment of such
Lender Party, is not otherwise disadvantageous to such Lender Party.

                                       31
<PAGE>   37

        (d) If a Lender Party is reimbursed for an amount paid by Canadian
Borrowers pursuant to this Section 3.9, it shall promptly return such amount to
Canadian Borrowers.

        (e) Within thirty (30) days after the date of any payment of Other
Taxes, Canadian Borrowers shall furnish to Canadian Agent the original or a
certified copy of a receipt evidencing such payment.

        (f) Without prejudice to the survival of any other agreement of Canadian
Borrowers hereunder, the agreements and obligations of Canadian Borrowers
contained in this section shall survive the termination of this Agreement and
the payment in full of the Canadian Notes.

        Section 3.10. Currency Conversion and Currency Indemnity.

        (a) Canadian Borrowers and Canadian Guarantor (collectively, for
purposes of this Section 3.10 herein referred to as "Obligors") shall make
payment relative to any Obligation in the currency (the "Agreed Currency") in
which the Obligation was incurred. If any payment is received on account of any
Obligation in any currency (the "Other Currency") other than the Agreed Currency
(whether voluntarily, pursuant to any Conversion of a Canadian Advance or
pursuant to an order or judgment or the enforcement thereof or the realization
of any security or the liquidation of such Obligor or otherwise howsoever), such
payment shall constitute a discharge of the liability of an Obligor hereunder
and under the other Canadian Loan Documents in respect of such Obligation only
to the extent of the amount of the Agreed Currency which the relevant Lender
Parties are able to purchase with the amount of the Other Currency received by
it on the Business Day next following such receipt in accordance with its normal
procedures and after deducting any premium and costs of exchange.

        (b) If, for the purpose of obtaining or enforcing judgment in any court
in any jurisdiction, it becomes necessary to convert into a particular currency
(the "Judgment Currency") any amount due in the Agreed Currency then the
conversion shall be made on the basis of the rate of exchange prevailing on the
next Business Day following the date such judgment is given and in any event
each Obligor shall be obligated to pay the Lender Parties any deficiency in
accordance with Section 3.10(c). For the foregoing purposes "rate of exchange"
means the rate at which the relevant Lender Parties, as applicable, in
accordance with their normal banking procedures are able on the relevant date to
purchase the Agreed Currency with the Judgment Currency after deducting any
premium and costs of exchange.

        (c) If any Lender Party receives any payment or payments on account of
the liability of an Obligor hereunder pursuant to any judgment or order in any
Other Currency, and the amount of the Agreed Currency which the relevant Lender
Party is able to purchase on the Business Day next following such receipt with
the proceeds of such payment or payments in accordance with its normal
procedures and after deducting any premiums and costs of exchange is less than
the amount of the Agreed Currency due in respect of such Obligations immediately
prior to such judgment or order, then Canadian Borrowers on demand shall, and
Canadian Borrowers hereby agree to, indemnify and save such Lender Party
harmless from and against any loss, cost or expense arising out of or in
connection with such deficiency. The agreement of indemnity

                                       32
<PAGE>   38

provided for in this Section 3.10(c) shall constitute an obligation separate and
independent from all other obligations contained in this Agreement, shall give
rise to a separate and independent cause of action, shall apply irrespective of
any indulgence granted by the Lender Parties or any of them from time to time,
and shall continue in full force and effect notwithstanding any judgment or
order for a liquidated sum in respect of an amount due hereunder or under any
judgment or order.

                  ARTICLE IV - Conditions Precedent to Advances

        Section 4.1. Documents to be Delivered. No Lender has any obligation to
make its first Canadian Loan, and Canadian LC Issuer has no obligation to issue
the first Letter of Credit, unless Canadian Agent shall have received all of the
following, duly executed and delivered and in form, substance and date
satisfactory to Canadian Agent:

        (a) This Agreement and any other documents that Lenders are to execute
in connection herewith.

        (b) Each Canadian Note.

        (c) The Guaranty of Canadian Guarantor.

        (d) Certain certificates of Canadian Borrowers including:

                (i) An "Omnibus Certificate" of the Secretary or Assistant
        Secretary and of the Chairman of the Board, President, or Vice President
        - Finance of each Canadian Borrower, which shall contain the names and
        signatures of the officers of such Canadian Borrower authorized to
        execute Canadian Loan Documents and which shall certify to the truth,
        correctness and completeness of the following exhibits attached thereto:
        (1) a copy of resolutions duly adopted by the Board of Directors of such
        Canadian Borrower and in full force and effect at the time this
        Agreement is entered into, authorizing the execution of this Agreement
        and the other Canadian Loan Documents delivered or to be delivered in
        connection herewith and the consummation of the transactions
        contemplated herein and therein, (2) a copy of the charter documents of
        such Canadian Borrower and all amendments thereto, certified by the
        appropriate official of its jurisdiction of organization, and (3) a copy
        of any bylaws of such Canadian Borrower; and

                (ii) A "Compliance Certificate" of the Chairman of the Board or
        President and of the Vice President - Finance of each Canadian Borrower,
        of even date with such Canadian Loan or such Letter of Credit, in which
        such officers certify to the satisfaction of the conditions set out in
        subsections (a), (b) and (c) of Section 4.3.

        (e) certificate (or certificates) of the due formation, valid existence
and good standing of each Canadian Borrower in its jurisdiction of organization,
issued by the appropriate official of such jurisdiction.

                                       33
<PAGE>   39

        (f) A favorable opinion of Bennett Jones LLP, counsel for Restricted
Persons, substantially in the form set forth in Exhibit E and a favorable
opinion of Blake, Cassels & Graydon LLP covering the matters requested by
Canadian Agent.

        (g) The Initial Financial Statements.

        Section 4.2. Additional Conditions Precedent to First Canadian Loan or
First Letter of Credit. No Lender has any obligation to make its first Canadian
Loan, and Canadian LC Issuer has no obligation to issue the first Letter of
Credit, unless on the date thereof:

        (a) All commitment, facility, agency, legal and other fees required to
be paid or reimbursed to any Lender pursuant to any Canadian Loan Documents or
any commitment agreement heretofore entered into shall have been paid.

        (b) No event which would reasonably be expected to have a Material
Adverse Effect shall have occurred since June 30, 2000.

        (c) US Borrower shall have certified to Canadian Agent and Lenders that
the Initial Financial Statements fairly present US Borrower's Consolidated
financial position at the respective dates thereof and the Consolidated results
of US Borrower's operations and US Borrower's Consolidated cash flows for the
respective periods thereof.

        (d) US Borrower shall have certified to Canadian Agent and Lenders that
no Restricted Person has any outstanding Liabilities of any kind (including
contingent obligations, tax assessments, and unusual forward or long-term
commitments) which are, in the aggregate, material to US Borrower or material
with respect to US Borrower's Consolidated financial condition and not shown in
the Initial Financial Statements or disclosed in the Disclosure Schedule.

        (e) Contemporaneously with the making of the first Canadian Loan or the
issuance of the first Letter of Credit, the Indebtedness outstanding under the
Existing US Agreement shall be refinanced under the US Agreement.

        (f) All legal matters relating to the Canadian Loan Documents and the
consummation of the transactions contemplated thereby shall be satisfactory to
Thompson & Knight L.L.P., US counsel to Canadian Agent, and Blake, Cassels &
Graydon LLP, Canadian counsel to Canadian Agent.

        Section 4.3. Additional Conditions Precedent to all Canadian Loans and
Letters of Credit. No Lender has any obligation to make any Canadian Loan
(including its first), and Canadian LC Issuer has no obligation to issue any
Letter of Credit (including its first), unless the following conditions
precedent have been satisfied:

        (a) All representations and warranties made by any Restricted Person in
any Canadian Loan Document shall be true on and as of the date of such Canadian
Loan or the date of issuance

                                       34
<PAGE>   40

of such Letter of Credit (except to the extent that the facts upon which such
representations are based have been changed by the extension of credit
hereunder) as if such representations and warranties had been made as of the
date of such Canadian Loan or the date of issuance of such Letter of Credit.

        (b) No Default shall exist at the date of such Canadian Loan or the date
of issuance of such Letter of Credit.

        (c) The making of such Canadian Loan or the issuance of such Letter of
Credit shall not be prohibited by any Law and shall not subject any Lender or
any LC Issuer to any material penalty under or pursuant to any such Law.

                   ARTICLE V - Representations and Warranties

        To confirm each Lender's understanding concerning Restricted Persons and
Restricted Persons' businesses, properties and obligations and to induce each
Lender to enter into this Agreement and to extend credit hereunder, each
Canadian Borrower represents and warrants to each Lender that:

        Section 5.1. No Default. No event has occurred and is continuing which
constitutes a Default.

        Section 5.2. Organization and Good Standing. Each Canadian Borrower and
each Subsidiary of a Canadian Borrower that is a Restricted Person is duly
organized, validly existing and in good standing under the Laws of its
jurisdiction of organization, having all powers required to carry on its
business and enter into and carry out the transactions contemplated hereby. Each
Canadian Borrower and each Subsidiary of a Canadian Borrower that is a
Restricted Person is duly qualified, in good standing, and authorized to do
business in all other jurisdictions within Canada wherein the character of the
properties owned or held by it or the nature of the business transacted by it
makes such qualification necessary except where failure to so qualify would not
have a Material Adverse Effect. Each Canadian Borrower and each Subsidiary of a
Canadian Borrower that is a Restricted Person has taken all actions and
procedures customarily taken in order to enter, for the purpose of conducting
business or owning property, each jurisdiction outside Canada wherein the
character of the properties owned or held by it or the nature of the business
transacted by it makes such actions and procedures desirable except where
failure to so qualify would not have a Material Adverse Effect.

        Section 5.3. Authorization. Each Canadian Borrower has duly taken all
action necessary to authorize the execution and delivery by it of the Canadian
Loan Documents to which it is a party and to authorize the consummation of the
transactions contemplated thereby and the performance of its obligations
thereunder. Each Canadian Borrower is duly authorized to borrow funds hereunder.

                                       35
<PAGE>   41

        Section 5.4. No Conflicts or Consents. The execution and delivery by
each Canadian Borrower and each Subsidiary of a Canadian Borrower that is a
Restricted Person of the Canadian Loan Documents to which each is a party, the
performance by each of its obligations under such Canadian Loan Documents, and
the consummation of the transactions contemplated by the various Canadian Loan
Documents, do not and will not (i) conflict with any provision of (A) any Law,
(B) the organizational documents or any unanimous shareholders agreement of any
Restricted Person, or (C) any agreement, judgment, license, order or permit
applicable to or binding upon any Restricted Person unless such conflict would
not reasonably be expected to have a Material Adverse Effect, or (ii) result in
the acceleration of any Indebtedness owed by any Restricted Person which would
reasonably be expected to have a Material Adverse Effect, or (iii) result in or
require the creation of any Lien upon any assets or properties of any Restricted
Person which would reasonably be expected to have a Material Adverse Effect,
except as expressly contemplated or permitted in the Canadian Loan Documents.
Except as expressly contemplated in the Canadian Loan Documents no consent,
approval, authorization or order of, and no notice to or filing with, any
Tribunal or third party is required in connection with the execution, delivery
or performance by any Restricted Person of any Canadian Loan Document or to
consummate any transactions contemplated by the Canadian Loan Documents, unless
failure to obtain such consent would not reasonably be expected to have a
Material Adverse Effect.

        Section 5.5. Enforceable Obligations. This Agreement is, and the other
Canadian Loan Documents when duly executed and delivered will be, legal, valid
and binding obligations of each Restricted Person which is a party hereto or
thereto, enforceable in accordance with their terms except as such enforcement
may be limited by bankruptcy, insolvency or similar Laws of general application
relating to the enforcement of creditors' rights.

        Section 5.6. Full Disclosure. No certificate, statement or other
information delivered herewith or heretofore by any Canadian Borrower or any
Subsidiary of a Canadian Borrower that is a Restricted Person to any Lender in
connection with the negotiation of this Agreement or in connection with any
transaction contemplated hereby contains any untrue statement of a material fact
or omits to state any material fact known to any such Person (other than
industry-wide risks normally associated with the types of businesses conducted
by Restricted Persons) necessary to make the statements contained herein or
therein not misleading as of the date made or deemed made. There is no fact
known to any such Person (other than industry-wide risks normally associated
with the types of businesses conducted by Restricted Persons) that has not been
disclosed to each Lender in writing which would reasonably be expected to have a
Material Adverse Effect.

        Section 5.7. Litigation. Except as disclosed in the Initial Financial
Statements or in the Disclosure Schedule: (a) there are no actions, suits or
legal, equitable, arbitrative or administrative proceedings pending, or to the
knowledge of any Canadian Borrower threatened, against any Canadian Borrower or
any Subsidiary of a Canadian Borrower that is a Restricted Person before any
Tribunal which would reasonably be expected to have a Material Adverse Effect,
and (b) there are no outstanding judgments, injunctions, writs, rulings or
orders by any such Tribunal against any Canadian Borrower which would reasonably
be expected to have a Material Adverse Effect.

                                       36
<PAGE>   42

        Section 5.8. Environmental and Other Laws. Except as disclosed in the
Disclosure Schedule: (a) Canadian Borrowers and each Subsidiary of a Canadian
Borrower that is a Restricted Person are conducting their businesses in material
compliance with all applicable Laws, including Environmental Laws, and have and
are in compliance with all licenses and permits required under any such Laws,
unless failure to so comply would not reasonably be expected to have a Material
Adverse Effect; (b) none of the operations or properties of any Canadian
Borrowers and each Subsidiary of a Canadian Borrower that is a Restricted Person
is the subject of federal, provincial or local investigation evaluating whether
any material remedial action is needed to respond to a release of any Hazardous
Materials into the environment or to the improper storage or disposal (including
storage or disposal at offsite locations) of any Hazardous Materials, unless
such remedial action would not reasonably be expected to have a Material Adverse
Effect; and (c) neither any Canadian Borrower nor any Subsidiary of a Canadian
Borrower that is a Restricted Person (and to the best knowledge of Canadian
Borrowers, no other Person) has filed any notice under any Law indicating that
any such Person is responsible for the improper release into the environment, or
the improper storage or disposal, of any material amount of any Hazardous
Materials or that any Hazardous Materials have been improperly released, or are
improperly stored or disposed of, upon any property of any such Person, unless
such failure to so comply would not reasonably be expected to have a Material
Adverse Effect.

        Section 5.9. Names and Places of Business. Neither Canadian Borrower
has, during the preceding five years, had, been known by, or used any other
trade or fictitious name, except as disclosed in the Disclosure Schedule. Except
as otherwise indicated in the Disclosure Schedule, the chief executive office
and principal place of business of each Canadian Borrower is (and for the
preceding five years have been) located at the address of such Canadian Borrower
set out on the signature pages hereto. Except as indicated in the Disclosure
Schedule, no Canadian Borrower or any Subsidiary of a Canadian Borrower that is
a Restricted Person has any other office or place of business.

        Section 5.10. Canadian Borrowers' Subsidiaries. No Canadian Borrower
presently has any Subsidiary or owns any stock in any other corporation or
association except those listed in the Disclosure Schedule. Neither any Canadian
Borrower nor any of its Restricted Subsidiaries is a member of any general or
limited partnership, limited liability company, joint venture or association of
any type whatsoever except (a) those listed in the Disclosure Schedule, (b)
associations, joint ventures or other relationships (i) which are established
pursuant to a standard form operating agreement or similar agreement or which
are partnerships for purposes of federal income taxation only, (ii) which are
not corporations or partnerships (or subject to the Uniform Partnership Act)
under applicable state Law, and (iii) whose businesses are limited to the
exploration, development and operation of oil, gas or mineral properties,
pipelines or gathering systems, transportation and related facilities and
interests owned directly by the parties in such associations, joint ventures or
relationships, and (c) associations, joint ventures or other relationships (i)
which are not corporations or partnerships under applicable provincial Law, and
(ii) whose businesses are limited to the exploration, development and operation
of oil, gas or mineral properties, pipelines or gathering systems,
transportation and related facilities and interests owned directly by the
parties in such associations, joint ventures or relationships. Each

                                       37
<PAGE>   43

Canadian Borrower owns, directly or indirectly, the equity interest in each of
its Subsidiaries which is indicated in the Disclosure Schedule.

        Section 5.11. Title to Properties; Licenses. Each Canadian Borrower and
each Subsidiary of a Canadian Borrower that is a Restricted Person has good and
defensible title to all of its material properties and assets, free and clear of
all Liens other than Permitted Liens and of all impediments to the use of such
properties and assets in such Person's business except to the extent failure to
have such title would not have a Material Adverse Effect. Each Canadian Borrower
and each Subsidiary of a Canadian Borrower that is a Restricted Person possesses
all licenses, permits, franchises, patents, copyrights, trademarks and trade
names, and other intellectual property (or otherwise possesses the right to use
such intellectual property without violation of the rights of any other Person)
which are necessary to carry out its business as presently conducted and as
presently proposed to be conducted hereafter, and no such Person is in violation
in any material respect of the terms under which it possesses such intellectual
property or the right to use such intellectual property except to the extent
failure to possess such licenses, permits, franchises, and intellectual property
would not have a Material Adverse Effect.

        Section 5.12. Solvency. Upon giving effect to the issuance of the
Canadian Notes, the execution of the Canadian Loan Documents by Canadian
Borrowers and the consummation of the transactions contemplated hereby, each
Canadian Borrower will be solvent (as such term is used in applicable
bankruptcy, liquidation, receivership, insolvency or similar Laws).

            ARTICLE VI - Affirmative Covenants of Canadian Borrowers

        To conform with the terms and conditions under which each Lender is
willing to have credit outstanding to each Canadian Borrower, and to induce each
Lender to enter into this Agreement and extend credit hereunder, each Canadian
Borrower warrants, covenants and agrees that until the full and final payment of
the Canadian Obligations and the termination of this Agreement, unless Canadian
Required Lenders have previously agreed otherwise:

        Section 6.1. Payment and Performance. Each Canadian Borrower will pay
all amounts due by it under the Canadian Loan Documents in accordance with the
terms thereof and will observe, perform and comply with every covenant, term and
condition expressed or implied in the Canadian Loan Documents to be binding upon
it. Each Canadian Borrower will cause each of its Subsidiaries which is a
Restricted Person to observe, perform and comply with every such term, covenant
and condition in any Loan Document.

        Section 6.2. Books, Financial Statements and Reports. Each Canadian
Borrower will at all times maintain full and accurate books of account and
records. Each Canadian Borrower will maintain and will cause its Subsidiaries to
maintain a standard system of accounting, will maintain its Fiscal Year, and
will furnish (or will cause to be furnished) the following statements and
reports to each Lender Party at Canadian Borrowers' expense:

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<PAGE>   44

        (a) As soon as available, and in any event within ninety (90) days after
the end of each Fiscal Year, complete Consolidated financial statements of US
Borrower together with all notes thereto, prepared in reasonable detail in
accordance with US GAAP, together with an unqualified opinion, based on an audit
using generally accepted auditing standards, by KPMG Peat Marwick L.L.P., or
other independent certified public accountants selected by US Borrower and
acceptable to US Agent, stating that such Consolidated financial statements have
been so prepared. These financial statements shall contain a Consolidated
balance sheet as of the end of such Fiscal Year and Consolidated statements of
earnings, of cash flows, and of changes in owners' equity for such Fiscal Year,
each setting forth in comparative form the corresponding figures for the
preceding Fiscal Year. In addition, within ninety (90) days after the end of
each Fiscal Year each Canadian Borrower will furnish to Canadian Agent and each
Lender a certificate in the form of Exhibit D signed by the President, Senior
Vice President - Finance, Treasurer or Vice President Accounting of US Borrower,
stating that such financial statements are accurate and complete, stating that
such Person has reviewed the Canadian Loan Documents, containing all
calculations required to be made to show compliance or non-compliance with the
provisions of Section 7.7, and further stating that there is no condition or
event at the end of such Fiscal Year or at the time of such certificate which
constitutes a Default and specifying the nature and period of existence of any
such condition or event.

        (b) As soon as available, and in any event within forty-five (45) days
after the end of each Fiscal Quarter, US Borrower's Consolidated and
consolidating balance sheet and income statement as of the end of such Fiscal
Quarter and a Consolidated statement of cash flows for the period from the
beginning of the then current Fiscal Year to the end of such Fiscal Quarter, all
in reasonable detail and prepared in accordance with US GAAP, subject to changes
resulting from normal year-end adjustments. In addition each Canadian Borrower
will, together with each such set of financial statements, furnish a certificate
in the form of Exhibit D signed by the President, Senior Vice President -
Finance, Treasurer or Vice President - Accounting of such US Borrower stating
that such financial statements are accurate and complete (subject to normal
year-end adjustments), stating that such Person has reviewed the Canadian Loan
Documents, containing all calculations required to be made to show compliance or
non-compliance with the provisions of Section 7.7 and further stating that there
is no condition or event at the end of such Fiscal Quarter or at the time of
such certificate which constitutes a Default and specifying the nature and
period of existence of any such condition or event.

        (c) Promptly upon their becoming available, copies of all financial
statements, reports, notices and proxy statements sent by US Borrower or any of
its Subsidiaries that is a Restricted Person to its shareholders and all
registration statements, prospectuses, periodic reports and other statements and
schedules filed by any such Person with any exchange, any securities commission
or any similar Governmental Authority, including any information or estimates
with respect to US Borrower's oil and gas business (including its exploration,
development and production activities) which are required to be furnished in
such Canadian Borrower's annual report pursuant to securities legislation or the
rules, policies and requirements of any Governmental Authority.

        Section 6.3. Other Information and Inspections. Each Canadian Borrower
and each Subsidiary of a Canadian Borrower that is a Restricted Person will
furnish to each Lender any

                                       39
<PAGE>   45

information which Canadian Agent may from time to time reasonably request
concerning any covenant, provision or condition of the Loan Documents or any
matter in connection with such Persons' businesses and operations. Each Canadian
Borrower and each Subsidiary of a Canadian Borrower that is a Restricted Person
will permit representatives appointed by Canadian Agent (including independent
accountants, auditors, agents, lawyers, appraisers and any other Persons) to
visit and inspect upon prior written notice during normal business hours any of
such Restricted Person's property, including its books of account, other books
and records, and any facilities or other business assets, and to make extra
copies therefrom and photocopies and photographs thereof, and to write down and
record any information such representatives obtain, and each Canadian Borrower
and each Subsidiary of a Canadian Borrower that is a Restricted Person shall
permit Canadian Agent or its representatives to investigate and verify the
accuracy of the information furnished to Canadian Agent or any Lender in
connection with the Loan Documents and to discuss all such matters with its
officers, employees and representatives.

        Section 6.4. Notice of Material Events and Change of Address. Canadian
Borrowers will promptly notify each Lender in writing, stating that such notice
is being given pursuant to this Agreement, of:

        (a) the occurrence of any event which would have a Material Adverse
Effect,

        (b) the occurrence of any Default,

        (c) the acceleration of the maturity of any Indebtedness owed by any of
Canadian Borrowers or any of their Subsidiaries that are Restricted Persons
having a principal balance of more than US $100,000,000, or of any default by
any such Person under any indenture, mortgage, agreement, contract or other
instrument to which any of them is a party or by which any of them or any of
their properties is bound, if such default would have a Material Adverse Effect,

        (d) the occurrence of any Termination Event,

        (e) any claim of US $100,000,000 or more, any notice of potential
liability under any Environmental Laws which might exceed such amount, or any
other material adverse claim asserted against any of Canadian Borrowers or any
of their Subsidiaries that are Restricted Persons or with respect to any such
Person's properties, and

        (f) the filing of any suit or proceeding against any Canadian Borrowers
or any of their Subsidiaries that are Restricted Person in which an adverse
decision would reasonably be expected to have a Material Adverse Effect.

Canadian Borrowers will also notify Canadian Agent and Canadian Agent's counsel
in writing promptly in the event that any Canadian Borrower or any of their
Subsidiaries that is a Restricted Person changes its name or the location of its
chief executive office.

        Section 6.5. Maintenance of Properties. Each Canadian Borrower and each
Subsidiary of a Canadian Borrower that is a Restricted Person will maintain,
preserve, protect, and keep all

                                       40
<PAGE>   46

property used or useful in the conduct of its business in good condition, and
will from time to time make all repairs, renewals and replacements needed to
enable the business and operations carried on in connection therewith to be
promptly and advantageously conducted at all times except to the extent failure
to do so would not reasonably be expected to have a Material Adverse Effect.

        Section 6.6. Maintenance of Existence and Qualifications. Each Canadian
Borrower and each Subsidiary of a Canadian Borrower that is a Restricted Person
will maintain and preserve its existence and its rights and franchises in full
force and effect and will qualify to do business in all states or jurisdictions
where required by applicable Law, except where the failure so to qualify will
not have a Material Adverse Effect.

        Section 6.7. Payment of Trade Liabilities, Taxes, etc. Each Canadian
Borrower and each Subsidiary of a Canadian Borrower that is a Restricted Person
will (a) timely file all required tax returns; (b) timely pay all taxes,
assessments, and other governmental charges or levies imposed upon it or upon
its income, profits or property; and (c) maintain appropriate accruals and
reserves for all of the foregoing in accordance with US GAAP. Such Restricted
Person may, however, delay paying or discharging any of the foregoing so long as
it is in good faith contesting the validity thereof by appropriate proceedings
and has set aside on its books adequate reserves therefor.

        Section 6.8. Insurance. Each Canadian Borrower and each Subsidiary of a
Canadian Borrower that is a Restricted Person will keep or cause to be kept
insured in accordance with industry standards by financially sound and reputable
insurers, its surface equipment and other property of a character usually
insured by similar Persons engaged in the same or similar businesses.

        Section 6.9. Performance on Canadian Borrowers' Behalf. If either
Canadian Borrower or any Subsidiary of a Canadian Borrower that is a Restricted
Person fails to pay any taxes, insurance premiums, expenses, lawyers' fees or
other amounts it is required to pay under any Canadian Loan Document, Canadian
Agent may pay the same, and shall use its best efforts to give at least five (5)
Business Days notice to Canadian Borrowers prior to making any such payment;
provided, however, that any failure by Canadian Agent to so notify Canadian
Borrowers shall not limit or otherwise impair Canadian Agent's ability to make
any such payment. Northstar Energy shall immediately reimburse Canadian Agent
for any such payments and each amount paid by Canadian Agent shall constitute a
Canadian Obligation owed hereunder which is due and payable on the date such
amount is paid by Canadian Agent.

        Section 6.10. Interest. Each Canadian Borrower hereby promises to each
Lender Party to pay interest at the Default Rate applicable to Canadian Base
Rate Loans on all Canadian Obligations (including Canadian Obligations to pay
fees or to reimburse or indemnify any Lender) which such Canadian Borrower has
in this Agreement promised to pay to such Lender Party and which are not paid
when due. Such interest shall accrue from the date such Canadian Obligations
become due until they are paid.

                                       41
<PAGE>   47

        Section 6.11. Compliance with Law. Each Canadian Borrower and each
Subsidiary of a Canadian Borrower that is a Restricted Person will conduct its
business and affairs in compliance with all Laws applicable thereto except to
the extent failure to do so would not reasonably be expected to have a Material
Adverse Effect.

        Section 6.12. Environmental Matters.

        (a) Each Canadian Borrower and each Subsidiary of a Canadian Borrower
that is a Restricted Person will comply in all material respects with all
Environmental Laws now or hereafter applicable to such Restricted Person, as
well as all contractual obligations and agreements with respect to environmental
remediation or other environmental matters, and shall obtain, at or prior to the
time required by applicable Environmental Laws, all environmental, health and
safety permits, licenses and other authorizations necessary for its operations
and will maintain such authorizations in full force and effect, unless such
failure to so comply would not reasonably be expected to have a Material Adverse
Effect.

        (b) Each Canadian Borrower will promptly furnish to Canadian Agent all
written notices of violation, orders, claims, citations, complaints, penalty
assessments, suits or other proceedings received by such Canadian Borrower, or
of which it has notice, pending or threatened against such Canadian Borrower, by
any Governmental Authority with respect to any alleged violation of or
non-compliance with any Environmental Laws or any permits, licenses or
authorizations in connection with its ownership or use of its properties or the
operation of its business which involve a potential liability or claim in excess
of US $100,000,000.

        Section 6.13. Bank Accounts; Offset. To secure the repayment of the
Obligations each Canadian Borrower hereby grants to each Lender a right of
offset, each of which shall be in addition to all other interests, liens, and
rights of any Lender at common Law, under the Loan Documents, or otherwise, and
each of which shall be upon and against (a) any and all moneys, securities or
other property (and the proceeds therefrom) of such Canadian Borrower now or
hereafter held or received by or in transit to any Lender from or for the
account of such Canadian Borrower, whether for safekeeping, custody, pledge,
transmission, collection or otherwise, (b) any and all deposits (general or
special, time or demand, provisional or final) of such Canadian Borrower with
any Lender, and (c) any other credits and claims of such Canadian Borrower at
any time existing against any Lender, including claims under certificates of
deposit. At any time and from time to time after the occurrence of any Default,
each Lender is hereby authorized to offset against the Obligations then due and
payable (in either case without notice to such Canadian Borrower), any and all
items hereinabove referred to. To the extent that such Canadian Borrower has
accounts designated as royalty or joint interest owner accounts, the foregoing
right of offset shall not extend to funds in such accounts which belong to, or
otherwise arise from payments to such Canadian Borrower for the account of,
third party royalty or joint interest owners.

                                       42
<PAGE>   48

        ARTICLE VII - Negative Covenants of Canadian Borrowers

        To conform with the terms and conditions under which each Lender is
willing to have credit outstanding to each Canadian Borrower, and to induce each
Lender to enter into this Agreement and make the Canadian Loans, each Canadian
Borrower warrants, covenants and agrees that until the full and final payment of
the Canadian Obligations and the termination of this Agreement, unless Canadian
Required Lenders have previously agreed otherwise:

        Section 7.1. Indebtedness. Neither any Canadian Borrower nor any
Subsidiary of a Canadian Borrower that is a Restricted Subsidiary will in any
manner owe or be liable for Indebtedness except:

        (a) the Canadian Obligations.

        (b) capital lease obligations (excluding oil, gas or mineral leases)
entered into in the ordinary course of such Restricted Person's business in
arm's length transactions at competitive market rates under competitive terms
and conditions in all respects, provided that such capital lease obligations
required to be paid in any Fiscal Year do not in the aggregate exceed US
$35,000,000 for all Restricted Subsidiaries, whether or not Subsidiaries of any
Canadian Borrower.

        (c) unsecured Liabilities owed among Restricted Persons.

        (d) guaranties by one Restricted Person of Liabilities owed by another
Restricted Person, if such Liabilities either (i) are not Indebtedness, or (ii)
are allowed under subsections (a), (b) or (c) of this Section 7.1.

        (e) Indebtedness of the Restricted Persons for plugging and abandonment
bonds or for letters of credit issued by any Lender in place thereof which are
required by regulatory authorities in the area of operations, and Indebtedness
of the Restricted Persons for other bonds or letters of credit issued by any
Lender which are required by such regulatory authorities with respect to other
normal oil and gas operations.

        (f) non-recourse Indebtedness as to which no Restricted Person (i)
provides any guaranty or credit support of any kind (including any undertaking,
guarantee, indemnity, agreement or instrument that would constitute
Indebtedness) or (ii) is directly or indirectly liable (as a guarantor or
otherwise); provided, that after giving effect to such Indebtedness outstanding
from time to time, US Borrower is not in violation of Section 7.7.

        (g) Indebtedness that is subordinated to the US Obligations and the
Canadian Obligations on terms acceptable to Canadian Required Lenders.

        (h) Indebtedness in the approximate amount of C $3,459,000 owed to
Indeck Gas Supply Corporation by Northstar Energy pursuant to a Gas Sales and
Purchase Agreement dated as of March 9, 1989, as heretofore or hereafter amended
from time to time.

        (i) Acquired Debt.

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<PAGE>   49

        (j) Indebtedness under Hedging Contracts.

        (k) Indebtedness relating to the surety bond and letter of credit
obligations listed on Schedule 2.

        (l) miscellaneous items of Indebtedness of all Restricted Persons (other
than US Borrower) not described in subsections (a) through (m) which do not in
the aggregate exceed US $200,000,000 in principal amount at any one time
outstanding.

        Section 7.2. Limitation on Liens. Except for Permitted Liens, neither
any Canadian Borrower nor any Subsidiary of a Canadian Borrower that is a
Restricted Person will create, assume or permit to exist any Lien upon any of
the properties or assets which it now owns or hereafter acquires. Neither any
Canadian Borrower nor any Subsidiary of a Canadian Borrower that is a Restricted
Person will allow the filing or continued existence of any financing statement
describing as collateral any assets or property of such Restricted Person, other
than financing statements which describe only collateral subject to a Lien
permitted under this section and which name as secured party or lessor only the
holder of such Lien.

        Section 7.3. Limitation on Mergers. Neither any Canadian Borrower nor
any Subsidiary of a Canadian Borrower that is a Restricted Person will merge or
consolidate with or into any other Person except that any Subsidiary of US
Borrower may be merged into or consolidated with (a) another Subsidiary of US
Borrower, or (b) US Borrower, so long as US Borrower is the surviving business
entity.

        Section 7.4. Limitation on Issuance of Securities by Subsidiaries of US
Borrower; Ownership of certain Restricted Subsidiaries by US Borrower.

        (a) Neither any Canadian Borrower nor any Subsidiary of a Canadian
Borrower that is a Restricted Person will issue any additional shares of its
capital stock, additional partnership interests or other securities or any
options, warrants or other rights to acquire such additional shares, partnership
interests or other securities except to another Restricted Person which is a
wholly-owned direct or indirect Subsidiary of US Borrower unless (i) such
securities are being issued to acquire a business, directly or indirectly
through the use of the proceeds of such issuance, and (ii) such securities are
convertible into the common shares or similar securities of US Borrower and/or
can be redeemed in cash at the option of the Restricted Person that issued such
securities. In addition, (A) Northstar Energy may issue "Exchangeable Shares"
(as defined in the Restated Articles of Incorporation of Northstar Energy) upon
the terms specified in the Restated Articles of Incorporation of Northstar
Energy as in effect on the date hereof (in this section called "Exchangeable
Shares"), (B) Devon Canada may issue exchangeable shares upon substantially the
same terms as such Exchangeable Shares, and (C) Northstar Energy may issue stock
options to its employees from time to time to acquire such Exchangeable Shares,
provided that such options are granted under a stock option plan of either
Canadian Borrower and/or US Borrower.

                                       44
<PAGE>   50

        (b) US Borrower will at all times own, directly or indirectly, 100% of
the outstanding shares of common stock of Northstar Energy.

        Section 7.5. Limitation on Restricted Payments. The aggregate amount of
Restricted Payments made by the Restricted Persons during any Fiscal Year shall
not exceed five percent (5%) of the book value of the Consolidated Assets of US
Borrower as of the end of the immediately preceding Fiscal year, as adjusted to
take into account any increase associate with an acquisition or merger.

        Section 7.6. Transactions with Affiliates. Neither any Canadian
Borrower nor any Subsidiary of a Canadian Borrower that is a Restricted Person
will engage in any material transaction with any of its Affiliates on terms
which are less favorable in any material respect to it than those which would
have been obtainable at the time in arm's-length dealing with Persons other than
such Affiliates, provided that such restriction shall not apply to transactions
among such Restricted Persons that are wholly-owned, directly or indirectly, by
US Borrower.

        Section 7.7. Funded Debt to Total Capitalization. At the end of each
Fiscal Quarter, the ratio of US Borrower's Consolidated Total Funded Debt to US
Borrower's Total Capitalization will never exceed sixty-five percent (65%).

        ARTICLE VIII - Events of Default and Remedies

        Section 8.1. Events of Default. Each of the following events constitutes
an Event of Default under this Agreement:

        (a) Any Restricted Person fails to pay any principal component of any
Canadian Obligation when due and payable or fails to pay any other Canadian
Obligation within three (3) days after the date when due and payable, whether at
a date for the payment of a fixed installment or as a contingent or other
payment becomes due and payable or as a result of acceleration or otherwise;

        (b) Any "default" or "event of default" occurs under any Canadian Loan
Document which defines either such term, and the same is not remedied within the
applicable period of grace (if any) provided in such Loan Document;

        (c) Any Restricted Person fails (other than as referred to in
subsections (a) or (b) above) to (i) duly comply with Section 7.4(b) of the
Canadian Agreement or (ii) duly observe, perform or comply with any other
covenant, agreement, condition or provision of any Canadian Loan Document, and
such failure remains unremedied for a period of thirty (30) days after notice of
such failure is given by Canadian Agent to Canadian Borrower;

        (d) Any representation or warranty previously, presently or hereafter
made in writing by or on behalf of any Restricted Person in connection with any
Canadian Loan Document shall prove to have been false or incorrect in any
material respect on any date on or as of which made;

                                       45
<PAGE>   51

provided, that if such falsity or lack of correctness is capable of being
remedied or cured within a 30-day period, Canadian Borrowers shall (subject to
the other provisions of this Section 8.1) have a period of 30 days after written
notice thereof has been given to Canadian Borrowers by Canadian Agent within
which to remedy or cure such lack of correctness, or this Agreement, any
Canadian Note, or the Guaranty executed by Canadian Guarantor is asserted to be
or at any time ceases to be valid, binding and enforceable in any material
respect as warranted in Section 5.5 for any reason other than its release or
subordination by Canadian Agent;

        (e) Any Restricted Person (i) fails to duly pay any Indebtedness in
excess of US $100,000,000 constituting principal or interest owed by it with
respect to borrowed money or money otherwise owed under any note, bond, or
similar instrument, or (ii) breaches or defaults in the performance of any
agreement or instrument by which any such Indebtedness is issued, evidenced,
governed, or secured, other than a breach or default described in clause (i)
above, and any such failure, breach or default results in the acceleration of
such Indebtedness;

        (f) Any Change in Control occurs;

        (g) Any "Event of Default" occurs under the US Agreement; and

        (h) Any Canadian Borrower or any other Restricted Person having assets
with a book value of at least US $100,000,000:

                (i) suffers the entry against it of a judgment, decree or order
        for relief by a Tribunal of competent jurisdiction in an involuntary
        proceeding commenced under any applicable bankruptcy, insolvency or
        other similar Law of any jurisdiction now or hereafter in effect,
        including the Bankruptcy and Insolvency Act (Canada) and the Companies'
        Creditors Arrangement Act (Canada), as each are from time to time
        amended, or has any such proceeding commenced against it which remains
        undismissed for a period of thirty days; or

                (ii) commences a voluntary case under any applicable bankruptcy,
        insolvency or similar Law now or hereafter in effect, including the
        Bankruptcy and Insolvency Act (Canada) and the Companies' Creditors
        Arrangement Act (Canada), as each are from time to time amended; or
        applies for or consents to the entry of an order for relief in an
        involuntary case under any such Law; or makes a general assignment for
        the benefit of creditors; or fails generally to pay (or admits in
        writing its inability to pay) its debts as such debts become due; or
        takes corporate or other action to authorize any of the foregoing; or

                (iii) suffers the appointment of or taking possession by a
        receiver, receiver- manager, liquidator, assignee, custodian, trustee,
        sequestrator or similar official of all or a substantial part of its
        property in a proceeding brought against or initiated by it, and such
        appointment or taking possession is neither made ineffective nor
        discharged within thirty days after the making thereof, or such
        appointment or taking possession is at any time consented to, requested
        by, or acquiesced to by it; or

                                       46
<PAGE>   52

                (iv) suffers the entry against it of a final judgment for the
        payment of money in an amount that exceeds (x) the valid and collectible
        insurance in respect thereof or (y) the amount of an indemnity with
        respect thereto reasonably acceptable to the Required Lenders by US
        $100,000,000 or more, unless the same is discharged within thirty days
        after the date of entry thereof or an appeal or appropriate proceeding
        for review thereof is taken within such period and a stay of execution
        pending such appeal is obtained; or

                (v) suffers a levy of distress or execution or possession, or a
        writ or warrant of attachment or any similar process to be issued by any
        Tribunal against all or any part of its property having a book value of
        at least US $100,000,000, and such writ or warrant of attachment or any
        similar process is not stayed or released within thirty days after the
        entry or levy thereof or after any stay is vacated or set aside.

Upon the occurrence of an Event of Default described in subsection (h)(i),
(h)(ii) or (h)(iii) of this section with respect to Canadian Borrowers, all of
the Canadian Obligations shall thereupon be immediately due and payable, without
demand, presentment, notice of demand or of dishonor and nonpayment, protest,
notice of protest, notice of intention to accelerate, declaration or notice of
acceleration, or any other notice or declaration of any kind, all of which are
hereby expressly waived by Canadian Borrowers and each Restricted Person who at
any time ratifies or approves this Agreement. Upon any such acceleration, any
obligation of any Lender to make any further Canadian Advances, any obligation
of Canadian LC Issuer to issue Letters of Credit hereunder, and any obligation
of Canadian Swing Lender to make any further Canadian Swing Loans shall be
permanently terminated. During the continuance of any other Event of Default,
Canadian Agent at any time and from time to time may (and upon written
instructions from Canadian Required Lenders, Canadian Agent shall), without
notice to Canadian Borrowers or any other Restricted Person, do either or both
of the following: (1) terminate any obligation of Lenders to make Canadian
Advances hereunder, any obligation of Canadian LC Issuer to issue Letters of
Credit hereunder, and any obligation of Canadian Swing Lender to make Canadian
Swing Loans hereunder, and (2) declare any or all of the Canadian Obligations
immediately due and payable, and all such Canadian Obligations shall thereupon
be immediately due and payable, without demand, presentment, notice of demand or
of dishonor and nonpayment, protest, notice of protest, notice of intention to
accelerate, declaration or notice of acceleration, or any other notice or
declaration of any kind, all of which are hereby expressly waived by Canadian
Borrowers and each Restricted Person who at any time ratifies or approves this
Agreement.

        Section 8.2. Remedies. If any Event of Default shall occur and be
continuing, each Lender Party may protect and enforce its rights under the
Canadian Loan Documents by any appropriate proceedings, including proceedings
for specific performance of any covenant or agreement contained in any Canadian
Loan Document, and each Lender Party may enforce the payment of any Canadian
Obligations due it or enforce any other legal or equitable right which it may
have. All rights, remedies and powers conferred upon Lender Parties under the
Canadian Loan Documents shall be deemed cumulative and not exclusive of any
other rights, remedies or powers available under the Canadian Loan Documents or
at Law or in equity.

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<PAGE>   53

                           ARTICLE IX - Canadian Agent

        Section 9.1. Appointment, Powers, and Immunities.

        (a) Each Lender hereby irrevocably appoints and authorizes Canadian
Agent to act as its agent under this Agreement and the other Canadian Loan
Documents with such powers and discretion as are specifically delegated to
Canadian Agent by the terms of this Agreement and the other Canadian Loan
Documents, together with such other powers as are reasonably incidental thereto.
The Agent-Related Persons: (i) shall not have any duties or responsibilities
except those expressly set forth in this Agreement and shall not be trustees or
fiduciaries for any Lender; (ii) shall not be responsible to the Lenders for any
recital, statement, representation, or warranty (whether written or oral) made
in or in connection with any Canadian Loan Document or any certificate or other
document referred to or provided for in, or received by any of them under, any
Canadian Loan Document, or for the value, validity, effectiveness, genuineness,
enforceability, or sufficiency of any Canadian Loan Document, or any other
document referred to or provided for therein or for any failure by any
Restricted Person or any other Person to perform any of its obligations
thereunder; (iii) shall not be responsible for or have any duty to ascertain,
inquire into, or verify the performance or observance of any covenants or
agreements by any Restricted Person or the satisfaction of any condition or to
inspect the property (including the books and records) of any Restricted Person
or any of its Subsidiaries or Affiliates or for the failure of any Restricted
Person or Lender Party to perform its obligations under any Loan Document; (iv)
shall not be required to initiate or conduct any litigation or collection
proceedings under any Loan Document; and (v) shall not be responsible for any
action taken or omitted to be taken by it under or in connection with any Loan
Document, except for its own gross negligence or willful misconduct; provided ,
however, that no action taken in accordance with the directions of the number of
Lenders herein specified with respect to a particular action shall be deemed to
constitute gross negligence or willful misconduct for purposes of this Section.
Canadian Agent may employ agents and attorneys-in-fact and shall not be
responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. Without limiting the
generality of the foregoing sentence, the use of the term "agent" herein and in
the other Loan Documents with reference to US Agent is not intended to connote
any fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable Law. Instead, such term is used merely as a matter of
market custom, and is intended to create or reflect only an administrative
relationship between independent contracting parties.

        (b) US LC Issuer shall act on behalf of the Lenders with respect to any
Letters of Credit issued by it and the documents associated therewith until such
time (and except for so long) as the US Agent may agree at the request of the
Required Lenders to act for US LC Issuer with respect thereto; provided ,
however, that US LC Issuer shall have all of the benefits and immunities (i)
provided to the US Agent in this Article IX with respect to any acts taken or
omissions suffered by US LC Issuer in connection with Letters of Credit issued
by it or proposed to be issued by it and the application and agreements for
letters of credit pertaining to the Letters of Credit as fully as if the term
"US Agent" as used in this Article IX included US LC Issuer with respect to such
acts or omissions, and (ii) as additionally provided herein with respect to US
LC Issuer.

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<PAGE>   54

        Section 9.2. Reliance by Canadian Agent.

        (a) Canadian Agent shall be entitled to rely upon any certification,
notice, instrument, writing, or other communication (including, without
limitation, any thereof by telephone or telecopy) believed by it to be genuine
and correct and to have been signed, sent or made by or on behalf of the proper
Person or Persons, and upon advice and statements of legal counsel (including
counsel for any Restricted Person), independent accountants, and other experts
selected by Canadian Agent. Canadian Agent may deem and treat the payee of any
Canadian Note as the holder thereof for all purposes hereof unless and until
Canadian Agent receives and accepts an Assignment and Acceptance executed in
accordance with Section 10.6 hereof. Canadian Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement or any
other Loan Document in accordance with a request or consent of the Canadian
Required Lenders, Canadian Majority Lenders or all Lenders, if required
hereunder, and such request and any action taken or failure to act pursuant
thereto shall be binding upon all Lenders and participants. Where this Agreement
expressly permits or prohibits an action unless the Canadian Required Lenders,
Canadian Majority Lenders or all Lenders otherwise determine, the Canadian Agent
shall, and in all other instances, the Canadian Agent may, but shall not be
required to, initiate any solicitation for the consent or a vote of the Lenders.

        (b) For purposes of determining compliance with the conditions specified
in Section 4.01, each Lender that has signed this Agreement shall be deemed to
have consented to, approved or accepted or to be satisfied with, each document
or other matter either sent by Canadian Agent to such Lender for consent,
approval, acceptance or satisfaction, or required thereunder to be consented to
or approved by or acceptable or satisfactory to a Lender; provided, however,
that Canadian Agent shall not be required to take any action that exposes
Canadian Agent to personal liability or that is contrary to any Loan Document or
applicable Law or unless it shall first be indemnified to its satisfaction by
the Lenders against any and all liability and expense which may be incurred by
it by reason of taking any such action.

        Section 9.3. Defaults. Canadian Agent shall not be deemed to have
knowledge or notice of the occurrence of a Default or Event of Default unless
Canadian Agent has received written notice from a Lender or Canadian Borrowers
specifying such Default or Event of Default and stating that such notice is a
"Notice of Default". In the event that Canadian Agent receives such a notice of
the occurrence of a Default or Event of Default, Canadian Agent shall give
prompt notice thereof to the Lenders. Canadian Agent shall (subject to Section
9.1 hereof) take such action with respect to such Default or Event of Default as
shall reasonably be directed by the Canadian Required Lenders. Notwithstanding
the foregoing, unless and until Canadian Agent shall have received such
directions, Canadian Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interest of the Lenders.

        Section 9.4. Rights as Lender. With respect to its Percentage Share of
the Canadian Maximum Credit Amount and the Canadian Loans made by it, Canadian
Agent (and any successor acting as Canadian Agent) in its capacity as a Lender
hereunder shall have the same rights and powers hereunder as any other Lender
and may exercise the same as though it were not

                                       49
<PAGE>   55

acting as Canadian Agent, and the term "Lender" or "Lenders" shall, unless the
context otherwise indicates, include Canadian Agent in its individual capacity.
Canadian Agent (and any successor acting as Canadian Agent) and its Affiliates
may (without having to account therefor to any Lender) accept deposits from,
lend money to, make Investments in, provide services to, and generally engage in
any kind of lending, trust, or other business with any Restricted Person or any
of its Subsidiaries or Affiliates as if it were not acting as Canadian Agent,
and Canadian Agent (and any successor acting as Canadian Agent) and its
Affiliates may accept fees and other consideration from any Restricted Person or
any of its Subsidiaries or Affiliates for services in connection with this
Agreement or otherwise without having to account for the same to the Lenders.

        Section 9.5. Indemnification. The Lenders agree to indemnify each
Agent-Related Person (to the extent not reimbursed under Section 10.4 hereof,
but without limiting the obligations of Canadian Borrowers under such section)
ratably in accordance with their respective Percentage Shares, for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including legal fees), or disbursements of any kind and nature
whatsoever that may be imposed on, incurred by or asserted against Canadian
Agent (including by any Lender) in any way relating to or arising out of any
Canadian Loan Document or the transactions contemplated thereby or any action
taken or omitted by Canadian Agent under any Canadian Loan Document (INCLUDING
ANY OF THE FOREGOING ARISING FROM THE NEGLIGENCE OF CANADIAN AGENT) ; provided
that no Lender shall be liable for any of the foregoing to the extent they arise
from the gross negligence or willful misconduct of the Person to be indemnified,
and provided further that no action taken in accordance with the directions of
the number of Lenders herein specified with respect to a particular action shall
be deemed to constitute gross negligence or willful misconduct for purposes of
this Section. Without limitation of the foregoing, each Lender agrees to
reimburse Canadian Agent promptly upon demand for its ratable share of any costs
or expenses payable by Canadian Borrower under Section 10.4, to the extent that
Canadian Agent is not promptly reimbursed for such costs and expenses by
Canadian Borrowers. The agreements contained in this section shall survive
payment in full of the Canadian Loans and all other amounts payable under this
Agreement.

        Section 9.6. Non-Reliance on Canadian Agent and Other Lenders . Each
Lender agrees that it has, independently and without reliance on Canadian Agent
or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own credit analysis of the Canadian Borrowers and
their Subsidiaries and decision to enter into this Agreement and that it will,
independently and without reliance upon Canadian Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own analysis and decisions in taking or not taking
action under the Canadian Loan Documents. Except for notices, reports, and other
documents and information expressly required to be furnished to the Lenders by
Canadian Agent hereunder, Canadian Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the affairs, financial condition, or business of any Restricted
Person or any of its Subsidiaries or Affiliates that may come into the
possession of Canadian Agent or any of its Affiliates.

                                       50
<PAGE>   56

        Section 9.7. Administrative Agent in its Individual Capacity. Bank of
America Canada and its Affiliates may make loans to, issue letters of credit for
the account of, accept deposits from, acquire equity interests in and generally
engage in any kind of banking, trust, financial advisory, underwriting or other
business with each of the Restricted Persons and their respective Affiliates as
though Bank of America Canada were not the Canadian Agent or the Canadian LC
Issuer hereunder and without notice to or consent of Lenders. Lenders
acknowledge that, pursuant to such activities, Bank of America Canada or its
Affiliates may receive information regarding any Restricted Person or its
Affiliates (including information that may be subject to confidentiality
obligations in favor of such Restricted Person or such Affiliate) and
acknowledge that the Canadian Agent shall be under no obligation to provide such
information to them. With respect to its Canadian Loans, Bank of America Canada
shall have the same rights and powers under this Agreement as any other Lender
and may exercise such rights and powers as though it were not the Canadian Agent
or the Canadian LC Issuer, and the terms "Canadian Lender", "Canadian Lenders",
"Lender" and "Lenders" include Bank of America Canada in its individual
capacity.

        Section 9.8. Sharing of Set-Offs and Other Payments. Each Lender Party
agrees that if it shall, whether through the exercise of rights under Canadian
Loan Documents or rights of banker's lien, set off, or counterclaim against
Canadian Borrowers or otherwise, obtain payment of a portion of the aggregate
Canadian Obligations owed to it which, taking into account all distributions
made by Canadian Agent under Section 3.1, causes such Lender Party to have
received more than it would have received had such payment been received by
Canadian Agent and distributed pursuant to Section 3.1, then (a) it shall be
deemed to have simultaneously purchased and shall be obligated to purchase
interests in the Canadian Obligations as necessary to cause all Lender Parties
to share all payments as provided for in Section 3.1, and (b) such other
adjustments shall be made from time to time as shall be equitable to ensure that
Canadian Agent and all Lender Parties share all payments of Canadian Obligations
as provided in Section 3.1; provided, however, that nothing herein contained
shall in any way affect the right of any Lender Party to obtain payment (whether
by exercise of rights of banker's lien, set-off or counterclaim or otherwise) of
indebtedness other than the Canadian Obligations. Canadian Borrowers expressly
consent to the foregoing arrangements and agree that any holder of any such
interest or other participation in the Canadian Obligations, whether or not
acquired pursuant to the foregoing arrangements, may to the fullest extent
permitted by Law exercise any and all rights of banker's lien, set-off, or
counterclaim as fully as if such holder were a holder of the Canadian
Obligations in the amount of such interest or other participation. If all or any
part of any funds transferred pursuant to this section is thereafter recovered
from the seller under this section which received the same, the purchase
provided for in this section shall be deemed to have been rescinded to the
extent of such recovery, together with interest, if any, if interest is required
pursuant to the order of a Tribunal order to be paid on account of the
possession of such funds prior to such recovery.

        Section 9.9. Investments. Whenever Canadian Agent in good faith
determines that it is uncertain about how to distribute to Lender Parties any
funds which it has received, or whenever Canadian Agent in good faith determines
that there is any dispute among Lender Parties about how such funds should be
distributed, Canadian Agent may choose to defer distribution of the funds which
are the subject of such uncertainty or dispute. If Canadian Agent in good faith

                                       51
<PAGE>   57

believes that the uncertainty or dispute will not be promptly resolved, or if
Canadian Agent is otherwise required to invest funds pending distribution to
Lender Parties, Canadian Agent shall invest such funds pending distribution; all
interest on any such Investment shall be distributed upon the distribution of
such Investment and in the same proportion and to the same Persons as such
Investment. All moneys received by Canadian Agent for distribution to Lender
Parties (other than to the Person who is Canadian Agent in its separate capacity
as a Lender Party) shall be held by Canadian Agent pending such distribution
solely as Canadian Agent for such Lender Parties, and Canadian Agent shall have
no equitable title to any portion thereof.

        Section 9.10. Benefit of Article IX. The provisions of this Article
(other than the following Section 9.11) are intended solely for the benefit of
Lender Parties, and no Restricted Person shall be entitled to rely on any such
provision or assert any such provision in a claim or defense against any Lender.
Lender Parties may waive or amend such provisions as they desire without any
notice to or consent of Canadian Borrower or any Restricted Person.

        Section 9.11. Resignation. Canadian Agent may resign at any time by
giving written notice thereof to Lenders and Canadian Borrowers. Each such
notice shall set forth the date of such resignation. Upon any such resignation,
Canadian Required Lenders shall have the right to appoint a successor Canadian
Agent and if no Default or Event of Default has occurred and is continuing,
Canadian Required Lenders shall obtain the consent of Canadian Borrowers. A
successor must be appointed for any retiring Canadian Agent, and such Canadian
Agent's resignation shall become effective when such successor accepts such
appointment. If, within thirty days after the date of the retiring Canadian
Agent's resignation, no successor Canadian Agent has been appointed and has
accepted such appointment, then the retiring Canadian Agent may appoint a
successor Canadian Agent, which shall be a commercial bank organized or licensed
to conduct a banking or trust business under the Laws of Canada or of any
province thereof and if no Default or Event of Default has occurred and is
continuing, retiring Canadian Agent shall obtain the consent of Canadian
Borrowers. Upon the acceptance of any appointment as Canadian Agent hereunder by
a successor Canadian Agent, the retiring Canadian Agent shall be discharged from
its duties and obligations under this Agreement and the other Canadian Loan
Documents. After any retiring Canadian Agent's resignation hereunder the
provisions of this Article IX shall continue to inure to its benefit as to any
actions taken or omitted to be taken by it while it was Canadian Agent under the
Canadian Loan Documents.

        Section 9.12. Lenders to Remain Pro Rata. It is the intent of all
parties hereto that the pro rata share of each Lender in the Tranche B Loans and
in the Canadian Obligations and the related rights and obligations of such
Lender under the Loan Documents shall be substantially the same at all times
during the term of this Agreement. Accordingly, the initial Tranche B Percentage
Share of each Tranche B Lender in the Tranche B Maximum Credit Amount will be
the same as the initial Percentage Share of such Lender in the Canadian Maximum
Credit Amount. All subsequent assignments and adjustments of the interests of
the Tranche B Lenders in the Tranche B Facility and the Canadian Obligations
will be made so as to maintain such a pro rata arrangement; provided that for
the purposes of determining these pro rata shares, any Percentage Share held by
any Lender's Affiliates shall be included in determining the interests of such
Lender.

                                       52
<PAGE>   58

        Section 9.13. Other Agents. None of the Lenders identified on the facing
page or signature pages of this Agreement as a "syndication agent" or
"documentation agent" shall have any right, power, obligation, liability,
responsibility or duty under this Agreement other than those applicable to all
Lenders as such. Without limiting the foregoing, none of the Lenders so
identified shall have or be deemed to have any fiduciary relationship with any
Lender. Each Lender acknowledges that it has not relied, and will not rely, on
any of the Lenders so identified in deciding to enter into this Agreement or in
taking or not taking action hereunder.

                            ARTICLE X - Miscellaneous

        Section 10.1. Waivers and Amendments; Acknowledgments.

        (a) Waivers and Amendments. No failure or delay (whether by course of
conduct or otherwise) by any Lender Party in exercising any right, power or
remedy which such Lender Party may have under any of the Canadian Loan Documents
shall operate as a waiver thereof or of any other right, power or remedy, nor
shall any single or partial exercise by any Lender Party of any such right,
power or remedy preclude any other or further exercise thereof or of any other
right, power or remedy. No waiver of any provision of any Canadian Loan Document
and no consent to any departure therefrom shall ever be effective unless it is
in writing and signed as provided below in this section, and then such waiver or
consent shall be effective only in the specific instances and for the purposes
for which given and to the extent specified in such writing. No notice to or
demand on any Restricted Person shall in any case of itself entitle any
Restricted Person to any other or further notice or demand in similar or other
circumstances. This Agreement and the other Canadian Loan Documents set forth
the entire understanding between the parties hereto with respect to the
transactions contemplated herein and therein and supersede all prior discussions
and understandings with respect to the subject matter hereof and thereof, and no
waiver, consent, release, modification or amendment of or supplement to this
Agreement or the other Canadian Loan Documents shall be valid or effective
against any party hereto unless the same is in writing and signed by (i) if such
party is Canadian Borrowers, by Canadian Borrowers, (ii) if such party is
Canadian Agent or Canadian LC Issuer, by such party, and (iii) if such party is
a Lender, by such Lender or by Canadian Agent on behalf of Lenders with the
written consent of Canadian Required Lenders (which consent has already been
given as to the termination of the Canadian Loan Documents as provided in
Section 10.10). Notwithstanding the foregoing or anything to the contrary
herein, Canadian Agent shall not, without the prior consent of US Majority
Lenders and Canadian Majority Lenders, execute and deliver on behalf of such
Lender any waiver or amendment which would increase the Canadian Maximum Credit
Amount hereunder, except in connection with the Re-allocations described in
Section 1.12. Notwithstanding the foregoing or anything to the contrary herein,
Canadian Agent shall not, without the prior consent of each individual Canadian
Lender, execute and deliver on behalf of such Lender any waiver or amendment
which would: (1) waive any of the conditions specified in Article IV, (2)
increase the maximum amount which such Lender is committed hereunder to lend,
(3) reduce any fees payable to such Lender hereunder, or the principal of, or
interest on, such Lender's Note, (4) postpone any date fixed for any payment of
any such fees, principal or interest, (5) change the aggregate amount of
Percentage Shares which is required for Canadian Agent,

                                       53
<PAGE>   59

Lenders or any of them to take any particular action under the Canadian Loan
Documents, (6) release Canadian Borrowers from their obligation to pay such
Lender's Note or Canadian Guarantor from its guaranty of such payment, or (7)
amend this Section 10.1(a), except in connection with the Re-allocations
described in Section 1.12.

        (b) Acknowledgments and Admissions. Canadian Borrower hereby represents,
warrants, acknowledges and admits that (i) it has been advised by counsel in the
negotiation, execution and delivery of the Canadian Loan Documents to which it
is a party, (ii) it has made an independent decision to enter into this
Agreement and the other Canadian Loan Documents to which it is a party, without
reliance on any representation, warranty, covenant or undertaking by Canadian
Agent or any Lender, whether written, oral or implicit, other than as expressly
set out in this Agreement or in another Canadian Loan Document delivered on or
after the date hereof, (iii) there are no representations, warranties,
covenants, undertakings or agreements by any Lender as to the Canadian Loan
Documents except as expressly set out in this Agreement or in another Canadian
Loan Document delivered on or after the date hereof, (iv) no Lender has any
fiduciary obligation toward such Canadian Borrower with respect to any Canadian
Loan Document or the transactions contemplated thereby, (v) the relationship
pursuant to the Canadian Loan Documents between such Canadian Borrower and the
other Restricted Persons, on one hand, and each Lender, on the other hand, is
and shall be solely that of debtor and creditor, respectively, (vi) no
partnership or joint venture exists with respect to the Canadian Loan Documents
between any Restricted Person and any Lender, (vii) Canadian Agent is not such
Canadian Borrower's Canadian Agent, but Canadian Agent for Lenders, (viii)
without limiting any of the foregoing, Canadian Borrower is not relying upon any
representation or covenant by any Lender, or any representative thereof, and no
such representation or covenant has been made, that any Lender will, at the time
of an Event of Default or Default, or at any other time, waive, negotiate,
discuss, or take or refrain from taking any action permitted under the Canadian
Loan Documents with respect to any such Event of Default or Default or any other
provision of the Canadian Loan Documents, and (ix) all Lender Parties have
relied upon the truthfulness of the acknowledgments in this section in deciding
to execute and deliver this Agreement and to become obligated hereunder.

        (c) Joint Acknowledgment. THIS WRITTEN AGREEMENT AND THE OTHER CANADIAN
LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.

        THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

        (d) Annual Rates of Interest. For the purposes of the Interest Act
(Canada), whenever interest payable pursuant to this Agreement is calculated on
the basis of a period other than a calendar year (the "Interest Period"), each
rate of interest determined pursuant to such calculation expressed as an annual
rate is equivalent to such rate as so determined multiplied by the actual

                                       54
<PAGE>   60

number of days in the calendar year in which the same is to be ascertained and
divided by the number of days in the Interest Period.

        Section 10.2. Survival of Agreements; Cumulative Nature. All of
Restricted Persons' various representations, warranties, covenants and
agreements in the Canadian Loan Documents shall survive the execution and
delivery of this Agreement and the other Canadian Loan Documents and the
performance hereof and thereof, including the making or granting of the Canadian
Loans and the delivery of the Canadian Notes and the other Canadian Loan
Documents, and shall further survive until all of the Canadian Obligations are
paid in full to each Lender Party and all of Lender Parties' obligations to
Canadian Borrowers are terminated. All statements and agreements contained in
any certificate or other instrument delivered by any Restricted Person to any
Lender Party under any Canadian Loan Document shall be deemed representations
and warranties by each Canadian Borrower or agreements and covenants of Canadian
Borrower under this Agreement. The representations, warranties, indemnities, and
covenants made by Restricted Persons in the Canadian Loan Documents, and the
rights, powers, and privileges granted to Lender Parties in the Canadian Loan
Documents, are cumulative, and, except for expressly specified waivers and
consents, no Canadian Loan Document shall be construed in the context of another
to diminish, nullify, or otherwise reduce the benefit to any Lender Party of any
such representation, warranty, indemnity, covenant, right, power or privilege.
In particular and without limitation, no exception set out in this Agreement to
any representation, warranty, indemnity, or covenant herein contained shall
apply to any similar representation, warranty, indemnity, or covenant contained
in any other Canadian Loan Document, and each such similar representation,
warranty, indemnity, or covenant shall be subject only to those exceptions which
are expressly made applicable to it by the terms of the various Canadian Loan
Documents.

        Section 10.3. Notices. All notices, requests, consents, demands and
other communications required or permitted under any Canadian Loan Document
shall be in writing, unless otherwise specifically provided in such Canadian
Loan Document (provided that Canadian Agent may give telephonic notices to the
other Lender Parties), and shall be deemed sufficiently given or furnished if
delivered by personal delivery, by facsimile or other electronic transmission,
by delivery service with proof of delivery, or by registered Canadian mail,
postage prepaid, to each Canadian Borrower and Restricted Persons at the address
of each Canadian Borrower specified on the signature pages hereto and to
Canadian Agent at its address specified on the signature pages hereto and to
each Lender Party at the address specified on Annex II (unless changed by
similar notice in writing given by the particular Person whose address is to be
changed). Any such notice or communication shall be deemed to have been given
(a) in the case of personal delivery or delivery service, as of the date of
first attempted delivery during normal business hours at the address provided
herein, (b) in the case of facsimile or other electronic transmission, upon
receipt, or (c) in the case of registered Canadian mail, five Business Days
after deposit in the mail; provided, however, that no Borrowing Notice shall
become effective until actually received by Canadian Agent.

        Section 10.4. Payment of Expenses; Indemnity.

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<PAGE>   61

        (a) Payment of Expenses. Whether or not the transactions contemplated by
this Agreement are consummated, Northstar Energy will promptly (and in any
event, within 30 days after any invoice or other statement or notice) pay: (i)
all reasonable costs and expenses incurred by or on behalf of Canadian Agent
(including without limitation, legal fees) in connection with (1) the
negotiation, preparation, execution and delivery of the Canadian Loan Documents,
and any and all consents, waivers or other documents or instruments relating
thereto, (2) the borrowings hereunder and other action reasonably required in
the course of administration hereof, (3) monitoring or confirming (or
preparation or negotiation of any document related to) Canadian Borrowers'
compliance with any covenants or conditions contained in this Agreement or in
any Canadian Loan Document, and (ii) all reasonable costs and expenses incurred
by or on behalf of any Lender Party (including without limitation, legal fees,
consultants' fees and accounting fees) in connection with the defense or
enforcement of any of the Canadian Loan Documents (including this section) or
the defense of any Lender Party's exercise of its rights thereunder.

        (b) INDEMNITY. NORTHSTAR ENERGY AGREES TO INDEMNIFY EACH AGENT-RELATED
PERSON AND EACH LENDER PARTY, UPON DEMAND, FROM AND AGAINST ANY AND ALL
LIABILITIES, OBLIGATIONS, CLAIMS, LOSSES, DAMAGES, PENALTIES, FINES, ACTIONS,
JUDGMENTS, SUITS, SETTLEMENTS, COSTS, EXPENSES OR DISBURSEMENTS, EXCLUDING
PRINCIPAL AND INTEREST OWING BY DEVON CANADA WITH RESPECT TO CANADIAN ADVANCES
MADE TO DEVON CANADA, BUT INCLUDING REASONABLE FEES OF LEGAL COUNSEL,
ACCOUNTANTS, EXPERTS AND ADVISORS) OF ANY KIND OR NATURE WHATSOEVER (IN THIS
SECTION COLLECTIVELY CALLED "LIABILITIES AND COSTS") WHICH TO ANY EXTENT (IN
WHOLE OR IN PART) MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST SUCH
LENDER PARTY GROWING OUT OF, RESULTING FROM OR IN ANY OTHER WAY ASSOCIATED WITH
THE CANADIAN LOAN DOCUMENTS AND THE TRANSACTIONS AND EVENTS (INCLUDING THE
ENFORCEMENT OR DEFENSE THEREOF) AT ANY TIME ASSOCIATED THEREWITH OR CONTEMPLATED
THEREIN (WHETHER ARISING IN CONTRACT OR IN TORT OR OTHERWISE AND INCLUDING ANY
VIOLATION OR NONCOMPLIANCE WITH ANY ENVIRONMENTAL LAWS BY ANY AGENT-RELATED
PERSON OR ANY LENDER PARTY OR ANY OTHER PERSON OR ANY LIABILITIES OR DUTIES OF
ANY AGENT-RELATED PERSON OR ANY LENDER PARTY OR ANY OTHER PERSON WITH RESPECT TO
HAZARDOUS MATERIALS FOUND IN OR RELEASED INTO THE ENVIRONMENT).

THE FOREGOING INDEMNIFICATION SHALL APPLY WHETHER OR NOT SUCH LIABILITIES AND
COSTS ARE IN ANY WAY OR TO ANY EXTENT OWED, IN WHOLE OR IN PART, UNDER ANY CLAIM
OR THEORY OF STRICT LIABILITY OR CAUSED, IN WHOLE OR IN PART BY ANY NEGLIGENT
ACT OR OMISSION OF ANY KIND BY ANY AGENT-RELATED PERSON OR LENDER PARTY,

provided only that no Agent-Related Person or Lender Party shall be entitled
under this section to receive indemnification for that portion, if any, of any
liabilities and costs which is proximately caused by its own individual gross
negligence or willful misconduct, as determined in a final judgment. If any
Person (including Canadian Borrowers or any of their Affiliates) ever alleges
such gross negligence or willful misconduct by any Lender Party, the
indemnification provided for in this section shall nonetheless be paid upon
demand, subject to later adjustment or reimbursement, until such time as a court
of competent jurisdiction enters a final judgment as to

                                       56
<PAGE>   62

the extent and effect of the alleged gross negligence or willful misconduct. As
used in this section the term "Lender Party" shall refer not only to each Person
designated as such in Section 1.1 but also to each director, officer, agent,
attorney, employee, representative, attorney-in-fact and Affiliate of such
Person.

        Section 10.5. Parties in Interest. All grants, covenants and agreements
contained in the Canadian Loan Documents shall bind and inure to the benefit of
the parties thereto and their respective successors and assigns; provided,
however, that no Restricted Person may assign or transfer any of its rights or
delegate any of its duties or obligations under any Canadian Loan Document
without the prior consent of all Lenders (and any attempted assignment or
transfer by any Restricted Person without such consent shall be null and void).
No Canadian Borrower nor any Affiliates of any Canadian Borrower shall directly
or indirectly purchase or otherwise retire any Canadian Obligations owed to any
Lender nor will any Lender accept any offer to do so, unless each Lender shall
have received substantially the same offer with respect to the same Percentage
Share of the Canadian Obligations owed to it. If Canadian Borrower or any
Affiliate of any Canadian Borrower at any time purchases some but less than all
of the Canadian Obligations owed to all Lender Parties, such purchaser shall not
be entitled to any rights of any Lender under the Canadian Loan Documents unless
and until Canadian Borrowers or their Affiliates have purchased all of the
Canadian Obligations.

        Section 10.6. Assignments and Participations.

        (a) Each Lender may assign to one or more Eligible Transferees all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Canadian Loans, Canadian Note, and its
Percentage Share of the Canadian LC Obligations and the Canadian Maximum Credit
Amount); provided, however, that

                (i) each such assignment shall be to an Eligible Transferee;

                (ii) together with each such assignment of its rights and
        obligations under this Agreement, such Lender shall assign the same
        Percentage Share of its rights and obligations with respect to the
        Tranche B Loans under the US Agreement to the same Eligible Transferee
        or an Affiliate of such Eligible Transferee;

                (iii) except in the case of such an assignment to another Lender
        or an assignment of all of a Lender's rights and obligations under this
        Agreement, any partial assignment of such Lender's rights and
        obligations under this Agreement and under the US Agreement shall be in
        a collective amount at least equal to US $20,000,000 or an integral
        multiple of US $5,000,000 in excess thereof (in the case of the US
        Agreement calculated with respect to the Maximum US Credit Amount during
        the Tranche B Revolving Period and thereafter calculated with respect to
        the aggregate amount of the Tranche B Facility Usage and the Tranche A
        Maximum Credit Amount, and in the case of the Canadian Credit Agreement
        calculated with respect to the Canadian Maximum Credit Amount during the
        Canadian Revolving Period and thereafter calculated with respect to the
        Canadian Facility Usage);

                                       57
<PAGE>   63

                (iv) each such assignment by a Lender shall be of a constant,
        and not varying, percentage of all of its rights and obligations under
        the Canadian Loan Documents, excluding, in the case of Bank of America
        Canada, Canadian Swing Loans; and

                (v) the parties to such assignment shall execute and deliver to
        Canadian Agent for its acceptance an Assignment and Acceptance in the
        form of Exhibit F hereto, together with any Canadian Note subject to
        such assignment and a processing fee of US$3,500.

Upon execution, delivery, and acceptance of such Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Lender hereunder and
the assigning Lender shall, to the extent of such assignment, relinquish its
rights and be released from its obligations under this Agreement. Upon the
consummation of any assignment pursuant to this section, the assignor, Canadian
Agent and Canadian Borrowers shall make appropriate arrangements so that, if
required, new Canadian Notes are issued to the assignor and the assignee. If the
assignee is not incorporated under the Laws of Canada or a province thereof, it
shall deliver to Canadian Borrowers and Canadian Agent certification as to
exemption from deduction or withholding of Taxes in accordance with Section 3.9
of the US Agreement.

        (b) Canadian Agent shall maintain at its address referred to in Section
10.3 a copy of each Assignment and Acceptance delivered to and accepted by it
and a register for the recordation of the names and addresses of the Lenders and
their Percentage Share of the Canadian Maximum Credit Amount of, and principal
amount of the Canadian Loans owing to, each Lender from time to time (the
"Register"). The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and Canadian Borrowers, Canadian Agent and the
Lenders may treat each Person whose name is recorded in the Register as a Lender
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by Canadian Borrowers or any Lender at any reasonable time and
from time to time upon reasonable prior notice.

        (c) Upon its receipt of an Assignment and Acceptance executed by the
parties thereto, together with any Canadian Note subject to such assignment and
payment of the processing fee, Canadian Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of Exhibit F
hereto, (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the
parties thereto.

        (d) Each Lender may sell participations to one or more Persons that are
Eligible Transferees in all or a portion of its rights and obligations under
this Agreement (including all or a portion of the Canadian Maximum Credit Amount
and its Canadian Loans); provided, however, that (i) such Lender's obligations
under this Agreement shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, (iii) the participant shall be entitled to the benefit of the yield
protection provisions contained in Article III (provided that a participant
shall not be entitled to receive any greater payment under Section 3.1 or 3.2
than the applicable Lender would have been entitled to receive with respect to
the participation sold to such participant, unless the sale of the participation
to such participant is

                                       58
<PAGE>   64

made with the Canadian Borrowers' prior written consent. A participant that
would have been subject to Section 3.9 if it were a Lender, shall not be
entitled to the benefits of Section 3.1 unless Canadian Borrowers have been
notified of the participation sold to such participant, and such participant
agrees, for the benefit of Canadian Borrowers, to comply with such Section as if
it were a Lender) and the right of offset contained in Section 6.13 (provided
that such participant agrees to be subject to Section 9.8 as if it were a
Lender), and (iv) Canadian Borrowers shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations under
this Agreement, and such Lender shall retain the sole right to enforce the
obligations of Canadian Borrowers relating to its Canadian Loans and its
Canadian Note and to approve any amendment, modification, or waiver of any
provision of this Agreement (provided that such Lender may agree that it will
not approve amendments, modifications, or waivers decreasing the amount of
principal of or the rate at which interest is payable on such Canadian Loans or
Canadian Note, extending any scheduled principal payment date or date fixed for
the payment of interest on such Canadian Loans or Canadian Note, or extending
its Canadian Maximum Credit Amount without the prior consent of the
participant).

        (e) If the consent of Canadian Borrowers to an assignment or to an
Eligible Assignee is required hereunder, Canadian Borrowers shall be deemed to
have given their consent ten (10) Business Days after the date notice thereof
has been delivered by the assigning Lender (through Canadian Agent) unless such
consent is expressly refused by Canadian Borrowers prior to such tenth Business
Day.

        (f) Notwithstanding anything to the contrary contained herein, if at any
time Bank of America Canada assigns all of its Percentage Share in the Canadian
Obligations and its rights and obligations hereunder pursuant to subsection
10.6(a) above, Bank of America Canada may resign as Canadian LC Issuer and/or
terminate its commitment to make Canadian Swing Loans by giving written notice
thereof to Canadian Borrowers and Canadian Lenders. Each such notice shall set
forth the date of such resignation; provided that any such resignation or
termination shall not become effective until a successor has been appointed as
provided below and has accepted such appointment. In the event of any such
resignation by Bank of America Canada as Canadian LC Issuer or termination of
its commitment to make Canadian Swing Loans, Canadian Borrowers shall be
entitled to appoint from among the Canadian Lenders a successor Canadian LC
Issuer or Canadian Swing Lender hereunder. If, within sixty days after notice
has been given to Canadian Borrowers and Canadian Lenders of any such
resignation or termination, no successor Canadian LC Issuer or Canadian Swing
Lender, as the case may be, has been appointed and has accepted such
appointment, then Bank of America Canada may appoint such a successor, which
shall be a commercial bank organized or licensed to conduct a banking or trust
business under the Laws of Canada or of any province thereof. If Bank of America
Canada resigns as Canadian LC Issuer, it shall retain all the rights and
obligations of Canadian LC Issuer hereunder with respect to all Letters of
Credit outstanding as of the effective date of its resignation as Canadian LC
Issuer and all Canadian LC Obligations with respect thereto (including the right
to require Canadian Lenders to make Canadian Prime Rate Loans or fund
participations in unreimbursed amounts pursuant to Section 2.8. If Bank of
America Canada terminates its commitment to make Canadian Swing Loans, it shall
retain all the rights of Canadian Swing Lender provided for hereunder with
respect to Canadian Swing Loans made by it and outstanding as of the effective
date of such termination,

                                       59
<PAGE>   65

including the right to require the Canadian Lenders to make Canadian Prime Rate
Loans (or other Advances if requested by a Canadian Borrower) or fund
participations in outstanding Canadian Swing Loans pursuant to Section 1.11.

        (g) Notwithstanding any other provision set forth in this Agreement, any
Lender residing in the United States may at any time assign and pledge all or
any portion of its Canadian Advances and its Canadian Note to any Federal
Reserve Bank as collateral security pursuant to Regulation A and any Operating
Circular issued by such Federal Reserve Bank. No such assignment shall release
the assigning Lender from its obligations hereunder.

        (h) Any Lender may furnish any information concerning Canadian Borrowers
or any of its Subsidiaries in the possession of such Lender from time to time to
assignees and participants (including prospective assignees and participants),
subject, however, to the provisions of Section 10.7 hereof.

        Section 10.7. Confidentiality. Canadian Agent and each Lender (in this
Section each is called a "Lending Party") agrees to keep confidential any
information furnished or made available to it by Canadian Borrowers pursuant to
this Agreement that is marked confidential; provided that nothing herein shall
prevent any Lending Party from disclosing such information (a) to any other
Lending Party or any Affiliate of any Lending Party, or any officer, director,
employee, agent, or advisor of any Lending Party or Affiliate of any Lending
Party, (b) to any other Person if reasonably incidental to the administration of
the credit facility provided herein, (c) as required by any Law, rule, or
regulation, (d) upon the order of any Tribunal, (e) upon the request or demand
of any regulatory agency or authority, (f) that is or becomes available to the
public or that is or becomes available to any Lending Party other than as a
result of a disclosure by any Lending Party prohibited by this Agreement, (g) in
connection with any litigation to which such Lending Party or any of its
Affiliates may be a party, (h) to the extent necessary in connection with the
exercise of any remedy under this Agreement or any other Canadian Loan Document,
and (i) subject to provisions substantially similar to those contained in this
section, to any actual or proposed participant or assignee.

        Section 10.8. Governing Law; Submission to Process. EXCEPT TO THE EXTENT
THAT THE LAW OF ANOTHER JURISDICTION IS EXPRESSLY ELECTED IN A CANADIAN LOAN
DOCUMENT, THE CANADIAN LOAN DOCUMENTS SHALL BE DEEMED CONTRACTS AND INSTRUMENTS
MADE UNDER THE LAWS OF THE PROVINCE OF ALBERTA AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE PROVINCE OF ALBERTA
AND THE LAWS OF CANADA APPLICABLE THERETO, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. EACH OF THE PARTIES HEREBY AGREES THAT ANY LEGAL ACTION OR
PROCEEDING AGAINST SUCH CANADIAN BORROWER WITH RESPECT TO THIS AGREEMENT, THE
CANADIAN NOTES OR ANY OF THE CANADIAN LOAN DOCUMENTS MAY BE BROUGHT IN THE
COURTS OF THE PROVINCE OF ALBERTA AND EACH PARTY SUBMITS AND ATTORNS TO, THE
NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. EACH PARTY WAIVES ANY RIGHT
TO STAY OR TO DISMISS ANY ACTION OR PROCEEDING BROUGHT BEFORE SAID COURTS ON THE
BASIS OF FORUM NON CONVENIENS. NOTHING HEREIN SHALL AFFECT THE RIGHT OF LENDER
PARTIES TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE
RIGHT OF LENDER PARTIES TO BRING PROCEEDINGS AGAINST CANADIAN BORROWERS IN THE
COURTS OF ANY OTHER JURISDICTION.

                                       60
<PAGE>   66

        Section 10.9. Waiver of Judgment Interest Act (Alberta). To the extent
permitted by Law, the provisions of the Judgment Interest Act (Alberta) shall
not apply to the Canadian Loan Documents and are hereby expressly waived by
Canadian Borrowers.

        Section 10.10. Deemed Reinvestment Not Applicable. For the purposes of
the Interest Act (Canada), the principle of deemed reinvestment of interest
shall not apply to any interest calculation under the Canadian Loan Documents,
and the rates of interest stipulated in this Agreement are intended to be
nominal rates and not effective rates or yields.

        Section 10.11. Limitation on Interest. Lender Parties, Restricted
Persons and any other parties to the Canadian Loan Documents intend to contract
in strict compliance with applicable usury Law from time to time in effect. In
furtherance thereof such Persons stipulate and agree that none of the terms and
provisions contained in the Canadian Loan Documents shall ever be construed to
create a contract to pay, for the use, forbearance or detention of money,
interest in excess of the maximum amount of interest permitted to be charged by
applicable Law from time to time in effect. Neither any Restricted Person nor
any present or future guarantors, endorsers, or other Persons hereafter becoming
liable for payment of any Obligation shall ever be liable for unearned interest
thereon or shall ever be required to pay interest thereon in excess of the
maximum amount that may be lawfully charged under applicable Law from time to
time in effect, and the provisions of this section shall control over all other
provisions of the Canadian Loan Documents which may be in conflict or apparent
conflict herewith. Lender Parties expressly disavow any intention to charge or
collect excessive unearned interest or finance charges in the event the maturity
of any Obligation is accelerated. If (a) the maturity of any Obligation is
accelerated for any reason, (b) any Obligation is prepaid and as a result any
amounts held to constitute interest are determined to be in excess of the legal
maximum, or (c) any Lender or any other holder of any or all of the Obligations
shall otherwise collect moneys which are determined to constitute interest which
would otherwise increase the interest on any or all of the Obligations to an
amount in excess of that permitted to be charged by applicable Law then in
effect, then all sums determined to constitute interest in excess of such legal
limit shall, without penalty, be promptly applied to reduce the then outstanding
principal of the related Obligations or, at such Lender's or holder's option,
promptly returned to Canadian Borrowers or the other payor thereof upon such
determination. In determining whether or not the interest paid or payable, under
any specific circumstance, exceeds the maximum amount permitted under applicable
Law, Lender Parties and Restricted Persons (and any other payors thereof) shall
to the greatest extent permitted under applicable Law, and in accordance with
generally accepted actuarial practices and principles, (i) characterize any
non-principal payment as an expense, fee or premium rather than as interest,
(ii) exclude voluntary prepayments and the effects thereof, and (iii) amortize,
prorate, allocate, and spread the total amount of interest throughout the entire
contemplated term of the instruments evidencing the Obligations in accordance
with the amounts outstanding from time to time thereunder and the maximum legal
rate of interest from time to time in effect under applicable Law in order to
lawfully charge the maximum amount of interest permitted under applicable Law.
In no event shall the aggregate "interest" (as defined in section 347 of the
Criminal Code (Canada)) payable under the Canadian Loan Documents exceed the
maximum effective annual rate of interest on the "credit advanced" (as defined
in that section) permitted under that section and, if any payment, collection or
demand pursuant to this Agreement in

                                       61
<PAGE>   67

respect of "interest" (as defined in that section) is determined to be contrary
to the provisions of that section, such payment, collection or demand shall be
deemed to have been made by mutual mistake of Canadian Borrowers, Canadian Agent
and Lenders and the amount of such excess payment or collection shall be
refunded to Canadian Borrowers. For purposes of the Canadian Loan Documents, the
effective annual rate of interest shall be determined in accordance with
generally accepted actuarial practices and principles over the term applicable
to the Canadian Obligations on the basis of annual compounding of the lawfully
permitted rate of interest and, in the event of dispute, a certificate of a
Fellow of the Canadian Institute of Actuaries appointed by Canadian Agent shall
be prima facie evidence, for the purposes of such determination.

        Section 10.12. Termination; Limited Survival. In their sole and absolute
discretion, Canadian Borrowers may at any time that no Canadian Obligations are
owing elect in a written notice delivered to Canadian Agent to terminate this
Agreement. Upon receipt by Canadian Agent of such a notice, if no Canadian
Obligations are then owing this Agreement and all other Canadian Loan Documents
shall thereupon be terminated and the parties thereto released from all
prospective obligations thereunder. Notwithstanding the foregoing or anything
herein to the contrary, any waivers or admissions made by any Restricted Person
in any Canadian Loan Document, any Obligations under Sections 3.2 through 3.6,
and any obligations which any Person may have to indemnify or compensate any
Lender Party shall survive any termination of this Agreement or any other
Canadian Loan Document. At the request and expense of Canadian Borrowers,
Canadian Agent shall prepare and execute all necessary instruments to reflect
and effect such termination of the Canadian Loan Documents. Canadian Agent is
hereby authorized to execute all such instruments on behalf of all Lenders,
without the joinder of or further action by any Lender.

        Section 10.13. Severability. If any term or provision of any Canadian
Loan Document shall be determined to be illegal or unenforceable all other terms
and provisions of the Canadian Loan Documents shall nevertheless remain
effective and shall be enforced to the fullest extent permitted by applicable
Law.

        Section 10.14. Counterparts; Fax. This Agreement may be separately
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to
constitute one and the same Agreement. This Agreement and the Canadian Loan
Documents may be validly executed and delivered by facsimile or other electronic
transmission.

        Section 10.15. Waiver of Jury Trial, Punitive Damages, etc. EACH
CANADIAN BORROWER AND EACH LENDER PARTY HEREBY KNOWINGLY, VOLUNTARILY,
INTENTIONALLY, AND IRREVOCABLY (A) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED
BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, OR DIRECTLY OR INDIRECTLY AT ANY TIME ARISING OUT OF, UNDER OR IN
CONNECTION WITH THE CANADIAN LOAN DOCUMENTS OR ANY TRANSACTION CONTEMPLATED
THEREBY OR ASSOCIATED THEREWITH, BEFORE OR AFTER MATURITY, IN EACH CASE WHETHER
NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR
OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM,
DEMAND,

                                       62
<PAGE>   68

ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND
THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY, (B) WAIVES,
TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR
RECOVER IN ANY SUCH LITIGATION ANY "SPECIAL DAMAGES", AS DEFINED BELOW, (C)
CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OR COUNSEL FOR
ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH
PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVERS, AND (D) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT, THE OTHER CANADIAN LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED
HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
CONTAINED IN THIS SECTION. AS USED IN THIS SECTION, "SPECIAL DAMAGES" INCLUDES
ALL SPECIAL, CONSEQUENTIAL, EXEMPLARY, OR PUNITIVE DAMAGES (REGARDLESS OF HOW
NAMED), BUT DOES NOT INCLUDE ANY PAYMENTS OR FUNDS WHICH ANY PARTY HERETO HAS
EXPRESSLY PROMISED TO PAY OR DELIVER TO ANY OTHER PARTY HERETO.

        Section 10.16. Defined Terms. Capitalized terms and phrases used and not
otherwise defined herein shall for all purposes of this Agreement have the
meaning given to such terms and phrases in Annex I hereto.

        Section 10.17. Annex I, Exhibits and Schedules; Additional Definitions.
Annex I, Annex II, and all Exhibits and Schedules attached to this Agreement are
a part hereof for all purposes.

        Section 10.18. Amendment of Defined Instruments. Unless the context
otherwise requires or unless otherwise provided herein the terms defined in this
Agreement which refer to a particular agreement, instrument or document also
refer to and include all renewals, extensions, modifications, amendments and
restatements of such agreement, instrument or document, provided that nothing
contained in this section shall be construed to authorize any such renewal,
extension, modification, amendment or restatement.

        Section 10.19. References and Titles. All references in this Agreement
to Exhibits, Schedules, articles, sections, subsections and other subdivisions
refer to the Exhibits, Schedules, articles, sections, subsections and other
subdivisions of this Agreement unless expressly provided otherwise. Titles
appearing at the beginning of any subdivisions are for convenience only and do
not constitute any part of such subdivisions and shall be disregarded in
construing the language contained in such subdivisions. The words "this
Agreement", "this instrument", "herein", "hereof", "hereby", "hereunder" and
words of similar import refer to this Agreement as a whole and not to any
particular subdivision unless expressly so limited. The phrases "this section"
and "this subsection" and similar phrases refer only to the sections or
subsections hereof in which such phrases occur. The word "or" is not exclusive,
and the word "including" (in its various forms) means "including without
limitation". Pronouns in masculine, feminine and neuter genders shall be
construed to include any other gender, and words in the singular form shall be
construed to include the plural and vice versa, unless the context otherwise
requires.

                                       63
<PAGE>   69
        Section 10.20. Calculations and Determinations. All calculations under
the Canadian Loan Documents of interest chargeable with respect to Eurodollar
Loans and of fees (excluding stamping fees on Bankers' Acceptances) shall be
made on the basis of actual days elapsed (including the first day but excluding
the last) and a year of 360 days. All calculations with respect to Bankers'
Acceptances shall be made on the basis of actual days elapsed (including the
first day but excluding the last) and a year of 365 days. All other calculations
of interest made under the Canadian Loan Documents shall be made on the basis of
actual days elapsed (including the first day but excluding the last) and a year
of 365 or 366 days, as appropriate. Each determination by a Lender Party of
amounts to be paid under Article III or any other matters which are to be
determined hereunder by a Lender Party (such as any US Dollar Eurodollar Rate,
Canadian Dollar Eurodollar Rate, Adjusted US Dollar Eurodollar Rate, Adjusted
Canadian Dollar Eurodollar Rate, Business Day, Interest Period, or Reserve
Requirement) shall, in the absence of manifest error, be conclusive and binding.
Unless otherwise expressly provided herein or unless Required Lenders otherwise
consent all financial statements and reports furnished to any Lender Party
hereunder shall be prepared and all financial computations and determinations
pursuant hereto shall be made in accordance with US GAAP.

        Section 10.21. Construction of Indemnities and Releases. All
indemnification and release provisions of this Agreement shall be construed
broadly (and not narrowly) in favor of the Persons receiving indemnification
from or being released.

        Section 10.22. Separate Obligations. All obligations of Northstar Energy
and Devon Canada under this Agreement and the other Canadian Loan Documents are
separate and individual obligations of Northstar Energy and Devon Canada,
respectively, and Northstar Energy shall not have any liabilities in respect of
Canadian Advances made by the Lenders to Devon Canada nor shall Devon Canada
have any liabilities in respect of Canadian Advances made to Northstar Energy.

        Section 10.23. Termination of Existing Canadian Agreement. Upon the
payment in full of all outstanding indebtedness owing under the Existing
Canadian Agreement, the Existing Canadian Agreement and the other loan documents
executed pursuant thereto shall be terminated and the parties thereto shall have
no further obligations or liabilities, covenants, or representations thereunder;
provided, however, the indemnification obligations provided in the Existing
Canadian Agreement shall not be terminated and shall survive the termination of
the Existing Canadian Agreement.

        [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

                                       64
<PAGE>   70

        IN WITNESS WHEREOF, this Agreement is executed as of the date first
written above.

                                      NORTHSTAR ENERGY CORPORATION
                                      Canadian Borrower

                                      By:  /s/ PAUL BRERETON
                                         --------------------------------------
                                         Paul Brereton
                                         Vice President - Finance

                                      Address:
                                      3000, 400-3 Avenue SW
                                      Calgary, AB T2P 4H2
                                      Attention: Vice President - Finance
                                      Telephone: (403) 213-8151
                                      Fax: (403) 213-8190

                                      DEVON ENERGY CANADA CORPORATION
                                      Canadian Borrower

                                      By:  /s/ PAUL BRERETON
                                         --------------------------------------
                                         Paul Brereton
                                         Vice President - Finance

                                      Address:
                                      3000, 400-3 Avenue SW
                                      Calgary, AB T2P 4H2
                                      Attention: Vice President - Finance
                                      Telephone: (403) 213-8151
                                      Fax: (403) 213-8190

                                       65
<PAGE>   71

                                      BANK OF AMERICA CANADA
                                      Administrative Agent,
                                      Canadian LC Issuer and Lender

                                      By:  /s/ RICHARD J. HALL
                                         --------------------------------------
                                         Richard J. Hall
                                         Vice President

                                      Address:
                                      200 Front Street West, Suite 2700
                                      Toronto, Canada M5V 3L2
                                      Attention: Richard J. Hall
                                      Telephone: (416)349-4008
                                      Fax: (416) 349-4283

<PAGE>   72
                                      BANK ONE CANADA
                                      Lender

                                      By: /s/ JEREMIAH A. HYNES III
                                         --------------------------------------
                                         Name: Jeremiah A. Hynes III
                                         Title: First Vice President

<PAGE>   73
                                      THE CHASE MANHATTAN BANK
                                      Lender

                                      By: /s/ ROBERT W. TRABAND
                                         --------------------------------------
                                         Name: Robert W. Traband
                                         Title: Vice President

<PAGE>   74
                                      UMB BANK
                                      Lender

                                      By: /s/ RICHARD J. LEHRTER
                                         --------------------------------------
                                         Name: Richard J. Lehrter
                                         Title: Community Bank President

<PAGE>   75
                                      FIRST UNION NATIONAL BANK
                                      Lender

                                      By: /s/ DAVID E. HUMPHREYS
                                         --------------------------------------
                                         Name: David E. Humphreys
                                         Title: Vice President

<PAGE>   76
                                      WESTDEUTSCHE LANDESBANK
                                      GIROZENTRALE
                                      Lender

                                      By: /s/ CYNTHIA M. NIESEN
                                         --------------------------------------
                                         Name: Cynthia M. Niesen
                                         Title: Managing Director

                                      By: /s/ THOMAS LEE
                                         --------------------------------------
                                         Name: Thomas Lee
                                         Title: Associate

<PAGE>   77
                                      THE BANK OF NEW YORK
                                      Lender

                                      By: /s/ RAYMOND J. PALMER
                                         --------------------------------------
                                         Name: Raymond J. Palmer
                                         Title: Vice President

<PAGE>   78

                                      ROYAL BANK OF CANADA
                                      Lender

                                      By: /s/ S.G. TIBBATTS
                                         --------------------------------------
                                         Name:  S.G. Tibbatts
                                         Title: Account Manager

<PAGE>   79
                                      SUNTRUST BANK, ATLANTA
                                      Lender

                                      By: /s/ STEVEN J. NEWBY
                                         --------------------------------------
                                         Name:  Steven J. Newby
                                         Title: Vice President

                                      By: /s/ MARY CRAWFORD OWEN
                                         --------------------------------------
                                         Name:  Mary Crawford Owen
                                         Title: Banking Officer

<PAGE>   80
                                      J.P. MORGAN CANADA
                                      Lender

                                      By: /s/ JEFF MARK
                                         --------------------------------------
                                         Name:  Jeff Mark
                                         Title:

<PAGE>   81
                                      CITIBANK CANADA
                                      Lender

                                      By:   /s/ K. CLINTON GERST
                                         --------------------------------------
                                         Name:  K. Clinton Gerst
                                         Title: Managing Director

<PAGE>   82
                                      DEUTSCHE BANK AG NEW YORK
                                      AND/OR CAYMAN ISLANDS BRANCHES
                                      Lender

                                      By: /s/ JOEL MAKOWSKY
                                         --------------------------------------
                                         Name:  Joel Makowsky
                                         Title: Vice President

<PAGE>   83
                                      CANADIAN IMPERIAL BANK OF
                                      COMMERCE
                                      Lender

                                      By: /s/ JOELLE SCHELLENBERG
                                         --------------------------------------
                                         Name:  Joelle Schellenberg
                                         Title: Director

                                      By: /s/ DAVID J. SWAIN
                                         --------------------------------------
                                         Name:  David J. Swain
                                         Title: Managing Director

<PAGE>   84

                                      ABN AMRO BANK CANADA
                                      Lender

                                      By:   /s/ MARK BOHN
                                         --------------------------------------
                                         Name:  Mark Bohn
                                         Title: Vice President

                                      By:   /s/ ROBERT DUFFIELD
                                         --------------------------------------
                                         Name:  Robert Duffield
                                         Title: Vice President
<PAGE>   85
                                      BAYERISCHE LANDESBANK
                                      GIROZENTRALE, CAYMAN ISLANDS
                                      BRANCH
                                      Lender

                                      By:  /s/  PETER OBERMANN
                                         --------------------------------------
                                         Name:  Peter Obermann
                                         Title: Senior Vice President

                                      By:  /s/  JAMES BOYLE
                                         --------------------------------------
                                         Name:  James Boyle
                                         Title: Vice President
<PAGE>   86
                                      THE FUJI BANK, LIMITED
                                      Lender

                                      By:   /s/  NATE ELLIS
                                         ---------------------------------------
                                         Name:   Nate Ellis
                                         Title:  Senior Vice President & Manager

<PAGE>   87
                                      CREDIT LYONNAIS
                                      Lender

                                      By:    /s/  PHILLIPPE SOUSTRA
                                         --------------------------------------
                                         Name:    Phillippe Soustra
                                         Title:   Senior Vice President

<PAGE>   88

                                      BANK OF TOKYO - MITSUBISHI
                                      (CANADA)
                                      Lender

                                      By:    /s/  DAVIS J. STEWART
                                         --------------------------------------
                                         Name:    Davis J. Stewart
                                         Title:   Vice President

<PAGE>   89
                                                                         ANNEX I

                                 DEFINED TERMS

       "Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any assets acquired by such specified Person, and any refinancing of
the foregoing indebtedness on similar terms, taking into account current market
conditions.

       "Adjusted Canadian Dollar Eurodollar Rate" means, for any Canadian Dollar
Eurodollar Loan for any Eurodollar Interest Period therefor, the per annum rate
equal to the sum of (a) the Applicable Margin plus (b) the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) determined by
Canadian Agent to be equal to the quotient obtained by dividing (i) the Canadian
Dollar Eurodollar Rate for such Canadian Dollar Eurodollar Loan for such
Eurodollar Interest Period by (ii) 1 minus the Reserve Requirement for such
Canadian Dollar Eurodollar Loan for such Interest Period. The Adjusted Canadian
Dollar Eurodollar Rate for any Canadian Dollar Eurodollar Loan shall change
whenever the Applicable Margin or the Reserve Requirement changes. No Adjusted
Canadian Dollar Eurodollar Rate charged by any Person shall ever exceed the
Highest Lawful Rate.

       "Adjusted US Dollar Eurodollar Rate" means, for any US Dollar Eurodollar
Loan for any Eurodollar Interest Period therefor, the per annum rate equal to
the sum of (a) the Applicable Margin plus (b) the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) determined by US Agent to be
equal to the quotient obtained by dividing (i) the US Dollar Eurodollar Rate for
such US Dollar Eurodollar Loan for such Eurodollar Interest Period by (ii) 1
minus the Reserve Requirement for such US Dollar Eurodollar Loan for such
Interest Period. The Adjusted US Dollar Eurodollar Rate for any US Dollar
Eurodollar Loan shall change whenever the Applicable Margin or the Reserve
Requirement changes. No Adjusted US Dollar Eurodollar Rate charged by any Person
shall ever exceed the Highest Lawful Rate.

       "Affiliate" means, as to any Person, each other Person that directly or
indirectly (through one or more intermediaries or otherwise) controls, is
controlled by, or is under common control with, such Person. A Person shall be
deemed to be "controlled by" any other Person if such other Person possesses,
directly or indirectly, power

       (a) to vote 20% or more of the securities (on a fully diluted basis)
having ordinary voting power for the election of directors or managing general
partners; or

       (b) to direct or cause the direction of the management and policies of
such Person whether by contract or otherwise.
<PAGE>   90

       "Agent-Related Persons" means the US Agent (including Bank of America in
its capacity as US LC Issuer and US Swing Lender) and its Affiliates, the
Canadian Agent (including Bank of America Canada in its capacity as Canadian LC
Issuer and Canadian Swing Lender) and its Affiliates, the Arranger, any
successors to US Agent or Canadian Agent appointed in accordance with the Loan
Documents, and the officers, directors, employees, agents and attorneys-in-fact
of such Persons.

       "Applicable Currency" means (i) when used with respect to any US Loan or
US LC Obligations, US Dollars, and (ii) when used with respect to any Canadian
Prime Rate Loan, any Canadian Dollar Eurodollar Loan or any Bankers' Acceptance,
Canadian Dollars, and (iii) when used with respect to any Canadian Base Rate
Loan or an US Dollar Eurodollar Loan made under the Canadian Agreement, US
Dollars.

       "Applicable Lending Office" means, for each Lender and for each Type of
Loan, the "Lending Office" of such Lender (or of an Affiliate of such Lender)
designated for such Type of Loan on Annex II hereof or such other office of such
Lender (or an Affiliate of such Lender) as such Lender may from time to time
specify to US Agent, Canadian Agent, and Borrowers by written notice in
accordance with the terms hereof as the office by which its Loans of such Type
are to be made and maintained.

       "Applicable Margin" means

       (a)     when used in the Canadian Agreement on any date and when used in
               the US Agreement, except with respect to any Tranche B Loan, on
               any date, the number of Basis Points per annum set forth below
               based on the Applicable Rating Level on such date:

<TABLE>
<CAPTION>

               =================================================================
                            Applicable                    Applicable
                           Rating Level                    Margin
               -----------------------------------------------------------------
               <S>                                        <C>
                             Level I                         24.0
               -----------------------------------------------------------------
                             Level II                        35.0
               -----------------------------------------------------------------
                             Level III                       45.0
               -----------------------------------------------------------------
                             Level IV                        67.5
               -----------------------------------------------------------------
                             Level V                         75.0
               =================================================================
</TABLE>

       (b)     when used with respect to any Tranche B Loan on any date, the
               number of Basis Points per annum set forth below based on the
               Applicable Rating Level on such date:

                                       2
<PAGE>   91
<TABLE>
<CAPTION>

               =================================================================
                            Applicable                    Applicable
                           Rating Level                    Margin
               -----------------------------------------------------------------
               <S>                                        <C>
                             Level I                         26.0
               -----------------------------------------------------------------
                             Level II                        37.5
               -----------------------------------------------------------------
                             Level III                       47.5
               -----------------------------------------------------------------
                             Level IV                        70.0
               -----------------------------------------------------------------
                             Level V                         77.5
               =================================================================
</TABLE>

Changes in the Applicable Margin will occur automatically without prior notice
as changes in the Applicable Rating Level occur. US Agent will give notice
promptly to Borrowers and the Lenders of changes in the Applicable Margin.

       "Applicable Rating Level" means for any day, the highest Rating Level (as
such term is defined below in this paragraph) issued by S&P or Moody's
(collectively, in this definition called the "Designated Rating Agencies"). As
used in this definition, (i) the term "Rating Level" means for any day with
respect to any of the Designated Rating Agencies, the rating level described
below (or its then equivalent) applicable on such day, issued by such Designated
Rating Agency, from time to time, with respect to US Borrower's Long-Term Debt
or if such rating is unavailable, equivalents thereof, including counterparty
ratings, implied ratings and corporate ratings; (ii) "US Borrower's Long-Term
Debt" means senior, unsecured, non-credit enhanced long-term indebtedness for
borrowed money of US Borrower, and (iii) "$" means a rating equal to or more
favorable than and "<" means a rating less favorable than.

<TABLE>
<CAPTION>

               =================================================================
                     Rating Level          S&P         Moody's
               -----------------------------------------------------------------
               <S>                         <C>         <C>
                       Level I             $A-           $A3
               -----------------------------------------------------------------
                       Level II            BBB+          Baa1
               -----------------------------------------------------------------
                       Level III           BBB           Baa2
               -----------------------------------------------------------------
                       Level IV            BBB-          Baa3
               -----------------------------------------------------------------
                       Level V             <BBB-         <Baa3
               =================================================================
</TABLE>

If any of the Designated Rating Agencies shall not have in effect a rating for
US Borrower's Long-Term Debt or if the rating system of any of the Designated
Rating Agencies shall change, or if either of the Designated Rating Agencies
shall cease to be in the business of rating corporate debt obligations, US
Borrower and Required Lenders shall negotiate in good faith to amend this

                                       3
<PAGE>   92

definition to reflect such changed rating system or the unavailability of
ratings from such Designated Rating Agency, but until such an agreement shall be
reached, the Applicable Rating Level shall be based only upon the rating by the
remaining Designated Rating Agency.

       "Arranger" means Banc of America Securities LLC, in its capacity as sole
lead arranger and sole book manager.

       "BA Discount Rate" means, in respect of a BA being accepted by a Lender
on any date, (i) for a Lender that is listed in Schedule I to the Bank Act
(Canada), the average bankers' acceptance rate as quoted on Reuters CDOR page
(or such other page as may, from time to time, replace such page on that service
for the purpose of displaying quotations for bankers' acceptances accepted by
leading Canadian financial institutions) at approximately 10:00 a.m. (Toronto,
Ontario time) on such drawdown date for bankers' acceptances having a comparable
maturity date as the maturity date of such BA (the "CDOR Rate"); or, if such
rate is not available at or about such time, the average of the bankers'
acceptance rates (expressed to five decimal places) as quoted to the Canadian
Agent by the Schedule I BA Reference Banks as of 10:00 a.m. (Toronto, Ontario
time) on such drawdown date for bankers' acceptances having a comparable
maturity date as the maturity date of such BA; and (ii) for a Lender that is
listed in Schedule II to the Bank Act (Canada) or a Lender that is listed in
Schedule III to the Bank Act (Canada) that is not subject to the restrictions
and requirements referred to in subsection 524 (2) of the Bank Act (Canada), the
rate established by the Canadian Agent to be the lesser of (A) the CDOR Rate
plus 10 Basis Points; and (B) the average of the bankers' acceptance rates
(expressed to five decimal places) as quoted to the Canadian Agent by the
Schedule II BA Reference Banks as of 10:00 a.m. (Toronto, Ontario time) on such
drawdown date for bankers' acceptances having a comparable maturity date as the
maturity date of such BA;

       "Bankers' Acceptance" or "BA" means a Canadian Dollar draft of either
Canadian Borrower, for a term selected by such Canadian Borrower of either 30,
60, 90 or 180 days (as reduced or extended by the Lender, acting reasonably, to
allow the maturity thereof to fall on a Business Day) payable in Canada.

       "Bank of America" means Bank of America, N.A.

       "Bankruptcy and Insolvency Act (Canada)" means the Bankruptcy and
Insolvency Act, S.C. 1992, c. 27, including the regulations made and, from time
to time, in force under that Act.

       "Basis Point" means one one-hundredth of one percent (0.01%).

       "Borrower" means any of US Borrower and Canadian Borrowers.

       "Borrowing" means a borrowing of new Loans of a single Type pursuant to
Section 1.2 or a Continuation or Conversion of existing Loans into a single Type
(and, in the case of Eurodollar Loans, with the same Interest Period) pursuant
to Section 1.3 of the US Agreement or the Canadian Agreement or the acceptance
or purchase of Bankers' Acceptances issued by Canadian Borrowers under the
Canadian Agreement or the Continuation or Conversion of existing Banker's

                                       4
<PAGE>   93

Acceptances into Canadian Loans of a single Type in the case of Eurodollar Loans
with the same Interest Period pursuant to Section 1.3 of the Canadian Agreement.

       "Borrowing Notice" means a written or telephonic request, or a written
confirmation, made by any Borrower which meets the requirements of Section 1.2
of the US Agreement or Section 1.2 of the Canadian Agreement.

       "Business Day" means (a) with respect to the Canadian Agreement, a day,
other than a Saturday or Sunday, on which commercial banks are open for business
with the public in Dallas, Texas and Toronto, Ontario and (b) with respect to
the US Agreement, a day, other than a Saturday or Sunday, on which commercial
banks are open for business with the public in Dallas, Texas. Any Business Day
in any way relating to Eurodollar Loans (such as the day on which an Interest
Period begins or ends) must also be a day on which, in the judgment of US Agent
or Canadian Agent, as applicable, significant transactions in dollars are
carried out in the interbank eurocurrency market.

       "Canadian Advances" has the meaning given to such term in Section 1.1(a)
of the Canadian Agreement.

       "Canadian Agent" means Bank of America Canada, as administrative agent
under the Canadian Agreement, and its successors and assigns in such capacity.

       "Canadian Agreement" means that certain Credit Agreement dated the
Closing Date among Canadian Borrowers, Canadian Agent and Lenders, as it may be
amended, supplemented, restated or otherwise modified and in effect from time to
time.

       "Canadian Base Rate Loan" means a Canadian Loan which bears interest at
the Canadian US Dollar Base Rate.

       "Canadian Borrowers" means Northstar Energy and Devon Energy Canada.

       "Canadian Dollar" or "C$" means the lawful currency of Canada.

       "Canadian Dollar Eurodollar Loan" means a Canadian Loan that bears
interest at the Adjusted Canadian Dollar Eurodollar Rate.

       "Canadian Dollar Eurodollar Rate" means, for any Canadian Dollar
Eurodollar Loan within a Borrowing and with respect to the related Interest
Period therefor, (a) the interest rate per annum (carried out to the fifth
decimal place) equal to the rate determined by the Canadian Agent to be the
offered rate that appears on the page of the Telerate Screen that displays an
average British Bankers Association Interest Settlement Rate (such page
currently being page number 3740) for deposits in Canadian Dollars (for delivery
on the first day of such Interest Period) with a term equivalent to such
Interest Period, determined as of approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period, or (b) in the
event the rate referenced in the preceding subsection (a) does not appear on
such page or service or

                                       5
<PAGE>   94

such page or service shall cease to be available, the rate per annum (carried
out to the fifth decimal place) equal to the rate determined by the Canadian
Agent to be the offered rate on such other page or other service that displays
an average British Bankers Association Interest Settlement Rate for deposits in
Canadian Dollars (for delivery on the first day of such Interest Period) with a
term equivalent to such Interest Period, determined as of approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period, or (c) in the event the rates referenced in the preceding subsections
(a) and (b) are not available, the rate per annum determined by the Canadian
Agent as the rate of interest at which deposits in Canadian Dollars (for
delivery on the first day of such Interest Period) in same day funds in the
approximate amount of the applicable Canadian Dollar Eurodollar Loan and with a
term equivalent to such Interest Period would be offered by its London branch to
major banks in the offshore Canadian Dollar market at their request at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period.

       "Canadian Facility Maturity Date" means the date which is five years and
one day after the Conversion Date.

       "Canadian Facility Usage" means, at the time in question, the US Dollar
Equivalent of the aggregate amount of Canadian Loans, Canadian LC Obligations,
and BA's outstanding at such time.

       "Canadian Guarantor" means US Borrower.

       "Canadian LC Issuer" means Bank of America Canada in its capacity as the
issuer of Letters of Credit under the Canadian Agreement, and its successors in
such capacity. Canadian Agent may, with the consent of Canadian Borrowers and
the Lender in question, appoint any Canadian Resident Lender hereunder as a
Canadian LC Issuer in place of or in addition to Bank of America Canada.

       "Canadian LC Obligations" means, at the time in question, the sum of all
Matured Canadian LC Obligations plus the maximum amounts which Canadian LC
Issuer might then or thereafter be called upon to advance under all Letters of
Credit then outstanding under the Canadian Agreement.

       "Canadian LC Sublimit" means US $25,000,000.

       "Canadian Lenders" means each signatory to the Canadian Agreement (other
than any Borrower), including Bank of America Canada in its capacity as a
Canadian Lender and Canadian Swing Lender hereunder, rather than as Canadian
Agent and Canadian LC Issuer, and the successors of each such party as holder of
a Canadian Note.

       "Canadian Loan Documents" means the Canadian Agreement, the Canadian
Notes, the Letters of Credit issued under the Canadian Agreement, the LC
Applications related thereto, the BA's, the Guaranty executed by Canadian
Guarantor, and all other agreements, certificates,

                                       6
<PAGE>   95

documents, instruments and writings at any time delivered in connection herewith
or therewith (exclusive of term sheets and commitment letters).

       "Canadian Loans" means the Canadian Revolving Loans, the Canadian Term
Loans into which such Canadian Revolving Loans may be converted, the Competitive
Bid Loans made under the Canadian Agreement, and the Canadian Swing Loans.

       "Canadian Majority Lenders" means Canadian Lenders whose aggregate
Percentage Shares under the Canadian Agreement exceed sixty-six and two thirds
percent (66 2/3%).

       "Canadian Maximum Credit Amount" means US $275,000,000 on the Closing
Date, as increased or decreased thereafter pursuant to Section 1.9 of the US
Credit Agreement or Section 1.12 of the Canadian Agreement, but in no event
greater than $375,000,000 or less than $175,000,000, or the Canadian Dollar
Exchange Equivalent.

       "Canadian Notes" means each Lender's "Canadian Note", as defined in
Section 1.1(a) of the Canadian Agreement, the Competitive Bid Notes issued under
the Canadian Agreement, and the Canadian Swing Notes.

       "Canadian Obligations" means all Liabilities from time to time owing by
Canadian Borrowers to any Lender Party under or pursuant to any of the Canadian
Loan Documents, including all Canadian LC Obligations owing thereunder.
"Canadian Obligation" means any part of the Canadian Obligations.

       "Canadian Prime Rate" means on any day a fluctuating rate of interest per
annum equal to the higher of (i) the rate of interest per annum most recently
announced by Bank of America Canada as its reference rate for Canadian Dollar
commercial loans made to a Person in Canada; and (ii) Bank of America Canada's
Discount Rate for Bankers' Acceptances having a maturity of thirty days plus the
Applicable Margin. No Canadian Prime Rate charged by any Person shall ever
exceed the Highest Lawful Rate.

       "Canadian Prime Rate Loan" means a Canadian Loan that bears interest at
the Canadian Prime Rate.

       "Canadian Re-allocation" has the meaning given it in Section 1.9 of the
US Agreement.

       "Canadian Required Lenders" means Canadian Lenders whose aggregate
Percentage Shares under the Canadian Agreement exceed fifty percent (50%).

       "Canadian Resident Lender" means each Lender identified as such on Annex
II to the Canadian Agreement or any Assignment and Acceptance executed by a new
Lender, each being a Person that is not a non-resident of Canada for the
purposes of the Income Tax Act (Canada).

       "Canadian Revolving Loans" has the meaning given it in Section 1.1(a) of
the Canadian Agreement.

                                       7
<PAGE>   96

       "Canadian Revolving Period" means the period from and including the
Closing Date until the Conversion Date (or, if earlier, the day on which the
obligations of Lenders to make Canadian Loans or the obligations of Canadian LC
Issuer to issue Letters of Credit under the Canadian Agreement have been
terminated or the Canadian Notes first become due and payable in full).

       "Canadian Swing Lender" means Bank of America Canada, in its individual
capacity.

       "Canadian Swing Loans" has the meaning given it in Section 1.1(b) of the
Canadian Agreement.

       "Canadian Swing Notes" has the meaning given it in Section 1.1(b) of the
Canadian Agreement.

       "Canadian Swing Rate" means on any day a fluctuating rate of interest per
annum established from time to time by Bank of America Canada as its money
market rate, which rate may not be the lowest rate of interest charged by Bank
of America Canada to its customers, plus the Applicable Margin. The Canadian
Swing Rate shall never exceed the Highest Lawful Rate.

       "Canadian Swing Sublimit" means US $25,000,000.

       "Canadian Term Loan" has the meaning given it in Section 1.7 of the
Canadian Agreement.

       "Canadian Term Period" means the period from and including the day
immediately following the Conversion Date until and including the Canadian
Facility Maturity Date.

       "Canadian US Dollar Base Rate" means for a day, the rate per annum equal
to the higher of (a) the Federal Funds Rate for such day plus one-half of one
percent (0.5%) and (b) the rate of interest per annum most recently established
by Bank of America Canada as its reference rate for US Dollar commercial loans
made to a Person in Canada. Any change in the Canadian US Dollar Base Rate due
to a change in the Bank of America Canada's reference rate shall be effective on
the effective date of such change. No Canadian US Dollar Base Rate charged by
any Person shall ever exceed the Highest Lawful Rate.

       "Cash Equivalents" means Investments in:

       (a)     marketable obligations, maturing within twelve months after
               acquisition thereof, issued or unconditionally guaranteed by
               Canada or the United States of America or an instrumentality or
               agency thereof and entitled to the full faith and credit of
               Canada or the United States of America, as applicable;

       (b)     demand deposits, and time deposits (including certificates of
               deposit) maturing within twelve months from the date of deposit
               thereof, with a domestic office (1) of US Agent or Canadian Agent
               or any Lender, or (2) of any bank or trust

                                       8
<PAGE>   97

               company organized under the laws of Canada or the United States
               of America or any Province or State therein, provided that (x)
               the full amount of each such deposit in such bank or trust
               company is insured by the Federal Deposit Insurance Corporation
               if applicable, or (y) such bank or trust company has capital,
               surplus and undivided profits aggregating at least US
               $50,000,000, and

       (c)     (1) publicly traded debt securities with an original term of 270
               days or less or (2) interest bearing securities issued to the
               public by banks, associated entities or similar institutions,
               which can be put to the issuer at the investor's unconditional
               option within one month after acquisition, so long as in each
               case such securities have a credit rating of at least A-1 from
               S&P or P-1 from Moody's or A-1 [low] from CBRS or R-1 [low] from
               DBRS.

       "CBRS" means CBRS Inc., or its successor.

       "Change of Control" means the occurrence of either of the following
events: (i) any Person (or syndicate or group of Persons which is deemed a
"person" for the purposes of Section 13(d)(3) of the Securities Exchange Act of
1934, as amended) acquires more than fifty percent (50%) of the outstanding
stock of US Borrower having ordinary voting power (disregarding changes in
voting power based on the occurrence of contingencies) for the election of
directors, or (ii) during any period of twelve successive months a majority of
the Persons who were directors of US Borrower at the beginning of such period
cease to be directors of US Borrower, unless such cessation relates to a
voluntary reduction by US Borrower of the number of directors that comprise the
board of directors of US Borrower.

       "Closing Date" means August 29, 2000.

       "Companies' Creditors Arrangement Act (Canada)" means the Companies'
Creditors Arrangement Act, R.S.C. 1985, c. C-36, including the regulations made
and from time to time in force under that Act.

       "Competitive Bid" means (i) with respect to the US Agreement, a response
from any Lender to an Invitation to Bid, substantially in the form of Exhibit J
to the US Agreement and (ii) with respect to the Canadian Agreement, a response
from any Canadian Resident Lender to an Invitation to Bid, substantially in the
form of Exhibit K to the Canadian Agreement.

       "Competitive Bid Accept/Reject Letter" means (i) with respect to the US
Agreement, a notice sent by US Borrower to US Agent, substantially in the form
of Exhibit K to the US Agreement, indicating its acceptance or rejection of
Competitive Bids from various Lenders and (ii) with respect to the Canadian
Agreement, a notice sent by the applicable Canadian Borrower to Canadian Agent,
substantially in the form of Exhibit L to the Canadian Agreement, indicating its
acceptance or rejection of Competitive Bids from various Lenders.

                                       9
<PAGE>   98

       "Competitive Bid Interest Period" means, with respect to any Competitive
Bid Loan, a period from one day to one hundred eighty days as specified in the
Competitive Bid applicable thereto.

       "Competitive Bid Loan" means (i) with respect to the US Agreement, a loan
from a Lender to US Borrower pursuant to the bidding procedure described in
Section 1.7 of the US Agreement and (ii) with respect to the Canadian Agreement,
a loan from a Canadian Resident Lender to the applicable Canadian Borrower
pursuant to the bidding procedure described in Section 1.9 of the Canadian
Agreement.

       "Competitive Bid Note" (i) with respect to the US Agreement, a
"Competitive Bid Note" as defined in Section 1.7 of the US Agreement and (ii)
with respect to the Canadian Agreement, a "Competitive Bid Note" as defined in
Section 1.9 of the Canadian Agreement.

       "Competitive Bid Rate" means, for any Competitive Bid Loan, the fixed
rate at which such Lender is willing to make such Competitive Bid Loan indicated
in its Competitive Bid. The Competitive Bid Rate shall in no event, however,
exceed the Highest Lawful Rate.

       "Competitive Bid Request" means (i) with respect to the US Agreement, a
request by US Borrower in the form of Exhibit H to the US Agreement for Lenders
to submit Competitive Bids and (ii) with respect to the Canadian Agreement, a
request by the applicable Canadian Borrower in the form of Exhibit I to the
Canadian Agreement for Canadian Resident Lenders to submit Competitive Bids.

       "Consolidated" refers to the consolidation of any Person, in accordance
with US GAAP, with its properly consolidated subsidiaries. References herein to
a Person's Consolidated financial statements, financial position, financial
condition, liabilities, etc. refer to the consolidated financial statements,
financial position, financial condition, liabilities, etc. of such Person and
its properly consolidated subsidiaries.

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

       "Continuation" (i) as used in the US Agreement shall refer to the
continuation pursuant to Section 1.3 thereof of a Eurodollar Loan as a
Eurodollar Loan from one Interest Period to the next Interest Period and (ii) as
used in the Canadian Agreement shall refer to the continuation pursuant to
Section 1.3 thereof of a Eurodollar Loan as a Eurodollar Loan from one Interest
Period to the next Interest Period or a rollover of a Banker's Acceptance at
maturity.

       "Continuation/Conversion Notice" means (i) with respect to the US
Agreement, a written or telephonic request, or a written confirmation, made by
Borrower which meets the requirements of Section 1.3 of the US Agreement, and
(ii) with respect to the Canadian Agreement, a written

                                       10
<PAGE>   99

or telephonic request, or a written confirmation, made by the applicable
Canadian Borrower which meets the requirements of Section 1.3 of the Canadian
Agreement.

       "Conversion" (i) as used in the US Agreement shall refer to a conversion
pursuant to Section 1.3 or Article III of one Type of US Loan into another Type
of US Loan and (ii) as used in the Canadian Agreement shall refer to a
conversion pursuant to Section 1.3 or Article III of one Type of Canadian
Advance into another Type of Canadian Advance.

       "Conversion Date" means the date which is 364 days after the Closing
Date, or such later day to which the Conversion Date is extended pursuant to
Section 1.6 of the Canadian Agreement.

       "DBRS" means Dominion Bond Rating Service Limited, or its successor.

       "Default" means any Event of Default and any default, event or condition
which would, with the giving of any requisite notices and the passage of any
requisite periods of time, constitute an Event of Default.

       "Default Rate" means at the time in question (i) with respect to any US
Base Rate Loan, the rate two percent (2%) per annum above the US Base Rate then
in effect, (ii) with respect to any US Dollar Eurodollar Loan, the rate two
percent (2%) per annum above the Adjusted US Dollar Eurodollar Rate then in
effect for such Loan, (iii) with respect to any Canadian Prime Rate Loan, the
rate two percent (2%) per annum above the Canadian Prime Rate then in effect for
such Loan, (iv) with respect to any Canadian Base Rate Loan, the rate two
percent (2%) per annum above the Canadian US Dollar Base Rate then in effect for
such Loan, (v) with respect to any Canadian Dollar Eurodollar Loan, the rate two
percent (2%) per annum above the Adjusted Canadian Dollar Eurodollar Rate then
in effect for such Loan; (vi) with respect to any Competitive Bid Loan, the rate
two percent (2%) per annum above the Competitive Bid Rate then in effect for
such Loan; (vii) with respect to any US Swing Loan, the rate two percent (2%)
per annum above the US Swing Rate then in effect for such Loan; and (viii) with
respect to any Canadian Swing Loan, the rate two percent (2%) per annum above
the Canadian Swing Rate then in effect for such Loan. No Default Rate charged by
any Person shall ever exceed the Highest Lawful Rate.

       "Depository Bills and Notes Act (Canada)" means the Depository Bills and
Notes Act (Canada), R.S.C. 1998, c. 13, including the regulations made and, from
time to time, in force under that Act.

       "Devon Energy Canada" means Devon Energy Canada Corporation, a Canadian
corporation organized under the laws of Alberta.

       "Devon Nevada" means Devon Energy Corporation (Nevada), a Nevada
corporation.

       "Devon Oklahoma" means Devon Energy Corporation (Oklahoma), an Oklahoma
corporation, formerly known as Devon Energy Corporation, an Oklahoma
corporation.

                                       11
<PAGE>   100

       "Devon SFS" means Santa Fe Snyder Corporation, a Delaware corporation
into which Devon Merger Co. has been merged (with Santa Fe Snyder Corporation
being the survivor, becoming a wholly-owned Subsidiary of US Borrower and
changing its name to Devon SFS Operating, Inc.).

       "Disclosure Schedule" means (i) with respect to the US Agreement,
Schedule 1 thereto, and (ii) with respect to the Canadian Agreement, Schedule 1
thereto.

       "Discount Proceeds" means, in respect of each Bankers' Acceptance, funds
in an amount which is equal to:

       Face Amount
       -----------
       1 + (Rate x Term)
           ------------
               365

(where "Face Amount" is the principal amount of the Bankers' Acceptance being
purchased, "Rate" is the BA Discount Rate divided by 100 and "Term" is the
number of days in the term of the Bankers' Acceptance.)

       "Distribution" means (a) any dividend or other distribution made by a
Restricted Person on or in respect of any stock, partnership interest, or other
equity interest in such Restricted Person (including any option or warrant to
buy such an equity interest), or (b) any payment made by a Restricted Person to
purchase, redeem, acquire or retire any stock, partnership interest, or other
equity interest in such Restricted Person (including any such option or
warrant).

       "Domestic Lending Office" means, with respect to any Lender, the office
of such Lender specified as its "Domestic Lending Office" below its name on
Annex II to the Canadian Agreement or the US Agreement, or such other office as
such Lender may from time to time specify to any Borrower and US Agent; with
respect to LC Issuer, the office, branch, or agency through which it issues
Letters of Credit; and, with respect to US Agent, the office, branch, or agency
through which it administers this Agreement.

       "Eligible Transferee" means a Person which either (a) is a Lender or an
Affiliate of a Lender, (b) an Approved Fund or (c) is consented to as an
Eligible Transferee by US Agent or Canadian Agent, as applicable, and, so long
as no Default or Event of Default is continuing, by the Borrowers, in each case
which consent will not be unreasonably withheld; provided that the Borrowers'
consent shall not be required for a Person to be an "Eligible Transferee" for
purposes of Section 10.6(d) of the US Agreement and Section 10.6(d) of the
Canadian Agreement. As used in this definition, "Fund" means any Person (other
than a natural Person) that is (or will be) engaged in making, purchasing,
holding or otherwise investing in commercial loans and similar extensions of
credit in the ordinary course of its business, and "Approved Fund" means any
Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a
Lender or (c) an entity or an Affiliate of an entity that administers or manages
a Lender.

                                       12
<PAGE>   101

       "Environmental Laws" means any and all Laws relating to the environment
or to emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances or wastes
into the environment including ambient air, surface water, ground water, or
land, or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances or wastes.

       "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, together with all rules and regulations promulgated
with respect thereto.

       "ERISA Affiliate" means US Borrower and all members of a controlled group
of corporations and all trades or businesses (whether or not incorporated) under
common control that, together with US Borrower, are treated as a single employer
under Section 414 of the Internal Revenue Code.

       "ERISA Plan" means any employee pension benefit plan subject to Title IV
of ERISA maintained by any ERISA Affiliate with respect to which any Restricted
Person has a fixed or contingent liability.

       "Eurodollar Interest Period" means, with respect to each particular
Eurodollar Loan in a Borrowing, the period specified in the Borrowing Notice or
Continuation/Conversion Notice applicable thereto, beginning on and including
the date specified in such Borrowing Notice or Continuation/Conversion Notice
(which must be a Business Day), and ending one, two, three, or six months
thereafter, as the applicable Borrower may elect in such notice; provided that:
(a) any Interest Period which would otherwise end on a day which is not a
Business Day shall be extended to the next succeeding Business Day unless such
Business Day falls in another calendar month, in which case such Interest Period
shall end on the next preceding Business Day; (b) any Interest Period which
begins on the last Business Day in a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day in a calendar month; and (c)
notwithstanding the foregoing, any Interest Period which would otherwise end
after the last day of the US Facility Commitment Period or the Canadian
Revolving Period shall end on the last day of the US Facility Commitment Period
or the Canadian Revolving Period (or, if the last day of such period is not a
Business Day, on the next preceding Business Day).

       "Eurodollar Lending Office" means, with respect to any Lender, the office
of such Lender specified as its "Eurodollar Lending Office" below its name on
Annex II to the Canadian Agreement or the US Agreement (or, if no such office is
specified, its Domestic Lending Office), or such other office of such Lender as
such Lender may from time to time specify to Borrowers, Canadian Agent, and US
Agent.

       "Eurodollar Loan" means any Canadian Dollar Eurodollar Loan and any US
Dollar Eurodollar Loan.

                                       13
<PAGE>   102

       "Event of Default" means (i) with respect to the US Agreement the meaning
given to such term in Section 8.1 thereof and (ii) with respect to the Canadian
Agreement the meaning given to such term in Section 8.1 thereof.

       "Exchange Equivalent" in respect of one currency (the "Original
Currency"), being Canadian Dollars or U.S. Dollars, as the case may be, means,
at the date of determination, the amount of currency expressed in the other such
currency necessary to purchase, based on the Noon Rate on such date, the
specified amount of the Original Currency on such date.

       "Existing Canadian Agreement" means that certain Canadian Credit
Agreement dated as of October 15, 1999 among Canadian Borrowers, Canadian Agent,
and certain lenders named therein.

       "Existing Santa Fe Snyder Agreement" means those two certain Credit
Agreements dated as of May 5, 1999 by and among Santa Fe Snyder Corporation, The
Chase Manhattan Bank, as administrative agent, and the lenders party thereto.

       "Existing US Agreement" means that certain US Credit Agreement dated as
of October 15, 1999 among Devon Oklahoma, US Agent, and certain lenders named
therein.

       "Facility Fee Rate" means, on any date, the number of Basis Points per
annum set forth below based on the Applicable Rating Level on such date:

<TABLE>
<CAPTION>

                    ==========================================================
                            Applicable                    Applicable
                           Rating Level                Facility Fee Rate
                    ----------------------------------------------------------
                    <S>                                <C>
                             Level I                         11.0
                    ----------------------------------------------------------
                             Level II                        12.5
                    ----------------------------------------------------------
                             Level III                       15.0
                    ----------------------------------------------------------
                             Level IV                        17.5
                    ----------------------------------------------------------
                             Level V                         25.0
                    ==========================================================
</TABLE>

       "Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100th of one percent) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of Dallas, Texas on the Business
Day next succeeding such day, provided that (i) if the day for which such rate
is to be determined is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (ii) if such rate is not so
published for any day, the Federal Funds Rate for such

                                       14
<PAGE>   103

day shall be the average rate quoted to US Agent on such day on such
transactions as determined by US Agent.

       "Fiscal Quarter" means a three-month period ending on March 31, June 30,
September 30 or December 31 of any year.

       "Fiscal Year" means a twelve-month period ending on December 31 of any
year.

       "Governmental Authority" means any domestic or foreign, national,
federal, provincial, state, municipal or other local government or body and any
division, agency, ministry, commission, board or authority or any
quasi-governmental or private body exercising any statutory, regulatory,
expropriation or taxing authority under the authority of any of the foregoing,
and any domestic, foreign or international judicial, quasi-judicial, arbitration
or administrative court, tribunal, commission, board or panel acting under the
authority of any of the foregoing.

       "Hazardous Materials" means any substances regulated under any
Environmental Law, whether as pollutants, contaminants, or chemicals, or as
industrial, toxic or hazardous substances or wastes, or otherwise.

       "Hedging Contract" means (a) any agreement providing for options, swaps,
floors, caps, collars, forward sales or forward purchases involving interest
rates, commodities or commodity prices, equities, currencies, bonds, or indexes
based on any of the foregoing, (b) any option, futures or forward contract
traded on an exchange, and (c) any other derivative agreement or other similar
agreement or arrangement.

       "Highest Lawful Rate" means, with respect to each Lender Party to whom
Obligations are owed, the maximum nonusurious rate of interest that such Lender
Party is permitted under applicable Law to contract for, take, charge, or
receive with respect to such Obligations. All determinations herein of the
Highest Lawful Rate, or of any interest rate determined by reference to the
Highest Lawful Rate, shall be made separately for each Lender Party as
appropriate to assure that the Loan Documents are not construed to obligate any
Person to pay interest to any Lender Party at a rate in excess of the Highest
Lawful Rate applicable to such Lender Party.

       "Income Tax Act (Canada)" means the Income Tax Act, S.C. 1970-71-72, c.
63, including the regulations made and, from time to time, in force under that
Act.

       "Indebtedness" of any Person means Liabilities in any of the following
categories:

       (a)     Liabilities for borrowed money,

       (b)     Liabilities constituting an obligation to pay the deferred
               purchase price of property or services, other than customary
               payment terms taken in the ordinary course of such Person's
               business,

                                       15
<PAGE>   104

       (c)    Liabilities evidenced by a bond, debenture, note or similar
              instrument;

       (d)    Liabilities arising under conditional sales or other title
              retention agreements or under leases capitalized in accordance
              with US GAAP, but excluding customary oil, gas or mineral leases
              and operating leases,

       (e)    Liabilities with respect to payments received in consideration of
              oil, gas, or other minerals yet to be acquired or produced at the
              time of payment (including obligations under "take-or-pay"
              contracts to deliver gas in return for payments already received
              and the undischarged balance of any production payment created by
              such Person or for the creation of which such Person directly or
              indirectly received payment);

       (f)    Liabilities under Hedging Contracts,

       (g)    Liabilities with respect to letters of credit or applications or
              reimbursement agreements therefor, or

       (h)    Liabilities under direct or indirect guaranties of Liabilities of
              any Person or constituting obligations to purchase or acquire or
              to otherwise protect or insure a creditor against loss in respect
              of Indebtedness of the types described in paragraphs (a) through
              (g) above of any Person (such as obligations under working capital
              maintenance agreements, agreements to keep-well, or agreements to
              purchase debt, assets, goods, securities or services, but
              excluding endorsements in the ordinary course of business of
              negotiable instruments in the course of collection),

provided, however, that the "Indebtedness" of any Person shall not include
Liabilities that were incurred by such Person on ordinary trade terms to
vendors, suppliers, or other Persons providing goods and services for use by
such Person in the ordinary course of its business, unless and until such
Liabilities are outstanding more than 90 days past the original invoice or
billing date therefor. Any Indebtedness owed by a partnership shall be deemed
Indebtedness of any partner in such partnership to the extent such partner has
any liability of any kind therefor.

       "Initial Financial Statements" means (i) the audited annual Consolidated
financial statements of US Borrower dated as of December 31, 1999, (ii) the
unaudited quarterly Consolidated financial statements of US Borrower dated as of
June 30, 2000, (iii) the audited annual Consolidated financial statements of
Santa Fe Snyder Corporation dated as of December 31, 1999, and (iv) the
unaudited quarterly Consolidated financial statements of Santa Fe Snyder
Corporation dated as of June 30, 2000.

       "Interest Act (Canada)" means the Interest Act, R.S.C. 1985, c. I-15,
including the regulations made and, from time to time, in force under that Act.

                                       16
<PAGE>   105

       "Interest Payment Date" means (a) with respect to each US Base Rate Loan,
Canadian US Dollar Base Rate Loan, Canadian Prime Rate Loan, Canadian Swing
Loan, and US Swing Loan the last day of each March, June, September and December
beginning September 30, 2000, and (b) with respect to each Eurodollar Loan, the
last day of the Eurodollar Interest Period that is applicable thereto and, if
such Eurodollar Interest Period is six months in length, the date specified by
US Agent which is approximately three months after such Eurodollar Interest
Period begins; provided that the last day of each calendar month shall also be
an Interest Payment Date for each such Loan so long as any Event of Default
exists under Section 8.1 (a) or (b).

       "Interest Period" means (i) with respect to any Eurodollar Loan, the
related Eurodollar Interest Period and (ii) with respect to any Competitive Bid
Loan, the related Competitive Bid Interest Period.

       "Internal Revenue Code" means the United States Internal Revenue Code of
1986, as amended from time to time and any successor statute or statutes.

       "Investment" means any investment made directly or indirectly, in any
Person, whether by acquisition of shares of capital stock, indebtedness or other
obligations or securities or by loan, advance, capital contribution or otherwise
and whether made in cash, by the transfer of property, or by any other means.

       "Invitation to Bid" means (i) with respect to the US Agreement, an
invitation by US Agent to each Lender, substantially in the form of Exhibit I
thereto, inviting such Lender to submit Competitive Bids in response to a
Competitive Bid Request under the US Agreement, and (ii) with respect to the
Canadian Agreement, an invitation by Canadian Agent to each Lender,
substantially in the form of Exhibit J thereto, inviting such Lender to submit
Competitive Bids in response to a Competitive Bid Request under the Canadian
Agreement.

       "Judgment Interest Act (Alberta)" means the Judgment Interest Act, S.A.
1984 c. J-O.5, including the regulations made and, from time to time, in force
under that Act.

       "Law" means any statute, law, regulation, ordinance, rule, treaty,
judgment, order, decree, permit, concession, franchise, license, agreement or
other governmental restriction of the United States or Canada or any state,
province or political subdivision thereof or of any foreign country or any
department, province or other political subdivision thereof.

       "LC Application" means any application for a Letter of Credit hereafter
made by any Borrower to US LC Issuer or Canadian LC Issuer.

       "LC Collateral" (i) as used in the US Agreement, has the meaning given to
such term in Section 2.6 of the US Agreement and (ii) as used in the Canadian
Agreement, has the meaning given such term in Section 2.11 of the Canadian
Agreement.

       "Lender Parties" means US Agent, US LC Issuer, Canadian Agent, Canadian
LC Issuer, and all Lenders.

                                       17
<PAGE>   106

       "Lenders" means, collectively, the US Lenders and the Canadian Lenders.

       "Lenders Schedule" means Annex II to the US Agreement and Annex II to the
Canadian Agreement which are the same.

       "Letter of Credit" means any letter of credit issued by US LC Issuer
under the US Agreement or the Existing US Agreement or by Canadian LC Issuer
under the Canadian Agreement or the Existing Canadian Agreement at the
application of any Borrower.

       "Liabilities" means, as to any Person, all indebtedness, liabilities and
obligations of such Person, whether matured or unmatured, liquidated or
unliquidated, primary or secondary, direct or indirect, absolute, fixed or
contingent, and whether or not required to be considered pursuant to US GAAP.

       "Lien" means, with respect to any property or assets, any lien, mortgage,
security interest, pledge, deposit, production payment, rights of a vendor under
any title retention or conditional sale agreement or lease substantially
equivalent thereto, tax lien, mechanic's or materialman's lien, or any other
charge or encumbrance for security purposes, whether arising by Law or agreement
or otherwise, but excluding any right of offset. "Lien" also means any filed
financing statement, any registration of a pledge (such as with an issuer of
uncertificated securities), or any other arrangement or action which would serve
to perfect a Lien described in the preceding sentence, regardless of whether
such financing statement is filed, such registration is made, or such
arrangement or action is undertaken before or after such Lien exists.

       "Loan Documents" means, collectively, the Canadian Loan Documents and the
US Loan Documents.

       "Loans" means, collectively, the Canadian Loans and the US Loans.

       "Majority Lenders" means, collectively, US Majority Lenders and Canadian
Majority Lenders.

       "Material Adverse Effect" means any event which would reasonably be
expected to have a material and adverse effect upon (a) US Borrower's
Consolidated financial condition, (b) US Borrower's Consolidated operations,
properties or prospects, considered as a whole, (c) US Borrower's ability to
timely pay the Obligations, or (d) the enforceability of the material terms of
any Loan Documents.

       "Matured Canadian LC Obligations" means all amounts paid by Canadian LC
Issuer on drafts or demands for payment drawn or made under or purported to be
under any Letter of Credit issued under the Canadian Agreement and all other
amounts due and owing to Canadian LC Issuer under any LC Application for any
such Letter of Credit, to the extent the same have not been repaid to Canadian
LC Issuer (with the proceeds of Loans or otherwise).

                                       18
<PAGE>   107

       "Matured US LC Obligations" means all amounts paid by US LC Issuer on
drafts or demands for payment drawn or made under or purported to be under any
Letter of Credit issued under the US Agreement and all other amounts due and
owing to US LC Issuer under any LC Application for any such Letter of Credit, to
the extent the same have not been repaid to US LC Issuer (with the proceeds of
Loans or otherwise).

       "Maximum Canadian Drawing Amount" means at the time in question the sum
of the maximum amounts which Canadian LC Issuer might then or thereafter be
called upon to advance under all Letters of Credit issued pursuant to the
Canadian Agreement which are then outstanding.

       "Maximum US Drawing Amount" means at the time in question the sum of the
maximum amounts which US LC Issuer might then or thereafter be called upon to
advance under all Letters of Credit issued pursuant to the US Agreement which
are then outstanding.

       "Moody's" means Moody's Investor Service, Inc., or its successor.

       "Net Proceeds" means with respect to any Bankers' Acceptance, the
Discount Proceeds less the amount equal to the applicable Stamping Fee Rate
multiplied by the face amount of such Bankers' Acceptance.

       "Non-resident Lender" means any Lender which is not a Canadian Resident
Lender, and shall initially mean each Lender identified as such on Annex II to
the Canadian Agreement or thereafter on any Assignment and Acceptance.

       "Noon Rate" means, in relation to the conversion of one currency into
another currency, the rate of exchange for such conversion as quoted by the Bank
of Canada (or, if not so quoted, the spot rate of exchange quoted for wholesale
transactions made by Canadian Agent at Toronto, Ontario at approximately noon
(Toronto, Ontario local time)).

       "Northstar Energy" means Northstar Energy Corporation, an Alberta
corporation.

       "Notes" mean, collectively, the Canadian Notes and the US Notes.

       "Obligations" means, collectively, the US Obligations and the Canadian
Obligations.

       "Offer of Extension" means (a) with respect to the Canadian Agreement, a
written offer by Canadian Agent, for and on behalf of Required Lenders, to
Canadian Borrowers to extend the Canadian Facility Revolving Period to a date
364 days from acceptance by Canadian Borrowers of such offer, and setting forth,
if applicable, the terms and conditions on which such extension is offered by
the Lenders and as may be accepted by Canadian Borrowers, and (b) with respect
to the US Agreement, a written offer by US Agent, for and on behalf of Required
Lenders, to US Borrower to extend the Tranche B Revolving Period to a date 364
days from acceptance by US Borrower of such offer, and setting forth, if
applicable, the terms and conditions on which such extension is offered by the
Lenders and as may be accepted by US Borrower.

                                       19
<PAGE>   108

       "PennzEnergy Debentures" means the following Debentures of PennzEnergy
Company, which were issued prior to the merger of PennzEnergy Company with and
into US Borrower:

       (a)    10.125% Debentures due November 15, 2009 in the aggregate
              principal amount of US $200,000,000;

       (b)    10.25% Debentures due November 1, 2005 in the aggregate principal
              amount of US $250,000,000;

       (c)    the PennzEnergy Exchangeable Debentures.

       "PennzEnergy Exchangeable Debentures" means the following Exchangeable
Debentures of PennzEnergy Company, which were issued prior to the merger of
PennzEnergy Company with and into US Borrower:

       (a)    4.90% Exchangeable Senior Debentures due August 15, 2008 in the
              aggregate principal amount of US $443,807,000; and

       (b)    4.95% Exchangeable Senior Debentures due August 15, 2008 in the
              aggregate principal amount of US $316,506,000.

       "Percentage Share" means

       (a)    under the US Agreement with respect to any Lender (i) when used in
              Article I of the US Agreement except when used in Section 1.5(d)
              thereof with respect to utilization fees, or in Article II of the
              US Agreement prior to the Tranche B Conversion Date, in any
              Borrowing Notice thereunder or when no US Loans are outstanding,
              the percentage set forth opposite such Lender's name on the
              Lenders Schedule as modified by assignments of a Lender's rights
              and obligations under the US Agreement made by or to such Lender
              in accordance with the terms of the US Agreement, and (ii) when
              used otherwise, the percentage obtained by dividing (x) the sum of
              the unpaid principal balance of such Lender's US Loans and such
              Lender's Percentage Share of the US LC Obligations, by (y) the sum
              of the aggregate unpaid principal balance of all US Loans at such
              time plus the aggregate amount of all US LC Obligations
              outstanding at such time; and

       (b)    under the Canadian Agreement with respect to any Lender (i) when
              used in Article I of the Canadian Agreement except when used in
              Section 1.5(c) thereof with respect to utilization fees, in
              Article II of the Canadian Agreement prior to the Conversion Date,
              in any Borrowing Notice thereunder or when no Canadian Advances
              are outstanding, the percentage set forth opposite such Lender's
              name on the Lenders Schedule as modified by assignments of a
              Lender's rights and obligations under the Canadian Agreement made
              by or to such Lender in accordance with the terms of the Canadian
              Agreement, and (ii) when used otherwise, the percentage obtained
              by dividing (x) the sum of the unpaid principal

                                       20
<PAGE>   109

               balance of such Lender's Canadian Advances and such Lender's
               Percentage Share of the Canadian LC Obligations, by (y) the sum
               of the aggregate unpaid principal balance of all Canadian
               Advances at such time plus the aggregate amount of all Canadian
               LC Obligations outstanding at such time.

       "Permitted Distribution" means (i) any Distribution made by any
Restricted Person that is payable only in common stock of such Restricted
Person, and (ii) any other Distribution made by any Restricted Person to US
Borrower, Canadian Borrower or to any other Restricted Person that is a
wholly-owned Subsidiary of US Borrower.

       "Permitted Investments" means (a) Cash Equivalents, (b) Investments in
Restricted Subsidiaries that are wholly-owned by US Borrower and in Canadian
Borrowers, and (c) US Borrower's Investments in Thunder Creek Gas Services
L.L.C. and Sage Creek Gas Processors, L.L.C., which are limited liability
companies involved in the methane gas and conventional gas production and
development in the Powder River basin of central Wyoming and are owned by a
Subsidiary of US Borrower and other industry partners (US Borrower will include
its pro rata share of these entities in its Consolidated financial statements),
(d) payments made for the purchase of oil and gas assets, leaseholds and
associated facilities and/or the purchase of equity interests in entities
involved in the oil and gas industry, all in accordance with US Borrower's
normal business practices; provided that no Default shall exist before or after
any such acquisition or Investment, and (e) Investments in any Person, so long
as such Person becomes a Restricted Subsidiary of US Borrower within one year
after the date such Investment is made.

       "Permitted Liens" means:

       (a)     Liens for taxes, assessments or governmental charges which are
               not due or delinquent, or the validity of which US Borrower or
               any Restricted Subsidiary shall be contesting in good faith;
               provided US Borrower or such Restricted Subsidiary shall have
               made adequate provision therefor in accordance with US GAAP;

       (b)     the Lien of any judgment rendered, or claim filed, against US
               Borrower or any Restricted Subsidiary which does not constitute
               an Event of Default and which US Borrower or any such Restricted
               Subsidiary shall be contesting in good faith; provided US
               Borrower or such Restricted Subsidiary shall have made adequate
               provision therefor in accordance with US GAAP;

       (c)     Liens, privileges or other charges imposed or permitted by law
               such as statutory liens and deemed trusts, carriers' liens,
               builders' liens, materialmens' liens and other liens, privileges
               or other charges of a similar nature which relate to obligations
               not due or delinquent, including any lien or trust arising in
               connection with workers' compensation, unemployment insurance,
               pension, employment and similar laws or regulations;

                                       21
<PAGE>   110

       (d)    Liens arising in the ordinary course of and incidental to
              construction, maintenance or current operations which have not
              been filed pursuant to law against US Borrower or any Restricted
              Subsidiary or in respect of which no steps or proceedings to
              enforce such lien have been initiated or which relate to
              obligations which are not due or delinquent or if due or
              delinquent, which US Borrower or such Restricted Subsidiary shall
              be contesting in good faith; provided US Borrower or such
              Restricted Subsidiary shall have made adequate provision therefor
              in accordance with US GAAP;

       (e)    Liens incurred or created in the ordinary course of business and
              in accordance with sound oil and gas industry practice in respect
              of the exploration, development or operation of oil and gas
              properties or related production or processing facilities or the
              transmission of petroleum substances as security in favor of any
              other Person conducting the exploration, development, operation or
              transmission of the property to which such Liens relate, for US
              Borrower's or any of its Restricted Subsidiaries' portion of the
              costs and expenses of such exploration, development, operation or
              transmission, provided that such costs or expenses are not due or
              delinquent or, if due or delinquent, which US Borrower or such
              Restricted Subsidiary shall be contesting in good faith; provided
              US Borrower or such Restricted Subsidiary shall have made adequate
              provision therefor in accordance with US GAAP;

       (f)    overriding royalty interests, net profit interests, reversionary
              interests and carried interests or other similar burdens on
              production in respect of US Borrower's or any of its Restricted
              Subsidiaries' oil and gas properties that are entered into with or
              granted to arm's length third parties in the ordinary course of
              business and in accordance with sound oil and gas industry
              practice in the area of operation;

       (g)    Liens for penalties arising under non-participation provisions of
              operating agreements in respect of US Borrower's or any of its
              Restricted Subsidiaries' oil and gas properties if such Liens do
              not materially detract from the value of any material part of the
              property of US Borrower and its Subsidiaries taken as a whole;

       (h)    easements, rights-of-way, servitudes, zoning or other similar
              rights or restrictions in respect of land held by US Borrower or
              any Restricted Subsidiary (including, without limitation,
              rights-of-way and servitudes for railways, sewers, drains, pipe
              lines, gas and water mains, electric light and power and telephone
              or telegraph or cable television conduits, poles, wires and
              cables) which, either alone or in the aggregate, do not materially
              detract from the value of such land or materially impair its use
              in the operation of the business of US Borrower and its Restricted
              Subsidiaries taken as a whole;

       (i)    security given by US Borrower or any Restricted Subsidiary to a
              public utility or any Governmental Authority when required by such
              public utility or Governmental Authority in the ordinary course of
              the business of US Borrower or any Restricted

                                       22
<PAGE>   111

              Subsidiary in connection with operations of US Borrower or any
              Restricted Subsidiary if such security does not, either alone or
              in the aggregate, materially detract from the value of any
              material part of the property of US Borrower and its Restricted
              Subsidiaries taken as a whole;

       (j)    the right reserved to or vested in any Governmental Authority by
              the terms of any lease, license, grant or permit or by any
              statutory or regulatory provision to terminate any such lease,
              license, grant or permit or to require annual or other periodic
              payments as a condition of the continuance thereof;

       (k)    all reservations in the original grant of any lands and premises
              or any interests therein and all statutory exceptions,
              qualifications and reservations in respect of title;

       (l)    any Lien from time to time disclosed by US Borrower or any
              Restricted Subsidiary to the US Agent or the Canadian Agent and
              which is consented to by the Majority Lenders;

       (m)    any right of first refusal in favor of any Person granted in the
              ordinary course of business with respect to all or any of the oil
              and gas properties of US Borrower or any Restricted Subsidiary;

       (n)    Liens on cash or marketable securities of US Borrower or any
              Restricted Subsidiary granted in connection with any Hedging
              Contract permitted under the US Agreement;

       (o)    Liens in respect of Indebtedness permitted by Sections 7.1(b),
              7.1(g) and 7.1(j);

       (p)    Liens in favor of the US Agent or the Canadian Agent for the
              benefit of the Lender Parties;

       (q)    Liens to collateralize moneys held in a cash collateral account by
              a lender in respect of the prepayment of bankers' acceptances,
              letters of credit or similar obligations accepted or issued by
              such lender but only if at the time of such prepayment no default
              or event of default has occurred and is continuing under the
              credit facility pursuant to which the bankers' acceptances or
              letters of credit have been accepted or issued;

       (r)    purchase money Liens upon or in any tangible personal property and
              fixtures (including real property surface rights upon which such
              fixtures are located and contractual rights and receivables
              relating to such property) acquired by US Borrower or a Restricted
              Subsidiary in the ordinary course of business to secure the
              purchase price of such property or to secure Indebtedness incurred
              solely for the purpose of financing the acquisition of such
              property, including any Liens

                                       23
<PAGE>   112

              existing on such property at the time of its acquisition (other
              than any such Lien created in contemplation of any such
              acquisition);

       (s)    the rights of buyers under production sale contracts related to US
              Borrower's or a Restricted Subsidiary's share of petroleum
              substances entered into in the ordinary course of business,
              provided that the contracts create no rights (including any Lien)
              in favor of the buyer or any other Person in, to or over any
              reserves of petroleum substances or other assets of US Borrower or
              a Restricted Subsidiary, other than a dedication of reserves (not
              by way of Lien or absolute assignment) on usual industry terms;

       (t)    Liens arising in respect of operating leases of personal property
              under which Canadian Borrowers or any of their Subsidiaries are
              lessees;

       (u)    Liens on property of a Person existing at the time such Person
              becomes a Restricted Subsidiary, is merged into or consolidated
              with US Borrower or any of its Subsidiaries; provided, such Liens
              were in existence prior to the contemplation of such stock
              acquisition, merger or consolidation and do not extend to any
              assets other than those of the Person so acquired or merged into
              or consolidated with US Borrower or any of its Subsidiaries.

       (v)    any extension, renewal or replacement (or successive extensions,
              renewals or replacements), as a whole or in part, of any Lien
              referred to in the preceding paragraphs (a) to (u) inclusive of
              this definition, so long as any such extension, renewal or
              replacement of such Lien is limited to all or any part of the same
              property that secured the Lien extended, renewed or replaced (plus
              improvements on such property), the indebtedness or obligation
              secured thereby is not increased and such Lien is otherwise
              permitted by the applicable section above;

       (w)    in addition to Liens permitted by clauses (a) through (v) above,
              Liens on property or assets if the aggregate Indebtedness secured
              thereby does not exceed US $50,000,000.

provided that nothing in this definition shall in and of itself constitute or be
deemed to constitute an agreement or acknowledgment by the US Agent or the
Canadian Agent or any Lender that the Indebtedness subject to or secured by any
such Permitted Lien ranks (apart from the effect of any Lien included in or
inherent in any such Permitted Liens) in priority to the Obligations;

       "Person" means an individual, corporation, partnership, limited liability
company, association, joint stock company, trust or trustee thereof, estate or
executor thereof, unincorporated organization or joint venture, Tribunal, or any
other legally recognizable entity.

       "Rating Agency" means any of S & P or Moody's, or their respective
successors.

       "Re-allocations" means, collectively, all US Re-allocations and all
Canadian Re-allocations

                                       24
<PAGE>   113

       "Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect.

       "Request for an Offer of Extension" means (a) with respect to the
Canadian Agreement, a written request made by Canadian Borrowers to the Lenders
to have Required Lenders issue an offer to Canadian Borrowers extending the
Canadian Revolving Period for a further 364 days, and (b) with respect to the US
Agreement, a written request made by US Borrower to the Lenders to have Required
Lenders issue an offer to US Borrower extending the Tranche B Revolving Period
for a further 364 days.

       "Required Lenders" means, collectively, US Required Lenders and Canadian
Required Lenders.

       "Reserve Requirement" means, at any time, the maximum rate at which
reserves (including any marginal, special, supplemental, or emergency reserves)
are required to be maintained under regulations issued from time to time by the
Board of Governors of the Federal Reserve System of the United States of America
(or any successor) by member banks of such Federal Reserve System against
"Eurocurrency liabilities" (as such term is used in Regulation D). Without
limiting the effect of the foregoing, the Reserve Requirement shall reflect any
other reserves required to be maintained by such member banks with respect to
(a) any category of liabilities which includes deposits by reference to which
the Adjusted US Dollar Eurodollar Rate or the Adjusted Canadian Dollar
Eurodollar Rate is to be determined, or (b) any category of extensions of credit
or other assets which include US Dollar Eurodollar Loans or Canadian Dollar
Eurodollar Loans.

       "Restricted Distribution" means any Distribution that is not a Permitted
Distribution.

       "Restricted Investment" means any Investment that is not a Permitted
Investment.

       "Restricted Payments" means, collectively, all Restricted Distributions
and all Restricted Investments.

       "Restricted Person" means any of US Borrower and each Restricted
Subsidiary.

       "Restricted Subsidiary" means each Canadian Borrower, Devon Oklahoma,
Devon SFS and any other Subsidiary of US Borrower that is not an Unrestricted
Subsidiary.

       "S & P" means Standard & Poor's Ratings Services (a division of McGraw
Hill Companies, Inc.), or its successor.

       "Santa Fe Snyder Indentures" means the following Indentures of Devon SFS:

       (a)    Indenture dated as of June 1, 1999 between Devon SFS and The Bank
              of New York, as Trustee;

                                       25
<PAGE>   114

       (b)    First Supplemental Indenture dated as of June 14, 1999 between
              Devon SFS and The Bank of New York as Trustee, including the form
              of .05% Senior Note Due 2004;

       (c)    Indenture dated as of June 10, 1997 between Devon SFS and Texas
              Commerce Bank National Association, as Trustee;

       (d)    First Supplemental Indenture dated as of June 10, 1997 between
              Devon SFS and Texas Commerce Bank National Association Trustee;
              and

       (e)    Second Supplemental Indenture dated as of June 10, 1997 between
              Devon SFS and Texas Commerce Bank National Association.

       "Schedule I BA Reference Banks" means the Lenders listed in Schedule I to
the Bank Act (Canada) as are, at such time, designated by Canadian Agent, with
the prior consent of Canadian Borrowers (acting reasonably), as the Schedule I
BA Reference Banks.

       "Schedule II BA Reference Banks" means the Lenders listed in Schedule II
to the Bank Act (Canada) as are, at such time, designated by Canadian Agent,
with the prior consent of Canadian Borrowers (acting reasonably), as the
Schedule II BA Reference Banks.

       "Stamping Fee Rate" means with respect to any Bankers' Acceptance
accepted by any Canadian Resident Lender at any time, the Applicable Margin then
in effect; provided that if an Event of Default has occurred and is continuing,
the Stamping Fee Rate shall be increased by two hundred (200) Basis Points.

       "Subsidiary" means, with respect to any Person, any corporation,
association, partnership, limited liability company, joint venture, business
trust, or other business or corporate entity, enterprise or organization which
is directly or indirectly (through one or more intermediaries) controlled by or
owned fifty percent or more by such Person, provided that (a) associations,
joint ventures or other relationships (i) which are established pursuant to a
standard form operating agreement or similar agreement or which are partnerships
for purposes of federal income taxation only, (ii) which are not corporations or
partnerships (or subject to the Uniform Partnership Act) under applicable state
Law, and (iii) whose businesses are limited to the exploration, development and
operation of oil, gas or mineral properties, transportation and related
facilities and interests owned directly by the parties in such associations,
joint ventures or relationships, shall not be deemed to be "Subsidiaries" of
such Person and (b) associations, joint ventures or other relationships (i)
which are not corporations or partnerships under applicable provincial Law, and
(ii) whose businesses are limited to the exploration, development and operation
of oil, gas or mineral properties, transportation and related facilities and
interests owned directly by the parties in such associations, joint ventures or
relationships, shall not be deemed to be "Subsidiaries" of such Person.

       "Termination Event" means (a) the occurrence with respect to any ERISA
Plan of (i) a reportable event described in Sections 4043(b)(5) or (6) of ERISA
or (ii) any other reportable

                                       26
<PAGE>   115

event described in Section 4043(b) of ERISA other than a reportable event not
subject to the provision for 30-day notice to the Pension Benefit Guaranty
Corporation pursuant to a waiver by such corporation under Section 4043(a) of
ERISA, or (b) the withdrawal of any ERISA Affiliate from an ERISA Plan during a
plan year in which it was a "substantial employer" as defined in Section
4001(a)(2) of ERISA, or (c) the filing of a notice of intent to terminate any
ERISA Plan or the treatment of any ERISA Plan amendment as a termination under
Section 4041 of ERISA, or (d) the institution of proceedings to terminate any
ERISA Plan by the Pension Benefit Guaranty Corporation under Section 4042 of
ERISA, or (e) any other event or condition which might constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any ERISA Plan.

       "Total Capitalization" means the sum (without duplication) of (i) US
Borrower's Consolidated Total Funded Debt plus (ii) US Borrower's Consolidated
shareholder's equity.

       "Total Funded Debt" means Liabilities referred to in clauses (a), (b),
(c), (d), and (e) of the definition of "Indebtedness." Total Funded Debt shall
not include the PennzEnergy Exchangeable Debentures.

       "Tranche A Facility Usage" means, at the time in question, the aggregate
amount of Tranche A Loans and existing US LC Obligations outstanding at such
time under the US Agreement.

       "Tranche A Lenders" means Lenders designated as Tranche A Lenders on the
Lenders Schedule.

       "Tranche A Loan" has the meaning given it in Section 1.1(a) of the US
Agreement.

       "Tranche A Maturity Date" means October 15, 2004.

       "Tranche A Maximum Credit Amount" means $200,000,000.

       "Tranche A Note" has the meaning given it in Section 1.1(a) of the US
Agreement.

       "Tranche A Percentage Share" means with respect to any Tranche A Lender
(i) when used in Article I of the US Agreement or in Article II of the US
Agreement, in any Borrowing Notice thereunder or when no Tranche A Loans are
outstanding, the Tranche A percentage set forth opposite such Tranche A Lender's
name on the Lenders Schedule as modified by assignments of a Tranche A Lender's
rights and obligations under the US Agreement made by or to such Lender in
accordance with the terms of the US Agreement, and (ii) when used otherwise, the
percentage obtained by dividing (x) the sum of the unpaid principal balance of
such Lender's Tranche A Loans and such Lender's Percentage Share of the US LC
Obligations, by (y) the sum of the aggregate unpaid principal balance of all
Tranche A Loans at such time plus the aggregate amount of all US LC Obligations
outstanding at such time.

                                       27
<PAGE>   116

       "Tranche A Required Lenders" means Tranche A Lenders whose aggregate
Tranche A Percentage Shares equal or exceed fifty percent (50%).

       "Tranche B Conversion Date" means the date which is 364 days after the
Closing Date, or such later day to which the Tranche B Conversion Date is
extended pursuant to Section 1.1 of the US Agreement.

       "Tranche B Facility Fee Rate" means, on any date, the number of Basis
Points per annum set forth below based on the Applicable Rating Level on such
date:
<TABLE>
<CAPTION>

                   =============================================================
                            Applicable              Applicable Tranche B
                           Rating Level                Facility Fee Rate
                   -------------------------------------------------------------
                   <S>                              <C>
                             Level I                          9.0
                   -------------------------------------------------------------
                             Level II                        10.0
                   -------------------------------------------------------------
                             Level III                       12.5
                   -------------------------------------------------------------
                             Level IV                        15.0
                   -------------------------------------------------------------
                             Level V                         22.5
                   =============================================================
</TABLE>

       "Tranche B Facility Usage" means, at the time in question, the aggregate
amount of Tranche B Loans outstanding at such time under the US Agreement.

       "Tranche B Lenders" means Lenders designated as Tranche B Lenders on the
Lenders Schedule.

       "Tranche B Loan" has the meaning given it in Section 1.1(b) of the US
Agreement.

       "Tranche B Maturity Date" means the date which is two years and one day
after the Tranche B Conversion Date.

       "Tranche B Maximum Credit Amount" means $525,000,000 on the Closing Date,
as increased or decreased thereafter pursuant to Section 1.9 of the US Credit
Agreement or Section 1.12 of the Canadian Agreement, but in no event greater
than $625,000,000 or less than $425,000,000.

       "Tranche B Note" has the meaning given it in Section 1.1(b) of the US
Agreement.

       "Tranche B Percentage Share" means with respect to any Tranche B Lender
(i) when used in Article I of the US Agreement, in any Borrowing Notice
thereunder or when no Tranche B

                                       28
<PAGE>   117

Loans are outstanding, the Tranche B percentage set forth opposite such Tranche
B Lender's name on the Lenders Schedule as modified by assignments of a Tranche
B Lender's rights and obligations under the US Agreement made by or to such
Lender in accordance with the terms of the US Agreement, and (ii) when used
otherwise, the percentage obtained by dividing (x) the sum of the unpaid
principal balance of such Lender's Tranche B Loans, by (y) the sum of the
aggregate unpaid principal balance of all Tranche B Loans.

       "Tranche B Required Lenders" means Tranche B Lenders whose aggregate
Tranche B Percentage Shares equal or exceed fifty percent (50%).

       "Tranche B Revolving Period" means the period from the Closing Date until
the Tranche B Conversion Date.

       "Tribunal" means any government, any arbitration panel, any court or any
governmental department, commission, board, bureau, agency or instrumentality of
the United States of America or Canada or any state, province, commonwealth,
nation, territory, possession, county, parish, town, township, village or
municipality, whether now or hereafter constituted or existing.

       "Type" means (i) with respect to any US Loans, the characterization of
such US Loans as either US Base Rate Loans or US Dollar Eurodollar Loans and
(ii) with respect to any Canadian Advances, the characterization of such
Canadian Advances as Canadian Base Rate Loans, Canadian Prime Rate Loans, US
Dollar Eurodollar Loans, Canadian Dollar Eurodollar Loans or Bankers'
Acceptances.

       "Unrestricted Subsidiary" means any corporation, association,
partnership, limited liability company, joint venture, or other business or
corporate entity, enterprise or organization in which US Borrower does not
presently own an interest (directly or indirectly) which hereafter becomes a
Subsidiary of US Borrower and which, within 90 days thereafter, is designated as
an Unrestricted Subsidiary by US Borrower to US Agent, provided that US Borrower
may not designate as an Unrestricted Subsidiary any Subsidiary in which it has
made an Investment of more than US $100,000,000 (directly or indirectly) by any
means other than newly issued stock or treasury stock of US Borrower, which may
be used to make an Investment in Unrestricted Subsidiaries without limit and
provided further that in the event the book value of the assets of any
Unrestricted Subsidiary at any time exceeds US $100,000,000, such Subsidiary
shall cease to be an Unrestricted Subsidiary and shall automatically become a
Restricted Person. The following Subsidiaries of US Borrower shall initially be
designated as Unrestricted Subsidiaries:

       (1)     167496 Canada Ltd.
       (2)     172173 Canada Inc.
       (3)     410760 Alberta Ltd.
       (4)     655945 Alberta Ltd.
       (5)     658387 Alberta Inc.
       (6)     659502 Alberta Inc.
       (7)     661151 Alberta Ltd.
       (8)     728098 Alberta Ltd.

                                       29
<PAGE>   118

       (9)    746481 Alberta Ltd.
       (10)   853843 Alberta Ltd.
       (11)   892306 Alberta Ltd.
       (12)   Adobe Offshore Pipeline Company
       (13)   American Sulphur Export Corporation
       (14)   Amsulex, Inc.
       (15)   Azerbaijan International Operating Corporation
       (16)   B&N Co. A Limited Partnership
       (17)   Blackwood & Nichols Co. A Limited Partnership
       (18)   BN Coal, L.L.C.
       (19)   BN Non-Coal, L.L.C.
       (20)   Bonito Pipe Line Company
       (21)   Braemar Shipping Company Limited
       (22)   Cachuma Gas Processing Company
       (23)   Canadian Gas Gathering Systems II, Inc.
       (24)   Canoa Ranch Corporation
       (25)   Canyon Reef Carriers, Inc.
       (26)   Capitan Oil Pipeline Company
       (27)   Caspian International Petroleum Company
       (28)   Catclaw Pipeline, Inc.
       (29)   Ceara Star (Malta) Ltd.
       (30)   David Limited Partnership
       (31)   DBC, Inc.
       (32)   Devon Energy Petroleum Pipeline Company
       (33)   Devon Energy Offshore Pipeline Company
       (34)   Devon Acquisition Corp.
       (35)   Devon Energy Sinai, Inc.
       (36)   Devon Energy Intrastate Pipeline Company
       (37)   Devon Energy Brasil, Ltda.
       (38)   Devon Energy Suez, Inc.
       (39)   Devon Energy Red Sea, Inc.
       (40)   Devon Energy Egypt, Inc.
       (41)   Devon Energy International Company
       (42)   Devon Energy Partners A Limited Partnership
       (43)   Devon Energy Qatar Production, Inc.
       (44)   Devon Financing Trust
       (45)   Devon Energy Insurance Company Limited
       (46)   Devon Energy Canada, Ltd.
       (47)   Devon Production Corporation, a Nevada corporation
       (48)   Devon Energy Exploration Brazil, Inc.
       (49)   Devon Energy Caspian Corporation
       (50)   Devon Energy Canada Holding Corporation, an Alberta corporation
       (51)   Devon Energy Management Company, L.L.C.
       (52)   Devon Energy Beni Suef Inc.
       (53)   Devon-Blanco Company, an Oklahoma general partnership

                                       30
<PAGE>   119

       (54)   Fanar Petroleum Company
       (55)   Foothills Partnership
       (56)   Gulf Coast American Corp.
       (57)   Mexican Flats Service Company, Inc.
       (58)   Morrison Petroleums (Alberta) Ltd.
       (59)   Morrison Petroleums, Ltd.
       (60)   Morrison Gas Gathering Inc.
       (61)   Morrison Administration Corporation
       (62)   Morrison Nuclear Inc.
       (63)   Morrison Operating Company Ltd.
       (64)   Mountain Energy Inc.
       (65)   Northstar Energy Partnership
       (66)   Northstar Energy Inc.
       (67)   Northstar Energy Cogeneration Partnership #2
       (68)   Nueces Intrastate Pipe Line Company
       (69)   PennzEnergy (U.K.) Company
       (70)   Pennzoil Caspian Development Corporation
       (71)   Pennzoil Energy Marketing Company
       (72)   Pennzoil Qatar Inc.
       (73)   Pennzoil Gas Marketing Company
       (74)   Pennzoil Asiatic Inc.
       (75)   Pennzoil Petroleums Ltd.
       (76)   Pennzoil Resources Canada Ltd.
       (77)   Pennzoil Venezuela Corporation SA
       (78)   Pepco Partners, L.P.
       (79)   Petrolera Santa Fe (Columbia), Ltd.
       (80)   Polar Energy Marketing Corporation
       (81)   Richland Development Corporation
       (82)   Richland Properties Company, L.L.C.
       (83)   Richland Translation Company
       (84)   Sage Creek Processors, L.L.C.
       (85)   Santa Fe Energy Resources of Malaysia, Ltd.
       (86)   Santa Fe Energy Resources (Thai Holding), Ltd.
       (87)   Santa Fe Energy Resources South East Asia Limited
       (88)   Santa Fe Energy Resources Gabon (Agali), Ltd.
       (89)   Santa Fe Energy Resources (Bermuda) Limited
       (90)   Santa Fe Energy Resources (Brazil Holdings I), Ltd.
       (91)   Santa Fe Energy Resources Port Bouet Ltd.
       (92)   Santa Fe Energy Resources Bangko Ltd.
       (93)   Santa Fe Energy Resources Kepala Burung Limited
       (94)   Santa Fe Energy Resources of Gabon, Ltd.
       (95)   Santa Fe Platform Management, Inc.
       (96)   Santa Fe Energy Resources (Brazil Holdings II), Ltd.
       (97)   Santa Fe Energy Resources (New Ventures IV), Ltd.
       (98)   Santa Fe Energy Resources (Jabung), Ltd.

                                       31
<PAGE>   120

       (99)   Santa Fe Energy Company of Argentina
       (100)  Santa Fe Energy Resources of Bolivia, Inc.
       (101)  Santa Fe Energy Resources of Peru, Ltd.
       (102)  Santa Fe Energy Resources of Myanmar, Ltd.
       (103)  Santa Fe Energy Resources of Canada, Inc.
       (104)  Santa Fe Energy Resources (New Ventures III), Ltd.
       (105)  Santa Fe Energy Resources of Gabon (Mondah Bay), Ltd.
       (106)  Santa Fe Energy Resources (Cote D'Ivoire) Ltd.
       (107)  Santa Fe Energy Resources Congo, Ltd.
       (108)  Santa Fe Energy Resources (Thailand), Ltd.
       (109)  Santa Fe Energy Resources Limited
       (110)  Santa Fe Energy Resources (New Ventures II), Ltd.
       (111)  Santa Fe Energy Resources International, Ltd.
       (112)  Santa Fe Energy Resources of Ghana, Ltd.
       (113)  Santa Fe Energy Resources (Delaware), Ltd.
       (114)  Santa Fe Pacific Fuels Company
       (115)  Santa Fe Energy Resources of China, Ltd.
       (116)  Santa Fe Energy Resources of Morocco, Ltd.
       (117)  Santa Fe Energy Resources Pagatan Ltd.
       (118)  Security Purchasing, Inc.
       (119)  SFERI, Inc.
       (120)  SFR Petroleo Do Brazil Ltda.
       (121)  SFS (International), Ltd.
       (122)  SFS Malta Holding Company Ltd.
       (123)  SFS (France) SARL
       (124)  SFS Malta One, Inc.
       (125)  SFS (Holdings), Ltd.
       (126)  SFS Malta Two, Inc.
       (127)  SFS Malta International Trading Company Ltd.
       (128)  Sisquoc Gas Pipeline Company
       (129)  Snyder Gas Marketing, Inc.
       (130)  Snyder Fluid Technology, Inc.
       (131)  SOCO International Holdings, Inc.
       (132)  SOCO Louisiana Leasing, Inc.
       (133)  SOCO Gas Systems, Inc.
       (134)  SOCO International, Inc.
       (135)  SOCO Technologies, Inc.
       (136)  Strategic Trust Company
       (137)  Thunder Creek Gas Services, L.L.C.
       (138)  Tiburon Transport Company
       (139)  Trend Exploration (PNG) Party Ltd.
       (140)  Trend Argentina S.A.
       (141)  Vermejo Park Corporation
       (142)  Vermejo Minerals Corporation
       (143)  Wyoming Gathering and Production Company, Inc.

                                       32
<PAGE>   121

        "US Account" means an account established by Canadian Agent in New York
 into which funds to be advanced to Canadian Borrowers by Lenders in US Dollars
 and funds to be paid by Canadian Borrowers to Lenders in US Dollars will be
 deposited.

        "US Agent" means Bank of America, N.A., as administrative agent, under
 the US Agreement and its successors and assigns in such capacity.

        "US Agreement" means that certain Credit Agreement of even date herewith
 among US Borrower, US Agent and the Lenders, as it may be amended,
 supplemented, restated or otherwise modified and in effect from time to time.

        "US Base Rate" means, for any day, the rate per annum equal to the
 higher of (a) the Federal Funds Rate for such day plus one-half of one percent
 (0.5%) and (b) the US Reference Rate for such day. Any change in the US Base
 Rate due to a change in the US Reference Rate or the Federal Funds Rate shall
 be effective on the effective date of such change in the US Reference Rate or
 Federal Funds Rate. No US Base Rate charged by any Person shall ever exceed the
 Highest Lawful Rate.

        "US Base Rate Loan" means a US Loan made in US Dollars which bears
 interest at the US Base Rate.

        "US Borrower" means Devon Energy Corporation, a Delaware corporation.

        "US Dollar" or "US $" means the lawful currency of the United States of
America.

        "US Dollar Equivalent" means, with respect to an amount denominated in
 Canadian Dollars, the amount of US Dollars required to purchase the relevant
 stated amount of Canadian Dollars based on the Noon Rate.

        "US Dollar Eurodollar Loan" means a US Loan or a Canadian Loan, in each
 case, which bears interest at the Adjusted US Dollar Eurodollar Rate.

       "US Dollar Eurodollar Rate" means, for any US Dollar Eurodollar Loan
within a Borrowing and with respect to the related Interest Period therefor, (a)
the interest rate per annum (carried out to the fifth decimal place) equal to
the rate determined by the US Agent to be the offered rate that appears on the
page of the Telerate Screen that displays an average British Bankers Association
Interest Settlement Rate (such page currently being page number 3750) for
deposits in U.S. dollars (for delivery on the first day of such Interest Period)
with a term equivalent to such Interest Period, determined as of approximately
11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period, or (b) in the event the rate referenced in the preceding
subsection (a) does not appear on such page or service or such page or service
shall cease to be available, the rate per annum (carried out to the fifth
decimal place) equal to the rate determined by the US Agent to be the offered
rate on such other page or other service that displays an average British
Bankers Association Interest Settlement Rate for deposits in U.S. dollars (for
delivery on the first day of such Interest Period) with a term equivalent to
such Interest

                                       33
<PAGE>   122

Period, determined as of approximately 11:00 a.m. (London time) two Business
Days prior to the first day of such Interest Period, or (c) in the event the
rates referenced in the preceding subsections (a) and (b) are not available, the
rate per annum determined by the US Agent as the rate of interest at which
deposits in U.S. dollars (for delivery on the first day of such Interest Period)
in same day funds in the approximate amount of the applicable US Dollar
Eurodollar Loan and with a term equivalent to such Interest Period would be
offered by its London branch to major banks in the offshore U.S. dollar market
at their request at approximately 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period.

       "US Facility Commitment Period" means the period from and including the
Closing Date until the Tranche A Maturity Date (or, if earlier, the day on which
the obligations of Lenders to make US Loans hereunder or the obligations of US
LC Issuer to issue Letters of Credit hereunder have been terminated or the US
Notes first become due and payable in full).

       "US Facility Usage" means, at the time in question, the aggregate amount
of US Loans and existing US LC Obligations outstanding at such time under the US
Agreement.

       "US GAAP" means those generally accepted accounting principles and
practices which are recognized as such from time to time by the Financial
Accounting Standards Board (or any generally recognized successor) and which, in
the case of US Borrower and its Consolidated Subsidiaries, are applied for all
periods after the Closing Date in a manner consistent with the manner in which
such principles and practices were applied to the Initial Financial Statements.

       "US LC Issuer" means Bank of America, N.A. in its capacity as the issuer
of Letters of Credit under the US Agreement, and its successors in such
capacity.

       "US LC Obligations" means, at the time in question, with respect to the
US Agreement, the sum of all Matured US LC Obligations plus the maximum amounts
which US LC Issuer might then or thereafter be called upon to advance under all
Letters of Credit then outstanding.

       "US LC Sublimit" means US $75,000,000.

       "US Lenders" means each signatory to the US Agreement (other than US
Borrower), including Bank of America in its capacity as a US Lender and US Swing
Lender hereunder, rather than as US Agent and US LC Issuer, and the successors
of each such party as holder of a US Note.

       "US Loans" means the Tranche A Loans, the Tranche B Loans, Competitive
Bid Loans made under the US Agreement, and the US Swing Loans.

       "US Loan Documents" means the US Agreement, the US Notes issued under the
US Agreement, the Letters of Credit issued under the US Agreement, the LC
Applications related thereto, and all other agreements, certificates, documents,
instruments and writings at any time delivered in connection herewith or
therewith (exclusive of term sheets and commitment letters).

                                       34
<PAGE>   123

       "US Majority Lenders" means US Lenders whose aggregate Percentage Shares
under the US Agreement exceed sixty-six and two thirds percent (66 2/3%).

       "US Maximum Credit Amount" means the amount of US $725,000,000 on the
Closing Date, as increased or decreased thereafter by the amount of each
increase or decrease in the Tranche B Maximum Credit Amount pursuant to Section
1.9 of the US Credit Agreement or Section 1.12 of the Canadian Agreement, but in
no event greater than $825,000,000 or less than $625,000,000.
 .
       "US Notes" means the Tranche A Notes, the Tranche B Notes, the
Competitive Bid Notes issued under the US Agreement, and the US Swing Note.

       "US Obligations" means all Liabilities from time to time owing by any
Restricted Person to any Lender Party under or pursuant to any of the US Loan
Documents, including all US LC Obligations owing thereunder. "US Obligation"
means any part of the US Obligations.

       "US Re-allocation" has the meaning given it in Section 1.9 of the US
Agreement.

       "US Reference Rate" means, for any day, the rate of interest in effect
for such day as publicly announced from time to time by Bank of America as its
"prime rate." Such rate is a rate set by Bank of America based upon various
factors including Bank of America's costs and desired return, general economic
conditions and other factors, and is used as a reference point for pricing some
loans, which may be priced at, above, or below such announced rate. Any change
in such rate announced by Bank of America shall take effect at the opening of
business on the day specified in the public announcement of such change.

       "US Required Lenders" means US Lenders whose aggregate Percentage Shares
under the US Agreement equal or exceed fifty percent (50%).

       "US Swing Lender" means Bank of America, N.A., in its individual
capacity.

       "US Swing Loans" has the meaning given it in Section 1.1(f) of the US
Agreement.

       "US Swing Note" has the meaning given it in Section 1.1(f) of the US
Agreement.

       "US Swing Rate" means on any day a fluctuating rate of interest per annum
established from time to time by Bank of America, N.A. as its money market rate,
which rate may not be the lowest rate of interest charged by Bank of America,
N.A. to its customers, plus the Applicable Margin. The US Swing Rate shall never
exceed the Highest Lawful Rate.

       "US Swing Sublimit" means US $50,000,000.

       "Withholding Tax" has the meaning given it in Section 3.2(d) of the
Canadian Agreement.

                                       35
<PAGE>   124
                                                      Annex II - Lender Schedule

                                 BANK OF AMERICA
<TABLE>
<CAPTION>

US AGREEMENT
<S>                                                               <C>
Name of Affiliate that is Lender under US Agreement:              Bank of America, N.A.

Applicable Lending Office for US Loans:                           901 Main Street, 64(th) Floor
                                                                  Dallas, Texas 75202

Address for Notices:                                              901 Main Street, 64(th) Floor
                                                                  Dallas, Texas 75202
                                                                  Attention:  Denise A. Smith

US TRANCHE A
        Tranche A Note Amount (5 year):                           US$ 19,333,333.34
        Tranche A Percentage Share:                               9.66666%

US TRANCHE B
        Tranche B Note Amount (364 day):                          US$ 55,468,750.03
        Tranche B Percentage Share:                               8.875%

CANADIAN AGREEMENT

Name of Affiliate that is Lender under Canadian Agreement:        Bank of America Canada

                                                                  (CANADIAN RESIDENT LENDER)

Applicable Lending Office for Canadian Advances:                  200 Front Street West,
                                                                  Suite 2700
                                                                  Toronto, Ontario M5V3L2

Address for Notices:                                              200 Front Street West,
                                                                  Suite 2700
                                                                  Toronto, Ontario M5V3L2
                                                                  Attention:  Richard J. Hall

CANADIAN FACILITY
        Canadian Note Amount:                                     US$ 33,281,250.02
        Canadian Percentage Share:                                8.875%
</TABLE>

<PAGE>   125

                                                      Annex II - Lender Schedule

                            FIRST UNION NATIONAL BANK
<TABLE>
<CAPTION>

US AGREEMENT
<S>                                                               <C>
Name of Affiliate that is Lender under US Agreement:              First Union National Bank

Applicable Lending Office for US Loans:                           1001 Fannin Street
                                                                  Suite 2255
                                                                  Houston, Texas 77002

Address for Notices:                                              1001 Fannin Street
                                                                  Suite 2255
                                                                  Houston, Texas 77002
                                                                  Attention: David Humphreys

US TRANCHE A
        Tranche A Note Amount (5 year):                           US$ 19,333,333.33
        Tranche A Percentage Share:                               9.66666%

US TRANCHE B
        Tranche B Note Amount (364 day):                          US$ 55,468,750.03
        Tranche B Percentage Share:                               8.875%

CANADIAN AGREEMENT

Name of Affiliate that is Lender under Canadian Agreement:        First Union National Bank

                                                                  (NON-RESIDENT LENDER)

Applicable Lending Office for Canadian Advances:                  1001 Fannin Street
                                                                  Suite 2255
                                                                  Houston, Texas 77002

Address for Notices:                                              1001 Fannin Street
                                                                  Suite 2255
                                                                  Houston, Texas 77002
                                                                  Attention: David Humphreys

CANADIAN FACILITY
        Canadian Note Amount:                                     US$ 33,281,250.02
        Canadian Percentage Share:                                8.875%
</TABLE>

<PAGE>   126

                                                      Annex II - Lender Schedule

                              TORONTO-DOMINION BANK
<TABLE>
<CAPTION>

US AGREEMENT
<S>                                                                   <C>
Name of Affiliate that is Lender under US Agreement:                  Toronto-Dominion (Texas), Inc.

Applicable Lending Office for US Loans:                               909 Fannin Street
                                                                      Suite 1700
                                                                      Houston, Texas 77010

Address for Notices:                                                  909 Fannin Street
                                                                      Suite 1700
                                                                      Houston, Texas 770010
                                                                      Attention: Mark Green

US TRANCHE A
        Tranche A Note Amount (5 year)                                US$ 6,666,666.67
        Tranche A Percentage Share:                                   3.33333%

US TRANCHE B
        Not a Tranche B Lender

CANADIAN AGREEMENT

        Not a Canadian Lender
</TABLE>
<PAGE>   127

                                                      Annex II - Lender Schedule

                      WESTDEUTSCHE LANDESBANK GIROZENTRALE
<TABLE>
<CAPTION>

US AGREEMENT
<S>                                                               <C>
Name of Affiliate that is Lender under US Agreement:              Westdeutsche Landesbank
                                                                  Girozentrale

Applicable Lending Office for US Loans:                           1211 Avenue of the Americas
                                                                  New York, NY 10036

Address for Notices:                                              1211 Avenue of the Americas
                                                                  New York, NY 10036
                                                                  Attention: Felicia LaForgia

US TRANCHE A
        Tranche A Note Amount (5 year):                           US$ 12,000,000
        Tranche A Percentage Share:                               6.0%

US TRANCHE B
        Tranche B Note Amount (364 day):                          US$ 34,375,000.00
        Tranche B Percentage Share:                               5.50%

CANADIAN AGREEMENT

Name of Affiliate that is Lender under Canadian Agreement:        Westdeutsche Landesbank
                                                                  Girozentrale

                                                                  (NON-RESIDENT LENDER)

Applicable Lending Office for Canadian Advances:                  1211 Avenue of the Americas
                                                                  New York, NY 10036

Address for Notices:                                              1211 Avenue of the Americas
                                                                  New York, NY 10036
                                                                  Attention: Felicia LaForgia

CANADIAN FACILITY
        Canadian Note Amount:                                     US$ 20,625,000.00
        Canadian Percentage Share:                                5.50%
</TABLE>
<PAGE>   128

                                                      Annex II - Lender Schedule

                              THE BANK OF NEW YORK
<TABLE>
<CAPTION>

US AGREEMENT
<S>                                                               <C>
Name of Affiliate that is Lender under US Agreement:              The Bank of New York

Applicable Lending Office for US Loans:                           One Wall Street
                                                                  New York, NY 10286

Address for Notices:                                              One Wall Street
                                                                  New York, NY 10286
                                                                  Attention: Raymond Palmer

US TRANCHE A
        Tranche A Note Amount (5 year):                           US$ 12,000,000
        Tranche A Percentage Share:                               6.0%

US TRANCHE B
        Tranche B Note Amount (364 day):                          US$ 34,375,000.00
        Tranche B Percentage Share:                               5.50%

CANADIAN AGREEMENT

Name of Affiliate that is Lender under Canadian Agreement:        The Bank of New York

                                                                  (NON-RESIDENT LENDER)

Applicable Lending Office for Canadian Advances:                  One Wall Street
                                                                  New York, NY 10286

Address for Notices:                                              One Wall Street
                                                                  New York, NY 10286
                                                                  Attention: Raymond Palmer

CANADIAN FACILITY
        Canadian Note Amount:                                     US$ 20,625,000.00
        Canadian Percentage Share:                                5.50%
</TABLE>
<PAGE>   129

                                                      Annex II - Lender Schedule

                              ROYAL BANK OF CANADA
<TABLE>
<CAPTION>

US AGREEMENT
<S>                                                               <C>
Name of Affiliate that is Lender under US Agreement:              Royal Bank of Canada

Applicable Lending Office for US Loans:                           One Liberty Plaza, 4(th) Floor
                                                                  New York, New York 10006

Address for Notices:                                              One Liberty Plaza, 4(th) Floor
                                                                  New York, New York 10006
                                                                  Attention: Asst. Manager, Loan
                                                                  Processing

US TRANCHE A
        Tranche A Note Amount (5 year):                           US$ 16,000,000
        Tranche A Percentage Share:                               8.0%

US TRANCHE B
        Tranche B Note Amount (364 day):                          US$ 34,375,000.00
        Tranche B Percentage Share:                               5.50%

CANADIAN AGREEMENT

Name of Affiliate that is Lender under Canadian Agreement:        Royal Bank of Canada

                                                                  (CANADIAN RESIDENT LENDER)

Applicable Lending Office for Canadian Advances:                  Corporate Banking-Multinational
                                                                  335-8th Avenue, S.W., Suite 2300
                                                                  Calgary, Alberta  T2P 1C9

Address for Notices:                                              Corporate Banking-Multinational
                                                                  335-8th Avenue, S.W., Suite 2300
                                                                  Calgary, Alberta  T2P 1C9
                                                                  Attention:  Asst. Manager, Loan
                                                                  Processing

CANADIAN FACILITY
        Canadian Note Amount:                                     US$ 20,625,000.00
        Canadian Percentage Share:                                5.50%
</TABLE>
<PAGE>   130

                                                      Annex II - Lender Schedule

                                BANK OF MONTREAL
<TABLE>
<CAPTION>

US AGREEMENT
<S>                                                         <C>
Name of Affiliate that is Lender under US Agreement:        Bank of Montreal

Applicable Lending Office for US Loans:                     115 South La Salle
                                                            11th Floor
                                                            Chicago, Illinois 60603
                                                            Attention: Phyllis Lee

Address for Notices:                                        700 Louisiana, Suite 4400
                                                            Houston, Texas 77002
                                                            Attention: Kathleen Doyle

US TRANCHE A
        Tranche A Note Amount (5 year):                     US$ 16,000,000
        Tranche A Percentage Share:                         8.0%

US TRANCHE B
        Not a Tranche B Lender

CANADIAN AGREEMENT

        Not a Canadian Lender

</TABLE>
<PAGE>   131

                                                      Annex II - Lender Schedule

                                    BANK ONE
<TABLE>
<CAPTION>

US AGREEMENT
<S>                                                               <C>
Name of Affiliate that is Lender under US Agreement:              Bank One, NA

Applicable Lending Office for US Loans:                           1 Bank One Plaza
                                                                  Mail Code: IL1-0634
                                                                  Chicago, Illinois 60670

Address for Notices:                                              1100 Louisiana, Suite 3200
                                                                  Houston, Texas 77002
                                                                  Attention: Dixon Schultz

US TRANCHE A
        Tranche A Note Amount (5 year):                           US$ 19,333,333.33
        Tranche A Percentage Share:                               9.66666%

US TRANCHE B
        Tranche B Note Amount (364 day):                          US$ 55,468,750.03
        Tranche B Percentage Share:                               8.875%

CANADIAN AGREEMENT

Name of Affiliate that is Lender under Canadian Agreement:        Bank One Canada

                                                                  (CANADIAN RESIDENT LENDER)

Applicable Lending Office for Canadian Advances:                  161 Bay Street, Suite 4240
                                                                  Toronto, Ontario M5J 2S1

Address for Notices:                                              1100 Louisiana, Suite 3200
                                                                  Houston, Texas 77002
                                                                  Attention: Ron Dierker

CANADIAN FACILITY
        Canadian Note Amount:                                     US$ 33,281,250.02
        Canadian Percentage Share:                                8.875%
</TABLE>

<PAGE>   132

                                                      Annex II - Lender Schedule

                             SUNTRUST BANK, ATLANTA
<TABLE>
<CAPTION>

US AGREEMENT
<S>                                                               <C>
Name of Affiliate that is Lender under US Agreement:              SunTrust Bank, Atlanta

Applicable Lending Office for US Loans:                           303 Peachtree Street, N.E.
                                                                  Third Floor, MC-1929
                                                                  Atlanta, Georgia 30308

Address for Notices:                                              303 Peachtree Street, N.E.
                                                                  Third Floor, MC-1929
                                                                  Atlanta, Georgia 30308
                                                                  Attention: Todd Davis

US TRANCHE A
        Tranche A Note Amount (5 year):                           US$ 6,666,666.67
        Tranche A Percentage Share:                               3.33333%

US TRANCHE B
        Tranche B Note Amount (364 day):                          US$ 14,322,916.56
        Tranche B Percentage Share:                               2.29166665%

CANADIAN AGREEMENT

Name of Affiliate that is Lender under Canadian Agreement:        SunTrust Bank, Atlanta

                                                                  (NON-RESIDENT LENDER)

Applicable Lending Office for Canadian Advances:                  303 Peachtree Street, N.E.
                                                                  Third Floor, MC-1929
                                                                  Atlanta, Georgia 30308

Address for Notices:                                              303 Peachtree Street, N.E.
                                                                  Third Floor, MC-1929
                                                                  Atlanta, Georgia 30308
                                                                  Attention: Todd Davis

CANADIAN FACILITY
        Canadian Note Amount:                                     US$ 8,593,749.94
        Canadian Percentage Share:                                2.29166665%
</TABLE>
<PAGE>   133

                                                      Annex II - Lender Schedule

                            THE CHASE MANHATTAN BANK
<TABLE>
<CAPTION>

US AGREEMENT
<S>                                                               <C>
Name of Affiliate that is Lender under US Agreement:              The Chase Manhattan Bank

Applicable Lending Office for US Loans:                           600 Travis Street, 20th Floor
                                                                  Houston, Texas 77002-8086

Address for Notices:                                              600 Travis Street, 20th Floor
                                                                  Houston, Texas 77002-8086
                                                                  Attention: Peter Licalzi

US TRANCHE A
        Tranche A Note Amount (5 year):                           US$ 19,333,333.33
        Tranche A Percentage Share:                               9.66666%

US TRANCHE B
        Tranche B Note Amount (364 day):                          US$ 55,468,750.03
        Tranche B Percentage Share:                               8.875%

CANADIAN AGREEMENT

Name of Affiliate that is Lender under Canadian Agreement:        The Chase Manhattan Bank

                                                                  (NON-RESIDENT LENDER)

Applicable Lending Office for Canadian Advances:                  600 Travis Street, 20th Floor
                                                                  Houston, Texas 77002-8086

Address for Notices:                                              600 Travis Street, 20th Floor
                                                                  Houston, Texas 77002-8086
                                                                  Attention: Peter Licalzi

CANADIAN FACILITY
        Canadian Note Amount:                                     US$ 33,281,250.02
        Canadian Percentage Share:                                8.875%
</TABLE>
<PAGE>   134

                                                      Annex II - Lender Schedule

                                    UMB BANK
<TABLE>
<CAPTION>

US AGREEMENT
<S>                                                               <C>
Name of Affiliate that is Lender under US Agreement:              UMB Bank

Applicable Lending Office for US Loans:                           204 N. Robinson
                                                                  Oklahoma City, OK 73102

Address for Notices:                                              204 N. Robinson
                                                                  Oklahoma City, OK 73102
                                                                  Attention: Richard Lehrter

US TRANCHE A
        Tranche A Note Amount (5 year):                           US$ 4,000,000
        Tranche A Percentage Share:                               2.0%

US TRANCHE B
        Tranche B Note Amount (364 day):                          US$ 12,500,000.00
        Tranche B Percentage Share:                               2.0%

CANADIAN AGREEMENT

Name of Affiliate that is Lender under Canadian Agreement:        UMB Bank

                                                                  (NON-RESIDENT LENDER)

Applicable Lending Office for Canadian Advances:                  204 N. Robinson
                                                                  Oklahoma City, OK 73102

Address for Notices:                                              204 N. Robinson
                                                                  Oklahoma City, OK 73102
                                                                  Attention: Richard Lehrter

CANADIAN FACILITY
        Canadian Note Amount:                                     US$ 7,500,000.00
        Canadian Percentage Share:                                2.0%
</TABLE>
<PAGE>   135

                                                      Annex II - Lender Schedule

                                    CIBC INC.
<TABLE>
<CAPTION>

US AGREEMENT
<S>                                                               <C>
Name of Affiliate that is Lender under US Agreement:              CIBC Inc.

Applicable Lending Office for US Loans:                           2 Paces West
                                                                  2727 Paces Ferry Road
                                                                  Suite 1200
                                                                  Atlanta, Georgia 30339
                                                                  Attention: Kathryn McGovern

Address for Notices:                                              1600 Smith Street, Suite 3100
                                                                  Houston, TX 77002
                                                                  Attention: Paul Jordan

US TRANCHE A
        Tranche A Note Amount (5 year):                           US$ 12,000,000
        Tranche A Percentage Share:                               6.0%

US TRANCHE B
        Tranche B Note Amount (364 day):                          US$ 17,968,750.00
        Tranche B Percentage Share:                               2.875%

CANADIAN AGREEMENT

Name of Affiliate that is Lender under Canadian Agreement:        Canadian Imperial Bank of
                                                                  Commerce

                                                                  (CANADIAN RESIDENT LENDER)

Applicable Lending Office for Canadian Advances:                  40 Dundas Street West
                                                                  5th Floor
                                                                  Toronto, Ontario M5G 2C2

Address for Notices:                                              855 Second Street, S.W.
                                                                  10th Floor, Banker's Hall
                                                                  Calgary, Alberta T2P 4J7
                                                                  Attention: Joelle Schellenberg

CANADIAN FACILITY
        Canadian Note Amount:                                     US$ 10,781,250.00
        Canadian Percentage Share:                                2.875%
</TABLE>
<PAGE>   136

                                                      Annex II - Lender Schedule

                                DEUTSCHE BANK AG
<TABLE>
<CAPTION>

US AGREEMENT
<S>                                                               <C>
Name of Affiliate that is Lender under US Agreement:              Deutsche Bank AG New York
                                                                  and/or Cayman Islands
                                                                  Branches

Applicable Lending Office for US Loans:                           31 West 52nd Street
                                                                  New York, NY 10019

Address for Notices:                                              31 West 52nd Street
                                                                  New York, NY 10019
                                                                  Attention: Joel Makowsky

US TRANCHE A
        Tranche A Note Amount (5 year):                           US$ 9,333,333.33
        Tranche A Percentage Share:                               4.66666%

US TRANCHE B
        Tranche B Note Amount (364 day):                          US$ 31,770,833.34
        Tranche B Percentage Share:                               5.08333333%

CANADIAN AGREEMENT

Name of Affiliate that is Lender under Canadian Agreement:        Deutsche Bank AG New York
                                                                  and/or Cayman Islands
                                                                        Branches

                                                                  (NON-RESIDENT LENDER)

Applicable Lending Office for Canadian Advances:                  31 West 52nd Street
                                                                  New York, NY 10019

Address for Notices:                                              31 West 52nd Street
                                                                  New York, NY 10019
                                                                  Attention: Joel Makowsky

CANADIAN FACILITY
        Canadian Note Amount:                                     US$ 19,062,500.00
        Canadian Percentage Share:                                5.08333333%
</TABLE>
<PAGE>   137

                                                      Annex II - Lender Schedule

                    MORGAN GUARANTY TRUST COMPANY OF NEW YORK
<TABLE>
<CAPTION>

US AGREEMENT
<S>                                                               <C>
Name of Affiliate that is Lender under US Agreement:              Morgan Guaranty Trust
                                                                  Company of New York

Applicable Lending Office for US Loans:                           60 Wall Street
                                                                  New York, NY  10260-0060

Address for Notices:                                              60 Wall Street
                                                                  New York, NY 10260-0060
                                                                  Attention: Dennis Wilczek

US TRANCHE A
        Tranche A Note Amount (5 year):                           US$ 12,000,000
        Tranche A Percentage Share:                               6.0%

US TRANCHE B
        Tranche B Note Amount (364 day):                          US$ 25,781,250.00
        Tranche B Percentage Share:                               4.125%

CANADIAN AGREEMENT

Name of Affiliate that is Lender under Canadian Agreement:        J.P. Morgan Canada

                                                                  (CANADIAN RESIDENT LENDER)

Applicable Lending Office for Canadian Advances:                  Royal Bank Plaza
                                                                  South Tower, Suite 2200
                                                                  Toronto, Ontario  M5J 2J2

Address for Notices:                                              60 Wall Street
                                                                  New York, NY  10260-0060
                                                                  Attention: Dennis Wilczek

CANADIAN FACILITY
        Canadian Note Amount:                                     US$ 15,468,750.00
        Canadian Percentage Share:                                4.125%
</TABLE>
<PAGE>   138

                                                      Annex II - Lender Schedule

                                 CITIBANK, N.A.
<TABLE>
<CAPTION>

US AGREEMENT
<S>                                                               <C>
Name of Affiliate that is Lender under US Agreement:               Citibank, N.A.

Applicable Lending Office for US Loans:                            399 Park Avenue
                                                                   New York, New York 10043

Borrowing Notices:                                                 One Penn's Way
                                                                   New Castle Delaware 19720
                                                                   Attention: David Chiu

Address for Notices:                                               1200 Smith Street, Suite 2000
                                                                   Houston, Texas 77002
                                                                   Attention: James F. Rielly

US TRANCHE A
        Tranche A Note Amount (5 year):                            US$ 16,000,000
        Tranche A Percentage Share:                                8.0%

US TRANCHE B
        Tranche B Note Amount (364 day):                           US$ 45,312,500.00
        Tranche B Percentage Share:                                7.25%

CANADIAN AGREEMENT

Name of Affiliate that is Lender under Canadian Agreement:         Citibank Canada

                                                                   (CANADIAN RESIDENT LENDER)

Applicable Lending Office for Canadian Advances:                   400 Third Avenue SW
                                                                   Suite 4210
                                                                   Calgary, Alberta T2P 4H2

Address for Notices:                                               400 Third Avenue SW
                                                                   Suite 4210
                                                                   Calgary, Alberta T2P 4H2
                                                                   Attention:  Diane Gould

                                                         cc:       1200 Smith Street, Suite 2000
                                                                   Houston, Texas 77002
                                                                   Attention: James F. Rielly

CANADIAN FACILITY
        Canadian Note Amount:                                      US$ 27,187,500.00
        Canadian Percentage Share:                                 7.25%
</TABLE>
<PAGE>   139

                                                      Annex II - Lender Schedule

                               ABN AMRO BANK, N.V.
<TABLE>
<CAPTION>

US AGREEMENT
<S>                                                                <C>
Name of Affiliate that is Lender under US Agreement:               ABN AMRO Bank, N.V.

Applicable Lending Office for US Loans:                            208 South LaSalle, Suite 1500
                                                                   Chicago, Illinois 60604-1003
                                                                   Attention: Loan Administration

Address for Notices:                                               208 South LaSalle, Suite 1500
                                                                   Chicago, Illinois 60604-1003
                                                                   Attention: Dina Tucci-Albro

                                                         cc:       Three Riverway Suite 1700
                                                                   Houston, Texas 77056
                                                                   Attention: Jamie A. Conn

US TRANCHE A
        Not a Tranche A Lender

US TRANCHE B
        Tranche B Note Amount (364 day):                           US$ 45,312,500.00
        Tranche B Percentage Share:                                7.25%

CANADIAN AGREEMENT

Name of Affiliate that is Lender under Canadian Agreement:          ABN AMRO Bank Canada

                                                                    (CANADIAN RESIDENT LENDER)

Applicable Lending Office for Canadian Advances:                    208 South LaSalle, Suite 1500
                                                                    Chicago, Illinois 60604-1003
                                                                    Attention: Loan Administration

Address for Notices:                                                208 South LaSalle, Suite 1500
                                                                    Chicago, Illinois 60604-1003
                                                                    Attention: Dina Tucci-Albro

                                                         cc:        Three Riverway Suite 1700
                                                                    Houston, Texas 77056
                                                                    Attention: Jamie A. Conn

CANADIAN FACILITY
        Canadian Note Amount:                                       US$ 27,187,500.00
        Canadian Percentage Share:                                  7.25%
</TABLE>

<PAGE>   140

                                                      Annex II - Lender Schedule

<PAGE>   141

                                                      Annex II - Lender Schedule

                       BAYERISCHE LANDESBANK GIROZENTRALE
<TABLE>
<CAPTION>

US AGREEMENT
<S>                                                               <C>
Name of Affiliate that is Lender under US Agreement:              Bayerische Landesbank
                                                                  Girozentrale, Cayman Islands
                                                                  Branch

Applicable Lending Office for US Loans:                           560 Lexington Avenue
                                                                  New York, New York 10022

Address for Notices:                                              560 Lexington Avenue
                                                                  New York, New York 10022
                                                                  Attention: Stephen Christenson

US TRANCHE A
        Not a Tranche A Lender

US TRANCHE B
        Tranche B Note Amount (364 day):                          US$ 29,687,500.00
        Tranche B Percentage Share:                               4.75%

CANADIAN AGREEMENT

Name of Affiliate that is Lender under Canadian Agreement:        Bayerische Landesbank
                                                                  Girozentrale, Cayman Islands
                                                                  Branch

                                                                  (NON-RESIDENT LENDER)

Applicable Lending Office for Canadian Advances:                  560 Lexington Avenue
                                                                  New York, New York 10022

Address for Notices:                                              560 Lexington Avenue
                                                                  New York, New York 10022
                                                                  Attention: Stephen Christenson

CANADIAN FACILITY
        Canadian Note Amount:                                     US$ 17,812,500.00
        Canadian Percentage Share:                                4.75%
</TABLE>
<PAGE>   142

                                                      Annex II - Lender Schedule

                             THE FUJI BANK, LIMITED
<TABLE>
<CAPTION>

US AGREEMENT
<S>                                                               <C>
Name of Affiliate that is Lender under US Agreement:              The Fuji Bank, Limited

Applicable Lending Office for US Loans:                           2 World Trade Center
                                                                  79th Floor
                                                                  New York, New York 10048

Address for Notices:                                              1221 McKinney Street
                                                                  Suite 4100
                                                                  Houston, Texas 77010
                                                                  Attention: Jacques Azagury

US TRANCHE A
        Not a Tranche A Lender

US TRANCHE B
        Tranche B Note Amount (364 day):                          US$ 29,687,500.00
        Tranche B Percentage Share:                               4.75%

CANADIAN AGREEMENT

Name of Affiliate that is Lender under Canadian Agreement:        The Fuji Bank, Limited

                                                                  (NON-RESIDENT LENDER)

Applicable Lending Office for Canadian Advances:                  2 World Trade Center
                                                                  79th Floor
                                                                  New York, New York 10048

Address for Notices:                                              1221 McKinney Street
                                                                  Suite 4100
                                                                  Houston, Texas 77010
                                                                  Attention: Jacques Azagury

CANADIAN FACILITY
        Canadian Note Amount:                                     US$ 17,812,500.00
        Canadian Percentage Share:                                4.75%
</TABLE>
<PAGE>   143

                                                      Annex II - Lender Schedule

                                 CREDIT LYONNAIS
<TABLE>
<CAPTION>

US AGREEMENT
<S>                                                               <C>
Name of Affiliate that is Lender under US Agreement:              Credit Lyonnais

Applicable Lending Office for US Loans:                           1000 Louisiana Street
                                                                  Suite 5360
                                                                  Houston, Texas 77002

Address for Notices:                                              1000 Louisiana Street
                                                                  Suite 5360
                                                                  Houston, Texas 77002
                                                                  Attention: John Grandstaff

US TRANCHE A
        Not a Tranche A Lender

US TRANCHE B
        Tranche B Note Amount (364 day):                          US$ 29,687,500.00
        Tranche B Percentage Share:                               4.75%

CANADIAN AGREEMENT

Name of Affiliate that is Lender under Canadian Agreement:        Credit Lyonnais

                                                                  (NON-RESIDENT LENDER)

Applicable Lending Office for Canadian Advances:                  1000 Louisiana Street
                                                                  Suite 5360
                                                                  Houston, Texas 77002

Address for Notices:                                              1000 Louisiana Street
                                                                  Suite 5360
                                                                  Houston, Texas 77002
                                                                  Attention: John Grandstaff

CANADIAN FACILITY
        Canadian Note Amount:                                     US$ 17,812,500.00
        Canadian Percentage Share:                                4.75%
</TABLE>
<PAGE>   144

                                                      Annex II - Lender Schedule

                           BANK OF TOKYO - MITSUBISHI
<TABLE>
<CAPTION>

US AGREEMENT
<S>                                                               <C>
Name of Affiliate that is Lender under US Agreement:              Bank of Tokyo - Mitsubishi
                                                                  Ltd. Houston Agency

Applicable Lending Office for US Loans:                           1100 Louisiana Street,
                                                                  Suite 2800
                                                                  Houston, Texas 77002-5216

Address for Notices:                                              1100 Louisiana Street,
                                                                  Suite 2800
                                                                  Houston, Texas 77002-5216
                                                                  Attention: John M. McIntyre

US TRANCHE A
        Not a Tranche A Lender

US TRANCHE B
        Tranche B Note Amount (364 day):                          US$ 17,968,750.00
        Tranche B Percentage Share:                               2.875%

CANADIAN AGREEMENT

Name of Affiliate that is Lender under Canadian Agreement:        Bank of Tokyo - Mitsubishi
                                                                  (Canada)

                                                                  (CANADIAN RESIDENT LENDER)

Applicable Lending Office for Canadian Advances:                  Suite 2410 Park Place
                                                                  666 Burrard Street
                                                                  Vancouver, B.C.  V6C 3L1

Address for Notices:                                              Suite 2410 Park Place
                                                                  666 Burrard Street
                                                                  Vancouver, B.C.  V6C 3L1
                                                                  Attention: Davis Stewart

CANADIAN FACILITY
        Canadian Note Amount:                                     US$ 10,781,250.00
        Canadian Percentage Share:                                2.875%
</TABLE>

<PAGE>   145
                                                                      SCHEDULE 1

                               DISCLOSURE SCHEDULE

               To supplement the following sections of the US Agreement of which
this Schedule is a part, US Borrower hereby makes the following disclosures:

       1.     Section 4.2(d) Other Obligations:

              None

       2.     Section 5.7 Litigation:

              None.

       3.     Section 5.8 ERISA Plans and Liabilities:

    Retirement Plan for Non-Bargaining Employees of Devon Energy Corporation

    1989 Amendment to Pension Plan for Employees of Devon Energy Corporation

    Retirement Trust for Non-Bargaining Employees of Devon Energy Corporation

        Retirement Plan for Former Employees of Devon Energy Corporation

        Retirement Trust for Former Employees of Devon Energy Corporation

                PennzEnergy's Salaried Employees Retirement Plan

       Agreement dated January 20, 1997 between Pennzoil Products Company
         and Chauffeurs, Teamsters and Helpers Local No. 175 affiliated
            with the International Brotherhood of Teamsters, AFL-CIO

             Santa Fe Energy Resources, Inc. Retirement Income Plan

               Santa Fe Energy Resources Offshore Retirement Plan

       4.     Section 5.9 Environmental and Other Laws:

              None.

       5.     Section 5.10 Names and Places of Business:

              Names.  US Borrower was formerly known as Devon Delaware
                      Corporation.

                     Devon Energy Corporation (Oklahoma) was formerly known as
                     Devon Energy Corporation.

                     Mountain Energy Inc. was formerly known as 628838 Alberta
                     Inc.

                     Kerr-McGee Canadian Onshore Ltd. was amalgamated into Devon
<PAGE>   146

                     Energy Canada Corporation on December 31, 1996.

                     On March 14, 1997, Northstar Energy Corporation acquired
                     all of the outstanding shares of Morrison Petroleums Ltd.,
                     a publicly traded oil and gas company. On January 30, 1998,
                     Northstar Energy Corporation amalgamated with three of its
                     wholly owned subsidiaries, PLC-Windsor Ltd.,
                     Northstar-Outrider Acquisition Corporation and PowerLink
                     Services Ltd. to form Northstar Energy Corporation. On July
                     31, 1998, Morrison Petroleums Ltd. was wound up into
                     Northstar Energy Corporation.

                     On August 29, 2000, Devon Merger Co. was merged into Santa
                     Fe Snyder Corporation which changed its name to Devon SFS
                     Operating, Inc.

            Offices. The principal places of business and other significant
                     offices of the Restricted Persons are as follows:

                     Devon Energy Corporation
                     20 North Broadway, Suite 1500
                     Oklahoma City, Oklahoma 73102

                     Devon Energy Corporation
                     Two Allen Center, Suite 3300
                     1200 Smith Street
                     Houston, Texas 77002

                     Devon Energy Canada Corporation
                     3000, 400 - 3rd Avenue, S.W.
                     Calgary, Alberta T2P 4H2
                     CANADA

                     Northstar Energy Corporation
                     3000, 400 - 3rd Avenue, S.W.
                     Calgary, Alberta T2P 4H2
                     CANADA

                     Devon SFS Operating, Inc.
                     840 Gessner, Suite 1400
                     Houston, Texas 77024

       6. Section 5.11 US Borrower's Subsidiaries: The following entities are,
directly or indirectly, wholly owned by US Borrower (unless otherwise noted):

                     Devon Energy Corporation (Oklahoma), an Oklahoma
                     corporation

                                        2
<PAGE>   147

                    Devon Energy Management Company, L.L.C.

                    Devon Energy Canada Holding Corporation, an Alberta
                           corporation

                    Devon Energy Canada Corporation, an Alberta corporation

                    DBC, Inc., an Oklahoma corporation

                    Devon Acquisition Corporation, a Delaware corporation

                    Devon Production Corporation, a Nevada corporation

                    Catclaw Pipeline, Inc., an Oklahoma corporation

                    Northstar Energy Corporation (100% of common shares)

                    Devon Energy Canada, Ltd.

                    Devon Energy Insurance Company Limited

                    Richland Development Corporation

                    Canoa Ranch Corporation

                    Richland Transistion Company

                    Strategic Trust Company

                    Vermejo Park Corporation

                    Vermejo Minerals Corporation

                    Devon Financing Trust (100% of common securities)

                    Thunder Creek Gas Services, L.L.C. (75%)

                    Sage Creek Processors, L.L.C.

                    American Sulphur Export Corporation
                           (50%) which owns 100% of Amsulex, Inc.

                    172173 Canada Inc.

                    410760 Alberta Ltd.

                    659502 Alberta Inc.

                    661151 Alberta Ltd.

                    728098 Alberta Ltd.

                                        3
<PAGE>   148

                    David Limited Partnership

                    Foothills Partnership (1%)

                    Morrison Nuclear Inc.

                    Devon Energy Partners A Limited Partnership

                    Morrison Petroleums (Alberta) Ltd.

                    Mountain Energy Inc.

                    Northstar Energy Partnership

                    Devon Energy Production Company, L.P.

                    Bonito Pipe Line Company

                    Cachuma Gas Processing Company

                    Canyon Reef Carriers, Inc.

                    Capitan Oil Pipeline Company

                    Pennzoil Energy Marketing Company

                    Pennzoil Gas Marketing Company

                    Devon Energy International Company

                    Pennzoil Asiatic Inc.

                    Devon Energy Egypt, Inc.

                    Pennzoil Qatar Inc.

                    Azerbaijan International Operating Corporation (5%)

                    Caspian International Petroleum Company (30%)

                    Devon Energy Beni Suef Inc.

                    Devon Energy Caspian Corporation

                    Pennzoil Caspian Development Corporation

                    Devon Energy Exploration Brazil, Inc.

                    Devon Energy Brasil, Ltda.

                                        4
<PAGE>   149

                       Devon Energy Qatar Production, Inc.

                       Devon Energy Red Sea, Inc.

                       Fanar Petroleum Company (50%)

                       Devon Energy Sinai, Inc.

                       Devon Energy Suez, Inc.

                       Pennzoil Venezuela Corporation SA

                       Nueces Intrastate Pipe Line Company

                       Devon Energy Intrastate Pipeline Company

                       Devon Energy Offshore Pipeline Company

                       Devon Energy Petroleum Pipeline Company

                       Pennzoil Petroleums Ltd.

                       Pennzoil Resources Canada Ltd.

                       PennzEnergy (U.K.) Company

                       Pepco Partners, L.P. (20%)

                       Sisquoc Gas Pipeline Company

                       Tiburon Transport Company

                       655945 Alberta Ltd.

                       658387 Alberta Inc.

                       853843 Alberta Ltd.

                       892306 Alberta Ltd..

                       Canadian Gas Gathering Systems II, Inc.

                       167496 Canada Ltd. (64%)

                       Devon-Blanco Company

                       Morrison Administration Corporation

                       Morrison Capital, Inc.

                                        5

<PAGE>   150

                       Morrison Gas Gathering Inc.

                       Morrison Operating Company Ltd.

                       Morrison Petroleums, Ltd.

                       Northstar Energy Cogeneration Partnership #2

                       Northstar Energy Inc.

                       Polar Energy Marketing Corporation

                       Richland Properties Company, L.L.C.

                       BN Coal, L.L.C.

                       BN Non-Coal, L.L.C.

                       B&N Co. A Limited Partnership

                       Blackwood & Nichols Co. A Limited Partnership

                       Devon SFS Operating, Inc. (formerly Devon Merger
                              Co./Santa Fe Snyder Corporation)

                       Santa Fe Platform Management, Inc.

                       Security Purchasing, Inc.

                       Snyder Fluid Technology, Inc.

                       Snyder Gas Marketing, Inc.

                       SOCO Technologies, Inc.

                       SOCO Gas Systems, Inc.

                       SOCO Louisiana Leasing, Inc.

                       Adobe Offshore Pipeline Company

                       Santa Fe Pacific Fuels Company

                       Mexican Flats Service Company, Inc.

                       Wyoming Gathering and Production Company, Inc.

                       SOCO International, Inc.

                       SOCO International Holdings, Inc.

                                        6
<PAGE>   151

                        Santa Fe Energy Resources (Delaware), Ltd.

                        SFERI, Inc.

                        Santa Fe Energy Resources of Ghana, Ltd.

                        Santa Fe Energy Resources International, Ltd.

                        Santa Fe Energy Resources (New Ventures II), Ltd.

                        Santa Fe Energy Resources (New Ventures III), Ltd.

                        Santa Fe Energy Resources (New Ventures IV), Ltd.

                        Santa Fe Energy Resources (Cote D'Ivoire) Ltd.

                        Santa Fe Energy Resources Port Bouet Ltd.

                        Santa Fe Energy Resources (Bermuda) Limited.

                        Santa Fe Energy Resources Kepala Burung Limited

                        Santa Fe Energy Resources Bangko Ltd.

                        Santa Fe Energy Resources Pagatan Ltd.

                        Santa Fe Energy Resources of China, Ltd.

                        Santa Fe Energy Resources of Malaysia, Ltd.

                        Santa Fe Energy Resources (Thai Holding), Ltd.

                        Santa Fe Energy Resources (Thailand), Ltd.

                        Santa Fe Energy Resources Congo, Ltd.

                        Santa Fe Energy Resources Gabon (Agali), Ltd.

                        Santa Fe Energy Resources (Brazil Holdings I), Ltd.

                        Santa Fe Energy Resources (Brazil Holdings II), Ltd.

                        SFR Petroleo Do Brazil Ltda.

                        SFS (International), Ltd.

                        SFS (Holdings), Ltd.

                        Santa Fe Energy Resources (Jabung), Ltd.

                                       7
<PAGE>   152

                       Santa Fe Energy Resources Limited

                       Santa Fe Energy Resources of Gabon, Ltd.

                       Petrolera Santa Fe S.A.

                       Braemar Shipping Company Limited

                       Santa Fe Energy Resources South East Asia Limited

                       746481 Alberta Ltd.

                       Trend Exploration (PNG) Party Ltd.

                       Santa Fe Energy Resources of Gabon (Mondah Bay), Ltd.

                       Santa Fe Energy Resources of Canada, Inc.

                       Santa Fe Energy Resources of Myanmar, Ltd.

                       Petrolera Santa Fe (Columbia), Ltd.

                       Santa Fe Energy Resources of Peru, Ltd.

                       Santa Fe Energy Resources of Bolivia, Inc.

                       Santa Fe Energy Company of Argentina

                       Trend Argentina S.A.

                       Santa Fe Energy Resources of Morocco, Ltd.

                       Gulf Coast American Corp.

                       SFS Malta One, Inc.

                       SFS Malta Two, Inc.

                       SFS (France) SARL

                       Ceara Star (Malta) Ltd.

                       SFS Malta Holding Company Ltd.

                       SFS Malta International Trading Company Ltd.

               7.      Section 5.14 Insider:

                       None.

                                        8
<PAGE>   153
                                                                     EXHIBIT A-1

                                PROMISSORY NOTE

US $_____________               Toronto, Ontario                 August 29, 2000

     FOR VALUE RECEIVED, the undersigned, ____________________, an Alberta
corporation, (herein called "Borrower"), hereby promises to pay to the order of
___________________________ (herein called "Lender") the principal sum of
_________________________________ US Dollars (US $_____________), or, if greater
or less, the aggregate unpaid principal amount of the Canadian Loan made under
this Note by Lender to Borrower pursuant to the terms of the Credit Agreement
(as hereinafter defined), together with interest on the unpaid principal balance
thereof as hereinafter set forth, both principal and interest payable as herein
provided in lawful money of the United States of America at the offices of
Canadian Agent under the Credit Agreement, 200 Front Street West, Suite 2700,
Toronto, Ontario M5V3L2 or at such other place within Toronto, Ontario as from
time to time may be designated by the holder of this Note.

     This Note (a) is issued and delivered under that certain Canadian Credit
Agreement of even date herewith among Borrower, *[Northstar Energy
Corporation/Devon Energy Canada Corporation], Bank of America Canada,
individually and as administrative agent ("Canadian Agent"), and the lenders
(including Lender) referred to therein (herein, as from time to time
supplemented, amended or restated, called the "Credit Agreement"), and is a
"Canadian Note" as defined therein and (b) is subject to the terms and
provisions of the Credit Agreement, which contains provisions for payments and
prepayments hereunder and acceleration of the maturity hereof upon the happening
of certain stated events. Payments on this Note shall be made and applied as
provided herein and in the Credit Agreement. Reference is hereby made to the
Credit Agreement for a description of certain rights, limitations of rights,
obligations and duties of the parties hereto and for the meanings assigned to
terms used and not defined herein.

     The principal amount of this Note, together with all interest accrued
hereon, shall be due and payable in full on the Canadian Facility Maturity Date.

     Canadian Base Rate Loans (exclusive of any past due principal or interest)
from time to time outstanding shall bear interest on each day outstanding at the
Canadian US Dollar Base Rate in effect on such day; provided that if an Event of
Default has occurred and is continuing, Canadian Base Rate Loans shall bear
interest on each day outstanding at the applicable Default Rate in effect on
such day. On each Interest Payment Date Borrower shall pay to the holder hereof
all unpaid interest which has accrued on the Canadian Base Rate Loans to but not
including such Interest Payment Date. Canadian Prime Rate Loans (exclusive of
any past due principal or interest) from time to time outstanding shall bear
interest on each day outstanding at the Canadian Prime Rate in effect on such
day; provided that if an Event of Default has occurred and is continuing,
Canadian Prime Rate Loans shall bear interest on each day outstanding at the
<PAGE>   154
applicable Default Rate in effect on such day. On each Interest Payment Date
Borrower shall pay to the holder hereof all unpaid interest which has accrued on
the Canadian Prime Rate Loans to but not including such Interest Payment Date.
Each US Dollar Eurodollar Loan (exclusive of any past due principal or interest)
shall bear interest on each day during the related Interest Period at the
related Adjusted US Dollar Eurodollar Rate in effect on such day; provided that
if an Event of Default has occurred and is continuing, such US Dollar Eurodollar
Loan shall bear interest on each day outstanding at the applicable Default Rate
in effect on such day. On each Interest Payment Date relating to such US Dollar
Eurodollar Loan, Borrower shall pay to the holder hereof all unpaid interest
which has accrued on such US Dollar Eurodollar Loan to but not including such
Interest Payment Date. Each Canadian Dollar Eurodollar Loan (exclusive of any
past due principal or interest) shall bear interest on each day during the
related Interest Period at the related Adjusted Canadian Dollar Eurodollar Rate
in effect on such day; provided that if an Event of Default has occurred and is
continuing, such Canadian Dollar Eurodollar Loan shall bear interest on each day
outstanding at the applicable Default Rate in effect on such day. On each
Interest Payment Date relating to such Canadian Dollar Eurodollar Loan, Borrower
shall pay to the holder hereof all unpaid interest which has accrued on such
Canadian Dollar Eurodollar Loan to but not including such Interest Payment Date.
All past due principal of and past due interest on the Loans shall bear interest
on each day outstanding at the applicable Default Rate in effect on such day,
and such interest shall be due and payable daily as it accrues. Notwithstanding
the foregoing provisions of this paragraph: (a) this Note shall never bear
interest in excess of the Highest Lawful Rate, and (b) if at any time the rate
at which interest is payable on this Note is limited by the Highest Lawful Rate
(by the foregoing subsection (a) or by reference to the Highest Lawful Rate in
the definitions of Canadian US Dollar Base Rate, Canadian Prime Rate, Adjusted
US Dollar Eurodollar Rate, Adjusted Canadian Dollar Eurodollar Rate, and Default
Rate), this Note shall bear interest at the Highest Lawful Rate and shall
continue to bear interest at the Highest Lawful Rate until such time as the
total amount of interest accrued hereon equals (but does not exceed) the total
amount of interest which would have accrued hereon had there been no Highest
Lawful Rate applicable hereto.

     Notwithstanding the foregoing paragraph and all other provisions of this
Note, in no event shall the interest payable hereon, whether before or after
maturity, exceed the maximum amount of interest which, under applicable Law, may
be charged on this Note, and this Note is expressly made subject to the
provisions of the Credit Agreement which more fully set out the limitations on
how interest accrues hereon.

     If this Note is placed in the hands of a lawyer for collection after
default, or if all or any part of the indebtedness represented hereby is proved,
established or collected in any court or in any bankruptcy, receivership, debtor
relief, probate or other court proceedings, Borrower and all endorsers, sureties
and guarantors of this Note jointly and severally agree to pay reasonable
attorneys' fees and collection costs to the holder hereof in addition to the
principal and interest payable hereunder.

     Borrower and all endorsers, sureties and guarantors of this Note hereby
severally waive demand, presentment, notice of demand and of dishonor and
nonpayment of this Note, protest, notice of protest, notice of intention to
accelerate the maturity of this Note, declaration or notice

                                       2
<PAGE>   155
of acceleration of the maturity of this Note, diligence in collecting, the
bringing of any suit against any party and any notice of or defense on account
of any extensions, renewals, partial payments or changes in any manner of or in
this Note or in any of its terms, provisions and covenants, or any releases or
substitutions of any security, or any delay, indulgence or other act of any
trustee or any holder hereof, whether before or after maturity.

            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

                                       3
<PAGE>   156
     THIS NOTE AND THE RIGHTS AND DUTIES OF THE PARTIES HERETO SHALL BE GOVERNED
BY THE LAWS OF THE PROVINCE OF ALBERTA (WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW), EXCEPT TO THE EXTENT THE SAME ARE GOVERNED BY APPLICABLE
FEDERAL LAW.

                                       [NORTHSTAR ENERGY
                                       CORPORATION/DEVON ENERGY CANADA
                                       CORPORATION]

                                       By:
                                           -------------------------------------
                                           Name:
                                           Title:

                                       4
<PAGE>   157
                                                                     EXHIBIT A-2

                                 PROMISSORY NOTE

US $25,000,000                   Toronto, Ontario                August 29, 2000

     FOR VALUE RECEIVED, the undersigned, ____________________, an Alberta
corporation, (herein called "Borrower"), hereby promises to pay to the order of
Bank of America Canada (herein called "Lender") the principal sum of Twenty Five
Million US Dollars (US $25,000,000), or, if greater or less, the aggregate
unpaid principal amount of the Canadian Loan made under this Note by Lender to
Borrower pursuant to the terms of the Credit Agreement (as hereinafter defined),
together with interest on the unpaid principal balance thereof as hereinafter
set forth, both principal and interest payable as herein provided in lawful
money of the United States of America at the offices of Canadian Agent under the
Credit Agreement, 200 Front Street West, Suite 2700, Toronto, Ontario M5V3L2 or
at such other place within Toronto, Ontario as from time to time may be
designated by the holder of this Note.

     This Note (a) is issued and delivered under that certain Canadian Credit
Agreement of even date herewith among Borrower, *[Northstar Energy
Corporation/Devon Energy Canada Corporation], Bank of America Canada,
individually and as administrative agent ("Canadian Agent"), and the lenders
(including Lender) referred to therein (herein, as from time to time
supplemented, amended or restated, called the "Credit Agreement"), and is a
"Canadian Swing Note" as defined therein and (b) is subject to the terms and
provisions of the Credit Agreement, which contains provisions for payments and
prepayments hereunder and acceleration of the maturity hereof upon the happening
of certain stated events. Payments on this Note shall be made and applied as
provided herein and in the Credit Agreement. Reference is hereby made to the
Credit Agreement for a description of certain rights, limitations of rights,
obligations and duties of the parties hereto and for the meanings assigned to
terms used and not defined herein.

     The principal amount of this Note, together with all interest accrued
hereon, shall be due and payable in full on the Conversion Date.

     Canadian Swing Loans (exclusive of any past due principal or interest) from
time to time outstanding shall bear interest on each day outstanding at the
Canadian Swing Rate in effect on such day; provided that if an Event of Default
has occurred and is continuing, Canadian Swing Loans shall bear interest on each
day outstanding at the applicable Default Rate in effect on such day. On each
Interest Payment Date Borrower shall pay to the holder hereof all unpaid
interest which has accrued on the Canadian Swing Loans to but not including such
Interest Payment Date. All past due principal of and past due interest on the
Canadian Swing Loans shall bear interest on each day outstanding at the
applicable Default Rate in effect on such day, and such interest shall be due
and payable daily as it accrues. Notwithstanding the foregoing provisions of
this paragraph: (a) this Note shall never bear interest in excess of the Highest
Lawful Rate, and (b) if at any time the rate at which interest is payable on
this Note is limited by the Highest Lawful Rate

                                       5
<PAGE>   158
(by the foregoing subsection (a) or by reference to the Highest Lawful Rate in
the definitions of Canadian Swing Rate and Default Rate), this Note shall bear
interest at the Highest Lawful Rate and shall continue to bear interest at the
Highest Lawful Rate until such time as the total amount of interest accrued
hereon equals (but does not exceed) the total amount of interest which would
have accrued hereon had there been no Highest Lawful Rate applicable hereto.

     Notwithstanding the foregoing paragraph and all other provisions of this
Note, in no event shall the interest payable hereon, whether before or after
maturity, exceed the maximum amount of interest which, under applicable Law, may
be charged on this Note, and this Note is expressly made subject to the
provisions of the Credit Agreement which more fully set out the limitations on
how interest accrues hereon.

     If this Note is placed in the hands of a lawyer for collection after
default, or if all or any part of the indebtedness represented hereby is proved,
established or collected in any court or in any bankruptcy, receivership, debtor
relief, probate or other court proceedings, Borrower and all endorsers, sureties
and guarantors of this Note jointly and severally agree to pay reasonable
attorneys' fees and collection costs to the holder hereof in addition to the
principal and interest payable hereunder.

     Borrower and all endorsers, sureties and guarantors of this Note hereby
severally waive demand, presentment, notice of demand and of dishonor and
nonpayment of this Note, protest, notice of protest, notice of intention to
accelerate the maturity of this Note, declaration or notice of acceleration of
the maturity of this Note, diligence in collecting, the bringing of any suit
against any party and any notice of or defense on account of any extensions,
renewals, partial payments or changes in any manner of or in this Note or in any
of its terms, provisions and covenants, or any releases or substitutions of any
security, or any delay, indulgence or other act of any trustee or any holder
hereof, whether before or after maturity.

            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

                                       6
<PAGE>   159
     THIS NOTE AND THE RIGHTS AND DUTIES OF THE PARTIES HERETO SHALL BE
GOVERNED BY THE LAWS OF THE PROVINCE OF A LBERTA (WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW), EXCEPT TO THE EXTENT THE SAME ARE GOVERNED BY
APPLICABLE FEDERAL LAW.

                                       [NORTHSTAR ENERGY
                                       CORPORATION/DEVON ENERGY CANADA
                                       CORPORATION]

                                       By:
                                           -------------------------------------
                                           Name:
                                           Title:

                                       7
<PAGE>   160
[SPECIFY WHICH CANADIAN BORROWER IS BORROWING]
                                                                       EXHIBIT B

                                BORROWING NOTICE

     Reference is made to that certain Canadian Credit Agreement dated as of
August 29, 2000 (as from time to time amended, the "Canadian Agreement"), by and
among Northstar Energy Corporation, an Alberta corporation and Devon Energy
Canada Corporation, an Alberta corporation (collectively, "Canadian Borrowers"),
Bank of America Canada, individually and as administrative agent ("Canadian
Agent"), and certain financial institutions ("Lenders"). Terms which are defined
in the Canadian Agreement are used herein with the meanings given them in the
Canadian Agreement. Pursuant to the terms of the Canadian Agreement, *[Northstar
Energy Corporation/Devon Energy Canada Corporation] hereby requests Canadian
Lenders *[Canadian Swing Lender] to make Canadian Advances [Canadian Swing
Loans] to [Northstar Energy and/or Devon Energy Canada] as follows:

<TABLE>
<S>                                                                            <C>
     Aggregate amount of Borrowing:                                      C/US] $_____________

     Type of Canadian Advances in Borrowing:                                    _____________
     [Canadian Base Rate Loans, Canadian Prime Rate Loans,
     US Dollar Eurodollar Loans, Canadian Dollar Eurodollar Loans,
     Bankers' Acceptances, or Canadian Swing Loans]
          Canadian Resident Lender BA Purchase                                  _____  (check for yes)

     Date on which Borrowing is to be made:                                     _____________

     Length of Interest Period for Eurodollar Loans                             _____________ months
     [1, 2, 3 or 6 months]

     Term applicable for Bankers' Acceptances                                   _____________ days
     [30, 60, 90 or 180 days]
</TABLE>

            [CANADIAN ADVANCES IN BANKERS' ACCEPTANCES WILL INCLUDE,
                        AS REQUIRED, CANADIAN ADVANCES IN
          CANADIAN DOLLAR EURODOLLAR LOANS BY NON-RESIDENT LENDERS.]

     To induce Lenders to make such Canadian Advances, *[Northstar Energy
Corporation/Devon Energy Canada Corporation] hereby represents, warrants,
acknowledges, and agrees to and with Canadian Agent and each Lender that:

          (a) The officer of such Canadian Borrower signing this instrument is
     the duly elected, qualified and acting officer of such Canadian Borrower as
     indicated below such officer's signature hereto having all necessary
     authority to act for such Canadian Borrower in making the request herein
     contained.

                                       8
<PAGE>   161
          (b) The representations and warranties of such Canadian Borrower set
     forth in the Canadian Agreement and the other Canadian Loan Documents are
     true and correct on and as of the date hereof (except to the extent that
     the facts on which such representations and warranties are based have been
     changed by the extension of credit under the Canadian Agreement), with the
     same effect as though such representations and warranties had been made on
     and as of the date hereof.

          (c) There does not exist on the date hereof any condition or event
     which constitutes a Default which has not been waived in writing as
     provided in Section 10.1(a) of the Canadian Agreement; nor will any such
     Default exist upon such Canadian Borrower's receipt and application of the
     Canadian Loans requested hereby. Such Canadian Borrower will use the
     Canadian Loans hereby requested in compliance with Section 1.10 of the
     Canadian Agreement.

          (d) Except to the extent waived in writing as provided in Section
     10.1(a) of the Canadian Agreement, such Canadian Borrower has performed and
     complied with all agreements and conditions in the Canadian Agreement
     required to be performed or complied with by such Canadian Borrower on or
     prior to the date hereof, and each of the conditions precedent to Canadian
     Loans contained in the Canadian Agreement remains satisfied.

          (e) The Canadian Facility Usage, after the making of the Canadian
     Advances requested hereby, will not be in excess of the Canadian Maximum
     Credit Amount on the date requested for the making of such Canadian
     Advances. *[The Canadian Swing Loans, after the making of the Canadian
     Swing Loans requested hereby, will not be in excess of the Canadian Swing
     Sublimit.]

          (f) The Canadian Loan Documents have not been modified, amended or
     supplemented by any unwritten representations or promises, by any course of
     dealing, or by any other means not provided for in Section 10.1(a) of the
     Canadian Agreement. The Canadian Agreement and the other Canadian Loan
     Documents are hereby ratified, approved, and confirmed in all respects.

     The officer of the Canadian Borrower signing this instrument hereby
certifies that, to the best of his knowledge after due inquiry, the above
representations, warranties, acknowledgments, and agreements of such Canadian
Borrower are true, correct and complete.

                                       9
<PAGE>   162
     IN WITNESS WHEREOF, this instrument is executed as of _________, ________.

                              *[NORTHSTAR ENERGY
                              CORPORATION/DEVON ENERGY CANADA
                              CORPORATION]

                                       By:
                                           -------------------------------------
                                           Name:
                                           Title:

<PAGE>   163
                                                                       EXHIBIT C

                         CONTINUATION/CONVERSION NOTICE

     Reference is made to that certain Canadian Credit Agreement dated as of
August 29, 2000 (as from time to time amended, the "Canadian Agreement"), by and
among Northstar Energy Corporation, an Alberta corporation, and Devon Energy
Canada Corporation, an Alberta corporation (collectively, "Canadian Borrowers"),
Bank of America Canada, individually and as administrative agent ("Canadian
Agent"), and certain financial institutions ("Lenders"). Terms which are defined
in the Canadian Agreement are used herein with the meanings given them in the
Canadian Agreement.

     *[Northstar Energy Corporation/Devon Energy Canada Corporation] hereby
requests a conversion or continuation of existing Canadian Advances [Canadian
Swing Loans] into a new Borrowing pursuant to Section 1.3 of the Canadian
Agreement as follows:

     Existing Borrowing(s) to be continued or converted:

          US $_______________________ of US Dollar Eurodollar Loans with
          Eurodollar Interest Period ending _______________________

          C $_______________________ of Canadian Dollar Eurodollar Loans with
          Eurodollar Interest Period ending _______________________

          US $_______________________ of Canadian Base Rate Loans

          C $_______________________ of Canadian Prime Rate Loans

          C $_______________________ of Bankers' Acceptances with a term of [30,
          60, 90, or 180] days (including, as required, Non-resident Lender
          Canadian Dollar Eurodollar Loans

             Canadian Resident Lender Purchase          ________ (check for yes)

          C $_______________________ of Canadian Swing Loans

     If being combined with new Canadian Advances,_______________________ [US/C]
$_______________________ of new Canadian Advances to be advanced
on_______________________,

     Aggregate amount of new Borrowing:                      [US/C] $___________

                                       10
<PAGE>   164

     Type of Canadian Advances in new Borrowing:                     ___________

     [Canadian Base Rate Loans, Canadian Prime Rate Loans,
     US Dollar Eurodollar Loans, Canadian Dollar Eurodollar
     Loans, or Bankers' Acceptances]
            Canadian Resident Lender BA Purchase           _____ (check for yes)

     Date of continuation or conversion:                             ___________

     Length of Eurodollar Interest Period for US Dollar
     Eurodollar Loans (1, 2, 3 or 6 months):                  ___________ months

     Length of Eurodollar Interest Period for
     Canadian Dollar Eurodollar Loans
     (1, 2, 3 or 6 months):                                   ___________ months

     Term applicable for Bankers' Acceptances
     (30, 60, 90 or 180 days):                                ___________ days

[CANADIAN A DVANCES IN BANKERS' ACCEPTANCES WILL INCLUDE, AS REQUIRED, CANADIAN
ADVANCES IN CANADIAN DOLLAR EURODOLLAR LOANS BY NON - RESIDENT LENDERS.]

     To meet the conditions set out in the Canadian Agreement for such
conversion/continuation, such Canadian Borrower hereby represents, warrants,
acknowledges, and agrees to and with Canadian Agent and each Lender that:

          (a) The officer of such Canadian Borrower signing this instrument is
     the duly elected, qualified and acting officer of such Canadian Borrower as
     indicated below such officer's signature hereto having all necessary
     authority to act for such Canadian Borrower in making the request herein
     contained.

          (b) There does not exist on the date hereof any condition or event
     which constitutes a Default which has not been waived in writing as
     provided in Section 10.1(a) of the Canadian Agreement.

          (c) The Canadian Loan Documents have not been modified, amended or
     supplemented by any unwritten representations or promises, by any course of
     dealing, or by any other means not provided for in Section 10.1(a) of the
     Canadian Agreement. The Canadian Agreement and the other Canadian Loan
     Documents are hereby ratified, approved, and confirmed in all respects.

     The officer of the Canadian Borrower signing this instrument hereby
certifies that, to the best of his knowledge after due inquiry, the above
representations, warranties, acknowledgements, and agreements of such Canadian
Borrower are true, correct and complete.

                                       11
<PAGE>   165
     IN WITNESS WHEREOF this instrument is executed as of _____________________.

                                       *[NORTHSTAR ENERGY
                                       CORPORATION/DEVON ENERGY CANADA
                                       CORPORATION]

                                       By:
                                           -------------------------------------
                                           Name:
                                           Title:

                                       12
<PAGE>   166
                                                                       EXHIBIT D

                            CERTIFICATE ACCOMPANYING
                              FINANCIAL STATEMENTS

     Reference is made to that certain Canadian Credit Agreement dated as of
August 29, 2000 (as from time to time amended, the "Canadian Agreement"), by and
among Northstar Energy Corporation, an Alberta corporation and Devon Energy
Canada Corporation, an Alberta corporation (collectively, "Canadian Borrowers"),
Bank of America Canada, individually and as administrative agent ("Canadian
Agent"), as Agent, and certain financial institutions ("Lenders"), which
Canadian Agreement is in full force and effect on the date hereof. Terms which
are defined in the Canadian Agreement are used herein with the meanings given
them in the Canadian Agreement.

     This Certificate is furnished pursuant to Section 6.1(b) of the Canadian
Agreement. Together herewith US Borrower and Canadian Borrowers are furnishing
to Canadian Agent and each Lender US Borrower's *[audited/unaudited] financial
statements (the "Financial Statements") as at ______________ (the "Reporting
Date"). US Borrower and each Canadian Borrower hereby represents, warrants, and
acknowledges to Canadian Agent and each Lender that:

          (a) the officer of US Borrower signing this instrument is the duly
     elected, qualified and acting [President/Senior Vice President -
     Finance/Treasurer/Vice President - Accounting] of US Borrower;

          (b) the Financial Statements are accurate and complete and satisfy the
     requirements of the Canadian Agreement;

          (c) attached hereto is a schedule of calculations showing [US
     Borrower's] compliance as of the Reporting Date with the requirements of
     Sections ____________ of the Canadian Agreement *[and [US Borrower's]
     non-compliance as of such date with the requirements of
     Section(s)___________________ of the Agreement];

          (d) on the Reporting Date [US Borrower] was, and on the date hereof
     [US Borrower] is, in full compliance with the disclosure requirements of
     Section 6.2(c) and 6.4 of the Canadian Agreement, and no Default otherwise
     existed on the Reporting Date or otherwise exists on the date of this
     instrument *[except for Default(s) under Section(s) ___________ of the
     Canadian Agreement, which *[is/are] more fully described on a schedule
     attached hereto].

          (e) *[Unless otherwise disclosed on a schedule attached hereto,] Each
     Canadian Borrower confirms that the representations and warranties of such
     Canadian Borrower set forth in the Canadian Agreement and the other
     Canadian Loan Documents are true and correct on and as of the date hereof
     (except to the extent that the facts on

<PAGE>   167
     which such representations and warranties are based have been changed by
     the extension of credit under the Agreement), with the same effect as
     though such representations and warranties had been made on and as of the
     date hereof.

     The officer of each Borrower signing this instrument hereby certifies that
he has reviewed the Canadian Loan Documents and the Financial Statements and has
otherwise undertaken such inquiry as is in his opinion necessary to enable him
to express an informed opinion with respect to the above representations,
warranties and acknowledgments of such Borrower and, to the best of his
knowledge, such representations, warranties, and acknowledgments are true,
correct and complete.

     IN WITNESS WHEREOF, this instrument is executed as of ____________, ______.

                                       DEVON ENERGY CORPORATION

                                       By:
                                           -------------------------------------
                                           Name:
                                           Title:

                                       NORTHSTAR ENERGY CORPORATION

                                       By:
                                           -------------------------------------
                                           Name:
                                           Title:

                                       DEVON ENERGY CANADA CORPORATION

                                       By:
                                           -------------------------------------
                                           Name:
                                           Title:

                                       2
<PAGE>   168
                                                                       EXHIBIT E

                    OPINION OF COUNSEL FOR RESTRICTED PERSONS

                                [To Be Inserted]

<PAGE>   169
                                                                       EXHIBIT F

                            ASSIGNMENT AND ACCEPTANCE

     Reference is made to that certain Canadian Credit Agreement dated as of
August 29, 2000 (as from time to time amended, the "Canadian Agreement"), by and
among Northstar Energy Corporation, an Alberta corporation, and Devon Energy
Canada Corporation, an Alberta corporation (collectively, "Canadian Borrowers"),
Bank of America Canada, individually and as administrative agent ("Canadian
Agent"), and certain financial institutions ("Lenders"). Terms which are defined
in the Canadian Agreement are used herein with the meanings given them in the
Canadian Agreement.

     The "Assignor" and the "Assignee" referred to on Schedule 1 agree as
follows:

     1. The Assignor hereby sells and assigns to the Assignee, without recourse
and without representation or warranty except as expressly set forth herein, and
the Assignee hereby purchases and assumes from the Assignor, an interest in and
to the Assignor's rights and obligations under the Canadian Agreement and the
other Canadian Loan Documents as of the date hereof equal to the percentage
interest specified on Schedule 1 of all outstanding rights and obligations under
the Canadian Agreement and the other Canadian Loan Documents. After giving
effect to such sale and assignment, the Assignee's Canadian Maximum Credit
Amount and the amount of the Canadian Loans owing to the Assignee will be as set
forth on Schedule 1.

     2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Canadian Loan
Documents or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Canadian Loan Documents or any other instrument or
document furnished pursuant thereto; (iii) makes no representation or warranty
and assumes no responsibility with respect to the financial condition of any
Restricted Person or the performance or observance by any Restricted Person of
any of its obligations under the Canadian Loan Documents or any other instrument
or document furnished pursuant thereto; and (iv) attaches the Canadian Note held
by the Assignor and requests that Canadian Agent exchange such Canadian Note for
new Canadian Notes payable to the order of the Assignee in an amount equal to
the Canadian Maximum Credit Amount assumed by the Assignee pursuant hereto and
to the Assignor in an amount equal to the Canadian Maximum Credit Amount
retained by the Assignor, if any, as specified on Schedule 1.

     3. The Assignee (i) confirms that it has received a copy of the Canadian
Agreement, together with copies of the financial statements referred to in
Section 6.2 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, independently and without
reliance upon Canadian Agent, the Assignor or any other Lender and based on such

<PAGE>   170
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Canadian
Agreement; (iii) confirms that it is an Eligible Transferee; (iv) appoints and
authorizes Canadian Agent to take such action as agent on its behalf and to
exercise such powers and discretion under the Canadian Agreement as are
delegated to Canadian Agent by the terms thereof, together with such powers and
discretion as are reasonably incidental thereto; and (v) agrees that it will
perform in accordance with their terms all of the obligations that by the terms
of the Canadian Agreement are required to be performed by it as a Lender.

     4. Following the execution of this Assignment and Acceptance, it will be
delivered to Canadian Agent for acceptance and recording by Canadian Agent. The
effective date for this Assignment and Acceptance (the "Effective Date") shall
be the date of acceptance hereof by Canadian Agent, unless otherwise specified
on Schedule 1.

     5. Upon such acceptance and recording by Canadian Agent, as of the
Effective Date, (i) the Assignee shall be a party to the Canadian Agreement and,
to the extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Canadian Agreement.

     6. Upon such acceptance and recording by Canadian Agent, from and after the
Effective Date, Canadian Agent shall make all payments under the Canadian
Agreement and the Canadian Notes in respect of the interest assigned hereby
(including, without limitation, all payments of principal, interest and
commitment fees with respect thereto) to the Assignee. The Assignor and Assignee
shall make all appropriate adjustments in payments under the Canadian Agreement
and the Canadian Notes for periods prior to the Effective Date directly between
themselves.

     7. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the Laws of the Province of Alberta, Canada.

     8. This Assignment and Acceptance may be executed in any number of
counterparts and by 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. Delivery of an executed
counterpart of Schedule 1 to this Assignment and Acceptance by facsimile shall
be effective as delivery of a manually executed counterpart of this Assignment
and Acceptance.

     IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule 1 to
this Assignment and Acceptance to be executed by their officers thereunto duly
authorized as of the date specified thereon.

                                       2
<PAGE>   171
                                   SCHEDULE 1

                                       to

                            ASSIGNMENT AND ACCEPTANCE

     Percentage interest assigned:                                         ____%

     Assignee's Canadian Maximum Credit Amount:                     US $________

     Aggregate outstanding principal amount
       of Loans assigned:                                           US $________

     Principal amount of Canadian Note payable to Assignee:         US $________

     Principal amount of Canadian Note payable to Assignor:         US $________

     Effective Date (if other than date
     of acceptance by Canadian Agent):                           *________, ____

                                       [NAME OF ASSIGNOR], as Assignor

                                       By:
                                           -------------------------------------
                                           Title:

                                       Dated:

                                              --------------------, ------------

                                       [NAME OF ASSIGNEE], as Assignee

                                       By:
                                           -------------------------------------
                                           Title:

                                       Domestic Lending Office:

                                       Eurodollar Lending Office:

* This date should be no earlier than five Business Days after the delivery
  of this Assignment and Acceptance to Canadian Agent.

<PAGE>   172

Accepted [and Approved] **
this ____________ day of __________, 20__

BANK OF AMERICA CANADA

By:
    ---------------------------------
    Name:
    Title:

[Approved this _________ day
of ____________, 20__

NORTHSTAR ENERGY CORPORATION

By:
    ---------------------------------
    Name:
    Title:

DEVON ENERGY CANADA CORPORATION

By:
    ---------------------------------
    Name:
    Title:

** Required if the Assignee is an Eligible Transferee solely by reason of
   subsection (b) of the definition of "Eligible Transferee".

                                        2
<PAGE>   173
                                                                       EXHIBIT G

                              RE-ALLOCATION NOTICE

     Reference is made to (i) that certain US Credit Agreement dated as of
August 29, 2000 (as from time to time amended, the "Agreement"), by and among
Devon Energy Corporation, a Delaware corporation ("US Borrower"), Bank of
America, N.A., individually and as administrative agent ("US Agent"), and
certain financial institutions ("US Lenders"), and (ii) that certain Canadian
Credit Agreement dated as of August 29, 2000 (as from time to time amended, the
"Agreement"), by and among Northstar Energy Corporation, an Alberta corporation,
and Devon Energy Canada Corporation, an Alberta corporation (collectively,
"Canadian Borrowers"), Bank of America Canada, individually and as
administrative agent ("Canadian Agent"), and certain financial institutions
("Canadian Lenders") Terms which are defined in the US Agreement and the
Canadian Agreement (collectively, the "Agreements") are used herein with the
meanings given them therein. Pursuant to the terms of the Agreements, Canadian
Borrowers hereby notify US Agent, Canadian Agent and Lenders that Canadian
Borrowers have elected to make a Canadian Re-allocation as follows:

<TABLE>
<S>                                                                             <C>
     Canadian Maximum Credit Amount reduction:                                  US $________________
     [US $25,000,000 or any higher integral multiple of US $1,000,000]

     Tranche B Maximum Credit Amount increase:                                  US $________________
     [must equal Canadian Maximum Credit Amount reduction]

     Effective Date of Canadian Re-allocation:                                      ________________
     [must be at least 90 days after effective date of
     immediately preceding Re-allocation]
</TABLE>

     Canadian Borrowers each hereby represent, warrant, acknowledge, and agree
to and with Canadian Agent and each Lender that:

          (a) The officer of such Canadian Borrower signing this instrument is
     the duly elected, qualified and acting officer of such Canadian Borrower as
     indicated below such officer's signature hereto having all necessary
     authority to act for such Canadian Borrower in making the request herein
     contained.

          (b) After giving effect to the Re-allocation requested hereby, the
     Tranche B Maximum Credit Amount will not be greater than US $625,000,000,
     the Canadian Maximum Credit Amount will not be greater than US
     $375,000,000, and the aggregate amount of the Tranche B Maximum Credit
     Amount and the Canadian Maximum Credit Amount will not be greater than US
     $800,000,000.

     The officer of each Canadian Borrower signing this instrument hereby
certifies that, to the best of his knowledge after due inquiry, the above
representations, warranties, acknowledgments, and agreements of such Canadian
Borrower are true, correct and complete.

<PAGE>   174
     IN WITNESS WHEREOF, this instrument is executed as of ____________, _____.

                                       DEVON ENERGY CANADA CORPORATION

                                       By:
                                           -------------------------------------
                                           Name:
                                           Title:

                                       NORTHSTAR ENERGY CORPORATION

                                       By:
                                           -------------------------------------
                                           Name:
                                           Title:

                                       2
<PAGE>   175
                                                                       EXHIBIT H

                                   [RESERVED]
<PAGE>   176
                                                                       EXHIBIT I

                             COMPETITIVE BID REQUEST

Bank of America Canada
 as Canadian Agent
200 Front Street West, Suite 2700
Toronto, Canada M5V 3L2
Attention: _______________                                                [Date]

                          NORTHSTAR ENERGY CORPORATION
                         DEVON ENERGY CANADA CORPORATION

Ladies and Gentlemen:

     Reference is made to that certain Canadian Credit Agreement dated as of
August 29, 2000 (as from time to time amended, the "Canadian Agreement"), by and
among Northstar Energy Corporation, an Alberta corporation and Devon Energy
Canada Corporation, an Alberta corporation (collectively, "Canadian Borrowers"),
Bank of America Canada, individually and as administrative agent ("Canadian
Agent"), and certain financial institutions ("Lenders"). Terms which are defined
in the Canadian Agreement are used herein with the meanings given them in the
Canadian Agreement. *[Northstar Energy Corporation/Devon Energy Canada
Corporation] hereby gives notice pursuant to Section 1.9(a) of the Canadian
Agreement that it requests Competitive Bids under the Canadian Agreement on the
terms set forth below:

     1.   Proposed Date of Competitive Bid Loan: _______________.
          (which is a Business Day)

     2.   Aggregate Principal Amount of Competitive Bid Loan: [C $] [US $]
          _______________.
          (C $5,000,000 or greater integral multiple of C $1,000,000)

     3.   Competitive Bid Interest Period and last day thereof: _______________.
          (1 day to 180 days)

     4.   Requested Maturity: _____________.
          (30 days or more)

     To induce Lenders to make such Competitive Bids, *[Northstar Energy
Corporation/Devon Energy Canada Corporation] hereby represents, warrants,
acknowledges, and agrees to and with Canadian Agent and each Lender that:

          (a) The officer of such Canadian Borrower signing this instrument is
     the duly elected, qualified and acting officer of such Canadian Borrower as
     indicated below such

<PAGE>   177
     officer's signature hereto having all necessary authority to act for such
     Canadian Borrower in making the request herein contained.

          (b) The representations and warranties of such Canadian Borrower set
     forth in the Canadian Agreement and the other Canadian Loan Documents,
     except as expressly made as of specific date, are true and correct in all
     material respects on and as of the date hereof (except to the extent that
     the facts on which such representations and warranties are based have been
     changed by the extension of credit under the Canadian Agreement), with the
     same effect as though such representations and warranties had been made on
     and as of the date hereof.

          (c) There does not exist on the date hereof any condition or event
     which constitutes a Default which has not been waived in writing as
     provided in Section 10.1(a) of the Agreement; nor will any such Default
     exist upon such Canadian Borrower's receipt and application of any
     Competitive Bid Loan made pursuant hereto.

          (d) The sum of (i) the aggregate unpaid principal balance of the
     Canadian Loans, after the making of any Competitive Bid Loan in the amount
     indicated hereby, plus (ii) the Canadian LC Obligations outstanding, will
     not be in excess of the Canadian Maximum Credit Amount on the date
     requested for the making of such Canadian Loans.

     The officer of the Canadian Borrower signing this instrument hereby
certifies that, to the best of his knowledge after due inquiry, the above
representations, warranties, acknowledgments, and agreements of such Canadian
Borrower are true, correct and complete.

     IN WITNESS WHEREOF, this instrument is executed as of _________, 20__.

                                       NORTHSTAR ENERGY CORPORATION/DEVON
                                       ENERGY CANADA CORPORATION

                                       By:
                                           -------------------------------------
                                           Name:
                                           Title:

                                       2
<PAGE>   178
                                                                       EXHIBIT J

                                INVITATION TO BID

To Lenders under the Canadian Agreement
(as defined below)
Attention: __________________                                             [Date]

                          NORTHSTAR ENERGY CORPORATION
                         DEVON ENERGY CANADA CORPORATION

Ladies and Gentlemen:

     Reference is made to that certain Canadian Credit Agreement dated as of
August 29, 2000 (as from time to time amended, the "Canadian Agreement"), by and
among Northstar Energy Corporation, an Alberta corporation and Devon Energy
Canada Corporation, an Alberta corporation (collectively, "Canadian Borrowers"),
Bank of America Canada, individually and as administrative agent ("Canadian
Agent"), and certain financial institutions ("Lenders"). Terms which are defined
in the Canadian Agreement and which are used but not defined herein are used
herein with the meanings given them in the Canadian Agreement. *[Northstar
Energy Corporation/Devon Energy Canada Corporation] has delivered a Competitive
Bid Request dated ____________________ pursuant to Section 1.9(a) of the
Canadian Agreement, and you are invited to submit a Competitive Bid by not later
than 9:00 a.m., Toronto, Canada time on the date specified for the proposed
Competitive Bid Loan. Your Competitive Bid must comply with Section 1.9(b) of
the Canadian Agreement and the following terms as set forth in such Canadian
Borrower's Competitive Bid Request:

     1.   Proposed Date of Competitive Bid Loan: ___________________.
          (which is a Business Day)

     2.   Aggregate Principal Amount of Competitive Bid Loan: __________________
          [C $] [US $]___________.
          (C $5,000,000 or greater integral multiple of C $1,000,000)

     3.   Competitive Bid Interest Period and last day thereof: _______________.
          (1 day to 180 days)

     4.   Requested Maturity: ___________________.
          (30 days or more)

                                       BANK OF AMERICA CANADA
                                       as Canadian Agent

                                       By:
                                           -------------------------------------
                                           Name:
                                           Title:

<PAGE>   179
                                                                       EXHIBIT K

                                 COMPETITIVE BID

Bank of America Canada
 as Canadian Agent
200 Front Street West, Suite 2700
Toronto, Canada M5V 3L2
Attention: __________________                                             [Date]

                         [NORTHSTAR ENERGY CORPORATION]
                        [DEVON ENERGY CANADA CORPORATION]

Ladies and Gentlemen:

     Reference is made to that certain Canadian Credit Agreement dated as of
August 29, 2000 (as from time to time amended, the "Canadian Agreement"), by and
among Northstar Energy Corporation, an Alberta corporation and Devon Energy
Canada Corporation, an Alberta corporation (collectively, "Canadian Borrowers"),
Bank of America Canada, individually and as administrative agent ("Canadian
Agent"), and certain financial institutions ("Lenders"). Terms which are defined
in the Canadian Agreement and which are used but not defined herein are used
herein with the meanings given them in the Canadian Agreement. The undersigned
Lender hereby makes a Competitive Bid pursuant to Section 1.9(b) of the Canadian
Agreement, in response to the Competitive Bid Request of Canadian Borrowers
dated _________________, on the following terms:

     1.   Principal Amount: [C $] [US $] ______________________________________.
          (C $5,000,000 or greater integral multiple of C $1,000,000;
          multiple Competitive Bids may be accepted by Canadian Borrowers)

     2.   Competitive Bid Rate: _______________ percent (__%).
          (expressed in decimal form to no more than four decimal places)

     3.   Competitive Bid Interest Period and last day thereof: _______________.
          (1 day to 180 days)

     4.   Maturity Date: _____________.
          (30 days or more)

<PAGE>   180

     The undersigned Lender hereby confirms that it is prepared to extend credit
to *[Northstar Energy Corporation/Devon Energy Canada Corporation] upon
acceptance by such Canadian Borrower of this Competitive Bid pursuant to Section
1.9(d) of the Canadian Agreement.

                                       _____________, Lender

                                       By:
                                           -------------------------------------
                                           Name:
                                           Title:

                                       2
<PAGE>   181
                                                                       EXHIBIT L

                      COMPETITIVE BID ACCEPT/REJECT LETTER

Bank of America Canada
 as Canadian Agent
200 Front Street West, Suite 2700
Toronto, Canada M5V 3L2
Attention: _________________                                              [Date]

                          NORTHSTAR ENERGY CORPORATION
                         DEVON ENERGY CANADA CORPORATION

Ladies and Gentlemen:

     Reference is made to that certain Canadian Credit Agreement dated as of
August 29, 2000 (as from time to time amended, the "Canadian Agreement"), by and
among Northstar Energy Corporation, an Alberta corporation and Devon Energy
Canada Corporation, an Alberta corporation (collectively, "Canadian Borrowers"),
Bank of America Canada, individually and as administrative agent ("Canadian
Agent"), and certain financial institutions ("Lenders"). Terms which are defined
in the Canadian Agreement and which are used but not defined herein are used
herein with the meanings given them in the Canadian Agreement. Pursuant to
Section 1.9(d) of the Canadian Agreement, *[Northstar Energy Corporation/Devon
Energy Canada Corporation] hereby accepts the following Competitive Bids made in
response to such Canadian Borrower's Competitive Bid Request dated
_______________ for Competitive Bid Loans maturing ______________:

<TABLE>
<CAPTION>
      Lender                     Principal Amount                     Interest Rate
      ------                     ----------------                     -------------
<S>                              <C>                                  <C>
      _____________________      [C $] [US $] ________________          _________%

      _____________________      [C $] [US $] ________________          _________%

      _____________________      [C $] [US $] ________________          _________%
</TABLE>

Such Canadian Borrower hereby rejects the following Competitive Bids:

<TABLE>
<CAPTION>
      Lender                     Principal Amount                     Interest Rate
      ------                     ----------------                     -------------
<S>                              <C>                                  <C>
      _____________________      [C $] [US $] ________________          _________%

      _____________________      [C $] [US $] ________________          _________%

      _____________________      [C $] [US $] ________________          _________%
</TABLE>

<PAGE>   182
     The proceeds of the Competitive Bid Loans made pursuant to the Competitive
Bids accepted hereby should be deposited in Bank of America Canada account
number _______________ on __________________ [or wire transferred to
______________________].

                                       *[NORTHSTAR ENERGY CORPORATION/DEVON
                                       ENERGY CANADA CORPORATION]

                                       By:
                                           -------------------------------------
                                           Name:
                                           Title:

                                        2
<PAGE>   183
                                                                       EXHIBIT M

                              COMPETITIVE BID NOTE

                                                                 August 29, 2000

     FOR VALUE RECEIVED, the undersigned, ______________________, an Alberta
corporation ("Borrower"), hereby promises to pay to the order of
_______________________ ("Lender"), the aggregate unpaid principal amount of all
Competitive Bid Loans made under this Note by Lender to Borrower pursuant to the
terms of the Credit Agreement (as hereinafter defined), together with interest
on the unpaid principal balance thereof as hereinafter set forth, both principal
and interest payable as herein provided in lawful money of the United States of
America at the offices of Canadian Agent under the Credit Agreement, 200 Front
Street West, Suite 2700, Toronto, Ontario or at such other place within Toronto,
Ontario, as from time to time may be designated by the holder of this Note.

     This Note (a) is issued and delivered under that certain Canadian Credit
Agreement of even date herewith, among Borrower, Northstar Energy Corporation,
Devon Energy Canada Corporation, Bank of America Canada, individually and as
administrative agent ("Canadian Agent"), and the lenders (including Lender)
referred to therein (as from time to time supplemented, amended or restated, the
"Credit Agreement"), and is a "Competitive Bid Note" as defined therein, and (b)
is subject to the terms and provisions of the Credit Agreement, which contains
provisions for payments and prepayments hereunder and acceleration of the
maturity hereof upon the happening of certain stated events. Payments on this
Note shall be made and applied as provided herein and in the Credit Agreement.
Reference is hereby made to the Credit Agreement for a description of certain
rights, limitations of rights, obligations and duties of the parties hereto and
for the meanings assigned to terms used and not defined herein.

     For the purposes of this Note, "Competitive Bid Rate Payment Date" means,
with respect to each Competitive Bid Loan: (i) the day on which the related
Competitive Bid Interest Period ends, and (ii) any day on which past due
interest or past due principal is owed hereunder with respect to such
Competitive Bid Loan and is unpaid. If the terms hereof or of the Credit
Agreement provide that payments of interest or principal with respect to such
Competitive Bid Loan shall be deferred from one Competitive Bid Rate Payment
Date to another day, such other day shall also be a Competitive Bid Rate Payment
Date.

     The principal amount of this Note and interest accrued hereon, shall be due
and payable as set forth in the Credit Agreement, and shall in any event be due
in full on the last day of the Canadian Revolving Period.

     Each Competitive Bid Loan (exclusive of any past due principal or past due
interest) shall bear interest on each day during the related Competitive Bid
Interest Period at the Competitive Bid Rate in effect on such day for such
Competitive Bid Loan, provided that if an Event of

<PAGE>   184
Default has occurred and is continuing such Competitive Bid Loan shall bear
interest on each day outstanding at the applicable Default Rate in effect on
such day. On each Competitive Bid Rate Payment Date relating to any Competitive
Bid Loan, Borrower shall pay to the holder hereof all unpaid interest which has
accrued on such Competitive Bid Loan to but not including such Competitive Bid
Rate Payment Date. All past due principal of and past due interest on
Competitive Bid Loans shall bear interest on each day outstanding at the
applicable Default Rate in effect on such day, and such interest shall be due
and payable daily as it accrues. Notwithstanding the foregoing provisions of
this paragraph: (a) this Note shall never bear interest in excess of the Highest
Lawful Rate, and (b) if at any time the rate at which interest is payable on
this Note is limited by the Highest Lawful Rate (by the foregoing clause (a) or
by reference to the Highest Lawful Rate in the definitions of Competitive Bid
Rate and Default Rate), this Note shall bear interest at the Highest Lawful Rate
and shall continue to bear interest at the Highest Lawful Rate until such time
as the total amount of interest accrued hereon equals (but does not exceed) the
total amount of interest which would have accrued hereon had there been no
Highest Lawful Rate applicable hereto.

     Notwithstanding the foregoing paragraph and all other provisions of this
Note, in no event shall the interest payable hereon, whether before or after
maturity, exceed the maximum amount of interest which, under applicable Law, may
be charged on this Note, and this Note is expressly made subject to the
provisions of the Credit Agreement which more fully set out the limitations on
how interest accrues hereon.

     If this Note is placed in the hands of a lawyer for collection after
default, or if all or any part of the indebtedness represented hereby is proved,
established or collected in any court or in any bankruptcy, receivership, debtor
relief, probate or other court proceedings, Borrower and all endorsers, sureties
and guarantors of this Note jointly and severally agree to pay reasonable
lawyers' fees and collection costs to the holder hereof in addition to the
principal and interest payable hereunder.

     Borrower and all endorsers, sureties and guarantors of this Note hereby
severally waive demand, presentment, notice of demand and of dishonor and
nonpayment of this Note, protest, notice of protest, notice of intention to
accelerate the maturity of this Note, declaration or notice of acceleration of
the maturity of this Note, diligence in collecting, the bringing of any suit
against any party and any notice of or defense on account of any extensions,
renewals, partial payments or changes in any manner of or in this Note or in any
of its terms, provisions and covenants, or any releases or substitutions of any
security, or any delay, indulgence or other act of any trustee or any holder
hereof, whether before or after maturity.

                                        2
<PAGE>   185
     THIS NOTE AND THE RIGHTS AND DUTIES OF THE PARTIES HERETO SHALL BE GOVERNED
BY THE LAWS OF THE PROVINCE OF ALBERTA (WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW), EXCEPT TO THE EXTENT THE SAME ARE GOVERNED BY APPLICABLE
FEDERAL LAW.

                                       *[NORTHSTAR ENERGY CORPORATION/DEVON
                                       ENERGY CANADA CORPORATION]

                                       By:
                                           -------------------------------------
                                           Name:
                                           Title:

                                       3<PAGE>

                                                                 EXECUTION COPY
================================================================================

                                    INDENTURE

                                      AMONG

                       L-3 COMMUNICATIONS HOLDINGS, INC.,
                                   THE COMPANY

                                       AND

                         L-3 COMMUNICATIONS CORPORATION,
                    HYGIENETICS ENVIRONMENTAL SERVICES, INC.,
                     L-3 COMMUNICATIONS ILEX SYSTEMS, INC.,
                      L-3 COMMUNICATIONS AYDIN CORPORATION,
                                   MPRI, INC.,
                   L-3 COMMUNICATIONS SPD TECHNOLOGIES, INC.,
                               SPD HOLDINGS, INC.,
                          SPD ELECTRICAL SYSTEMS, INC.,
                              SPD SWITCHGEAR, INC.,
                                 PAC ORD, INC.,
                                 HENSCHEL, INC.,
                              POWER PARAGON, INC.,
                         L-3 COMMUNICATIONS ESSCO, INC.,
                             ELECTRODYNAMICS, INC.,
                       INTERSTATE ELECTRONICS CORPORATION,
                       SOUTHERN CALIFORNIA MICROWAVE INC.,
                 L-3 COMMUNICATIONS STORM CONTROL SYSTEMS, INC.,
                   L-3 COMMUNICATIONS DBS MICROWAVE, INC. AND

                             MICRODYNE CORPORATION,
                                  AS GUARANTORS

                                       AND

                              THE BANK OF NEW YORK,
                                   AS TRUSTEE

              5.25% CONVERTIBLE SENIOR SUBORDINATED NOTES DUE 2009
                          DATED AS OF NOVEMBER 21, 2000

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

<PAGE>

                             CROSS-REFERENCE TABLE*

Trust Indenture                                                     Indenture
Act Section                                                          Section
-----------                                                         --------
310(a)(1) ..................................................            5.11
   (a)(2) ..................................................            5.11
   (a)(3) ..................................................             n/a
   (a)(4) ..................................................             n/a
   (a)(5) ..................................................            5.11
   (b) .....................................................       5.3; 5.11
   (c) .....................................................             n/a
311(a) .....................................................            5.12
   (b)......................................................            5.12
   (c)......................................................             n/a
312(a)......................................................            2.10
   (b)......................................................            15.3
   (c)......................................................            15.3
313(a)......................................................             5.7
   (b)(1)...................................................             n/a
   (b)(2)...................................................             5.7
   (c)......................................................       5.7; 15.2
   (d)......................................................             5.7
314(a)(1), (2), (3).........................................       9.6; 15.6
   (a)(4)...................................................  9.6; 9.7; 15.6
   (b)......................................................             n/a
   (c)(1)...................................................            15.5
   (c)(2)...................................................            15.5
   (c)(3)...................................................             n/a
   (d)......................................................             n/a
   (e)......................................................            15.6
   (f)......................................................             n/a
315(a)......................................................          5.1(a)
   (b)......................................................       5.6; 15.2
   (c)......................................................          5.1(b)
   (d)......................................................          5.1(c)
   (e)......................................................            4.14
316(a)(last sentence).......................................            2.13
   (a)(1)(A)................................................             4.5
   (a)(1)(B)................................................             4.4
   (a)(2)...................................................             n/a
   (b)......................................................             4.7
   (c)......................................................             7.4

                                        i

<PAGE>

317(a)(1)...................................................             4.8
   (a)(2)...................................................             4.9
   (b)......................................................             2.5
318(a)......................................................             15.1
   (b)......................................................              n/a
   (c)......................................................             15.1

------------
"n/a" means not applicable.

*This Cross-Reference Table shall not, for any purpose, be deemed to be a part
of the Indenture.

<PAGE>

<TABLE>
<CAPTION>

                               TABLE OF CONTENTS
                                                                                                               PAGE
<S>                                                                                                            <C>
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE..............................................................1

Section 1.1       Definitions.....................................................................................1
Section 1.2       Incorporation by Reference of Trust Indenture Act..............................................13
Section 1.3       Rules of Construction..........................................................................14

ARTICLE 2 THE SECURITIES.........................................................................................14

Section 2.1       Title and Terms................................................................................14
Section 2.2       Form of Securities.............................................................................15
Section 2.3       Legends........................................................................................16
Section 2.4       Execution, Authentication, Delivery and Dating.................................................21
Section 2.5       Registrar and Paying Agent.....................................................................22
Section 2.6       Paying Agent to Hold Assets in Trust...........................................................23
Section 2.7       General Provisions Relating to Transfer and Exchange...........................................23
Section 2.8       Book-Entry Provisions for the Global Securities................................................24
Section 2.9       Special Transfer Provisions....................................................................25
Section 2.10      Holder Lists...................................................................................27
Section 2.11      Persons Deemed Owners..........................................................................27
Section 2.12      Mutilated, Destroyed, Lost or Stolen Securities................................................27
Section 2.13      Treasury Securities............................................................................28
Section 2.14      Temporary Securities...........................................................................28
Section 2.15      Cancellation...................................................................................29
Section 2.16      CUSIP Numbers..................................................................................29
Section 2.17      Defaulted Interest.............................................................................29

ARTICLE 3 SATISFACTION AND DISCHARGE.............................................................................29

Section 3.1       Satisfaction and Discharge of Indenture........................................................29
Section 3.2       Deposited Monies to be Held in Trust...........................................................31
Section 3.3       Return of Unclaimed Monies.....................................................................31

ARTICLE 4 DEFAULTS AND REMEDIES..................................................................................31

Section 4.1       Events of Default..............................................................................31
Section 4.2       Acceleration of Maturity; Rescission and Annulment.............................................32
Section 4.3       Other Remedies.................................................................................33
Section 4.4       Waiver of Past Defaults........................................................................33
Section 4.5       Control by Majority............................................................................33
Section 4.6       Limitation on Suit.............................................................................34
Section 4.7       Unconditional Rights of Holders to Receive Payment and to Convert..............................34
Section 4.8       Collection of Indebtedness and Suits for Enforcement by the Trustee............................35
Section 4.9       Trustee May File Proofs of Claim...............................................................35
Section 4.10      Restoration of Rights and Remedies.............................................................36
Section 4.11      Rights and Remedies Cumulative.................................................................36
Section 4.12      Delay or Omission Not Waiver...................................................................36
Section 4.13      Application of Money Collected.................................................................36
Section 4.14      Undertaking for Costs..........................................................................37
Section 4.15      Waiver of Stay or Extension Laws...............................................................37

ARTICLE 5 THE TRUSTEE............................................................................................37

Section 5.1       Certain Duties and Responsibilities............................................................37
Section 5.2       Certain Rights of Trustee......................................................................39
Section 5.3       Individual Rights of Trustee...................................................................40
Section 5.4       Money Held in Trust............................................................................40
Section 5.5       Trustee's Disclaimer...........................................................................40
Section 5.6       Notice of Defaults.............................................................................40
Section 5.7       Reports by Trustee to Holders..................................................................41
</TABLE>

                                      iii

<PAGE>

<TABLE>

<S>                                                                                                             <C>
Section 5.8       Compensation and Indemnification...............................................................41
Section 5.9       Replacement of Trustee.........................................................................41
Section 5.10      Successor Trustee by Merger, Etc...............................................................42
Section 5.11      Corporate Trustee Required; Eligibility........................................................42
Section 5.12      Collection of Claims Against the Company.......................................................43

ARTICLE 6 CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE...................................................43

Section 6.1       Company May Consolidate, Etc., Only on Certain Terms...........................................43
Section 6.2       Successor Corporation Substituted..............................................................44

ARTICLE 7 AMENDMENTS, SUPPLEMENTS AND WAIVERS....................................................................44

Section 7.1       Without Consent of Holders of Securities.......................................................44
Section 7.2       With Consent of Holders of Securities..........................................................45
Section 7.3       Compliance with Trust Indenture Act............................................................46
Section 7.4       Revocation of Consents and Effect of Consents or Votes.........................................46
Section 7.5       Notation on or Exchange of Securities..........................................................46
Section 7.6       Trustee to Sign Amendment, Etc.................................................................47

ARTICLE 8 MEETING OF HOLDERS OF SECURITIES.......................................................................47

Section 8.1       Purposes for Which Meetings May Be Called......................................................47
Section 8.2       Call Notice and Place of Meetings..............................................................47
Section 8.3       Persons Entitled to Vote at Meetings...........................................................47
Section 8.4       Quorum; Action.................................................................................48
Section 8.5       Determination of Voting Rights; Conduct and Adjournment of Meetings............................48
Section 8.6       Counting Votes and Recording Action of Meetings................................................49

ARTICLE 9 COVENANTS..............................................................................................49

Section 9.1       Payment of Principal, Premium and Interest.....................................................49
Section 9.2       Maintenance of Offices or Agencies.............................................................49
Section 9.3       Corporate Existence............................................................................50
Section 9.4       Maintenance of Properties......................................................................50
Section 9.5       Payment of Taxes and Other Claims..............................................................50
Section 9.6       Reports........................................................................................51
Section 9.7       Compliance Certificate.........................................................................51
Section 9.8       Resale of Certain Securities...................................................................51
Section 9.9       Liquidated Damages.............................................................................51

ARTICLE 10 REDEMPTION OF SECURITIES..............................................................................52

Section 10.1      [Reserved].....................................................................................52
Section 10.2      Optional Redemption............................................................................52
Section 10.3      Notice to Trustee..............................................................................52
Section 10.4      Selection of Securities to Be Redeemed.........................................................52
Section 10.5      Notice of Redemption...........................................................................53
Section 10.6      Effect of Notice of Redemption.................................................................54
Section 10.7      Deposit of Redemption Price....................................................................54
Section 10.8      Securities Redeemed in Part....................................................................54

ARTICLE 11 REPURCHASE AT THE OPTION OF A HOLDER UPON A CHANGE OF CONTROL.........................................55

Section 11.1      Repurchase Right...............................................................................55
Section 11.2      Conditions to the Company's Election to Pay the Repurchase Price in Common Stock...............55
Section 11.3      Notices; Method of Exercising Repurchase Right, Etc............................................56

ARTICLE 12 CONVERSION OF SECURITIES..............................................................................59

Section 12.1      Conversion Right and Conversion Price..........................................................59

</TABLE>

                                       iv

<PAGE>

<TABLE>

<S>                                                                                                             <C>
Section 12.2      Exercise of Conversion Right...................................................................59
Section 12.3      Fractions of Shares............................................................................60
Section 12.4      Adjustment of Conversion Price.................................................................60
Section 12.5      Notice of Adjustments of Conversion Price......................................................69
Section 12.6      Notice Prior to Certain Actions................................................................69
Section 12.7      Company to Reserve Common Stock................................................................70
Section 12.8      Taxes on Conversions...........................................................................70
Section 12.9      Covenant as to Common Stock....................................................................70
Section 12.10     Cancellation of Converted Securities...........................................................70
Section 12.11     Effect of Reclassification, Consolidation, Merger or Sale......................................71
Section 12.12     Responsibility of Trustee for Conversion Provisions............................................72

ARTICLE 13 SUBORDINATION.........................................................................................72

Section 13.1      Agreement to Subordinate.......................................................................72
Section 13.2      Liquidation; Dissolution; Bankruptcy...........................................................72
Section 13.3      Default on Designated Senior Debt..............................................................73
Section 13.4      Acceleration of Securities.....................................................................73
Section 13.5      When Distribution Must Be Paid Over............................................................73
Section 13.6      Notice by Company..............................................................................74
Section 13.7      Subrogation....................................................................................74
Section 13.8      Relative Rights................................................................................74
Section 13.9      Subordination May Not Be Impaired by Company...................................................75
Section 13.10     Distribution or Notice to Representative.......................................................75
Section 13.11     Rights of Trustee and Paying Agent.............................................................75
Section 13.12     Authorization to Effect Subordination..........................................................75
Section 13.13     Antilayering Provision.........................................................................76
Section 13.14     Amendments.....................................................................................76

ARTICLE 14 SUBSIDIARY GUARANTEES.................................................................................76

Section 14.1      Agreement to Guarantee.........................................................................76
Section 14.2      Execution and Delivery of Guarantees...........................................................77
Section 14.3      Guarantors May Consolidate, Etc. on Certain Terms..............................................78
Section 14.4      Releases.......................................................................................79
Section 14.5      No Recourse Against Others.....................................................................79
Section 14.6      Subordination of Subsidiary Guarantees; Anti-layering..........................................80
Section 14.7      Future Subsidiary Guarantees...................................................................80

ARTICLE 15 OTHER PROVISIONS OF GENERAL APPLICATION...............................................................80

Section 15.1      Trust Indenture Act Controls...................................................................80
Section 15.2      Notices........................................................................................80
Section 15.3      Communication by Holders with Other Holders....................................................81
Section 15.4      Acts of Holders of Securities..................................................................81
Section 15.5      Certificate and Opinion as to Conditions Precedent.............................................82
Section 15.6      Statements Required in Certificate or Opinion..................................................82
Section 15.7      Effect of Headings and Table of Contents.......................................................83
Section 15.8      Successors and Assigns.........................................................................83
Section 15.9      Separability Clause............................................................................83
Section 15.10     Benefits of Indenture..........................................................................83
Section 15.11     Section Governing Law..........................................................................83
Section 15.12     Counterparts...................................................................................83
Section 15.13     Legal Holidays.................................................................................84
Section 15.14     Recourse Against Others........................................................................84

</TABLE>

                                       v

<PAGE>

EXHIBITS

     EXHIBIT A:     Form of Security

                                       vi

<PAGE>

                  This INDENTURE dated as of November 21, 2000, among L-3
Communications Holdings, Inc, a Delaware corporation (the "Company"), and L-3
Communications Corporation, a Delaware corporation ("L-3 Communications"),
Hygienetics Environmental Services, Inc., a Delaware corporation, L-3
Communications ILEX Systems, Inc, a Delaware corporation, L-3 Communications
Aydin Corporation, a Delaware corporation, MPRI, Inc., a Delaware corporation,
L-3 Communications SPD Technologies, Inc., a Delaware corporation, SPD Holdings,
Inc., a Delaware corporation, SPD Electrical Systems, Inc., a Delaware
corporation, SPD Switchgear, Inc., a Delaware corporation, Pac Ord, Inc., a
Delaware corporation, Henschel, Inc., a Delaware corporation, Power Paragon,
Inc., a Delaware corporation, L-3 Communications ESSCO, Inc., a Delaware
corporation, Electrodynamics, Inc., an Arizona Corporation, Interstate
Electronics Corporation, a California Corporation, Southern California Microwave
Inc, a California corporation, L-3 Communications Storm Control Systems, Inc., a
California corporation, L-3 Communications DBS Microwave, Inc., a California
corporation and Microdyne Corporation, a Maryland corporation (collectively,
including L-3 Communications, the "Guarantors"), and The Bank of New York, a New
York banking corporation, as trustee (the "Trustee").

                             RECITALS OF THE COMPANY

                  The Company has duly authorized the creation of an issue of
its 5.25% Convertible Senior Subordinated Notes due 2009 guaranteed by the
Guarantors (herein called the "Securities") of substantially the tenor and
amount hereinafter set forth, and to provide therefor the Company and the
Guarantors have duly authorized the execution and delivery of this Indenture.

                  All things necessary to make the Securities, when the
Securities are executed by the Company and authenticated and delivered
hereunder, the valid obligations of the Company and the Guarantors, and to make
this Indenture a valid agreement of the Company and the Guarantors, 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 covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Securities, as
follows:

                                   ARTICLE 1

                   DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.1   DEFINITIONS.

                  For all purposes of this Indenture and the Securities, the
following terms are defined as follows:

                  "Act," when used with respect to any Holder of a Security, has
         the meaning specified in Section 15.4(a).

                  "Adjusted Interest Rate" means, with respect to any Reset
         Transaction, the rate per annum that is the arithmetic average of the
         rates quoted by two Reference Dealers selected by the Company or its
         successor as the rate at which interest on the Securities should accrue
         so that the fair market value, expressed in Dollars, of a Security
         immediately after the later of:

                       (1) the public announcement of such Reset Transaction;
                  or

<PAGE>

                       (2) the public announcement of a change in dividend
                  policy in connection with such Reset Transaction;

         will most closely equal the average Trading Price of a Security for the
         20 Trading Days preceding the date of public announcement of such Reset
         Transaction; provided that the Adjusted Interest Rate shall not be less
         than 5.25% per annum.

                  "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.

                  "Agent Member" has the meaning stated in Section 2.8.

                  "Bankruptcy Law" means Title 11 of the U.S. Code or any
         similar federal or state law for the relief of debtors.

                  "Beneficial Owner" shall mean any person who is considered a
         beneficial owner of a security in accordance with Rule 13(d)(3)
         promulgated by the SEC under the Exchange Act.

                  "Board of Directors" means either the board of directors of
         the Company or, except with respect to paragraph (3) under the
         definition of "Change of Control," any committee of that board
         empowered to act for it with respect to this Indenture.

                  "Board Resolution" means a resolution duly adopted by the
         Board of Directors, a copy of which, certified by the Secretary or an
         Assistant Secretary of the Company to be in full force and effect on
         the date of such certification, shall have been delivered to the
         Trustee.

                  "Business Day," when used with respect to any Place of Payment
         or Place of Conversion, means each Monday, Tuesday, Wednesday, Thursday
         and Friday that is not a day on which banking institutions in that
         Place of Payment or Place of Conversion, as the case may be, are
         authorized or obligated by law to close.

                  "Change of Control" means the occurrence of any of the
         following after the date of this Indenture:

                           (1) the sale, lease, transfer, conveyance or other
                  disposition (other than by way of merger or consolidation), in
                  one or a series of related transactions, of all or
                  substantially all of the assets of the Company and its
                  subsidiaries (other than the Excluded Subsidiaries) taken as a
                  whole to any "person" (as such term is used in Section
                  13(d)(3) of the Exchange Act) other than the Principals or
                  their Related Parties;

                           (2) the consummation of any transaction (including,
                  without limitation, any merger or consolidation) the result of
                  which is that any "person" (as defined above), other than the
                  Principals and their Related Parties, becomes the "beneficial
                  owner," directly or indirectly, of more than 50% of the Voting
                  Stock of the Company (measured by voting power rather than
                  number of shares);

                                       2
<PAGE>

                           (3) the first day on which a majority of the members
                  of the Board of Directors of the Company are not Continuing
                  Directors; or

                           (4) the consolidation or merger of the Company with
                  or into any other person, any merger of another person into
                  the Company, or any conveyance, transfer, sale, lease or other
                  disposition of all or substantially all of the properties and
                  assets of the Company and its subsidiaries (other than the
                  Excluded Subsidiaries) taken as a whole to another person,
                  other than:

                               (a)  any transaction:

                                    (i)     that does not result in any
                                            reclassification, conversion,
                                            exchange or cancellation of
                                            outstanding shares of the Company's
                                            capital stock; and

                                    (ii)    pursuant to which holders of the
                                            Company's capital stock immediately
                                            prior to such transaction have the
                                            entitlement to exercise, directly or
                                            indirectly, 50% or more of the total
                                            voting power of all shares of the
                                            Company's capital stock entitled to
                                            vote generally in elections of
                                            directors of the continuing or
                                            surviving person immediately after
                                            giving effect to such issuance; and

                               (b) any merger solely for the purpose of changing
                           the Company's jurisdiction of incorporation and
                           resulting in a reclassification, conversion or
                           exchange of outstanding shares of common stock solely
                           into shares of common stock of the surviving entity.

         Notwithstanding the foregoing, a Change of Control will be deemed not
to have occurred if:

                  (1) the Trading Price per share of the Company's Common Stock
         for any five Trading Days within:

                               (a) the period of 10 consecutive Trading Days
                           ending immediately after the later of the Change of
                           Control or the public announcement of the Change of
                           Control, in the case of a Change of Control under
                           clause (1) above; or

                               (b) the period of 10 consecutive Trading Days
                           ending immediately before the Change of Control, in
                           the case of a Change of Control under clause (2)
                           above,

                  equals or exceeds 110% of the conversion price of the
                  Securities in effect on each such Trading Day; or

               (2) at least 90% of the consideration in the transaction or
          transactions constituting a Change of Control consists of shares of
          common stock traded or to be traded immediately following such Change
          of Control on a national securities exchange or the Nasdaq National
          Market and, as a result of the transaction or transactions, the
          Securities become convertible solely into such common stock (and any
          rights attached thereto).

                                       3
<PAGE>

                  "Clearstream" means Clearstream Banking, societe anonyme
                  (formerly Cedelbank).

                  "Common Stock" means any stock of any class of the Company
         that has no preference in respect of dividends or of amounts payable in
         the event of any voluntary or involuntary liquidation, dissolution or
         winding up of the Company and that is not subject to redemption by the
         Company. However, subject to the provisions of Section 12.11, shares
         issuable on conversion of Securities shall include only shares of the
         class designated as Common Stock, par value $0.01 per share, of the
         Company at the date of this Indenture or shares of any class or classes
         resulting from any reclassification or reclassifications thereof and
         that have no preference in respect of dividends or of amounts payable
         in the event of any voluntary or involuntary liquidation, dissolution
         or winding up of the Company and that are not subject to redemption by
         the Company; provided, however, that if at any time there shall be more
         than one such resulting class, the shares of each such class then so
         issuable shall be substantially in the proportion which the total
         number of shares of such class resulting from all such
         reclassifications bears to the total number of shares of all such
         classes resulting from all such reclassifications.

                  "Company" means the corporation named as the "Company" in the
         first paragraph of this Indenture until a successor Person shall have
         become such pursuant to the applicable provisions of this Indenture,
         and thereafter "Company" shall mean such successor Person.

                  "Company Notice" has the meaning specified in Section 11.3.

                  "Company Order" means a written order signed in the name of
         the Company by both (1) the Chairman of the Board, the Chief Executive
         Officer, the President or a Vice President and (2) so long as not the
         same as the officer signing pursuant to clause (1), the Chief Financial
         Officer, the Controller, the Treasurer or the Secretary of the Company,
         and delivered to the Trustee.

                  "Continuing Directors" means, as of any date of determination,
         any member of the Board of Directors of the Company who:

                  (1) was a member of the Board of Directors on May 22, 1998; or

                  (2) was nominated for election or elected to the Board of
               Directors with the approval of a majority of the Continuing
               Directors who were members of the Board at the time of the new
               director's nomination or election.

                  "Conversion Agent" means any Person authorized by the Company
         to convert Securities in accordance with Article 12.

                  "Conversion Price" has the meaning specified in Section 12.1.

                  "Corporate Trust Office" means for purposes of presentation or
         surrender of Securities for payment, registration, transfer, exchange
         or conversion or for service of notices or demands upon the Company or
         for any other purpose of this Indenture, the principal office of the
         Trustee located at 101 Barclay Street, Floor 21 West, New York, New
         York 10286, attention: Corporate Trust Administration.

                  "corporation" means corporations, associations, limited
         liability companies, companies and business trusts.

                                       4
<PAGE>

         "Current Market Price" has the meaning set forth in Section 12.4(g).

         "Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.

         "Default" means an event which is, or after notice or lapse of time or
both would be, an Event of Default.

         "Defaulted Interest" has the meaning specified in Section 2.17.

         "Depositary" means The Depository Trust Company, its nominees and their
respective successors.

         "Designated Senior Debt" means:

                  (1) any Senior Debt outstanding under any credit facility; and

                  (2) any other Senior Debt permitted under this Indenture, the
         principal amount of which is $25.0 million or more and that has been
         designated by the Company as "Designated Senior Debt."

         "Dividend Yield" on any security for any period means the dividends
paid or proposed to be paid pursuant to an announced dividend policy on such
security for such period divided by, if with respect to dividends paid on such
security, the average Trading Price of such security during such period and, if
with respect to dividends proposed to be paid on such security, the Trading
Price of such security on the effective date of the related Reset Transaction.

         "Dollar," "U.S. Dollar" or "U.S. $" means a dollar or other equivalent
unit in such coin or currency of the United States as at the time shall be legal
tender for the payment of public and private debts.

         "Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
Office, as operator of the Euroclear System.

         "Event of Default" has the meaning specified in Section 4.1.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended.

         "Excluded Subsidiary" means any Subsidiary of the Company or of L-3
Communications that has been designated by the Board of Directors as an
Unrestricted Subsidiary pursuant to a Board Resolution, but only to the extent
that such Subsidiary has been designated as, or, if the indentures governing the
Outstanding Senior Subordinated Notes are no longer in effect, could have been
designated as, an "Unrestricted Subsidiary" pursuant to the terms of the
indentures governing any of the Outstanding Senior Subordinated Notes as the
same are in effect on the date of this Indenture (whether or not those
indentures are subsequently amended, waived, modified or terminated or expire
and whether or not any of those Notes continue to be outstanding).

         "Expiration Time" has the meaning specified in Section 12.4(f).

         "fair market value" has the meaning set forth in Section 12.4(g).

                                       5
<PAGE>

         "Global Security" has the meaning specified in Section 2.2(b).

         "Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtednes.

         "Guarantees" means the obligations of the Guarantors described herein.

         "Guarantors" means each person listed in the preamble to this Indenture
as a Guarantor, each Subsidiary of the Company that executes a Guarantee in
accordance with the provisions of this Indenture, their respective successors
and assigns and any and all future domestic Subsidiaries of the Company, other
than any Subsidiary that are properly designated an "Excluded Subsidiary" by the
Company in accordance with the terms of that definition.

         "Holder," when used with respect to any Security, including any Global
Security, means the Person in whose name the Security is registered in the
Register.

         "Indebtedness" means, with respect to any Person, any indebtedness of
such Person, whether or not contingent, in respect to borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or banker's acceptances
or representing capital lease obligations or the balance deferred and unpaid of
the purchase price of any property or representing any hedging obligations,
except any such balance that constitutes an accrued expense or trade payable, if
and to the extent any of the foregoing indebtedness (other than letters of
credit and hedging obligations) would appear as a liability upon a balance sheet
of such Person prepared in accordance with GAAP, as well as all indebtedness of
others secured by a lien on any assets of such Person (whether or not such
indebtedness is assumed by such Person) and, to the extent not otherwise
included, the guarantee by such person of any indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date shall be:

                  (1) the accreted value thereof, in the case of any
         Indebtedness that does not require current payments of interest; and

                  (2) the principal amount thereof, together with any interest
         thereon that is more than 30 days past due, in the case of any other
         Indebtedness.

         "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.

         "Initial Purchaser" means Lehman Brothers Inc.

         "Interest Payment Date" means each of June 1 and December 1; provided,
however, that if any such date is not a Business Day, the Interest Payment Date
shall be the next succeeding Business Day.

         "Interest Rate" means, (a) if a Reset Transaction has not occurred,
5.25% per annum, or (b) following the occurrence of a Reset Transaction, the
Adjusted Interest Rate related to such Reset Transaction to, but not including
the effective date of any succeeding Reset Transaction.

                                       6
<PAGE>

                  "Liquidated Damages" means all amounts, if any, payable
pursuant to Section 3 of the Registration Rights Agreement.

                  "L-3 Communications" means L-3 Communications Corporation, a
Delaware corporation and a wholly-owned subsidiary of the Company.

                  "Maturity" means the date on which the principal of such
Security becomes due and payable as therein or herein provided, whether at the
Stated Maturity or by acceleration, conversion, call for redemption, exercise of
a Repurchase Right or otherwise.

                  "Nasdaq National Market" means the National Association of
Securities Dealers Automated Quotation National Market or any successor national
securities exchange or automated over-the-counter trading market in the United
States.

                  "Non-Electing Share" has the meaning specified in Section
12.11.

                  "Obligations" means any principal, premium (if any), interest
(including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization, whether or not a claim for post-filing
interest is allowed in such proceeding), penalties, fees, charges, expenses,
indemnifications, reimbursement obligations, damages (including Liquidated
Damages), guarantees and other liabilities or amounts payable under the
documentation governing any Indebtedness or in respect thereto.

                  "Officer" of the Company or any Guarantor means the Chairman
of the Board, the Chief Executive Officer, the President, the Chief Financial
Officer, the Treasurer, the Controller, any Vice President or the Secretary of
the Company or such Guarantor.

                  "Officers' Certificate" means a certificate signed on behalf
of the Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Section 15.5 hereof.

                  "Opinion of Counsel" means a written opinion of counsel, who
may be counsel to the Company (and may include directors or employees of the
Company) and who is acceptable to the Trustee, which acceptance shall not be
unreasonably withheld.

                  "Outstanding," when used with respect to Securities, means, as
of the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except Securities:

                  (1) previously canceled by the Trustee or delivered to the
         Trustee for cancellation;

                  (2) for the payment or redemption of which money in the
         necessary amount has been previously 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, however,
         that if such Securities are to be redeemed, notice of such redemption
         has been duly given pursuant to this Indenture; and

                                       7
<PAGE>

                  (3) that have been paid in exchange for or in lieu of other
         Securities which 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.

                  "Outstanding Senior Subordinated Notes" means the 10% Senior
Subordinated Notes due 2007, 8 1/2% Senior Subordinated Notes due 2008 and 8%
Senior Subordinated Notes due 2008 issued by L-3 Communications and guaranteed
by certain of its subsidiaries.

                  "Paying Agent" has the meaning specified in Section 2.5.

                  "Payment Blockage Notice" has the meaning specified in Section
13.3(ii).

                  "Permitted Junior Securities" means Equity Interests in the
Company or debt securities that are subordinated to all Senior Debt of the
Company and the Guarantors (and any debt securities issued in exchange for such
Senior Debt) to substantially the same extent as, or to a greater extent than,
the Securities and the Guarantees are subordinated to such Senior Debt pursuant
to this Indenture.

                  "Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
estate, unincorporated organization or government or any agency or political
subdivision thereof, and shall include any syndicate or group that would be
deemed to be a person under Section 13(d)(3) of the Exchange Act.

                  "Physical Securities" means Securities issued in definitive,
fully registered form without interest coupons, substantially in the form of
Exhibit A hereto, with the applicable legends as provided in Section 2.3.

                  "Place of Conversion" means any city in which any Conversion
Agent is located.

                  "Place of Payment" means any city in which any Paying Agent is
located.

                  "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 2.12 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.

                  "Principals" means Lehman Brothers Holding Inc. and any of its
affiliates, Lockheed Martin, Frank C. Lanza and Robert V. LaPenta.

                  "Purchase Agreement" means the Purchase Agreement, dated
November 16, 2000, between the Company and the Initial Purchaser.

                  "QIB" means a "qualified institutional buyer" as defined in
Rule 144A.

                  "Record Date" means either a Regular Record Date or a Special
Record Date, as the case may be; provided that, for purposes of Section 12.4,
Record Date has the meaning specified in 12.4(g).

                                       8
<PAGE>

                  "Redemption Date," when used with respect to any Security to
be redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.

                  "Redemption Price," when used with respect to any Security to
be redeemed, means the price at which such Security is to be redeemed pursuant
to this Indenture.

                  "Reference Dealer" means a dealer engaged in the trading of
convertible securities.

                  "Reference Period" has the meaning set forth in Section
12.4(d).

                  "Register" has the meaning specified in Section 2.5.

                  "Registrar" has the meaning specified in Section 2.5.

                  "Registration Rights Agreement" means the Resale Registration
Rights Agreement dated as of November 21, 2000, among the Company, the
Guarantors and the Initial Purchaser.

                  "Registration Statement" has the meaning specified in the
Registration Rights Agreement.

                  "Regular Record Date" for the interest on the Securities
(including Liquidated Damages, if any) means the May 15 (whether or not a
Business Day) next preceding an Interest Payment Date on June 1 and the November
15 (whether or not a Business Day) next preceding an Interest Payment Date on
December 1.

                  "Regulation S" means Regulation S under the Securities Act.

                  "Related Party" with respect to any Principal means:

                           (1) any controlling stockholder, 50% (or more) owned
                  Subsidiary, or spouse or immediate family member (in the case
                  of an individual) of such Principal; or

                           (2) any trust, corporation, partnership or other
                  entity, the beneficiaries, stockholders, partners, owners or
                  Persons beneficially holding a more than 50% controlling
                  interest of which consist of such Principal and/or such other
                  Persons referred to in clause (1) above.

                  "Repurchase Date" has the meaning specified in Section 11.1.

                  "Repurchase Price" has the meaning specified in Section 11.1.

                  "Repurchase Right" has the meaning specified in Section 11.1.

                  "Reset Transaction" means (i) a merger, consolidation or
statutory share exchange to which the entity that is the issuer of the Common
Stock into which the Securities are then convertible is a party, (ii) a sale of
all or substantially all the assets of that entity, (iii) a recapitalization of
that Common Stock or (iv) a distribution described in Section 12.4(d), in each
case if after the effective date of the transaction or distribution the
Securities would be convertible into:

                                       9
<PAGE>

                  (1) shares of an entity the common stock of which had a
         Dividend Yield for the four fiscal quarters of such entity immediately
         preceding the public announcement of such transaction or distribution
         that was more than 2.5% higher then the Dividend Yield on the Common
         Stock (or other common stock then issuable upon conversion of the
         Securities) for the four fiscal quarters preceding the public
         announcement of such transaction or distribution; or

                  (2) shares of an entity that announces a dividend policy prior
         to the effective date of such transaction or distribution which policy,
         if implemented, would result in a Dividend Yield on such entity's
         common stock for the next four fiscal quarters that would result in
         such a 2.5% increase.

         "Responsible Officer," when used with respect to the Trustee, means any
officer in the Corporate Trust Office of the Trustee and also means, with
respect to a particular corporate trust matter, any other officer of the Trustee
whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.

         "Restricted Securities" means the Securities defined as such in Section
2.3.

         "Restricted Securities Legend" has the meaning set forth in Section
2.3(a).

         "Rule 144" means Rule 144 under the Securities Act (including any
successor rule thereof), as the same may be amended from time to time.

         "Rule 144A" means Rule 144A as promulgated under the Securities Act
(including any successor rule thereof), as the same may be amended from time to
time.

         "SEC" means the Securities and Exchange Commission.

         "Securities" has the meaning ascribed to it in the first paragraph
under the caption "Recitals of the Company."

         "Securities Act" means the Securities Act of 1933, as amended.

         "Senior Debt" means :

                  (1) all Indebtedness of the Company outstanding under credit
         facilities and all hedging obligations with respect thereto;

                  (2) any other Indebtedness permitted to be incurred by the
         Company under the terms of this Indenture, unless the instrument under
         which such Indebtedness is incurred expressly provides that it is on a
         parity with or subordinated in right of payment to the Securities; and

                  (3) all principal, premium (if any), interest (including
         interest accruing on or after the filing of any petition in bankruptcy
         or for reorganization, whether or not a claim for post-filing interest
         is allowed in such proceeding), penalties, fees, charges, expenses,
         indemnification, reimbursement obligations, damages, guarantees and
         other liabilities or amounts payable under the documentation governing
         any Indebtedness referred to in either clause (1) or clause (2) above.

                                       10
<PAGE>

Notwithstanding anything to the contrary in the foregoing, Senior Debt will not
include:

                  (1) any liability for federal, state, local or other taxes
         owed or owing by the Company;

                  (2) any Indebtedness of the Company to any of its Subsidiaries
         or other Affiliates (other than Lehman Brothers Inc. and its
         affiliates);

                  (3) any trade payables; or

                  (4) any Indebtedness that is incurred in violation of this
         Indenture.

         "Senior Debt of a Guarantor" means:

                  (1) all Indebtedness of the Guarantors outstanding under
         credit facilities and all hedging obligations with respect thereto;

                  (2) any other Indebtedness permitted to be incurred by the
         Guarantors under the terms of this Indenture, unless the instrument
         under which such Indebtedness is incurred expressly provides that it is
         on a parity with or subordinated in right of payment to the Guarantees
         of the Securities; and

                  (3) all principal, premium (if any), interest (including
         interest accruing on or after the filing of any petition in bankruptcy
         or for reorganization, whether or not a claim for post-filing interest
         is allowed in such proceeding), penalties, fees, charges, expenses,
         indemnification, reimbursement obligations, damages, guarantees and
         other liabilities or amounts payable under the documentation governing
         any Indebtedness referred to in either clause (1) or clause (2) above.

Notwithstanding anything to the contrary in the foregoing, Senior Debt of a
Guarantor will not include:

                  (1) any liability for federal, state, local or other taxes
         owed or owing by that Guarantor;

                  (2) any Indebtedness of that Guarantor to any of its
         Subsidiaries or other Affiliates;

                  (3) any trade payables; or

                  (4) any obligations with respect to the Outstanding Senior
         Subordinated Notes of L-3 Communications (and the related guarantees).

         "Significant Subsidiary" means any Subsidiary which is a "significant
subsidiary" within the meaning of Rule 405 under the Securities Act.

         "Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 2.17.

                                       11
<PAGE>

         "Stated Maturity" means the date specified in any Security as the fixed
date for the payment of principal on such Security or on which an installment of
interest (including Liquidated Damages, if any) on such Security is due and
payable.

         "Subsidiary" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For the purposes of this definition only, "voting stock" means
stock which ordinarily has voting power for the election of directors, whether
at all times or only so long as no senior class of stock has such voting power
by reason of any contingency.

         "TIA" means the Trust Indenture Act of 1939, as amended (15 U.S. Code
Section 77aaa-77bbbb), as in effect on the date of this Indenture; provided,
however, that in the event the TIA is amended after such date, "TIA" means, to
the extent such amendment is applicable to this Indenture, the Trust Indenture
Act of 1939, as so amended, or any successor statute.

         "Trading Day" means:

                  (1) if the applicable security is listed or admitted for
         trading on the New York Stock Exchange or another national security
         exchange, a day on which the New York Stock Exchange or such other
         national security exchange is open for business;

                  (2) if the applicable security is quoted on the Nasdaq
         National Market, a day on which trades may be made thereon; or

                  (3) if the applicable security is not so listed, admitted for
         trading or quoted, any day other than a Saturday or Sunday or a day on
         which banking institutions in the State of New York are authorized or
         obligated by law or executive order to close.

         "Trading Price" of a security on any date of determination means:

                  (1) the closing sale price (or, if no closing sale price is
         reported, the last reported sale price) of such security (regular day)
         on the New York Stock Exchange on such date;

                  (2) if such security is not listed for trading on the New York
         Stock Exchange on any such date, the closing sale price as reported in
         the composite transactions for the principal U.S. securities exchange
         on which such security is so listed;

                  (3) if such security is not so listed on a U.S. national or
         regional securities exchange, the closing sale price as reported by the
         Nasdaq National Market;

                  (4) if such security is not so reported, the last price quoted
         by Interactive Data Corporation for such security or, if Interactive
         Data Corporation is not quoting such price, a similar quotation service
         selected by the Company;

                  (5) if such security is not so quoted, the average of the
         mid-point of the last bid and ask prices for such security from at
         least two dealers recognized as market-makers for such security; or

                                       12
<PAGE>

                  (6) if such security is not so quoted, the average of the last
         bid and ask prices for such security from a Reference Dealer.

         "Transfer Agent" means any Person, which may be the Company, authorized
by the Company to exchange or register the transfer of Securities.

         "Trigger Event" has the meaning specified in Section 12.4(d).

         "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.

         "U.S. Government Obligations" means: (1) direct obligations of the
United States of America for the payment of which the full faith and credit of
the United States of America is pledged or (2) obligations of a person
controlled or supervised by and acting as an agency or instrumentality of the
United States of America, the payment of which is unconditionally guaranteed as
a full faith and credit obligation by the United States of America and which in
either case, are non-callable at the option of the issuer thereof.

         "Vice President," when used with respect to the Company, 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" means, at any time, the capital stock that is entitled
to vote in the election of the Board of Directors at that time.

SECTION 1.2 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.

         Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.

         The following TIA 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; and

         "obligor" on the Securities means the Company and any other obligor on
the indenture securities.

         All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.

                                       13
<PAGE>

SECTION 1.3       RULES OF CONSTRUCTION.

         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 accounting terms not otherwise defined herein have the
         meanings assigned to them in accordance with accounting principles
         generally accepted in the United States prevailing at the time of any
         relevant computation hereunder; and

                  (3) 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.

                                   ARTICLE 2

                                 THE SECURITIES

SECTION 2.1       TITLE AND TERMS.

         (a) The Securities shall be known and designated as the "5.25%
Convertible Senior Subordinated Notes due 2009" of the Company. The aggregate
principal amount of Securities which may be authenticated and delivered under
this Indenture is limited to $250,000,000 (or $300,000,000 if the over-allotment
option set forth in Section 2 of the Purchase Agreement is exercised in full),
except for Securities authenticated and delivered upon registration of, transfer
of, or in exchange for, or in lieu of other Securities pursuant to Section 2.7,
2.8, 2.9, 2.12, 7.5, 10.7, 11.1 or 12.2. The Securities shall be issuable in
denominations of $1,000 or integral multiples thereof.

         (b) The Securities shall mature on June 1, 2009.

         (c) Interest shall accrue from and including November 21, 2000 at the
Interest Rate until the principal thereof is paid or made available for payment.
Interest shall be payable semiannually in arrears on June 1 and December 1 in
each year, commencing June 1, 2001.

         (d) Interest on the Securities shall be computed (i) for any full
semi-annual period for which a particular Interest Rate is applicable, on the
basis of a 360-day year of twelve 30-day months and (ii) for any period for
which a particular Interest Rate is applicable shorter than a full semiannual
period for which interest is calculated, on the basis of a 30-day month and, for
such periods of less than a month, the actual number of days elapsed over a
30-day month. For purposes of determining the Interest Rate, the Trustee may
assume that a Reset Transaction has not occurred unless the Trustee has received
an Officers' Certificate stating that a Reset Transaction has occurred and
specifying the Adjusted Interest Rate then in effect.

         (e) A Holder of any Security at the close of business on a Regular
Record Date shall be entitled to receive interest (including Liquidated Damages,
if any) on such Security on the corresponding Interest Payment Date. A Holder of
any Security which is converted after the close of business on a Regular Record
Date and prior to the corresponding Interest Payment Date (other than any
Security whose Maturity is prior to such Interest Payment Date) shall be
entitled to receive interest on the

                                       14
<PAGE>

principal amount of such Security, notwithstanding the conversion of such
Security prior to such Interest Payment Date. However, any such Holder which
surrenders any such Security for conversion during the period between the close
of business on such Regular 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 the principal amount of such Security so
converted, which is payable by the Company to such Holder on such Interest
Payment Date, at the time such Holder surrenders such Security for conversion.
Notwithstanding the foregoing, any such Holder which surrenders for conversion
any Security which has been called for redemption by the Company on a date that
is after a Record Date but prior to the corresponding Interest Payment Date in a
notice of redemption given by the Company pursuant to Section 10.5 shall be
entitled to receive (and retain) such interest and need not pay the Company an
amount equal to the interest on the principal amount of such Security so
converted at the time such Holder surrenders such Security for conversion.

         (f) Principal of, and premium, if any, and interest (including
Liquidated Damages, if any) on, Global Securities shall be payable to the
Depositary in immediately available funds.

         (g) Principal and premium, if any, on Physical Securities shall be
payable in immediately available funds or, at the option of the Company, at the
office or agency of the Company maintained for such purpose, initially the
Corporate Trust Office of the Trustee. Interest (including Liquidated Damages,
if any) on Physical Securities will be payable (i) to Holders having an
aggregate principal amount of $5,000,000 or less, by check mailed to the holders
of these notes and (ii) to Holders having an aggregate principal amount of more
than $5,000,000, either by check mailed to each Holder or, upon application by a
Holder to the Registrar not later than the relevant Record Date, by wire
transfer in immediately available funds to that Holder's account within the
United States, which application shall remain in effect until the Holder
notifies, in writing, the Registrar to the contrary.

         (h) The Securities shall be redeemable at the option of the Company as
provided in Article 10.

         (i) The Securities shall be repurchaseable by the Company at the option
of Holders as provided in Article 11.

         (j) The Securities shall be convertible at the option of the Holders as
provided in Article 12.

         (k) The Securities shall be subordinated in right of payment to Senior
Debt of the Company as provided in Article 13.

         (l) The Securities shall be jointly and severally guaranteed by the
Guarantors as provided in Article 14.

SECTION 2.2       FORM OF SECURITIES.

         (a) Except as otherwise provided pursuant to this Section 2.2, the
Securities are issuable in fully registered form without coupons in
substantially the form of Exhibit A hereto, with such applicable legends as are
provided for in Section 2.3. The Securities are not issuable in bearer form. The
terms and provisions contained in the form of Security shall constitute, and are
hereby expressly made, a part of this Indenture and to the extent applicable,
the Company and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby. Any of the
Securities may have such letters, numbers or other marks of identification and
such notations, legends

                                       15
<PAGE>

and endorsements as the officers executing the same may approve (execution
thereof to be conclusive evidence of such approval) and as are not inconsistent
with the provisions of this Indenture, or as may be required to comply with any
law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any securities exchange or automated quotation system on which the
Securities may be listed or designated for issuance, or to conform to usage.

         (b) The Securities are being offered and sold by the Company pursuant
to the Purchase Agreement. Securities offered and sold (A) to QIBs in accordance
with Rule 144A and (B) in reliance on Regulation S, each as provided in the
Purchase Agreement, shall be issued initially in the form of one or more
permanent global Securities in fully registered form without interest coupons,
substantially in the form of Exhibit A hereto, with the applicable legends as
provided in Section 2.3 (each a "Global Security" and collectively the "Global
Securities"). Each Global Security shall be duly executed by the Company and
authenticated and delivered by the Trustee, and shall be registered in the name
of the Depositary or its nominee and retained by the Trustee, as Custodian, at
its Corporate Trust Office, for credit to the accounts of the Agent Members
holding the Securities evidenced thereby (or in the case of Securities held for
purchasers who acquired such Securities in accordance with Regulation S,
registered with the Depositary for credit to the accounts of the Agent Members
then holding such Securities on behalf of Euroclear or Clearstream, as the case
may be). The aggregate principal amount of the Global Securities may from time
to time be increased or decreased by adjustments made on the records of the
Trustee, as Custodian, and of the Depositary or its nominee, as hereinafter
provided.

         (c) Physical Securities acquired by QIBs in accordance with Rule 144A
or in reliance on Regulation S may be exchanged for interests in Global
Securities pursuant to Section 2.9(b).

SECTION 2.3       LEGENDS.

         (A) RESTRICTED SECURITIES LEGENDS.

         Each Security issued hereunder shall, upon issuance, bear the legend
set forth in Section 2.3(a)(i), and each stock certificate representing shares
of the Common Stock issued upon conversion of any Security issued hereunder,
shall, upon issuance, bear the legend set forth in Section 2.3(a)(ii)(each such
legend, a "Restricted Securities Legend"), and such legend shall not be removed
except as provided in Section 2.3(a)(iii). Each Security that bears or is
required to bear the Restricted Securities Legend set forth in Section 2.3(a)(i)
(together with each stock certificate representing shares of the Common Stock
issued upon conversion of such Security that bears or is required to bear the
Restricted Securities Legend set forth in Section 2.3(a)(ii), collectively, the
"Restricted Securities") shall be subject to the restrictions on transfer set
forth in this Section 2.3(a) (including the Restricted Securities Legend set
forth below), and the Holder of each such Restricted Security, by such Holder's
acceptance thereof, shall be deemed to have agreed to be bound by all such
restrictions on transfer.

         As used in Section 2.3(a), the term "transfer" encompasses any sale,
pledge, transfer or other disposition whatsoever of any Restricted Security.

         (i) RESTRICTED SECURITIES LEGEND FOR SECURITIES.

         Except as provided in Section 2.3(a)(iii), any certificate evidencing
such Security (and all Securities issued in exchange therefor or substitution
thereof, other than stock certificates representing shares of the Common Stock,
if any, issued upon conversion thereof which shall bear the legend set forth

                                       16
<PAGE>

in Section 2.3(a)(ii), if applicable) shall bear a Restricted Securities Legend
in substantially the following form:

         "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, (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") THAT IS PURCHASING AT LEAST $100,000 IN AGGREGATE PRINCIPAL
         AMOUNT OF NOTES OR AN "ACCREDITED INVESTOR" AS DEFINED IN RULE
         501(a)(4), (5) OR (6) UNDER THE SECURITIES ACT (A "NON-INSTITUTIONAL
         ACCREDITED INVESTOR") THAT IS PURCHASING AT LEAST $250,000 IN AGGREGATE
         PRINCIPAL AMOUNT OF NOTES OR (C) IT IS A NON-U.S. PERSON OUTSIDE THE
         UNITED STATES ACQUIRING THIS SECURITY IN COMPLIANCE WITH REGULATION S
         UNDER THE SECURITIES ACT AND IT WILL NOT ENGAGE IN HEDGING TRANSACTIONS
         WITH RESPECT TO THE SECURITIES OR THE COMMON STOCK ISSUABLE UPON
         CONVERSION OF THE SECURITIES EXCEPT IN COMPLIANCE WITH THE SECURITIES
         ACT OR;

         (2) AGREES THAT IT WILL NOT 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 THAT IS
         PURCHASING NOTES IN AN AGGREGATE PRINCIPAL AMOUNT OF AT LEAST $100,000
         OR TO A NON-INSTITUTIONAL ACCREDITED INVESTOR THAT IS PURCHASING NOTES
         IN AN AGGREGATE PRINCIPAL AMOUNT OF AT LEAST $250,000, AND THAT, IN
         EITHER CASE, PRIOR TO SUCH TRANSFER, FURNISHES TO THE BANK OF NEW YORK,
         AS TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS APPLICABLE), A SIGNED LETTER
         CONTAINING CERTAIN REPRESENTATIONS AND WARRANTIES RELATING TO THE
         RESTRICTIONS ON TRANSFER OF THE SECURITY EVIDENCED HEREBY (THE FORM OF
         LETTER CAN BE OBTAINED FROM SUCH TRUSTEE), (D) TO A NON-U.S. PERSON
         OUTSIDE THE UNITED STATES IN COMPLIANCE WITH REGULATIONS S UNDER THE
         SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION
         PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (F)
         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

                                       17
<PAGE>

         (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) OR 2(F) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
         LEGEND. IN CONNECTION WITH ANY TRANSFER OF THE SECURITY EVIDENCED
         HEREBY WITHIN TWO YEARS AFTER THE DATE SUCH SECURITY WAS LAST HELD BY
         AN AFFILIATE OF THE COMPANY (OTHER THAN A TRANSFER PURSUANT TO CLAUSE
         2(E) OR 2(F) ABOVE), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET
         FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND
         SUBMIT THIS CERTIFICATE TO THE TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS
         APPLICABLE). IF THE PROPOSED TRANSFER IS PURSUANT TO CLAUSE 2(C) OR
         2(E) ABOVE, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE
         TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS,
         LEGAL OPINIONS OR OTHER INFORMATION AS THE COMPANY MAY REASONABLY
         REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
         EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
         REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED UPON
         THE DATE THAT IS TWO YEARS AFTER THE DATE SUCH SECURITY WAS LAST HELD
         BY AN AFFILIATE OF THE COMPANY OR UPON THE TRANSFER OF THE SECURITY
         EVIDENCED HEREBY PURSUANT TO CLAUSE 2(E) OR 2(F) ABOVE. AS USED HEREIN,
         THE TERMS "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO
         THEM BY REGULATION S UNDER THE SECURITIES ACT.

                  (ii) RESTRICTED SECURITIES LEGEND FOR THE COMMON STOCK ISSUED
         UPON CONVERSION OF THE SECURITIES.

                  Each stock certificate representing Common Stock issued upon
conversion of the Securities will bear the following legend (unless such Common
Stock has been sold pursuant to Rule 144A or pursuant to a registration
statement that has been declared effective under the Securities Act):

         "THE SECURITY EVIDENCED HEREBY 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. THE HOLDER HEREOF AGREES THAT
         UNTIL THE EXPIRATION OF THE LATER OF TWO YEARS AFTER THE DATE SUCH
         SECURITY WAS LAST HELD BY AN AFFILIATE OF THE COMPANY AND TWO YEARS
         AFTER THE ORIGINAL ISSUANCE OF THE SECURITY UPON THE CONVERSION OF
         WHICH THE COMMON STOCK EVIDENCED HEREBY WAS ISSUED,

         (1) IT WILL NOT RESELL OR OTHERWISE TRANSFER THE SECURITY EXCEPT: (A)
         TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A NON-U.S. PERSON
         OUTSIDE THE UNITED STATES IN COMPLIANCE WITH REGULATIONS S UNDER THE
         SECURITIES ACT AND THAT IT WILL NOT

                                       18
<PAGE>

         ENGAGE IN HEDGING TRANSACTIONS WITH RESPECT TO THE SECURITY, (C)
         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) THAT IS PURCHASING A NUMBER
         OF SHARES OF COMMON STOCK AT LEAST EQUAL TO $100,000 DIVIDED BY $81.50
         (THE INITIAL CONVERSION PRICE) OR TO A NON-INSTITUTIONAL ACCREDITED
         INVESTOR (AS DEFINED IN RULE 501 (a)(4), (5), OR (6) UNDER THE
         SECURITIES ACT) THAT IS PURCHASING A NUMBER OF SHARES OF COMMON STOCK
         AT LEAST EQUAL TO $250,000 DIVIDED BY $81.50 (THE INITIAL CONVERSION
         PRICE), AND THAT, IN EITHER CASE, FURNISHES TO FIRST CHICAGO TRUST
         COMPANY OF NEW YORK, AS TRANSFER AGENT (OR ANY SUCCESSOR TRANSFER
         AGENT, AS APPLICABLE), A SIGNED LETTER CONTAINING CERTAIN
         REPRESENTATIONS AND WARRANTIES RELATING TO THE RESTRICTIONS ON TRANSFER
         OF THE SECURITY EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE
         OBTAINED FROM SUCH TRANSFER AGENT), (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;

         (2) PRIOR TO ANY SUCH TRANSFER OTHER THAN A TRANSFER PURSUANT TO CLAUSE
         1(E) ABOVE, IT WILL FURNISH TO SUCH TRANSFER AGENT (OR ANY SUCCESSOR
         TRANSFER AGENT, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR
         OTHER INFORMATION AS THE COMPANY MAY REASONABLY REQUIRE TO CONFIRM THAT
         SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
         TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
         SECURITIES ACT; AND

         (3) IT WILL DELIVER TO EACH PERSON TO WHOM THE COMMON STOCK EVIDENCED
         HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO A CLAUSE 1(E)
         ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

         THIS LEGEND WILL BE REMOVED UPON THE DATE THAT IS TWO YEARS AFTER THE
         DATE SUCH SECURITY WAS LAST HELD BY AN AFFILIATE OF THE COMPANY OR THE
         TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY PURSUANT TO CLAUSE 1(D)
         OR 1(E) ABOVE. AS USED HEREIN, THE TERMS "UNITED STATES" AND "U.S.
         PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
         SECURITIES ACT."

                  (iii) REMOVAL OF THE RESTRICTED SECURITIES LEGENDS.

                  Each Security and each stock certificate representing shares
of the Common Stock issued upon conversion of any Security (other than a stock
certificate representing shares of the Common Stock issued upon conversion of a
Security that previously has been sold pursuant to a registration statement that
has been declared effective under the Securities Act and which continues to be
effective at the time of

                                       19
<PAGE>

such sale) shall bear the applicable Restricted Securities Legend set forth in
Section 2.3(a)(i) or 2.3(a)(ii), as the case may be, until the earlier of:

                  (2) the date which is the later of two years after the
         original issuance date of such Security and two years after the date
         such Security was last held by an affiliate of the Company; and

                  (3) the date such Security has, or such shares of the Common
         Stock have been sold pursuant to a registration statement that has been
         declared effective under the Securities Act (and which continues to be
         effective at the time of such sale).

The Holder must give notice thereof to the Trustee and any transfer agent for
the Common Stock, as applicable.

                  Notwithstanding the foregoing, the Restricted Securities
Legend may be removed from any Security or any stock certificate representing
shares of the Common Stock issued upon conversion of any Security if there is
delivered to the Company such satisfactory evidence, which may include an
opinion of independent counsel, as may be reasonably required by the Company,
that neither such legend nor the restrictions on transfer set forth therein are
required to ensure that transfers of such Security or shares of the Common Stock
issued upon conversion of Securities, as the case may be, will not violate the
registration requirements of the Securities Act or the qualification
requirements under any state securities laws. Upon provision of such
satisfactory evidence, at the written direction of the Company, (i) in the case
of a Security, the Trustee shall authenticate and deliver in exchange for such
Security another Security or Securities having an equal aggregate principal
amount that does not bear such legend or (ii) in the case of a stock certificate
representing shares of the Common Stock, the transfer agent for the Common Stock
shall authenticate and deliver in exchange for the stock certificate or stock
certificates representing such shares of Common Stock bearing such legend, one
or more new stock certificates representing a like aggregate number of shares of
Common Stock that do not bear such legend. If the Restricted Securities Legend
has been removed from a Security or stock certificates representing shares of
the Common Stock issued upon conversion of any Security as provided above, no
other Security issued in exchange for all or any part of such Security or stock
certificates representing shares of the Common Stock issued upon conversion of
such Security shall bear such legend, unless the Company has reasonable cause to
believe that such other Security is a "restricted security" (or such shares of
Common Stock are "restricted securities") within the meaning of Rule 144 or
Regulation S and instructs the Trustee in writing to cause a Restricted
Securities Legend to appear thereon.

                  Any Security (or Security issued in exchange or substitution
therefor) as to which such restrictions on transfer shall have expired in
accordance with their terms or as to which the conditions for removal of the
Restricted Securities Legend set forth in Section 2.3(a)(i) as set forth therein
have been satisfied may, upon surrender of such Security for exchange to the
Registrar in accordance with the provisions of Section 2.7, be exchanged for a
new Security or Securities, of like tenor and aggregate principal amount, which
shall not bear the Restricted Securities Legend required by Section 2.3(a)(i).

                  Any stock certificate representing shares of the Common Stock
issued upon conversion of any Security as to which such restrictions on transfer
shall have expired in accordance with their terms or as to which the conditions
for removal of the Restricted Securities Legend set forth in Section 2.3(a)(ii)
as set forth therein have been satisfied may, upon surrender of the stock
certificates representing such shares of Common Stock for exchange in accordance
with the procedures of the transfer agent for the Common Stock, be exchanged for
a new stock certificate or stock certificates

                                       20
<PAGE>

representing a like aggregate number of shares of Common Stock, which shall not
bear the Restricted Securities Legend required by Section 2.3(a)(ii).

         (b) GLOBAL SECURITY LEGEND.

                  Each Global Security shall also bear the following legend on
         the face thereof:

         THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
         REFERRED TO HEREIN. THIS GLOBAL SECURITY MAY NOT BE EXCHANGED OR
         TRANSFERRED, IN WHOLE OR IN PART, FOR A SECURITY REGISTERED IN THE NAME
         OF ANY PERSON OTHER THAN DTC OR A NOMINEE THEREOF, EXCEPT IN THE
         LIMITED CIRCUMSTANCES SET FORTH IN THE INDENTURE. BENEFICIAL INTERESTS
         IN THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT IN ACCORDANCE
         WITH THE INDENTURE.

         (c) LEGEND FOR PHYSICAL SECURITIES.

                  Physical Securities, in addition to the legend set forth in
Section 2.3(a)(i), will also bear a legend substantially in the following form:

         THIS SECURITY WILL NOT BE ACCEPTED IN EXCHANGE FOR A BENEFICIAL
         INTEREST IN A GLOBAL SECURITY UNLESS THE HOLDER OF THIS SECURITY,
         SUBSEQUENT TO SUCH EXCHANGE, WILL HOLD NO NOTES.

SECTION 2.4 EXECUTION, AUTHENTICATION, DELIVERY AND DATING.

         Two Officers of the Company shall execute the Securities on behalf of
the Company by manual or facsimile signature. If an Officer of the Company whose
signature is on a Security no longer holds that office at the time the Security
is authenticated, the Security shall be valid nevertheless.

         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.

         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 or on behalf of the Trustee by manual signature, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder.

         The Trustee may appoint an authenticating agent or agents reasonably
acceptable to the Company with respect to the Securities. The Company agrees to
pay to each authenticating agent from time to time reasonable compensation for
its services under this Section. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent.

                                       21
<PAGE>

         The Trustee's certificates of authentication shall be in substantially
the following form:

         This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture

Dated:

                                                        The Bank of New York,

                                                                   As Trustee

                                                By /s/ Kisha A. Holder
                                                  -----------------------------
                                                         Authorized Signatory

SECTION 2.5 REGISTRAR AND PAYING AGENT.

         The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange (the "Registrar") and an
office or agency where Securities may be presented for payment (the "Paying
Agent"). The Registrar shall keep a register of the Securities (the "Register")
and of their transfer and exchange. The Company may appoint one or more
co-Registrars and one or more additional Paying Agents for the Securities. The
term "Paying Agent" includes any additional paying agent and the term
"Registrar" includes any additional registrar. The Company may change any Paying
Agent or Registrar without prior notice to any Holder.

                  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:

                  (1) hold all sums held by it for the payment of the principal
         of and premium, if any, or interest (including Liquidated Damages, if
         any) on Securities in trust for the benefit of the Persons entitled
         thereto until such sums shall be paid to such Persons or otherwise
         disposed of as provided in this Indenture;

                  (2) give the Trustee notice of any Default by the Company in
         the making of any payment of principal and premium, if any, or interest
         (including Liquidated Damages, if any); and

                  (3) at any time during the continuance of any such Default,
         upon the written request of the Trustee, forthwith pay to the Trustee
         all sums so held in trust by such Paying Agent.

         The Company shall give prompt written notice to the Trustee of the name
and address of any Agent who is not a party to this Indenture. If the Company
fails to appoint or maintain another entity as Registrar or Paying Agent, the
Trustee shall act as such. The Company or any Affiliate of the Company may act
as Paying Agent or Registrar; provided, however, that none of the Company, its
subsidiaries or the Affiliates of the foregoing shall act:

                                       22
<PAGE>

                  (i) as Paying Agent in connection with redemptions, offers to
         purchase and discharges, except as otherwise specified in this
         Indenture, and

                  (ii) as Paying Agent or Registrar if a Default or Event of
         Default has occurred and is continuing.

                  The Company hereby initially appoints The Bank of New York as
Registrar and Paying Agent for the Securities.

SECTION 2.6 PAYING AGENT TO HOLD ASSETS IN TRUST.

                  Not later than 11:00 a.m. (New York City time) on each due
date of the principal, premium, if any, and interest (including Liquidated
Damages, if any) on any Securities, the Company shall deposit with one or more
Paying Agents money in immediately available funds in an aggregate amount
sufficient to pay the principal, premium, if any, and interest (including
Liquidated Damages, if any) due on such date. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company) shall have no
further liability for the money so paid over to the Trustee.

                  If the Company shall act as a Paying Agent, it shall, prior to
or on each due date of the principal of and premium, if any, or interest
(including Liquidated Damages, if any) on any of the Securities, segregate and
hold in trust for the benefit of the Holders a sum sufficient with monies held
by all other Paying Agents, to pay the principal and premium, if any, or
interest (including Liquidated Damages, if any) so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as provided in this
Indenture, and shall promptly notify the Trustee of its action or failure to
act.

SECTION 2.7 GENERAL PROVISIONS RELATING TO TRANSFER AND EXCHANGE.

                  The Securities are issuable only in registered form. A Holder
may transfer a Security only by written application to the Registrar stating the
name of the proposed transferee and otherwise complying with the terms of this
Indenture. No such transfer shall be effected until, and such transferee shall
succeed to the rights of a Holder only upon, final acceptance and registration
of the transfer by the Registrar in the Register. Furthermore, any Holder of a
Global Security shall, by acceptance of such Global Security, agree that
transfers of beneficial interests in such Global Security may be effected only
through a book-entry system maintained by the Holder of such Global Security (or
its agent) and that ownership of a beneficial interest in the Global Security
shall be required to be reflected in a book-entry. Notwithstanding the
foregoing, in the case of a Restricted Security, a beneficial interest in a
Global Security being transferred in reliance on an exemption from the
registration requirements of the Securities Act other than in accordance with
Rule 144, Regulation S or Rule 144A may only be transferred for a Physical
Security.

                  When Securities are presented to the Registrar with a request
to register the transfer or to exchange them for an equal aggregate principal
amount of Securities of other authorized denominations, the Registrar shall
register the transfer or make the exchange as requested if its requirements for
such transactions are met (including that such Securities are duly endorsed or
accompanied by a written instrument of transfer duly executed by the Holder
thereof or by an attorney who is authorized in writing to act on behalf of the
Holder). Subject to Section 2.4, to permit registrations of transfers and
exchanges, the Company shall execute and the Trustee shall authenticate
Securities at the Registrar's request. No service charge shall be made for any
registration of transfer or exchange or redemption of the Securities, but the
Company may require payment of a sum sufficient to cover any transfer tax or
similar

                                       23
<PAGE>

governmental charge payable in connection therewith (other than any such
transfer taxes or other similar governmental charge payable upon exchanges
pursuant to Section 2.14, 7.5 or 10.7).

         Neither the Company nor the Registrar shall be required to exchange or
register a transfer of any Securities:

                  (1) for a period of 15 Business Days prior to the making of a
         Notice of Redemption of Securities selected for redemption under
         Article 10;

                  (2) so selected for redemption or, if a portion of any
         Security is selected for redemption, the portion thereof selected for
         redemption; or

                  (3) surrendered for conversion or, if a portion of any
         Security is surrendered for conversion, the portion thereof surrendered
         for conversion.

         Each Holder of a Security agrees to indemnify the Company and the
Trustee against any liability that may result from the transfer, exchange or
assignment of such Holder's Security in violation of any provision of this
Indenture and/or applicable United States Federal or state securities law.

         The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Security (including any transfers between beneficial owners of any Global
Security) other than to require delivery of such certificates and other
documentation or evidence as are expressly required by, and to do so if and when
expressly required by the terms of, this Indenture, and to examine the same to
determine substantial compliance as to form with the express requirements
hereof.

SECTION 2.8 BOOK-ENTRY PROVISIONS FOR THE GLOBAL SECURITIES.

         (a) The Global Securities initially shall:

                  (i) be registered in the name of the Depositary (or a nominee
         thereof);

                  (ii) be delivered to the Trustee as custodian for such
         Depositary;

                  (iii) bear the Restricted Securities Legend set forth in
         Section 2.3(a)(i); and

                  (iv) the Global Securities Legend set forth in Section 2.3(b).

         Members of, or participants in, the Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depositary, or the Trustee as its custodian, or under such
Global Security, and the Depositary may be treated by the Company, the Trustee
and any agent of the Company or the Trustee as the absolute owner of such Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
contained herein shall prevent the Company, the Trustee or any agent of the
Company or Trustee from giving effect to any written certification, proxy or
other authorization furnished by the Depositary or impair, as between the
Depositary and the Agent Members, the operation of customary practices governing
the exercise of the rights of a Holder of any Security. With respect to any
Global Security deposited on behalf of the subscribers for the Securities
represented thereby with the Trustee as custodian for the Depositary for credit
to their respective accounts (or to such other accounts as they may direct) at
Euroclear or

                                       24
<PAGE>

Clearstream, the provisions of the "Operating Procedures of the Euroclear
System" and the "Terms and Conditions Governing Use of Euroclear" and the
"Management Regulations" and "Instructions to Participants" of Clearstream,
respectively, shall be applicable to the Global Securities.

         (b) The Holder of a Global Security may grant proxies and otherwise
authorize any Person, including DTC Participants and Persons that may hold
interests through DTC Participants, to take any action which a Holder is
entitled to take under this Indenture or the Securities.

         (c) A Global Security may not be transferred, in whole or in part, to
any Person other than the Depositary (or a nominee thereof), and no such
transfer to any such other Person may be registered. Beneficial interests in a
Global Security may be transferred in accordance with the rules and procedures
of the Depositary and the provisions of Section 2.9.

         (d) If at any time:

                  (i) the Depositary notifies the Company in writing that it is
         no longer willing or able to continue to act as Depositary for the
         Global Securities, or the Depositary ceases to be a "clearing agency"
         registered under the Exchange Act and a successor depositary for the
         Global Securities is not appointed by the Company within 120 days of
         such notice or cessation;

                  (ii) the Company, at its option, notifies the Trustee in
         writing that it elects to cause the issuance of the Physical Securities
         under this Indenture in exchange for all or any part of the Securities
         represented by a Global Security or Global Securities; or

                  (iii) an Event of Default has occurred and is continuing and
         the Registrar has received a request from the Depositary for the
         issuance of Physical Securities in exchange for such Global Security or
         Global Securities;

the Depositary shall surrender such Global Security or Global Securities to the
Trustee for cancellation and the Company shall execute, and the Trustee, upon
receipt of an Officers' Certificate and Company Order for the authentication and
delivery of Securities, shall authenticate and deliver in exchange for such
Global Security or Global Securities, Physical Securities in an aggregate
principal amount equal to the aggregate principal amount of such Global Security
or Global Securities. Such Physical Securities shall be registered in such names
as the Depositary shall identify in writing as the beneficial owners of the
Securities represented by such Global Security or Global Securities (or any
nominee thereof).

         (e) Notwithstanding the foregoing, in connection with any transfer of
beneficial interests in a Global Security to the beneficial owners thereof
pursuant to Section 2.8(d), the Registrar shall reflect on its books and records
the date and a decrease in the principal amount of such Global Security in an
amount equal to the principal amount of the beneficial interests in such Global
Security to be transferred.

SECTION 2.9 SPECIAL TRANSFER PROVISIONS.

         Unless a Security is (i) transferred after the time period referred to
in Rule 144(k) under the Securities Act or (ii) sold pursuant to a registration
statement that has been declared effective under the Securities Act (and which
continues to be effective at the time of such sale), the following provisions
shall apply to any sale, pledge or other transfer of Securities:

                                       25
<PAGE>

         (a) TRANSFER OF SECURITIES TO A QIB OR TO A NON-U.S. PERSON IN
ACCORDANCE WITH REGULATION S.

         The following provisions shall apply with respect to the registration
of any proposed transfer of Securities to (x) a QIB or (y) a Non-U.S. Person in
Accordance with Regulation S:

         (i) If the Securities to be transferred consist of a beneficial
interest in the Global Securities, the transfer of such interest may be effected
only through the book-entry systems maintained by Euroclear and Clearstream, if
applicable, and the Depositary.

         (ii) If the Securities to be transferred consist of Physical
Securities, the Registrar shall register the transfer if such transfer is being
made by a proposed transferor who has checked the box provided for on the form
of Security stating (or has otherwise advised the Company and the Registrar in
writing) that the sale has been made:

                  (A) in compliance with the provisions of Rule 144A to a
                  transferee who has signed the certification provided for on
                  the form of Security stating or has otherwise advised the
                  Company and the Registrar in writing that:

                  (1) it is purchasing the Securities for its own account or an
                  account with respect to which it exercises sole investment
                  discretion, in each case for investment and not with a view to
                  distribution;

                  (2) it and any such account is a QIB within the meaning of
                  Rule 144A;

                  (3) it is aware that the sale to it is being made in reliance
                  on Rule 144A;

                  (4) it acknowledges that it has received such information
                  regarding the Company as it has requested pursuant to Rule
                  144A or has determined not to request such information; and

                  (5) it is aware that the transferor is relying upon its
                  foregoing representations in order to claim the exemption from
                  registration provided by Rule 144A, or

                  (B) in compliance with Regulation S to a transferee who has
         signed a certification provided for on the form of Security stating (or
         has otherwise advised the Company and the Registrar in writing) that it
         is not a "U.S. person" as defined in Regulation S.

         In addition, the Registrar shall reflect on its books and records the
date and an increase in the principal amount of the Global Securities in an
amount equal to the aggregate principal amount of the Physical Securities to be
transferred, and the Trustee shall cancel the Physical Securities so
transferred.

         (b) OTHER EXCHANGES.

         In the event that Global Securities are exchanged for Securities in
definitive registered form pursuant to Section 2.8 prior to the effectiveness of
a Shelf Registration Statement with respect to such Securities, such Securities
may be exchanged only in accordance with the provisions of clause (a) above
(including the certification requirements intended to ensure that such transfers
comply with Rule 144A or Regulation S, as the case may be) and such other
procedures as may from time to time be adopted by the Company.

                                       26
<PAGE>

         (c) GENERAL.

         By its acceptance of any Security bearing the Restricted Securities
Legend, each Holder of such a Security acknowledges the restrictions on transfer
of such Security set forth in this Indenture and agrees that it will transfer
such Security only as provided in this Indenture. The Registrar shall not
register a transfer of any Security unless such transfer complies with the
restrictions on transfer of such Security set forth in this Indenture. The
Registrar shall be entitled to receive and rely on written instructions from the
Company verifying that such transfer complies with such restrictions on
transfer. In connection with any transfer of Securities, each Holder agrees by
its acceptance of the Securities to furnish the Registrar or the Company such
certifications, legal opinions or other information as either of them may
reasonably require to confirm that such transfer is being made pursuant to an
exemption from, or a transaction not subject to, the registration requirements
of the Securities Act; provided that the Registrar shall not be required to
determine (but may rely on a determination made by the Company with respect to)
the sufficiency of any such certifications, legal opinions or other information.

         The Registrar shall retain copies of all certifications, letters,
notices and other written communications received pursuant to Section 2.8 hereof
or this Section 2.9. The Company shall have the right to inspect and make copies
of all such letters, notices or other written communications at any reasonable
time upon the giving of reasonable written notice to the Registrar.

SECTION 2.10      HOLDER LISTS.

         The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders and shall otherwise comply with Section 312(a) of the TIA. If the
Trustee is not the Registrar, the Company shall furnish to the Trustee prior to
or on each Interest Payment Date and at such other times as the Trustee may
request in writing a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Holders relating to such
Interest Payment Date or request, as the case may be.

SECTION 2.11      PERSONS DEEMED OWNERS.

                  The Company, the Trustee and any agent of the Company or the
Trustee may treat the Holder as the owner of such Security for the purpose of
receiving payment of principal of and premium, if any, and interest (including
Liquidated Damages, if any) on such Security and for all other purposes
whatsoever, whether or not such Security be overdue, and notwithstanding any
notice of ownership or writing thereon, or any notice of previous loss or theft
or other interest therein.

SECTION 2.12      MUTILATED, DESTROYED, LOST OR 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 is delivered to the Company and the Trustee

                  (1) evidence to their satisfaction of the destruction, loss or
         theft of any Security, and

                  (2) 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

                                       27
<PAGE>

         or the Trustee that such Security has been acquired by a bona fide
         purchaser, the Company shall execute and, upon request, 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, the Company in its discretion, but
subject to any conversion rights, may, instead of issuing a new Security, pay
such Security, upon satisfaction of the condition set forth in the preceding
paragraph.

         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 2.12 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 such new
Security shall be 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 2.12 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 2.13      TREASURY SECURITIES.

         In determining whether the Holders of the requisite principal amount of
Outstanding Securities are present at a meeting of Holders for quorum purposes
or have given any request, demand, authorization, direction, notice, consent or
waiver hereunder, Securities owned by the Company or any Affiliate of the
Company shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
determination as to the presence of a quorum or upon any such request, demand,
authorization, direction, notice, consent or waiver, only such Securities of
which the Trustee has received written notice and are so owned shall be so
disregarded.

SECTION 2.14      TEMPORARY SECURITIES.

         Pending the preparation of Securities in definitive form, the Company
may execute and the Trustee shall, upon written request of the Company,
authenticate and deliver temporary Securities (printed or lithographed).
Temporary Securities shall be issuable in any authorized denomination, and
substantially in the form of the Securities in definitive form but with such
omissions, insertions and variations as may be appropriate for temporary
Securities, all as may be determined by the Company. Every such temporary
Security shall be executed by the Company and authenticated by the Trustee upon
the same conditions and in substantially the same manner, and with the same
effect, as the Securities in definitive form. Without unreasonable delay, the
Company will execute and deliver to the Trustee Securities in definitive form
(other than in the case of Securities in global form) and thereupon any or all
temporary Securities (other than any such Securities in global form) may be
surrendered in exchange therefor, at each office or agency maintained by the
Company pursuant to Section 9.2 and the Trustee shall authenticate and deliver
in exchange for such temporary Securities an equal aggregate principal

                                       28
<PAGE>

amount of Securities in definitive form. Such exchange shall be made by the
Company at its own expense and without any charge therefor. Until so exchanged,
the temporary Securities shall in all respects be entitled to the same benefits
and subject to the same limitations under this Indenture as Securities in
definitive form authenticated and delivered hereunder.

SECTION 2.15      CANCELLATION.

                  All securities surrendered for payment, redemption,
repurchase, conversion, registration of transfer or exchange shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee.
All Securities so delivered shall be canceled promptly by the Trustee, and no
Securities shall be issued in lieu thereof except as expressly permitted by any
of the provisions of this Indenture. The Trustee shall dispose of all cancelled
Securities in accordance with its customary procedures. If the Company shall
acquire any of the Securities, such acquisition shall not operate as a
redemption or satisfaction of the indebtedness represented by such Securities
unless the same are delivered to the Trustee for cancellation.

SECTION 2.16      CUSIP NUMBERS.

                  The Company in issuing the Securities may use "CUSIP" numbers
(if then generally in use), and the Trustee shall use CUSIP numbers in notices
of redemption or exchange as a convenience to Holders; provided that any such
notice shall state that no representation is made as to the correctness of such
numbers either as printed on the Securities or as contained in any such notice
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 shall promptly notify the Trustee of
any change in the CUSIP numbers.

SECTION 2.17      DEFAULTED INTEREST.

                  If the Company fails to make a payment of interest (including
Liquidated Damages, if any) on any Security when due and payable ("Defaulted
Interest"), it shall pay such Defaulted Interest plus (to the extent lawful) any
interest payable on the Defaulted Interest, in any lawful manner. It may elect
to pay such Defaulted Interest, plus any such interest payable on it, to the
Persons who are Holders of such Securities on which the interest is due on a
subsequent Special Record Date. The Company shall notify the Trustee in writing
of the amount of Defaulted Interest proposed to be paid on each such Security.
The Company shall fix any such Special Record Date and payment date for such
payment. At least 15 days before any such Special Record Date, the Company shall
mail to Holders affected thereby a notice that states the Special Record Date,
the Interest Payment Date, and amount of such interest (and such Liquidated
Damages, if any) to be paid.

                                   ARTICLE 3

                           SATISFACTION AND DISCHARGE

SECTION 3.1       SATISFACTION AND DISCHARGE OF INDENTURE.

                  When:

                  (1) the Company shall deliver to the Trustee for cancellation
         all Securities previously authenticated (other than any Securities
         which have been destroyed, lost

                                       29
<PAGE>

         or stolen and in lieu of, or in substitution for which, other
         Securities shall have been authenticated and delivered) and not
         previously canceled; or

                  (2) all the Securities not previously canceled or delivered to
         the Trustee for cancellation will become due and payable or are by
         their terms scheduled to become due and payable, within one year or
         have been called for redemption within one year under arrangements
         satisfactory to the Trustee for the giving of notice of redemption;

                  (3) the Company shall deposit with the Trustee, in trust, cash
         in U.S. Dollars and/or U.S. Government Obligations which through the
         payment of interest and principal in respect thereof, in accordance
         with their terms, will provide (and without reinvestment and assuming
         no tax liability will be imposed on such Trustee), not later than one
         day before the due date of any payment of money, an amount in cash,
         sufficient, in the opinion of a nationally recognized firm of
         independent public accountants expressed in a written certification
         thereof delivered to the Trustee, to pay principal of, premium, if any,
         or interest (including Liquidated Damages, if any) on all of the
         Securities (other than any Securities which shall have been mutilated,
         destroyed, lost or stolen and in lieu of or in substitution for which
         other Securities shall have been authenticated and delivered) not
         previously canceled or delivered to the Trustee for cancellation, on
         the dates such payments of principal, premium, if any, or interest
         (including Liquidated Damages, if any) are due to such date of Maturity
         or redemption, as the case may be; and

                  (4) the Company shall have delivered to the Trustee an
         Officers' Certificate and an Opinion of Counsel to the effect that (x)
         the Company has received from, or there has been published by, the
         Internal Revenue Service a ruling or (y) since the date of execution of
         this Indenture, there has been a change in the applicable federal
         income tax law, in the case of either clause (x) or (y) to the effect
         that, and based thereon such Opinion of Counsel shall confirm that, the
         Holders will not recognize income, gain or loss for federal income tax
         purposes as a result of such deposit and discharge and will be subject
         to federal income tax on the same amount and in the same manner and at
         the same times as would have been the case if such deposit and
         discharge had not occurred; and

if, in the case of either clause (3) or (4), the Company shall also pay or cause
to be paid all other sums payable hereunder by the Company, then this Indenture
shall cease to be of further effect (except as to:

                  (i) remaining rights of registration of transfer, substitution
         and exchange and conversion of Securities;

                  (ii) rights hereunder of Holders to receive payments of
         principal of and premium, if any, and interest (including Liquidated
         Damages, if any) on, the Securities and the other rights, duties and
         obligations of Holders, as beneficiaries hereof with respect to the
         amounts, if any, so deposited with the Trustee; and

                  (iii) the rights, obligations and immunities of the Trustee
         hereunder);

and the Trustee, on demand of the Company accompanied by an Officers'
Certificate and an Opinion of Counsel and at the cost and expense of the
Company, shall execute proper instruments acknowledging satisfaction of and
discharging this Indenture; provided, however, that the Company shall reimburse
the Trustee for all amounts due the Trustee under Section 5.8 and for any costs
or expenses thereafter

                                       30
<PAGE>

reasonably and properly incurred by the Trustee and to compensate the Trustee
for any services thereafter reasonably and properly rendered by the Trustee in
connection with this Indenture or the Securities.

SECTION 3.2       DEPOSITED MONIES TO BE HELD IN TRUST.

                  Subject to Section 3.3, all monies deposited with the Trustee
pursuant to Section 3.1 shall be held in trust and applied by it to the payment,
notwithstanding the provisions of Article 13, either directly or through any
Paying Agent (including the Company if acting as its own Paying Agent), to the
Holders of the particular Securities for the payment or redemption of which such
monies have been deposited with the Trustee, of all sums due and to become due
thereon for principal, premium, if any, and interest (including Liquidated
Damages, if any). All monies deposited with the Trustee pursuant to Section 3.1
(and held by it or any Paying Agent) for the payment of Securities subsequently
converted shall be returned to the Company upon the earlier of the request of
the Company and the date on which there are no Securities outstanding.

SECTION 3.3       RETURN OF UNCLAIMED MONIES.

                  The Trustee and the Paying Agent shall pay to the Company any
money held by them for the payment of principal or premium, if any, or interest
(including Liquidated Damages, if any) that remains unclaimed for two years
after the date upon which such payment shall have become due. After payment to
the Company, Holders entitled to the money must look to the Company for payment
as general creditors unless an applicable abandoned property law designates
another Person, and all liability of the Trustee and such Paying Agent with
respect to such money shall cease.

                                   ARTICLE 4

                              DEFAULTS AND REMEDIES

SECTION 4.1       EVENTS OF DEFAULT.

                  An "Event of Default" with respect to the Securities occurs
when any of the following occurs (whatever the reason for such Event of Default
and whether it shall be occasioned by the provisions of Article 13 or 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 for 30 days in the payment when due of interest or
         Liquidated Damages on the Securities, whether or not prohibited by the
         subordination provisions of this Indenture;

                  (2) default in payment when due of the principal of or
         premium, if any, on the Securities, whether or not prohibited by the
         subordination provisions of this Indenture;

                  (3) failure by the Company to comply with any of its other
         agreements in this Indenture or the Securities (other than a default
         specified in clause (1) or (2) above) and such default or breach
         continues for a period of 60 consecutive days after written notice of
         such breach or default shall have been given to the Company by the
         Trustee or to the Company and the Trustee by the Holders of 25% or more
         in aggregate principal amount of the Outstanding Securities;

                                       31
<PAGE>

                  (4) a default under any mortgage, indenture or instrument
         under which there may be issued or by which there may be secured or
         evidenced any Indebtedness of the Company or any of its Subsidiaries
         (other than the Excluded Subsidiaries) for money borrowed (or the
         payment of which is guaranteed by the Company or any of those
         Subsidiaries) whether such Indebtedness or guarantee now exists, or is
         created after the date of this Indenture, which default results in the
         acceleration of such Indebtedness prior to its express maturity and, in
         each case, the principal amount of such Indebtedness, together with the
         principal amount of any other such Indebtedness the maturity of which
         has been so accelerated, aggregates $10.0 million or more;

                  (5) failure by the Company or any of its Subsidiaries (other
         than the Excluded Subsidiaries) to pay final judgments aggregating in
         excess of $10.0 million, which judgments are not paid, discharged or
         stayed for a period of 60 days;

                  (6) the commencement by the Company of a voluntary case or
         proceeding under any applicable U.S. 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
         the Company to the entry of a decree or order for relief in respect of
         the Company in an involuntary case or proceeding under any applicable
         U.S. federal or state bankruptcy, insolvency, reorganization or other
         similar law or to the commencement of any bankruptcy or insolvency case
         or proceeding against the Company, or the filing by the Company of a
         petition or answer or consent seeking reorganization or relief under
         any applicable U.S. federal or state law, or the consent by the Company
         to the filing of such petition or to the appointment of or the taking
         possession by a Custodian of the Company or of any substantial part of
         its property, or the making by the Company of an assignment for the
         benefit of creditors, or the admission by the Company in writing of its
         inability to pay its debts generally as they become due, or the taking
         of corporate action by the Company expressly in furtherance of any such
         action; and

                  (7) except as permitted by this Indenture, any Guarantee shall
         be held in any judicial proceeding to be unenforceable or invalid.

SECTION 4.2       ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.

         If an Event of Default with respect to Outstanding Securities other
than the Event of Default specified in Section 4.1(6) above occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of the Outstanding Securities, by written notice to the Company, may
declare due and payable 100% of the principal amount of all Outstanding
Securities plus any accrued and unpaid interest (including Liquidated Damages,
if any) to the date of payment. Upon a declaration of acceleration, such
principal and accrued and unpaid interest (including Liquidated Damages, if any)
to the date of payment shall be immediately due and payable.

         The Holders either (a) through notice to the Trustee of not less than a
majority in aggregate principal amount of the Outstanding Securities, or (b) by
the adoption of a resolution, at a meeting of Holders of the Outstanding
Securities at which a quorum is present, by the Holders of at least a majority
in aggregate principal amount of the Outstanding Securities represented at such
meeting, may, on behalf of the Holders of all of the Securities, rescind and
annul an acceleration and its consequences if:

                  (1) all existing Events of Default, other than the nonpayment
         of principal of or interest on the Securities which have become due
         solely because of the acceleration, have been remedied, cured or
         waived, and

                                       32
<PAGE>

                  (2) the rescission would not conflict with any judgment or
         decree of a court of competent jurisdiction.

No such rescission or annulment shall affect any subsequent Default or impair
any right consequent thereon. If an Event of Default under Section 4.1(6) occurs
and is continuing with respect to the Company, then, without any further action
by the Holders, the principal amount of all Outstanding Securities plus any
accrued and unpaid interest (including Liquidated Damages, if any) shall become
immediately due and payable.

SECTION 4.3       OTHER REMEDIES.

                  If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy to collect the payment of principal, premium, if
any, and interest on the Securities or to enforce the performance of any
provision of the Securities or this Indenture.

                  The Trustee may maintain a proceeding even if it does not
possess any of the Notes or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Holder of a Security in exercising any
right or remedy accruing upon an Event of Default shall not impair the right or
remedy or constitute a waiver of or acquiescence in the Event of Default. All
remedies are cumulative to the extent permitted by law.

SECTION 4.4       WAIVER OF PAST DEFAULTS.

                  The Holders, either (a) through the written consent of not
less than a majority in aggregate principal amount of the Outstanding
Securities, or (b) by the adoption of a resolution, at a meeting of Holders of
the Outstanding Securities at which a quorum is present, by the Holders of at
least a majority in aggregate principal amount of the Outstanding Securities
represented at such meeting, may, on behalf of the Holders of all of the
Securities, waive an existing Default or Event of Default, except a Default or
Event of Default:

                  (1) in the payment of the principal of or premium, if any, or
         interest (including Liquidated Damages, if any) on any Security
         (provided, however, that subject to Section 4.7, the Holders of a
         majority in aggregate principal amount of the Outstanding Securities
         may rescind an acceleration and its consequences, including any related
         payment default that resulted from such acceleration); or

                  (2) in respect of a covenant or provision hereof which, under
         Section 7.2, cannot be modified or amended without the consent of the
         Holders of each Outstanding Security affected.

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; provided, however, that no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon.

SECTION 4.5       CONTROL BY MAJORITY.

                  The Holders of a majority in aggregate principal amount of the
Outstanding Securities (or such lesser amount as shall have acted at a meeting
pursuant to the provisions of this Indenture) shall have the right to direct the
time, method and place of conducting any proceeding for any remedy available to

                                       33
<PAGE>

the Trustee or exercising any trust or power conferred on the Trustee. However,
the Trustee may refuse to follow any direction that:

                  (1) conflicts with any law or with this Indenture;

                  (2) the Trustee determines may be unduly prejudicial to the
         rights of the Holders not joining therein; or

                  (3) may expose the Trustee to personal liability.

The Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.

SECTION 4.6       LIMITATION ON SUIT.

                  No Holder of any Security shall have any right to pursue any
remedy with respect to this Indenture or the Securities (including, instituting
any proceeding, judicial or otherwise, with respect to this Indenture or for the
appointment of a receiver or trustee) unless:

                  (1) such Holder has previously given written notice to the
         Trustee of an Event of Default that is continuing;

                  (2) the Holders of at least 25% in aggregate principal amount
         of the Outstanding Securities shall have made written request to the
         Trustee to pursue the remedy;

                  (3) such Holder or Holders have offered to the Trustee
         indemnity satisfactory to it against any costs, expenses and
         liabilities incurred in complying with such request;

                  (4) the Trustee has failed to comply with the request for 60
         days after its receipt of such notice, request and offer of indemnity;
         and

                  (5) during such 60-day period, no direction inconsistent with
         such written request has been given to the Trustee by the Holders of a
         majority in aggregate principal amount of the Outstanding Securities
         (or such amount as shall have acted at a meeting pursuant to the
         provisions of this Indenture);

provided, however, that no one or more of such Holders may use this Indenture to
prejudice the rights of another Holder or to obtain preference or priority over
another Holder.

SECTION 4.7       UNCONDITIONAL RIGHTS OF HOLDERS TO RECEIVE PAYMENT AND TO
                  CONVERT.

                  Notwithstanding any other provision in this Indenture, the
Holder of any Security shall have the right, which is absolute and
unconditional, to receive payment of the principal of and premium, if any, and
interest (including Liquidated Damages, if any) on such Security on the Stated
Maturity expressed in such Security (or, in the case of redemption, on the
Redemption Date, or in the case of the exercise of a Repurchase Right, on the
Repurchase Date) and to convert such Security in accordance with Article 12, and
to bring an action for the enforcement of any such payment on or after such
respective dates and such right to convert, and such rights shall not be
impaired or affected without the consent of such Holder.

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<PAGE>

SECTION 4.8 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY THE TRUSTEE.

         The Company covenants that if:

                  (1) a Default or Event of Default is made in the payment of
         any interest (including Liquidated Damages, if any) on any Security
         when such interest (including Liquidated Damages, if any) becomes due
         and payable and such Default or Event of Default continues for a period
         of 30 days; or

                  (2) a Default or Event of Default is made in the payment of
         the principal of or premium, if any, on any Security at the Maturity
         thereof;

the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable (as expressed
therein or as a result of any acceleration effected pursuant to Section 4.2) on
such Securities for principal and premium, if any, and interest (including
Liquidated Damages, if any) and, to the extent that payment of such interest
shall be legally enforceable, interest on any overdue principal and premium, if
any, and on any overdue interest (including Liquidated Damages, if any),
calculated using the Interest Rate, 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.

                  If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company and collect the monies adjudged or decreed
to be payable in the manner provided by law out of the property of the Company,
wherever situated.

                  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 of Securities 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 4.9       TRUSTEE MAY FILE PROOFS OF CLAIM.

                  In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to the Company or the property of the Company
or its creditors, the Trustee (irrespective of whether the principal of the
Securities shall then be due and payable as therein expressed or by declaration
or otherwise and irrespective of whether the Trustee shall have made any demand
on the Company for the payment of overdue principal or interest (including
Liquidated Damages, if any)) shall be entitled and empowered, by intervention in
such proceeding or otherwise:

                  (1) to file and prove a claim for the whole amount of
         principal and premium, if any, and interest (including Liquidated
         Damages, if any) owing and unpaid in respect of the Securities and to
         file such other papers or documents as may be necessary or advisable in
         order to have the claims of the Trustee (including any claim for the
         reasonable compensation, expenses, disbursements and advances of the
         Trustee, its agents and counsel) and of the Holders of Securities
         allowed in such judicial proceeding; and

                                       35
<PAGE>

                  (2) to collect and receive any monies or other property
         payable or deliverable on any such claim and to distribute the same;

and any Custodian in any such judicial proceedings is hereby authorized by each
Holder of Securities 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
of Securities, to pay to the Trustee any amount due to 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 5.8.

                  Nothing contained herein shall be deemed to authorize the
Trustee to authorize or consent to or accept, or adopt on behalf of any Holder
of a Security, 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 of a
Security in any such proceeding.

SECTION 4.10      RESTORATION OF RIGHTS AND REMEDIES.

                  If the Trustee or any Holder of a Security 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 of Securities 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 4.11      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 2.12, no right or remedy conferred in this Indenture upon
or reserved to the Trustee or to the Holders of Securities 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 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 4.12      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 any acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders of Securities may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders of Securities, as the case may be.

SECTION 4.13      APPLICATION OF MONEY COLLECTED.

                  Subject to Article 13, 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 of such money on
account of principal or premium, if any, or interest (including Liquidated
Damages, if any), upon presentation of the Securities and the notation thereon
of the payment if only partially paid and upon surrender thereof if fully paid:

                                       36
<PAGE>

                  FIRST:  To the payment of all amounts due the Trustee;

                  SECOND: To the payment of the amounts then due and unpaid for
                  principal of and premium, if any, and interest (including
                  Liquidated Damages, if any) 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 for principal and premium, if any, and interest
                  (including Liquidated Damages, if any), respectively; and

                  THIRD:  Any remaining amounts shall be repaid to the Company.

SECTION 4.14      UNDERTAKING FOR COSTS.

                  All parties to this Indenture agree, and each Holder of any
Security by such Holder's acceptance thereof shall be deemed to have agreed,
that any court may in its discretion require, 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, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in aggregate
principal amount of the Outstanding Securities, or to any suit instituted by any
Holder of any Security for the enforcement of the payment of the principal of or
premium, if any, or interest (including Liquidated Damages, if any) on any
Security on or after the Stated Maturity expressed in such Security (or, in the
case of redemption or exercise of a Repurchase Right, on or after the Redemption
Date) or for the enforcement of the right to convert any Security in accordance
with Article 12.

SECTION 4.15      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 to 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.

                                    ARTICLE 5

                                   THE TRUSTEE

SECTION 5.1       CERTAIN DUTIES AND RESPONSIBILITIES.

       (a) Except during the continuance of an Event of Default,

                  (1) The Trustee undertakes to perform such duties and only
         such duties as are specifically set forth in this Indenture or the TIA,
         and no implied covenants or obligations shall be read into this
         Indenture against the Trustee; and

                                       37
<PAGE>

                  (2) In the absence of bad faith on its part, the Trustee may
         conclusively rely, as to the truth of the statements and the
         correctness of the opinions expressed therein, upon certificates or
         opinions furnished to the Trustee and conforming to the requirements of
         this Indenture; provided, however, that in the case of any such
         certificates or opinions which by any provision hereof are specifically
         required to be furnished to the Trustee, the Trustee shall examine the
         certificates or opinions to determine whether or not, on their face,
         they conform to the requirements to this Indenture (but need not
         investigate or confirm the accuracy of mathematical calculations or any
         facts stated therein).

         (b) In case an Event of Default actually known to a Responsible Officer
of the Trustee has occurred and is continuing, the Trustee shall exercise such
of the rights and powers vested in it by this Indenture, and use the same degree
of care and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of such person's own affairs.

         (c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:

                  (1) This paragraph (c) shall not be construed to limit the
         effect of paragraph (a) of this Section 5.1;

                  (2) The Trustee shall not be liable for any error of judgment
         made in good faith by a Responsible Officer, unless it shall be proved
         that the Trustee was negligent in ascertaining the pertinent facts; and

                  (3) The Trustee shall not be liable with respect to any action
         taken or omitted to be taken by it in good faith in accordance with a
         direction received by it of the Holders of a majority in principal
         amount of the Outstanding Securities (or such lesser amount as shall
         have acted at a meeting pursuant to the provisions of this Indenture)
         relating to the time, method and place of conducting any proceeding for
         any remedy available to the Trustee, or exercising any trust or power
         conferred upon the Trustee, under this Indenture.

         (d) Whether or not herein 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 5.1.

         (e) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any liability in the performance of any
of its duties hereunder, or in the exercise of any of its rights or powers. The
Trustee may refuse to perform any duty or exercise any right or power unless it
receives indemnity satisfactory to it against any loss, liability, cost or
expense (including, without limitation, reasonable fees of counsel).

         (f) The Trustee shall not be obligated to pay interest on any money or
other assets received by it unless otherwise agreed in writing with the Company.
Assets held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.

         (g) 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,

                                       38
<PAGE>

direction, consent, order, bond, debenture, note, coupon, 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 at the sole cost of the
Company and shall incur no liability or additional liability of any kind by
reason of such inquiry or investigation.

         (h) The Trustee shall not be deemed to have notice or actual knowledge
of any Default or Event of Default unless a Responsible Officer of the Trustee
has actual knowledge thereof or unless written notice of any event which is in
fact a Default is received by the Trustee pursuant to Section 15.2, and such
notice references the Securities and this Indenture.

         (i) The rights, privileges, protections, immunities and benefits given
to the Trustee hereunder, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and each Paying Agent, authenticating agent,
Conversion Agent or Registrar acting hereunder.

SECTION 5.2       CERTAIN RIGHTS OF TRUSTEE.

         Subject to the provisions of Section 5.1 and subject to Section 315(a)
through (d) of the TIA:

                  (1) The Trustee may conclusively rely on any document believed
         by it to be genuine and to have been signed or presented by the proper
         person. The Trustee need not investigate any fact or matter stated in
         the document.

                  (2) Before the Trustee acts or refrains from acting, it may
         require an Officers' Certificate or an Opinion of Counsel, or both. The
         Trustee shall not be liable for any action it takes or omits to take in
         good faith in reliance on the Officers' Certificate or Opinion of
         Counsel.

                  (3) The Trustee may act through attorneys and agents and shall
         not be responsible for the misconduct or negligence of any attorney or
         agent appointed with due care.

                  (4) The Trustee shall not be liable for any action taken or
         omitted to be taken by it in good faith which it believed to be
         authorized or within the discretion or rights or powers conferred upon
         it by this Indenture, unless the Trustee's conduct constitutes
         negligence.

                  (5) The Trustee may consult with counsel of its selection and
         the advice of such counsel as to matters of law shall be full and
         complete authorization and protection in respect of any action taken,
         omitted or suffered by it hereunder in good faith and in accordance
         with the advice or opinion of such counsel.

                  (6) Unless otherwise specifically provided in this Indenture,
         any demand, request, direction or notice from the Company shall be
         sufficiently evidenced by a Company order and any resolution of the
         Board of Directors shall be sufficiently evidenced by a Board
         Resolution.

                                       39
<PAGE>

                  (7) The permissive rights of the Trustee to do things
         enumerated in this Indenture shall not be construed as a duty unless so
         specified herein.

                  (8) The Trustee may request that the Company deliver an
         Officers' Certificate setting forth the names of individuals and/or
         titles of officers authorized at such time to take specified actions
         pursuant to this Indenture, which Officers' Certificate may be signed
         by any person authorized to sign an Officers' Certificate, including
         any person specified as so authorized in any such certificate
         previously delivered and not superceded.

SECTION 5.3       INDIVIDUAL RIGHTS OF TRUSTEE.

                  The Trustee in its individual or any other capacity may become
the owner or pledgee of Securities and may otherwise deal with the Company or
any Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest (as such term is defined in Section 310(b) of the TIA), it must
eliminate such conflict within 90 days, apply to the SEC for permission to
continue as trustee (to the extent permitted under Section 310(b) of the TIA) or
resign. Any agent may do the same with like rights and duties. The Trustee is
also subject to Sections 5.11 and 5.12.

SECTION 5.4       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 expressly agreed with the Company.

SECTION 5.5       TRUSTEE'S DISCLAIMER.

                  The recitals contained herein and in the Securities (except
for those in the certificate of authentication) shall be taken as the statements
of the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity, sufficiency or priority
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.

SECTION 5.6       NOTICE OF DEFAULTS.

                  Within 90 days after the occurrence of any Default or Event of
Default hereunder of which the Trustee has received written notice, the Trustee
shall give notice to Holders pursuant to Section 15.2, unless such Default or
Event of Default shall have been cured or waived; provided, however, that,
except in the case of a Default or Event of Default in the payment of the
principal of or premium, if any, or interest (including Liquidated Damages, if
any), or in the payment of any redemption or repurchase obligation on any
Security, the Trustee shall be protected in withholding such notice if and so
long as Responsible Officers of the Trustee in good faith determine that the
withholding of such notice is in the interest of the Holders. The Company will
give the Trustee notice of any uncured Event of Default within 10 days after any
Responsible Officer of the Company becomes aware of or receives actual notice of
such Event of Default.

                                       40
<PAGE>

SECTION 5.7       REPORTS BY TRUSTEE TO HOLDERS.

         The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required by Section 313
of the TIA at the times and in the manner provided by the TIA.

         A copy of each report at the time of its mailing to Holders shall be
filed with the SEC, if required, and each stock exchange, if any, on which the
Securities are listed. The Company shall promptly notify the Trustee when the
Securities become listed on any stock exchange or any delisting thereof.

SECTION 5.8       COMPENSATION AND INDEMNIFICATION.

         The Company covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, such compensation for all services
rendered by it hereunder as the parties shall agree from time to time (which
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) and the Company covenants and agrees to pay or
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by or on behalf of it in accordance
with any of the provisions of this Indenture (including the reasonable
compensation and the expenses and disbursements of its counsel and of all agents
and other persons not regularly in its employ), except to the extent that any
such expense, disbursement or advance is due to its negligence or bad faith.
When the Trustee incurs expenses or renders services in connection with an Event
of Default specified in Section 4.1, the expenses (including the reasonable
charges and expenses of its counsel) and the compensation for the services are
intended to constitute expenses of administration under any Bankruptcy Law. The
Company also covenants to indemnify the Trustee and its officers, directors,
employees and agents for, and to hold such Persons harmless against, any loss,
liability or expense including taxes (other than taxes based on the income of
the Trustee) incurred by them, arising out of or in connection with the
acceptance or administration of this Indenture or the trusts hereunder or the
performance of their duties hereunder, including the costs and expenses of
defending themselves against or investigating any claim (whether asserted by the
Company, any Holder or any other Person) or liability in connection with the
exercise or performance of any of its powers or duties hereunder, except to the
extent that any such loss, liability or expense was due to the negligence or
willful misconduct of such Persons. The obligations of the Company under this
Section 5.8 to compensate and indemnify the Trustee and its officers, directors,
employees and agents and to pay or reimburse such Persons for expenses,
disbursements and advances shall constitute additional indebtedness hereunder
and shall survive the satisfaction and discharge of this Indenture or the
earlier resignation or removal of the Trustee. Such additional indebtedness
shall be a lien prior to that of the Securities upon all property and funds held
or collected by the Trustee as such, except funds held in trust for the benefit
of the Holders of particular Securities, and the Securities are hereby
subordinated to such senior claim. "Trustee" for purposes of this Section 5.8
shall include any predecessor Trustee, but the negligence or willful misconduct
of any Trustee shall not affect the indemnification of any other Trustee.

SECTION 5.9       REPLACEMENT OF TRUSTEE.

         A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 5.9.

                                       41
<PAGE>

                  The Trustee may resign and be discharged from the trust hereby
created by so notifying the Company in writing. The Holders of at least a
majority in aggregate principal amount of Outstanding Securities may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company must
remove the Trustee if:

                  (i) the Trustee fails to comply with Section 5.11 or Section
         310 of the TIA;

                  (ii) the Trustee becomes incapable of acting;

                  (iii) the Trustee is adjudged a bankrupt or an insolvent or an
         order for relief is entered with respect to the Trustee under any
         Bankruptcy Law; or

                  (iv) a Custodian or public officer takes charge of the Trustee
         or its property.

                  If the Trustee resigns or is removed or if a vacancy exists in
the office of the Trustee for any reason, the Company shall promptly appoint a
successor Trustee. The Trustee shall be entitled to payment of its fees and
reimbursement of its expenses while acting as Trustee. Within one year after the
successor Trustee takes office, the Holders of at least a majority in aggregate
principal amount of Outstanding Securities may appoint a successor Trustee to
replace the successor Trustee appointed by the Company.

                  Any Holder may petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor Trustee if the
Trustee fails to comply with Section 5.10.

                  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 or removal, the resigning or removed Trustee, as the case
may be, may petition, at the expense of the Company, any court of competent
jurisdiction for the appointment of a successor Trustee.

                  A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The Company shall issue a notice of the successor
Trustee's succession to the Holders. Upon payment of its charges, the retiring
Trustee shall promptly transfer all property held by it as Trustee to the
successor Trustee, subject nevertheless to its lien, if any, provided for in
Section 5.8. Notwithstanding replacement of the Trustee pursuant to this Section
5.9, the Company's obligations under Section 5.8 shall continue for the benefit
of the retiring Trustee with respect to expenses, losses and liabilities
incurred by it prior to such replacement.

SECTION 5.10      SUCCESSOR TRUSTEE BY MERGER, ETC.

                  Subject to Section 5.11, if the Trustee consolidates with,
merges or converts into, or transfers all or substantially all of its corporate
trust business (including the administration of this Indenture) to, another
Person, corporation or national banking association, the successor entity
without any further act shall be the successor Trustee as to the Securities.

SECTION 5.11      CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.

                  The Trustee shall at all times satisfy the requirements of
Section 310(a)(1), (2) and (5) of the TIA. The Trustee shall at all times have
(or, in the case of a corporation included in a bank holding

                                       42
<PAGE>

company system, the related bank holding company shall at all times have), a
combined capital and surplus of at least $25 million as set forth in its (or its
related bank holding company's) most recent published annual report of
condition. The Trustee is subject to Section 310(b) of the TIA.

SECTION 5.12      COLLECTION OF CLAIMS AGAINST THE COMPANY.

                  The Trustee is subject to Section 311(a) of the TIA, excluding
any creditor relationship listed in Section 311(b) of the TIA. A Trustee who has
resigned or been removed shall be subject to Section 311(a) of the TIA to the
extent indicated therein.

                                   ARTICLE 6

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

SECTION 6.1       COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.

                  The Company shall not consolidate with or merge with or 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 the event that the Company shall consolidate with or
         merge into another Person or convey, transfer or lease its properties
         and assets substantially 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 organized and validly existing under the laws of the
         United States of America, any State thereof or the District of Columbia
         and, if the entity surviving such transaction or transferee entity is
         not the Company, then such surviving or transferee entity 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 the principal of and premium, if any and
         interest (including Liquidated Damages, if any), on all the Securities
         and the performance of every covenant of this Indenture on the part of
         the Company to be performed or observed and shall have provided for
         conversion rights in accordance with Section 12.11;

                  (2) at the time of consummation of 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 happened and be
         continuing; and

                  (3) the Company shall have 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.

                                       43
<PAGE>

SECTION 6.2       SUCCESSOR CORPORATION SUBSTITUTED.

                  Upon any consolidation or merger by the Company with or into
any other corporation or any conveyance, transfer or lease of the properties and
assets of the Company substantially as an entirety to any Person, in accordance
with Section 6.1, the successor corporation 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 corporation had been named as the Company herein, and thereafter,
except in the case of a lease to another Person, the predecessor corporation
shall be relieved of all obligations and covenants under this Indenture and the
Securities.

                                   ARTICLE 7

                       AMENDMENTS, SUPPLEMENTS AND WAIVERS

SECTION 7.1       WITHOUT CONSENT OF HOLDERS OF SECURITIES.

         Without the consent of any Holders of Securities, the Company, when
authorized by a Board Resolution, and the Trustee, at any time and from time to
time, may amend this Indenture and the Securities to:

                  (a) add to the covenants of the Company and/or the Guarantors
         for the benefit of the Holders of Securities;

                  (b) surrender any right or power herein conferred upon the
         Company and/or the Guarantors;

                  (c) make provision with respect to the conversion rights of
         Holders of Securities pursuant to Section 12.11;

                  (d) provide for the assumption of the Company's obligations to
         the Holders of Securities in the case of a merger, consolidation,
         conveyance, transfer or lease pursuant to Article 6;

                  (e) reduce the Conversion Price; provided, however, that such
         reduction in the Conversion Price shall not adversely affect the
         interest of the Holders of Securities (after taking into account tax
         and other consequences of such reduction);

                  (f) comply with the requirements of the SEC in order to effect
         or maintain the qualification of this Indenture under the TIA;

                  (g) make any changes or modifications necessary in connection
         with the registration of any Securities under the Securities Act as
         contemplated in the Registration Rights Agreement; provided, however,
         that such action pursuant to this clause (g) does not, in the good
         faith opinion of the Board of Directors (as evidenced by a Board
         Resolution) and the Trustee, adversely affect the interests of the
         Holders of Securities in any material respect;

                  (h) cure any ambiguity, or correct or supplement any provision
         herein which may be inconsistent with any other provision herein or
         which is otherwise defective; provided, however,

                                       44
<PAGE>

         that such action pursuant to this clause (h) does not, in the good
         faith opinion of the Board of Directors (as evidenced by a Board
         Resolution) and the Trustee, adversely affect the interests of the
         Holders of Securities in any material respect; or

                  (i) add or modify any other provisions with respect to matters
         or questions arising under this Indenture which the Company and the
         Trustee may deem necessary or desirable; provided, however, that such
         action pursuant to this clause (i) does not, in the good faith opinion
         of the Board of Directors (as evidenced by a Board Resolution) and the
         Trustee, adversely affect the interests of the Holders of Securities in
         any material respect.

SECTION 7.2 WITH CONSENT OF HOLDERS OF SECURITIES.

                  Except as provided below in this Section 7.2, this Indenture
or the Securities may be amended or supplemented, and noncompliance in any
particular instance with any provision of this Indenture or the Securities may
be waived, in each case (i) with the written consent of the Holders of at least
a majority in aggregate principal amount of the Outstanding Securities or (ii)
by the adoption of a resolution, at a meeting of Holders of the Outstanding
Securities at which a quorum is present, by the Holders of a majority in
aggregate principal amount of the Outstanding Securities represented at such
meeting.

                  Without the written consent or the affirmative vote of each
Holder of Securities affected thereby, an amendment or waiver under this Section
7.2 may not:

                  (a) change the Stated Maturity of the principal of, or any
         installment of interest (including Liquidated Damages, if any) on, any
         Security;

                  (b) reduce the principal amount of, or any premium or interest
         (including Liquidated Damages, if any), on any Security;

                  (c) change the currency of payment of principal of, premium,
         if any, or interest (including Liquidated Damages, if any) on any
         Security;

                  (d) impair the right of any Holder to institute suit for the
         enforcement of any payment in or with respect to any Security;

                  (e) modify the obligation of the Company to maintain an office
         or agency in The City of New York pursuant to Section 9.2;

                  (f) except as permitted by Section 12.11, adversely affect the
         Repurchase Right or the right to convert any Security as provided in
         Article 12;

                  (g) modify the provisions in Article 13 or Article 14 relating
         to the subordination of the Securities in a manner adverse to the
         Holders of Securities;

                  (h) modify the provisions in Article 10 relating to the
         redemption of the Securities in a manner adverse to the Holders of
         Securities;

                  (i) modify any of the provisions of this Section 4.4 or
         Section 7.2, except to increase any percentage contained herein or
         therein or to provide that certain other provisions of this

                                       45
<PAGE>

         Indenture cannot be modified or waived without the consent of the
         Holder of each Outstanding Security affected thereby; or

                  (j) reduce the requirements of Section 8.4 for quorum or
         voting, or reduce the percentage in aggregate principal amount of the
         Outstanding Securities the consent of whose Holders is required for any
         such supplemental indenture or the consent of whose Holders is required
         for any waiver provided for in this Indenture.

                  It shall not be necessary for any Act of Holders of Securities
under this Section 7.2 to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such Act shall approve the
substance thereof.

SECTION 7.3       COMPLIANCE WITH TRUST INDENTURE ACT.

                  Every amendment to this Indenture or the Securities shall be
set forth in a supplemental indenture that complies with the TIA as then in
effect.

SECTION 7.4       REVOCATION OF CONSENTS AND EFFECT OF CONSENTS OR VOTES.

                  Until an amendment, supplement or waiver becomes effective, a
written consent to it by a Holder is a continuing consent by the Holder and
every subsequent Holder of a Security or portion of a Security that evidences
the same debt as the consenting Holder's Security, even if notation of the
consent is not made on any Security; provided, however, that unless a record
date shall have been established, any such Holder or subsequent Holder may
revoke the consent as to its Security or portion of a Security if the Trustee
receives written notice of revocation before the date the amendment, supplement
or waiver becomes effective.

                  An amendment, supplement or waiver becomes effective on
receipt by the Trustee of written consents from or affirmative votes by, as the
case may be, the Holders of the requisite percentage of aggregate principal
amount of the Outstanding Securities, and thereafter shall bind every Holder of
Securities; provided, however, if the amendment, supplement or waiver makes a
change described in any of the clauses (a) through (j) of Section 7.2, the
amendment, supplement or waiver shall bind only each Holder of a Security which
has consented to it or voted for it, as the case may be, and every subsequent
Holder of a Security or portion of a Security that evidences the same
indebtedness as the Security of the consenting or affirmatively voting Holder,
as the case may be.

SECTION 7.5       NOTATION ON OR EXCHANGE OF SECURITIES.

                  If an amendment, supplement or waiver changes the terms of a
Security:

                  (a) the Trustee may require the Holder of a Security to
         deliver such Securities to the Trustee, the Trustee may place an
         appropriate notation on the Security about the changed terms and return
         it to the Holder and the Trustee may place an appropriate notation on
         any Security thereafter authenticated; or

                  (b) if the Company or the Trustee so determines, the Company
         in exchange for the Security shall issue and the Trustee shall
         authenticate a new Security that reflects the changed terms.

                                       46
<PAGE>

                  Failure to make the appropriate notation or issue a new
Security shall not affect the validity and effect of such amendment, supplement
or waiver.

SECTION 7.6       TRUSTEE TO SIGN AMENDMENT, ETC.

                  The Trustee shall sign any amendment authorized pursuant to
this Article 7 if the amendment does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. If the amendment does adversely affect
the rights, duties, liabilities or immunities of the Trustee, the Trustee may
but need not sign it. In signing or refusing to sign such amendment, the Trustee
shall be entitled to receive and shall be fully protected in relying upon an
Officers' Certificate and an Opinion of Counsel as conclusive evidence that such
amendment is authorized or permitted by this Indenture.

                                   ARTICLE 8

                        MEETING OF HOLDERS OF SECURITIES

SECTION 8.1       PURPOSES FOR WHICH MEETINGS MAY BE CALLED.

                  A meeting of Holders of Securities may be called at any time
and from time to time pursuant to this Article to make, give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be made, given or taken by Holders of
Securities.

SECTION 8.2       CALL NOTICE AND PLACE OF MEETINGS.

                  (a) The Trustee may at any time call a meeting of Holders of
Securities for any purpose specified in Section 8.1, to be held at such time and
at such place in The City of New York. Notice of every meeting of Holders of
Securities, setting forth the time and the place of such meeting and in general
terms the action proposed to be taken at such meeting, shall be given, in the
manner provided in Section 15.2, not less than 21 nor more than 180 days prior
to the date fixed for the meeting.

                  (b) In case at any time the Company, pursuant to a Board
Resolution, or the Holders of at least 10% in principal amount of the
Outstanding Securities shall have requested the Trustee to call a meeting of the
Holders of Securities for any purpose specified in Section 8.1, by written
request setting forth in reasonable detail the action proposed to be taken at
the meeting, and the Trustee shall not have made the first publication of the
notice of such meeting within 21 days after receipt of such request or shall not
thereafter proceed to cause the meeting to be held as provided herein, then the
Company or the Holders of Securities in the amount specified, as the case may
be, may determine the time and the place in The City of New York for such
meeting and may call such meeting for such purposes by giving notice thereof as
provided in paragraph (a) of this Section 8.2.

SECTION 8.3       PERSONS ENTITLED TO VOTE AT MEETINGS.

                  To be entitled to vote at any meeting of Holders of
Securities, a Person shall be (a) a Holder of one or more Outstanding
Securities, or (b) a Person appointed by an instrument in writing as proxy for a
Holder or Holders of one or more Outstanding Securities by such Holder or
Holders. The only Persons who shall be entitled to be present or to speak at any
meeting of Holders shall be the Persons entitled to vote at such meeting and
their counsel, any representatives of the Trustee and its counsel and any
representatives of the Company and its counsel.

                                       47
<PAGE>

SECTION 8.4       QUORUM; ACTION.

                  The Persons entitled to vote a majority in principal amount of
the Outstanding Securities shall constitute a quorum. In the absence of a quorum
within 30 minutes of the time appointed for any such meeting, the meeting shall,
if convened at the request of Holders of Securities, be dissolved. In any other
case, the meeting may be adjourned for a period of not less than 10 days as
determined by the chairman of the meeting prior to the adjournment of such
meeting. In the absence of a quorum at any such adjourned meeting, such
adjourned meeting may be further adjourned for a period of not less than 10 days
as determined by the chairman of the meeting prior to the adjournment of such
adjourned meeting. Notice of the reconvening of any adjourned meeting shall be
given as provided in Section 8.2(a), except that such notice need be given only
once and not less than five days prior to the date on which the meeting is
scheduled to be reconvened. Notice of the reconvening of an adjourned meeting
shall state expressly the percentage of the principal amount of the Outstanding
Securities which shall constitute a quorum.

                  Subject to the foregoing, at the reconvening of any meeting
adjourned for a lack of a quorum, the Persons entitled to vote 25% in aggregate
principal amount of the Outstanding Securities at the time shall constitute a
quorum for the taking of any action set forth in the notice of the original
meeting.

                  At a meeting or an adjourned meeting duly reconvened and at
which a quorum is present as aforesaid, any resolution and all matters (except
as limited by the proviso to Section 7.2) shall be effectively passed and
decided if passed or decided by the Persons entitled to vote not less than a
majority in principal amount of Outstanding Securities represented and voting at
such meeting.

                  Any resolution passed or decisions taken at any meeting of
Holders of Securities duly held in accordance with this Section shall be binding
on all the Holders of Securities, whether or not present or represented at the
meeting.

SECTION 8.5       DETERMINATION OF VOTING RIGHTS; CONDUCT AND ADJOURNMENT OF
                  MEETINGS.

                  (a) Notwithstanding any other provisions of this Indenture,
the Trustee may make such reasonable regulations as it may deem advisable for
any meeting of Holders of Securities in regard to proof of the holding of
Securities and of the appointment of proxies and in regard to the appointment
and duties of inspectors of votes, the submission and examination of proxies,
certificates and other evidence of the right to vote, and such other matters
concerning the conduct of the meeting as it shall deem appropriate. Except as
otherwise permitted or required by any such regulations, the holding of
Securities shall be proved in the manner specified in Section 1.3 and the
appointment of any proxy shall be proved in the manner specified in Section 1.3.
Such regulations may provide that written instruments appointing proxies,
regular on their face, may be presumed valid and genuine without the proof
specified in Section 1.3 or other proof.

                  (b) The Trustee shall, by an instrument in writing, appoint a
temporary chairman (which may be the Trustee) of the meeting, unless the meeting
shall have been called by the Company or by Holders of Securities as provided in
Section 8.2(b), in which case the Company or the Holders of Securities calling
the meeting, as the case may be, shall in like manner appoint a temporary
chairman. A permanent chairman and a permanent secretary of the meeting shall be
elected by vote of the Persons entitled to vote a majority in principal amount
of the Outstanding Securities represented at the meeting.

                                       48
<PAGE>

                  (c) At any meeting, each Holder of a Security or proxy shall
be entitled to one vote for each $1,000 principal amount of Securities held or
represented by him; provided, however, that no vote shall be cast or counted at
any meeting in respect of any Security challenged as not Outstanding and ruled
by the chairman of the meeting to be not Outstanding. The chairman of the
meeting shall have no right to vote, except as a Holder of a Security or proxy.

                  (d) Any meeting of Holders of Securities duly called pursuant
to Section 8.2 at which a quorum is present may be adjourned from time to time
by Persons entitled to vote a majority in principal amount of the Outstanding
Securities represented at the meeting, and the meeting may be held as so
adjourned without further notice.

SECTION 8.6       COUNTING VOTES AND RECORDING ACTION OF MEETINGS.

                  The vote upon any resolution submitted to any meeting of
Holders of Securities shall be by written ballots on which shall be subscribed
the signatures of the Holders of Securities or of their representatives by proxy
and the principal amounts and serial numbers of the Outstanding Securities held
or represented by them. The permanent chairman of the meeting shall appoint two
inspectors of votes who shall count all votes cast at the meeting for or against
any resolution and who shall make and file with the secretary of the meeting
their verified written reports in duplicate of all votes cast at the meeting. A
record, at least in duplicate, of the proceedings of each meeting of Holders of
Securities shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more Persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 8.2 and, if
applicable, Section 8.4. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.

                                   ARTICLE 9

                                    COVENANTS

SECTION 9.1       PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.

                  The Company will duly and punctually pay the principal of and
premium, if any, and interest (including Liquidated Damages, if any) in respect
of the Securities in accordance with the terms of the Securities and this
Indenture.

SECTION 9.2       MAINTENANCE OF OFFICES OR AGENCIES.

                  The Company hereby appoints the Corporate Trust Office of the
Trustee, where Securities may be:

                  (i)      presented or surrendered for payment;

                  (ii)     surrendered for registration of transfer or exchange;

                  (iii)    surrendered for conversion;

                                       49
<PAGE>

and where notices and demands to or upon the Company in respect of the
Securities and this Indenture maybe served.

                  The Company may at any time and from time to time vary or
terminate the appointment of any such office or appoint any additional offices
for any or all of such purposes; provided, however, that until all of the
Securities have been delivered to the Trustee for cancellation, or monies
sufficient to pay the principal of and premium, if any, and interest (including
Liquidated Damages, if any) on the Securities have been made available for
payment and either paid or returned to the Company pursuant to the provisions of
Section 9.3, the Company will maintain in The City of New York, an office or
agency where Securities may be presented or surrendered for 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, and notice to the
Holders in accordance with Section 15.2, of the appointment or termination of
any such agents and of the location and any change in the location of any such
office or agency.

                  If at any time the Company shall fail to maintain any such
required office or agency in The City of New York, or shall fail to furnish the
Trustee with the address thereof, presentations and surrenders may be made at,
and notices and demands may be served on, the Corporate Trust Office of the
Trustee.

SECTION 9.3       CORPORATE EXISTENCE.

                  Subject to Article 6, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect its corporate
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 Company determines 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 9.4       MAINTENANCE OF PROPERTIES.

                  The Company will maintain and keep its properties and every
part thereof in such repair, working order and condition, and make or cause to
be made all such needful and proper repairs, renewals and replacements thereto,
as in the judgment of the Company are necessary in the interests of the Company;
provided, however, that nothing contained in this Section shall prevent the
Company from selling, abandoning or otherwise disposing of any of its properties
or discontinuing a part of its business from time to time if, in the judgment of
the Company, such sale, abandonment, disposition or discontinuance is advisable
and does not materially adversely affect the interests or business of the
Company.

SECTION 9.5       PAYMENT OF TAXES AND OTHER CLAIMS.

                  The Company will, and will cause any Significant Subsidiary
to, promptly pay and discharge or cause to be paid and discharged all material
taxes, assessments and governmental charges or levies lawfully imposed upon it
or upon its income or profits or upon any of its property, real or personal, or
upon any part thereof, as well as all material claims for labor, materials and
supplies which, if unpaid, might by law become a lien or charge upon its
property; provided, however, that neither the Company nor any Significant
Subsidiary shall be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge, levy, or claim if the amount,
applicability or validity thereof shall currently

                                       50
<PAGE>

be contested in good faith by appropriate proceedings and if the Company or such
Significant Subsidiary, as the case may be, shall have set aside on its books
reserves deemed by it adequate with respect thereto.

SECTION 9.6       REPORTS.

                  (a) The Company shall deliver to the Trustee within 15 days
after it files them with the SEC copies of the annual reports and of the
information, documents, and other reports (or copies of such portions of any of
the foregoing as the SEC may by rules and regulations prescribe) which the
Company is required to file with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act; provided, however, the Company shall not be required to deliver to
the Trustee any materials for which the Company has sought and received
confidential treatment by the SEC. The Company also shall comply with the other
provisions of Section 314(a) of the TIA.

                  (b) 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 informational 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 conclusively rely exclusively on Officers' Certificates).

                  (c) If at any time the Company is not subject to Section 13 or
15(d) of the Exchange Act, upon the request of a Holder of a Security, the
Company will promptly furnish or cause to be furnished to such Holder or to a
prospective purchaser of such Security designated by such Holder, as the case
may be, the information, if any, required to be delivered by it pursuant to Rule
144A(d)(4) under the Securities Act to permit compliance with Rule 144A in
connection with the resale of such Security.

SECTION 9.7       COMPLIANCE CERTIFICATE.

                  The Company shall deliver to the Trustee, within 120 days
after the end of each fiscal year of the Company (which as of the date hereof is
December 31), an Officers' Certificate stating that in the course of the
performance by the signers of their duties as Officers of the Company, they
would normally have knowledge of any failure by the Company to comply with all
conditions, or any Default by the Company with respect to any covenants, under
this Indenture, and further stating whether or not they have knowledge of any
such failure or Default and, if so, specifying each such failure or Default and
the nature thereof. In the event an Officer of the Company comes to have actual
knowledge of a Default, regardless of the date, the Company shall deliver an
Officers' Certificate to the Trustee specifying such Default and the nature and
status thereof.

SECTION 9.8       [RESERVED].

SECTION 9.9       LIQUIDATED DAMAGES.

                  If Liquidated Damages are payable by the Company pursuant to
the Registration Rights Agreement, the Company shall deliver to the Trustee an
Officers' Certificate to that effect stating (i) the amount of such Liquidated
Damages that are payable and (ii) the date on which such Liquidated Damages are
payable. Unless and until a Responsible Officer of the Trustee receives such a
certificate, the Trustee may assume without inquiry that no Liquidated Damages
are payable. If the Company has paid Liquidated Damages directly to the persons
entitled to them, the Company shall deliver to the Trustee an Officers'
Certificate setting forth the particulars of such payment.

                                       51
<PAGE>

                                   ARTICLE 10

                            REDEMPTION OF SECURITIES

SECTION 10.1      [RESERVED].

SECTION 10.2      OPTIONAL REDEMPTION.

                  On or after December 1, 2003, the Company may, at its option,
redeem the Securities in whole at any time or in part from time to time, on any
date prior to Maturity, upon notice as set forth in Section 10.5, at the
Redemption Price (expressed as percentages of the principal amount) set forth
below if redeemed on a Redemption Date occurring during the 12-month period
beginning December 1 of the years indicated and ending November 30 of the
following year:

        Year                                           Redemption Price
        ----                                           ----------------

        2003.......................................    102.625%

        2004.......................................    101.313%

        2005, and thereafter.......................    100.0%

plus any interest (including Liquidated Damages, if any) accrued and unpaid to,
but excluding, the Redemption Date.

SECTION 10.3      NOTICE TO TRUSTEE.

                  If the Company elects to redeem Securities pursuant to the
provisions of Section 10.2, it shall notify the Trustee at least 45 days (unless
a shorter period is reasonably acceptable to the Trustee) prior to the intended
Redemption Date of (i) such intended Redemption Date, (ii) the principal amount
of Securities to be redeemed and (iii) the CUSIP numbers of the Securities to be
redeemed.

SECTION 10.4      SELECTION OF SECURITIES TO BE REDEEMED.

                  If fewer than all the Securities are to be redeemed, the
Trustee shall select the particular Securities to be redeemed in principal
amounts of $1,000 or whole multiples of $1,000 from the Outstanding Securities
by a method that complies with the requirements of any exchange on which the
Securities are listed, or, if the Securities are not listed on an exchange, on a
pro rata basis or by lot or in accordance with any other method the Trustee
considers fair and appropriate. Securities and portions thereof that the Trustee
selects shall be in amounts equal to the minimum authorized denominations for
Securities to be redeemed or any integral multiple thereof.

                  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 of such Security shall be
deemed to be the portion selected for redemption; provided, however, that the
Holder of such Security so converted and deemed redeemed shall not be entitled
to any additional interest payment as a result of such deemed redemption than
such Holder would have otherwise been entitled to receive upon conversion of
such Security. 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.

                                       52
<PAGE>

                  The Trustee shall promptly notify the Company and the
Registrar in writing of the Securities selected for redemption and, in the case
of any Securities selected for partial redemption, the principal amount thereof
to be redeemed.

                  For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has been
or is to be redeemed.

SECTION 10.5      NOTICE OF REDEMPTION.

                  Notice of redemption shall be given in the manner provided in
Section 15.2 to the Holders of Securities to be redeemed. Such notice shall be
given not less than 20 nor more than 60 days prior to the intended Redemption
Date.

                  All notices of redemption shall state:

                  (1) such intended Redemption Date;

                  (2) the Redemption Price and interest (including Liquidated
         Damages, if any) accrued and unpaid to, but excluding, the Redemption
         Date, if any;

                  (3) if fewer than all the Outstanding Securities are to be
         redeemed, the aggregate principal amount of Securities to be redeemed
         and the aggregate principal amount of Securities which will be
         Outstanding after such partial redemption;

                  (4) that on the Redemption Date the Redemption Price and
         interest accrued and unpaid to, but excluding, the Redemption Date, if
         any, will become due and payable upon each such Security to be
         redeemed, and that interest (including Liquidated Damages, if any)
         thereon shall cease to accrue on and after such date;

                  (5) the Conversion Price, the date on which the right to
         convert the principal of the Securities to be redeemed will terminate
         and the places where such Securities may be surrendered for conversion;

                  (6) the place or places where such Securities are to be
         surrendered for payment of the Redemption Price, accrued and unpaid
         interest, if any; and

                  (7) the CUSIP number of the Securities.

         The notice given shall specify the last date on which exchanges or
transfers of Securities may be made pursuant to Section 2.7, and shall specify
the serial numbers of Securities, if Physical Securities are selected for
redemption, and the portions thereof called for redemption.

         Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name of and at the expense of the Company.

                                       53
<PAGE>

SECTION 10.6      EFFECT OF NOTICE OF REDEMPTION.

                  Notice of redemption having been given as provided in Section
10.5, the Securities so to be redeemed shall, on the Redemption Date, become due
and payable at the Redemption Price therein specified and from and after such
date (unless the Company shall default in the payment of the Redemption Price
and accrued and unpaid interest) such Securities shall cease to bear interest.
Upon surrender of any such Security for redemption in accordance with such
notice, such Security shall be paid by the Company at the Redemption Price;
provided, however, the installments of interest on Securities whose Stated
Maturity is prior to or on the Redemption Date shall be payable to the Holders
of such Securities, or one or more Predecessor Securities, registered as such on
the relevant Record Date according to their terms and the provisions of Section
2.7.

                  If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal and premium, if any, shall,
until paid, bear interest from the Redemption Date at the Interest Rate.

SECTION 10.7      DEPOSIT OF REDEMPTION PRICE.

                  Prior to 11:00 a.m. New York City time on any Redemption Date,
the Company shall deposit with the Trustee or with a Paying Agent an amount of
money sufficient to pay the Redemption Price, and accrued and unpaid interest
(including Liquidated Damages, if any), in respect of all the Securities to be
redeemed on that Redemption Date, other than any Securities called for
redemption on that date which have been converted prior to the date of such
deposit, and accrued and unpaid interest, if any, on such Securities.

                  If any Security called for redemption is converted, any money
deposited with the Trustee or with a Paying Agent or so segregated and held in
trust for the redemption of such Security shall (subject to any right of the
Holder of such Security or any Predecessor Security to receive interest as
provided in the fourth to last paragraph of Section 2.1) be paid to the Company
on Company Request or, if then held by the Company, shall be discharged from
such trust.

SECTION 10.8      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 9.2 (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 the 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 unredeemed portion of the principal of the Security so surrendered.

                                       54
<PAGE>

                                   ARTICLE 11

          REPURCHASE AT THE OPTION OF A HOLDER UPON A CHANGE OF CONTROL

SECTION 11.1      REPURCHASE RIGHT.

         In the event that a Change of Control shall occur, each Holder shall
have the right (the "Repurchase Right"), at the Holder's option, but subject to
the provisions of Section 11.2, to require the Company to repurchase, and upon
the exercise of such right the Company shall repurchase, all of such Holder's
Securities not theretofore called for redemption, or any portion of the
principal amount thereof that is equal to any integral multiple of $1,000
(provided that no single Security may be repurchased in part unless the portion
of the principal amount of such Security to be Outstanding after such repurchase
is equal to an integral multiple of $1,000), on the date specified in the
Company Notice given pursuant to Section 11.3 in connection with such Change of
Control (the "Repurchase Date") that is no earlier than 30 days nor later than
60 days after the date of such Company Notice at a purchase price equal to 100%
of the principal amount of the Securities to be repurchased (the "Repurchase
Price"), plus, subject to Section 2.1(e), interest (including Liquidated
Damages, if any) accrued and unpaid to, but excluding, the Repurchase Date;
provided, however, that installments of interest on Securities whose Stated
Maturity is prior to or on the Repurchase Date shall be payable to the Holders
of such Securities, or one or more Predecessor Securities, registered as such on
the relevant Record Date according to their terms and the provisions of Section
2.1.

         Subject to the fulfillment by the Company of the conditions set forth
in Section 11.2, in the event of a Change of Control the Company may elect to
pay the Repurchase Price by delivering a number of shares of Common Stock equal
to (i) the Repurchase Price divided by (ii) 95% of the average of the Trading
Prices per share of Common Stock for the five consecutive Trading Days
immediately preceding and including the third Trading Day prior to the
Repurchase Date.

         Whenever in this Indenture (including Sections 2.2, 4.2(a) and 4.7) or
Exhibit A annexed hereto there is a reference, in any context, to the principal
of any Security as of any time, such reference shall be deemed to include
reference to the Repurchase Price payable in respect to such Security to the
extent that such Repurchase Price is, was or would be so payable at such time,
and express mention of the Repurchase Price in any provision of this Indenture
shall not be construed as excluding the Repurchase Price in those provisions of
this Indenture when such express mention is not made; provided, however, that,
for the purposes of Article 13, such reference shall be deemed to include
reference to the Repurchase Price only to the extent the Repurchase Price is
payable in cash.

SECTION 11.2      CONDITIONS TO THE COMPANY'S ELECTION TO PAY THE REPURCHASE
                  PRICE IN COMMON STOCK.

         The Company may, at its option, pay the Repurchase Price payable to
Holders pursuant to Section 11.1 upon redemption of the Securities, in shares of
Common Stock, if the following conditions are satisfied:

         (a) The shares of Common Stock to be so issued:

                  (i) shall not require registration under any federal
         securities law before such shares may be freely transferable without
         being subject to any transfer restrictions under

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<PAGE>

         the Securities Act upon repurchase or redemption, as the case may be,
         or if such registration is required, such registration shall be
         completed and shall become effective prior to the Repurchase Date or
         the Redemption Date, as the case may be; and

                  (ii) shall not require registration with, or approval of, any
         governmental authority under any state law or any other federal law
         before shares may be validly issued or delivered upon repurchase or
         redemption or if such registration is required or such approval must be
         obtained, such registration shall be completed or such approval shall
         be obtained prior to the Repurchase Date or Redemption Date, as the
         case may be.

         (b) The shares of Common Stock to be listed upon repurchase or
redemption of Securities hereunder are, or shall have been, approved for listing
on the Nasdaq National Market or the New York Stock Exchange or listed on
another national securities exchange, in any case, prior to the Repurchase Date
or the Redemption Date, as the case may be.

         (c) All shares of Common Stock which may be issued upon repurchase or
redemption of Securities will be issued out of the Company's authorized but
unissued Common Stock or treasury stock and will, upon issue, be duly and
validly issued and fully paid and nonassessable and free of any preemptive or
similar rights.

         (d) If any of the conditions set forth in clauses (a) through (c) of
this Section 11.2 are not satisfied in accordance with the terms thereof, the
Repurchase Price shall be paid by the Company only in cash.

SECTION 11.3      NOTICES; METHOD OF EXERCISING REPURCHASE RIGHT, ETC.

         (a) Unless the Company shall have theretofore called for redemption all
of the Outstanding Securities, prior to or on the 30th day after the occurrence
of a Change of Control, the Company, or, at the written request and expense of
the Company prior to or on the 30th day after such occurrence, the Trustee,
shall give to all Holders of Securities notice, in the manner provided in
Section 15.2, of the occurrence of the Change of Control and of the Repurchase
Right set forth herein arising as a result thereof (the "Company Notice"). The
Company shall also deliver a copy of such notice of a Repurchase Right to the
Trustee. Each notice of a Repurchase Right shall state:

                  (1) the Repurchase Date;

                  (2) the date by which the Repurchase Right must exercised;

                  (3) the Repurchase Price and accrued and unpaid interest
         (including Liquidated Damages, if any), if any;

                  (4) whether the Repurchase Price shall be paid by the Company
         in cash or by delivery of shares of Common Stock;

                  (5) a description of the procedure which a Holder must follow
         to exercise its Repurchase Right, and the place or places where such
         Securities, are to be surrendered for payment of the Repurchase Price
         and accrued and unpaid interest, if any;

                  (6) that on the Repurchase Date the Repurchase Price and
         accrued and unpaid interest, if any, will become due and payable in
         cash upon each such Security designated

                                       56
<PAGE>

         by the Holder to be repurchased, and that interest thereon shall cease
         to accrue on and after said date;

                  (7) the Conversion Price then in effect, the date on which the
         right to convert the principal amount of the Securities to be
         repurchased will terminate and the place where such Securities may be
         surrendered for conversion;

                  (8) the place or places where such Securities, together with
         the Option to Elect Repayment Upon a Change of Control certificate
         included in Exhibit A annexed hereto are to be delivered for payment of
         the Repurchase Price and accrued and unpaid interest, if any; and

                  (9) the CUSIP number of the Securities.

         No failure of the Company to give the foregoing notices or defect
therein shall limit any Holder's right to exercise a Repurchase Right or affect
the validity of the proceedings for the repurchase of Securities.

         If any of the foregoing provisions or other provisions of this Article
11 are inconsistent with applicable law, such law shall govern.

         (b) To exercise its Repurchase Right, a Holder shall deliver to the
Trustee prior to the close of business on the day immediately preceding the
Repurchase Date:

                  (1) written notice of the Holder's exercise of such right,
         which notice shall set forth the name of the Holder, the principal
         amount of the Securities to be repurchased (and, if any Security is to
         be repurchased in part, the serial number thereof, the portion of the
         principal amount thereof to be repurchased) and a statement that an
         election to exercise the Repurchase Right is being made thereby, and,
         in the event that the Repurchase Price shall be paid in shares of
         Common Stock, the name or names (with addresses) in which the
         certificate or certificates for shares of Common Stock shall be issued;
         and

                  (2) the Securities with respect to which the Repurchase Right
         is being exercised.

The right of the Holder to convert the Securities with respect to which the
Repurchase Right is being exercised shall continue until the close of business
on the Business Day immediately preceding the Repurchase Date provided that the
Holder delivers notice to the Paying Agent prior to the close of business on the
Business Day immediately preceding the Repurchase Date.

         (c) In the event a Repurchase Right shall be exercised in accordance
with the terms hereof, the Company shall pay or cause to be paid to the Trustee
the Repurchase Price in cash or shares of Common Stock, as provided above, for
payment to the Holder on the Repurchase Date or, if shares of Common Stock are
to be paid, as promptly after the Repurchase Date as practicable, together with
accrued and unpaid interest to, but excluding, the Repurchase Date payable in
cash with respect to the Securities as to which the Repurchase Right has been
exercised; provided, however, that installments of interest that mature prior to
or on the Repurchase Date shall be payable in cash to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Regular Record Date.

                                       57
<PAGE>

                  (d) If any Security (or portion thereof) surrendered for
repurchase shall not be so paid on the Repurchase Date, the principal amount of
such Security (or portion thereof, as the case may be) shall, until paid, bear
interest to the extent permitted by applicable law from the Repurchase Date at
the Interest Rate, and each Security shall remain convertible into Common Stock
until the principal of such Security (or portion thereof, as the case may be)
shall have been paid or duly provided for.

                  (e) Any Security which is to be repurchased only in part shall
be surrendered to the Trustee (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 make available for delivery to the Holder of such
Security without service charge, a new Security or Securities, containing
identical terms and conditions, each in an authorized denomination in aggregate
principal amount equal to and in exchange for the unrepurchased portion of the
principal of the Security so surrendered.

                  (f) Any issuance of shares of Common Stock in respect of the
Repurchase Price shall be deemed to have been effected immediately prior to the
close of business on the Repurchase Date and the Person or Persons in whose name
or names any stock certificate or stock certificates representing shares of
Common Stock shall be issuable upon such repurchase shall be deemed to have
become on the Repurchase Date the holder or holders of record of the shares
represented thereby; provided, however, that any surrender for repurchase on a
date when the stock transfer books of the Company shall be closed shall
constitute the Person or Persons in whose name or names the stock certificate or
stock certificates representing such shares are to be issued as the holder or
holders of record of the shares represented thereby for all purposes at the
opening of business on the next succeeding day on which such stock transfer
books are open. No payment or adjustment shall be made for dividends or
distributions on any Common Stock issued upon repurchase of any Security
declared prior to the Repurchase Date.

                  (g) No fractions of shares of Common Stock shall be issued
upon repurchase of any Security or Securities. If more than one Security shall
be repurchased from the same Holder and the Repurchase Price shall be payable in
shares of Common Stock, the number of full shares which shall be issued upon
such repurchase shall be computed on the basis of the aggregate principal amount
of the Securities (or specified portions thereof) to be so repurchased. Instead
of any fractional share of Common Stock which would otherwise be issued on the
repurchase of any Security or Securities (or specified portions thereof), the
Company shall pay a cash adjustment in respect of such fraction (calculated to
the nearest one-100th of a share) in an amount equal to the same fraction of the
Trading Price of the Common Stock as of the Trading Day preceding the Repurchase
Date.

                  (h) Any issuance and delivery of stock certificates
representing shares of Common Stock on repurchase of Securities shall be made
without charge to the Holder of Securities being repurchased for such stock
certificates or for any tax or duty in respect of the issuance or delivery of
such stock certificates or the Securities represented thereby; provided,
however, that the Company shall not be required to pay any tax or duty which may
be payable in respect of (i) income of the Holder or (ii) any transfer involved
in the issuance or delivery of stock certificates representing shares of Common
Stock in a name other than that of the Holder of the Securities being
repurchased, and no such issuance or delivery shall be made unless the Person
requesting such issuance or delivery has paid to the Company the amount of any
such tax or duty or has established, to the satisfaction of the Company, that
such tax or duty has been paid.

                  (i) All Securities delivered for repurchase shall be delivered
to the Trustee to be canceled at the direction of the Trustee, which shall
dispose of the same as provided in Section 2.15.

                                       58
<PAGE>

                  (j) Prior to mailing the Company notice, but in any event
within 90 days following a Change of Control, the Company will either repay all
outstanding Senior Debt or offer to repay all Senior Debt and terminate all
commitments thereunder of each lender who has accepted such offer or obtain the
requisite consents, if any, under all agreements governing outstanding Senior
Debt to permit the repurchase of Securities required by this covenant.

                  (k) The Company will publicly announce the results of the
Repurchase Right offer on or as soon as practicable after it closes.

                                   ARTICLE 12

                            CONVERSION OF SECURITIES

SECTION 12.1      CONVERSION RIGHT AND CONVERSION PRICE.

                  Subject to and upon compliance with the provisions of this
Article, at the option of the Holder thereof, any Security 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 Price, determined as hereinafter provided, in effect at the time of
conversion. Such conversion right shall expire at the close of business on the
Business Day immediately preceding June 1, 2009.

                  In case a Security or portion thereof is called for
redemption, such conversion right in respect of the Security or the portion so
called, shall expire at the close of business on the Business Day preceding the
Redemption Date, unless the Company defaults in making the payment due upon
redemption. In the case of a Change of Control for which the Holder exercises
its Repurchase Right with respect to a Security or portion thereof, such
conversion right in respect of the Security or portion thereof shall expire at
the close of business on the Business Day immediately preceding the Repurchase
Date.

                  The price at which shares of Common Stock shall be delivered
upon conversion (the "Conversion Price") shall be initially equal to $81.50 per
share of Common Stock. The Conversion Price shall be adjusted in certain
instances as provided in paragraphs (a), (b), (c), (d), (e), (f), (h) and (1) of
Section 12.4.

SECTION 12.2      EXERCISE OF CONVERSION RIGHT.

                  To exercise the conversion right, the Holder of any Security
to be converted shall surrender such Security duly endorsed or assigned to the
Company or in blank, at the office of any Conversion Agent, accompanied by a
duly signed conversion notice substantially in the form attached to the
Security, to the Company, with a copy to the Trustee, stating that the Holder
elects to convert such Security or, if less than the entire principal amount
thereof is to be converted, the portion thereof to be converted.

                  Securities surrendered for conversion during the period from
the close of business on any Regular Record Date to the opening of business on
the next succeeding Interest Payment Date (other than any Security whose
Maturity is prior to such Interest Payment Date or that has been called for
redemption by the Company on a date that falls on or after such Regular Record
Date and on or prior to the related Interest Payment Date) shall be accompanied
by payment in New York Clearing House funds or other funds acceptable to the
Company of an amount equal to the interest to be received on such Interest
Payment Date on the principal amount of Securities being surrendered for
conversion.

                                       59
<PAGE>

         Securities shall be deemed to have been converted immediately prior to
the close of business on the day of surrender of such Securities for conversion
in accordance with the provisions of this Article 12, including any required
payments, and at such time the rights of the Holders of such Securities as
Holders shall cease, and the Person or Persons entitled to receive the Common
Stock issuable upon conversion shall be treated for all purposes as the record
holder or holders of such Common Stock at such time. As promptly as practicable
on or after the conversion date, the Company shall cause to be issued and
delivered to such Conversion Agent a stock certificate or stock certificates
representing the number of full shares of Common Stock issuable upon conversion
of such Securities, together with payment in lieu of any fraction of a share as
provided in Section 12.3.

         In the case of any Security which is converted in part only, upon such
conversion the Company shall execute and the Trustee shall authenticate and make
available for delivery to the Holder thereof, at the expense of the Company, a
new Security or Securities of authorized denominations in aggregate principal
amount equal to the unconverted portion of the principal amount of such
Securities.

         If shares of Common Stock to be issued upon conversion of a Restricted
Security, or Securities to be issued upon conversion of a Restricted Security in
part only, are to be registered in a name other than that of the Holder of such
Restricted Security, such Holder must deliver to the Conversion Agent a
certificate in substantially the form set forth in the form of Security set
forth in Exhibit A annexed hereto, dated the date of surrender of such
Restricted Security and signed by such Holder, as to compliance with the
restrictions on transfer applicable to such Restricted Security. Neither the
Trustee nor any Conversion Agent, Registrar or Transfer Agent shall be required
to register in a name other than that of the Holder shares of Common Stock or
Securities issued upon conversion of any such Restricted Security not so
accompanied by a properly completed certificate.

         The Company hereby initially appoints The Bank of New York as the
Conversion Agent.

SECTION 12.3      FRACTIONS OF SHARES.

         No fractional shares of Common Stock shall be issued upon conversion of
any Security or Securities. If more than one Security shall be surrendered for
conversion at one time by the same Holder, the number of full shares which shall
be issued upon conversion thereof shall be computed on the basis of the
aggregate principal amount of the Securities (or specified portions thereof) so
surrendered. Instead of any fractional share of Common Stock which would
otherwise be issued upon conversion of any Security or Securities (or specified
portions thereof), the Company shall pay a cash adjustment in respect of such
fraction (calculated to the nearest one-100th of a share) in an amount equal to
the same fraction of the Trading Price of the Common Stock as of the Trading Day
preceding the date of conversion.

SECTION 12.4      ADJUSTMENT OF CONVERSION PRICE.

         The Conversion Price shall be subject to adjustment, calculated by the
Company, from time to time as follows:

                  (a) In case the Company shall hereafter pay a dividend or make
         a distribution to all holders of the outstanding Common Stock in shares
         of Common Stock, the Conversion Price in effect at the opening of
         business on the date following the date fixed for the determination of
         stockholders entitled to receive such dividend or other distribution
         shall be reduced by multiplying such Conversion Price by a fraction:

                                       60
<PAGE>

                  (i) the numerator of which shall be the number of shares of
         Common Stock outstanding at the close of business on the Record Date
         (as defined in Section 12.4(g)) fixed for such determination; and

                  (ii) the denominator of which shall be the sum of such number
         of shares and the total number of shares constituting such dividend or
         other distribution.

Such reduction shall become effective immediately after the opening of business
on the day following the Record Date. If any dividend or distribution of the
type described in this Section 12.4(a) is declared but not so paid or made, the
Conversion Price shall again be adjusted to the Conversion Price which would
then be in effect if such dividend or distribution had not been declared.

         (b) In case the outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Conversion Price in effect
at the opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately reduced, and conversely,
in case outstanding shares of Common Stock shall be combined into a smaller
number of shares of Common Stock, the Conversion Price in effect at the opening
of business on the day following the day upon which such combination becomes
effective shall be proportionately increased, such reduction or increase, as the
case may be, to become effective immediately 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 12.4(d)) to all holders of its
outstanding shares of Common Stock entitling them to subscribe for or purchase
shares of Common Stock (or securities convertible into shares of Common Stock)
at a price per share less than (or having a conversion price per share less
than) the Current Market Price on the Record Date fixed for the determination of
stockholders entitled to receive such rights or warrants, the Conversion Price
shall be adjusted so that the same shall equal the price determined by
multiplying the Conversion Price in effect at the opening of business on the
date after such Record Date by a fraction:

                  (i) the numerator of which shall be the number of shares of
         Common Stock outstanding at the close of business on the Record Date,
         plus the number of shares which the aggregate offering price of the
         total number of shares so offered for subscription or purchase (or the
         aggregate conversion price of the convertible securities so offered)
         would purchase at such Current Market Price; and

                  (ii) the denominator of which shall be the number of shares of
         Common Stock outstanding on the close of business on the Record Date,
         plus 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).

Such adjustment shall become effective immediately after the opening of business
on the day following the Record Date fixed for determination of stockholders
entitled to receive such rights or warrants. To the extent that shares of Common
Stock (or securities convertible into Common Stock) are not delivered pursuant
to such rights or warrants, upon the expiration or termination of such rights or
warrants, the Conversion Price shall be readjusted to the Conversion Price 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

                                       61
<PAGE>

securities convertible into Common Stock) actually delivered. In the event that
such rights or warrants are not so issued, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if such date
fixed for the determination of stockholders 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 shares of any class of capital stock of the
Company (other than any dividends or distributions to which Section 12.4(a)
applies) or evidences of its indebtedness, cash or other assets, including
securities, but excluding (1) any rights or warrants referred to in Section
12.4(c), (2) any stock, securities or other property or assets (including cash)
distributed in connection with a reclassification, change, merger,
consolidation, statutory share exchange, combination, sale or conveyance to
which Section 12.11 applies and (3) dividends and distributions paid exclusively
in cash (the securities described in foregoing clauses (1), (2) and (3)
hereinafter in this Section 12.4(d) called the "securities"), then, in each such
case, subject to the second succeeding paragraph of this Section 12.4(d), the
Conversion Price shall be reduced so that the same shall be equal to the price
determined by multiplying the Conversion Price in effect immediately prior to
the close of business on the Record Date with respect to such distribution by a
fraction:

                  (i) the numerator of which shall be the Current Market Price
         on such date, less the fair market value (as determined by the Board of
         Directors, whose determination shall be conclusive and set forth in a
         Board Resolution) on such date of the portion of the securities so
         distributed applicable to one share of Common Stock (determined on the
         basis of the number of shares of the Common Stock outstanding on the
         Record Date); and

                  (ii) the denominator of which shall be such Current Market
         Price.

Such reduction shall become effective immediately prior to the opening of
business on the day following the Record Date. However, in the event that the
then fair market value (as so determined) of the portion of the securities so
distributed applicable to one share of Common Stock is equal to or greater than
the Current Market Price on the Record Date, 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) the
amount of securities such Holder would have received had such Holder converted
such Security (or portion thereof) immediately prior to such Record Date. In the
event that such dividend or distribution is not so paid or made, the Conversion
Price shall again be adjusted to be the Conversion Price 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 12.4(d) by reference to the actual or
when issued trading market for any securities 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 12.4(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.

                                       62
<PAGE>

         Notwithstanding the foregoing, in the event that the Company shall make
a distribution subject to this Section 12.4(d) the Company may, in lieu of
making any adjustment required pursuant to this Section 12.4(d), make proper
provision so that each holder of a Security who converts such Security (or any
portion thereof) after the Record Date for such distribution shall be entitled
to receive upon such conversion, in addition to the shares of Common Stock
issuable upon such conversion, the securities such Holder would have received
had such Holder converted such Security (or portion thereof) immediately prior
to such Record Date.

         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 capital stock (either initially or under certain circumstances), which
rights or warrants, until the occurrence of a specified event or events
("Trigger Event"):

         (i)      are deemed to be transferred with such shares of Common Stock;

         (ii)     are not exercisable; and

         (iii)    are also issued in respect of future issuances of Common
                  Stock;

shall be deemed not to have been distributed for purposes of this Section
12.4(d) (and no adjustment to the Conversion Price under this Section 12.4(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 securities,
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 Price under
this Section 12.4(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 Price 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 all of which shall
         have expired or been terminated without exercise, the Conversion Price
         shall be readjusted as if such rights and warrants had never been
         issued.

         For purposes of this Section 12.4(d) and Sections 12.4(a), 12.4(b) and
         12.4(c), any dividend or distribution to which this Section 12.4(d) is
         applicable that also includes shares of Common Stock, a subdivision or
         combination of Common Stock to which Section 12.4(c) applies, or rights
         or warrants to subscribe for or purchase shares of

                                       63
<PAGE>

         Common Stock to which Section 12.4(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 shares of Common Stock, such subdivision or combination or
         such rights or warrants to which Sections 12.4(a), 12.4(b) and 12.4(c)
         apply, respectively (and any Conversion Price reduction required by
         this Section 12.4(d) with respect to such dividend or distribution
         shall then be made), immediately followed by

                  (2) a dividend or distribution of such shares of Common Stock,
         such subdivision or combination or such rights or warrants (and any
         further Conversion Price reduction required by Sections 12.4(a),
         12.4(b) and 12.4(c) with respect to such dividend or distribution shall
         then be made), except:

                           (A) the Record Date of such dividend or distribution
                  shall be substituted as (x) "the date fixed for the
                  determination of stockholders entitled to receive such
                  dividend or other distribution," "Record Date fixed for such
                  determinations" and "Record Date" within the meaning of
                  Section 12.4(a), (y) "the day upon which such subdivision
                  becomes effective" and "the day upon which such combination
                  becomes effective" within the meaning of Section 12.4(b), and
                  (z) as "the date fixed for the determination of stockholders
                  entitled to receive such rights or warrants," "the Record Date
                  fixed for the determination of the stockholders entitled to
                  receive such rights or warrants" and such "Record Date" within
                  the meaning of Section 12.4(c); and

                           (B) any shares of 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 12.4(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,
       distribute to all holders of its Common Stock cash (excluding any cash
       that is distributed upon a reclassification, change, merger,
       consolidation, statutory share exchange, combination, sale or conveyance
       to which Section 12.11 applies or as part of a distribution referred to
       in Section 12.4(d)), in an aggregate amount that, combined together with:

                     (1) the aggregate amount of any other such distributions to
              all holders of Common Stock made exclusively in cash within the 12
              months preceding the date of payment of such distribution, and in
              respect of which no adjustment pursuant to this Section 12.4(e)
              has been made; and

                     (2) the aggregate of any cash plus the fair market value
              (as determined by the Board of Directors, whose determination
              shall be conclusive and set forth in a Board Resolution) of
              consideration payable in respect of any tender offer by the
              Company or any of its subsidiaries for all or any portion of the
              Common Stock concluded within the 12 months preceding the date of
              such distribution, and in respect of which no adjustment pursuant
              to Section 12.4(f) has been made;

                                       64
<PAGE>

exceeds 10% of the product of the Current Market Price on the Record Date with
respect to such distribution times the number of shares of Common Stock
outstanding on such date, then and in each such case, immediately after the
close of business on such date, the Conversion Price shall be reduced so that
the same shall equal the price determined by multiplying the Conversion Price in
effect immediately prior to the close of business on such Record Date by a
fraction:

                     (i) the numerator of which shall be equal to the Current
              Market Price on the Record Date less an amount equal to the
              quotient of (x) the excess of such combined amount over such 10%
              and (y) the number of shares of Common Stock outstanding on the
              Record Date, and

                     (ii) the denominator of which shall be equal to the Current
              Market Price on such date.

However, in the event that the then fair market value (as so determined) of the
portion of the securities so distributed applicable to one share of Common Stock
is equal to or greater than the Current Market Price on the Record Date, 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) the amount of cash such Holder would have received had such
Holder converted such Security (or portion thereof) immediately prior to such
Record Date. In the event that such dividend or distribution is not so paid or
made, the Conversion Price shall again be adjusted to be the Conversion Price
which 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 Common Stock shall expire and
     such tender offer (as amended upon the expiration thereof) shall require
     the payment to stockholders (based on the acceptance (up to any maximum
     specified in the terms of the tender offer) of Purchased Shares (as defined
     below)) of an aggregate consideration having a fair market value (as
     determined by the Board of Directors, whose determination shall be
     conclusive and set forth in a Board Resolution) that combined together
     with:

                  (1) the aggregate of the cash plus the fair market value (as
         determined by the Board of Directors, whose determination shall be
         conclusive and set forth in a Board Resolution), 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 such tender offer and in respect of which no adjustment
         pursuant to this Section 12.4(f) has been made;

                  (2) the aggregate amount of any distributions to all holders
         of the Company's 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 12.4(e) has been made; and

exceeds 10% of the product of the Current Market Price 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
(including any tendered shares) on the Expiration Time, 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 Price shall be adjusted so that the same

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shall equal the price determined by multiplying the Conversion Price in effect
immediately prior to close of business on the date of the Expiration Time by a
fraction:

                     (i) the numerator of which shall be the number of shares of
              Common Stock outstanding (including any tendered shares) at the
              Expiration Time multiplied by the Current Market Price of the
              Common Stock on the Trading Day next succeeding the Expiration
              Time; and

                     (ii) the denominator shall be the sum of (x) the fair
              market value (determined as aforesaid) of the aggregate
              consideration payable to stockholders based on the acceptance (up
              to any maximum specified in the terms of the tender offer) of all
              shares validly tendered and not withdrawn as of the Expiration
              Time (the shares deemed so accepted, up to any such maximum, being
              referred to as the "Purchased Shares") and (y) the product of the
              number of shares of Common Stock outstanding (less any Purchased
              Shares) on the Expiration Time and the Current Market Price of the
              Common Stock on the Trading Day next succeeding the Expiration
              Time.

Such reduction (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 shares pursuant to any such tender offer, but
the Company is permanently prevented by applicable law from effecting any such
purchases or all such purchases are rescinded, the Conversion Price shall again
be adjusted to be the Conversion Price which would then be in effect if such
tender offer had not been made. If the application of this Section 12.4(f) to
any tender offer would result in an increase in the Conversion Price, no
adjustment shall be made for such tender offer under this Section 12.4(f).1

          (g) For purposes of this Section 12.4, the following terms shall have
     the meanings indicated:

                  (1) "Current Market Price" shall mean the average of the daily
         Trading Prices per share of Common Stock for the ten consecutive
         Trading Days immediately prior to the date in question; provided,
         however, that if:

                           (i) 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
                  Price pursuant to Section 12.4(a), (b), (c), (d), (e) or (f)
                  occurs during such ten consecutive Trading Days, the Trading
                  Price for each Trading Day prior to the "ex" date for such
                  other event shall be adjusted by multiplying such Trading
                  Price by the same fraction by which the Conversion Price is so
                  required to be adjusted as a result of such other event;

                           (ii) the "ex" date for any event (other than the
                  issuance or distribution requiring such computation) that
                  requires an adjustment to the Conversion Price pursuant to
                  Section 12.4(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 Trading
                  Price for each Trading Day on and after the "ex" date for such
                  other event shall be adjusted by multiplying such Trading
                  Price by the reciprocal of the fraction by which the
                  Conversion Price is so required to be adjusted as a result of
                  such other event; and

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                           (iii) 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 (i) or (ii) of this proviso, the Trading 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 by the Board of Directors in a manner
                  consistent with any determination of such value for purposes
                  of Section 12.4(d) or (f), whose determination shall be
                  conclusive and set forth in a Board Resolution) of the
                  evidences of indebtedness, shares of capital stock or assets
                  being distributed 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 12.4(f), the Current
         Market Price of the Common Stock on any date shall be deemed to be the
         average of the daily Trading Prices per share of Common Stock for such
         day and the next two succeeding Trading Days; provided, however, that
         if the "ex" date for any event (other than the tender offer requiring
         such computation) that requires an adjustment to the Conversion Price
         pursuant to Section 12.4(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 Trading Price
         for each Trading Day on and after the "ex" date for such other event
         shall be adjusted by multiplying such Trading Price by the reciprocal
         of the fraction by which the Conversion Price is so required to be
         adjusted as a result of such other event. For purposes of this
         paragraph, the term "ex" date, when used:

                           (A) with respect to any issuance or distribution,
                  means the first date on which the Common Stock trades regular
                  way on the relevant exchange or in the relevant market from
                  which the Trading Price was obtained without the right to
                  receive such issuance or distribution;

                           (B) with respect to any subdivision or combination of
                  shares of Common Stock, means the first date on which the
                  Common Stock trades regular way on such exchange or in such
                  market after the time at which such subdivision or combination
                  becomes effective; and

                           (C) with respect to any tender or exchange offer,
                  means the first date on which the Common Stock trades 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 Price are called for pursuant to this Section 12.4, such
         adjustments shall be made to the Current Market Price as may be
         necessary or appropriate to effectuate the intent of this Section 12.4
         and to avoid unjust or inequitable results as determined in good faith
         by the Board of Directors.

                  (2) "fair market value" shall mean the amount which a willing
         buyer would pay a willing seller in an arm's length transaction which,
         in the absence of a current market for such transaction, shall be
         determined in good faith by the Board of Directors.

                  (3) "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

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         applicable security) is exchanged for or converted into any combination
         of cash, securities or other property, the date fixed for determination
         of stockholders 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 may make such reductions in the Conversion Price, in
addition to those required by Sections 12.4(a), (b), (c), (d), (e) or (f), as
the Board of Directors considers to be advisable to avoid or diminish any income
tax to holders of Common Stock resulting from any dividend or distribution of
stock (or rights to acquire stock) or from any event treated as such for income
tax purposes.

         To the extent permitted by applicable law, the Company from time to
time may reduce the Conversion Price by any amount for any period of time if the
period is at least 20 days and the reduction is irrevocable during the period
and the Board of Directors determines in good faith that such reduction would be
in the best interests of the Company, which determination shall be conclusive
and set forth in a Board Resolution. Whenever the Conversion Price is reduced
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 Register a notice
of the reduction at least 15 days prior to the date the reduced Conversion Price
takes effect, and such notice shall state the reduced Conversion Price and the
period during which it will be in effect.

         (i) No adjustment in the Conversion Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in such price;
provided, however, that any adjustments which by reason of this Section 12.4(i)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Article 12 shall be made
by the Company and shall be made to the nearest cent or to the nearest one
hundredth of a share, as the case may be. No adjustment need be made for a
change in the par value or no par value of the Common Stock.

         (j) In any case in which this Section 12.4 provides that an adjustment
shall become effective immediately after a Record Date for an event, the Company
may defer until the occurrence of such event (i) issuing to the Holder of any
Security converted after such Record Date and before the occurrence of such
event the additional shares of Common Stock issuable upon such conversion by
reason of the adjustment required by such event over and above the Common Stock
issuable upon such conversion before giving effect to such adjustment and (ii)
paying to such holder any amount in cash in lieu of any fraction pursuant to
Section 12.3.

         (k) For purposes of this Section 12.4, the number of shares of Common
Stock at any time outstanding shall not include shares held in the treasury of
the Company but shall include shares issuable in respect of scrip certificates
issued in lieu of fractions of shares of Common Stock. The Company will not pay
any dividend or make any distribution on shares of Common Stock held in the
treasury of the Company.

         (l) If the distribution date for the rights provided in the Company's
rights agreement, if any, occurs prior to the date a Security is converted, and
the Holder of the Security who converts such Security after the distribution
date is not entitled to receive the rights that would otherwise be attached (but
for the date of conversion) to the shares of Common Stock received upon such
conversion, then an adjustment shall be made to the Conversion Price pursuant to
clause 12.4(b) as if the rights were being distributed to the common
stockholders of the Company immediately prior to such conversion. If such an
adjustment is made and the rights are later

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redeemed, invalidated or terminated, then a corresponding reversing adjustment
shall be made to the Conversion Price, on an equitable basis, to take account of
such event.

SECTION 12.5      NOTICE OF ADJUSTMENTS OF CONVERSION PRICE.

         Whenever the Conversion Price is adjusted as herein provided (other
than in the case of an adjustment pursuant to the second paragraph of Section
12.4(h) for which the notice required by such paragraph has been provided), the
Company shall promptly file with the Trustee and any Conversion Agent other than
the Trustee an Officers' Certificate setting forth the adjusted Conversion Price
and showing in reasonable detail the facts upon which such adjustment is based.
Unless and until the Trustee and any Conversion Agent other than the Trustee
receive an Officers' Certificate setting forth an adjustment to the Conversion
Price, the Trustee and such Conversion Agent may assume without inquiry that the
Conversion Price has not and is not required to be adjusted and that the last
Conversion Price of which the Trustee and such Conversion Agent have knowledge
remains in effect. Promptly after delivery of such Officers' Certificate, the
Company shall prepare a notice stating that the Conversion Price has been
adjusted and setting forth the adjusted Conversion Price and the date on which
each adjustment becomes effective, and shall mail such notice to each Holder at
the address of such Holder as it appears in the Register within 20 days of the
effective date of such adjustment. Failure to deliver such notice shall not
affect the legality or validity of any such adjustment.

         Neither the Trustee nor any Conversion Agent shall be under any duty or
responsibility with respect to any such certificate or the information and
calculations contained therein, except to exhibit the same to any Holder of
Securities desiring inspection thereof at its office during normal business
hours.

SECTION 12.6      NOTICE PRIOR TO CERTAIN ACTIONS.

         In case at any time after the date hereof:

                  (1) the Company shall declare a dividend (or any other
         distribution) on its Common Stock payable otherwise than in cash out of
         its capital surplus or its consolidated retained earnings;

                  (2) the Company shall authorize the granting to the holders of
         its Common Stock of rights or warrants to subscribe for or purchase any
         shares of capital stock of any class (or of securities convertible into
         shares of capital stock of any class) or of any other rights;

                  (3) there shall occur any reclassification of the Common Stock
         of the Company (other than a subdivision or combination of its
         outstanding Common Stock, a change in par value, a change from par
         value to no par value or a change from no par value to par value), or
         any merger, consolidation, statutory share exchange or combination to
         which the Company is a party and for which approval of any shareholders
         of the Company is required, or the sale, transfer or conveyance of all
         or substantially all of the assets of the Company; or

                  (4) there shall occur the voluntary or involuntary
         dissolution, liquidation or winding up of the Company;

the Company shall cause to be filed at each office or agency maintained for the
purpose of conversion of securities pursuant to Section 9.2, and shall cause to
be provided to the Trustee and all Holders in

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accordance with Section 15.2, at least 20 days (or 10 days in any case specified
in clause (1) or (2) above) prior to the applicable record or effective date
hereinafter specified, a notice stating:

                  (A) the date on which a record is to be taken for the purpose
         of such dividend, distribution, rights or warrants, or, if a record is
         not to be taken, the date as of which the holders of Common Stock of
         record to be entitled to such dividend, distribution, rights or
         warrants are to be determined; or

                  (B) the date on which such reclassification, merger,
         consolidation, statutory share exchange, combination, sale, transfer,
         conveyance, dissolution, liquidation or winding up 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 shares of
         Common Stock for securities, cash or other property deliverable upon
         such reclassification, merger, consolidation, statutory share exchange,
         sale, transfer, dissolution, liquidation or winding up.

                  Neither the failure to give such notice nor any defect therein
shall affect the legality or validity of the proceedings or actions described in
clauses (1) through (4) of this Section 12.6.

SECTION 12.7      COMPANY TO RESERVE COMMON STOCK.

                  The Company shall at all times use its best efforts to reserve
and keep available, free from preemptive rights, out of its authorized but
unissued Common Stock, for the purpose of effecting the conversion of
Securities, the full number of shares of fully paid and nonassessable Common
Stock then issuable upon the conversion of all Outstanding Securities.

SECTION 12.8      TAXES ON CONVERSIONS.

                  Except as provided in the next sentence, the Company will pay
any and all taxes (other than taxes on income) and duties that may be payable in
respect of the issue or delivery of shares of Common Stock on conversion of
Securities pursuant hereto. A Holder delivering a Security for conversion shall
be liable for and will be required to pay any tax or duty which may be payable
in respect of any transfer involved in the issue and delivery of shares of
Common Stock in a name other than that of the Holder of the Security or
Securities to be converted, and no such issue or delivery shall be made unless
the Person requesting such issue has paid to the Company the amount of any such
tax or duty, or has established to the satisfaction of the Company that such tax
or duty has been paid.

SECTION 12.9      COVENANT AS TO COMMON STOCK.

                  The Company covenants that all shares of Common Stock which
may be issued upon conversion of Securities will upon issuance be fully paid and
nonassessable and that the Company will pay all taxes, liens and charges with
respect to the issuance thereof, except (1) as provided in Section 12.8 or (2)
with respect to any liens or charges created by or imposed upon such Common
Stock by the Holder of the Security or Securities to be converted.

SECTION 12.10     CANCELLATION OF CONVERTED SECURITIES.

                  All Securities delivered for conversion shall be delivered to
the Trustee to be canceled by or at the direction of the Trustee, which shall
dispose of the same as provided in Section 2.15.

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SECTION 12.11     EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE.

                  If any of following events occur, namely:

                           (i) any reclassification or change of the outstanding
                  shares of Common Stock (other than a change as a result of a
                  subdivision or combination);

                           (ii) any merger, consolidation, statutory share
                  exchange or combination of the Company with or into 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

                           (iii) 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 TIA 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
Security shall be convertible into the kind and 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 merger, consolidation,
statutory share exchange, 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 12.11
the kind and amount of securities, cash or other property receivable upon such
merger, consolidation, statutory share exchange, 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 shares 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 13.

                  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 Register, within 20 days after execution thereof.
Failure to deliver such notice shall not affect the legality or validity of such
supplemental indenture.

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                  The above provisions of this Section shall similarly apply to
successive reclassifications, mergers, consolidations, statutory share
exchanges, combinations, sales and conveyances.

                  If this Section 12.11 applies to any event or occurrence,
Section 12.4 shall not apply.

SECTION 12.12     RESPONSIBILITY OF TRUSTEE FOR CONVERSION PROVISIONS.

                  The Trustee, subject to the provisions of Section 5.1, and any
Conversion Agent shall not at any time be under any duty or responsibility to
any Holder of Securities to determine whether any facts exist which may require
any adjustment of the Conversion Price, or with respect to the nature or intent
of any such adjustments when made, or with respect to the method employed, or
herein or in any supplemental indenture provided to be employed, in making the
same. Neither the Trustee, subject to the provisions of Section 5.1, nor any
Conversion Agent shall be accountable with respect to the validity or value (of
the kind or amount) of any Common Stock, or of any other securities or property,
which may at any time be issued or delivered upon the conversion of any
Security; and it or they do not make any representation with respect thereto.
Neither the Trustee, subject to the provisions of Section 5.1, nor any
Conversion Agent shall be responsible for any failure of the Company to make any
cash payment or to issue, transfer or deliver any shares of stock or share
certificates or other securities or property upon the surrender of any Security
for the purpose of conversion; and the Trustee, subject to the provisions of
Section 5.1, and any Conversion Agent shall not be responsible or liable for any
failure of the Company to comply with any of the covenants of the Company
contained in this Article.

                                   ARTICLE 13

                                  SUBORDINATION

SECTION 13.1      AGREEMENT TO SUBORDINATE.

                  The Company agrees, and each Holder by accepting a Security
agrees, that the Indebtedness evidenced by the Securities is subordinated in
right of payment, to the extent and in the manner provided in this Article 13,
to the prior payment in full in cash of all Senior Debt (whether outstanding on
the date hereof or hereafter created, incurred, assumed or guaranteed), and that
the subordination is for the benefit of the holders of Senior Debt.

SECTION 13.2      LIQUIDATION; DISSOLUTION; BANKRUPTCY.

                  Upon any distribution to creditors of the Company in a
liquidation or dissolution of the Company or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to the Company or its
property, an assignment for the benefit of creditors or any marshalling of the
Company's assets and liabilities, the holders of Senior Debt shall be entitled
to receive payment in full in cash of all Obligations due in respect of such
Senior Debt (including interest after the commencement of any such proceeding at
the rate specified in the applicable Senior Debt, whether or not an allowable
claim in any such proceeding) before the Holders of Securities will be entitled
to receive any payment with respect to the Securities, and until all Obligations
with respect to Senior Debt are paid in full in cash, any distribution to which
the Holders of Securities would be entitled shall be made to the holders of
Senior Debt (except, in each case, that Holders of Securities may receive
Permitted Junior Securities and payments made from the trust described under
Article 3).

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SECTION 13.3      DEFAULT ON DESIGNATED SENIOR DEBT.

                  The Company may not make any payment or distribution to the
Trustee or any Holder in respect of Obligations with respect to the Securities
and may not acquire from the Trustee or any Holder any Securities for cash or
property (other than (i) securities that are subordinated to at least the same
extent as the Securities to (a) Senior Debt and (b) any securities issued in
exchange for Senior Debt and (ii) payments and other distributions made from any
defeasance trust created pursuant to Section 3 hereof) until all principal and
other Obligations with respect to the Senior Debt have been paid in full if:

                  (i) a default in the payment of any principal or other
Obligations with respect to Designated Senior Debt occurs and is continuing; or

                  (ii) a default, other than a payment default, on Designated
Senior Debt occurs and is continuing that then permits holders of the Designated
Senior Debt to accelerate its maturity and the Trustee receives a notice of the
default (a "Payment Blockage Notice") from the Company or a Representative with
respect to such Designated Senior Debt. If the Trustee receives any such Payment
Blockage Notice, no subsequent Payment Blockage Notice shall be effective for
purposes of this Section unless and until (a) at least 360 days shall have
elapsed since the effectiveness of the immediately prior Payment Blockage Notice
and (b) all scheduled payments of principal, premium, if any, and interest on
the Securities that have come due have been paid in full in cash. No nonpayment
default that existed or was continuing on the date of delivery of any Payment
Blockage Notice to the Trustee shall be, or be made, the basis for a subsequent
Payment Blockage Notice unless such default shall have been waived or cured for
a period of not less than 90 days.

                  The Company may and shall resume payments on and distributions
in respect of the Securities and may acquire them upon the earlier of:

                  (1) the date upon which the default is cured or waived, or

                  (2) in the case of a default referred to in Section 13.3(ii)
hereof, 179 days pass after notice is received if the maturity of such
Designated Senior Debt has not been accelerated,

                  if this Article otherwise permits the payment, distribution or
acquisition at the time of such payment or acquisition.

SECTION 13.4      ACCELERATION OF SECURITIES.

                  If payment of the Securities is accelerated because of an
Event of Default, the Company shall promptly notify holders of Senior Debt of
the acceleration.

SECTION 13.5      WHEN DISTRIBUTION MUST BE PAID OVER.

                  In the event that the Trustee or any Holder receives any
payment of any Obligations with respect to the Securities at a time when the
Trustee or such Holder, as applicable, has actual knowledge that such payment is
prohibited by this Article 13 hereof, such payment shall be held by the Trustee
or such Holder, in trust for the benefit of, and shall be paid forthwith over
and delivered, upon written request, to, the holders of Senior Debt as their
interests may appear or their representative under the indenture or other
agreement (if any) pursuant to which Senior Debt may have been issued, as their
respective interests may appear, for application to the payment of all
Obligations with respect to Senior

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Debt remaining unpaid to the extent necessary to pay such Obligations in full in
accordance with their terms, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Debt.

                  With respect to the holders of Senior Debt, the Trustee
undertakes to perform only such obligations on the part of the Trustee as are
specifically set forth in this Article 13, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt, and shall not be liable to any
such holders if the Trustee shall pay over or distribute to or on behalf of
Holders or the Company or any other Person money or assets to which any holders
of Senior Debt shall be entitled by virtue of this Article 13, except if such
payment is made as a result of the willful misconduct or negligence of the
Trustee.

SECTION 13.6      NOTICE BY COMPANY.

                  The Company shall promptly notify the Trustee and the Paying
Agent of any facts known to the Company that would cause a payment of any
Obligations with respect to the Securities to violate this Article 13, but
failure to give such notice shall not affect the subordination of the Securities
to the Senior Debt as provided in this Article 13.

                  The Trustee shall be entitled to rely on the delivery to it of
a written notice by a person representing himself to be a holder of Senior Debt
(or a trustee or agent on behalf of such holder) to establish that such notice
has been given by a holder of Senior Debt (or a trustee or agent on behalf of
any such holder). In the event that the Trustee determines in good faith that
further evidence is required with respect to the right of any person as holder
of Senior Debt to participate in any payment or distribution pursuant to this
Article 13, the Trustee may request such person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Debt held by
such person, the extent to which such person is entitled to participate in such
evidence is not furnish, the Trustee may defer any payment which it may be
required to make for the benefit of such person pursuant to the terms of this
Indenture pending judicial determination as to the rights of such person to
receive such payment.

SECTION 13.7      SUBROGATION.

                  After all Senior Debt is paid in full in cash and until the
Securities are paid in full, Holders of Securities shall be subrogated (equally
and ratably with all other Indebtedness pari passu with the Securities) to the
rights of holders of Senior Debt to receive distributions applicable to Senior
Debt to the extent that distributions otherwise payable to the Holders of
Securities have been applied to the payment of Senior Debt. A distribution made
under this Article 13 to holders of Senior Debt that otherwise would have been
made to Holders of Securities is not, as between the Company and Holders, a
payment by the Company on the Securities.

SECTION 13.8      RELATIVE RIGHTS.

                  This Article 13 defines the relative rights of Holders of
Securities and holders of Senior Debt. Nothing in this Indenture shall:

                  (1) impair, as between the Company and Holders of Securities,
the obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the Securities in accordance with their terms;

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<PAGE>

                  (2) affect the relative rights of Holders of Securities and
creditors of the Company other than their rights in relation to holders of
Senior Debt; or

                  (3) prevent the Trustee or any Holder of Securities from
exercising its available remedies upon a Default or Event of Default, subject to
the rights of holders and owners of Senior Debt to receive distributions and
payments otherwise payable to Holders of Securities.

                  If the Company fails because of this Article 13 to pay
principal of or interest on a Security on the due date, the failure is still a
Default or Event of Default.

SECTION 13.9      SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.

                  No right of any holder of Senior Debt to enforce the
subordination of the Indebtedness evidenced by the Securities shall be impaired
by any act or failure to act by the Company or any Holder or by the failure of
the Company or any Holder to comply with this Indenture.

SECTION 13.10     DISTRIBUTION OR NOTICE TO REPRESENTATIVE.

                  Whenever a distribution is to be made or a notice given to
holders of Senior Debt, the distribution may be made and the notice given to
their Representative.

                  Upon any payment or distribution of assets of the Company
referred to in this Article 13, the Trustee and the Holders of Securities shall
be entitled to rely upon any order or decree made by any court of competent
jurisdiction or upon any certificate of such Representative or of the
liquidating trustee or agent or other Person making any distribution to the
Trustee or to the Holders of Securities for the purpose of ascertaining the
Persons entitled to participate in such distribution, the holders of the Senior
Debt and other Indebtedness of the Company, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article 13.

SECTION 13.11     RIGHTS OF TRUSTEE AND PAYING AGENT.

                  Notwithstanding the provisions of this Article 13 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Securities, unless the Trustee shall have received at
its Corporate Trust Office at least three Business Days prior to the date of
such payment written notice of facts that would cause the payment of any
Obligations with respect to the Securities to violate this Article 13. Only the
Company or a Representative may give the notice. Nothing in this Article 13
shall impair the claims of, or payments to, the Trustee under or pursuant to
Section 5.8 hereof.

                  The Trustee in its individual or any other capacity may hold
Senior Debt with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights.

SECTION 13.12     AUTHORIZATION TO EFFECT SUBORDINATION.

                  Each Holder of Securities, by the Holder's acceptance thereof,
authorizes and directs the Trustee on such Holder's behalf to take such action
as may be necessary or appropriate to effectuate the subordination as provided
in this Article 13, and appoints the Trustee to act as such Holder's
attorney-in-fact for any and all such purposes. If the Trustee does not file a
proper proof of claim or proof of debt in the form required in any proceeding
referred to in Section 4.9 hereof at least 30 days before the expiration

                                       75
<PAGE>

of the time to file such claim, the credit agents are hereby authorized to file
an appropriate claim for and on behalf of the Holders of the Securities.

SECTION 13.13     ANTILAYERING PROVISION.

                  (1) The Company will not incur, create, issue, assume,
guarantee or otherwise become liable for any Indebtedness that is subordinate or
junior in right of payment to any Senior Debt and senior in any respect in right
of payment to the Securities.

                  (2) No Guarantor will incur, create, issue, assume, guarantee
or otherwise become liable for any Indebtedness that is subordinate or junior in
right of payment to any Senior Debt of a Guarantor and senior in any respect in
right of payment to any of the Guarantees.

SECTION 13.14     AMENDMENTS.

                  The provisions of this Article 13 shall not be amended or
modified without the written consent of the holders of at least 75% in aggregate
principal amount of the Securities then outstanding if such amendment would
adversely affect the rights of Holders of Securities.

                                   ARTICLE 14

                              SUBSIDIARY GUARANTEES

SECTION 14.1      AGREEMENT TO GUARANTEE.

                  The Guarantors hereby agree as follows:

                  (1) The Guarantors, jointly and severally with all other
Guarantors, if any, unconditionally guarantee to each Holder of a Security
authenticated and delivered by the Trustee and to the Trustee and its successors
and assigns, regardless of the validity and enforceability of the Indenture, the
Securities or the Obligations of the Company under the Indenture or the
Securities, that:

                           (a) the principal of, premium, interest and
                  additional amounts, if any, on the Securities will be promptly
                  paid in full when due, whether at maturity, by acceleration,
                  redemption or otherwise, and interest on the overdue principal
                  of, and premium, interest and Liquidated Damages, if any, on
                  the Securities, to the extent lawful, and all other
                  Obligations of the Company to the Holders or the Trustee
                  thereunder or under the Indenture will be promptly paid in
                  full, all in accordance with the terms thereof; and

                           (b) in case of any extension of time for payment or
                  renewal of any Securities or any of such other Obligations,
                  that the same will be promptly paid in full when due in
                  accordance with the terms of the extension or renewal, whether
                  at stated maturity, by acceleration or otherwise.

                  (2) Notwithstanding the foregoing, in the event that this
Subsidiary Guarantee would constitute or result in a violation of any applicable
fraudulent conveyance or similar law of any relevant jurisdiction, the liability
of the Guarantors under this Indenture shall be reduced to the maximum amount
permissible under such fraudulent conveyance or similar law.

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<PAGE>

SECTION 14.2      EXECUTION AND DELIVERY OF GUARANTEES.

                  (1) To evidence their Guarantees set forth in this Indenture,
the Guarantors hereby agree that a notation of such Guarantee shall be endorsed
by an Officer of the Guarantors on each Security authenticated and delivered by
the Trustee on or after the date hereof. The form of such notation is included
in the Form of Security attached as Exhibit A to this Indenture.

                  (2) Notwithstanding the foregoing, the Guarantors hereby agree
that their Guarantee set forth herein shall remain in full force and effect
notwithstanding any failure to endorse on each Security a notation of such
Guarantee.

                  (3) If an Officer whose signature is on this Indenture or a
Security no longer holds that office at the time the Trustee authenticates the
Security on which a Guarantee is endorsed, the Guarantee shall be valid
nevertheless.

                  (4) The delivery of any Security by the Trustee, after the
authentication thereof under the Indenture, shall constitute due delivery of the
Guarantee set forth in this Indenture on behalf of the Guarantors.

                  (5) The Guarantors hereby agree that their obligations
hereunder shall be unconditional, regardless of the validity, regularity or
enforceability of the Securities or the Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Securities with
respect to any provisions of the Securities or the Indenture, the recovery of
any judgment against the Company, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a guarantor.

                  (6) The Guarantors hereby waive diligence, presentment, demand
of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the
Company, protest, notice and all demands whatsoever and covenants that their
Guarantee made pursuant to this Indenture will not be discharged except by
complete performance of the obligations contained in the Securities and the
Indenture.

                  (7) If any Holder or the Trustee is required by any court or
otherwise to return to the Company or the Guarantors, or any Custodian, Trustee,
liquidator or other similar official acting in relation to either the Company or
the Guarantors, any amount paid by either to the Trustee or such Holder, the
Guarantee made pursuant to this Indenture, to the extent theretofore discharged,
shall be reinstated in full force and effect.

                  (8) The Guarantors agree that they shall not be entitled to
any right of subrogation in relation to the Holders in respect of any
obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby. The Guarantors further agree that, as between the Guarantors,
on the one hand, and the Holders and the Trustee, on the other hand:

                           (a) the maturity of the Obligations guaranteed hereby
                  may be accelerated as provided in Article 4 of the Indenture
                  for the purposes of the Guarantee made pursuant to this
                  Indenture, notwithstanding any stay, injunction or other
                  prohibition preventing such acceleration in respect of the
                  obligations guaranteed hereby;

                           (b) in the event of any declaration of acceleration
                  of such Obligations as provided in Article 4 of the Indenture,
                  such Obligations (whether or not due and payable)

                                       77
<PAGE>

                  shall forthwith become due and payable by the Guarantors for
                  the purpose of the Guarantee made pursuant to this Indenture;
                  and

                           (c) the Guarantors shall have the right to seek
                  contribution from any other non-paying Guarantor so long as
                  the exercise of such right does not impair the rights of the
                  Holders or the Trustee under the Guarantee made pursuant to
                  this Indenture.

SECTION 14.3      GUARANTORS MAY CONSOLIDATE, ETC. ON CERTAIN TERMS.

                  (1) Except as set forth in Articles 6 and 9 of the Indenture,
nothing contained in this Indenture or in the Securities shall prevent (a) any
consolidation or merger of any of the Guarantors with or into the Company or any
other Guarantor, (b) any transfer, sale or conveyance of the property of any of
the Guarantors as an entirety or substantially as an entirety, to the Company or
any other Guarantor or (c) any merger of a Guarantor with or into with an
Affiliate of that Guarantor that has no significant assets or liabilities and
was incorporated solely for the purpose of reincorporating such Guarantor in
another State of the United States so long as the amount of Indebtedness of the
Company and the domestic non-Guarantor subsidiaries is not increased thereby.

                  (2) Except as set forth in Article 9 of the Indenture, nothing
contained in this Indenture or in the Securities shall prevent any consolidation
or merger of any of the Guarantors with or into a corporation or corporations
other than the Company or any other Guarantor (in each case, whether or not
affiliated with the Guarantor), or successive consolidations or mergers in which
a Guarantor or its successor or successors shall be a party or parties, or shall
prevent any sale or conveyance of the property of a Guarantor as an entirety or
substantially as an entirety, to a corporation other than the Company or any
other Guarantor (in each case, whether or not affiliated with the Guarantors)
authorized to acquire and operate the same; provided, however, that the
Guarantors hereby covenant and agree that (i) subject to the Indenture, upon any
such consolidation, merger, sale or conveyance, the due and punctual performance
and observance of all of the covenants and conditions of this Indenture to be
performed by the Guarantors, shall be expressly assumed (in the event that any
of the Guarantors are not the surviving corporation in the merger), by
supplemental indenture satisfactory in form to the Trustee, executed and
delivered to the Trustee, by the corporation formed by such consolidation, or
into which the Guarantors shall have been merged, or by the corporation which
shall have acquired such property, (ii) immediately after giving effect to such
consolidation, merger, sale or conveyance no Default or Event of Default exists;
and (iii) such transaction will only be permitted under this Indenture if it
would be permitted under the terms of all of the indentures governing the
Outstanding Senior Subordinated Notes as the same are in effect on the date
hereof (whether or not those indentures are subsequently amended, waived,
modified or terminated or expire and whether or not any of these notes continue
to be outstanding).

                  (3) In case of any such consolidation, merger, sale or
conveyance and upon the assumption by the successor corporation, by supplemental
indenture, executed and delivered to the Trustee and satisfactory in form to the
Trustee, of the Subsidiary Guarantee made pursuant to this Indenture and the due
and punctual performance of all of the covenants and conditions of this
Indenture to be performed by the Guarantors, such successor corporation shall
succeed to and be substituted for the Guarantors with the same effect as if it
had been named herein as one of the Guarantors. Such successor corporation
thereupon may cause to be signed any or all of the Subsidiary Guarantees to be
endorsed upon the Securities issuable under the Indenture which theretofore
shall not have been signed by the Company and delivered to the Trustee. All the
Subsidiary Guarantees so issued shall in all respects have the same legal rank
and benefit under the Indenture and this Supplemental Indenture as the
Subsidiary Guarantees theretofore and thereafter issued in accordance with the
terms of the Indenture and this

                                       78
<PAGE>

Supplemental Indenture as though all of such Subsidiary Guarantees had been
issued at the date of the execution hereof.

SECTION 14.4      RELEASES.

                  (1) Concurrently with any sale of assets (including, if
applicable, all of the Capital Stock of the Guarantors), all Liens, if any, in
favor of the Trustee in the assets sold thereby shall be released. If the assets
sold in such sale or other disposition include all or substantially all of the
assets of the Guarantors or all of the Capital Stock of the Guarantors, then the
Guarantors (in the event of a sale or other disposition of all of the Capital
Stock of any of the Guarantors) or the Person acquiring the property (in the
event of a sale or other disposition of all or substantially all of the assets
of any of the Guarantors) shall be released from and relieved of its obligations
under this Indenture and its Subsidiary Guarantee made pursuant hereto. Upon
delivery by the Company to the Trustee of an Officers' Certificate to the effect
that such sale or other disposition was made by the Company or the Guarantors,
as the case may be, in accordance with the provisions of this Indenture, the
Trustee shall execute any documents reasonably required in order to evidence the
release of the Guarantors from their obligations under this Indenture and their
Subsidiary Guarantee made pursuant hereto. If the Guarantors are not released
from their obligations under their Subsidiary Guarantee, they shall remain
liable for the full amount of principal of and interest on the Securities and
for the other obligations of the Guarantors under this Indenture.

                  (2) Upon the designation of any of the Guarantors as an
Excluded Subsidiary in accordance with the terms of this Indenture and the
indentures governing the Outstanding Senior Subordinated Notes as the same are
in effect on the date hereof (whether or not those indentures are subsequently
amended, waived, modified or terminated or expire and whether or not any of
those notes continue to be outstanding), such Guarantor shall be released and
relieved of all of its obligations under this Indenture. Upon delivery by the
Company to the Trustee of an Officers' Certificate and an Opinion of Counsel to
the effect that such designation of such Guarantor as an Excluded Subsidiary was
made by the Company in accordance with the provisions of this Indenture and the
indentures governing the Outstanding Senior Subordinated Notes as the same are
in effect on the date hereof (whether or not those indentures are subsequently
amended, waived, modified or terminated or expire and whether or not any of
those notes continue to be outstanding), the Trustee shall execute any documents
reasonably required in order to evidence the release of such Guarantor from its
obligations under its Guarantee. Any of the Guarantors not released from their
obligations under the Subsidiary Guarantee shall remain liable for the full
amount of principal of and interest on the Securities and for the other
obligations of any of the Guarantors under this Indenture as provided in this
Section 14.

SECTION 14.5      NO RECOURSE AGAINST OTHERS.

                  No past, present or future director, officer, employee,
incorporator, stockholder or agent of the Guarantors, as such, shall have any
liability for any obligations of the Company or any Guarantor under the
Securities, any Guarantees, this Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder of the
Securities by accepting a Security waives and releases all such liability. The
waiver and release are part of the consideration for issuance of the Securities.
Such waiver may not be effective to waive liabilities under the federal
securities laws and it is the view of the Securities and Exchange Commission
that such a waiver is against public policy.

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<PAGE>

SECTION 14.6      SUBORDINATION OF SUBSIDIARY GUARANTEES; ANTI-LAYERING.

                  No Guarantor shall incur, create, issue, assume, guarantee or
otherwise become liable for any Indebtedness that is subordinate or junior in
right of payment to any Senior Debt of a Guarantor and senior in any respect in
right of payment to any of the Guarantees. Notwithstanding the foregoing
sentence, the Guarantee of each Guarantor shall be subordinated to the prior
payment in full of all Senior Debt of that Guarantor, which shall include all
guarantees of Senior Debt.

SECTION 14.7      FUTURE SUBSIDIARY GUARANTEES.

                  If the Company or any of its Subsidiaries shall acquire or
create another Subsidiary after the date of this Indenture (other than a foreign
Subsidiary or a domestic Subsidiary that has been properly designated as an
"Excluded Subsidiary" in accordance with the provisions of that defined term),
then such Subsidiary shall become a Guarantor and execute a Supplemental
Indenture in form and substance satisfactory to the Trustee, and deliver an
Opinion of Counsel to the Trustee as to the validity of such Guarantee.

                                   ARTICLE 15

                     OTHER PROVISIONS OF GENERAL APPLICATION

SECTION 15.1      TRUST INDENTURE ACT CONTROLS.

                  This Indenture is subject to the provisions of the TIA which
are required to be part of this Indenture, and shall, to the extent applicable,
be governed by such provisions.

SECTION 15.2      NOTICES.

                  Any notice or communication to the Company or the Trustee is
duly given if in writing and delivered in person or mailed by first-class mail
to the address set forth below:

         (a)      If to the Company or any Guarantor:

                  L-3 Communications Corporation
                  600 Third Avenue, 34th Floor
                  New York, New York 10016
                  Attn:  Vice President-Finance (Fax: 212-805-5470)

with a copy to:

                  Simpson Thacher & Bartlett
                  425 Lexington Avenue
                  New York, New York 10017
                  Attn:  Vincent Pagano Jr., Esq. (Fax: 212-455-2502)

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<PAGE>

         (b)      if to the Trustee:

                  The Bank of New York
                  101 Barclay Street, Floor 21 West
                  New York, New York 10286
                  Attn:  Corporate Trust Administration (Fax: 212-815-5915)

The Company or the Trustee by notice to the other may designate additional or
different addresses for subsequent notices or communications.

                  Any notice or communication to a Holder shall be mailed by
first-class mail to his address shown on the Register kept by the Registrar.
Failure to mail a notice or communication to a Holder or any defect in such
notice or communication shall not affect its sufficiency with respect to other
Holders.

                  If a notice or communication is mailed or sent in the manner
provided above within the time prescribed, it is duly given as of the date it is
mailed, whether or not the addressee receives it, except that notice to the
Trustee shall only be effective upon receipt thereof by the Trustee.

                  If the Company mails a notice or communication to Holders, it
shall mail a copy to the Trustee at the same time.

SECTION 15.3      COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.

                  Holders may communicate pursuant to Section 312(b) of the TIA
with other Holders with respect to their rights under the Securities or this
Indenture. The Company, the Trustee, the Registrar and anyone else shall have
the protection of Section 312(c) of the TIA.

SECTION 15.4      ACTS OF HOLDERS OF SECURITIES.

                  (a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders of Securities may be embodied in and evidenced by:

                  (1) one or more instruments of substantially similar tenor
         signed by such Holders in person or by agent or proxy duly appointed in
         writing;

                  (2) the record of Holders of Securities voting in favor
         thereof, either in person or by proxies duly appointed in writing, at
         any meeting of Holders of Securities duly called and held in accordance
         with the provisions of Article 8; or

                  (3) a combination of such instruments and any such record.

Except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments or record or both are delivered to
the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments and record (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the Holders
of Securities signing such instrument or instruments and so voting at such
meeting. Proof of execution of any such instrument or of a writing appointing
any such agent or proxy, or of the holding by any Person of a Security, shall be
sufficient for any purpose of this Indenture and (subject to Section 5.1)
conclusive in favor of the Trustee

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<PAGE>

and the Company if made in the manner provided in this Section. The record of
any meeting of Holders of Securities shall be proved in the manner provided in
Section 8.6.

                  (b) The fact and date of the execution by any Person of any
such instrument or writing may be provided in any manner which the Trustee
reasonably deems sufficient.

                  (c) The principal amount and serial numbers of Securities held
by any Person, and the date of such Person holding the same, shall be proved by
the Register.

                  (d) Any request, demand, authorization, direction, notice,
consent, election, waiver or other Act of the Holders 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 15.5      CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.

                  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 an Opinion of Counsel,
unless such officer knows, or in the exercise of reasonable care should know,
that the Opinion of Counsel with respect to the matters upon which such
certificate or opinion is based is erroneous. Any such Opinion of Counsel may be
based, insofar as it relates to factual matters, upon a certificate 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 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.

                  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 an Officers' Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such Counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or request, no
additional certificate or opinion need be furnished.

SECTION 15.6      STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.

                  Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:

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<PAGE>

                  (1) a statement that each individual signing such certificate
         or opinion on behalf of the Company 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 15.7      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 15.8      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 15.9      SEPARABILITY CLAUSE.

                  In case any provision in this Indenture or 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 15.10     BENEFITS OF INDENTURE.

                  Nothing contained in this Indenture or in the Securities,
express or implied, shall give to any Person, other than the parties hereto and
their successors hereunder, the holders of Senior Debt and the Holders of
Securities, any benefit or legal or equitable right, remedy or claim under this
Indenture.

SECTION 15.11     SECTION GOVERNING LAW.

THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

SECTION 15.12     COUNTERPARTS.

                  This instrument may be executed in any number of counterparts,
each of which when so executed shall be deemed to be an original but all such
counterparts shall together constitute but one and the same instrument.

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<PAGE>

SECTION 15.13     LEGAL HOLIDAYS.

                  In any case where any Interest Payment Date, Redemption Date,
Repurchase Date or Stated Maturity of any Security or the last day on which a
Holder of a Security has a right to convert such Security shall not be a
Business Day at any Place of Payment or Place of Conversion, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of interest (including Liquidated Damages, if any) or principal or
premium, if any, or conversion of the Securities, need not be made at such Place
of Payment or Place of Conversion on such day, but may be made on the next
succeeding Business Day at such Place of Payment or Place of Conversion with the
same force and effect as if made on the Interest Payment Date, Redemption Date,
Repurchase Date or at the Stated Maturity or on such last day for conversion;
provided, however, that in the case that payment is made on such succeeding
Business Day, no interest shall accrue on the amount so payable for the period
from and after such Interest Payment Date, Redemption Date, Repurchase Date or
Stated Maturity, as the case may be.

SECTION 15.14     RECOURSE AGAINST OTHERS.

                  No recourse for the payment of the principal of or premium, if
any, or interest (including Liquidated Damages, if any) on any Security, or for
any claim based thereon or otherwise in respect thereof, shall be had against
any incorporator, shareholder, officer or director, as such, past, present or
future, of the Company or of any successor corporation, whether by virtue of any
constitution, statute or rule of law or by the enforcement of any assessment or
penalty or otherwise, all such liability being, by the acceptance thereof and as
part of the consideration for the issue thereof, expressly waived and released.

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<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed all as of the day and year first above written.

                                  The Bank of New York,
                                  as trustee and not in its individual capacity

                                  By: /s/ Kisha A. Holder
                                     ---------------------------------
                                     Name:  Kisha A. Holder
                                     Title: Assistant Treasurer

                                   Indenture
<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed all as of the day and year first above written.

                       L-3 COMMUNICATIONS HOLDINGS, INC.,
                                 as the Company

                       By: /s/ Christopher C. Cambria
                           ---------------------------------
                          Name:  Christopher C. Cambria
                          Title: Vice President

                         L-3 COMMUNICATIONS CORPORATION,
                                 as a Guarantor

                       By: /s/ Christopher C. Cambria
                           ---------------------------------
                          Name:  Christopher C. Cambria
                          Title: Vice President

                  HYGIENETICS ENVIRONMENTAL SERVICES, INC.,
                                 as a Guarantor

                       By: /s/ Christopher C. Cambria
                           ---------------------------------
                          Name:  Christopher C. Cambria
                          Title: Vice President

                   L-3 COMMUNICATIONS ILEX SYSTEMS, INC.,
                                 as a Guarantor

                       By: /s/ Christopher C. Cambria
                           ---------------------------------
                          Name:  Christopher C. Cambria
                          Title: Vice President

                                   Indenture
<PAGE>

                      L-3 COMMUNICATIONS AYDIN CORPORATION,
                                 as a Guarantor

                       By: /s/ Christopher C. Cambria
                           ---------------------------------
                          Name:  Christopher C. Cambria
                          Title: Vice President

                          MPRI, INC.,
                                 as a Guarantor

                       By: /s/ Christopher C. Cambria
                           ---------------------------------
                          Name:  Christopher C. Cambria
                          Title: Vice President

                       L-3 COMMUNICATIONS SPD TECHNOLOGIES , INC.,
                                 as a Guarantor

                       By: /s/ Christopher C. Cambria
                           ---------------------------------
                          Name:  Christopher C. Cambria
                          Title: Vice President

                               SPD HOLDINGS, INC.,
                                 as a Guarantor

                       By: /s/ Christopher C. Cambria
                           ---------------------------------
                          Name:  Christopher C. Cambria
                          Title: Vice President

                          SPD ELECTRICAL SYSTEMS, INC.,
                                 as a Guarantor

                       By: /s/ Christopher C. Cambria
                           ---------------------------------
                          Name:  Christopher C. Cambria
                          Title: Vice President

                                   Indenture

<PAGE>

                              SPD SWITCHGEAR, INC.,
                                 as a Guarantor

                       By: /s/ Christopher C. Cambria
                           ---------------------------------
                          Name:  Christopher C. Cambria
                          Title: Vice President

                                 PAC ORD, INC.,
                                 as a Guarantor

                       By: /s/ Christopher C. Cambria
                           ---------------------------------
                          Name:  Christopher C. Cambria
                          Title: Vice President

                                 HENSCHEL, INC.,
                                 as a Guarantor

                       By: /s/ Christopher C. Cambria
                           ---------------------------------
                          Name:  Christopher C. Cambria
                          Title: Vice President

                              POWER PARAGON, INC.,
                                 as a Guarantor

                       By: /s/ Christopher C. Cambria
                           ---------------------------------
                          Name:  Christopher C. Cambria
                          Title: Vice President

                         L-3 COMMUNICATIONS ESSCO, INC.,
                                 as a Guarantor

                       By: /s/ Christopher C. Cambria
                           ---------------------------------
                          Name:  Christopher C. Cambria
                          Title: Vice President

                                   Indenture
<PAGE>

                             ELECTRODYNAMICS, INC.,
                                 as a Guarantor

                       By: /s/ Christopher C. Cambria
                           ---------------------------------
                          Name:  Christopher C. Cambria
                          Title: Vice President

                       INTERSTATE ELECTRONICS CORPORATION,
                                 as a Guarantor

                       By: /s/ Christopher C. Cambria
                           ---------------------------------
                          Name:  Christopher C. Cambria
                          Title: Vice President

                      SOUTHERN CALIFORNIA MICROWAVE, INC.,
                                 as a Guarantor

                       By: /s/ Christopher C. Cambria
                           ---------------------------------
                          Name:  Christopher C. Cambria
                          Title: Vice President

                 L-3 COMMUNICATIONS STORM CONTROL SYSTEMS, INC.,
                                 as a Guarantor

                       By: /s/ Christopher C. Cambria
                           ---------------------------------
                          Name:  Christopher C. Cambria
                          Title: Vice President

                     L-3 COMMUNICATIONS DBS MICROWAVE, INC.,
                                 as a Guarantor

                       By: /s/ Christopher C. Cambria
                           ---------------------------------
                          Name:  Christopher C. Cambria
                          Title: Vice President
<PAGE>

                             MICRODYNE CORPORATION,
                                 as a Guarantor

                       By: /s/ Christopher C. Cambria
                           ---------------------------------
                          Name:  Christopher C. Cambria
                          Title: Vice President

                                   Indenture
<PAGE>
                                                                       EXHIBIT A

                        L-3 Communications Holdings, Inc.

               5.25% Convertible Senior Subordinated Note due 2009
                                  (the "Notes")

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE REFERRED
TO HEREIN. THIS GLOBAL SECURITY MAY NOT BE EXCHANGED OR TRANSFERRED, IN WHOLE OR
IN PART, FOR A SECURITY REGISTERED IN THE NAME OF ANY PERSON OTHER THAN DTC OR A
NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES SET FORTH IN THE INDENTURE.
BENEFICIAL INTERESTS IN THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT IN
ACCORDANCE WITH THE INDENTURE.

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, (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") THAT IS PURCHASING AT LEAST $100,000 IN
AGGREGATE PRINCIPAL AMOUNT OF NOTES OR AN "ACCREDITED INVESTOR" AS DEFINED IN
RULE 501(a)(4), (5) OR (6) UNDER THE SECURITIES ACT (A "NON-INSTITUTIONAL
ACCREDITED INVESTOR") THAT IS PURCHASING AT LEAST $250,000 IN AGGREGATE
PRINCIPAL AMOUNT OF NOTES OR (C) IT IS A NON-U.S. PERSON OUTSIDE THE UNITED
STATES ACQUIRING THIS SECURITY IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT AND IT WILL NOT ENGAGE IN HEDGING TRANSACTIONS WITH RESPECT TO
THE SECURITIES OR THE COMMON STOCK ISSUABLE UPON CONVERSION THE SECURITIES
EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT;

(2) AGREES THAT IT WILL NOT 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 THAT IS PURCHASING NOTES IN AN AGGREGATE PRINCIPAL AMOUNT OF
AT LEAST $100,000 OR TO A NON-INSTITUTIONAL ACCREDITED INVESTOR THAT IS
PURCHASING NOTES IN AN AGGREGATE PRINCIPAL AMOUNT OF AT LEAST $250,000, AND
THAT, IN EITHER CASE, PRIOR TO SUCH TRANSFER, FURNISHES TO THE BANK OF NEW YORK,
AS TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS APPLICABLE), A SIGNED LETTER CONTAINING

                                       1
<PAGE>

CERTAIN REPRESENTATIONS AND WARRANTIES RELATING TO THE RESTRICTIONS ON TRANSFER
OF THE SECURITY EVIDENCED HEREBY (THE FORM OF LETTER CAN BE OBTAINED FROM SUCH
TRUSTEE), (D) TO A NON-U.S. PERSON OUTSIDE THE UNITED STATES IN COMPLIANCE WITH
REGULATION S UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (F)
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(F) ABOVE) A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF THE SECURITY EVIDENCED HEREBY WITHIN TWO YEARS AFTER THE DATE SUCH
SECURITY WAS LAST HELD BY AN AFFILIATE OF THE COMPANY (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE 2(E) OR 2(F) ABOVE), THE HOLDER MUST CHECK THE APPROPRIATE
BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND
SUBMIT THIS CERTIFICATE TO THE TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS
APPLICABLE). IF THE PROPOSED TRANSFER IS PURSUANT TO CLAUSE 2(C) OR 2(E) ABOVE,
THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE (OR ANY
SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS THE COMPANY MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER
IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED
UPON THE DATE THAT IS TWO YEARS AFTER THE DATE SUCH SECURITY WAS LAST HELD BY AN
AFFILIATE OF THE COMPANY OR UPON THE TRANSFER OF THE SECURITY EVIDENCED HEREBY
PURSUANT TO CLAUSE 2(E) OR 2(F) ABOVE. AS USED HEREIN, THE TERMS "UNITED STATES"
AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT.

                                       2
<PAGE>

                                      No.   01

CUSIP:   502424 AA 2                  Initial principal balance of this Note:
                                      $250,000,000

                  L-3 Communications Holdings, Inc., a Delaware corporation (the
"Company," which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to CEDE &
CO., or its registered assigns, the principal sum listed on the Schedule of
Increases or Decreases in Global Security attached hereto on June 1, 2009.

                  Interest Payment Dates: June 1 and December 1, commencing June
1, 2001.

                  Regular Record Dates: May 15 and November 15.

                  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.

-----------------------
Subject to increase or decrease as set forth in the attached schedule.

                                       3
<PAGE>

                  IN WITNESS WHEREOF, the Company has caused this Security to be
duly executed manually or by facsimile by its duly authorized officers.

Dated: November 21, 2000            L-3 COMMUNICATIONS HOLDINGS, INC.

                                    By: /s/ Christopher Cambria
                                        ---------------------------------
                                    Name:  Christopher C. Cambria
                                    Title: Vice President

                                    By: /s/ Mike Strianese
                                        ---------------------------------
                                    Name:  Mike Strianese
                                    Title:

Trustee's Certificate of Authentication

This is one of the Securities of the series designated
therein referred to in the within-named Indenture.

                                    Dated:   November 21, 2000

                                    THE BANK OF NEW YORK
                                    as Trustee

                                    By: /s/ Kisha A. Holder
                                        ---------------------------------
                                         Authorized Signatory

                                       4
<PAGE>

                        L-3 COMMUNICATIONS HOLDINGS, INC.
            5.25% Convertible Senior Subordinated Debenture due 2009

                  Capitalized terms used herein but not defined shall have the
meanings assigned to them in the Indenture referred to below unless otherwise
indicated.

1.       Principal and Interest.

                  L-3 Communications Holdings, Inc., a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Security at
the Interest Rate from November 21, 2000 until repayment at Maturity, redemption
or repurchase. The Company will pay interest on this Security semiannually in
arrears on June 1 and December 1 of each year (each an "Interest Payment Date"),
commencing June 1, 2001.

                  Interest on the Securities shall be computed (i) for any full
semiannual period for which a particular Interest Rate is applicable on the
basis of a 360-day year of twelve 30-day months and (ii) for any period for
which a particular Interest Rate is applicable shorter than a full semiannual
period for which interest is calculated, on the basis of a 30-day month and, for
such periods of less than a month, the actual number of days elapsed over a
30-day month.

                  A Holder of any Security at the close of business on a Regular
Record Date shall be entitled to receive interest (including Liquidated Damages,
if any) on such Security on the corresponding Interest Payment Date. A Holder of
any Security which is converted after the close of business on a Regular Record
Date and prior to the corresponding Interest Payment Date (other than any
Security whose Maturity is prior to such Interest Payment Date) shall be
entitled to receive interest on the principal amount of such Security,
notwithstanding the conversion of such Security prior to such Interest Payment
Date. However, any such Holder which surrenders any such Security for conversion
during the period between the close of business on such Regular 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 the
principal amount of such Security so converted, which is payable by the Company
to such Holder on such Interest Payment Date, at the time such Holder surrenders
such Security for conversion. Notwithstanding the foregoing, any such Holder
which surrenders for conversion any Security which has been called for
redemption by the Company on a date that is after a Record Date but prior to the
corresponding Interest Payment Date in a notice of redemption given by the
Company pursuant to Section 10.5 of the Indenture shall be entitled to receive
(and retain) such interest and need not pay the Company an amount equal to the
interest on the principal amount of such Security so converted at the time such
Holder surrenders such Security for conversion.

                  In accordance with the terms of the Resale Registration Rights
Agreement, dated November 21, 2000 (the "Registration Rights Agreement"), among
the Company, the Guarantors named therein and Lehman Brothers Inc., the Holder
of any Transfer Restricted Securities (as defined in the Registration Rights
Agreement) shall be entitled to Liquidated Damages during the continuance of a
Registration Default (as defined therein).

                                       1
<PAGE>

                  Any Liquidated Damages will be payable in cash semiannually,
in arrears, on each Interest Payment Date and will cease to accrue on the
earlier of (i) the date the Registration Default is cured and (ii) the day
immediately prior to the date on which this Security ceases to be a Transfer
Restricted Security. The Holder of this Security is entitled to the benefits of
the Registration Rights Agreement. In the event of a conflict between the terms
of this Security and the terms of the Registration Rights Agreement, the
Registration Rights Agreement shall prevail to the extent permitted by
applicable law.

2.       Method of Payment.

                  Interest on any Security which is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall be paid to the
person in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest.

                  Principal of, and premium, if any, and interest (including
Liquidated Damages, if any) on, Global Securities will be payable to the
Depositary in immediately available funds.

                  Principal and premium, if any, on Physical Securities will be
payable in immediately available funds or, at the option of the Company, at the
office or agency of the Company maintained for such purpose, initially the
Corporate Trust Office of the Trustee. Interest (including Liquidated Damages)
will be payable, in the case of Securities having a principal amount of less
than $5.0 million, at the option of the Company, by mailing a check to the
Holders or at the office or agency of the Company maintained for such purpose,
initially the Corporate Trust Office of the Trustee. Interest (including
Liquidated Damages, if any) on Physical Securities having an aggregate principal
amount of more than $5.0 million will be paid: (a) by check mailed to each
Holder, or (b) upon application to the Registrar by any such Holder not later
than the relevant Record Date, by wire transfer in immediately available funds
to an account within the United States, which application shall remain in effect
until the Holder notifies, in writing, the Registrar to the contrary.

3.       Paying Agent and Registrar.

                  Initially, The Bank of New York, the Trustee under the
Indenture, will act as Paying Agent and Registrar. The Company may change the
Paying Agent or Registrar without notice to any Holder.

4.       Indenture; Guarantees.

                  The Company issued this Security under an Indenture, dated as
of November 21, 2000 (the "Indenture"), among the Company, the Guarantors named
therein and The Bank of New York, as trustee (the "Trustee"). The terms of the
Security include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended ("TIA").
This Security is subject to all such terms, and Holders are referred to the
Indenture and the TIA for a statement of all such terms. To the extent permitted
by applicable

                                       2
<PAGE>

law, in the event of any inconsistency between the terms of this Security and
the terms of the Indenture, the terms of the Indenture shall control.

                  The Obligations of the Company under the Indenture and the
Securities have been jointly and severally guaranteed on a senior subordinated
basis by certain of the Company's subsidiaries, all as provided in the
Indenture.

5.       Optional Redemption.

                  This Security may be redeemed in whole or in part, upon not
less than 20 nor more than 60 days' notice, at any time on or after December 1,
2003, at the option of the Company, at the Redemption Prices (expressed as
percentages of the principal amount) set forth below, plus any interest accrued
but unpaid to the Redemption Date.

        During the Twelve
        Months Commencing                              Redemption Prices
        -----------------                              -----------------
        December 1, 2003............................   102.625%
        December 1, 2004............................   101.313%
        December 1, 2005 and thereafter.............   100.000%

                  Securities in original denominations larger than $1,000 may be
redeemed in part.

                  On and after the Redemption Date, interest ceases to accrue on
Securities or portions of Securities called for redemption, unless the Company
defaults in the payment of the Redemption Price.

                  Notice of redemption will be given by the Company to the
Holders as provided in the Indenture.

6.       Repurchase Right Upon a Change of Control or a Termination of Trading.

                  If a Change of Control occurs, the Holder of Securities, at
the Holder's option, shall have the right, in accordance with the provisions of
the Indenture, to require the Company to repurchase the Securities (or any
portion of the principal amount hereof that is at least an integral multiple of
$1,000, provided that the portion of the principal amount of this Security to be
Outstanding after such repurchase is at least equal to $1,000) at the Repurchase
Price in cash, plus any interest accrued and unpaid to the Repurchase Date.

                  Subject to the conditions provided in the Indenture, if a
Change of Control occurs, the Company may elect to pay the Repurchase Price by
delivering a number of shares of Common Stock equal to (i) a Repurchase Price
divided by (ii) 95% of the average of the Closing Prices per share for the five
consecutive Trading Days immediately preceding and including the third Trading
Day prior to the Repurchase Date.

                                       3
<PAGE>

                  No fractional shares of Common Stock will be issued upon
repurchase of any Securities. Instead of any fractional share of Common Stock
which would otherwise be issued upon conversion of such Securities, the Company
shall pay a cash adjustment as provided in the Indenture.

                  In the event of a Change of Control, a Company Notice will be
given by the Company to the Holders as provided in the Indenture. To exercise a
Repurchase Right, a Holder must deliver to the Trustee a written notice as
provided in the Indenture.

7.       Conversion Rights.

                  Subject to and upon compliance with the provisions of the
Indenture, the Holder of Securities is entitled, at such Holder's option, at any
time before the close of business on the Business Day immediately preceding June
1, 2009, to convert the Holder's Securities (or any portion of the principal
amount hereof which is an integral multiple of $1,000), at the principal amount
thereof or of such portion, into duly authorized, fully paid and nonassessable
shares of Common Stock of the Company at the Conversion Price in effect at the
time of conversion.

                  In the case of a Security (or a portion thereof) called for
redemption, the conversion right in respect of the Security (or such portion
thereof) so called, shall expire at the close of business on the second Business
Day preceding the Redemption Date, unless the Company defaults in making the
payment due upon redemption. In the case of a Change of Control for which the
Holder exercises its Repurchase Right with respect to a Security (or a portion
thereof), the conversion right in respect of the Security (or portion thereof)
shall expire at the close of business on the Business Day preceding the
Repurchase Date.

                  The Conversion Price shall be initially equal to $81.50 per
share of Common Stock. The Conversion Price shall be adjusted under certain
circumstances as provided in the Indenture.

                  To exercise the conversion right, the Holder must surrender
the Security (or portion thereof) duly endorsed or assigned to the Company or in
blank, at the office of the Conversion Agent, accompanied by a duly signed
conversion notice to the Company, with a copy to the Trustee. Any Security
surrendered for conversion during the period from the close of business on any
Regular Record Date to the opening of business on the corresponding Interest
Payment Date (other than any Security whose Maturity is prior to such Interest
Payment Date or that has been called for redemption on a date that falls on or
after such Regular Record Date and on or before the related Interest Payment
Date), shall also be accompanied by payment in New York Clearing House funds or
other funds acceptable to the Company of an amount equal to the interest payable
on such Interest Payment Date on the principal amount of the Securities being
surrendered for conversion.

                  No fractional shares of Common Stock will be issued upon
conversion of any Securities. Instead of any fractional share of Common Stock
which would otherwise be issued

                                       4
<PAGE>

upon conversion of such Securities, the Company shall pay a cash adjustment as
provided in the Indenture.

8.       Subordination.

                  The Indebtedness evidenced by this Security is, to the extent
and in the manner provided in the Indenture, subordinated and subject in right
of payment to the prior payment in full of all amounts then due on all Senior
Debt of the Company, and this Security is issued subject to such provisions of
the Indenture with respect thereto. Each Holder of this Security, by accepting
the same, (a) agrees to and shall be bound by such provisions, (b) authorizes
and directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination so provided and (c)
appoints the Trustee such Holder's attorney-in-fact for any and all such
purposes.

9.       Denominations; Transfer; Exchange.

                  The Securities are issuable in registered form, without
coupons, in denominations of $1,000 and integral multiples of $1,000 in excess
thereof. A Holder may register the transfer or exchange of Securities in
accordance with the Indenture. The Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture.

                  In the event of a redemption in part, the Company will not be
required (a) to register the transfer of, or exchange, Securities for a period
of 15 days immediately preceding the date notice is given identifying the serial
numbers of the Securities called for such redemption, or (b) to register the
transfer of, or exchange, any such Securities, or portion thereof, called for
redemption.

                  In the event of redemption, conversion or repurchase of the
Securities in part only, a new Security or Securities for the unredeemed,
unconverted or unrepurchased portion thereof will be issued in the name of the
Holder hereof.

10.      Persons Deemed Owners.

                  The registered Holder of this Security shall be treated as its
owner for all purposes.

11.      Unclaimed Money.

                  The Trustee and the Paying Agent shall pay to the Company any
money held by them for the payment of principal, premium, if any, or interest
that remains unclaimed for two years after the date upon which such payment
shall have become due. After payment to the Company, Holders entitled to the
money must look to the Company for payment as general creditors unless an
applicable abandoned property law designates another Person, and all liability
of the Trustee and such Paying Agent with respect to such money shall cease.

                                       5
<PAGE>

12.      Discharge Prior to Redemption or Maturity.

                  Subject to certain conditions contained in the Indenture, the
Company may discharge its obligations under the Securities and the Indenture if
(1) (a) all of the Outstanding Securities shall become due and payable at their
scheduled Maturity within one year or (b) all of the Outstanding Securities are
scheduled for redemption within one year, and (2) the Company shall have
deposited with the Trustee money and/or U.S. Government Obligations sufficient
to pay the principal of, and premium, if any, and interest on, all of the
Outstanding Securities on the date of Maturity or redemption, as the case may
be.

13.      Amendment; Supplement; Waiver.

                  The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities under
the Indenture at any time by the Company and the Trustee with the consent of the
Holders of a majority in aggregate principal amount of the Outstanding
Securities (or such lesser amount as shall have acted at a meeting pursuant to
the provisions of the Indenture). The Indenture also contains provisions
permitting the Holders of specified percentages in principal amount of the
Securities at the time Outstanding, on behalf of the Holders of all the
Securities, to waive compliance by the Company 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 Security shall be conclusive
and binding upon such Holder and upon all future Holders of this Security and of
any Security issued upon registration of transfer hereof or in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security or such other Security.

                  No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest (including Additional Amounts, if any) on this
Security at the times, places and rate, and in the coin or currency, herein
prescribed or to convert this Security (or pay cash in lieu of conversion) as
provided in the Indenture.

14.      Defaults and Remedies.

                  The Indenture provides that an Event of Default with respect
to the Securities occurs when any of the following occurs:

                  (1) default for 30 days in the payment when due of interest or
         Liquidated Damages on the Securities, whether or not prohibited by the
         subordination provisions of this Indenture;

                  (2) default in payment when due of the principal of or
         premium, if any, on the Securities, whether or not prohibited by the
         subordination provisions of this Indenture;

                                       6
<PAGE>

                  (3) failure by the Company to comply with any of its other
         agreements in this Indenture or the Securities (other than a default
         specified in clause (1) or (2) above) and such default or breach
         continues for a period of 60 consecutive days after written notice of
         such breach or default shall have been given to the Company by the
         Trustee or to the Company and the Trustee by the Holders of 25% or more
         in aggregate principal amount of the Outstanding Securities.

                  (4) a default under any mortgage, indenture or instrument
         under which there may be issued or by which there may be secured or
         evidenced any Indebtedness of the Company or any of its Subsidiaries
         (other than the Excluded Subsidiaries) for money borrowed (or the
         payment of which is guaranteed by the Company or any of those
         Subsidiaries) whether such Indebtedness or guarantee now exists, or is
         created after the date of this Indenture, which default results in the
         acceleration of such Indebtedness prior to its express maturity and, in
         each case, the principal amount of such Indebtedness, together with the
         principal amount of any other such Indebtedness the maturity of which
         has been so accelerated, aggregates $10.0 million or more;

                  (5) failure by the Company or any of its Subsidiaries (other
         than the Excluded Subsidiaries) to pay final judgments aggregating in
         excess of $10.0 million, which judgments are not paid, discharged or
         stayed for a period of 60 days;

                  (6) certain events of bankruptcy, insolvency or reorganization
         of the Company.

                  (7) except as permitted by this Indenture, any Guarantee shall
         be held in any judicial proceeding to be unenforceable or invalid.

                  If an Event of Default 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.

15.      Authentication.

                  This Security shall not be valid until the Trustee (or
authenticating agent) executes the certificate of authentication on the other
side of this Security.

                                       7
<PAGE>

16.      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 Gifts to Minors
Act).

17.      Additional Rights of Holders of Transfer Restricted Securities.

                  In addition to the rights provided to Holders under the
Indenture, Holders of Transfer Restricted Securities shall have all the rights
set forth in the Registration Rights Agreement.

18.      CUSIP Numbers.

                  Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP numbers
to be printed on this Security and the Trustee may use CUSIP numbers in notices
of redemption as a convenience to Holders. No representation is made as to the
accuracy of such numbers either as printed on this Security or as contained in
any notice of redemption and reliance may be placed only on the other
identification numbers placed thereon.

19.      Governing Law.

                  The Indenture and this Security shall be governed by, and
construed in accordance with, the law of the State of New York.

20.      Successor Corporation.

                  In the event a successor corporation assumes all the
obligations of the Company under this Security, pursuant to the terms hereof and
of the Indenture, the Company will be released from all such obligations.

21.      Counterparts.

         This Security may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original but all such
counterparts shall together constitute but one and the same instrument.

                                       8
<PAGE>

  FORM OF NOTATION ON SENIOR SUBORDINATED NOTE RELATING TO SUBSIDIARY GUARANTEE

Pursuant to the Indenture each Guarantor (i) has jointly and severally
unconditionally guaranteed (a) the due and punctual payment of the principal of,
and premium, interest and Liquidated Damages on the Notes, whether at maturity
or an interest payment date, by acceleration, call for redemption or otherwise,
(b) the due and punctual payment of interest on the overdue principal and
premium of, and interest and Liquidated Damages on the Notes, and (c) in case of
any extension of time of payment or renewal of any Notes or any of such other
obligations, the same will be promptly paid in full when due in accordance with
the terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise and (ii) has agreed to pay any and all costs and
expenses (including reasonable attorneys' fees) incurred by the Trustee or any
Holder in enforcing any rights under this Guarantee.

Notwithstanding the foregoing, in the event that the Guarantee of any Guarantor
would constitute or result in a violation of any applicable fraudulent
conveyance or similar law of any relevant jurisdiction, the liability of such
Guarantor under its Guarantee shall be reduced to the maximum amount permissible
under such fraudulent conveyance or similar law.

No past, present or future director, officer, employee, agent, incorporator,
stockholder or agent of any Guarantor, as such, shall have any liability for any
obligations of the Company or any Guarantor under the Notes, any Guarantee, the
Indenture, any supplemental indenture delivered pursuant to the Indenture by
such Guarantor or any Guarantees, or for any claim based on, in respect of or by
reason of such obligations or their creation. Each Holder by accepting a Note
waives and releases all such liability.

This Guarantee shall be binding upon each Guarantor and its successors and
assigns and shall inure to the benefit of the successors and assigns of the
Trustee and the Holders and, in the event of any transfer or assignment of
rights by any Holder or the Trustee, the rights and privileges herein conferred
upon that party shall automatically extend to and be vested in such transferee
or assignee, all subject to the terms and conditions hereof.

This Guarantee shall not be valid or obligatory for any purpose until the
certificate of authentication on the Note upon which this Guarantee is noted
have been executed by the Trustee under the Indenture by the manual signature of
one of its authorized officers. Capitalized terms used herein have the meaning
assigned to them in the Indenture.

<PAGE>

                         L-3 COMMUNICATIONS CORPORATION

                         By:  /s/ Christopher C. Cambria
                              ---------------------------------
                            Name:  Christopher C. Cambria
                            Title: Vice President

                         HYGIENETICS ENVIRONMENTAL SERVICES, INC.

                         By:  /s/ Christopher C. Cambria
                              ---------------------------------
                            Name:  Christopher C. Cambria
                            Title: Vice President

                         L-3 COMMUNICATIONS ILEX SYSTEMS, INC.

                         By:  /s/ Christopher C. Cambria
                              ---------------------------------
                            Name:  Christopher C. Cambria
                            Title: Vice President

                         SOUTHERN CALIFORNIA MICROWAVE, INC.

                         By:  /s/ Christopher C. Cambria
                              ---------------------------------
                            Name:  Christopher C. Cambria
                            Title: Vice President

                         L-3 COMMUNICATIONS SPD TECHNOLOGIES, INC.

                         By:  /s/ Christopher C. Cambria
                              ---------------------------------
                            Name:  Christopher C. Cambria
                            Title: Vice President

                                       2
<PAGE>

                         L-3 COMMUNICATIONS ESSCO, INC.

                         By:  /s/ Christopher C. Cambria
                              ---------------------------------
                            Name:  Christopher C. Cambria
                            Title: Vice President

                         L-3 COMMUNICATIONS STORM CONTROL SYSTEMS, INC.

                         By:  /s/ Christopher C. Cambria
                              ---------------------------------
                            Name:  Christopher C. Cambria
                            Title: Vice President

                         L-3 COMMUNICATIONS DBS MICROWAVE, INC.

                         By:  /s/ Christopher C. Cambria
                              ---------------------------------
                            Name:  Christopher C. Cambria
                            Title: Vice President

                         SPD ELECTRICAL SYSTEMS, INC.

                         By:  /s/ Christopher C. Cambria
                              ---------------------------------
                            Name:  Christopher C. Cambria
                            Title: Vice President

                         SPD SWITCHGEAR, INC.

                         By:  /s/ Christopher C. Cambria
                              ---------------------------------
                            Name:  Christopher C. Cambria
                            Title: Vice President

                                       3
<PAGE>

                         PAC ORD, INC.

                         By:  /s/ Christopher C. Cambria
                              ---------------------------------
                            Name:  Christopher C. Cambria
                            Title: Vice President

                         HENSCHEL, INC.

                         By:  /s/ Christopher C. Cambria
                              ---------------------------------
                            Name:  Christopher C. Cambria
                            Title: Vice President

                         SPD HOLDINGS, INC.

                         By:  /s/ Christopher C. Cambria
                              ---------------------------------
                            Name:  Christopher C. Cambria
                            Title: Vice President

                         POWER PARAGON, INC.

                         By:  /s/ Christopher C. Cambria
                              ---------------------------------
                            Name:  Christopher C. Cambria
                            Title: Vice President

                         L-3 COMMUNICATIONS AYDIN CORPORATION

                         By:  /s/ Christopher C. Cambria
                              ---------------------------------
                            Name:  Christopher C. Cambria
                            Title: Vice President

                                       4
<PAGE>

                         MPRI, INC.

                         By:  /s/ Christopher C. Cambria
                              ---------------------------------
                            Name:  Christopher C. Cambria
                            Title: Vice President

                         ELECTRODYNAMICS, INC.

                         By:  /s/ Christopher C. Cambria
                              ---------------------------------
                            Name:  Christopher C. Cambria
                            Title: Vice President

                         INTERSTATE ELECTRONICS CORPORATION

                         By:  /s/ Christopher C. Cambria
                              ---------------------------------
                            Name:  Christopher C. Cambria
                            Title: Vice President

                         MICRODYNE  CORPORATION

                         By:  /s/ Christopher C. Cambria
                              ---------------------------------
                            Name:  Christopher C. Cambria
                            Title: Vice President

                                       5
<PAGE>

                                 ASSIGNMENT FORM

         To assign this Security, fill in the form below and have your signature
guaranteed: (I) or (we) assign and transfer this Security to:

--------------------------------------------------------------------------------
                  (Insert assignee's soc. sec. or tax I.D. no.)

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

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

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

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

--------------------------------------------------------------------------------
              (Print or type assignee's name, address and zip code)

and irrevocably appoint________________________________________________________
to transfer this Security on the books of the Company.  The agent may
substitute another to act for him.

Dated:         Your Name:_____________________________________________________
               (Print your name exactly as it appears on the face of this
                Security)

               Your Signature:________________________________________________
               (Sign exactly as your name appears on the face of this Security)

               Signature Guarantee*:__________________________________________

         * Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).

<PAGE>

In connection with any transfer of this Security occurring prior to the date
which is the earlier of the end of the period referred to in Rule 144(k) under
the Securities Act of 1933, as amended (the "Securities Act"), the undersigned
confirms that without utilizing any general solicitation or general advertising
that:

                           [Check One]

[  ] (a) this Security is being transferred in compliance with the exemption
         from registration under the Securities Act provided by Rule 144A
         thereunder, and that the transfer has been effected pursuant to and in
         accordance with Rule 144A under the Securities Act and, accordingly,
         the undersigned does hereby further certify that the Securities are
         being transferred to a transferee that the undersigned reasonably
         believes is purchasing the Securities for its own account, or for one
         or more accounts with respect to which such transferee exercises sole
         investment discretion, and such transferee and each 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

[  ] (b) this Security is being transferred in compliance with the exemption
         from registration under the Securities Act provided by Regulation S
         thereunder, and (A) the offer of the Securities was not made to a
         person in the United States; (B) either: (i) at the time the buy order
         was originated, the transferee was outside the United States or the
         Transferor and any person acting on its behalf reasonably believed that
         the transferee was outside the United States, or (ii) 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
         its behalf knows that the transaction was pre-arranged with a buyer in
         the United States; (C) no directed selling efforts have been made in
         contravention of the requirements of Rule 903(b) or 904(b) of
         Regulation S, as applicable; and (D) the transaction is not part of a
         plan or scheme to evade the registration requirements of the Securities
         Act.

                           or

[ ] (c)  this Security is being transferred other than in accordance with
         (a) or (b) above and documents are being furnished which comply with
         the conditions of transfer set forth in this Security and the
         Indenture.

                                       2
<PAGE>

If none of the foregoing boxes is checked, the Trustee or other Registrar shall
not be obligated to register this Security in the name of any Person other than
the Holder hereof unless the conditions to any such transfer of registration set
forth herein and in Sections 2.7, 2.8 and 2.9 of the Indenture shall have been
satisfied.

Dated:_______________  ________________________________________________________
                       NOTICE: The signature to this assignment must correspond
                       with the name as written upon the face of the
                       within-mentioned instrument in every particular, without
                       alteration or any change whatsoever.

                       Signature Guarantee:

                       ---------------------------------------------------------
                       Signature must be guaranteed by a
                       participant in a recognized
                       signature guarantee medallion
                       program or other signature guarantor
                       acceptable to the Trustee.

                                       3
<PAGE>

TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.

                  The undersigned represents and warrants that: (a) it is
purchasing this Security for its own account or an account with respect to which
it exercises sole investment discretion, in each case for investment and not
with a view to distribution; (b) it and any such account is a "Qualified
Institutional Buyer" within the meaning of Rule 144A under the Securities Act of
1933; (c) it is aware that the sale to it is being made in reliance on Rule
144A; (d) it acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information; and (e) it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.

Dated:________________________  ________________________________________________
                                NOTICE:  To be executed by an executive officer

TO BE COMPLETED BY PURCHASER IF (b) ABOVE IS CHECKED.

                  The undersigned represents and warrants that it is purchasing
the Securities for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account are not
"U.S. persons" as defined in Regulation S under the Securities Act.

Dated:________________________  ________________________________________________
                                NOTICE:  To be executed by an executive officer

                                       4
<PAGE>

                                CONVERSION NOTICE

TO:               L-3 COMMUNICATIONS HOLDINGS, INC.
                  600 Third Avenue, 34th Floor
                  New York, New York 10016
                  Attn:  Vice President-Finance

COPY TO:

                  THE BANK OF NEW YORK
                  101 Barclay Street, Floor 21 West
                  New York, New York 10286
                  Attn:  Corporate Trust Administration (L-3 Communications
                  Holdings, Inc. 5.25% Convertible Senior Subordinated Notes
                  due 2009)

                  The undersigned registered owner of this Security hereby
irrevocably exercises the option to convert this Security, or the portion hereof
(the principal amount of which is an integral multiple of $1,000) below
designated, into shares of Common Stock in accordance with the terms of the
Indenture referred to in this Security, and directs that the shares issuable and
deliverable upon such conversion, together with any check in payment for
fractional shares and any Securities representing any unconverted principal
amount hereof, be issued and delivered to the registered holder hereof unless a
different name has been indicated below. If shares or any portion of this
Security not converted are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto. Any amount required to be paid to the undersigned on account of
interest (including Additional Amounts, if any) accompanies this Security.

Dated:_______________ Your Name:______________________________________________
                      (Print your name exactly as it appears on the face of
                       this Security)

                      Your Signature:________________________________________
                      (Sign exactly as your name appears on the face of this
                       Security)

                      Signature Guarantee*:__________________________________

                      Social Security or other Taxpayer
                      Identification Number:_________________________________

         Principal amount to be converted (if less than all):  $

                                       5
<PAGE>

         * Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).

                                       6
<PAGE>

Fill in for registration of shares (if to be issued) and Securities (if to be
delivered) other than to and in the name of the registered holder:

                  ________________________________________
                  (Name)

                  ________________________________________
                  (Street Address)

                  ________________________________________
                  (City, State and Zip Code)

                                       7
<PAGE>

                     NOTICE OF EXERCISE OF REPURCHASE RIGHT

TO:      L-3 COMMUNICATIONS HOLDINGS, INC.
         600 Third Avenue, 34th Floor
         New York, New York 10016
         Attn:  Vice President-Finance

                  The undersigned registered owner of this Security hereby
irrevocably acknowledges receipt of a notice from L-3 Communications Holdings,
Inc. (the "Company") as to the occurrence of a Change of Control with respect to
the Company and requests and instructs the Company to repay the entire principal
amount of this Security, or the portion thereof (the principal amount of which
is an integral multiple of $1,000) below designated, in accordance with the
terms of the Indenture referred to in this Security, together with interest
(including Additional Amounts, if any) accrued and unpaid to, but excluding,
such date, to the registered holder hereof, in cash.

Dated:_______          Your Name:______________________________________________
                       (Print your name exactly as it appears on the face of
                       this Security)

                       Your Signature:_________________________________________
                       (Sign exactly as your name appears on the face of this
                       Security)

                       Signature Guarantee:* __________________________________

                       Social Security or other Taxpayer
                       Identification Number:__________________________________

         Principal amount to be repaid (if less than all):  $

---------------------------
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee)

                                       8
<PAGE>

              SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY

                  The initial principal amount of this Global Security is
$250,000,000. The following increases or decreases of a part of this Global
Security have been made:

<TABLE>
<CAPTION>
                                                                            Principal Amount of this         Signature of
                      Amount of decrease in      Amount of increase in           Global Security         Authorized officer of
                       Principal Amount of        Principal Amount of        following such decrease          Trustee or
Date of Exchange       this Global Security       this Global Security            (or increase)          Securities Coordinator
----------------       --------------------       --------------------            -------------          ----------------------
<S>                   <C>                        <C>                        <C>                          <C>

</TABLE>

                                       9

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