Document:

<PAGE>

                                                                    Exhibit 4(g)

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                      GENERAL ELECTRIC CAPITAL CORPORATION

                                       AND

                            JPMORGAN CHASE BANK, N.A.
                                   AS TRUSTEE

                           SUBORDINATED DEBT INDENTURE

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                            Dated as of ______, 2005

<PAGE>

                             CROSS REFERENCE SHEET(1)
                                     between

the provisions of Sections 310 through 318(a) of the Trust Indenture Act of
1939, as amended, and the Subordinated Debt Indenture:

<TABLE>
<CAPTION>
                                                                       Section of the Subordinated Debt
                            Section of Act                                         Indenture
                            --------------                                         ---------
<S>                                                                    <C>
310 (a) (1), (2) and (5)...........................................                      7.09
310 (a) (3) and (4)................................................            Not applicable
310 (b)............................................................             7.08 and 7.10
310 (c)............................................................            Not applicable
311 (a) and (b)....................................................                         *
311 (c)............................................................            Not applicable
312 (a)............................................................                      5.01
312 (b) and (c)....................................................                         *
313 (a)............................................................                      5.03
313 (b)  (1).......................................................            Not applicable
313 (b)  (2).......................................................                         *
313 (c)............................................................                         *
313 (d)............................................................                         *
314 (a)............................................................                      5.02
314 (b)............................................................            Not applicable
314 (c)  (1) and (2)...............................................                     15.05
314 (c)  (3).......................................................            Not applicable
314 (d)............................................................            Not applicable
314 (e)............................................................                     15.05
314 (f)............................................................            Not applicable
315 (a), (c) and (d)...............................................                      7.01
315 (b)............................................................                      6.08
315 (e)............................................................                      6.09
316 (a)  (1).......................................................             6.01 and 6.07
316 (a)  (2).......................................................                   Omitted
316 (a) last sentence..............................................                      8.04
316 (b)............................................................                      6.04
316 (e)............................................................                         *
317 (a)............................................................                      6.02
317 (b)............................................................                      4.04(a)
3.18 (a)...........................................................                     15.08
</TABLE>

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      (1) This cross reference sheet is not part of the Subordinated Debt
Indenture.

      *Automatically included under Section 318(c) of the Trust Indenture Act of
1939, as amended.
<PAGE>

                               TABLE OF CONTENTS(2)

<TABLE>
<CAPTION>
                                                                                                            Page
<S>                                                                                                         <C>

                                              ARTICLE ONE

                                              DEFINITIONS

Section 1.01.      Definitions..........................................................................     1

                                              ARTICLE TWO

                    DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF SECURITIES

Section 2.01.      Forms................................................................................      8
Section 2.02.      Amount Unlimited; Issuable in Series and Tranches....................................      8
Section 2.03.      Authentication.......................................................................     11
Section 2.04.      Date and Denomination of Securities..................................................     13
Section 2.05.      Execution of Securities..............................................................     14
Section 2.06.      Exchange and Registration of Transfer of Securities..................................     15
Section 2.07.      Mutilated, Destroyed, Lost or Stolen Securities......................................     18
Section 2.08.      Temporary Securities.................................................................     19
Section 2.09.      Cancellation of Securities Paid, etc.................................................     20
Section 2.10.      Computation of Interest..............................................................     20
Section 2.11.      Reopening of Tranches................................................................     20

                                             ARTICLE THREE

             REDEMPTION OF SECURITIES; SINKING FUNDS; REPAYMENT AT THE OPTION OF THE HOLDER

Section 3.01.      Applicability of Article.............................................................     20
Section 3.02.      Notice of Redemption; Selection of Securities........................................     20
Section 3.03.      Payment of Securities Called for Redemption..........................................     22
Section 3.04.      Satisfaction of Mandatory Sinking Fund Payments with Securities......................     22
Section 3.05.      Redemption of Securities for Sinking Fund............................................     23
Section 3.06.      Repayment at the Option of the Holder................................................     24

                                              ARTICLE FOUR

                                  PARTICULAR COVENANTS OF THE COMPANY

Section 4.01.      Payment of Principal, Premium and Interest...........................................     24
Section 4.02.      Offices for Notices and Payments, etc................................................     25
</TABLE>

-----------------------
     (2) This table of contents shall not, for any purpose, be deemed to be part
of the Subordinated Debt Indenture

<PAGE>

<TABLE>
<S>                                                                                                          <C>
Section 4.03.      Appointments to Fill Vacancies in Trustee's Office...................................     26
Section 4.04.      Provision as to Paying Agent.........................................................     26
Section 4.05.      Statement as to Compliance...........................................................     27

                                              ARTICLE FIVE

                    SECURITYHOLDER LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE

Section 5.01.      Securityholder Lists.................................................................     28
Section 5.02.      Reports by the Company...............................................................     28
Section 5.03.      Reports by the Trustee...............................................................     28

                                              ARTICLE SIX

                     REMEDIES OF THE TRUSTEE AND SECURITYHOLDER ON EVENT OF DEFAULT

Section 6.01.      Events of Default....................................................................     28
Section 6.02.      Payment of Securities on Default; Suit Therefor......................................     31
Section 6.03.      Application of Moneys Collected by Trustee...........................................     33
Section 6.04.      Proceedings by Securityholders.......................................................     34
Section 6.05.      Proceedings by Trustee...............................................................     34
Section 6.06.      Remedies Cumulative and Continuing...................................................     35
Section 6.07.      Direction of Proceedings and Waiver of Defaults by Securityholders...................     35
Section 6.08.      Notice of Defaults...................................................................     36
Section 6.09.      Undertaking to Pay Costs.............................................................     36

                                             ARTICLE SEVEN

                                         CONCERNING THE TRUSTEE

Section 7.01.      Duties and Responsibilities of Trustee...............................................     36
Section 7.02.      Reliance on Documents, Opinions, etc.................................................     38
Section 7.03.      No Responsibility for Recitals, etc..................................................     39
Section 7.04.      Ownership of Securities..............................................................     39
Section 7.05.      Moneys to be Held in Trust...........................................................     39
Section 7.06.      Compensation and Expenses of Trustee.................................................     39
Section 7.07.      Officers' Certificate as Evidence....................................................     40
Section 7.08.      Indentures Not Creating Potential Conflicting Interests for the Trustee..............     40
Section 7.09.      Eligibility of Trustee...............................................................     40
Section 7.10.      Resignation or Removal of Trustee....................................................     40
Section 7.11.      Acceptance by Successor Trustee......................................................     42
Section 7.12.      Succession by Merger, etc............................................................     43
Section 7.13.      Appointment of Authenticating Agent..................................................     43
</TABLE>

                                       ii
<PAGE>

<TABLE>
<S>                                                                                                          <C>
                                             ARTICLE EIGHT

                                     CONCERNING THE SECURITYHOLDERS

Section 8.01.      Action by Securityholders............................................................     45
Section 8.02.      Proof of Execution by Securityholders................................................     45
Section 8.03.      Who are Deemed Absolute Owners.......................................................     46
Section 8.04.      Company-Owned Securities Disregarded.................................................     47
Section 8.05.      Revocation of Consents; Future Holders Bound.........................................     47

                                              ARTICLE NINE

                                       SECURITYHOLDERS' MEETINGS

Section 9.01.      Purposes of Meetings.................................................................     47
Section 9.02.      Call of Meeting by Trustee...........................................................     48
Section 9.03.      Call of Meeting by Company or Securityholders........................................     48
Section 9.04.      Qualifications for Voting............................................................     48
Section 9.05.      Quorum; Adjourned Meetings...........................................................     49
Section 9.06.      Regulations..........................................................................     49
Section 9.07.      Voting...............................................................................     50
Section 9.08.      No Delay of Rights by Meeting........................................................     50

                                              ARTICLE TEN

                                        SUPPLEMENTAL INDENTURES

Section 10.01.     Supplemental Indentures without Consent of Securityholders...........................     51
Section 10.02.     Supplemental Indentures with Consent of Securityholders..............................     52
Section 10.03.     Compliance with Trust Indenture Act; Effect of Supplemental Indentures...............     53
Section 10.04.     Notation on Securities...............................................................     53
Section 10.05.     Evidence of Compliance of Supplemental Indenture to be Furnished Trustee.............     53

                                             ARTICLE ELEVEN

                               CONSOLIDATION, MERGER, SALE OR CONVEYANCE

Section 11.01.     Company May Not Consolidate, etc., Except Under Certain Conditions...................     54
Section 11.02.     Successor Corporation to be Substituted..............................................     54
Section 11.03.     Documents to be Given Trustee........................................................     55

                                             ARTICLE TWELVE

                                SATISFACTION AND DISCHARGE OF INDENTURE

Section 12.01.     Discharge of Indenture...............................................................     55
Section 12.02.     Deposited Moneys to be Held in Trust by Trustee......................................     55
</TABLE>

                                      iii
<PAGE>

<TABLE>
<S>                                                                                                          <C>
Section 12.03.     Paying Agent to Repay Moneys Held....................................................     56
Section 12.04.     Return of Unclaimed Moneys...........................................................     56

                                            ARTICLE THIRTEEN

                    IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

Section 13.01.     Indenture and Securities Solely Corporate Obligations................................     56

                                            ARTICLE FOURTEEN

                                             SUBORDINATION

Section 14.01.     Agreement To Subordinate.............................................................     56
Section 14.02.     Liquidation, Dissolution, Bankruptcy.................................................     57
Section 14.03.     Default on Senior Indebtedness.......................................................     57
Section 14.04.     When Distributions Must Be Paid Over.................................................     57
Section 14.05.     Subrogation..........................................................................     57
Section 14.06.     Relative Rights......................................................................     57
Section 14.07.     Subordination May Not Be Impaired by Company.........................................     58
Section 14.08.     Rights of Trustee and Paying Agent...................................................     58
Section 14.09.     Distribution or Notice to Representative.............................................     58
Section 14.10.     Article Fourteen Not To Prevent Events of Default or Limit Right To Accelerate.......     58
Section 14.11.     Trust Moneys Not Subordinated........................................................     58
Section 14.12.     Trustee Entitled to Rely.............................................................     59
Section 14.13.     Trustee To Effectuate Subordination..................................................     59
Section 14.14.     Trustee Not Fiduciary for Holders of Senior Indebtedness.............................     59
Section 14.15.     Reliance by Holders of Senior Indebtedness on Subordination Provisions...............     59

                                            ARTICLE FIFTEEN

                                        MISCELLANEOUS PROVISIONS

Section 15.01.     Provisions Binding on Company's Successors...........................................     60
Section 15.02.     Official Acts by Successor Corporation...............................................     60
Section 15.03.     Addresses for Notices, etc...........................................................     60
Section 15.04.     New York Contract....................................................................     60
Section 15.05.     Evidence of Compliance with Conditions Precedent.....................................     60
Section 15.06.     Legal Holidays.......................................................................     61
Section 15.07.     Securities in a Specified Currency Other Than Dollars................................     61
Section 15.08.     Trust Indenture Act to Control.......................................................     61
Section 15.09.     Table of Contents, Headings, etc.....................................................     62
Section 15.10.     Execution in Counterparts............................................................     62
Section 15.11.     Separability.........................................................................     62
</TABLE>

                                       iv
<PAGE>

            THIS SUBORDINATED DEBT INDENTURE, dated as of [_______], 2005,
between GENERAL ELECTRIC CAPITAL CORPORATION, a corporation duly organized and
existing under the laws of the State of Delaware (the "Company"), and JPMORGAN
CHASE BANK, N.A., a national banking association, as trustee (the "Trustee").

                             RECITALS OF THE COMPANY

      WHEREAS, the Company has duly authorized the issue from time to time of
its subordinated debentures, notes or other evidences of indebtedness to be
issued in one or more series (the "Securities") up to such principal amount or
amounts as may from time to time be authorized in accordance with the terms of
this Subordinated Debt Indenture and to provide, among other things, for the
authentication, delivery and administration of the Securities, the Company has
duly authorized the execution and delivery of this Subordinated Debt Indenture;
and

      WHEREAS, all things necessary to make this Subordinated Debt Indenture a
valid indenture and agreement according to its terms have been done;

      NOW, THEREFORE:

      In consideration of the premises and the purchases of the Securities by
the holders thereof, the Company and the Trustee mutually covenant and agree for
the equal and proportionate benefit of the respective holders from time to time
of the Securities or of any and all series thereof and of the coupons, if any,
appertaining thereto as follows:

                                   ARTICLE ONE

                                   DEFINITIONS

            Section 1.01. Definitions. The terms defined in this Section 1.01
(except as herein otherwise expressly provided or unless the context otherwise
requires) for all purposes of this Subordinated Debt Indenture shall have the
respective meanings specified in this Section 1.01. All other terms used in this
Subordinated Debt Indenture which are defined in the Trust Indenture Act of
1939, as amended, or which are by reference therein defined in the Securities
Act of 1933, as amended (except as herein otherwise expressly provided or unless
the context otherwise requires) shall have the meanings assigned to such terms
in said Trust Indenture Act and in said Securities Act as in force at the date
of this Subordinated Debt Indenture as originally executed. The words "herein",
"hereof" and "hereunder", and other words of similar import refer to this
Subordinated Debt Indenture as a whole and not to any particular Article,
Section or other subdivision.

Authenticating Agent:

            The term "Authenticating Agent" means any Person authorized by the
Trustee pursuant to Section 7.13 to act on behalf of the Trustee to authenticate
Securities.

<PAGE>

Authorized Newspaper:

            The term "Authorized Newspaper" shall mean a newspaper (which, in
the case of The City of New York, will, if practicable, be The Wall Street
Journal (Eastern edition), in the case of the United Kingdom, will, if
practicable, be The Financial Times (London edition) and, in the case of
Luxembourg, will, if practicable, be The Luxemburger Wort) published in an
official language of the country of publication customarily published at least
once a day for at least five days in each calendar week and of general
circulation in The City of New York, the United Kingdom or in Luxembourg, as
applicable. If it shall be impractical to make any publication of any notice
required hereby in an Authorized Newspaper, any publication or other notice in
lieu thereof which is made or given by the Trustee after consulting with the
Company shall constitute a sufficient publication of such notice.

Board of Directors:

            The term "Board of Directors" shall mean the Board of Directors of
the Company or any Committee of such Board to which the relevant powers of such
Board have been lawfully delegated.

Business Day:

            The term "Business Day" shall mean, unless otherwise specified with
respect to a particular Tranche of Notes, any day other than a Saturday or
Sunday or any other day on which banking institutions are generally authorized
or obligated by law or regulation to close in The City of New York or (i) with
respect to any floating rate notes where interest is determined with respect to
LIBOR, in London, England, (ii) with respect to Notes denominated in a Specified
Currency other than U.S. dollars, Australian dollars or Euros, in the principal
financial center of the country of the Specified Currency, (iii) with respect to
Notes denominated in Australian dollars, in Sydney or (iv) with respect to Notes
denominated in Euros, a day on which the Trans-European Automated Real-Time
Gross Settlement Express Transfer (TARGET) System is not open.

Common Depositary:

            The term "Common Depositary" means a common depositary of Securities
on behalf of Euroclear Bank S.A./N.V., as operator of the Euroclear System and
Clearstream Banking, societe anonyme, each in its capacity as Depositary, and
shall initially be JPMorgan Chase Bank, N.A.

Company:

            The term "Company" shall mean General Electric Capital Corporation,
a Delaware corporation, until any successor corporation shall have become such
pursuant to the provisions of Article Eleven, and thereafter "Company" shall
mean such successor, except as otherwise provided in Section 11.02.

                                       2
<PAGE>

Coupon:

            The term "Coupon" shall mean any interest coupon appertaining to a
Security.

currency:

            The term "currency" shall mean Dollars or any Specified Currency.

Depositary:

            The term "Depositary" shall mean, with respect to the Securities of
any series or Tranche issuable or issued in the form of one or more Registered
Global Securities, the Person designated as Depositary by the Company pursuant
to Section 2.02 until a successor Depositary shall have become such pursuant to
the applicable provisions of this Subordinated Debt Indenture, and thereafter
"Depositary" shall mean or include each Person who is then a Depositary
hereunder, and if at any time there is more than one such Person, "Depositary"
as used with respect to the Securities of any such series or Tranche shall mean
the Depositary with respect to such Registered Global Security or Securities.

Dollar:

            The term "Dollar" shall mean the coin or currency of the United
States of America as at the time of payment is legal tender for the payment of
public and private debts.

Event of Default:

            The term "Event of Default" shall have the meaning specified in
Section 6.01.

Global Series Note:

            The term "Global Series Note" shall mean any Outstanding Global
Medium-Term Note for a series as may hereafter be established by or pursuant to
a supplemental indenture or a resolution of the Board of Directors. The Global
Series Notes may be issued in one or more Tranches, pursuant to the provisions
of Section 2.02.

Indebtedness:

            The term "Indebtedness" of any corporation shall mean all
indebtedness representing money borrowed which is created, assumed, incurred or
guaranteed in any manner by such corporation or for which such corporation is
otherwise responsible or liable (whether by agreement to purchase indebtedness
of, or to supply funds to or invest in, others).

interest:

            The term "interest", when used with respect to a non-interest
bearing Security, means interest payable after the principal thereof has become
due and payable, whether at maturity, by declaration of acceleration, by call
for redemption, pursuant to a sinking fund or otherwise.

                                       3
<PAGE>

Officers' Certificate:

            The term "Officers' Certificate" shall mean a certificate signed by
any President, the Chairman or any Vice Chairman of the Board or any Vice
President and by the Senior Vice President-Corporate Treasury and Global Funding
Operation or any Assistant Treasurer, the Controller or the Secretary or any
Assistant Secretary of the Company and delivered to the Trustee. Each such
certificate shall comply with Section 314 of the Trust Indenture Act of 1939 and
include the statements provided for in Section 15.05 if and to the extent
required by the provisions of such Section.

Opinion of Counsel:

            The term "Opinion of Counsel" shall mean an opinion in writing
signed by legal counsel, who may be an employee of or of counsel to the Company,
or may be other counsel. Each such opinion shall comply with Section 314 of the
Trust Indenture Act of 1939 and include the statements provided for in Section
15.05 if and to the extent required by the provisions of such Section.

Original Issue Discount Security:

            The term "Original Issue Discount Security" shall mean any Security
which at any time provides for an amount less than the principal amount thereof
to be due and payable upon redemption or a declaration of acceleration of the
maturity thereof pursuant to Section 6.01.

Overdue Rate:

            The term "Overdue Rate" with respect to each Tranche of Securities
shall mean the rate designated as such in or pursuant to the resolution of the
Board of Directors or the supplemental indenture, as the case may be, relating
to such Tranche as contemplated by Section 2.02.

Person:

            The term "Person" shall mean any individual, corporation,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.

Principal Office of the Trustee:

            The term "principal office of the Trustee", or other similar term,
shall mean the principal office of the Trustee at which any particular time its
corporate trust business shall be administered.

Registered Global Security:

            The term "Registered Global Security" shall mean a Security
evidencing all or a part of a Tranche of Securities, issued to the Depositary
for such Tranche in accordance with Section 2.03 and bearing the legend
prescribed in Section 2.03.

                                       4
<PAGE>

Registered Security:

            The term "Registered Security" shall mean any Security registered on
the Security register of the Company.

Representative:

            The term "Representative" shall mean any trustee, agent or
representative (if any) for an issue of Senior Indebtedness.

Responsible Officer:

            The term "Responsible Officer", when used with respect to the
Trustee, shall mean any Vice President, any Assistant Vice President, any
Assistant Treasurer, any Trust Officer, any Assistant Trust Officer, or any
other officer or assistant officer of the Trustee customarily performing
functions similar to those performed by the Persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of his knowledge of and familiarity with the particular subject.

Securities; Outstanding:

            The terms "Securities" shall mean any of the securities, as defined
in the first paragraph of the recitals hereof, that are authenticated and
delivered under this Subordinated Debt Indenture.

            The term "Outstanding", when used with reference to Securities,
shall, subject to the provisions of Section 8.04, mean, as of any particular
time, all Securities authenticated and delivered by the Trustee under this
Subordinated Debt Indenture, except:

            (a) Securities theretofore canceled by the Trustee or delivered to
      the Trustee for cancellation;

            (b) Securities, or portions thereof, for the payment or redemption
      of which moneys in the necessary amount shall have been deposited in trust
      with the Trustee or with any paying agent (other than the Company) or
      shall have been set aside and segregated in trust by the Company (if the
      Company shall act as its own paying agent), provided that if such
      Securities are to be redeemed prior to the maturity thereof, notice of
      such redemption shall have been mailed as in Article Three provided, or
      provision satisfactory to the Trustee shall have been made for mailing
      such notice; and

            (c) Securities in lieu of or in substitution for which other
      Securities shall have been authenticated and delivered, or which shall
      have been paid, pursuant to the terms of Section 2.07, unless proof
      satisfactory to the Trustee is presented that any such Securities are held
      by Persons in whose hands any of such Securities is a valid, binding and
      legal obligation of the Company.

In determining whether the holders of the requisite principal amount of
Outstanding Securities have given any request, demand, authorization, direction,
notice, consent or waiver hereunder,

                                       5
<PAGE>

the principal amount of an Original Issue Discount Security that shall be deemed
to be Outstanding for such purposes shall be the amount of the principal thereof
that would be due and payable as of the date of such determination upon a
declaration of acceleration of the maturity thereof pursuant to Section 6.01.

Security register:

            The term "Security register" shall have the meaning specified in
Section 2.06.

Security registrar:

            The term "Security registrar" shall have the meaning specified in
Section 2.06.

Securityholder:

            The term "Securityholder", "holder of Securities", or other similar
terms, shall mean, (a) with respect to any Registered Security, the Person in
whose name at the time such Registered Security is registered on the books of
the Company kept for that purpose in accordance with the terms hereof or (b)
with respect to any Unregistered Security, the bearer thereof.

Senior Indebtedness:

            The term "Senior Indebtedness" shall mean (i) the principal of,
premium, if any, and interest on, all the Company's indebtedness for money
borrowed, other than the Securities, whether outstanding on the date of
execution of this Subordinated Debt Indenture or thereafter created, assumed or
incurred, and any deferrals, renewals or extensions thereof; (ii) obligations of
the Company arising from any guaranty, letter of credit or similar credit
enhancement; and (iii) obligations of the company associated with derivative
products such as interest rate and foreign exchange rate swaps, forward sales of
interests in commodities, and similar arrangements, provided, however, that
Senior Indebtedness shall not include (1) any liability for Federal, state,
local or other taxes owed or owing by the Company, (2) any accounts payable or
other liability to trade creditors (other than those obligations referenced in
items (ii) and (iii), above) arising in the ordinary course of business
(including instruments evidencing such liabilities), (3) any indebtedness,
guarantee or obligation of the Company which is expressly subordinate or junior
in right of payment in any respect to any other indebtedness, guarantee or
obligation of the Company, or (4) any obligations with respect to any capital
stock. The term "indebtedness for money borrowed" as used herein shall include,
without limitation, any obligation of the Company for the repayment of borrowed
money, whether or not evidenced by bonds, debentures, notes or other written
instruments, and any deferred obligation for the payment of the purchase price
of property or assets.

Specified Currency:

            The term "Specified Currency" shall mean the currency in which a
Security is denominated, which may include Dollars, any foreign currency or any
composite of two or more currencies.

                                       6
<PAGE>

Stated Maturity:

            The term "Stated Maturity", when used with respect to any Senior
Indebtedness or any installment of principal thereof or interest thereon, shall
mean the date specified in the instrument evidencing such Senior Indebtedness as
the fixed date on which the principal of such Senior Indebtedness or such
installment of principal or interest is due and payable.

Subordinated Debt Indenture:

            The term "Subordinated Debt Indenture" shall mean this instrument as
originally executed or as it may be amended or supplemented from time to time as
herein provided, and shall include the form and terms of particular Tranches of
Securities established as contemplated hereunder.

Subsidiary:

            The term "Subsidiary" shall mean (i) any corporation of which the
Company directly or indirectly owns or controls at that time at least a majority
of the outstanding stock having under ordinary circumstances (not dependent upon
the happening of a contingency) voting power to elect a majority of the board of
directors of such corporation or (ii) any other Person (other than a
corporation) in which the Company directly or indirectly has at least a majority
ownership interest and power to direct the policies, management and affairs
thereto.

Tranche:

            The term "Tranche" shall mean all Securities of the same series
having identical terms but for authentication date and public offering price.

Trust Indenture Act of 1939:

            The term "Trust Indenture Act of 1939" shall mean the Trust
Indenture Act of 1939 as it was in force at the date of execution of this
Subordinated Debt Indenture, except as provided in Section 10.03.

Trustee:

            The term "Trustee" shall mean the corporation or association named
as Trustee in this Subordinated Debt Indenture and, subject to the provisions of
Article Seven, shall also include its successors and assigns as Trustee
hereunder. If pursuant to the provisions of this Subordinated Debt Indenture
there shall be at any time more than one Trustee hereunder, the term "Trustee"
as used with respect to Securities of any Tranche shall mean the Trustee with
respect to Securities of such Tranche.

Unregistered Security:

            The term "Unregistered Security" shall mean any Security other than
a Registered Security.

                                       7
<PAGE>

                                  ARTICLE TWO

         DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF SECURITIES

            Section 2.01. Forms. The Securities and the Coupons, if any,
appertaining thereto shall be in substantially such form as shall be established
by or pursuant to a resolution of the Board of Directors or in one or more
indentures supplemental hereto, in each case with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Subordinated Debt Indenture, and may have such legends or endorsements
placed thereon 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 Subordinated Debt 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 stock exchange on which such Securities may be listed,
or to conform to usage.

            The Trustee's Certificate of Authentication on all Securities shall
be in substantially the following form, and shall be executed on behalf of the
Trustee by its authorized officer or agent:

            This is one of the Securities of the Tranche designated therein
      described in the within-mentioned Subordinated Debt Indenture.

                        _________________________________,
                                   as Trustee

                        By:______________________________

            Section 2.02. Amount Unlimited; Issuable in Series and Tranches. The
aggregate principal amount of Securities which may be authenticated and
delivered under this Subordinated Debt Indenture is unlimited.

            The Securities may be issued in one or more series, each of which
may consist of one or more Tranches. There shall be established in or pursuant
to a resolution of the Board of Directors or established in one or more
indentures supplemental hereto, prior to the issuance of Securities of any
Tranche,

            (1) the title of the series to which such Tranche belongs (which
      shall distinguish the Securities of such series from all other
      Securities);

            (2) any limit upon the aggregate principal amount of the Securities
      of such series or Tranche which may be authenticated and delivered under
      this Subordinated Debt Indenture (except for Securities authenticated and
      delivered upon registration of transfer of, or in exchange for, or in lieu
      of, other Securities of the Tranche pursuant to Section 2.06, 2.07, 2.08,
      3.03, 3.06 or 10.04);

                                       8
<PAGE>

            (3) the date or dates on which the principal and premium, if any, of
      the Securities of the Tranche are payable;

            (4) the rate or rates, or the method of determination thereof, at
      which the Securities of the Tranche shall bear interest, if any, the date
      or dates from which such interest shall accrue, the interest payment dates
      on which such interest shall be payable and, in the case of Registered
      Securities, if other than as set forth in Section 2.04, the record dates
      for the determination of holders to whom interest is payable;

            (5) the terms of the subordination of the Securities of the Tranche
      and any other provisions relevant to such subordination, if different from
      the terms of subordination and other provisions relevant to such
      subordination set forth herein;

            (6) the place or places where the principal of, and premium, if any,
      and any interest on Securities of the Tranche shall be payable;

            (7) the Specified Currency of the Securities of the Tranche;

            (8) the currency or currencies in which payments on the Securities
      of the Tranche are payable, if other than the Specified Currency;

            (9) the price or prices at which, the period or periods within which
      and the terms and conditions upon which Securities of the Tranche may be
      redeemed, in whole or in part, at the option of the Company, pursuant to
      any sinking fund or otherwise;

            (10) the obligation, if any, of the Company to redeem, purchase or
      repay Securities of the Tranche pursuant to any sinking fund or analogous
      provisions or at the option of a holder thereof and the price or prices at
      which or process by which and the period or periods within which and the
      terms and conditions upon which Securities of the Tranche shall be
      redeemed, purchased or repaid, in whole or in part, pursuant to such
      obligation;

            (11) the denominations in which Securities of the Tranche shall be
      issuable, if other than as provided in Section 2.04;

            (12) if other than the principal amount thereof, the portion of the
      principal amount of Securities of the Tranche which shall be payable upon
      declaration of acceleration of the maturity thereof pursuant to Section
      6.01;

            (13) if other than the Specified Currency, the coin or currency in
      which payment of the principal of or interest on the Securities of the
      Tranche shall be payable;

            (14) if the principal of or interest on the Securities of the
      Tranche are to be payable, at the election of the Company or a holder
      thereof, in a coin or currency other than the Specified Currency, the
      period or periods within which, and the terms and conditions upon which,
      such election may be made;

                                       9
<PAGE>

            (15) if the amount of payments of principal of and interest on the
      Securities of the Tranche may be determined with reference to an index
      based on a coin or currency other than the Specified Currency, the manner
      in which such amounts shall be determined;

            (16) whether the Securities of the Tranche will be issuable as
      Registered Securities (and, if so, whether such Securities will be
      issuable as Registered Global Securities) or Unregistered Securities (with
      or without Coupons), or any combination of the foregoing, any restriction
      applicable to the offer, sale or delivery of Unregistered Securities or
      the payment of interest thereon and, if other than as provided in Section
      2.06, the terms upon which Unregistered Securities of any Tranche may be
      exchanged for Registered Securities of such Tranche and vice versa;

            (17) whether and under what circumstances the Company will pay
      additional amounts on the Securities of the Tranche held by a Person who
      is not a U.S. Person in respect of any tax, assessment, or governmental
      charge withheld or deducted and, if so, whether the Company will have the
      option to redeem such Securities rather than pay such additional amounts;

            (18) if the Securities of such Tranche are to be issuable in
      definitive form (whether upon original issue or upon exchange of a
      temporary Security of such Tranche) only upon receipt of certain
      certificates or other documents or satisfaction of other conditions, the
      form and terms of such certificates, documents or conditions, if other
      than as provided for by the form of such Securities established pursuant
      to Section 2.01;

            (19) any deletions or modifications of or additions to the Events of
      Default set forth in Section 6.01 or covenants of the Company set forth in
      Article Four or Article Eleven pertaining to the Securities of the
      Tranche;

            (20) if other than the rate of interest stated in the title of the
      Securities of the Tranche, the applicable Overdue Rate;

            (21) in the case of any Tranche of non-interest bearing Securities,
      the applicable dates for purposes of clause (a) of Section 5.01;

            (22) any trustees, depositaries, authenticating or paying agents,
      transfer agents or registrars or any other agents with respect to such
      Tranche;

            (23) the exchanges, if any, on which the Securities of the Tranche
      may be listed; and

            (24) any other terms of the Tranche (which terms shall not be
      inconsistent with the provisions of this Subordinated Debt Indenture).

            All Securities of any one Tranche and Coupons, if any, appertaining
thereto, shall be substantially identical except as to denomination and except
as may otherwise be provided in or pursuant to such resolution of the Board of
Directors or in any indenture supplemental hereto.

                                       10
<PAGE>

            Section 2.03. Authentication. At any time and from time to time
after the execution and delivery of this Subordinated Debt Indenture, the
Company may deliver Securities of any Tranche having attached thereto
appropriate Coupons, if any, executed by the Company to the Trustee or its agent
for authentication. Except as otherwise provided in this Article Two, the
Trustee shall thereupon authenticate and deliver, or cause to be authenticated
and delivered, said Securities to or for the account of the Company, upon the
written order of the Company, signed by its Chief Executive Officer, any
President, Chairman or any Vice Chairman of the Board or one of its Vice
Presidents (including Executive and Senior Vice Presidents) and by its Senior
Vice President-Corporate Treasury and Global Funding Operation or its
Controller, or pursuant to such procedures acceptable to the Trustee and to such
recipients as may be specified from time to time in such written order. If
provided for in such procedures, such written order may authorize authentication
and delivery pursuant to electronic instructions from the Company or its duly
authorized agent or agents. In authenticating or causing the authentication of
such Securities and accepting the additional responsibilities under this
Subordinated Debt Indenture in relation to such Securities, the Trustee shall be
entitled to receive and (subject to Sections 7.01 and 7.02) shall be fully
protected in relying upon:

            (1) a copy of any resolution or resolutions of the Board of
      Directors relating thereto and, if applicable, an appropriate record of
      any action taken pursuant to such resolution, in each case certified by
      the Secretary or an Assistant Secretary of the Company;

            (2) an executed supplemental indenture, if any, relating thereto;

            (3) an Officers' Certificate prepared in accordance with Section
      15.05 which shall also state to the best knowledge of the signers of such
      Certificate that no Event of Default with respect to any Tranche of
      Securities shall have occurred and be continuing; and

            (4) an Opinion of Counsel prepared in accordance with Section 15.05
      which shall also state:

                  (a) that the forms of such Securities and Coupons, if any,
            have been established by or pursuant to a resolution of the Board of
            Directors or by a supplemental indenture as permitted by Section
            2.01 in conformity with the provisions of this Subordinated Debt
            Indenture;

                  (b) that the terms of such Securities have been established by
            or pursuant to a resolution of the Board of Directors or by a
            supplemental indenture as permitted by Section 2.02 in conformity
            with the provisions of this Subordinated Debt Indenture; provided,
            that, in connection with the authentication of Securities of a
            series that are part of a medium-term note program, such Opinion of
            Counsel may, in the alternative, state that certain terms of the
            Securities have been established by or pursuant to a resolution of
            the Board of Directors or by a supplemental indenture as permitted
            by Section 2.02 in conformity with the provisions of this
            Subordinated Debt Indenture, and when such other terms as are to be
            established pursuant to procedures set forth in the

                                       11
<PAGE>

            written order relating to Securities of such series shall have been
            so established, all such terms will have been duly established in
            conformity with the provisions of this Subordinated Debt Indenture;

                  (c) that such Securities and Coupons, if any, when
            authenticated (in the case of the Securities) and delivered by or at
            the direction of the Trustee and issued by the Company in the manner
            and subject to any conditions specified in such Opinion of Counsel,
            will constitute legal, valid and binding obligations of the Company,
            enforceable in accordance with their terms, subject to bankruptcy,
            insolvency, reorganization and other laws of general applicability
            relating to or affecting the enforcement of creditors' rights and to
            general equity principles;

                  (d) that the Company has the corporate power to issue such
            Securities and Coupons, if any, and has duly taken all necessary
            corporate action with respect to such issuance;

                  (e) that the issuance of such Securities and Coupons, if any,
            will not contravene the certificate of incorporation or by-laws of
            the Company or result in any violation of any of the terms or
            provisions of any law or regulation or of any indenture, mortgage or
            other agreement known to such Counsel by which the Company or any of
            its Subsidiaries is bound; and

                  (f) that all laws and requirements in respect of the execution
            and delivery by the Company of such Securities and Coupons, if any,
            and the related supplemental indenture, if any, have been complied
            with and that authentication and delivery of such Securities and
            Coupons, if any, and the execution and delivery of the related
            supplemental indenture, if any, by the Trustee will not violate the
            terms of this Subordinated Debt Indenture;

provided, that, in connection with the authentication of Securities of a series
that are part of a medium-term note program, the Trustee shall be entitled to
receive the documents referred to in clauses (1), (2), (3) and (4) above only at
or before the time of the first request of the Company to the Trustee to
authenticate Securities of such series and the Trustee shall be protected in
relying on such documents in authenticating Securities of such series until such
documents are superceded or revoked.

            The Trustee shall have the right to decline to authenticate and
deliver or cause to be authenticated and delivered any Securities under this
Section 2.03 if the Trustee, being advised by counsel, determines that such
action may not lawfully be taken or if the Trustee in good faith by action of
its board of directors or trustees, executive committee, or a trust committee of
directors or trustees and Responsible Officers shall determine that such action
would expose the Trustee to personal liability to existing Security holders.

            If the Company shall establish pursuant to Section 2.02 that the
Securities of a Tranche are to be issued in the form of one or more Registered
Global Securities, then the Company shall execute and the Trustee shall, in
accordance with this Section 2.03 and the Company order with respect to such
Tranche, authenticate and deliver one or more Registered

                                       12
<PAGE>

Global Securities in temporary or permanent form that (i) shall represent and
shall be denominated in an amount equal to the aggregate principal amount of all
of the Securities of such Tranche to be represented by one or more Registered
Global Securities, (ii) shall be registered in the name of the Depositary and/or
the Common Depositary for such Registered Global Security or Securities or the
nominee of such Depositary or Common Depositary, (iii) shall be delivered by the
Trustee to such Depositary or Common Depositary or pursuant to such Depositary's
or Common Depositary's instruction and (iv) shall bear a legend substantially to
the following effect. "Unless and until it is exchanged in whole or in part for
Securities in definitive registered form, this Security may not be transferred
except as a whole by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the Depositary
or by the Depositary or any such nominee to a successor Depositary or a nominee
of such successor Depositary" or "Unless and until it is exchanged in whole or
in part for Securities in definitive registered form, this Registered Global
Security may not be transferred except as a whole by the Common Depositary to a
nominee of the Common Depositary or by a nominee of the Common Depositary to the
Common Depositary or another nominee of the Common Depositary or by the Common
Depositary or any such nominee to a successor Common Depositary or a nominee of
such successor Common Depositary."

            No holder of a beneficial interest in any Registered Global Security
held on its behalf by a Depositary shall have any rights under this Subordinated
Debt Indenture with respect to such Registered Global Security, and such
Depositary, or the Common Depositary, as applicable, may be treated by the
Company, the Trustee and any agent of the Company or the Trustee as the owner of
such Registered Global Security for all purposes whatsoever. None of the
Company, the Trustee or any agent of the Company or the Trustee will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in a Registered
Global Security or maintaining, supervising or reviewing any records relating to
such beneficial ownership interests. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by a Depositary or impair, as between a Depositary and
such holders of beneficial interests, the operation of customary practices
governing the exercise of the rights of the Depositary (or its nominee) as
holder of any Security.

            Each Depositary designated pursuant to Section 2.02 must, at the
time of its designation and at all times while it serves as Depositary
hereunder, be a clearing agency registered under the United States Securities
Exchange Act of 1934, as amended, or any other applicable statute or regulation.

            Section 2.04. Date and Denomination of Securities. The Securities of
each Tranche shall be issuable as Registered Securities or Unregistered
Securities in such denominations as shall be specified as contemplated by
Section 2.02. In the absence of any such specification (a) with respect to
Registered Securities, such Securities shall be issuable in denominations of
100,000 units of the Specified Currency and integral multiples of 1,000 units of
the Specified Currency in excess thereof; and (b) with respect to Unregistered
Securities, such Securities shall be issuable in denominations of not less than
1,000 units of the Specified Currency and in such other denominations in excess
thereof as may be provided in or pursuant to a supplemental indenture or
resolution of the Board of Directors in accordance with Section 2.02.

                                       13
<PAGE>

Securities of each Tranche shall be numbered, lettered or otherwise
distinguished in such manner or in accordance with such plan as the officers of
the Company executing the same may determined with the approval of the Trustee.

            Every Registered Security shall be dated the date of its
authentication. Every Unregistered Security shall be dated as provided in the
resolution of the Board of Directors or the supplemental indenture referred to
in Section 2.02; provided, however, that Unregistered Securities which are part
of the same Tranche as a prior issue of Notes shall be dated the original issue
date of such prior issue of Notes.

            The Person in whose name any Registered Security of a particular
Tranche is registered at the close of business on any record date (as
hereinafter defined) with respect to any interest payment date for such Tranche
shall be entitled to receive the interest payable on such interest payment date
notwithstanding the cancellation of such Registered Security upon any
registration of transfer or exchange subsequent to the record date and prior to
such interest payment date; provided, however, that if and to the extent that
the Company shall default in the payment of interest on such interest payment
date, such defaulted interest shall be paid to the Persons in whose names
Outstanding Registered Securities of such Tranche are registered on a subsequent
record date established by notice given by mail by or on behalf of the Company
to the holders of such Registered Securities not less than 15 days preceding
such subsequent record date, such record date to be not less than five days
preceding the date of payment of such defaulted interest. Except as otherwise
specified as contemplated by Section 2.02 for Registered Securities of a
particular Tranche, the term "record date" as used in this Section 2.04 with
respect to any regular interest payment date shall mean the last day of the
calendar month preceding such interest payment date if such interest payment
date is the fifteenth day of the calendar month, and shall mean the fifteenth
day of the calendar month preceding such interest payment date if such interest
payment date is the first day of a calendar month, whether or not such day shall
be a Business Day.

            Section 2.05. Execution of Securities. The Securities and, if
applicable, the Coupons appertaining thereto, shall be signed in the name and on
behalf of the Company by the manual or facsimile signature of any of its
Presidents, its Chairman of the Board, its Vice Chairman and Chief Financial
Officer, or its Senior Vice President-Corporate Treasury and Global Funding
Operation, under its corporate seal (which may be printed, engraved or otherwise
reproduced thereon, by facsimile or otherwise) attested by the Secretary or any
Assistant Secretary of the Company. Only such Securities as shall bear thereon a
certificate of authentication substantially in the form herein recited, executed
by the Trustee, shall be entitled to the benefits of this Subordinated Debt
Indenture or be valid or obligatory for any purpose. Such certificate by the
Trustee upon any Security executed by the Company shall be conclusive evidence
that the Security so authenticated has been duly authenticated and delivered
hereunder and that the holder is entitled to the benefits of this Subordinated
Debt Indenture.

            In case any officer of the Company who shall have signed any of the
Securities or Coupons, if any, shall cease to be such officer before the
Securities or Coupons so signed (or the Securities to which the Coupons so
signed appertain) shall have been authenticated and delivered by the Trustee, or
disposed of by the Company, such Securities or Coupons nevertheless may be
authenticated and delivered or disposed of as though the Person who signed such
Securities or

                                       14
<PAGE>

Coupons had not ceased to be such officer of the Company; and any Security or
Coupon may be signed on behalf of the Company by such Persons as, at the actual
date of such Security or Coupon, shall be the proper officers of the Company,
although at the date of the execution of this Subordinated Debt Indenture any
such Person was not such an officer.

            Section 2.06. Exchange and Registration of Transfer of Securities.
Registered Securities of any Tranche (other than a Registered Global Security,
except as set forth below) may be exchanged for a like aggregate principal
amount of Registered Securities of the same Tranche of other authorized
denominations. Unregistered Securities will not be issuable in exchange for
Registered Securities.

            Unregistered Securities of any Tranche (with all unmatured Coupons,
if any, and all matured Coupons, if any, then in default, attached thereto) may
be exchanged for Registered Securities of the same Tranche of any authorized
denominations and in an equal aggregate principal amount. Unregistered
Securities surrendered in exchange for Registered Securities after the close of
business on (i) any record date with respect to any regular payment of interest
and before the opening of business at such office on the relevant interest
payment date or (ii) any record date to be established for the payment of
defaulted interest and before the opening of business on the related proposed
date for payment of defaulted interest, shall be surrendered without the Coupon
relating to such date for payment of interest.

            Securities to be exchanged pursuant to the preceding two paragraphs
shall be surrendered, at the option of the holders thereof, either at the office
or agency designated and maintained by the Company for such purpose in the
Borough of Manhattan, The City of New York in accordance with the provisions of
Section 4.02 or at any of such other offices or agencies as may be designated
and maintained by the Company for such purpose in accordance with the provisions
of Section 4.02, and the Company shall execute and register and the Trustee
shall authenticate and deliver in exchange therefor the Security or Securities
which the Securityholder making the exchange shall be entitled to receive. Each
Person designated by the Company pursuant to the provisions of Section 4.02 as a
Person authorized to register and register transfer of the Securities is
sometimes herein referred to as a "Security registrar."

            Unregistered Securities in definitive form of any Tranche will be
exchangeable for Unregistered Securities in definitive form of the same Tranche
in other authorized denominations, in an equal aggregate principal amount.
Unregistered Securities to be so exchanged shall be surrendered, at the option
of the holders thereof, either at the office or agency designated and maintained
by the Company for such purpose outside the United States in accordance with the
provisions of Section 4.02, or at the office of any agent appointed by the
Company to perform such service, and the Company shall execute and the Trustee
shall authenticate and deliver, or cause to be authenticated and delivered, in
exchange therefor the Unregistered Security or Securities which the
Securityholder making the exchange shall be entitled to receive.

            The Company shall keep, at each such office or agency, a register
for each Tranche of Registered Securities issued hereunder (the registers of all
Security registrars being herein sometimes collectively referred to as the
"Security register" or the "registry books of the Company") in which, subject to
such reasonable regulations as it may prescribe, the Company

                                       15
<PAGE>

shall register Registered Securities and shall register the transfer of
Registered Securities as provided in this Article Two. The Security register
shall be in written form or in any other form capable of being converted into
written form within a reasonable time. At all reasonable times the Security
register shall be open for inspection by the Trustee and any Security registrar
other than the Trustee. Upon due presentment for registration of transfer of any
Registered Security of any Tranche at any designated office or agency, the
Company shall execute and register and the Trustee shall authenticate and
deliver in the name of the transferee or transferees a new Registered Security
or Registered Securities of the same Tranche for an equal aggregate principal
amount. Registration or registration of transfer of any Registered Security by
any Security registrar in the registry books of the Company maintained by such
Security registrar, and delivery of such Registered Security, duly
authenticated, shall be deemed to complete the registration or registration of
transfer of such Registered Security.

            The Company will at all times designate one Person (who may be the
Company and who need not be a Security registrar) to act as repository of a
master list of names and addresses of the holders of the Registered Securities.
The Company shall act as such repository unless and until some other Person is,
by written notice from the Company to the Trustee and each Security registrar,
designated by the Company to act as such. The Company shall cause each Security
registrar to furnish to such repository, on a current basis, such information as
to all registrations of transfer and exchanges effected by such registrar, as
may be necessary to enable such repository to maintain such master list on as
current a basis as is practicable.

            No Person shall at any time be designated as or act as a Security
registrar unless such Person is at such time empowered under applicable law to
act as such and duly registered to act as such under and to the extent required
by applicable law and regulations.

            All Registered Securities presented for registration of transfer or
for exchange, redemption, repayment or payment shall (if so required by the
Company or the Trustee) be duly endorsed by, or be accompanied by a written
instrument or instruments of transfer or exchange in form satisfactory to the
Company and the Trustee duly executed by, the holder or his attorney duly
authorized in writing.

            No service charge shall be made for any exchange or registration of
transfer of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
therewith.

            The Company shall not be required (i) to issue, register the
transfer of or exchange Securities to be redeemed for a period of fifteen
calendar days preceding the first publication of the relevant notice of
redemption, or if Registered Securities are Outstanding and there is no
publication, the mailing of the relevant notice of redemption, or (ii) to
register the transfer of or exchange any Registered Securities selected for
redemption, in whole or in part, except the unredeemed portion of any such
Registered Securities being redeemed in part, or (iii) to exchange any
Unregistered Securities selected for redemption except that such Unregistered
Securities may be exchanged for Registered Securities of like tenor, provided
that such Registered Securities shall be simultaneously surrendered for
redemption or (iv) to register the transfer of or exchange any Securities
surrendered for optional repayment, in whole or in part.

                                       16
<PAGE>

            Unregistered Securities and any Coupons appertaining thereto will be
transferable by delivery.

            Notwithstanding any other provision of this Section 2.06, unless and
until it is exchanged in whole or in part for Securities in definitive
registered form, a Registered Global Security representing all or a portion of
the Securities of a Tranche may not be transferred except as a whole by the
Depositary or the Common Depositary for such Tranche to a nominee of such
Depositary or Common Depositary or by a nominee of such Depositary or Common
Depositary to such Depositary or Common Depositary or another nominee of such
Depositary or Common Depositary or any such nominee to a successor Depositary or
Common Depositary for such Tranche or a nominee of such successor Depositary or
Common Depositary.

            If at any time the Depositary for the Securities of a Tranche
notifies the Company that it is unwilling or unable to continue as Depositary
for the Securities of such Tranche or if at any time the Depositary for
Securities of a Tranche shall no longer be registered or in good standing under
the Securities Exchange Act of 1934, as amended, or other applicable statute or
regulation, the Company shall appoint a successor Depositary registered and in
good standing as aforesaid with respect to the Securities of such Tranche. If a
successor Depositary for the Securities of such Tranche is not appointed by the
Company within 90 days after the Company receives such notice or becomes aware
of such condition, the Company will execute and the Trustee, upon receipt of an
Officers' Certificate for the authentication and delivery of definitive
Securities of such Tranche, will authenticate and deliver Securities of such
Tranche in definitive registered form without Coupons, in any authorized
denominations, in an aggregate principal amount equal to the aggregate principal
amount of the Registered Global Security or Securities representing such
Registered Securities in exchange for such Registered Global Security or
Securities.

            The Company may at any time and in its sole discretion, subject to
the procedures of the Depositary, determine that Registered Securities issued in
the form of one or more Registered Global Securities shall no longer be
represented by a Registered Global Security or Securities. In such event the
Company will execute and the Trustee, upon receipt of an Officer's Certificate
for the authentication and delivery of definitive Securities, will authenticate
and deliver Securities of the same Tranche in definitive registered form without
Coupons, in any authorized denominations, in an aggregate principal amount equal
to the aggregate principal amount of the Registered Global Security or
Securities in exchange for such Registered Global Security or Securities.

            If specified by the Company pursuant to Section 2.02 with respect to
Securities represented by a Registered Global Security, the Depositary for such
Registered Global Security may surrender such Registered Global Security in
exchange in whole or in part for Securities of the same Tranche in definitive
registered form on such terms as are acceptable to the Company and such
Depositary. Thereupon, the Company shall execute, and the Trustee shall
authenticate and deliver, without service charge:

                  (i) to the Person specified by such Depositary, a new
            Registered Security or Securities of the same Tranche, of any
            authorized denominations as requested by such Person, in an
            aggregate principal amount equal to and in

                                       17
<PAGE>

            exchange for such Person's beneficial interest in the Registered
            Global Security; and

                  (ii) to such Depositary or the Common Depository therefor, a
            new Registered Global Security in a denomination equal to the
            difference, if any, between the principal amount of the surrendered
            Registered Global Security and the aggregate principal amount of
            Registered Securities authenticated and delivered pursuant to clause
            (i) above.

            Upon the exchange of a Registered Global Security for Securities in
definitive registered form without Coupons, in authorized denominations, in an
aggregate principal amount equal to the principal amount of such Registered
Global Security, such Registered Global Security shall be canceled by the
Trustee or an agent of the Company or the Trustee. Securities in definitive
registered form without Coupons issued in exchange for a Registered Global
Security pursuant to this Section 2.06 shall be registered in such names and in
such authorized denominations as the Depositary for such Registered Global
Security, pursuant to instructions from its direct or indirect participants or
otherwise, shall instruct the Trustee or an agent of the Company or the Trustee.
The Trustee or such agent shall deliver such Securities to or as directed by the
Persons in whose names such Securities are so registered.

            Notwithstanding anything herein or in the terms of any Securities to
the contrary, none of the Company, the Trustee or any agent of the Company or
the Trustee (any of which, other than the Company, shall be entitled to rely on
an Officer's Certificate and an Opinion of Counsel) shall be required to
exchange any Unregistered Security for a Registered Security if such exchange
could result in adverse Federal income tax consequences to the Company (such as,
for example, the inability of the Company to deduct from its income, as computed
for Federal income tax purposes, the interest payable on the Unregistered
Securities) under then applicable United States Federal income tax laws, as
determined by the Company.

            Section 2.07. Mutilated, Destroyed, Lost or Stolen Securities. In
case any temporary or definitive Security or any Coupon appertaining to any
Security shall become mutilated or be destroyed, lost or stolen, the Company in
the case of a mutilated Security or Coupon shall, and in the case of a lost,
stolen, or destroyed Security or Coupon may in its discretion, execute and, upon
the written request or authorization of any officer of the Company, the Trustee
shall authenticate and deliver a new Security of the same Tranche or Coupon, as
the case may be, bearing a number not contemporaneously Outstanding, in exchange
and substitution for the mutilated Security or Coupon, or in lieu of and in
substitution for the Security or Coupon so destroyed, lost or stolen with (in
the case of mutilated, lost, stolen or destroyed Securities) Coupons
corresponding to the Coupons appertaining to such Securities. In every case the
applicant for a substituted Security or Coupon shall furnish to the Company and
to the Trustee such security or indemnity as may be required by them to save
each of them harmless, and, in every case of destruction, loss or theft, the
applicant shall also furnish to the Company and to the Trustee evidence to their
satisfaction of the destruction, loss or theft of such Security or Coupon and of
the ownership thereof.

            Upon the issuance of any substituted Security or Coupon, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may

                                       18
<PAGE>

be imposed in relation thereto and any other expenses connected therewith. In
case any Security or Coupon which has matured or is about to mature shall become
mutilated or be destroyed, lost or stolen, the Company may, instead of issuing a
substituted Security or Coupon, pay or authorize the payment of the same
(without surrender thereof except in the case of a mutilated Security or Coupon)
if the applicant for such payment shall furnish to the Company and to the
Trustee such security or indemnity as may be required by them to save each of
them harmless and, in case of destruction, loss or theft, evidence satisfactory
to the Company and the Trustee of the destruction, loss or theft of such
Security or Coupon and the ownership thereof.

            Every substituted Security or Coupon issued pursuant to the
provisions of this Section 2.07 by virtue of the fact that any Security or
Coupon is destroyed, lost or stolen shall constitute an additional contractual
obligation of the Company, whether or not the destroyed, lost or stolen Security
or Coupon shall be found at any time, and shall be entitled to all the benefits
of this Subordinated Debt Indenture equally and proportionately with any and all
other Securities or Coupons of the same Tranche duly issued hereunder. All
Securities and Coupons shall be held and owned upon the express condition that
the foregoing provisions are exclusive with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities and Coupons and shall
preclude (to the extent lawful) any and all other rights or remedies with
respect to the replacement or payment of negotiable instruments or other
securities without their surrender.

            Section 2.08. Temporary Securities. Pending the preparation of
definitive Securities of any Tranche, the Company may execute and the Trustee
shall authenticate and deliver temporary Securities (printed, lithographed or
typewritten). Temporary Securities shall be issuable in any authorized
denomination and substantially in the form of the definitive Securities in lieu
of which they are issued, 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 authenticated by the Trustee
upon the same conditions and in substantially the same manner, and with the same
effect, as the definitive Securities in lieu of which they are issued. Without
unreasonable delay, the Company will execute and deliver to the Trustee
definitive Securities of such Tranche and thereupon any or all temporary
Securities of such Tranche may be surrendered in exchange therefor, at the
option of the holders thereof, either at the office or agency to be designated
and maintained by the Company for such purpose in the Borough of Manhattan, The
City of New York in accordance with the provisions of Section 4.02 or at any of
such other offices or agencies as may be designated and maintained by the
Company for such purpose in accordance with the provisions of Section 4.02, and
the Trustee shall authenticate and deliver in exchange for such temporary
Securities an equal aggregate principal amount of definitive Securities of the
same Tranche and, in the case of Unregistered Securities, having attached
thereto any appropriate Coupons. Such exchange shall be made by the Company at
its own expense and without any charge therefor. Until so exchanged, the
temporary Securities of any Tranche shall in all respects be entitled to the
same benefits under this Subordinated Debt Indenture as definitive Securities of
the same Tranche authenticated and delivered hereunder, unless otherwise
established pursuant to Section 2.02. The provisions of this Section 2.08 are
subject to any restrictions or limitations on the issue and delivery of
temporary Unregistered Securities that may be established pursuant to Section
2.01 or 2.02 (including any provision that such Unregistered Securities
initially be issued in the form of a single global Unregistered Security to be
delivered to a depositary located outside the United

                                       19
<PAGE>

States and the procedures pursuant to which definitive or global Unregistered
Securities would be issued in exchange for such temporary global Unregistered
Security).

            Section 2.09. Cancellation of Securities Paid, etc. All Securities
and Coupons surrendered for the purpose of payment, redemption, repayment,
exchange or registration of transfer or for credit against any sinking fund
shall, if surrendered to the Company, any Security registrar, any paying agent
or any other agent of the Company or of the Trustee, be delivered to the Trustee
and promptly canceled by it, or, if surrendered to the Trustee, shall be
promptly canceled by it, and no Securities or Coupons shall be issued in lieu
thereof except as expressly permitted by any of the provisions of this
Subordinated Debt Indenture. All canceled Securities and Coupons held by the
Trustee shall be disposed of by the Trustee in accordance with the Trustee's
customary procedures or at the written request of the Company, the Trustee shall
deliver canceled Securities and Coupons to the Company. If the Company shall
acquire any of the Securities or Coupons, however, such acquisition shall not
operate as a redemption or satisfaction of the indebtedness represented by such
Securities or Coupons unless and until the same are delivered to the Trustee for
cancellation.

            Section 2.10. Computation of Interest. Except as otherwise specified
as contemplated by Section 2.02 for Securities of any Tranche, interest on the
Securities of each Tranche shall be computed on the basis of a 360-day year of
twelve 30-day months.

            Section 2.11. Reopening of Tranches and Series. All Securities
included in any one Tranche or series need not be issued by the Company at the
same time. Unless otherwise provided, a Tranche or series may be reopened for
issuances of additional Securities in such Tranche or series upon written order
of the Company in accordance with Section 2.03 of this Subordinated Debt
Indenture with respect to such additional Securities.

                                 ARTICLE THREE

            REDEMPTION OF SECURITIES; SINKING FUNDS; REPAYMENT AT THE
                              OPTION OF THE HOLDER

            Section 3.01. Applicability of Article. The provisions of this
Article Three shall be applicable, as the case may be, (i) to any Securities
which are redeemable or subject to repayment at the option of the holder before
their maturity and (ii) to any sinking fund for the retirement of any
Securities, in either case except as otherwise specified as contemplated by
Section 2.02 for any Tranche of Securities.

            The minimum amount of any sinking fund payment provided for by the
terms of any Securities is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by the
terms of such Securities is herein referred to as an "optional sinking fund
payment."

            Section 3.02. Notice of Redemption; Selection of Securities. In case
the Company shall desire to exercise any right to redeem all, or, as the case
may be, any part of, the Securities of any Tranche in accordance with their
terms, it shall fix a date for redemption. Notice of redemption to the holders
of Registered Securities of any Tranche to be redeemed as a

                                       20
<PAGE>

whole or in part at the option of the Company shall be given by mailing notice
of such redemption by first class mail, postage prepaid, at least 30 days and
not more than 60 days prior to the date fixed for redemption to such holders at
their last addresses as they shall appear upon the registry books of the Company
and to the Trustee. Notices of redemption to be sent to the holders of Global
Series Notes that are Registered Securities shall be sent only to the holders of
those Global Series Notes to be redeemed. Notice of redemption to the holders of
Unregistered Securities to be redeemed as a whole or in part who have filed
their names and addresses with the Trustee pursuant to Section 313(c)(2) of the
Trust Indenture Act of 1939 shall be given by mailing notice of such redemption,
by first class mail, postage prepaid, at least 30 days and not more than 60 days
prior to the date fixed for redemption, to such holders at such addresses as
were so furnished to the Trustee (and, in the case of any such notice given by
the Company, the Trustee shall make such information available to the Company
for such purpose). Notice of redemption to all other holders of Unregistered
Securities shall be published in an Authorized Newspaper in the Borough of
Manhattan, The City of New York, in an Authorized Newspaper in London and, if
any such Unregistered Securities are listed on the Luxembourg Stock Exchange, in
an Authorized Newspaper in Luxembourg, in each case, once in each of three
successive calendar weeks, the first publication to be not less than 30 nor more
than 60 days prior to the date fixed for redemption. Any notice if given in the
manner herein provided shall be conclusively presumed to have been duly given,
whether or not the holder receives such notice. In any case, failure to give
notice or any defect in the notice to the holder of any Security of a Tranche
designated for redemption as a whole or in part shall not affect the validity of
the proceedings for the redemption of any other Security of such Tranche.

            Each such notice of redemption shall specify the date fixed for
redemption, the redemption price at which the Securities of such Tranche are to
be redeemed, the place or places of payment, that payment will be made upon
presentation and surrender of such Securities and, in the case of Securities
issued with Coupons, of all Coupons appertaining thereto maturing after the date
fixed for redemption, that any interest accrued to the date fixed for redemption
will be paid as specified in said notice, and that on and after said date any
interest thereon or on the portions thereof to be redeemed will cease to accrue.
If less than all the Securities of a Tranche are to be redeemed, the notice of
redemption shall specify the number or numbers of the Securities to be redeemed.
In case any Security is to be redeemed in part only, the notice of redemption
shall state the portion of the principal amount thereof to be redeemed and shall
state that on and after the date fixed for redemption, upon surrender of such
Security, a new Security or Securities of the same Tranche in principal amount
equal to the unredeemed portion thereof, together with any unmatured Coupons
appertaining thereto, will be issued.

            Prior to the redemption date specified in the notice of redemption
given as provided in this Section 3.02, the Company will deposit with the
Trustee or with one or more paying agents (or if the Company is acting as its
own paying agent, shall segregate and hold in trust as provided in Section 4.05)
an amount of money sufficient to redeem on the redemption date all the
Securities or portions thereof so called for redemption, together with accrued
interest to the date fixed for redemption. If less than all the Securities of a
Tranche are to be redeemed, the Company will give the Trustee notice not less
than 60 days prior to the redemption date as to the aggregate principal amount
of Securities of such Tranche to be redeemed, and the Trustee shall select or
cause to be selected, in such manner as in its sole discretion it shall deem
appropriate and fair, the Securities or portions thereof to be redeemed.
Securities of a Tranche

                                       21
<PAGE>

may be redeemed in part only in multiples of the smallest authorized
denomination of that Tranche.

            Section 3.03. Payment of Securities Called for Redemption. If notice
of redemption has been given as provided in Section 3.02 or 3.05, the Securities
or portions of Securities of the Tranche with respect to which such notice has
been given shall become due and payable on the date and at the place or places
stated in such notice at the applicable redemption price, together with any
interest accrued to the date fixed for redemption, and on and after said date
(unless the Company shall default in the payment of such Securities or portions
of such Securities, together with any interest accrued to said date) any
interest on the Securities or portions of Securities of such Tranche so called
for redemption shall cease to accrue, and the unmatured Coupons, if any,
appertaining thereto shall be void. On presentation and surrender of such
Securities at a place of payment in said notice specified, together with all
Coupons, if any, appertaining thereto maturing after the date fixed for
redemption, the said Securities or the specified portions thereof shall be paid
and redeemed by the Company at the applicable redemption price, together with
any interest accrued thereon to the date fixed for redemption; provided,
however, that payment of interest becoming due on or prior to the date fixed for
redemption shall be payable in the case of Securities with Coupons attached
thereto, to the holders of the Coupons for such interest upon surrender thereof,
and in the case of Registered Securities, to the Holders of such Registered
Securities registered as such on the relevant record date subject to the terms
and provisions of Sections 2.02 and 2.04.

            If any Security issued with Coupons is surrendered for redemption
and is not accompanied by all appurtenant Coupons maturing after the date fixed
for redemption and all matured Coupons, if any, then in default, the surrender
of such missing Coupon or Coupons may be waived by the Company and the Trustee,
if there be furnished to each of them such security or indemnity as they may
require to save each of them harmless.

            Upon presentation of any Security redeemed in part only, the Company
shall execute and the Trustee shall authenticate and deliver to the holder
thereof, at the expense of the Company, a new Security or Securities of the same
Tranche, of authorized denominations, together with all unmatured Coupons, if
any, and all matured Coupons, if any, then in default appertaining thereto, in
aggregate principal amount equal to the unredeemed portion of the Security so
presented.

            Section 3.04. Satisfaction of Mandatory Sinking Fund Payments with
Securities. In lieu of making all or any part of any mandatory sinking fund
payment with respect to any Securities in cash, the Company may at its option
(a) deliver to the Trustee Securities, together with all unmatured Coupons, if
any, appertaining thereto, of the same Tranche theretofore purchased or
otherwise acquired by the Company or (b) receive credit for the principal amount
of Securities of the same Tranche which have been redeemed either at the
election of the Company pursuant to the terms of such Securities or through the
application of permitted optional sinking fund payments pursuant to the terms of
such Securities; provided that such Securities have not previously been so
credited. Such Securities shall be received and credited for such purpose by the
Trustee at the redemption price specified in such Securities for redemption
through operation of the sinking fund and the amount of such mandatory sinking
fund payment shall be reduced accordingly.

                                       22
<PAGE>

            Section 3.05. Redemption of Securities for Sinking Fund. Not less
than 60 days prior to each sinking fund payment date for any Securities, the
Company will deliver to the Trustee a certificate signed by the Senior Vice
President-Corporate Treasury and Global Funding Operation or any Assistant
Treasurer of the Company specifying the amount of the next ensuing sinking fund
payment for such Securities pursuant to the terms thereof, the portion thereof,
if any, which is to be satisfied by payment of cash (which cash may be deposited
with the Trustee or with one or more paying agents, or if the Company is acting
as its own paying agent, segregated and held in trust as provided in Section
4.04) and the portion thereof, if any, which is to be satisfied by delivering
and crediting Securities of the same Tranche pursuant to Section 3.04 (which
Securities, if not theretofore delivered, will accompany such certificate) and
whether the Company intends to exercise its right to make a permitted optional
sinking fund payment with respect to such Securities. Such certificate shall
also state that no Event of Default has occurred and is continuing with respect
to such Securities. Such certificate shall be irrevocable and, upon its
delivery, the Company shall be obligated to make the cash payment or payments
therein referred to, if any, on or before the next succeeding sinking fund
payment date. In the case of the failure of the Company to deliver such
certificate (or to deliver the Securities specified in this paragraph), the
sinking fund payment due on the next succeeding sinking fund payment date for
such Securities shall be paid entirely in cash and shall be sufficient to redeem
the principal amount of such Securities subject to a mandatory sinking fund
payment without the option to deliver or credit Securities as provided in
Section 3.04 and without the right to make any optional sinking fund payment, if
any, with respect to such Securities.

            Any sinking fund payment or payments (mandatory or optional) made in
cash plus any unused balance of any preceding sinking fund payments made in cash
which, in the aggregate, shall equal or exceed 100,000 units of the Specified
Currency with respect to the particular Tranche (or a lesser sum if the Company
shall so request or determine) with respect to any Securities shall be applied
by the Trustee (or by the Company if the Company is acting as its own paying
agent) on the sinking fund payment date on which such payment is made (or, if
such payment is made before a sinking fund payment date, on the next sinking
fund payment date following the date of such payment) to the redemption of such
Securities at the redemption price specified in such Securities for operation of
the sinking fund together with accrued interest, if any, to the date fixed for
redemption. Any sinking fund moneys not so applied or allocated by the Trustee
(or by the Company if the Company is acting as its own paying agent) to the
redemption of Securities shall be added to the next cash sinking fund payment
received by the Trustee (or if the Company is acting as its own paying agent,
segregated and held in trust as provided in Section 4.04) for such Securities
and, together with such payment (or such amount so segregated), shall be applied
in accordance with the provisions of this Section 3.05. Any and all sinking fund
moneys with respect to any Securities held by the Trustee (or if the Company is
acting as its own paying agent, segregated and held in trust as provided in
Section 4.04) on the last sinking fund payment date with respect to such
Securities and not held for the payment or redemption of particular Securities
of such Tranche shall be applied by the Trustee (or by the Company if the
Company is acting as its own paying agent), together with other moneys, if
necessary, to be deposited (or segregated) sufficient for the purpose, to the
payment of the principal of the Securities of that Tranche at maturity.

            The Trustee shall select or cause to be selected the Securities to
be redeemed upon such sinking fund payment date in the manner specified in the
last paragraph of Section 3.02 and

                                       23
<PAGE>

the Company shall cause notice of the redemption thereof to be given in the
manner provided in Section 3.02 except that the notice of redemption shall also
state that the Securities are being redeemed by operation of the sinking fund.
Such notice having been duly given, the redemption of such Securities shall be
made upon the terms and in the manner stated in Section 3.03.

            On or before each sinking fund payment date, the Company shall pay
to the Trustee in cash (or if the Company is acting as its own paying agent,
shall segregate and hold in trust as provided in Section 4.04) a sum equal to
any interest accrued to the date fixed for redemption of Securities or portions
thereof to be redeemed on such sinking fund payment date pursuant to this
Section 3.05.

            Neither the Trustee nor the Company shall redeem any Securities with
sinking fund moneys or give any notice of redemption of such Securities by
operation of the sinking fund for such Tranche during the continuance of a
default in payment of interest, if any, on such Securities or of any Event of
Default (other than an Event of Default occurring as a consequence of this
paragraph) with respect to such Securities, except that if the notice of
redemption of any such Securities shall theretofore have been given in
accordance with the provisions hereof, the Trustee (or the Company if the
Company is acting as its own paying agent) shall redeem such Securities if cash
sufficient for that purpose shall be deposited with the Trustee (or segregated
by the Company) for that purpose in accordance with the terms of this Article
Three. Except as aforesaid, any moneys in the sinking fund for such Securities
at the time when any such default or Event of Default shall occur and any moneys
thereafter paid into such sinking fund shall, during the continuance of such
default or Event of Default, be held as security for the payment of such
Securities; provided, however, that in case such default or Event of Default
shall have been cured or waived as provided herein, such moneys shall thereafter
be applied on the next sinking fund payment date for such Securities to which
such moneys may be applied pursuant to the provisions of this Section 3.05.

            Section 3.06. Repayment at the Option of the Holder. Any Tranche of
Securities may be made, by provision contained in or established pursuant to a
supplemental indenture or a resolution of the Board of Directors pursuant to
Section 2.02, subject to repayment, in whole or in part, at the option of the
holder on a date or dates specified prior to maturity, at a price equal to 100%
of the principal amount thereof, together with accrued interest to the date of
repayment or, in the case of Original Issue Discount Securities, at a price
equal to 100% of the accreted principal amount thereof to the date of such
repayment, on such notice as may be required; provided, however, that the holder
of a Security may only elect partial repayment in an amount that will result in
the portion of such Security that will remain Outstanding after such repayment
constituting an authorized denomination, or combination thereof, of such
Securities.

                                  ARTICLE FOUR

                       PARTICULAR COVENANTS OF THE COMPANY

            Section 4.01. Payment of Principal, Premium and Interest. The
Company covenants and agrees for the benefit of all holders of Securities issued
hereunder that it will duly and punctually pay or cause to be paid the principal
of, premium, if any, and interest, if any, on

                                       24
<PAGE>

all such Securities (for all purposes herein, references to interest shall
include any additional amounts payable pursuant to the terms of such Securities)
at the places, at the respective times and in the manner provided in such
Securities, in the Coupons, if any, appertaining thereto, and in this
Subordinated Debt Indenture. The interest on Securities issued with Coupons
(together with any additional amounts payable pursuant to the terms of such
Securities) shall be payable only upon presentation and surrender of the several
Coupons for such interest installments as are evidenced thereby as they
severally mature. If any temporary Unregistered Security provides that interest
thereon may be paid while such Security is in temporary form, the interest on
any such temporary Unregistered Security (together with any additional amounts
payable pursuant to the terms of such Security) shall be paid, as to the
installments of interest evidenced by Coupons attached thereto, if any, only
upon presentation and surrender thereof, and, as to the other installments of
interest, if any, only upon presentation of such Securities for notation thereon
of the payment of such interest, in each case subject to any restrictions that
may be established pursuant to Section 2.02.

            Section 4.02. Offices for Notices and Payments, etc. As long as any
Registered Securities remain Outstanding hereunder, the Company will designate
and maintain in the Borough of Manhattan, The City of New York an office or
agency where such Registered Securities may be presented for payment, and where
such Securities may be presented for registration of transfer and for exchange
as in this Subordinated Debt Indenture provided.

            The Company will maintain one or more offices or agencies in a city
or cities located outside the United States (including any city in which such an
agency is required to be maintained under the rules of any stock exchange on
which any of the Securities are listed) where any Unregistered Securities issued
hereunder and Coupons, if any, appertaining thereto may be presented for
payment. No payment on any Unregistered Security or Coupon will be made upon
presentation of such Unregistered Security or Coupon at an agency of the Company
within the United States nor will any payment be made by transfer to an account
in, or by check mailed to an address in, the United States unless pursuant to
applicable United States laws and regulations then in effect such payment can be
made without adverse consequences to the Company. Notwithstanding the foregoing,
payments in Dollars on Unregistered Securities and Coupons appertaining thereto
may be made at an agency of the Company maintained in the Borough of Manhattan,
The City of New York if such payment in Dollars at each agency maintained by the
Company outside the United States for payment on such Unregistered Securities is
illegal or effectively precluded by exchange controls or other similar
restrictions.

            Interest on Registered Securities may at the option of the Company
be paid by check mailed to the Persons entitled thereto at their respective
addresses as such appear on the registry books of the Company, or, at the option
of any holder of $5,000,000 or more aggregate principal amount of Registered
Securities of any Tranche and subject to applicable laws and regulations (or the
equivalent thereof in a Specified Currency), be made by wire transfer to an
account denominated in the currency in which such payment is to be made,
maintained by such holder, if appropriate wire transfer instructions have been
received by the Company or its agent not less than fifteen days prior to the
applicable interest payment date.

            Interest on Unregistered Securities and the Coupons appertaining
thereto shall be made upon presentation of such Securities or Coupons, subject
to applicable laws and

                                       25
<PAGE>

regulations, at the designated offices of such paying agents outside of the
United States as the Company may designate from time to time. Payments on
Unregistered Securities or the Coupons appertaining thereto will, upon
presentation of such Securities or Coupons, at the holder's option and subject
to applicable laws and regulations, be made by check or by wire transfer to an
account denominated in the currency in which such payment is to be made,
maintained by such holder with a bank outside the United States, if appropriate
wire transfer instructions have been received by the Company or its agent not
less than fifteen days prior to the applicable interest payment date.

            The Company will maintain in the Borough of Manhattan, The City of
New York an office or agency where notices and demands to or upon the Company in
respect of any Securities issued hereunder, the Coupons appertaining thereto or
this Subordinated Debt Indenture may be served.

            The Company may from time to time designate one or more additional
offices or agencies where Securities and any Coupons appertaining thereto may be
presented for payment, where Securities may be presented for exchange as
provided in this Subordinated Debt Indenture and pursuant to Section 2.02 and
where Registered Securities may be presented for registration of transfer as in
this Subordinated Debt Indenture provided, and the Company may from time to time
rescind any such designation, as the Company may deem desirable or expedient;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain the agencies provided for in
this Section 4.02. The Company will give to the Trustee prompt written notice of
any such designation or rescission thereof.

            The Company will give to the Trustee written notice of the location
of each such office or agency and of any change of location thereof. In case the
Company shall fail to maintain any such office or agency in the Borough of
Manhattan, The City of New York or shall fail to give such notice of the
location or of any change in the location thereof, presentations and demands may
be made and notices may be served at the principal office of the Trustee.

            The Company hereby designates the office of the Company located at
335 Madison Avenue, New York, New York 10017 as the office or agency of the
Company in the Borough of Manhattan, The City of New York where Registered
Securities may be presented for payment, for registration of transfer and for
exchange as in this Subordinated Debt Indenture provided and where notices and
demands to or upon the Company in respect of the Securities or of this
Subordinated Debt Indenture may be served. The Company also designates the
office of the Company located at 260 Long Ridge Road, Stamford, Connecticut
06927 as the office or agency of the Company as the repository pursuant to
Section 2.06 for the master list of the names and addresses of the holders of
Securities.

            Section 4.03. Appointments to Fill Vacancies in Trustee's Office.
The Company, whenever necessary to avoid or fill a vacancy in the office of
Trustee, will appoint, in the manner provided in Section 7.10, a successor
Trustee, so that there shall at all times be a Trustee with respect to all
Securities issued hereunder.

            Section 4.04. Provision as to Paying Agent. (a) If the Company shall
appoint a paying agent other than the Trustee with respect to the Securities of
any Tranche, it will cause

                                       26
<PAGE>

such paying agent to execute and deliver to the Trustee an instrument in which
such agent shall agree with the Trustee, subject to the provisions of this
Section 4.04,

            (1) that it will hold all sums held by it as such agent for the
      payment of the principal of, premium, if any, or interest, if any, on such
      Securities (whether such sums have been paid to it by the Company or by
      any other obligor on such Securities) in trust for the benefit of the
      holders of such Securities, or the Coupons appertaining thereto, if any;

            (2) that it will give the Trustee prompt notice of any failure by
      the Company (or by any other obligor on such Securities) to make any
      payment of the principal of, premium, if any, or interest, if any, on such
      Securities when the same shall be due and payable; and

            (3) that at any time during the continuance of any failure by the
      Company (or by any other obligor on such Securities) specified in the
      preceding paragraph (2), such paying agent will, upon the written request
      of the Trustee, forthwith pay to the Trustee all sums so held in trust by
      it.

            (b) If the Company shall act as its own paying agent with respect to
the Securities of any Tranche, it will, on or before each due date of the
principal of, premium, if any, or interest, if any, on such Securities, set
aside, segregate and hold in trust for the benefit of the holders of such
Securities or the Coupons appertaining thereto, if any, a sum sufficient to pay
such principal, premium, if any, or interest, if any, so becoming due and will
promptly notify the Trustee of any failure to take such action and of any
failure by the Company (or by any other obligor on such Securities) to make any
payment of the principal of, premium, if any, or interest, if any, on such
Securities when the same shall become due and payable.

            (c) Anything in this Section 4.04 to the contrary notwithstanding,
the Company may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Subordinated Debt Indenture, or for any other reason, pay or
cause to be paid to the Trustee all sums held in trust by it, or any paying
agent hereunder, as required by this Section 4.04, such sums to be held by the
Trustee upon the trusts herein contained.

            (d) Anything in this Section 4.04 to the contrary notwithstanding,
the agreement to hold sums in trust as provided in this Section 4.04 is subject
to Sections 12.03 and 12.04.

            (e) Whenever the Company shall have one or more paying agents with
respect to the Securities of any Tranche, it will, prior to each due date of the
principal of, premium, if any, or interest, if any, on the Securities of such
Tranche, deposit with a designated paying agent a sum sufficient to pay the
principal, premium, if any, and interest, if any, so becoming due, such sum to
be held in trust for the benefit of the Persons entitled to such principal,
premium, if any, or interest, if any, and (unless such paying agent is the
Trustee) the Company will promptly notify the Trustee of any failure so to act.

            Section 4.05. Statement as to Compliance. The Company will furnish
to the Trustee on or before June 1 in each year (beginning with the first June 1
which is not less than 60

                                       27
<PAGE>

days following the first date of issuance of any Tranche of Securities under
this Subordinated Debt Indenture) a brief certificate (which need not comply
with Section 15.05) from the principal executive, financial or accounting
officer of the Company stating that in the course of the performance by the
signer of his duties as an officer of the Company he would normally have
knowledge of any default or non-compliance by the Company in the performance of
any covenants or conditions contained in this Indenture, stating whether or not
he has knowledge of any such default or non-compliance and, if so, specifying
each such default or non-compliance of which the signer has knowledge and the
nature thereof.

                                  ARTICLE FIVE

                       SECURITYHOLDER LISTS AND REPORTS BY
                           THE COMPANY AND THE TRUSTEE

            Section 5.01. Securityholder Lists. If and so long as the Trustee
shall not be the Security registrar for any Tranche of Registered Securities,
the Company will furnish or cause to be furnished to the Trustee with respect to
each Tranche of Registered Securities issued hereunder a list in such form as
the Trustee may reasonably require of the names and addresses of the holders of
Registered Securities of such Tranche pursuant to Section 312 of the Trust
Indenture Act of 1939 (a) semiannually not more than 15 days after each record
date for the payment of interest in respect of the Registered Securities of such
Tranche, as of such record date, and on dates to be determined pursuant to
Section 2.02 for each Tranche of non-interest bearing Registered Securities in
each year and (b) at such other times as the Trustee may request in writing,
within 30 days after receipt by the Company of any such request, as of a date
not more than 15 days prior to the time such information is furnished.

            Section 5.02. Reports by the Company. The Company covenants to file
with the Trustee, within 15 days after the Company is required to file the same
with the Securities and Exchange Commission, copies of the annual reports and of
the information, documents and other reports that the Company may be required to
file with the Securities and Exchange Commission pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 or pursuant to Section 314
of the Trust Indenture Act of 1939.

            Section 5.03. Reports by the Trustee. Any Trustee's report required
under Section 313(a) of the Trust Indenture Act of 1939 shall be transmitted on
or before May 15 in each year beginning May 15, 2006, as provided in Section
313(c) of the Trust Indenture Act of 1939, so long as any Securities are
Outstanding hereunder, and shall be dated as of a date convenient to the Trustee
no more than 60 days prior thereto.

                                  ARTICLE SIX

                           REMEDIES OF THE TRUSTEE AND
                       SECURITYHOLDER ON EVENT OF DEFAULT

            Section 6.01. Events of Default. The term "Event of Default"
whenever used herein with respect to Securities of any series means any one of
the following events and such other events as may be established with respect to
the Securities of such series as contemplated

                                       28
<PAGE>

by Section 2.02, continued for the period of time, if any, and after the giving
of notice, if any, designated in this Subordinated Debt Indenture or as may be
established with respect to such Securities as contemplated by Section 2.02, as
the case may be, unless it is either inapplicable or is specifically deleted or
modified in the applicable resolution of the Board of Directors or in the
supplemental indenture under which such series of Securities is issued, as the
case may be, as contemplated by Section 2.02:

            (a) default in the payment of any installment of interest upon any
      Security of such series as and when the same shall become due and payable,
      and continuance of such default for a period of 30 days; or

            (b) default in the payment of the principal of, or premium, if any,
      on any Security of such series as and when the same shall become due and
      payable whether at maturity, upon redemption, by declaration, repayment or
      otherwise; or

            (c) default in the making or satisfaction of any sinking fund
      payment or analogous obligation as and when the same shall become due and
      payable by the terms of the Securities of such series; or

            (d) failure on the part of the Company duly to observe or perform
      any other of the covenants or agreements on the part of the Company in
      respect of the Securities of such series contained in this Subordinated
      Debt Indenture (other than a covenant or agreement in respect of the
      Securities of such series a default in whose observance or performance is
      elsewhere in this Section 6.01 specifically dealt with) continued for a
      period of 60 days after the date on which written notice of such failure,
      requiring the Company to remedy the same, shall have been given to the
      Company by the Trustee, or to the Company and the Trustee by the holders
      of at least twenty-five percent in aggregate principal amount of the
      Securities of such series at the time Outstanding; or

            (e) an event of default with respect to any other series of
      Securities issued pursuant to this Subordinated Debt Indenture or as
      defined in any other indenture or instrument evidencing or under which the
      Company has at the date of this Subordinated Debt Indenture or shall
      hereafter have outstanding any indebtedness for borrowed money shall
      happen and be continuing and such other series of Securities or such
      indebtedness, as the case may be, shall have been accelerated so that the
      same shall be or become due and payable prior to the date on which the
      same would otherwise have become due and payable, and such acceleration
      shall not be rescinded or annulled within ten days after written notice of
      such acceleration shall have been given to the Company by the Trustee or
      to the Company and the Trustee by the holders of at least twenty-five
      percent in aggregate principal amount of such Securities at the time
      Outstanding or within ten days after written notice of such acceleration
      shall have been given to the Company pursuant to the terms of such other
      indenture or instrument, as the case may be; provided, however, that if
      such event of default with respect to such other series of Securities or
      under such other indenture or instrument, as the case may be, shall be
      remedied or cured by the Company, or waived by the holders of such other
      series of Securities or of such other indebtedness, as the case may be,
      then the Event of Default hereunder by reason thereof shall be deemed
      likewise to have been thereupon remedied, cured or waived

                                       29
<PAGE>

      without further action upon the part of either the Trustee or any of the
      Securityholders of such series; and provided, further, that, subject to
      the provisions of Sections 6.08 and 7.01, the Trustee shall not be charged
      with knowledge of any such event of default or any remedy, cure or waiver
      thereof or any such acceleration unless written notice thereof shall have
      been given to the Trustee by the Company, by a holder or an agent of a
      holder of any Securities of such other series or of any such other
      indebtedness, as the case may be, or by the Trustee then acting under this
      Subordinated Debt Indenture with respect to such other series of
      Securities or under any other indenture or instrument, as the case may be,
      under which such event of default shall have occurred, or by the holders
      of at least twenty-five percent in aggregate principal amount of the
      Securities of such series at the time Outstanding; or

            (f) a decree or order by a court having jurisdiction in the premises
      shall have been entered adjudging the Company a bankrupt or insolvent, or
      approving as properly filed a petition seeking reorganization of the
      Company under the Federal Bankruptcy Code or any other similar applicable
      Federal or State law, and such decree and order shall have continued
      undischarged and unstayed for a period of 60 days; or a decree or order of
      a court having jurisdiction in the premises for the appointment of a
      receiver or liquidator or trustee or assignee (or other similar official)
      in bankruptcy or insolvency of the Company or of all or substantially all
      of its property, or for the winding up or liquidation of its affairs,
      shall have been entered, and such decree or order shall have continued
      undischarged and unstayed for a period of 60 days; or

            (g) the Company shall institute proceedings to be adjudicated a
      voluntary bankrupt, or shall consent to the filing of a bankruptcy
      proceeding against it, or shall file a petition or answer or consent
      seeking reorganization under the Federal Bankruptcy Code or any other
      similar applicable Federal or State law, or shall consent to the filing of
      any such petition, or shall consent to the appointment of a receiver or
      liquidator or trustee or assignee (or other similar official) in
      bankruptcy or insolvency of it or of all or substantially all of its
      property, or shall make an assignment for the benefit of creditors, or
      shall admit in writing its inability to pay its debts generally as they
      become due; or

            (h) any other Event or Default provided in the applicable resolution
      of the Board of Directors or in the supplemental indenture under which
      such series of Securities is issued, as the case may be, as contemplated
      by Section 2.02.

            If an Acceleration Default (as defined below) with respect to
Securities of any series at the time Outstanding occurs and is continuing, then
and in each and every case, unless the principal of all of the Securities of
such series shall have already become due and payable, either the Trustee or the
holders of not less than twenty-five percent in aggregate principal amount of
the Securities of such series then Outstanding hereunder, by notice in writing
to the Company (and to the Trustee if given by Securityholders of such series),
may declare the principal amount (or, if the Securities of such series are
Original Issue Discount Securities, such portion of the principal amount as may
be specified in the certificates evidencing the Securities of such series) of
all the Securities of such series to be due and payable immediately, and upon
any such declaration the same shall become and shall be immediately due and
payable, anything in this Subordinated Debt Indenture or in such Securities
contained to the contrary

                                       30
<PAGE>

notwithstanding. This provision, however, is subject to the condition that if,
at any time after the principal amount (or, if such Securities are Original
Issue Discount Securities, such portion of the principal amount as may be
specified in the certificates evidencing the Securities of such series) of the
Securities of any series shall have been so declared due and payable, and before
any judgment or decree for the payment of the moneys due shall have been
obtained or entered as hereinafter provided, the Company shall pay or shall
deposit with the Trustee a sum sufficient to pay all matured installments of
interest, if any, upon all such Securities and the principal of, and premium, if
any, on any and all such Securities which shall have become due otherwise than
by acceleration (with interest on overdue installments of interest (to the
extent that payment of such interest is enforceable under applicable law) and on
such principal at the Overdue Rate applicable to such series, to the date of
such payment or deposit) and all amounts payable to the Trustee pursuant to the
provisions of Section 7.06, and any and all defaults under this Subordinated
Debt Indenture with respect to such series of Securities, other than the
nonpayment of principal of and accrued interest on such Securities which shall
have become due solely by acceleration, shall have been remedied or cured or
waived or provision shall have been made therefor to the satisfaction of the
Trustee -- then and in every such case the holders of a majority in aggregate
principal amount of the Securities of such series then Outstanding, by written
notice to the Company and to the Trustee, may waive all defaults with respect to
such series and rescind and annul such declaration and its consequences; but no
such waiver or rescission and annulment shall extend to or shall affect any
subsequent default or shall impair any right consequent thereon. "Acceleration
Default" means an Event of Default as described in subsections (f) or (g) above
or an Event of Default under subsection (d) above due to a breach of the
Company's covenants and obligations under Article Eleven of this Subordinated
Debt Indenture or, if there is no Senior Indebtedness outstanding at that time,
any Event of Default.

            In case the Trustee shall have proceeded to enforce any right under
this Subordinated Debt Indenture and such proceedings shall have been
discontinued or abandoned because of such rescission or annulment or for any
other reason or shall have been determined adversely to the Trustee, then and in
every such case the Company and the Trustee shall be restored respectively to
their several positions and rights hereunder, and all rights, remedies and
powers of the Company and the Trustee shall continue as though no such
proceedings had been taken.

            Section 6.02. Payment of Securities on Default; Suit Therefor. The
Company covenants that (a) in case default shall be made in the payment of any
installment of interest upon any Security as and when the same shall become due
and payable, and such default shall have continued for a period of 30 days, (b)
in case default shall be made in the payment of the principal of, or premium, if
any, on any Security as and when the same shall become due and payable, whether
at maturity of such Security or upon redemption or by declaration, repayment or
otherwise or (c) in case of default in the making or satisfaction of any sinking
fund payment or analogous obligation when the same becomes due by the terms of
the Securities of any series - then, upon demand of the Trustee, the Company
will pay to the Trustee, for the benefit of the holder of any such Security (or
holders of any series of Securities in the case of clause (c) above) the whole
amount that then shall have become due and payable on any such Security (or
Securities of any such series in the case of clause (c) above) for principal,
premium, if any, and interest, if any, with interest upon the overdue principal
and premium, if any, and (to the extent that payment of such interest is
enforceable under applicable law) upon the overdue installments

                                       31
<PAGE>

of interest, if any, at the Overdue Rate applicable to any such Security (or
Securities of any such series in the case of clause (c) above); and, in addition
thereto, such further amount as shall be sufficient to cover costs and expenses
of collection, and any further amounts payable to the Trustee pursuant to the
provisions of Section 7.06.

            In case the Company shall fail forthwith to pay such amounts upon
such demand, the Trustee, in its own name and as trustee of an express trust,
shall be entitled and empowered to institute any actions or proceedings at law
or in equity for the collection of the sums so due and unpaid, and may prosecute
any such action or proceeding to judgment or final decree, and may enforce any
such judgment or final decree against the Company or any other obligor upon such
Securities and collect in the manner provided by law out of the property of the
Company or any other obligor on such Securities wherever situated the moneys
adjudged or decreed to be payable.

            In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Securities of any
series under the Federal Bankruptcy Code or any other similar applicable Federal
or State law, or in case a receiver or trustee (or other similar official) shall
have been appointed for the property of the Company or such other obligor, or in
the case of any other similar judicial proceedings relative to the Company or
other obligor on any Securities, or to the creditors or property of the Company
or such other obligor, the Trustee, irrespective of whether the principal of any
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
pursuant to the provisions of this Section 6.02, shall be entitled and
empowered, by intervention in such proceedings or otherwise, to file and prove a
claim or claims for the whole amount of principal (or, if any Securities are
Original Issue Discount Securities, such portion of the principal amount as may
be due and payable with respect to such Securities pursuant to a declaration in
accordance with Section 6.01), premium, if any, and interest, if any, owing and
unpaid in respect of any Securities and, in the case of any judicial
proceedings, to file such proofs of claim and other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee and of the
Securityholders allowed in such judicial proceedings relative to the Company or
any other obligor on any Securities, its or their creditors, or its or their
property, and to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute the same after the deduction
of costs and expenses of collection, and any further amounts payable to the
Trustee pursuant to the provisions of Section 7.06 and incurred by it up to the
date of such distribution; and any receiver, assignee or trustee (or other
similar official) in bankruptcy or reorganization is hereby authorized by each
of the Securityholders 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
Securityholders, to pay to the Trustee costs and expenses of collection and any
further amounts payable to the Trustee pursuant to the provisions of Section
7.06 and incurred by it up to the date of such distribution.

            Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Securityholder any
plan of reorganization, arrangement, adjustment or composition affecting any of
the Securities or the rights of any holder thereof, or to authorize the Trustee
to vote in respect of the claim of any Securityholder in any such proceeding.

                                       32
<PAGE>

            All rights of action and of asserting claims under this Subordinated
Debt Indenture, or under any Securities or Coupons appertaining to such
Securities, may be enforced by the Trustee without the possession of such
Securities or Coupons or the production thereof in any trial or other proceeding
relative thereto, and any such suit or proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall be for the ratable benefit of the holders of the
Securities or Coupons appertaining to such Securities in respect of which such
action was taken. In any proceedings brought by the Trustee (and also any
proceedings in which a declaratory judgment of a court may be sought as to the
interpretation or construction of any provision of this Subordinated Debt
Indenture, to which the Trustee shall be a party), the Trustee shall be held to
represent all the holders of the Securities or Coupons appertaining to such
Securities to which such proceedings relate, and it shall not be necessary to
make any holders of such Securities or Coupons appertaining to such Securities
parties to any such proceedings.

            Section 6.03. Application of Moneys Collected by Trustee. Any moneys
collected by the Trustee pursuant to this Article Six shall be applied in the
order following, at the date or dates fixed by the Trustee for the distribution
of such moneys, upon presentation of the several Securities and Coupons
appertaining to such Securities in respect of which moneys have been collected,
and the notation thereon of the payment if only partially paid, and upon
surrender thereof if fully paid:

            FIRST: To the payment of all amounts due the Trustee pursuant to the
      provisions of Section 7.06;

            SECOND: Subject to Article Fourteen, in case the principal of the
      Outstanding Securities in respect of which such moneys have been collected
      shall not have become due (at maturity, upon redemption, by declaration,
      repayment or otherwise) and be unpaid, to the payment of interest, if any,
      on such Securities, in the order of the maturity of the installments of
      such interest, with interest (to the extent that such interest has been
      collected by Trustee) upon the overdue installments of interest at the
      Overdue Rate applicable to such Securities, such payments to be made
      ratably to the Persons entitled thereto;

            THIRD: Subject to Article Fourteen, in case the principal of the
      Outstanding Securities in respect of which such moneys have been collected
      shall have become due (at maturity, upon redemption, by declaration,
      repayment or otherwise), to the payment of the whole amount then owing and
      unpaid upon such Securities for principal, premium, if any, and interest,
      if any, with interest on the overdue principal, premium, if any, and (to
      the extent that such interest has been collected by the Trustee) overdue
      installments of interest, if any, at the Overdue Rate applicable to such
      Securities; and in case such moneys shall be insufficient to pay in full
      the whole amounts so due and unpaid upon such Securities, then to the
      payment of such principal, premium, if any, and interest, if any, without
      preference or priority of principal and premium, if any, over interest, if
      any, or of interest, if any, over principal, and premium, if any, or of
      any installment of interest, if any, over any other installment of
      interest, if any, or of any such Security over any other such Security,
      ratably to the aggregate of such principal, premium, if any, and accrued
      and unpaid interest, if any; and

                                       33
<PAGE>

            FOURTH: To the payment of the remainder, if any, to the Company, its
      successors or assigns, or to whosoever may be lawfully entitled to receive
      the same, or as a court of competent jurisdiction may direct.

            Section 6.04. Proceedings by Securityholders. No holder of any
Security or of any Coupon appertaining thereto shall have any right by virtue of
or by availing of any provision of this Subordinated Debt Indenture to institute
any suit, action or proceeding to the extent lawful in equity or at law upon or
under or with respect to this Subordinated Debt Indenture or for the appointment
of a receiver or trustee (or other similar official), or for any other remedy
hereunder, unless such holder previously shall have given to the Trustee written
notice of default with respect to such series of Securities and of the
continuance thereof, as hereinbefore provided, and unless also the holders of
not less than twenty-five percent in aggregate principal amount of the
Securities of such series then Outstanding shall have made written request upon
the Trustee to institute such action, suit or proceeding in its own name as
Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee for 60 days after its receipt of
such notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding, it being understood and intended,
and being expressly covenanted by the taker and holder of every Security or
Coupon with every other taker and holder and the Trustee, that no one or more
holders of Securities of such series or Coupons appertaining to such Securities
shall have any right in any manner whatever by virtue of or by availing of any
provision of this Subordinated Debt Indenture to affect, disturb or prejudice
the rights of any other holder of Securities of such series or Coupons
appertaining to such Securities, or to obtain or seek to obtain priority over or
preference to any other such holder or to enforce any right under this
Subordinated Debt Indenture, except in the matter herein provided and for the
equal, ratable and common benefit of all holders of Securities of such series
and Coupons appertaining to such Securities.

            Notwithstanding any other provisions in this Subordinated Debt
Indenture, however, the right of any holder of any Security or Coupon to receive
payment of the principal of, premium, if any, and interest, if any, on such
Security or Coupon, on or after the respective due dates expressed in such
Security or Coupon, or upon redemption, by declaration, repayment or otherwise,
or to institute suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
holder, and no provision of the Securities of any series or Coupons appertaining
to such Securities or of this Subordinated Debt Indenture shall alter or impair
the obligation of the Company, which is absolute and unconditional, to pay the
principal of, premium, if any, and interest, if any, on such Securities and
Coupons at the respective places, at the respective times, at the respective
rates and in the coin or currency, therein and herein prescribed.

            Section 6.05. Proceedings by Trustee. In case of an Event of Default
hereunder, the Trustee may in its discretion proceed to protect and enforce the
rights vested in it and the Securityholders by this Subordinated Debt Indenture
by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any of such rights, either by suit in equity or
by action at law or by proceeding in bankruptcy or otherwise, whether for the
specific enforcement of any covenant or agreement contained in this Subordinated
Debt Indenture or

                                       34
<PAGE>

in aid of the exercise of any power granted in this Subordinated Debt Indenture,
or to enforce any other legal or equitable right vested in the Trustee by this
Subordinated Debt Indenture or by law.

            Section 6.06. Remedies Cumulative and Continuing. All powers and
remedies given by this Article Six to the Trustee or to the holders of the
Securities of any series or Coupons appertaining to such Securities shall, to
the extent permitted by law, be deemed cumulative and not exclusive of any
thereof or of any other powers and remedies available to the Trustee or the
holders of such Securities or Coupons, by judicial proceedings or otherwise, to
enforce the performance or observance of the covenants and agreements contained
in this Subordinated Debt Indenture, and no delay or omission of the Trustee or
of any holder of any such Securities or Coupons to exercise any right or power
accruing upon any default occurring and continuing as aforesaid shall impair any
such right or power, or shall be construed to be a waiver of any such default or
an acquiescence therein; and, subject to the provisions of Section 6.04, every
power and remedy given by this Article Six or by law to the Trustee or to the
holders of the Securities of any series or Coupons appertaining to such
Securities may be exercised from time to time, and as often as shall be deemed
expedient, by the Trustee or by the holders of such Securities or Coupons.

            Section 6.07. Direction of Proceedings and Waiver of Defaults by
Securityholders. The holders of a majority in aggregate principal amount of the
Securities of any series at the time Outstanding shall have the right to direct
the time, method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred on the Trustee, with
respect to the Securities of such series; provided, however, that (subject to
the provisions of Section 7.01) the Trustee shall have the right to decline to
follow any such direction if the Trustee, being advised by counsel, determines
that the action or proceeding so directed may not lawfully be taken or if the
Trustee in good faith by its board of directors or trustees, executive
committee, or a trust committee of directors or trustees and/or Responsible
Officers shall determine that the action or proceeding so directed would involve
the Trustee in personal liability. Prior to any declaration accelerating the
maturity of the Securities of any series, the holders of a majority in aggregate
principal amount of such Securities at the time Outstanding may on behalf of the
holders of all such Securities and all Coupons appertaining thereto waive any
past default or Event of Default with respect to such Securities and all Coupons
appertaining thereto and its consequences except a default in the payment of
interest, if any, on, or the principal of or premium, if any, on any Security of
such series or any Coupon appertaining thereto, or in the payment of any sinking
fund installment or analogous obligation with respect to such Securities or
Coupons, or in respect of a covenant or provision hereof which under Section
10.02 cannot be modified or amended without the consent of the holder of each
Security or Coupon affected. Upon any such waiver the Company, the Trustee and
the holders of such Securities and Coupons shall be restored to their former
position and rights hereunder, respectively; but no such waiver shall extend to
any subsequent or other default or Event of Default or impair any right
consequent thereon. Whenever any default or Event of Default hereunder shall
have been waived as permitted by this Section 6.07, said default or Event of
Default shall for all purposes of the Securities of such series and all Coupons
appertaining thereto and this Subordinated Debt Indenture be deemed to have been
cured and to be not continuing.

                                       35
<PAGE>

            Section 6.08. Notice of Defaults. The Trustee shall, within 90 days
after the occurrence of a default with respect to the Securities of any series,
give notice of all defaults with respect to that series known to a Responsible
Officer of the Trustee (i) if any Unregistered Securities of that series are
then Outstanding, to the holders thereof and of all Coupons appertaining
thereto, by publication at least once in an Authorized Newspaper in the Borough
of Manhattan, The City of New York at least once in an Authorized Newspaper in
London and, if any such Unregistered Securities are listed on the Luxembourg
Stock Exchange, at least once in an Authorized Newspaper in Luxembourg and (ii)
to all holders of Securities of such series and of all Coupons appertaining
thereto in the manner and to the extent provided in Section 313(c) of the Trust
Indenture Act of 1939, unless such defaults shall have been cured before the
giving of such notice (the term "defaults" for the purpose of this Section 6.08
being hereby defined to be the events specified in Section 6.01 or established
with respect to such Securities as contemplated by Section 2.02, not including
the periods of grace, if any, provided for therein or established with respect
to such Securities as contemplated by Section 2.02 and irrespective of the
giving of the notices specified in clauses (d) and (e) of Section 6.01 or
established with respect to such Securities as contemplated by Section 2.02);
provided, however, that except in the case of default in the payment of the
principal of, premium, if any, or interest, if any, on any of the Securities of
such series or in the making of any sinking fund installment or analogous
obligation with respect to such Securities, the Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive
committee, or a trust committee of directors and/or Responsible Officers of the
Trustee in good faith determines that the withholding of such notice is in the
interest of the holders of such Securities and the Coupons appertaining thereto.

            Section 6.09. Undertaking to Pay Costs. All parties to this
Subordinated Debt Indenture agree, and each holder of any Security or Coupon by
his 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 Subordinated Debt Indenture, or in any suit against the Trustee for any
action taken, omitted or suffered 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 6.09 shall not apply to any suit instituted
by the Trustee, to any suit instituted by any holder of Securities or group of
such holders, holding in the aggregate more than twenty-five percent in
principal amount of the Outstanding Securities of such series or to any suit
instituted by any Securityholder for the enforcement of the payment of the
principal of, premium, if any, or interest, if any, on any Security on or after
the due date expressed in such Security, on or after the date fixed for
redemption or repayment or after such Security shall have become due by
declaration.

                                 ARTICLE SEVEN

                             CONCERNING THE TRUSTEE

            Section 7.01. Duties and Responsibilities of Trustee. With respect
to the holders of any series of Securities issues hereunder, the Trustee, prior
to the occurrence of any Event of Default with respect to the Securities of such
series and after the curing or waiving of

                                       36
<PAGE>

all Events of Default which may have occurred with respect to such series,
undertakes to perform such duties and only such duties as are specifically set
forth in this Subordinated Debt Indenture. In case an Event of Default with
respect to the Securities of a series has occurred (which has not been cured or
waived), the Trustee shall exercise such of the rights and powers vested in it
by this Subordinated Debt Indenture with respect to such series, and use the
same degree of care and skill in their exercise, as a prudent man would exercise
or use under the circumstances in the conduct of his own affairs.

            No provision of this Subordinated Debt 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

            (a) prior to the occurrence of an Event of Default with respect to
      the Securities of a series and after the curing or waiving of all Events
      of Default with respect to such series which may have occurred:

                  (1) the duties and obligations of the Trustee with respect to
            the Securities shall be determined solely by the express provisions
            of this Subordinated Debt Indenture, and the Trustee shall not be
            liable except for the performance of such duties and obligations as
            are specifically set forth in this Subordinated Debt Indenture, and
            no implied covenants or obligations shall be read into this
            Subordinated Debt Indenture against the Trustee; and

                  (2) in the absence of bad faith on the part of the Trustee,
            the Trustee may conclusively rely, as to the truth of the statements
            and the correctness of the opinions expressed therein, upon any
            certificates or opinions furnished to the Trustee and conforming to
            the requirements of this Subordinated Debt Indenture; but 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 be under a duty to examine the same to determine
            whether or not they conform to the requirements of this Subordinated
            Debt Indenture;

            (b) the Trustee shall not be liable for any error of judgment made
      in good faith by a Responsible Officer or Officers of the Trustee, unless
      it shall be proved that the Trustee was negligent in ascertaining the
      pertinent facts; and

            (c) the Trustee shall not be liable with respect to any action
      taken, omitted or suffered to be taken by it in good faith in accordance
      with the direction of the holders of Securities of any series pursuant to
      Section 6.07 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 Subordinated Debt
      Indenture with respect to such Securities.

            None of the provisions of this Subordinated Debt Indenture shall be
construed as requiring the Trustee to expend or risk its own funds or otherwise
to incur any personal financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or

                                       37
<PAGE>

powers, if there shall be reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.

            The provisions of this Section 7.01 are in furtherance of and
subject to Section 315 of the Trust Indenture Act of 1939.

            Section 7.02. Reliance on Documents, Opinions, etc. In furtherance
of and subject to the Trust Indenture Act of 1939, and subject to the provisions
of Section 7.01:

            (a) the Trustee may rely and shall be protected in acting or
      refraining from acting upon any resolution, certificate, statement,
      instrument, opinion, report, notice, request, direction, consent, order or
      other paper or document believed by it to be genuine and to have been
      signed or presented by the proper party or parties;

            (b) any request, direction, order or demand of the Company mentioned
      herein shall be sufficiently evidenced by an instrument signed in the name
      of the Company by any of its Presidents, its Chairman or any Vice Chairman
      of the Board or any Vice President (including any Executive or Senior Vice
      President) and its Senior Vice President-Corporate Treasury and Global
      Funding Operation or its Controller (unless other evidence in respect
      thereof be herein specifically prescribed); and any resolution of the
      Board of Directors of the Company may be evidenced to the Trustee by a
      copy thereof certified by the Secretary, an Assistant Secretary or an
      Attesting Secretary of the Company;

            (c) the Trustee may consult with counsel and any advice or Opinion
      of Counsel shall be full and complete authorization and protection in
      respect of any action taken, omitted or suffered to be taken by it
      hereunder in good faith and in accordance with such advice or Opinion of
      Counsel;

            (d) the Trustee shall be under no obligation to exercise any of the
      rights or powers vested in it by this Subordinated Debt Indenture at the
      request, order or direction of any of the Securityholders, pursuant to the
      provisions of this Subordinated Debt Indenture, unless such Securityholder
      shall have offered reasonable security and indemnity satisfactory to the
      Trustee against the costs, expenses and liabilities which might be
      incurred therein or thereby;

            (e) the Trustee shall not be liable for any action taken, omitted or
      suffered by it in good faith and believed by it to be authorized or within
      the discretion or rights or powers conferred upon it by this Subordinated
      Debt Indenture;

            (f) the Trustee shall not be bound to make any inquiry or
      investigation into the facts or matters stated in any resolution,
      certificate, statement, instrument, opinion, report, notice, request,
      direction, consent, order, bond, note or other paper or document unless
      requested in writing so to do by the holders of a majority in aggregate
      principal amount of the Securities of any series affected then
      Outstanding; provided, however, that if the payment within a reasonable
      time to the Trustee of the costs and expenses or liabilities likely to be
      incurred by it in the making of such investigation is, in the opinion of
      the Trustee, not reasonably assured to the Trustee by the security
      conferred upon it by

                                       38
<PAGE>

      the terms of this Subordinated Debt Indenture, the Trustee may require
      reasonable indemnity against such costs, expenses or liabilities as a
      condition to so proceeding; and the reasonable expenses of such
      investigation shall be paid by the Company or, if paid by the Trustee,
      shall be repaid by the Company upon demand; and

            (g) the Trustee may execute any of the trusts or powers hereunder or
      perform any duties hereunder either directly or by or through agents or
      attorneys, and the Trustee shall not be responsible for any misconduct or
      negligence on the part of any agent or attorney appointed with due care by
      it hereunder.

            Section 7.03. No Responsibility for Recitals, etc. The recitals
contained herein and in the Securities shall be taken as the statements of the
Company (except in the Trustee's certificates of authentication), and the
Trustee assumes no responsibility for the correctness of the same. The Trustee
makes no representations as to the validity or sufficiency of this Subordinated
Debt Indenture or of the Securities or Coupons; provided that the Trustee shall
not be relieved of its duty to authenticate Securities only as authorized by
this Subordinated Debt Indenture. The Trustee shall not be accountable for the
use or application by the Company of any of the Securities or of the proceeds
thereof.

            Section 7.04. Ownership of Securities. The Trustee and any agent of
the Company or of the Trustee, in its individual or any other capacity, may
become the owner or pledgee of Securities or Coupons with the same rights it
would have if it were not Trustee or such agent.

            Section 7.05. Moneys to be Held in Trust. Subject to the provisions
of Sections 4.04, 12.03 and 12.04, all moneys received by the Trustee or any
paying agent shall, until used or applied as herein provided, be held in trust
for the purposes for which they were received, but need not be segregated from
other funds except to the extent required by law. Neither the Trustee nor any
paying agent shall be under any liability for interest on any moneys received by
it hereunder except such as it may agree in writing with the Company to pay
thereon. So long as no Event of Default shall have occurred and be continuing,
all interest allowed on any such moneys shall be paid from time to time upon the
written order of the Company, signed by any of its Presidents, its Chairman or
any Vice Chairman of the Board, or any Vice President (including any Executive
or Senior Vice President), the Senior Vice President-Corporate Treasury and
Global Funding Operation or Controller.

            Section 7.06. Compensation and Expenses of Trustee. The Company
covenants and agrees to pay to the Trustee from time to time, and the Trustee
shall be entitled to, reasonable compensation (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust)
and, except as otherwise expressly provided, the Company will pay or reimburse
the Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any of the
provisions of this Subordinated Debt Indenture (including the reasonable
compensation and the expenses and disbursements of its counsel and of all
Persons not regularly in its employ) except any such expense, disbursement or
advance as may arise from its negligence or bad faith. The Company also
covenants to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on the part
of the Trustee, arising

                                       39
<PAGE>

out of or in connection with the acceptance or administration of this trust and
its duties hereunder, including the costs and expenses of defending itself
against any claim of liability in the premises. The obligations of the Company
under this Section 7.06 to compensate and indemnify the Trustee and to pay or
reimburse the Trustee for expenses, disbursements and advances shall constitute
additional indebtedness hereunder and shall survive the satisfaction and
discharge of this Subordinated Debt Indenture.

            Section 7.07. Officers' Certificate as Evidence. Subject to the
provisions of Sections 7.01 and 7.02, whenever in the administration of the
provisions of this Subordinated Debt Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking,
omitting or suffering any action to be taken hereunder, such matter (unless
other evidence in respect thereof be herein specifically prescribed) may, in the
absence of negligence or bad faith on the part of the Trustee, be deemed to be
conclusively proved and established by an Officers' Certificate delivered to the
Trustee, and such Certificate, in the absence of negligence or bad faith on the
part of the Trustee, shall be full warrant to the Trustee for any action taken,
omitted or suffered by it under the provisions of this Subordinated Debt
Indenture upon the faith thereof.

            Section 7.08. Indentures Not Creating Potential Conflicting
Interests for the Trustee. The following indentures are hereby specifically
described for the purposes of Section 310(b)(1) of the Trust Indenture Act of
1939: (a) this Subordinated Debt Indenture with respect to the Securities of any
other series; and (b) the indenture dated as of April 1, 1991, among the
Company, as issuer, General Electric Company, as guarantor, and Chemical Bank
(now called JPMorgan Chase Bank, N.A.), as Trustee.

            Section 7.09. Eligibility of Trustee. The Trustee hereunder shall at
all times be a corporation organized and doing business under the laws of the
United States or any State, which (a) is authorized under such laws to exercise
corporate trust powers and (b) is subject to supervision or examination by
Federal or State authority and (c) shall have at all times a combined capital
and surplus of not less than $10,000,000. If such corporation publishes reports
of condition at least annually, pursuant to law, or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section 7.09, the combined capital and surplus of such corporation at any time
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. In case at any time the Trustee shall
cease to be eligible in accordance with the provisions of this Section 7.09, the
Trustee shall resign immediately in the manner and with the effect specified in
Section 7.10.

            The provisions of this Section 7.09 are in furtherance of and
subject to Section 310(a) of the Trust Indenture Act of 1939.

            Section 7.10. Resignation or Removal of Trustee. The Trustee, or any
Trustee or Trustees hereafter appointed, may at any time resign with respect to
any one or more or all series of Securities by giving written notice of
resignation to the Company and (i) if any Unregistered Securities of a series
affected are then Outstanding, by giving notice of such resignation to the
holders thereof, by publication at least once in an Authorized Newspaper in the
Borough of Manhattan, The City of New York, at least once in an Authorized
Newspaper in London and, if any such Unregistered Securities are listed on the
Luxembourg Stock Exchange,

                                       40
<PAGE>

at least once in an Authorized Newspaper in Luxembourg, (ii) if any Unregistered
Securities of a series affected are then Outstanding, by mailing notice of such
resignation to the holders thereof who have filed their names and addresses with
the Trustee pursuant to Section 313(c)(2) of the Trust Indenture Act of 1939, at
such addresses as were so furnished to the Trustee and (iii) by mailing notice
of such resignation to the holders of then Outstanding Registered Securities of
each series affected at their addresses as they shall appear on the registry
books of the Company. Upon receiving such notice of resignation, the Company
shall promptly appoint a successor Trustee or Trustees with respect to the
applicable series by written instrument, in duplicate, executed in the name of
and on behalf of the Company by a duly authorized officer, one copy of which
instrument shall be delivered to the resigning Trustee and one copy to the
successor Trustee. If no successor Trustee shall have been so appointed with
respect to any series and have accepted appointment within 60 days after the
giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee, or
any Securityholder who has been a bona fide holder of a Security or Securities
of the applicable series for at least six months may, subject to the provisions
of Section 6.09, on behalf of himself and all others similarly situated,
petition any such court for the appointment of a successor Trustee. Such court
may thereupon, after such notice, if any, as it may deem proper and prescribe,
appoint a successor Trustee.

            (a) In case at any time any of the following shall occur --

            (1) the Trustee shall fail to comply with the provisions of Section
      310(b) of the Trust Indenture Act of 1939 with respect to any series of
      Securities after written request therefor by the Company or by any
      Securityholder who has been a bona fide holder of a Security or Securities
      of such series for at least six months, or

            (2) the Trustee shall cease to be eligible in accordance with the
      provisions of Section 7.09 and Section 310(a) of the Trust Indenture Act
      of 1939 with respect to any series of Securities and shall fail to resign
      after written request therefor by the Company or by any such
      Securityholder, or

            (3) the Trustee shall become incapable of acting with respect to any
      series of Securities, or shall be adjudged a bankrupt or insolvent, or a
      receiver of the Trustee or of its property shall be appointed, or any
      public officer shall take charge or control of the Trustee or of its
      property or affairs for the purpose of rehabilitation, conservation or
      liquidation --

then, in any such case, the Company may remove the Trustee with respect to such
series and appoint a successor Trustee with respect to such series by written
instrument, in duplicate, executed in the name of and on behalf of the Company
by a duly authorized officer, one copy of which instrument shall be delivered to
the Trustee so removed and one copy to the successor Trustee, or, subject to the
provisions of Section 315(e) of the Trust Indenture Act of 1939, any
Securityholder who has been a bona fide holder of a Security or Securities of
such series for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee with respect to such
series. Such court may thereupon, after such notice, if any, as it may deem

                                       41
<PAGE>

proper and prescribe, remove the Trustee and appoint a successor Trustee with
respect to such series.

            (b) The holders of a majority in aggregate principal amount of the
Securities of one or more series (each series voting as a class) or all series
at the time Outstanding may remove the Trustee with respect to the applicable
series or all series, as the case may be, and appoint with respect to the
applicable series or all series, as the case may be, a successor Trustee by
written notice of such action to the Company, the Trustee and the successor
Trustee.

            (c) Any resignation or removal of the Trustee with respect to any
series and any appointment of a successor Trustee with respect to such series
pursuant to any of the provisions of this Section 7.10 shall become effective
upon acceptance of appointment by the successor Trustee as provided in Section
7.11.

            (d) No predecessor Trustee shall be liable for the acts or omissions
of any successor Trustee.

            Section 7.11. Acceptance by Successor Trustee. Any successor Trustee
appointed as provided in Section 7.10 shall execute, acknowledge and deliver to
the Company and to its predecessor Trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor Trustee with respect to any or all applicable series shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, duties and
obligations with respect to such series of its predecessor hereunder, with like
effect as if originally named as Trustee herein; but, nevertheless, on the
written request of the Company or of the successor Trustee, the Trustee ceasing
to act shall, upon payment (or due provision therefor) of any amounts then due
it pursuant to the provisions of Section 7.06, execute and deliver an instrument
transferring to such successor Trustee all the rights and powers with respect to
such series of the Trustee so ceasing to act. Upon request of any such successor
Trustee, the Company shall execute any and all instruments in writing in order
more fully and certainly to vest in and confirm to such successor Trustee all
such rights and powers.

            In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
predecessor Trustee and each successor Trustee with respect to the Securities of
any applicable series shall execute and deliver an indenture supplemental hereto
which shall contain such provisions as shall be deemed necessary or desirable to
confirm that all the rights, powers, trusts and duties of the predecessor
Trustee with respect to the Securities of any series as to which the predecessor
Trustee is not retiring shall continue to be vested in the predecessor Trustee,
and shall add to or change any of the provisions of this Subordinated Debt
Indenture as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Trustee, it being understood that
nothing herein or in such supplemental indenture shall constitute such Trustees
co-trustees of the same trust and that each such Trustee shall be Trustee of a
trust or trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee.

            No successor Trustee with respect to a series of Securities shall
accept appointment as provided in this Section 7.11 unless at the time of such
acceptance such

                                       42
<PAGE>

successor Trustee shall, with respect to such series, be qualified under
Section 310(b) of the Trust Indenture Act of 1939 and eligible under the
provisions of Section 7.09.

            Upon acceptance of appointment by a successor Trustee with respect
to any series as provided in this Section 7.11, the Company shall give notice
thereof (a) if any Unregistered Securities of a series affected are then
Outstanding, to the holders thereof, by publication of such notice at least once
in an Authorized Newspaper in the Borough of Manhattan, The City of New York, at
least once in an Authorized Newspaper in London and, if any such Unregistered
Securities are listed on the Luxembourg Stock Exchange, at least once in an
Authorized Newspaper in Luxembourg, (b) if any Unregistered Securities of a
series affected are then Outstanding, to the holders thereof who have filed
their names and addresses with the Trustee pursuant to Section 313(c)(2) of the
Trust Indenture Act of 1939, by mailing such notice to such holders at such
addresses as were so furnished to the Trustee (and the Trustee shall make such
information available to the Company for such purpose) and (c) to the holders of
Registered Securities of each series affected, by mailing such notice to such
holders at their addresses as they shall appear on the registry books of the
Company. If the Company fails to mail such notice within ten days after the
acceptance of appointment by the successor Trustee, the successor Trustee shall
cause such notice to be given at the expense of the Company.

            Section 7.12. Succession by Merger, etc. Any corporation into which
the Trustee may be merged or converted or with which it may be consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Trustee shall be a party, or any corporation succeeding to all or
substantially all of the corporate trust business of the Trustee, shall be the
successor to the Trustee hereunder, provided such corporation shall be qualified
under Section 310(b) of the Trust Indenture Act of 1939, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding.

            In case at the time such successor to the Trustee shall succeed to
the trust created by this Subordinated Debt Indenture with respect to one or
more series of Securities, any of such securities shall have been authenticated
but not delivered, any such successor to the Trustee by merger, conversion or
consolidation may adopt the certificate of authentication of any predecessor
Trustee, and deliver such Security so authenticated; and in case at that time
any of such Securities shall not have been authenticated, any successor to the
Trustee may authenticate such Securities either in the name of such successor to
the Trustee or, if such successor to the Trustee is a successor by merger,
conversion or consolidation, the name of any predecessor hereunder; and in all
such cases such certificate shall have the full force which it is anywhere in
such Securities or in this Subordinated Debt Indenture provided that the
certificate of the Trustee shall have.

            Section 7.13. Appointment of Authenticating Agent. The Trustee may
appoint an Authenticating Agent or Agents which shall be authorized to act on
behalf of the Trustee to authenticate Securities issued upon original issue and
upon exchange, registration of transfer, partial conversion or partial
redemption or pursuant to Section 2.07 and Securities so authenticated shall be
entitled to the benefits of this Subordinated Debt Indenture and shall be valid
and obligatory for all purposes as if authenticated by the Trustee hereunder.
Wherever reference is made in this Subordinated Debt Indenture to the
authentication and delivery of

                                       43
<PAGE>

Securities by the Trustee or the Trustee's certificate of authentication, such
reference shall be deemed to include authentication and delivery on behalf of
the Trustee by an Authenticating Agent and a certificate of authentication
executed on behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent shall be acceptable to the Company and shall at all times
be a corporation organized and doing business under the laws of the United
States of America, any State thereof or the District of Columbia, authorized
under such laws to act as Authenticating Agent, having a combined capital and
surplus of not less than $10,000,000 and subject to supervision or examination
by Federal or State authority. If such Authenticating Agent publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section 7.13,
the combined capital and surplus of such Authenticating Agent shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section 7.13, such
Authenticating Agent shall resign immediately in the manner and with the effect
specified in this Section 7.13.

            Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate agency or corporate trust business of an Authenticating Agent,
shall continue to be an Authenticating Agent, provided such corporation shall be
otherwise eligible under this Section 7.13, without the execution or filing of
any paper or any further act on the part of the Trustee or the Authenticating
Agent.

            An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 7.13, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Company and (i) if any
Unregistered Securities are then Outstanding, shall publish notice of such
appointment at least once in an Authorized Newspaper in the Borough of
Manhattan, The City of New York, at least once in an Authorized Newspaper in
London, and, if any Unregistered Securities are listed on the Luxembourg Stock
Exchange, at least one in an Authorized Newspaper in Luxembourg and (ii) shall
mail written notice of such appointment by first-class mail, postage prepaid, to
all holders of Securities as their names and addresses appear in the Security
register. Any successor Authenticating Agent upon acceptance of its appointment
hereunder shall become vested with all the rights, powers and duties of its
predecessor hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section 7.13.

            The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section 7.13.

            If an appointment is made pursuant to this Section 7.13, the
Securities may have endorsed thereon, in addition to the Trustee's certificate
of authentication, an alternative certificate of authentication in the following
form:

                                       44
<PAGE>

Dated:

            This is one of the Notes referred to in the within-mentioned
Subordinated Debt Indenture.

                                            JPMORGAN CHASE BANK, N.A.,
                                                 As Trustee

                                            [AUTHENTICATING AGENT],
                                                 As Authenticating Agent

                                            By:________________________,
                                                 Authorized Signatory

                                 ARTICLE EIGHT

                         CONCERNING THE SECURITYHOLDERS

            Section 8.01. Action by Securityholders. Whenever in this
Subordinated Debt Indenture it is provided that the holders of a specified
percentage in aggregate principal amount of the Securities of any or all series
may take any action (including the making of any demand or request, the giving
of any notice, consent or waiver or the taking of any other action) the fact
that at the time of taking any such action the holders of such specified
percentage have joined therein may be evidenced (a) by any instrument or any
number of instruments of similar tenor executed by such Securityholders in
person or by agent or proxy appointed in writing, or (b) by the record of such
holders of Securities voting in favor thereof at any meeting of such
Securityholders duly called and held in accordance with the provisions of
Article Nine, or (c) by a combination of such instrument or instruments and any
such record of such a meeting of such Securityholders.

            Section 8.02. Proof of Execution by Securityholders. Subject to the
provisions of Sections 7.01, 7.02 and 9.05, the execution of any instrument by a
Securityholder or his agent or proxy may be proved in the following manner: The
fact and date of the execution by any holder of any instrument may be proved by
the certificate of any notary public or other officer of any jurisdiction
authorized to take acknowledgements of deeds or administer oaths that the Person
executing such instruments acknowledged to him the execution thereof, or by an
affidavit of a witness to such execution sworn to before any such notary or
other such officer. Where such execution is by or on behalf of any legal entity
other than an individual, such certificate or affidavit shall also constitute
sufficient proof of the authority of the Person executing the same. The fact of
the holding by any holder of an Unregistered Security, and the identifying
number of such Security and the date of his holding the same, may be proved by
the production of such Security or by a certificate executed by any trust
company, bank, banker or recognized securities dealer wherever situated
satisfactory to the Trustee if such certificate shall be deemed by the

                                       45

<PAGE>

Trustee to be satisfactory. Each such certificate shall be dated and shall state
that on the date thereof a Security of such series bearing a specified
identifying number was deposited with or exhibited to such trust company, bank,
banker or recognized securities dealer by the Person named in such certificate.
Any such certificate may be issued in respect of one or more Unregistered
Securities of one or more series specified therein. The holding by the Person
named in any such certificate of any Unregistered Securities of any series
specified therein shall be presumed to continue for a period of one year from
the date of such certificate unless at the time of any determination of such
holding (1) another certificate bearing a later date issued in respect of the
same Securities shall be produced, or (2) the Security specified in such
certificate shall be produced by some other Person, or (3) the Security
specified in such certificate shall have ceased to be Outstanding. Subject to
Sections 7.01 and 7.02, the fact and date of the execution of any such
instrument and the amount and numbers of Securities held by the Person so
executing such instrument and the amount and numbers of any Security or
Securities may also be proven in accordance with such reasonable rules and
regulations as may be prescribed by the Trustee for the relevant series or in
any other manner which the Trustee for such series may deem sufficient.

            The ownership of Registered Securities shall be proved by the
registry books of the Company or by a certificate of the Person designated by
the Company to act as repository in accordance with the provisions of Section
2.06.

            The record of any Securityholders' meeting shall be proved in the
manner provided in Section 9.07.

            The Company may set a record date for purposes of determining the
identity of holders of Registered Securities of any series entitled to vote or
consent to any action referred to in Section 8.01, which record date may be set
at any time or from time to time by notice to the Trustee, for any date or dates
(in the case of any adjournment or reconsideration) not more than 60 days nor
less than five days prior to the proposed date of such vote or consent, and
thereafter, notwithstanding any other provisions hereof, with respect to
Registered Securities of any series, only holders of Registered Securities of
such series of record on such record date shall be entitled to so vote or give
such consent or revoke such vote or consent.

            Section 8.03. Who are Deemed Absolute Owners. The Company, the
Trustee and any agent of the Company or of the Trustee may deem the Person in
whose name any Registered Security shall be registered upon the books of the
Company to be, and may treat such Person as, the absolute owner of such Security
(whether or not such Security shall be overdue and notwithstanding any notation
of ownership or other writing thereon) for the purpose of receiving payment of
or on account of the principal of, premium, if any, and interest, if any, on
such Security and for all other purposes; and neither the Company nor the
Trustee nor any agent of the Company or of the Trustee shall be affected by any
notice to the contrary. The Company, the Trustee and any agent of the Company or
the Trustee may treat the holder of the Unregistered Security and the holder of
any Coupon as the absolute owner of such Unregistered Security or Coupon
(whether or not such Unregistered Security or Coupon shall be overdue) for the
purpose of receiving payment thereof or on account thereof and for all other
purposes and neither the Company, the Trustee, nor any agent of the Company or
the Trustee shall be affected by any notice to the contrary. All such payments
so made to any holder for the time being, or

                                       46

<PAGE>

upon his order, shall be valid, and, to the extent of the sum or sums so paid,
effectual to satisfy and discharge the liability for moneys payable upon any
such Security or Coupon.

            Section 8.04. Company-Owned Securities Disregarded. In determining
whether the holders of the requisite aggregate principal amount of Securities
have concurred in any demand, request, notice, direction, consent or waiver
under this Subordinated Debt Indenture, Securities which are owned by the
Company or any other obligor on the Securities with respect to which such
determination is being made or by any Person directly or indirectly controlling
or controlled by or under direct or indirect common control with the Company or
any other obligor on the Securities with respect to which such determination is
being made shall be disregarded and deemed not to be Outstanding for the purpose
of any such determination; provided, that for the purposes of determining
whether the Trustee shall be protected in relying on any such demand, request,
notice, direction consent or waiver, only Securities which a Responsible Officer
of the Trustee knows are so owned shall be so disregarded. Securities so owned
which have been pledged in good faith may be regarded as Outstanding for the
purposes of this Section 8.04 if the pledgee shall establish to the satisfaction
of the Trustee the pledgee's right to vote such Securities and that the pledgee
is not a Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company of any such other obligor. In
the case of a dispute as to such right, any decision by the Trustee taken upon
the advice of counsel shall be full protection to the Trustee.

            Section 8.05. Revocation of Consents; Future Holders Bound. At any
time prior to (but not after) the evidencing to the Trustee, as provided in
Section 8.01, of the taking of any action by the holders of the percentage in
aggregate principal amount of the Securities of any or all series, as the case
may be, specified in this Subordinated Debt Indenture in connection with such
action, any holder of a Security which is shown by the evidence to be included
in the Securities the holders of which have consented to such action may, by
filing written notice with the Trustee at its principal office and upon proof of
holding as provided in Section 8.02, revoke such action so far as concerns such
Security. Except as aforesaid any such action taken by the holder of any
Security shall be conclusive and binding upon such holder and upon all future
holders of such Security, irrespective of whether or not any notation in regard
thereto is made upon such Security or any Security issued in exchange or
substitution therefor.

                                  ARTICLE NINE

                            SECURITYHOLDERS' MEETINGS

            Section 9.01. Purposes of Meetings. A meeting of holders of
Securities of any or all series may be called at any time and from time to time
pursuant to the provisions of this Article Nine for any of the following
purposes:

            (1) to give any notice to the Company or to the Trustee, or to give
      any directions to the Trustee, or to consent to the waiving of any default
      hereunder and its consequences, or to take any other action authorized to
      be taken by Securityholders pursuant to any of the provisions of Article
      Six;

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<PAGE>

            (2) to remove the Trustee and nominate a successor Trustee pursuant
      to the provisions of Article Seven;

            (3) to consent to the execution of an indenture or indentures
      supplemental hereto pursuant to the provisions of Section 10.02; or

            (4) to take any other action authorized to be taken by or on behalf
      of the holders of any specified aggregate principal amount of the
      Securities of any or all series, as the case may be, under any other
      provision of this Subordinated Debt Indenture or under applicable law.

            Section 9.02. Call of Meeting by Trustee. The Trustee may at any
time call a meeting of holders of Securities of any or all series to take any
action specified in Section 9.01, to be held at such time and at such place as
the Trustee shall determine. Notice of every meeting of the holders of
Securities of any or all series, 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 (i) if any Unregistered Securities of a series affected are then
Outstanding, by giving notice of such meeting to the holders thereof, by
publication at least once in an Authorized Newspaper in the Borough of
Manhattan, The City of New York, at least once in an Authorized Newspaper in
London, and, if any such Unregistered Securities are listed on the Luxembourg
Stock Exchange, at least one in an Authorized Newspaper in Luxembourg, (ii) if
any Unregistered Securities of a series affected are then Outstanding, by
mailing notice of such a meeting to the holders thereof who have filed their
names and addresses with the Trustee pursuant to Section 313(c)(2) of the Trust
Indenture Act of 1939 at such addresses as were so furnished to the Trustee and
(iii) by mailing notice of such meeting to the holders of then Outstanding
Registered Securities of each series affected at their addresses as they shall
appear on the registry books of the Company. Such notice shall be given not less
than 10 nor more than 90 days prior to the date fixed for the meeting.

            Section 9.03. Call of Meeting by Company or Securityholders. In case
at any time a duly authorized officer of the Company in the name of and on
behalf of the Company or the holders of at least ten percent in aggregate
principal amount of the Securities then Outstanding of any series that may be
affected by the action proposed to be taken at the meeting, shall have requested
the Trustee to call a meeting of the holders of Securities of all series that
may be so affected, by written request setting forth in reasonable detail the
action proposed to be taken at the meeting, and the Trustee shall not have given
the notice of such meeting within 20 days after receipt of such request, then
the Company or such Securityholders, in the amount specified above, may
determine the time and the place for such meeting and may call such meeting to
take any action authorized in Section 9.01, by giving notice thereof as provided
in Section 9.02.

            Section 9.04. Qualifications for Voting. To be entitled to vote at
any meeting of Securityholders, a Person shall (a) be a holder of one or more
Securities with respect to which such meeting is being held or (b) be a Person
appointed by an instrument in writing as proxy by a holder of one or more such
Securities. The only Persons who shall be entitled to be present or to speak at
any meeting of Securityholders shall be the Persons entitled to vote at such
meeting and

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<PAGE>

their counsel and any representatives of the Trustee and its counsel and any
representatives of the Company and its counsel.

            Section 9.05. Quorum; Adjourned Meetings. The Persons entitled to
vote a majority in aggregate principal amount of the Securities of the relevant
series at the time Outstanding shall constitute a quorum for the transaction of
all business specified in Section 9.01. No business shall be transacted in the
absence of a quorum (determined as provided in this Section 9.05). In the
absence of a quorum within 30 minutes after the time appointed for any such
meeting, the meeting shall, if convened at the request of the holders of
Securities (as provided in Section 9.03), be dissolved. In any other case the
meeting shall be adjourned for a period of not less than ten days as determined
by the chairman of the meeting. In the absence of a quorum at any such adjourned
meeting, such adjourned meeting shall be further adjourned for a period of not
less than ten days as determined by the chairman of the meeting. Notice of the
reconvening of any adjourned meeting shall be given as provided in Section 9.02,
except that such notice need be published only once and must be mailed or
published not less than five days prior to the date on which the meeting is
schedule to be reconvened.

            Subject to the foregoing, at the second reconvening of any meeting
adjourned for lack of a quorum, the Persons entitled to vote 25% in aggregate
principal amount of the Securities of the relevant series then Outstanding shall
constitute a quorum for the taking of any action set forth in the notice of the
original meeting. Notice of the reconvening of an adjourned meeting shall state
expressly the percentage of the aggregate principal amount of the Securities of
the relevant series then Outstanding which shall constitute a quorum.

            At a meeting or any adjourned meeting duly convened and at which a
quorum is present as aforesaid, any resolution and all matters (except as
limited by the proviso in Section 10.02) shall be effectively passed and decided
if passed or decided by the Persons entitled to vote the lesser of (a) a
majority in aggregate principal amount of the Securities of the relevant series
then Outstanding and (b) 75% in aggregate principal amount of the Securities
represented and voting at the meeting.

            Any holder of a Security who has executed in person or by proxy and
delivered to the Trustee an instrument in writing complying with the provisions
of Article Eight shall be deemed to be present for the purposes of determining a
quorum and be deemed to have voted; provided that such holder of a Security
shall be considered as present or voting only with respect to the matters
covered by such instrument in writing.

            Section 9.06. Regulations. Notwithstanding any other provisions of
this Subordinated Debt Indenture, the Trustee may make such reasonable
regulations as it may deem advisable for any meeting of Securityholders, 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 think fit. Except as otherwise permitted or required by any such
regulations, the holding of Securities shall be proved in the manner specified
in Section 8.02 and the appointment of any proxy shall be proved in the manner
specified in Section 8.02.

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<PAGE>

            The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Securityholders as provided in Section 9.03, in which case the
Company or the Securityholders 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 majority vote of the meeting.

            Subject to the provisions of Section 8.04, at any meeting each
holder of Securities with respect to which such meeting is being held or proxy
for such holder shall be entitled to one vote for each $1,000 (or the equivalent
thereof in any foreign or composite currency) of principal amount (in the case
of Original Issue Discount Securities, such principal amount to be determined as
provided in the definition of "Security or Securities; Outstanding" in Section
1.01) of such Securities held or represented by him; provided, however, that no
vote shall be cast or counted at any meeting in respect of any such 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 other than
by virtue of such Securities held by him or instruments in writing as aforesaid
duly designating him as the Person to vote on behalf of other such
Securityholders. Any meeting of holders of Securities with respect to which a
meeting was duly called pursuant to the provisions of Section 9.02 or 9.03 may
be adjourned from time to time by a majority of those present, whether or not
constituting a quorum, and the meeting may be held as so adjourned without
further notice.

            Section 9.07. Voting. The vote upon any resolution submitted to any
meeting of holders of Securities with respect to which such meeting is being
held shall be by written ballots on which shall be subscribed the signatures of
such holder of Securities or of their representatives by proxy and the principal
amount (in the case of Original Issue Discount Securities, such principal amount
to be determined as provided in the definition of "Security or Securities;
Outstanding" in Section 1.01) 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 in duplicate of the
proceedings of each meeting of Securityholders 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 and setting
forth a copy of the notice of the meeting and showing that said notice was given
as provided in Section 9.02. The record will show the principal amount of the
Securities (in the case of Original Discount Securities, such principal amount
to be determined as provided in the definition of "Security or Securities;
Outstanding" in Section 1.01) voting in favor of or against any resolution. The
record shall be signed and verified by the affidavits of the permanent chairman
and secretary of the meeting and one of the duplicates shall be delivered to the
Company and the other 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.

            Section 9.08. No Delay of Rights by Meeting. Nothing in this Article
Nine shall be deemed or construed to authorize or permit, by reason of any call
of a meeting of

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<PAGE>

Securityholders of any or all series or any rights expressly or impliedly
conferred hereunder to make such call, any hindrance or delay in the exercise of
any right or rights conferred upon or reserved to the Trustee or to the
Securityholders of any or all such series under any of the provisions of this
Subordinated Debt Indenture or of the Securities.

                                  ARTICLE TEN

                             SUPPLEMENTAL INDENTURES

            Section 10.01. Supplemental Indentures without Consent of
Securityholders. The Company and the Trustee may from time to time and at any
time enter into an indenture or indentures supplemental hereto for one or more
of the following purposes:

            (a) to evidence the succession of another corporation to the
      Company, or successive successions, and the assumption by the successor
      corporation of the covenants, agreements and obligations of the Company
      pursuant to Article Eleven;

            (b) to add to the covenants of the Company such further covenants,
      restrictions or conditions for the protection of the holders of all or any
      series of Securities or Coupons appertaining to Unregistered Securities
      (and if such covenants are to be for the benefit of less than all
      Securities, stating that such covenants are expressly being included for
      the benefit of such series) as a duly authorized officer of the Company,
      on behalf of the Company, and the Trustee shall consider to be for the
      protection of the holders of such Securities or Coupons, and to make the
      occurrence, or the occurrence and continuance, of a default in any of such
      additional covenants, restrictions or conditions a default or an Event of
      Default permitting the enforcement of all or any of the several remedies
      provided in this Subordinated Debt Indenture as herein set forth;
      provided, however, that in respect of any such additional covenant,
      restriction or condition such supplemental indenture may provide for a
      particular period of grace after default (which period may be shorter or
      longer than that allowed in the case of other defaults) or may provide for
      an immediate enforcement upon such default or may limit the remedies
      available to the Trustee upon such default;

            (c) to provide for the issuance under this Subordinated Debt
      Indenture of Securities in coupon form (including Securities registrable
      as to principal only) and to provide for exchangeability of such
      Securities with the Securities of the same series issued hereunder in
      fully registered form and to make all appropriate changes for such
      purpose;

            (d) to establish the forms or terms of Securities of any series or
      of the Coupons appertaining to such Securities as permitted by Sections
      2.01 and 2.02;

            (e) to cure any ambiguity or to correct or supplement any provision
      contained herein or in any supplemental indenture which may be defective
      or inconsistent with any other provision contained herein or in any
      supplemental indenture, or to make such other provisions in regard to
      matters or questions arising under this Subordinated Debt

                                       51

<PAGE>

      Indenture which shall not adversely affect the interests of the holders of
      any Outstanding Securities or Coupons; and

            (f) to evidence and provide for the acceptance of appointment
      hereunder by a successor Trustee with respect to the Securities of one or
      more series or to add to or change any of the provisions of this
      Subordinated Debt Indenture as shall be necessary to provide for or
      facilitate the administration of the trusts hereunder by more than one
      Trustee, pursuant to the requirements of Section 7.11.

            The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer and assignment of any property thereunder, but the Trustee
shall not be obligated to, but may in its discretion, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Subordinated Debt Indenture or otherwise.

            Any supplemental indenture authorized by the provisions of this
Section 10.01 may be executed by the Company and the Trustee without the consent
of the holders of any of the Securities at the time Outstanding, notwithstanding
any of the provisions of Section 10.02.

            Section 10.02. Supplemental Indentures with Consent of
Securityholders. With the consent (evidenced as provided in Sections 8.01 and
8.02) of the holders of not less than 66-2/3% in aggregate principal amount of
the Outstanding Securities of each series (each series voting as a class) (in
the case of Original Issue Discount Securities, such principal amount to be
determined as provided in the definition of "Security or Securities;
Outstanding" in Section 1.01) affected by such supplemental indenture at the
time Outstanding, the Company and the Trustee may from time to time and at any
time enter into an indenture or indentures supplemental hereto for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Subordinated Debt Indenture or of any supplemental indenture
or modifying in any manner the rights of the holders of the Outstanding
Securities of each such series or the Coupons appertaining to such Securities;
provided, however, that no such supplemental indenture shall (i) extend the
fixed maturity of any Outstanding Security, or reduce the rate or extend the
time of payment of interest, if any, thereon, or reduce the principal amount or
premium, if any, thereof, or make the principal thereof or premium, if any, or
interest, if any, thereon payable in any coin or currency other than that
provided in any Outstanding Security or Coupon, or impair the right of any
holder of a Security to institute suit for any such payment, or reduce the
amount of the principal of an Outstanding Original Issue Discount Security that
would be due and payable upon an acceleration of the maturity thereof pursuant
to Section 6.01 or adversely affect the right of repayment, if any, at the
option of the holder, or extend the time, or reduce the amount of any payment to
any sinking fund or analogous obligation relating to any Security, (ii) reduce
the percentage in principal amount of Outstanding Securities of any series, the
holders of which are required to consent to any such supplemental indenture or
any waiver of any past default or Event of Default pursuant to Section 6.07 or
(iii) modify any provision of Section 6.07 or 10.02 (except to increase any such
percentage or to provide that certain other provisions of this Subordinated Debt
Indenture cannot be modified or waived without the consent of the holder of each
Security so affected) without, in the case of each of the foregoing clauses (i),
(ii) and (iii), the consent of the holder of each Security so affected. A
supplemental

                                       52

<PAGE>

indenture which changes or eliminates any covenant or other provision of this
Subordinated Debt Indenture which has expressly been included solely for the
benefit of one or more particular series of Outstanding Securities, or which
modifies the rights of the holders of Outstanding Securities of such series or
of Coupons appertaining to such Securities with respect to such covenant or
other provision, shall be deemed not to affect the rights under this
Subordinated Debt Indenture of the holders of Securities of any other series or
of Coupons appertaining to such Securities.

            Upon the request of the Company and upon the filing with the Trustee
of evidence of the consent of Securityholders as aforesaid, the Trustee shall
join with the Company in the execution of such supplemental indenture unless
such supplemental indenture affects the Trustee's own rights, duties or
immunities under this Subordinated Debt Indenture or otherwise, in which case
the Trustee may in its discretion, but shall not be obligated to, enter into
such supplemental indenture.

            It shall not be necessary for the consent of the Securityholders
under this Section 10.02 to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such consent shall approve
the substance thereof.

            Section 10.03. Compliance with Trust Indenture Act; Effect of
Supplemental Indentures. Any supplemental indenture executed pursuant to the
provisions of this Article Ten shall comply with the Trust Indenture Act of 1939
as then in effect. Upon the execution of any supplemental indenture pursuant to
the provisions of this Article Ten, this Subordinated Debt Indenture shall be
deemed to be modified and amended in accordance therewith and the respective
rights, limitations of rights, obligations, duties and immunities under this
Subordinated Debt Indenture of the Trustee, the Company and the holders of
Securities shall thereafter be determined, exercised and enforced hereunder
subject in all respects to such modifications and amendments, and all the terms
and conditions of any such supplemental indenture shall be and be deemed to be
part of the terms and conditions of this Subordinated Debt Indenture for any and
all purposes.

            Section 10.04. Notation on Securities. Securities authenticated and
delivered after the execution of any supplemental indenture pursuant to the
provisions of this Article Ten may bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture. If the
Company or the Trustee shall so determine, new Securities of any series so
modified as to conform, in the opinion of the Trustee and a duly authorized
officer of the Company, to any modification of this Subordinated Debt Indenture
contained in any such supplemental indenture may be prepared and executed by the
Company, authenticated by the Trustee and delivered in exchange for the
Securities of such series then Outstanding.

            Section 10.05. Evidence of Compliance of Supplemental Indenture to
be Furnished Trustee. The Trustee, subject to the provisions of Sections 7.01
and 7.02, shall be entitled to receive an Officers' Certificate and an Opinion
of Counsel as conclusive evidence that any supplemental indenture executed
pursuant hereto complies with the requirements of this Article Ten.

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<PAGE>

                                 ARTICLE ELEVEN

                    CONSOLIDATION, MERGER, SALE OR CONVEYANCE

            Section 11.01. Company May Not Consolidate, etc., Except Under
Certain Conditions. The Company covenants that it will not merge or consolidate
with any other Person or sell, convey, transfer or otherwise dispose of all or
substantially all of its assets to any other Person, unless (i) either the
Company shall be the continuing corporation, or the successor Person (if other
than the Company) shall be a corporation organized and existing under the laws
of the United States of America or a State thereof and such corporation shall
expressly assume the due and punctual payment of the principal of, and premium,
if any, and interest, if any, on all the Outstanding Securities and Coupons, if
any, according to their tenor, and the due and punctual performance and
observance of all of the covenants and conditions of this Subordinated Debt
Indenture to be performed by the Company by supplemental indenture satisfactory
to the Trustee, executed and delivered to the Trustee by such corporation and
(ii) the Company or such successor corporation, as the case may be, shall not,
immediately after such merger or consolidation, or such sale, conveyance,
transfer or other disposition, be in default in the performance of any such
covenant or condition. In the event of any such sale, conveyance (other than by
way of lease), transfer or other disposition, the predecessor company may be
dissolved, wound up and liquidated at any time thereafter.

            Section 11.02. Successor Corporation to be Substituted. In case of
any such consolidation, merger, sale, conveyance (other than by way of lease),
transfer or other disposition, and upon any such assumption by the successor
corporation, such successor corporation shall succeed to and be substituted for
the Company, with the same effect as if it had been named herein as the Company,
and the Company shall be relieved of any further obligation under this
Subordinated Debt Indenture and under the Outstanding Securities and Coupons, if
any. Such successor corporation thereupon may cause to be signed, and may issue
either in its own name or in the name of General Electric Capital Corporation,
any or all of the Securities issuable hereunder together with any Coupons
appertaining thereto which theretofore shall not have been signed by the Company
and delivered to the Trustee; and, upon the order of such successor corporation,
instead of the Company, and subject to all the terms, conditions and limitations
in this Subordinated Debt Indenture prescribed, the Trustee shall authenticate
and deliver any Securities together with any Coupons appertaining thereto which
previously shall have been signed and delivered by the officers of the Company
to the Trustee for authentication, and any Securities which such successor
corporation thereafter shall cause to be signed and delivered to the Trustee for
that purpose. All the Securities so issued together with any Coupons
appertaining thereto shall in all respects have the same legal rank and benefit
under this Subordinated Debt Indenture as the Securities theretofore or
thereafter issued in accordance with the terms of this Subordinated Debt
Indenture as though all of such Securities and Coupons appertaining thereto had
been issued at the date of the execution hereof.

            In case of any such consolidation, merger, sale, conveyance,
transfer or other disposition, such changes in phraseology and form (but not in
substance) may be made in the Securities and Coupons thereafter to be issued as
may be appropriate.

                                       54

<PAGE>

            Section 11.03. Documents to be Given Trustee. The Trustee, subject
to the provisions of Sections 7.01 and 7.02, shall be entitled to receive an
Officers' Certificate and an Opinion of Counsel as conclusive evidence that any
such consolidation, merger, sale, conveyance, transfer or other disposition, and
any such assumption, comply with the provisions of this Article Eleven.

                                 ARTICLE TWELVE

                     SATISFACTION AND DISCHARGE OF INDENTURE

            Section 12.01. Discharge of Indenture. When (a) the Company shall
deliver to the Trustee for cancellation all Securities theretofore authenticated
and all unmatured Coupons appertaining thereto (other than any Securities or
Coupons which shall have been destroyed, lost or stolen or in lieu of or in
substitution for which other Securities or Coupons shall have been authenticated
and delivered, or which shall have been paid, pursuant to the provisions of
Section 2.07) and not theretofore canceled or (b) all the Securities and all
unmatured Coupons appertaining thereto not theretofore canceled or delivered to
the Trustee for cancellation shall have become due and payable, or are by their
terms to become due and payable within one year or are to be called for
redemption within one year under arrangements satisfactory to the Trustee for
the giving of notice of redemption, and the Company shall deposit with the
Trustee, in trust, funds sufficient to pay at maturity or upon redemption all of
the Securities and Coupons appertaining thereto (other than any (i) Securities
or Coupons which shall have been mutilated, destroyed, lost or stolen and in
lieu of or in substitution for which other Securities or Coupons shall have been
authenticated and delivered, or which shall have been paid pursuant to the
provisions of Section 2.07 or (ii) Securities or Coupons for whose payment money
has theretofore been deposited in trust and thereafter repaid to the Company as
provided in Section 12.04) not theretofore canceled or delivered to the Trustee
for cancellation, including principal, premium, if any, and interest, if any,
due or to become due to such date of maturity or date fixed for redemption, as
the case may be, and if in either case the Company shall also pay or cause to be
paid all other sums payable hereunder by the Company, then this Subordinated
Debt Indenture shall cease to be of further effect (except as to (i) rights of
registration of transfer and exchange of Securities, (ii) substitution of
mutilated, defaced, destroyed, lost or stolen Securities, (iii) rights of
holders to receive payments of principal thereof and interest thereon, and
remaining rights of the holders to receive mandatory sinking fund payments, if
any, (iv) the rights, obligations and immunities of the Trustee hereunder and
(v) the rights of the Securityholders as beneficiaries hereof with respect to
the property so deposited with the Trustee payable to all or any of them), 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
Subordinated Debt Indenture, the Company, however, hereby agreeing to reimburse
the Trustee for any costs or expenses thereafter reasonably and properly
incurred by the Trustee in connection with this Subordinated Debt Indenture or
the Securities or Coupons appertaining thereto.

            Section 12.02. Deposited Moneys to be Held in Trust by Trustee. All
moneys deposited with the Trustee pursuant to the provisions of Section 12.01
shall be held in trust and applied by it to the payment, either directly or
through any paying agent (including the Company if acting as its own paying
agent), to the holders of the particular Securities or Coupons for

                                       55

<PAGE>

payment or redemption of which such moneys have been deposited with the Trustee,
of all sums due and to become due thereon for principal, premium, if any, and
interest, if any.

            Section 12.03. Paying Agent to Repay Moneys Held. Upon the
satisfaction and discharge of this Subordinated Debt Indenture, all moneys then
held by any paying agent of the Securities (other than the Trustee) shall, upon
demand of the Company, be repaid to it or paid to the Trustee, and thereupon
such paying agent shall be released from all further liability with respect to
such moneys.

            Section 12.04. Return of Unclaimed Moneys. Any moneys, deposited
with or paid to the Trustee for payment of the principal of, premium, if any, or
interest, if any, on any Securities or Coupons appertaining thereto and not
applied but remaining unclaimed by the holders of such Securities or Coupons for
two years after the date upon which the principal of, premium, if any, or
interest, if any, on such Securities or Coupons, as the case may be, shall have
become due and payable, shall be repaid to the Company by the Trustee upon
direction of the Company; and the holder of any such Securities or Coupons shall
thereafter look only to the Company for any payment which such holder may be
entitled to collect.

                                ARTICLE THIRTEEN

                    IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
                             OFFICERS AND DIRECTORS

            Section 13.01. Indenture and Securities Solely Corporate
Obligations. No recourse for the payment of the principal of, premium, if any,
or interest, if any, on any Security or any Coupon appertaining thereto, or for
any claim based thereon or otherwise in respect thereof, and no recourse under
or upon any obligation, covenant or agreement of the Company in this
Subordinated Debt Indenture or in any supplemental indenture, or in any Security
or Coupon, or because of the creation of any indebtedness represented thereby,
shall be had against any incorporator, stockholder, officer or director, as
such, past, present or future, of the Company or of any successor corporation,
either directly or through the Company or 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; it being expressly understood that all such
liability is hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Subordinated Debt Indenture and the
issue of the Securities and Coupons appertaining thereto.

                                ARTICLE FOURTEEN

                                  SUBORDINATION

            Section 14.01. Agreement To Subordinate. The Company agrees, and
each Securityholder 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 Fourteen, to the prior payment of all
Senior Indebtedness, and that such subordination is for the benefit of and
enforceable by the holders of Senior Indebtedness. Only obligations of the
Company which are Senior Indebtedness shall rank senior to the Securities in
accordance with

                                       56
<PAGE>

the provisions set forth herein. All provisions of this Article Fourteen shall
be subject to Section 14.11.

            Section 14.02. Liquidation, Dissolution, Bankruptcy. Upon any
payment or distribution of the assets of the Company to creditors upon a total
or partial liquidation or a total or partial dissolution of the Company or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to the Company or its respective properties:

            (1) holders of Senior Indebtedness shall be entitled to receive
      payment in full of the Senior Indebtedness before the holders of
      Securities shall be entitled to receive any payment of principal of or
      interest on or other amounts with respect to the Securities; and

            (2) until the Senior Indebtedness is paid in full, any distribution
      to which the holders of Securities would be entitled but for this Article
      Fourteen shall be made to holders of Senior Indebtedness as their
      interests may appear, except that holders of Securities may receive shares
      of stock and any debt securities that are subordinated to Senior
      Indebtedness to at least the same extent as the Securities and do not
      provide for the payment of principal prior to the Stated Maturity of all
      Senior Indebtedness.

            Section 14.03. Default on Senior Indebtedness. The Company may not
pay the principal of or interest on or other amounts with respect to the
Securities, make any deposit pursuant to Section 4.04 or repurchase, redeem or
otherwise retire any Securities (collectively, "pay the Securities") if (i) any
Senior Indebtedness is not paid when due and payable or (ii) any other default
on Senior Indebtedness occurs and the maturity of such Senior Indebtedness is
accelerated in accordance with its terms unless, in either case, (x) the default
has been cured or waived and any such acceleration has been rescinded or (y)
such Senior Indebtedness has been paid in full.

            Section 14.04. When Distributions Must Be Paid Over. If a
distribution is made to the holders of Securities that because of this Article
Fourteen should not have been made to them, the holders of Securities who
receive the distribution shall hold it in trust for holders of Senior
Indebtedness and pay it over to them as their interests may appear.

            Section 14.05. Subrogation. After all Senior Indebtedness is paid in
full and until the Securities are paid in full, holders of Securities shall be
subrogated to the rights of holders of Senior Indebtedness to receive
distributions applicable to Senior Indebtedness. A distribution made under this
Article Fourteen to holders of Senior Indebtedness which otherwise would have
been made to holders of Securities is not, as between the Company and holders of
Securities, a payment by the Company on Senior Indebtedness.

            Section 14.06. Relative Rights. This Article Fourteen defines the
relative rights of holders of Securities and holders of Senior Indebtedness.
Nothing in this Subordinated Debt 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 or other amounts with respect to the
      Securities in accordance with their terms; or

                                       57

<PAGE>

            (2) prevent the Trustee or any holder of Securities from exercising
      its available remedies upon an Event of Default, subject to the rights of
      holders of Senior Indebtedness to receive distributions otherwise payable
      to holders of Securities.

            Section 14.07. Subordination May Not Be Impaired by Company. No
right of any holder of Senior Indebtedness 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 by the failure of the Company to comply with this
Subordinated Debt Indenture.

            Section 14.08. Rights of Trustee and Paying Agent. Notwithstanding
Section 14.03, the Trustee or paying agent may continue to make payments on the
Securities and shall not be charged with knowledge of the existence of facts
that would prohibit the making of any such payments unless, not less than two
Business Days prior to the date of such payment, an officer of the Trustee
responsible for the administration of this Subordinated Debt Indenture receives
notice satisfactory to it in accordance with Section 15.03 that payments may not
be made under this Article Fourteen. The Company, the Security registrar or
co-registrar, the paying agent, a Representative or a holder of Senior
Indebtedness may give the notice; provided, however, that, if an issue of Senior
Indebtedness has a Representative, only the Representative, rather than a holder
of Senior Indebtedness, may give the notice. The Trustee shall be entitled to
assume that any prohibition on the right of the Company to pay the Securities
provided for in this Article Fourteen has not terminated unless an officer of
the Trustee responsible for the administration of this Subordinated Debt
Indenture receives written notice of such termination in accordance with Section
15.03 from any of the Persons specified in the foregoing sentence.

            The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. The
Security registrar and co-registrar and the paying agent may do the same with
like rights. The Trustee shall be entitled to all the rights set forth in this
Article Fourteen with respect to any Senior Indebtedness, which may at any time
be held by it, to the same extent as any other holder of Senior Indebtedness;
and nothing in Article Seven shall deprive the Trustee of any of its rights as
such holder. Nothing in this Article Fourteen shall apply to claims of, or
payments to, the Trustee under or pursuant to Article Seven.

            Section 14.09. Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior Indebtedness,
the distribution may be made and the notice given to their Representatives (if
any).

            Section 14.10. Article Fourteen Not To Prevent Events of Default or
Limit Right To Accelerate. The failure to make a payment pursuant to the
Securities by reason of any provision in this Article Fourteen shall not be
construed as preventing the occurrence of an Event of Default. Nothing in this
Article Fourteen shall have any effect on the right of the holders of Securities
or the Trustee to accelerate the maturity of the Securities.

            Section 14.11. Trust Moneys Not Subordinated. Notwithstanding
anything contained herein to the contrary, payments from money held in trust
under Section 7.05 or 12.02 by the Trustee or any paying agent for the payment
of principal of and interest or other amounts on the Securities shall not be
subordinated to the prior payment of any Senior Indebtedness, or

                                       58

<PAGE>

subject to the restrictions set forth in this Article Fourteen, and none of the
Trustee, any paying agent or the holders of Securities shall be obligated to pay
over any such amount to the Company, any holder of Senior Indebtedness, any
Representative or any other creditor of the Company.

            Section 14.12. Trustee Entitled to Rely. Upon any payment or
distribution pursuant to this Article Fourteen, the Trustee and the holders of
Securities shall be entitled to rely (i) upon any order or decree of a court of
competent jurisdiction in which any proceedings of the nature referred to in
Section 14.02 are pending, (ii) upon a certificate of the liquidating trustee or
agent or other Person making such payment or distribution to the Trustee or to
the holders of Securities or (iii) upon the Representatives for the holders of
Senior Indebtedness or upon the holders of Senior Indebtedness for which there
are no Representatives for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of the Senior
Indebtedness, 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 Fourteen. In the event that the
Trustee determines, in good faith, that further evidence is required with
respect to the right of any Person as a holder of Senior Indebtedness to
participate in any payment or distribution pursuant to this Article Fourteen,
the Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Indebtedness held by such
Person, the extent to which such Person is entitled to participate in such
payment or distribution and other facts pertinent to the rights of such Person
under this Article Fourteen and, if such evidence is not furnished, the Trustee
may defer any payment to such Person pending judicial determination as to the
right of such Person to receive such payment.

            Section 14.13. Trustee To Effectuate Subordination. Each holder of
Securities by accepting a Security authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the holders of Securities and the holders
of Senior Indebtedness as provided in this Article Fourteen and appoints the
Trustee as attorney-in-fact for any and all such purposes.

            Section 14.14. Trustee Not Fiduciary for Holders of Senior
Indebtedness. The Trustee, in its capacity as Trustee or paying agent hereunder,
shall not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness and shall not be liable in either capacity to any such holders if
it shall mistakenly pay over or distribute to holders of Securities, the
Company, or any other Person, money or assets to which any holders of Senior
Indebtedness shall be entitled by virtue of this Article Fourteen or otherwise.

            Section 14.15. Reliance by Holders of Senior Indebtedness on
Subordination Provisions. Each holder of Securities by accepting a Security
acknowledges and agrees that the foregoing subordination provisions are, and are
intended to be, an inducement and a consideration to each holder of any Senior
Indebtedness whether such Senior Indebtedness was created or acquired before or
after the issuance of the Securities, to acquire and continue to hold, or to
continue to hold, such Senior Indebtedness and such holder of Senior
Indebtedness shall be deemed conclusively to have relied on such subordination
provisions in acquiring and continuing to hold, or in continuing to hold, such
Senior Indebtedness.

                                       59

<PAGE>

                                ARTICLE FIFTEEN

                            MISCELLANEOUS PROVISIONS

            Section 15.01. Provisions Binding on Company's Successors. All the
covenants, stipulations, promises and agreements in this Subordinated Debt
Indenture contained by the Company shall bind its successors and assigns whether
so expressed or not.

            Section 15.02. Official Acts by Successor Corporation. Any act or
proceeding by any provision of this Subordinated Debt Indenture authorized or
required to be done or performed by any board, committee or officer of the
Company shall and may be done and performed with like force and effect by the
like board, committee or officer of any corporation that shall at the time be
the lawful sole successor of the Company.

            Section 15.03. Addresses for Notices, etc. Any notice or demand
which by any provision of this Subordinated Debt Indenture is required or
permitted to be given or served by the Trustee or by the holders of Securities
or Coupons on the Company may be given or served by being deposited postage
prepaid by first class mail in a post office letter box addressed (until another
address is filed by the Company with the Trustee) to General Electric Capital
Corporation, 260 Long Ridge Road, Stamford, Connecticut 06927, Attention Senior
Vice President-Corporate Treasury and Global Funding Operation. Any notice,
direction, request or demand by any holder of Securities or Coupons or the
Company to or upon the Trustee shall be deemed to have been sufficiently given
or made, for all purposes, if given or made in writing and (i) deposited (first
class postage prepaid) in a post office letter box, (ii) transmitted by
facsimile transmission or (iii) delivered by courier, in any event addressed and
delivered to the principal corporate trust office of the Trustee and to the
attention of its corporate trust office, which address at the date of execution
of this Subordinated Debt Indenture is 4 New York Plaza, 15th Floor, New York,
New York 10004, Attention: Institutional Trust Services.

            Section 15.04. New York Contract. This Subordinated Debt Indenture
and each Security, including any Coupons appertaining thereto, shall be deemed
to be a contract made under the laws of the State of New York, and for all
purposes shall be construed in accordance with the laws of said State.

            Section 15.05. Evidence of Compliance with Conditions Precedent.
Upon any application or demand by the Company to the Trustee to take any action
under any of the provisions of this Subordinated Debt Indenture, the Company
shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Subordinated Debt 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 have been complied with.

            Each certificate or opinion provided for in this Subordinated Debt
Indenture and delivered to the Trustee with respect to compliance with a
condition or covenant provided for in this Subordinated Debt Indenture shall
include: (1) a statement that the person making such certificate or opinion has
read such covenant or condition; (2) a brief statement as to the nature and
scope of the examination or investigation upon which the statements or opinion
contained in

                                       60

<PAGE>

such certificate or opinion are based; (3) a statement that, in the opinion of
such person, 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 or not, in
the opinion of such person, such condition or covenant has been complied with.

            Section 15.06. Legal Holidays. Except as may be otherwise provided
with respect to any Tranche or series of Securities, in any case where the date
of payment of interest, if any, on or principal of, or premium, if any, on the
Securities or the date fixed for redemption or repayment of any Security or
Coupon will not be a Business Day, then payment of such interest, if any, on or
principal of or premium, if any, on the Securities need not be made on such date
but may be made on the next succeeding Business Day, with the same force and
effect as if made on the date of maturity or date fixed for redemption or
repayment, and no interest shall accrue for the period from and after such date.

            Section 15.07. Securities in a Specified Currency Other Than
Dollars. Unless otherwise specified as contemplated by Section 2.02 with respect
to a particular series of Securities, whenever for purposes of this Subordinated
Debt Indenture any action may be taken by the holders of a specified percentage
in aggregate principal amount of Securities of all series or all series affected
by a particular action at the time Outstanding and, at such time, there are
Outstanding any Securities of any series which are denominated in a Specified
Currency other than Dollars (including Euros), then the principal amount of
Securities of such series which shall be deemed to be Outstanding for the
purpose of taking such action shall be that amount of Dollars that could be
obtained for such amount of such Specified Currency at the Market Exchange Rate.
For purposes of this Section 15.07, Market Exchange Rate shall mean the noon
Dollar buying rate in The City of New York for cable transfers of the Specified
Currency published by the Federal Reserve Bank of New York. If such Market
Exchange Rate is not available for any reason with respect to such Specified
Currency, the Trustee shall use, in its sole discretion and without liability on
its part, such quotation of the Federal Reserve Bank of New York or quotations
from one or more major banks in The City of New York or in the City of London,
England or such other quotations as the Trustee shall deem appropriate. The
provisions of this paragraph shall apply in determining the equivalent principal
amount in respect of Securities of a series denominated in a Specified Currency
other than Dollars in connection with any action taken by holders of Securities
pursuant to the terms of this Subordinated Debt Indenture, including, without
limitation, any determination contemplated in Section 6.01(d) or (e).

            All decisions and determinations of the Trustee regarding the Market
Exchange Rate or any alternative determination provided for in the preceding
paragraph shall be in its sole discretion and shall, in the absence of manifest
error, be conclusive to the extent permitted by law for all purposes and
irrevocably binding upon the Company and all Securityholders.

            Section 15.08. Trust Indenture Act to Control. If and to the extent
that any provision of this Subordinated Debt Indenture limits, qualifies or
conflicts with the duties imposed by, or with another provision (an
"incorporated provision") included in this Subordinated Debt Indenture by
operation of, Sections 310 to 318, inclusive, of the Trust Indenture Act of
1939, such imposed duties or incorporated provision shall control.

                                       61

<PAGE>

            Section 15.09. Table of Contents, Headings, etc. The table of
contents and the titles and headings of the articles and sections of this
Subordinated Debt Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof, and shall in no way modify or
restrict any of the terms or provisions hereof.

            Section 15.10. Execution in Counterparts. This Subordinated Debt
Indenture may be executed in any number of counterparts, each of which shall be
an original, but such counterparts shall together constitute but one and the
same instrument.

            Section 15.11. Separability. In case any provision in this
Subordinated Debt Indenture or in the Securities shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

                                       62
<PAGE>

                                   SIGNATURES

            IN WITNESS WHEREOF, the parties hereto have caused this Subordinated
Debt Indenture to be duly executed, all as of the date first written above.

                                           GENERAL ELECTRIC CAPITAL CORPORATION

                                           By: ________________________________
                                               Name:
                                               Title:

                                           JPMORGAN CHASE BANK, N.A.,
                                                as Trustee

                                           By: ________________________________
                                               Name:
                                               Title:

<PAGE>

STATE OF CONNECTICUT        )
                            ) SS:
COUNTY OF FAIRFIELD         )

            On the ____th day of _____________, 2005, before me personally came
_______________, to me known, who, being by me duly sworn, did depose and say
that he is an Authorized Person of GENERAL ELECTRIC CAPITAL CORPORATION, one of
the corporations described in and which executed the foregoing instrument, and
that he signed his name thereto by like authority.

            IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                              __________________________________
                                                          Notary Public

                                              Commission expires _________

<PAGE>

STATE OF NEW YORK           )
                            ) SS:
COUNTY OF NEW YORK          )

            On the ___th day of ________, 2005, before me personally came
__________________, to me known, who, being by me duly sworn, did depose and say
that he is a _____________ of JPMORGAN CHASE BANK, N.A., one of the corporations
described in and which executed the foregoing instrument, and that he signed his
name thereto by like authority.

            IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                              __________________________________
                                                          Notary Public

                                              Commission expires _________

                                        2<PAGE>
                                                                    EXHIBIT 10.1

                                                                  EXECUTION COPY

                        4,500,000 Shares of Common Stock

                         THE GREENBRIER COMPANIES, INC.

                             UNDERWRITING AGREEMENT

                                   May 5, 2005

BEAR, STEARNS & CO. INC.
WACHOVIA SECURITIES
BB&T CAPITAL MARKETS
D.A. DAVIDSON & CO.
     As Representatives of the
     several Underwriters named in
     Schedule I attached hereto (the "Representatives")
c/o Bear, Stearns & Co. Inc.
383 Madison Avenue
New York, New York 10179

Ladies/Gentlemen:

            The Greenbrier Companies, Inc., a corporation organized and existing
under the laws of Delaware (the "Company"), proposes, subject to the terms and
conditions stated herein, to issue and sell to the several underwriters named in
Schedule I hereto (the "Underwriters") an aggregate of 4,500,000 shares (the
"Firm Shares") of its common stock, par value $0.001 per share (the "Common
Stock"). For the sole purpose of covering over-allotments in connection with the
sale of the Firm Shares, at the option of the Underwriters, the Company also
proposes to sell to the Underwriters up to an aggregate additional 675,000
shares of Common Stock (the "Additional Shares"). The Firm Shares and any
Additional Shares purchased by the Underwriters are referred to herein as the
"Shares." The Shares are more fully described in the Registration Statement and
Prospectus referred to below. Bear, Stearns & Co. Inc. ("Bear Stearns") is
acting as lead manager (the "Lead Manager") in connection with the offering and
sale of the Shares contemplated herein (the "Offering").

                  1. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each of the Underwriters that:

                  (a) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
333-121181), and amendments thereto, and related preliminary prospectuses for
the registration under the Securities Act of 1933, as amended (the "Securities
Act"), of the Shares, which registration statement, as it may have been amended
(including post-effective amendments, if any), has been declared effective by
the Commission and copies of which have heretofore been delivered to the

<PAGE>

Underwriters. The registration statement, as it may have been amended at the
time it became effective, including the prospectus, financial statements,
schedules, exhibits and information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A or
434(d) under the Securities Act, is hereinafter referred to as the "Registration
Statement." If the Company has filed or is required pursuant to the terms hereof
to file a registration statement pursuant to Rule 462(b) under the Securities
Act registering additional shares of Common Stock (a "Rule 462(b) Registration
Statement"), then, unless otherwise specified, any reference herein to the term
"Registration Statement" shall be deemed to include such Rule 462(b)
Registration Statement. Other than the Registration Statement and, if
applicable, a Rule 462(b) Registration Statement, which, if filed, becomes
effective upon filing, no other document with respect to the Registration
Statement has heretofore been filed with the Commission. All of the Shares have
been registered under the Securities Act pursuant to the Registration Statement
or, if any Rule 462(b) Registration Statement is filed, will be duly registered
under the Securities Act with the filing of such Rule 462(b) Registration
Statement. No stop order suspending the effectiveness of either the Registration
Statement or the Rule 462(b) Registration Statement, if any, has been issued and
no proceeding for that purpose has been initiated or threatened by the
Commission. The Company, if required by the Securities Act and the rules and
regulations of the Commission (the "Rules and Regulations"), proposes to file
the Prospectus with the Commission pursuant to Rule 424(b) under the Securities
Act ("Rule 424(b)"). The prospectus, in the form in which it is to be filed with
the Commission pursuant to Rule 424(b), or, if the prospectus is not to be filed
with the Commission pursuant to Rule 424(b), the prospectus in the form included
as part of the Registration Statement at the time the Registration Statement
became effective, is hereinafter referred to as the "Prospectus," except that if
any revised prospectus or prospectus supplement shall be provided to the
Underwriters by the Company for use in connection with the Offering which
differs from the Prospectus (whether or not such revised prospectus or
prospectus supplement is required to be filed by the Company pursuant to Rule
424(b)), the term "Prospectus" shall also refer to such revised prospectus or
prospectus supplement, as the case may be, from and after the time it is first
provided to the Underwriters for such use. Any preliminary prospectus or
prospectus subject to completion included in the Registration Statement or filed
with the Commission pursuant to Rule 424 under the Securities Act is hereafter
called a "Preliminary Prospectus." Any reference herein to the Registration
Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer
to and include the documents incorporated by reference therein pursuant to Item
12 of Form S-3 which were filed under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), on or before the effective date of the
Registration Statement, the date of such Preliminary Prospectus or the date of
the Prospectus, as the case may be, and any reference herein to the terms
"amend," "amendment" or "supplement" with respect to the Registration Statement,
any Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include (i) the filing of any document under the Exchange Act after the
effective date of the Registration Statement, the date of such Preliminary
Prospectus or the date of the Prospectus, as the case may be, which is
incorporated therein by reference, and (ii) any such document so filed. All
references in this Agreement to the Registration Statement, the Rule 462(b)
Registration Statement, a Preliminary Prospectus and the Prospectus, or any
amendments or supplements to any of the foregoing, shall be deemed to include
any copy thereof filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval System ("EDGAR").

                                       2
<PAGE>

                  (b) At the time of the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement or the effectiveness of any
post-effective amendment to the Registration Statement, when the Prospectus is
first filed with the Commission pursuant to Rule 424(b) or Rule 434 under the
Securities Act ("Rule 434"), when any supplement to or amendment of the
Prospectus is filed with the Commission, when any document filed under the
Exchange Act was or is filed and at the Closing Date and the Additional Closing
Date, if any (as hereinafter respectively defined), the Registration Statement
and the Prospectus and any amendments thereof and supplements thereto complied
or will comply in all material respects with the applicable provisions of the
Securities Act, the Exchange Act and the Rules and Regulations and did not and
will not contain an untrue statement of a material fact and did not and will not
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein (i) in the case of the Registration
Statement, not misleading and (ii) in the case of the Prospectus or any related
Preliminary Prospectus in light of the circumstances under which they were made,
not misleading. When any Preliminary Prospectus was first filed with the
Commission (whether filed as part of the registration statement for the
registration of the Shares or any amendment thereto or pursuant to Rule 424(a)
under the Securities Act) and when any amendment thereof or supplement thereto
was first filed with the Commission, such Preliminary Prospectus and any
amendments thereof and supplements thereto complied in all material respects
with the applicable provisions of the Securities Act, the Exchange Act and the
Rules and Regulations and did not contain an untrue statement of a material fact
and did not omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. If Rule 434 is used, the Company
will comply with the requirements of Rule 434 and the Prospectus shall not be
"materially different," as such term is used in Rule 434, from the Prospectus
included in the Registration Statement at the time it became effective. No
representation and warranty is made in this subsection (b), however, with
respect to any information contained in or omitted from the Registration
Statement or the Prospectus or any related Preliminary Prospectus or any
amendment thereof or supplement thereto in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of any
Underwriter through the Lead Manager specifically for use therein. The parties
acknowledge and agree that such information provided by or on behalf of any
Underwriter consists solely of the material included in paragraphs six and nine
under the caption "Underwriting" in the Prospectus.

                  (c) Deloitte & Touche LLP, which certified the financial
statements and supporting schedules and information of the Company and its
subsidiaries that are included or incorporated by reference in the Registration
Statement or the Prospectus, is an independent registered public accounting firm
with respect to the Company as required by the Securities Act, the Exchange Act
and the Rules and Regulations.

                  (d) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, except as disclosed
in the Registration Statement and the Prospectus, the Company has not declared,
paid or made any dividends or other distributions of any kind on or in respect
of its capital stock and there has been no material adverse change or effect or
any development involving a prospective material adverse change or effect,
whether or not arising from transactions in the ordinary course of business, in
or affecting (i) the business, condition (financial or otherwise), results of
operations, stockholders' equity,

                                       3
<PAGE>

properties or prospects of the Company and each subsidiary of the Company (the
"Subsidiaries"), taken as a whole, (ii) the long-term debt or capital stock of
the Company or any of its Subsidiaries or (iii) the Offering or any other
transaction contemplated by this Agreement, the Registration Statement or the
Prospectus (a "Material Adverse Effect"). Since the date of the latest balance
sheet presented or incorporated by reference in the Registration Statement and
the Prospectus, neither the Company nor any Subsidiary has incurred or
undertaken any liability or obligation, whether direct or indirect, liquidated
or contingent, matured or unmatured, or entered into any transaction, including
any acquisition or disposition of any business or asset, which is material to
the Company and the Subsidiaries taken as a whole, except for liabilities,
obligations and transactions which are disclosed in the Registration Statement
and the Prospectus or the acquisition, disposition or leasing of railcars in the
ordinary course of business.

                  (e) The authorized, issued and outstanding capital stock of
he Company is as set forth in the Prospectus in the column headed "Actual"
under the caption "Capitalization" and, after giving effect to the Offering and
the other transactions contemplated by this Agreement, the Registration
Statement and the Prospectus, will be as set forth in the column headed "As
Adjusted" under the caption "Capitalization." All of the issued and outstanding
shares of capital stock of the Company are fully paid and nonassessable and have
been duly authorized and validly issued, in compliance with all applicable
state, federal and foreign securities laws and not in violation of or subject to
any preemptive or similar right that does or will entitle any person, upon the
issuance or sale of any security, to acquire from the Company or any Subsidiary
any Common Stock or other security of the Company or any Subsidiary or any
security convertible into, or exercisable or exchangeable for, Common Stock or
any other such security (any "Relevant Security"), except for such rights as may
have been fully satisfied or waived prior to the effectiveness of the
Registration Statement. The Shares to be delivered on the Closing Date and the
Additional Closing Date, if any (as hereinafter respectively defined), have been
duly authorized and, when delivered in accordance with this Agreement, will be
validly issued, fully paid and nonassessable, will have been issued in
compliance with all applicable state, federal and foreign securities laws and
will not have been issued in violation of or subject to any preemptive or
similar right that does or will entitle any person to acquire any Relevant
Security from the Company or any Subsidiary upon issuance or sale of Shares in
the Offering. The Common Stock and the Shares conform to the descriptions
thereof contained or incorporated by reference in the Registration Statement and
the Prospectus. Except as disclosed in the Registration Statement and the
Prospectus, neither the Company nor any Subsidiary has outstanding warrants,
options to purchase, or any preemptive rights or other rights to subscribe for
or to purchase, or any contracts or commitments to issue or sell, any Relevant
Security.

                  (f) The Subsidiaries listed in Exhibit A are the only
subsidiaries (within the meaning of Rule 405 under the Securities Act) or joint
ventures of the Company, except for entities that when taken together would not
constitute a "significant subsidiary" with the meaning of Rule 102 of Regulation
S-X. Except for the Subsidiaries and as otherwise disclosed in the Registration
Statement and the Prospectus, the Company holds no ownership or other interest,
nominal or beneficial, direct or indirect, in any corporation, partnership,
joint venture or other business entity. All of the issued shares of capital
stock of or other ownership interests in each Subsidiary have been duly
authorized and validly issued and are fully paid and nonassessable. All of the
issued shares of capital stock or other ownership interests in each

                                       4
<PAGE>

Subsidiary, or in the case of the entities listed on Exhibit C, such shares or
ownership interest representing the percentage of the voting control of the
Subsidiary set forth next to the name of the Subsidiary on Exhibit C, are owned
directly or indirectly by the Company free and clear of any lien, charge,
mortgage, pledge, security interest, claim, equity, trust or other encumbrance,
preferential arrangement, defect or restriction of any kind whatsoever (any
"Lien").

                  (g) Each of the Company and the Subsidiaries has been duly
organized or formed and validly exists as a corporation, partnership or limited
liability company in good standing under the laws of its jurisdiction of
organization or formation. Each of the Company and the Subsidiaries is duly
qualified to do business and is in good standing as a foreign corporation,
partnership or limited liability company in each jurisdiction in which the
character or location of its properties (owned, leased or licensed) or the
nature or conduct of its business makes such qualification necessary, except for
those failures to be so qualified or in good standing which (individually and in
the aggregate) could not reasonably be expected to have a Material Adverse
Effect. Each of the Company and the Subsidiaries has all requisite corporate (or
other entity) power and authority, and, except as could not reasonably be
expected to have a Material Adverse Effect, all necessary consents, approvals,
authorizations, orders, registrations, qualifications, licenses, filings and
permits of, with and from all judicial, regulatory and other legal or
governmental agencies and bodies and all third parties, foreign and domestic
(collectively, the "Consents"), to own, lease and operate its properties and
conduct its business as it is now being conducted and as disclosed in the
Registration Statement and the Prospectus, and each such Consent is valid and in
full force and effect, and neither the Company nor any Subsidiary has received
notice of any investigation or proceedings which has resulted in or, if decided
adversely to the Company or any Subsidiary, could reasonably be expected to
result in, the revocation of, or imposition of a materially burdensome
restriction on, any such Consent. Each of the Company and the Subsidiaries is in
compliance with all applicable laws, rules, regulations, ordinances, directives,
judgments, decrees and orders, foreign and domestic, except where failure to be
in compliance could not reasonably be expected to have a Material Adverse
Effect. No Consent contains a materially burdensome restriction not adequately
disclosed in the Registration Statement and the Prospectus.

                  (h) The Company has the corporate right, power and authority
to execute and deliver this Agreement, to perform its obligations hereunder and
to consummate the transactions contemplated by this Agreement, the Registration
Statement and the Prospectus. This Agreement and the transactions contemplated
by this Agreement, the Registration Statement and the Prospectus have been duly
authorized by the Company. This Agreement has been duly executed and delivered
by the Company and constitutes the legal, valid and binding obligation of the
Company, enforceable in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally and except as enforceability
may be subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).

                  (i) The execution, delivery, and performance of this Agreement
and consummation of the transactions contemplated by this Agreement, the
Registration Statement and the Prospectus do not and will not (A) conflict with,
require consent under or result in a breach of any of the terms and provisions
of, or constitute a default (or an event which with

                                       5
<PAGE>

notice or lapse of time, or both, would constitute a default) under, or result
in the creation or imposition of any Lien upon any property or assets of the
Company or any Subsidiary pursuant to, any indenture, mortgage, deed of trust,
loan agreement or other agreement, instrument, franchise, license or permit to
which the Company or any Subsidiary is a party or by which the Company or any
Subsidiary or their respective properties, operations or assets may be bound,
(B) violate or conflict with any provision of the certificate or articles of
incorporation, by-laws, certificate of formation, limited liability company
agreement or other organizational documents of the Company or any Subsidiary or
(C) violate or conflict with any law, rule, regulation, ordinance, directive,
judgment, decree or order of any judicial, regulatory or other legal or
governmental agency or body, domestic or foreign, except (in the case of clauses
(A) and (C) above) as could not reasonably be expected to have a Material
Adverse Effect.

                  (j) No Consent of, with or from any judicial, regulatory or
other legal or governmental agency or body or any third party, foreign or
domestic, is required for the execution, delivery and performance of this
Agreement or consummation of the transactions contemplated by this Agreement,
the Registration Statement and the Prospectus, including the issuance, sale and
delivery of the Shares to be issued, sold and delivered hereunder, except the
registration under the Securities Act of the Shares, which has become effective,
the Consents of Deloitte & Touche LLP in connection with the Registration
Statement, the Prospectus and the documents incorporated by reference therein
and such other Consents as may be required under state or foreign securities or
blue sky laws or the by-laws and rules of the National Association of Securities
Dealers, Inc. (the "NASD") or NASD Regulation, Inc. ("NASDR") in connection with
the purchase and distribution of the Shares by the Underwriters, each of which
has been obtained and is in full force and effect.

                  (k) Except as disclosed in the Registration Statement and the
Prospectus, there is no judicial, regulatory, arbitral or other legal or
governmental proceeding or other litigation or arbitration, domestic or foreign,
pending to which the Company or any Subsidiary is a party or of which any
property, operations or assets of the Company or any Subsidiary is the subject
which, individually or in the aggregate, if determined adversely to the Company
or any Subsidiary, could reasonably be expected to have a Material Adverse
Effect; to the best of the Company's knowledge, no such proceeding, litigation
or arbitration is threatened or contemplated; and the defense of all such
proceedings, litigation and arbitration against or involving the Company or any
Subsidiary could not reasonably be expected to have a Material Adverse Effect.

                  (l) The financial statements, including the notes thereto, and
the supporting schedules included or incorporated by reference in the
Registration Statement and the Prospectus present fairly the financial position
as of the dates indicated and the cash flows and results of operations for the
periods specified of the Company and its consolidated subsidiaries and the other
entities for which financial statements are included or incorporated by
reference in the Registration Statement and the Prospectus; except as otherwise
stated in the Registration Statement and the Prospectus, said financial
statements have been prepared in conformity with United States generally
accepted accounting principles ("GAAP") applied on a consistent basis throughout
the periods involved; and the supporting schedules included in the Registration
Statement and the Prospectus present fairly the information required to be
stated therein. No other financial statements or supporting schedules are
required to be included in the Registration

                                       6
<PAGE>

Statement. The other financial and statistical information included or
incorporated by reference in the Registration Statement and the Prospectus
present fairly the information included therein and, except for non-GAAP
financial measures (as such term is defined in Item 10(e) of Regulation S-K of
the Rules and Regulations), non-financial operating data (which are addressed
below in this Section 1(l)) and market and industry data (which are addressed
below in Section 1(n)), have been prepared on a basis consistent with that of
the financial statements that are included or incorporated by reference in the
Registration Statement and the Prospectus and the books and records of the
respective entities presented therein. The non-GAAP financial measures and
non-financial operating data (which terms do not include market or industry
data) included or incorporated by reference in the Registration Statement and
Prospectus have been derived from, and are consistent with, the books and
records of the Company and its subsidiaries.

                  (m) There are no pro forma or as adjusted financial statements
which are required to be included or incorporated by reference in the
Registration Statement and Prospectus in accordance with Regulation S-X.

                  (n) The statistical, industry-related and market-related data
included in the Registration Statement and the Prospectus (i) are based on or
derived from sources which the Company reasonably and in good faith believes are
reliable and accurate, and such data agree with the sources from which they are
derived, or (ii) with respect to the items set forth in Exhibit B hereto,
represent the Company's reasonable estimates determined in good faith.

                  (o) The Company is subject to the reporting requirements of
ection 13 or 15(d) of the Exchange Act and files reports with the Commission on
EDGAR. The Common Stock is registered pursuant to Section 12 of the Exchange Act
and the outstanding shares of Common Stock are listed on the New York Stock
Exchange (the "NYSE"), and the Company has taken no action designed to, or
likely to have the effect of, terminating the registration of the Common Stock
under the Exchange Act or de-listing the Common Stock from the NYSE, nor has the
Company received any notification that the Commission or the NYSE is
contemplating terminating such registration or listing.

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

                  (q) Neither the Company nor any of its "Affiliates" (as
efined under Rule 144 under the Securities Act) has taken, directly or
indirectly, any action which constitutes or is designed to cause or result in,
or which could reasonably be expected to constitute, cause or result in, the
stabilization or manipulation of the price of any security to facilitate the
sale or resale of the Shares, provided that this representation and warranty
does not cover any actions of the estate of Alan James (the "Estate") or any
representatives or agents acting on behalf of the Estate (collectively with the
Estate, the "James Group").

                                       7
<PAGE>

                  (r) Neither the Company nor any of its Affiliates has, prior
to the date hereof, made any offer or sale of any securities which could be
"integrated" for purposes of the Securities Act or the Rules and Regulations
with the offer and sale of the Shares pursuant to the Registration Statement.
Except as disclosed in the Registration Statement and the Prospectus, neither
the Company nor any of its Affiliates has sold or issued any Relevant Security
during the six-month period preceding the date of the Prospectus, including but
not limited to any sales pursuant to Rule 144A or Regulation D or S under the
Securities Act, other than shares of Common Stock issued pursuant to employee
benefit plans, qualified stock option plans or the employee compensation plans
or pursuant to outstanding options, rights or warrants as described in the
Registration Statement and the Prospectus. The representations and warranties in
this paragraph 1(r) do not cover any actions of the James Group.

                  (s) Except as disclosed in the Registration Statement and the
Prospectus, no holder of any Relevant Security has any rights to require
registration of any Relevant Security as part or on account of, or otherwise in
connection with, the offer and sale of the Shares contemplated hereby, and any
such rights so disclosed have either been fully complied with by the Company or
effectively waived by the holders thereof, and any such waivers remain in full
force and effect.

                  (t) The conditions for use of Form S-3 to register the
Offering under the Securities Act, as set forth in the General Instructions to
such Form, have been satisfied.

                  (u) The documents incorporated or deemed to be incorporated by
reference in the Prospectus, at the time they were or hereafter are filed with
the Commission, complied and will comply in all material respects with the
requirements of the Securities Act, the Exchange Act and the Rules and
Regulations, and, when read together with the other information in the
Prospectus, do not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.

                  (v) The Company is not and, at all times up to and including
consummation of the transactions contemplated by this Agreement, the
Registration Statement and the Prospectus, and after giving effect to
application of the net proceeds of the Offering as contemplated by the
Registration Statement, will not be, subject to registration as an "investment
company" under the Investment Company Act of 1940, as amended, and is not and
will not be an entity "controlled" by an "investment company" within the meaning
of such act.

                  (w) There are no contracts or other documents (including,
without limitation, any voting agreement), which are required to be described in
the Registration Statement and the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act, the Exchange Act or the Rules and
Regulations which have not been so described or filed.

                  (x) No relationship, direct or indirect, exists between or
among any of the Company or any Affiliate of the Company, on the one hand, and
any director, officer, stockholder, customer or supplier of the Company or any
Affiliate of the Company, on the other hand, which is required by the Securities
Act, the Exchange Act or the Rules and Regulations to be described in the
Registration Statement or the Prospectus which is not so described and

                                       8
<PAGE>

described as required. There are no outstanding loans, advances (except normal
advances for business expenses in the ordinary course of business) or guarantees
of indebtedness by the Company to or for the benefit of any of the officers or
directors of the Company or any of their respective family members, except as
disclosed in the Registration Statement and the Prospectus and except for one
salary advance that is immaterial in amount. The Company has not, in violation
of the Sarbanes-Oxley Act, directly or indirectly, including through a
Subsidiary, extended or maintained credit, arranged for the extension of credit,
or renewed an extension of credit, in the form of a personal loan to or for any
director or executive officer of the Company.

                  (y) Except as disclosed in the Registration Statement and the
Prospectus, there are no contracts, agreements or understandings between the
Company and any person that would give rise to a valid claim against the Company
or any Underwriter for a brokerage commission, finder's fee or other like
payment in connection with the transactions contemplated by this Agreement, the
Registration Statement and the Prospectus or, to the best of the Company's
knowledge, any arrangements, agreements, understandings, payments or issuance
with respect to the Company or any of its officers, directors, shareholders,
partners, employees, Subsidiaries or Affiliates that may affect the
Underwriters' compensation as determined by the NASD.

                  (z) The Company and each Subsidiary owns or leases all such
properties as are necessary to the conduct of its business as presently operated
and as proposed to be operated as described in the Registration Statement and
the Prospectus. The Company and the Subsidiaries have good and marketable title
in fee simple to all real property and good and marketable title to all personal
property owned by them, in each case free and clear of all Liens except such as
are described in the Registration Statement and the Prospectus or such as do not
(individually or in the aggregate) materially affect the value of such property
or interfere with the use made or proposed to be made of such property by the
Company and the Subsidiaries; and any real property and buildings held under
lease or sublease by the Company and the Subsidiaries are held by them under
valid, subsisting and enforceable leases with such exceptions as are not
material to, and do not interfere with, the use made and proposed to be made of
such property and buildings by the Company and the Subsidiaries. Neither the
Company nor any Subsidiary has received any notice of any claim adverse to its
ownership of any real or personal property or of any claim against the continued
possession of any real property, whether owned or held under lease or sublease
by the Company or any Subsidiary.

                  (aa) The Company and each Subsidiary (i) own or possess
adequate right to use all patents, patent applications, trademarks, service
marks, trade names, trademark registrations, service mark registrations,
copyrights, licenses, formulae, customer lists, and know-how and other
intellectual property (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures,
"Intellectual Property") necessary for the conduct of their respective
businesses as being conducted and as described in the Registration Statement and
Prospectus and (ii) have no reason to believe that the conduct of their
respective businesses does or will conflict with any such right of others. To
the best of the Company's knowledge, all material technical information
developed by and belonging to the Company which has not been patented has been
kept confidential. Except as described in the Registration Statement and
Prospectus, neither the Company nor any Subsidiary has granted or assigned to
any other person or entity any right to manufacture, have

                                       9
<PAGE>

manufactured, assemble or sell the current products and services of the Company
and its Subsidiaries or those products and services described in the
Registration Statement and Prospectus. Except as would, if determined adversely
to the Company or its Subsidiaries, not have individually or in the aggregate, a
Material Adverse Effect, the Company is not aware of any infringement by third
parties of any such Intellectual Property; there is no pending or, to the
Company's knowledge, threatened action, suit, proceeding or claim by others
challenging the Company's or any Subsidiary's rights in or to any such
Intellectual Property, and the Company is unaware of any facts which would form
a reasonable basis for any such claim; and there is no pending or, to the
Company's knowledge, threatened action, suit, proceeding or claim by others that
the Company or any Subsidiary infringes or otherwise violates any patent,
trademark, copyright, trade secret or other proprietary rights of others, and
the Company is unaware of any other fact which would form a reasonable basis for
any such claim.

                  (bb) The Company and the Subsidiaries maintain insurance in
such amounts and covering such risks as the Company reasonably considers
adequate for the conduct of its business and the value of its properties and as
is customary for companies engaged in similar businesses in similar industries,
all of which insurance is in full force and effect, except where the failure to
maintain such insurance could not reasonably be expected to have a Material
Adverse Effect. There are no material claims by the Company or any Subsidiary
under any such policy or instrument as to which any insurance company is denying
liability or defending under a reservation of rights clause, except (i) that
insurance liability has been denied with respect to the litigation filed by Mr.
James and described under "Recent Developments -- Settlement with the Estate of
Alan James" in the Prospectus, and (ii) the insurer is defending under a
reservation of rights in the litigation pending in Tarrant County, Texas that is
described under "Business -- Legal Matters" in the Prospectus. The Company
reasonably believes that it will be able to renew its existing insurance as and
when such coverage expires or will be able to obtain replacement insurance
adequate for the conduct of the business and the value of its properties at a
cost that would not have a Material Adverse Effect.

                  (cc) The Company has in effect insurance covering the Company,
its directors and officers for liabilities or losses arising in connection with
this Offering, including, without limitation, liabilities or losses arising
under the Securities Act, the Exchange Act, the Rules and Regulations and
applicable foreign securities laws.

                  (dd) Each of the Company and the Subsidiaries has accurately
prepared and timely filed (including through permitted extensions) all federal,
state, foreign and other tax returns that are required to be filed by it, except
where the failure to file would not have a Material Adverse Effect, and has paid
or made provision for the payment of all taxes, assessments, governmental or
other similar charges, including without limitation, all sales and use taxes and
all taxes which the Company or any Subsidiary is obligated to withhold from
amounts owing to employees, creditors and third parties, with respect to the
periods covered by such tax returns (whether or not such amounts are shown as
due on any tax return), except to the extent that any of such taxes, assessments
or charges are being contested in good faith. No deficiency assessment with
respect to a proposed adjustment of the Company's or any Subsidiary's federal,
state, local or foreign taxes is pending or, to the best of the Company's
knowledge, threatened. The accruals and reserves on the books and records of the
Company and the Subsidiaries in respect of tax liabilities for any taxable
period not finally determined are

                                       10
<PAGE>

adequate to meet any assessments and related liabilities for any such period
and, since August 31, 2004, the Company and the Subsidiaries have not incurred
any liability for taxes other than in the ordinary course of its business. There
is no tax lien, whether imposed by any federal, state, foreign or other taxing
authority, outstanding against the assets, properties or business of the Company
or any Subsidiary.

                  (ee) No labor disturbance by the employees of the Company or
any Subsidiary exists or, to the best of the Company's knowledge, is imminent
and the Company is not aware of any existing or imminent labor disturbances by
the subcontracted labor at the Company's facility in Sahagun, Mexico or the
employees of any of its or any Subsidiary's principal suppliers, manufacturers,
customers or contractors, which, in either case (individually or in the
aggregate), could reasonably be expected to have a Material Adverse Effect.

                  (ff) No nonexempt "prohibited transaction" (as defined in
either Section 406 of the Employee Retirement Income Security Act of 1974, as
amended, including the regulations and published interpretations thereunder
("ERISA") or Section 4975 of the Internal Revenue Code of 1986, as amended from
time to time (the "Code")), has occurred with respect to any employee benefit
plan for which the Company or any Subsidiary would have any liability; each
employee benefit plan for which the Company or any Subsidiary would have any
liability is in compliance in all material respects with applicable law,
including (without limitation) ERISA and the Code; neither the Company nor any
Subsidiary has nor has it maintained any employee benefit plans as such term is
defined in Section 3(3) of ERISA that are subject to Title IV of ERISA; and each
plan for which the Company would have any liability that is intended to be
qualified under Section 401(a) of the Code has received a favorable
determination letter from the IRS as to its qualification is so qualified and
nothing has occurred, whether by action or by failure to act, which would
reasonably be expected to cause the loss of such qualification.

                  (gg) The execution, delivery, and performance of this
Agreement and consummation of the transactions contemplated by this Agreement,
the Registration Statement and the Prospectus do not and will not involve any
prohibited transaction within the meaning of Section 406 of ERISA or Section
4975 of the Internal Revenue Code of 1986.

                  (hh) Except as disclosed in the Registration Statement with
respect to the Portland Harbor Superfund Site and the ongoing soil and
groundwater remediation at the Gunderson, Portland facility, and except as could
not reasonably be expected to have a Material Adverse Effect,

                  (i) Neither the Company nor any Subsidiary has unlawfully
released any hazardous substance in a manner likely to give rise to any
liability under any applicable law, rule, regulation, order, judgment, decree or
permit relating to pollution or protection of human health and safety and
environment ("Environmental Law").

                  (ii) Neither the Company nor any Subsidiary has agreed
contractually to indemnify any past or current owner or operator of any property
currently owned or operated by

                                       11
<PAGE>

the Company or any Subsidiary, for liability related to such prior ownership or
operation of such property, under any Environmental Law, including any
obligation for cleanup or remedial action.

                  (iii) There is no pending or, to the best of the Company's
knowledge, threatened administrative, regulatory or judicial action, claim or
notice of noncompliance or violation, investigation or proceedings relating to
any Environmental Law against the Company or any Subsidiary.

                  (ii) Neither the Company, any Subsidiary nor, to the Company's
knowledge, any of its employees or agents has at any time during the last five
years (i) made any unlawful contribution to any candidate for foreign office, or
failed to disclose fully any contribution in violation of law or (ii) made any
payment to any federal or state governmental officer or official, or other
person charged with similar public or quasi-public duties, other than payments
required or permitted by the laws of the United States of any jurisdiction
thereof.

                  (jj) Neither the Company nor any Subsidiary (i) is in
violation of its certificate or articles of incorporation, by-laws, certificate
of formation, limited liability company agreement or other organizational
documents, (ii) is in default under, and no event has occurred which, with
notice or lapse of time, or both, would constitute a default under or result in
the creation or imposition of any Lien upon any property or assets of the
Company or any of its subsidiaries pursuant to, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which it is a party or
by which it is bound or to which any of its property or assets is subject or
(iii) is in violation in any respect of any law, rule, regulation, ordinance,
directive, judgment, decree or order of any judicial, regulatory or other legal
or governmental agency or body, foreign or domestic, except (in the case clauses
(ii) and (iii) above) violations or defaults that could not (individually or in
the aggregate) reasonably be expected to have a Material Adverse Effect and
except (in the case of clause (ii) alone) for any Lien disclosed in the
Registration Statement and the Prospectus.

                  (kk) The Company is in compliance with applicable provisions
of the Sarbanes-Oxley Act that are effective.

                  (ll) The Company has implemented the "disclosure controls and
procedures" (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act)
required in order for the Chief Executive Officer and Chief Financial Officer of
the Company to engage in the review and evaluation process mandated by the
Exchange Act. The Company's "disclosure controls and procedures" are reasonably
designed to ensure that all information (both financial and non-financial)
required to be disclosed by the Company in the reports that it files or submits
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the Rules and Regulations, and that all such
information is accumulated and communicated to the Company's management as
appropriate to allow timely decisions regarding required disclosure and to make
the certifications of the Chief Executive Officer and Chief Financial Officer of
the Company required under the Exchange Act with respect to such reports.

                  (mm) Deloitte & Touche LLP and the audit committee of the
Company's Board of Directors have been advised of (i) all significant
deficiencies and material weaknesses in the design or operation of internal
controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f)
of the Exchange Act) which are reasonably likely to adversely affect the

                                       12
<PAGE>

Company's ability to record, process, summarize and report financial information
and (ii) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls over
financial reporting. The Chief Executive Officer and Chief Financial Officer
have indicated in the Company's Annual Report on Form 10-K for the fiscal year
ended August 31, 2004 and its Quarterly Reports on Form 10-Q for the fiscal
quarters ended November 30, 2004 and February 28, 2005 any change in the
Company's internal controls over financial reporting that occurred during the
Company's most recent fiscal quarter reported on in such Annual Report or
Quarterly Report that has materially affected, or is reasonably likely to
materially affect, the Company's internal control over financial reporting.

                  (nn) The section entitled "Management's Discussion and
Analysis of Financial Condition and Results of Operation - Critical Accounting
Policies" in the Registration Statement and the Prospectus accurately and fully
describes in accordance with applicable SEC rules (i) accounting policies which
the Company believes are the most important in the portrayal of the financial
condition and results of operations of the Company and its consolidated
subsidiaries and which require management's most difficult, subjective or
complex judgments ("critical accounting policies"), (ii) judgments and
uncertainties affecting the application of critical accounting policies and
(iii) explanation of the likelihood that materially different amounts would be
reported under different conditions or using different assumptions.

                  (oo) The Company's board of directors, senior management and
audit committee have reviewed and agreed with the selection, application and
disclosure of critical accounting policies and have consulted with their legal
advisers and independent accountants with regard to such disclosure.

                  (pp) The section entitled "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Liquidity and
Capital Resources" in the Registration Statement and the Prospectus accurately
and fully describes in accordance with applicable SEC rules (i) all material
trends, demands, commitments, events, uncertainties and risks, and the potential
effects thereof, that the Company believes would materially affect liquidity and
are reasonably likely to occur and (ii) all off-balance sheet arrangements that
have or are reasonably likely to have a current or future effect on the
financial condition, changes in financial condition, revenues or expenses,
results of operations, liquidity, capital expenditures or capital resources of
the Company and the Subsidiaries taken as a whole.

                  (qq) Except as disclosed in the Registration Statement and the
Prospectus, there are no outstanding guarantees or other contingent obligations
(other than under product warranties given in the ordinary course of business)
of the Company or any Subsidiary that could reasonably be expected to have a
Material Adverse Effect.

                  (rr) The Company and its Subsidiaries have all material
certifications required b y the Association of American Railroads ("AAR") as a
railcar builder, repair and refurbishment facility and component manufacturer,
and products sold and leased by the Company and its Subsidiaries in North
America meet applicable AAR, Transport Canada and Federal Railroad
Administration standards.

                                       13
<PAGE>

                  (ss) No event or circumstance has occurred or arisen that
could reasonably be expected to give rise to a requirement that the Company make
additional disclosure on Form 8-K and has not been so disclosed.

                  (tt) The Settlement Agreement between the Company and the
estate of Alan James dated April 20, 2005 (the "Settlement Agreement"), has been
duly executed and delivered by the Company and, to the Company's knowledge, each
other party thereto, and constitutes the legal, valid and binding obligation of
the Company, and, to the Company's knowledge, each other party thereto,
enforceable in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally and except as enforceability
may be subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law). The
Settlement Agreement is in full force and effect, and neither the Company nor,
to the Company's knowledge, any other party thereto, is in breach of, or default
under, the Settlement Agreement, and no event has occurred that with notice or
lapse of time or both would constitute such a breach or default thereunder by
the Company or, to the Company's knowledge, any other party thereto. There is no
pending or, to the Company's knowledge, threatened action, suit, proceeding or
claim by any person or any judicial, regulatory or other legal or governmental
agency or body challenging the validity, enforcement or other aspect of the
Settlement Agreement, and the Company is unaware of any facts which would form a
reasonable basis for any such claim. No governmental entity having competent
jurisdiction has taken any action or issued any order restraining, enjoining or
otherwise prohibiting the transactions contemplated by the Settlement Agreement.

                  (uu) The Stock Purchase Agreement among the Company, William
Furman, George Chelius, as Executor of the Will and Estate of Alan James and as
Trustee and Eric Epperson, as Executor of the Will and Estate of Alan James and
as Trustee dated April 20, 2005 (the "Purchase Agreement"), has been duly
executed and delivered by the Company and, to the Company's knowledge, each
other party thereto, and constitutes the legal, valid and binding obligation of
the Company, and, to the Company's knowledge, each other party thereto,
enforceable in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally and except as enforceability
may be subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law). The Purchase
Agreement is in full force and effect, and neither the Company nor, to the
Company's knowledge, any other party thereto, is in breach of, or default under,
the Purchase Agreement, and no event has occurred that with notice or lapse of
time or both would constitute such a breach or default thereunder by the Company
or, to the Company's knowledge, any other party thereto. There is no pending or,
to the Company's knowledge, threatened action, suit, proceeding or claim by any
person or any judicial, regulatory or other legal or governmental agency or body
challenging the validity, enforcement or other aspect of the Purchase Agreement,
and the Company is unaware of any facts which would form a reasonable basis for
any such claim.

            Any certificate signed by or on behalf of the Company and delivered
to the Representatives or to counsel for the Underwriters' shall be deemed to be
a representation and warranty by the Company to each Underwriter as to the
matters covered thereby.

                                       14
<PAGE>

            2.    Purchase, Sale and Delivery of the Shares.

                  (a) On the basis of the representations, warranties, covenants
and agreements herein contained, but subject to the terms and conditions herein
set forth, the Company agrees to sell to each Underwriter and each Underwriter,
severally and not jointly, agrees to purchase from the Company, at a purchase
price per share of $24.9895, the number of Firm Shares set forth opposite their
respective names on Schedule I hereto together with any additional number of
Shares which such Underwriter may become obligated to purchase pursuant to the
provisions of Section 9 hereof.

                  (b) Payment of the purchase price for, and delivery of
certificates representing, the Firm Shares shall be made at the office of
Gibson, Dunn & Crutcher LLP, 333 South Grand Avenue, Los Angeles, California
90071 ("Underwriters' Counsel"), or at such other place as shall be agreed upon
by the Lead Manager and the Company, at 10:00 A.M., New York City time, on the
third or (as permitted under Rule 15c6-1 under the Exchange Act) fourth business
day (unless postponed in accordance with the provisions of Section 9 hereof)
following the date of the effectiveness of the Registration Statement (or, if
the Company has elected to rely upon Rule 430A under the Securities Act, the
third or (as permitted under Rule 15c6-1 under the Exchange Act) fourth business
day after the determination of the public offering price of the Shares), or such
other time not later than ten business days after such date as shall be agreed
upon by the Lead Manager and the Company (such time and date of payment and
delivery being herein called the "Closing Date").

                  (c) Payment of the purchase price for the Firm Shares shall be
made by wire transfer in same day federal funds to, or as directed by, the
Company upon delivery of certificates for the Firm Shares to the Representatives
through the facilities of The Depository Trust Company for the respective
accounts of the several Underwriters. Certificates for the Firm Shares shall be
registered in such name or names and shall be in such denominations as the Lead
Manager may request at least two business days before the Closing Date. The
Company will permit the Lead Manager to examine and package such certificates
for delivery at least one full business day prior to the Closing Date.

                  (d) In addition, on the basis of the representations,
warranties, covenants and agreements herein contained, but subject to the terms
and conditions herein set forth, the Company hereby grants to the Underwriters,
acting severally and not jointly, the option to purchase the Additional Shares
at the same purchase price per share to be paid by the Underwriters to the
Company for the Firm Shares as set forth in this Section 2, for the sole purpose
of covering over-allotments in the sale of Firm Shares by the Underwriters. This
option may be exercised at any time and from time to time, in whole or in part
on one or more occasions, on or before the thirtieth day following the date of
the Prospectus, by written notice from the Lead Manager to the Company. Such
notice shall set forth the aggregate number of Additional Shares as to which the
option is being exercised and the date and time, as reasonably determined by the
Lead Manager, when the Additional Shares are to be delivered (any such date and
time being herein sometimes referred to as the "Additional Closing Date");
provided, however, that the Additional Closing Date shall not be earlier than
the Closing Date or earlier than the second full business day after the date on
which the option shall have been exercised nor later than the eighth full
business day after the date on which the option shall have been

                                       15
<PAGE>

exercised (unless such time and date are postponed in accordance with the
provisions of Section 9 hereof). Certificates for the Additional Shares shall be
registered in such name or names and in such authorized denominations as the
Lead Manager may request in writing at least two full business days prior to the
Additional Closing Date. The Company shall permit the Lead Manager to examine
and package such certificates for delivery at least one full business day prior
to the Additional Closing Date.

                  (e) If the option is exercised as to all or any portion of the
Additional Shares,each Underwriter, acting severally and not jointly, will
purchase that proportion of the total number of Additional Shares then being
purchased which the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto (or such number increased as set forth in
Section 9 hereof) bears to the total number of Firm Shares that the Underwriters
have agreed to purchase hereunder, subject, however, to such adjustments to
eliminate any fractional shares as the Lead Manager in its sole discretion shall
make.

                  (f) Payment of the purchase price for, and delivery of
certificates representing, the Additional Shares shall be made at the office of
Underwriters' Counsel, or at such other place as shall be agreed upon by the
Lead Manager and the Company, at 10:00 A.M., New York City time, on the
Additional Closing Date, or such other time as shall be agreed upon by the Lead
Manager and the Company. Payment of the purchase price for the Additional Shares
shall be made by wire transfer in same day federal funds to, or as directed by,
the Company upon delivery of the certificates for the Additional Shares to the
Representatives through the facilities of The Depository Trust Company for the
respective accounts of the Underwriters.

            3. Offering. Upon authorization of the release of the Firm Shares by
the Lead Manager, the Underwriters propose to offer the Shares for sale to the
public upon the terms and conditions set forth in the Prospectus.

            4. Covenants of the Company.

                  (a) The Company covenants and agrees with the Underwriters
                  that:

                        (i) The Registration Statement and any amendments
thereto have been declared effective, and if Rule 430A is used or the filing of
the Prospectus is otherwise required under Rule 424(b) or Rule 434, the Company
will file the Prospectus (properly completed if Rule 430A has been used)
pursuant to Rule 424(b) within the prescribed time period and will provide
evidence satisfactory to the Lead Manager of such timely filing. If the Company
elects to rely on Rule 434, the Company will prepare and file a term sheet that
complies with the requirements of Rule 434, and the Prospectus shall not be
"materially different" (as such term is used in Rule 434) from the Prospectus
included in the Registration Statement at the time it became effective.

                        The Company will notify you immediately (and, if
requested by the Lead Manager,will confirm such notice in writing) (A) when the
Registration Statement and any amendments thereto become effective, (B) of any
request by the Commission for any amendment of or supplement to the Registration
Statement or the Prospectus or for any

                                       16
<PAGE>

additional information, (C) of the Company's intention to file or prepare any
supplement or amendment to the Registration Statement or the Prospectus, (D) of
the mailing or the delivery to the Commission for filing of any amendment of or
supplement to the Registration Statement or the Prospectus, including but not
limited to Rule 462(b) under the Securities Act, (E) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto or of the initiation, or the
threatening, of any proceedings therefor, it being understood that the Company
shall make every reasonable effort to avoid the issuance of any such stop order,
(F) of the receipt of any comments from the Commission and (G) of the receipt by
the Company of any notification with respect to the suspension of the
qualification of the Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for that purpose. If the Commission shall propose
or enter a stop order at any time, the Company will make every reasonable effort
to prevent the issuance of any such stop order and, if issued, to obtain the
lifting of such order as soon as possible. The Company will not file any
amendment to the Registration Statement or any amendment of or supplement to the
Prospectus (including the prospectus required to be filed pursuant to Rule
424(b) or Rule 434) that differs from the prospectus on file at the time of the
effectiveness of the Registration Statement or file any document under the
Exchange Act if such document would be deemed to be incorporated by reference
into the Prospectus to which the Lead Manager shall reasonably object in writing
after being timely furnished in advance a copy thereof. The Company will provide
the Lead Manager with copies of all such amendments, filings and other documents
a sufficient time prior to any filing or other publication thereof to permit the
Lead Manager a reasonable opportunity to review and comment thereon.

                        (ii) The Company shall comply with the Securities Act
and the Exchange Act to permit completion of the distribution as contemplated in
this Agreement, the Registration Statement and the Prospectus. If at any time
when a prospectus relating to the Shares is required to be delivered under the
Securities Act or the Exchange Act in connection with the sales of Shares, any
event shall have occurred as a result of which the Prospectus as then amended or
supplemented would, in the judgment of the Underwriters or the Company, include
an untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances existing at the time of delivery to the
purchaser, not misleading, or if to comply with the Securities Act, the Exchange
Act or the Rules and Regulations it shall be necessary at any time to amend or
supplement the Prospectus or Registration Statement, or to file any document
incorporated by reference in the Registration Statement or the Prospectus or in
any amendment thereof or supplement thereto, the Company will notify you
promptly and prepare and file with the Commission, subject to Section 4(a)(i)
hereof, an appropriate amendment or supplement which will correct such statement
or omission or which will effect such compliance and will use its best efforts
to have any amendment to the Registration Statement declared effective as soon
as possible.

                        (iii) The Company will promptly deliver to each of you
and Underwriters' Counsel a signed copy of the Registration Statement, as
initially filed and all amendments thereto, including all consents and exhibits
filed therewith, and will maintain in the Company's files manually signed copies
of such documents for at least five years after the date of filing. The Company
will promptly deliver to each of the Underwriters such number of copies of any
Preliminary Prospectus, the Prospectus, the Registration Statement, all
amendments of

                                       17
<PAGE>

and supplements to such documents, if any, and all documents incorporated by
reference in the Registration Statement and Prospectus or any amendment thereof
or supplement thereto, as you may reasonably request. Prior to 10:00 A.M., New
York City time, on the business day next succeeding the date of this Agreement
and from time to time thereafter, the Company will furnish the Underwriters with
copies of the Prospectus in New York City in such quantities as you may
reasonably request.

                        (iv) The Company consents to the use and delivery of the
Preliminary Prospectus by the Underwriters in accordance with Rule 430 and
Section 5(b) of the Securities Act.

                        (v) The Company will use its reasonable best efforts, in
cooperation with the Lead Manager, to qualify the Shares for offering and sale
under the securities laws relating to the offering or sale of the Shares of such
jurisdictions, domestic or foreign, as the Lead Manager may designate and to
maintain such qualification in effect for so long as required for the
distribution thereof; except that in no event shall the Company be obligated in
connection therewith to qualify as a foreign corporation or to execute a general
consent to service of process.

                        (vi) The Company will make generally available to its
security holders and to the Underwriters as soon as practicable, but in any
event not later than twelve months after the effective date of the Registration
Statement (as defined in Rule 158(c) under the Securities Act), an earnings
statement of the Company and the Subsidiaries (which need not be audited)
complying with Section 11(a) of the Securities Act and the Rules and Regulations
(including, at the option of the Company, Rule 158).

                        (vii) During the period of 90 days from the date of the
Prospectus, without the prior written consent of the Lead Manager, the Company
(A) will not, directly or indirectly, issue, offer, sell, agree to issue, offer
or sell, solicit offers to purchase, grant any call option, warrant or other
right to purchase, purchase any put option or other right to sell, pledge,
borrow or otherwise dispose of any Relevant Security, or make any announcement
of any of the foregoing, (B) will not establish or increase any "put equivalent
position" or liquidate or decrease any "call equivalent position" (in each case
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder) with respect to any Relevant Security and
(C) will not otherwise enter into any swap, derivative or other transaction or
arrangement that transfers to another, in whole or in part, any economic
consequence of ownership of a Relevant Security, whether or not such transaction
is to be settled by delivery of Relevant Securities, other securities, cash or
other consideration; and the Company will obtain an undertaking in substantially
the form of Annex IV hereto of each of its officers and directors listed on
Schedule II attached hereto, an undertaking in substantially the form of Annex V
of William Furman and an undertaking in substantially the form of Annex VI of
the Estate, not to engage in any of the aforementioned transactions on their own
behalf, provided that the foregoing shall not apply to the sale of Shares as
contemplated by this Agreement and the Company's issuance of Common Stock upon
(x) the exercise of currently outstanding options; (y) the exercise of currently
outstanding warrants; and (z) the grant and exercise of options under, or the
issuance and sale of shares pursuant to, employee stock option plans in effect
on the date hereof, each as described in the Registration Statement and the

                                       18
<PAGE>

Prospectus. The Company will not file a registration statement under the
Securities Act in connection with any transaction by the Company or any person
that is prohibited pursuant to the foregoing, except for registration statements
on Form S-8 relating to employee benefit plans or Form S-4 relating to corporate
reorganizations or other transactions under Rule 145, or on Form S-3 relating to
shares of Common Stock held by the Estate pursuant to the registration rights
agreement dated April 20, 2005 by and among the Company, George L. Chelius and
Eric Epperson in their capacity as personal representatives of the Estate and in
their capacities as trustees under any trusts created under the Last Will and
Testament of Alan James dated March 12, 2004. This Section 4(a)(vii) shall not
apply to the filing of an exchange offer registration statement on Form S-4 or,
under certain circumstances, a shelf registration statement on Form S-3,
pursuant to the registration rights agreement to be entered into in connection
with the Company's unregistered private offering of senior unsecured notes
described under "Recent Developments -- Refinancing of Existing Credit
Facilities and New Debt Issuance" in the Prospectus.

                        (viii) During the period of five years from the
effective date of the Registration Statement, the Company will furnish to you
copies of all reports or other communications (financial or other) furnished to
security holders or from time to time published or publicly disseminated by the
Company, and will deliver to you (A) as soon as they are available, copies of
any reports, financial statements and proxy or information statements furnished
to or filed with the Commission or any national securities exchange on which any
class of securities of the Company is listed and (B) such additional information
concerning the business and financial condition of the Company as you may from
time to time reasonably request (such financial information to be on a
consolidated basis to the extent the accounts of the Company and the
Subsidiaries are consolidated in reports furnished to its security holders
generally or to the Commission), provided that such additional information shall
be subject to such confidentiality and use restrictions as the Company may
reasonably impose.

                        (ix) The Company will apply the net proceeds from the
sale of the Shares as set forth under the caption "Use of Proceeds" in the
Prospectus.

                        (x) The Company will list the Shares, subject to notice
of issuance, on the NYSE.

                        (xi) The Company, during the period when the Prospectus
is required to be delivered under the Securities Act or the Exchange Act, will
file all documents required to be filed with the Commission pursuant to the
Securities Act, the Exchange Act and the Rules and Regulations within the time
periods required thereby.

                        (xii) The Company will use its reasonable best efforts
to do and perform all things required to be done or performed under this
Agreement by the Company prior to the Closing Date or the Additional Closing
Date, as the case may be, and to satisfy all conditions precedent to the
delivery of the Firm Shares and the Additional Shares.

                        (xiii) The Company will not take, and will cause its
Affiliates not to take, directly or indirectly, any action which constitutes or
is designed to cause or result in, or which could reasonably be expected to
constitute, cause or result in, the stabilization or

                                       19
<PAGE>

manipulation of the price of any security to facilitate the sale or resale of
the Shares, provided that this covenant does not cover any actions of the James
Group.

                        (ix) The Company will not invest, or otherwise use the
proceeds received by the Company from its sale of the Shares in such a manner as
would require the Company or any of its Subsidiaries to register as an
investment company under the 1940 Act.

                        (x) The Company will maintain a transfer agent and, if
necessary under the jurisdiction of incorporation of the Company, a registrar
for the Common Stock.

            5. Payment of Expenses. Whether or not the transactions contemplated
by this Agreement, the Registration Statement and the Prospectus are consummated
or this Agreement is terminated, the Company hereby agrees to pay all costs and
expenses incident to the performance of its obligations hereunder, including the
following: (a) all expenses in connection with the preparation, printing and
filing of the Registration Statement, any Preliminary Prospectus and the
Prospectus and any and all amendments and supplements thereto and the mailing
and delivering of copies thereof to the Underwriters and dealers, (b) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares under the Securities Act and the
Offering, (c) the cost of producing this Agreement and any agreement among
Underwriters, blue sky survey, closing documents and other instruments,
agreements or documents (including any compilations thereof) in connection with
the Offering, (d) all expenses in connection with the qualification of the
Shares for offering and sale under state or foreign securities or blue sky laws
as provided in Section 4(a)(v) hereof, including the reasonable fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with any blue sky survey, (e) the filing fees
incident to, and the reasonable fees and disbursements of counsel for the
Underwriters in connection with, securing any required review by the NASD of the
terms of the Offering, (f) all fees and expenses in connection with listing the
Shares on the NYSE, (g) all travel expenses of the Company's officers and
employees and any other expense of the Company incurred in connection with
attending or hosting meetings with prospective purchasers of the Shares and (h)
any stock transfer taxes incurred in connection with this Agreement or the
Offering. The Company also will pay or cause to be paid: (A) the cost of
preparing stock certificates representing the Shares, (B) the cost and charges
of any transfer agent or registrar for the Shares and (C) all other costs and
expenses incident to the performance of its obligations hereunder which are not
otherwise specifically provided for in this Section 5. It is understood,
however, that except as provided in this Section, and Sections 7, 8 and 11
hereof, the Underwriters will pay all of their own costs and expenses, including
the fees and disbursements of their counsel and stock transfer taxes on resale
of any of the Shares by them. Notwithstanding anything to the contrary in this
Section 5, in the event that this Agreement is terminated pursuant to Section 6
(other than due solely to a failure of the condition contained in Section 6(o))
or 11(b) hereof, or subsequent to any effect or change that had or has or, with
the passage of time, would have a Material Adverse Effect, the Company will pay
all out-of pocket expenses of the Underwriters (including but not limited to
reasonable fees and disbursements of counsel to the Underwriters) incurred in
connection herewith.

            6. Conditions of Underwriters' Obligations. The obligations of the
Underwriters to purchase and pay for the Firm Shares and the Additional Shares,
as provided

                                       20
<PAGE>

herein, shall be subject to the accuracy of the representations and warranties
of the Company herein contained, as of the date hereof and as of the Closing
Date (for purposes of this Section 6 "Closing Date" shall refer to the Closing
Date for the Firm Shares and any Additional Closing Date, if different, for the
Additional Shares), to the accuracy of the statements made in any certificates,
opinions, written statements or letters furnished to you or to Underwriters'
Counsel pursuant to this Section 6, to the performance by the Company of its
obligations hereunder, and to each of the following additional conditions:

                  (a) The Registration Statement shall remain effective through
5:30 P.M., New York City time, on the date of this Agreement, or such later time
and date as shall have been consented to in writing by the Lead Manager; if the
Company shall have elected to rely upon Rule 430A or Rule 434 under the
Securities Act, the Prospectus shall have been filed with the Commission in a
timely fashion in accordance with Section 4(a)(i) hereof and a form of the
Prospectus containing information relating to the description of the Shares and
the method of distribution and similar matters shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time period; and, at or
prior to the Closing Date no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereof shall have been
issued and no proceedings therefor shall have been initiated or threatened by
the Commission.

                  (b) At the Closing Date, you shall have received the written
opinion of Squire, Sanders & Dempsey LLP, counsel for the Company, dated the
Closing Date, addressed to the Underwriters to the effect set forth in Annex I
and in form and substance reasonably satisfactory to the Underwriters.

                  (c) At the Closing Date, you shall have received the written
opinion of Tonkon Torp LLP, counsel for the Company, dated the Closing Date,
addressed to the Underwriters to the effect set forth in Annex II and in form
and substance reasonably satisfactory to the Underwriters.

                  (d) At the Closing Date, you shall have received the written
opinion of Norriss M. Webb, general counsel for the Company, dated the Closing
Date, addressed to the Underwriters to the effect set forth in Annex III and in
form and substance reasonably satisfactory to the Underwriters.

                  (e) At the Closing Date, you shall have received the written
opinion of Canadian regulatory counsel for the Company, dated the Closing Date,
addressed to the Underwriters to the effect set forth in Annex III(A) and in the
form and substance reasonably satisfactory to the Underwriters.

                  (f) All proceedings taken in connection with the sale of the
Firm Shares and the Additional Shares as herein contemplated shall be
satisfactory in form and substance to the Lead Manager and to Underwriters'
Counsel, and the Underwriters shall have received from Underwriters' Counsel a
written opinion, dated as of the Closing Date, with respect to the issuance and
sale of the Shares, the Registration Statement and the Prospectus and such other
related matters as the Lead Manager may require, and the Company shall have

                                       21
<PAGE>

furnished to Underwriters' Counsel such documents as they may reasonably request
for the purpose of enabling them to pass upon such matters.

                  (g) At the Closing Date you shall have received a certificate
of the Chief Executive Officer and Chief Financial Officer of the Company, dated
the Closing Date to the effect that (i) the condition set forth in subsection
(a) of this Section 6 has been satisfied, (ii) as of the date hereof and as of
the Closing Date, the representations and warranties of the Company set forth in
Section 1 hereof are accurate in all respects as of such dates, (iii) as of the
Closing Date all agreements, conditions and obligations of the Company to be
performed or complied with hereunder on or prior thereto have been duly
performed or complied with, (iv) the Company and the Subsidiaries have not
sustained any material loss or interference with their respective businesses or
properties from fire, flood, hurricane, accident or other calamity, whether or
not covered by insurance, or from any labor dispute or any legal or governmental
proceeding, (v) no stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereof has been issued and no
proceedings therefor have been initiated or threatened by the Commission and
(vi) subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as disclosed in the Prospectus
(exclusive of any supplement), there has not been any material adverse change or
any development involving a prospective material adverse change, whether or not
arising from transactions in the ordinary course of business, in or affecting
(A) the business, condition (financial or otherwise), results of operations,
stockholders' equity, properties or prospects of the Company and the
Subsidiaries, taken as a whole; (B) the long-term debt or capital stock of the
Company or any of its Subsidiaries; or (C) the Offering or consummation of any
of the other transactions contemplated by this Agreement, the Registration
Statement and the Prospectus.

                  (h) At the time this Agreement is executed and at the Closing
Date, you shall have received a comfort letter, from Deloitte & Touche LLP, an
independent registered public accounting firm with respect to the Company,
dated, respectively, as of the date of this Agreement and as of the Closing Date
addressed to the Underwriters and in form and substance satisfactory to the
Underwriters and Underwriters' Counsel.

                  (i) Subsequent to the execution and delivery of this Agreement
or, if earlier, the dates as of which information is given in the Registration
Statement (exclusive of any amendment thereof) and the Prospectus (exclusive of
any supplement thereto), there shall not have been any change in the capital
stock or long-term debt of the Company or any Subsidiary or any change or
development involving a change, whether or not arising from transactions in the
ordinary course of business, in the business, condition (financial or
otherwise), results of operations, stockholders' equity, properties or prospects
of the Company and the Subsidiaries, individually or taken as a whole, including
but not limited to the occurrence of any fire, flood, storm, explosion, accident
or other calamity at any of the properties owned or leased by the Company or any
of its Subsidiaries, the effect of which, in any such case described above, is,
in the judgment of the Lead Manager, so material and adverse as to make it
impracticable or inadvisable to proceed with the Offering on the terms and in
the manner contemplated in the Prospectus (exclusive of any supplement).

                  (j) On or after the date hereof, (i) there shall not have
occurred any downgrading, suspension or withdrawal of, nor shall any notice have
been given of any potential

                                       22
<PAGE>

or intended downgrading, suspension or withdrawal of, or of any review (or of
any potential or intended review) for a possible change that does not indicate
the direction of the possible change in, any rating of the Company or any
securities of the Company (including, without limitation, the placing of any of
the foregoing ratings on credit watch with negative or developing implications
or under review with an uncertain direction) by any "nationally recognized
statistical rating organization" as such term is defined for purposes of Rule
436(g)(2) under the Act and (ii) there shall not have occurred any change, nor
shall any notice have been given of any potential or intended change, in the
outlook for any rating of the Company or any securities of the Company by any
such rating organization.

                  (k) You shall have received a duly executed lock-up agreement
from: (i) each person who is a director or officer of the Company and listed on
Schedule II hereto, in each case substantially in the form attached hereto as
Annex IV, (ii) William Furman, substantially in the form attached hereto as
Annex V, and (iii) the Estate, substantially in the form attached hereto as
Annex VI.

                  (l) At the Closing Date, the Shares shall have been authorized
for listing on the NYSE, subject to notice of issuance.

                  (m) At the Closing Date, the NASD shall have confirmed that it
has no objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements.

                  (n) The Company shall have complied with the provisions of
Section 4(a)(iii) hereof with respect to the furnishing of Prospectuses.

                  (o) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any federal,
state or foreign governmental or regulatory authority that would, as of the
Closing Date, prevent the issuance or sale of the Shares; and no injunction or
order of any federal, state or foreign court shall have been issued that would,
as of the Closing Date, prevent the issuance or sale of the Shares.

                  (p) The Company shall have furnished the Underwriters and
Underwriters' Counsel with such other certificates, opinions or other documents
as they may have reasonably requested.

                  (q) The Settlement Agreement shall constitute the legal, valid
and binding obligation of the Company and of the other parties thereto, and
shall be in full force and effect, enforceable in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
and except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law). Neither the Company nor any other party thereto, shall be in
breach of, or default under, the Settlement Agreement, and no event shall have
occurred that with notice or lapse of time or both would, as of the Closing
Date, constitute such a breach or default thereunder by the Company or any other
party thereto. There shall be no pending or threatened action, suit, proceeding
or claim by any person or any judicial, regulatory or other legal or
governmental

                                       23
<PAGE>

agency or body challenging the validity, enforcement or other aspect of the
Settlement Agreement. No governmental entity having competent jurisdiction shall
have taken any action or issued any order restraining, enjoining or otherwise
prohibiting the transactions contemplated by the Settlement Agreement.

                  (r) The Purchase Agreement shall constitute the legal, valid
and binding obligation of the Company and of the other parties thereto, and
shall be in full force and effect, enforceable in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
and except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law). Neither the Company nor any other party thereto, shall be in
breach of, or default under, the Purchase Agreement, and no event shall have
occurred that with notice or lapse of time or both would, as of the Closing
Date, constitute such a breach or default thereunder by the Company or any other
party thereto. There shall be no pending or threatened action, suit, proceeding
or claim by any person or any judicial, regulatory or other legal or
governmental agency or body challenging the validity, enforcement or other
aspect of the Purchase Agreement.

            If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished pursuant to this
Section 6 shall not be satisfactory in form and substance to the Lead Manager
and to Underwriters' Counsel, all obligations of the Underwriters hereunder may
be cancelled by the Lead Manager at, or at any time prior to, the Closing Date
and the obligations of the Underwriters to purchase the Additional Shares may be
cancelled by the Lead Manager at, or at any time prior to, the Additional
Closing Date. Notice of such cancellation shall be given to the Company in
writing, or by telephone. Any such telephone notice shall be confirmed promptly
thereafter in writing.

            7. Indemnification.

                  (a) The Company shall indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
against any and all losses, liabilities, claims, damages and expenses whatsoever
as incurred (including but not limited to reasonable attorneys' fees and any and
all expenses whatsoever incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim whatsoever, and
any and all amounts paid in settlement of any claim or litigation), joint or
several, to which they or any of them may become subject under the Securities
Act, the Exchange Act or otherwise, insofar as such losses, liabilities, claims,
damages or expenses (or actions in respect thereof) arise out of or are based
upon (i) any untrue statement or alleged untrue statement of a material fact
contained in (A) the Registration Statement, as originally filed or any
amendment thereof, or any related Preliminary Prospectus or the Prospectus, or
in any supplement thereto or amendment thereof or (B) in any materials or
information provided to investors by, or with the approval of, the Company in
connection with the marketing of the offering of the Shares, including any road
show or investor presentations made to investors by the Company (whether in
person or electronically) ("Marketing Materials") but only if such Marketing
Materials are provided to investors together with a Preliminary Prospectus or
Prospectus or (ii) the omission or alleged

                                       24
<PAGE>

omission to state in the Registration Statement, as originally filed or any
amendment thereof, or any related Preliminary Prospectus or the Prospectus, or
in any supplement thereto or amendment thereof, or in any Marketing Materials, a
material fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that the Company will not be liable
in any such case to the extent but only to the extent that any such loss,
liability, claim, damage or expense arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Underwriter through the Lead
Manager expressly for use therein. The parties agree that such information
provided by or on behalf of any Underwriter through the Lead Manager consists
solely of the material referred to in the last sentence of Section 1(b) hereof.
This indemnity agreement will be in addition to any liability which the Company
may otherwise have, including but not limited to other liability under this
Agreement. The foregoing indemnity agreement with respect to any Preliminary
Prospectus or Marketing Materials shall not inure to the benefit of any
Underwriter who failed to deliver a Prospectus (as then amended or supplemented,
provided by the Company to the several Underwriters in the requisite quantity
and on a timely basis to permit proper delivery on or prior to the Closing Date)
to the person asserting any losses, claims, damages and liabilities and
judgments caused by any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus or Marketing Materials, or
caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, if such material misstatement or omission or alleged material
misstatement or omission was cured, as determined by a court of competent
jurisdiction in a decision not subject to further appeal, in such Prospectus and
such Prospectus was required by law to be delivered at or prior to the written
confirmation of sale to such person.

                  (b) Each Underwriter, severally and not jointly, shall
indemnify and hold harmless the Company, each of the directors of the Company,
each of the officers of the Company who shall have signed the Registration
Statement, and each other person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
against any losses, liabilities, claims, damages and expenses whatsoever as
incurred (including but not limited to reasonable attorneys' fees and any and
all expenses whatsoever incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim whatsoever, and
any and all amounts paid in settlement of any claim or litigation), joint or
several, to which they or any of them may become subject under the Securities
Act, the Exchange Act or otherwise, insofar as such losses, liabilities, claims,
damages or expenses (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, as originally filed or any amendment
thereof, or any related Preliminary Prospectus or the Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that any such loss, liability,
claim, damage or expense arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with information furnished in writing
to the Company by or on behalf of any Underwriter through the Lead Manager
specifically for use therein; provided, however, that in no case shall any
Underwriter be liable or responsible for any amount in excess of the

                                       25
<PAGE>

underwriting discount applicable to the Shares to be purchased by such
Underwriter hereunder. The parties agree that such information provided by or on
behalf of any Underwriter through the Lead Manager consists solely of the
material referred to in the last sentence of Section 1(b) hereof. This indemnity
will be in addition to any liability which any Underwriter may otherwise have,
including but not limited to other liability under this Agreement.

                  (c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of any claims or the commencement of any
action, such indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party under such subsection, notify each party
against whom indemnification is to be sought in writing of the claim or the
commencement thereof (but the failure so to notify an indemnifying party shall
not relieve the indemnifying party from any liability which it may have under
this Section 7 to the extent that it is not materially prejudiced as a result
thereof and in any event shall not relieve it from any liability that such
indemnifying party may have otherwise than on account of the indemnity agreement
hereunder). In case any such claim or action is brought against any indemnified
party, and it notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate, at its own expense in the
defense of such action, and to the extent it may elect by written notice
delivered to the indemnified party promptly after receiving the aforesaid notice
from such indemnified party, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party; provided however, that
counsel to the indemnifying party shall not (except with the written consent of
the indemnified party) also be counsel to the indemnified party. Notwithstanding
the foregoing, the indemnified party or parties shall have the right to employ
its or their own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of such indemnified party or parties unless (i)
the employment of such counsel shall have been authorized in writing by one of
the indemnifying parties in connection with the defense of such action, (ii) the
indemnifying parties shall not have employed counsel to have charge of the
defense of such action within a reasonable time after notice of commencement of
the action, (iii) the indemnifying party does not diligently defend the action
after assumption of the defense or (iv) such indemnified party or parties shall
have reasonably concluded that there may be defenses available to it or them
which are different from or additional to those available to one or all of the
indemnifying parties (in which case the indemnifying parties shall not have the
right to direct the defense of such action on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall be borne by the
indemnifying parties. No indemnifying party shall, without the prior written
consent of the indemnified parties, effect any settlement or compromise of, or
consent to the entry of judgment with respect to, any pending or threatened
claim, investigation, action or proceeding in respect of which indemnity or
contribution may be or could have been sought by an indemnified party under this
Section 7 or Section 8 hereof (whether or not the indemnified party is an actual
or potential party thereto), unless (A) such settlement, compromise or judgment
(x) includes an unconditional release of the indemnified party from all
liability arising out of such claim, investigation, action or proceeding and (y)
does not include a statement as to or an admission of fault, culpability or any
failure to act, by or on behalf of the indemnified party and (B) the
indemnifying party confirms in writing its indemnification obligations hereunder
with respect to such settlement, compromise or judgment.

            8. Contribution. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 7 hereof is
for any reason held to be

                                       26
<PAGE>

unavailable from any indemnifying party or is insufficient to hold harmless a
party indemnified thereunder, the Company on the one hand and the Underwriters
on the other hand shall contribute to the aggregate losses, claims, damages,
liabilities and expenses of the nature contemplated by such indemnification
provision (including any investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claims asserted, but after deducting in the case of losses,
claims, damages, liabilities and expenses suffered by the Company, any
contribution received by the Company from persons, other than the Underwriters,
who may also be liable for contribution, including persons who control the
Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, officers of the Company who signed the Registration Statement
and directors of the Company) as incurred to which the Company and one or more
of the Underwriters may be subject, in such proportions as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Underwriters on the other hand from the Offering or, if such allocation is not
permitted by applicable law, in such proportions as are appropriate to reflect
not only the relative benefits referred to above but also the relative fault of
the Company on the one hand and the Underwriters on the other hand in connection
with the statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other hand shall be deemed to be in the same proportion as
(a) the total proceeds from the Offering (net of underwriting discounts and
commissions but before deducting expenses) received by the Company bears to (b)
the underwriting discount or commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault of each of the Company on the one hand and of the Underwriters on the
other hand shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
on the one hand or the Underwriters on the other hand and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 8 were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
8. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 8 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any judicial, regulatory or
other legal or governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue or alleged untrue statement or
omission or alleged omission. Notwithstanding the provisions of this Section 8,
(i) no Underwriter shall be required to contribute any amount in excess of the
amount by which the discounts and commissions applicable to the Shares
underwritten by it and distributed to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission and (ii)
no person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. For purposes of this
Section 8, each person, if any, who controls an Underwriter within the meaning

                                       27
<PAGE>

of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have
the same rights to contribution as such Underwriter, and each person, if any,
who controls the Company within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, each officer of the Company who shall have
signed the Registration Statement and each director of the Company shall have
the same rights to contribution as the Company as applicable, subject in each
case to clauses (i) and (ii) of the immediately preceding sentence. Any party
entitled to contribution will, promptly after receipt of notice of commencement
of any action, suit or proceeding against such party in respect of which a claim
for contribution may be made against another party or parties, notify each party
or parties from whom contribution may be sought, but the omission to so notify
such party or parties shall not relieve the party or parties from whom
contribution may be sought from any obligation it or they may have under this
Section 8 or otherwise. The obligations of the Underwriters to contribute
pursuant to this Section 8 are several in proportion to the respective number of
Shares to be purchased by each of the Underwriters hereunder and not joint.

            9. Underwriter Default.

                  (a) If any Underwriter or Underwriters shall default in its or
their obligation to purchase Firm Shares or Additional Shares hereunder, and if
the Firm Shares or Additional Shares with respect to which such default relates
(the "Default Shares") do not (after giving effect to arrangements, if any, made
by the Lead Manager pursuant to subsection (b) below) exceed in the aggregate
10% of the number of Firm Shares or Additional Shares, each non-defaulting
Underwriter, acting severally and not jointly, agrees to purchase from the
Company that number of Default Shares that bears the same proportion of the
total number of Default Shares then being purchased as the number of Firm Shares
set forth opposite the name of such Underwriter in Schedule I hereto bears to
the aggregate number of Firm Shares set forth opposite the names of the
non-defaulting Underwriters, subject, however, to such adjustments to eliminate
fractional shares as the Lead Manager in its sole discretion shall make.

                  (b) In the event that the aggregate number of Default Shares
exceeds 10% of the number of Firm Shares or Additional Shares, as the case may
be, the Lead Manager may in its discretion arrange for itself or for another
party or parties (including any non-defaulting Underwriter or Underwriters who
so agree) to purchase the Default Shares on the terms contained herein. In the
event that within five calendar days after such a default the Lead Manager does
not arrange for the purchase of the Default Shares as provided in this Section
9, this Agreement or, in the case of a default with respect to the Additional
Shares, the obligations of the Underwriters to purchase and of the Company to
sell the Additional Shares shall thereupon terminate, without liability on the
part of the Company with respect thereto (except in each case as provided in
Sections 5, 7, 8, 10 and 11) or the Underwriters, but nothing in this Agreement
shall relieve a defaulting Underwriter or Underwriters of its or their
liability, if any, to the other Underwriters and the Company for damages
occasioned by its or their default hereunder.

                  (c) In the event that any Default Shares are to be purchased
by the non-defaulting Underwriters, or are to be purchased by another party or
parties as aforesaid, the Lead Manager or the Company shall have the right to
postpone the Closing Date or Additional Closing Date, as the case may be, for a
period not exceeding five business days, in order to effect

                                       28
<PAGE>

whatever changes may thereby be made necessary in the Registration Statement or
the Prospectus or in any other documents and arrangements, and the Company
agrees to file promptly any amendment or supplement to the Registration
Statement or the Prospectus which, in the opinion of Underwriters' Counsel, may
thereby be made necessary or advisable. The term "Underwriter" as used in this
Agreement shall include any party substituted under this Section 9 with like
effect as if it had originally been a party to this Agreement with respect to
such Firm Shares and Additional Shares.

            10. Survival of Representations and Agreements. All representations
and warranties, covenants and agreements of the Underwriters and the Company
contained in this Agreement or in certificates of officers of the Company or any
Subsidiary submitted pursuant hereto, including the agreements contained in
Section 5, the indemnity agreements contained in Section 7 and the contribution
agreements contained in Section 8, shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of any Underwriter
or any controlling person thereof or by or on behalf of the Company, any of its
officers and directors or any controlling person thereof, and shall survive
delivery of and payment for the Shares to and by the Underwriters. The
representations contained in Section 1 and the agreements contained in Sections
5, 7, 8, 10 and 11 hereof shall survive any termination of this Agreement,
including termination pursuant to Section 9 or 11 hereof.

            11. Effective Date of Agreement; Termination.

                  (a) This Agreement shall become effective upon the execution
of this Agreement by the parties hereto. If either the public offering price or
the purchase price per Share has not been agreed upon prior to 5:00 P.M., New
York City time, on the fifth full business day after the date of this Agreement,
this Agreement shall thereupon terminate without liability to the Company or the
Underwriters except as herein expressly provided. Until this Agreement becomes
effective as aforesaid, it may be terminated by the Company by notifying you or
by the Lead Manager notifying the Company. Notwithstanding any termination of
this Agreement, the provisions of this Section 11 and of Sections 1, 5, 7, 8, 10
and 12 through 17, inclusive, shall be in full force and effect at all times
after the execution hereof.

                  (b) The Lead Manager shall have the right to terminate this
Agreement at any time prior to the Closing Date or to terminate the obligations
of the Underwriters to purchase the Additional Shares at any time prior to the
Additional Closing Date, as the case may be, if (i) any domestic or
international event or act or occurrence has materially disrupted, or in the
opinion of the Lead Manager will in the immediate future materially disrupt, the
market for the Company's securities or securities in general, or (ii) if trading
on the NYSE or shall have been suspended or been made subject to material
limitations, or minimum or maximum prices for trading shall have been fixed, or
maximum ranges for prices for securities shall have been required, on the NYSE
or by order of the Commission or any other governmental authority having
jurisdiction, or (iii) if a banking moratorium has been declared by any state or
federal authority or if any material disruption in commercial banking or
securities settlement or clearance services shall have occurred, or (iv) any
downgrading shall have occurred in the Company's corporate credit rating, or (v)
since the respective dates as of which information is given in the Registration
Statement and the Prospectus, except as disclosed in the Prospectus (exclusive
of any supplement), any effect or change that had or has or, with the passage of
time, would

                                       29
<PAGE>

have a Material Adverse Effect or any development that could, in the Lead
Manager's judgment, be expected to result in a Material Adverse Effect, whether
or not arising in the ordinary course of business, or (vi) (A) if there shall
have occurred any outbreak or escalation of hostilities or acts of terrorism
involving the United States or there is a declaration of a national emergency or
war by the United States or (B) if there shall have been any other calamity or
crisis or any change in political, financial or economic conditions if the
effect of any such event in (A) or (B), in the judgment of the Lead Manager,
makes it impracticable or inadvisable to proceed with the offering, sale and
delivery of the Firm Shares or the Additional Shares, as the case may be, on the
terms and in the manner contemplated by the Prospectus, or (vii) if (A) the
Settlement Agreement shall have ceased to be valid and binding on the Company or
on the other parties thereto, or if any party thereto shall have breached or
defaulted under, or threatened to breach or default, the Settlement Agreement or
(B) there exists, or is threatened, any action, suit, proceeding or claim by any
person or any judicial, regulatory or other legal or governmental agency or body
challenging the validity, enforcement or other aspect of the Settlement
Agreement or (C) any governmental entity having competent jurisdiction shall
have issued any order or taken any action restraining, enjoining or otherwise
prohibiting the transactions contemplated by the Settlement Agreement or (viii)
if (A) the Purchase Agreement shall have ceased to be valid and binding on the
Company or on the other parties thereto, or if any party thereto shall have
breached or defaulted under, or threatened to breach or default, the Purchase
Agreement or (B) there exists, or is threatened, any action, suit, proceeding or
claim by any person or any judicial, regulatory or other legal or governmental
agency or body challenging the validity, enforcement or other aspect of the
Purchase Agreement.

                  (c) Any notice of termination pursuant to this Section 11
shall be in writing.

                  (d) If this Agreement shall be terminated pursuant to any of
the provisions hereof (other than pursuant to (i) notification by the Lead
Manager as provided in Section 11(a) hereof or (ii) Section 9(b) hereof), or if
the sale of the Shares provided for herein is not consummated because any
condition to the obligations of the Underwriters set forth herein is not
satisfied or because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or comply with any provision hereof, the
Company will, subject to demand by the Lead Manager, reimburse the Underwriters
for all out-of-pocket expenses (including the reasonable fees and expenses of
their counsel), incurred by the Underwriters in connection herewith.

            12. Notices. All communications hereunder, except as may be
otherwise specifically provided herein, shall be in writing, and:

                  (a) if sent to any Underwriter, shall be mailed, delivered, or
faxed and confirmed in writing, to such Underwriter c/o Bear, Stearns & Co.
Inc., 383 Madison Avenue, New York, New York 10179, Attention: Stephen Parish,
Senior Managing Director, Equity Capital Markets, with a copy to Underwriter's
Counsel at 333 South Grand Avenue, Los Angeles, California 90071, Attention:
Karen E. Bertero, Esq.; and

                                       30
<PAGE>

                  (b) if sent to the Company, shall be mailed, delivered, or
faxed and confirmed in writing to the Company and its counsel at the addresses
set forth in the Registration Statement, Attention: Larry Brady;

provided, however, that any notice to an Underwriter pursuant to Section 7 shall
be delivered or sent by mail or facsimile transmission to such Underwriter at
its address set forth in its acceptance facsimile to you, which address will be
supplied to any other party hereto by you upon request. Any such notices and
other communications shall take effect at the time of receipt thereof.

            13. Parties. This Agreement shall inure solely to the benefit of,
and shall be binding upon, the Underwriters, the Company and the controlling
persons, directors, officers, employees and agents referred to in Sections 7 and
8 hereof, and their respective successors and assigns, and no other person shall
have or be construed to have any legal or equitable right, remedy or claim under
or in respect of or by virtue of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the parties hereto and said
controlling persons and their respective successors, officers, directors, heirs
and legal representatives, and it is not for the benefit of any other person,
firm or corporation. The term "successors and assigns" shall not include a
purchaser, in its capacity as such, of Shares from any of the Underwriters.

            14. Governing Law and Jurisdiction; Waiver of Jury Trial. THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. The Company and Bear Stearns irrevocably (a) submit to the
jurisdiction of any court of the State of New York or the United State District
Court for the Southern District of the State of New York for the purpose of any
suit, action, or other proceeding arising out of this Agreement, or any of the
agreements or transactions contemplated by this Agreement, the Registration
Statement and the Prospectus (each, a "Proceeding"), (b) agree that all claims
in respect of any Proceeding may be heard and determined in any such court, (c)
waive, to the fullest extent permitted by law, any immunity from jurisdiction of
any such court or from any legal process therein, (d) agree not to commence any
Proceeding other than in such courts and (e) waive, to the fullest extent
permitted by law, any claim that such Proceeding is brought in an inconvenient
forum. THE COMPANY (ON BEHALF OF ITSELF AND, TO THE FULLEST EXTENT PERMITTED BY
LAW, ON BEHALF OF ITS RESPECTIVE EQUITY HOLDERS AND CREDITORS) HEREBY WAIVES ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON, ARISING
OUT OF OR IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT, THE REGISTRATION STATEMENT AND THE PROSPECTUS.

            15. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same instrument. Delivery of
a signed counterpart of this Agreement by facsimile transmission shall
constitute valid and sufficient delivery thereof.

            16. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.

                                       31
<PAGE>

            17. Time is of the Essence. Time shall be of the essence of this
Agreement. As used herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.

                            [signature page follows]

                                       32
<PAGE>

                                                                  EXECUTION COPY

            If the foregoing correctly sets forth your understanding, please so
indicate in the space provided below for that purpose, whereupon this letter
shall constitute a binding agreement among us.

                                       Very truly yours,

                                       THE GREENBRIER COMPANIES, INC.

                                       By: /s/ Larry G. Brady
                                           ------------------------------------
                                           Name: Larry G. Brady
                                           Title: Senior Vice President and CFO

Accepted as of the date first above written,

BEAR, STEARNS & CO. INC.
WACHOVIA SECURITIES
BB&T CAPITAL MARKETS
D.A. DAVIDSON & CO.

As representative of the several
Underwriters named on Schedule I

By: BEAR, STEARNS & CO. INC.

By: /s/ Cary H. Thompson
    -------------------------------
    Name: Cary H. Thompson
    Title: Senior Managing Director

<PAGE>

SCHEDULE I

<TABLE>
<CAPTION>
                                                             Number of Additional Shares to
                               Total Number of Firm          be Purchased if Option is
Underwriter                    Shares to be Purchased        Fully Exercised
<S>                            <C>                           <C>
Bear, Stearns & Co. Inc.               2,844,000                         426,600
Wachovia Securities                      711,000                         106,650
BB&T Capital Markets                     472,500                          70,875
D.A. Davidson & Co.                      472,500                          70,875

     Total ..................          4,500,000                         675,000
                                       =========                         =======
</TABLE>

                                       34
<PAGE>

                                                                  EXECUTION COPY

                                   SCHEDULE II

Vic Atiyeh
Daniel O'Neal
Bruce Ward
Ben Whiteley
Robin Bisson
Clark Wood
Larry Brady
Duane McDougall
James Sharp
Donald Washburn

<PAGE>

                                                                  EXECUTION COPY

                                    EXHIBIT A

                                  Subsidiaries

3048389 Nova Scotia Limited
Alliance Castings Company, LLC
Autostack Corporation
Chicago Castings Company, LLC
Greenbrier-Concarril, LLC
Greenbrier Europe B.V.
Greenbrier Germany GmbH
Greenbrier Leasing Corporation
Greenbrier Leasing, L.P.
Greenbrier Leasing Limited
Greenbrier Leasing Limited Partner, LLC
Greenbrier Management Services, LLC
Greenbrier Railcar, Inc.
Greenbrier U.K. Limited
Gunderson, Inc.
Gunderson-Concarril, S.A. de C.V.
Gunderson Marine, Inc.
Gunderson Rail Services, Inc.
Gunderson Specialty Products, LLC
Ohio Castings Company, LLC
TrentonWorks Limited
WagonySwidnica S.A.

                                       1
<PAGE>

                                    EXHIBIT B

                               Company Statements

1.    "Although no formal statistics are available for the European market, we
      believe we are the second largest new freight car manufacturer with an
      estimated 20% market share." (S-1, S-49)

2.    "...we believe we also hold a leading market position in the manufacturing
      of railcars in Europe." (S-2)

3.    "...we believe that approximately 2,000 railcars are refurbished each
      year..." (S-48)

                                       2
<PAGE>

                                    EXHIBIT C

3048389 Nova Scotia Limited         The Greenbrier Companies, Inc. owns 100% of
                                    the common stock. Preferred investors also
                                    have an interest in this entity.

Ohio Castings Company, LLC          Gunderson Specialty Products, LLC owns 33
                                    1/3% of the entity.

Alliance Castings Company, LLC      Ohio Castings Company, LLC owns 100% of this
                                    entity.

Chicago Castings Company, LLC       Ohio Castings Company, LLC owns 100% of this
                                    entity.

WagonySwidnica S.A.                 Greenbrier Europe B.V. owns 97% of this
                                    entity.

                                       3
<PAGE>

                                     ANNEX I

                  [SQUIRE, SANDERS & DEMPSEY L.L.P. LETTERHEAD]

May __, 2005

Bear, Stearns & Co. Inc.
Wachovia Securities
BB&T Capital Markets
D.A. Davidson & Co.
   As Representatives of the
   several Underwriters
      c/o Bear, Stearns & Co. Inc.
      383 Madison Avenue
      New York, New York 10179

                                          Re: The Greenbrier Companies
                                                4,500,000 Shares of Common Stock

Ladies and Gentlemen:

      We have acted as counsel for The Greenbrier Companies, a Delaware
corporation (the "Company"), in connection with the offering and sale of
4,500,000 shares (the "Shares") of the Company's common stock, par value $0.001
per share (the "Common Stock"). We are delivering this opinion to you at the
request of the Company pursuant to Section 6(b) of the Underwriting Agreement
dated May 5, 2005 (the "Underwriting Agreement") between the Company and you, as
representatives of the several underwriters named in Schedule I of the
Underwriting Agreement, relating to the purchase by such underwriters of the
Shares. Capitalized terms used in this opinion have the same meanings as in the
Underwriting Agreement, unless otherwise defined in this opinion.

      We have participated in the preparation of (i) a registration statement on
Form S-3 (File No. 333-121181), containing a form of base prospectus, filed by
the Company on December 13, 2004 with the Securities and Exchange Commission
(the "Commission") under the Securities Act of 1933, as amended (the "Securities
Act"), relating to the registration of 6,000,000 shares of the Common Stock,
(ii) the form of preliminary prospectus supplement, together with the
accompanying form of base prospectus, filed by the Company with the Commission
pursuant to Rule 424(b) under the Securities Act on April 21, 2005, and (iii)
the final form of prospectus supplement, together with the accompanying base
prospectus, filed by the Company with the Commission pursuant to Rule 424(b)
under the Securities Act on May 6, 2005. Such registration statement, in the
form it became effective and including the information deemed to be part of such
registration statement at the time of effectiveness pursuant to Rule 430A under
the Securities Act, is referred to as the "Registration Statement," and the
final form of prospectus

                                       4
<PAGE>

supplement, together with the accompanying base prospectus, as filed pursuant to
Rule 424(b) under the Securities Act, is referred to as the "Prospectus."

      In rendering this opinion, we have examined originals or copies, certified
or otherwise identified to our satisfaction, of all such agreements,
certificates and documents, and have considered such matters of law, as we have
deemed necessary or appropriate for purposes of this opinion. As to factual
matters not within our actual knowledge, we have relied without independent
verification upon such certificates as we have deemed appropriate, including
certificates of officers of the Company and certificates of public officials. We
have assumed without independent verification the genuineness of all signatures
on all documents reviewed by us (other than signatures by officers of the
Company), the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals, the conformity to authentic originals of
all documents submitted to us as copies, and the due authorization, execution
and delivery of all documents by all parties other than the Company.

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

      1. The Company is a corporation validly existing and in good standing
under the laws of the State of Delaware, with the corporate power and authority
to own its properties and conduct its business as described in the Registration
Statement and the Prospectus.

      2. The Company has an authorized capitalization as set forth in the
Registration Statement and the Prospectus. The Shares to be delivered on the
Closing Date have been duly authorized by the Company and, when issued and
delivered against payment therefor in accordance with the Underwriting
Agreement, will be validly issued, fully paid and nonassessable and will not
have been issued subject to preemptive or, to the best of our knowledge, similar
rights that entitle or will entitle any person to acquire any Shares from the
Company upon issuance or sale thereof. The Common Stock, the Shares and any
Additional Shares conform in all material respects to the description thereof
contained in the Registration Statement and the Prospectus.

      3. The Common Stock currently outstanding is listed on the New York Stock
Exchange, and the Shares to be sold under the Underwriting Agreement to the
Underwriters are duly authorized for listing on the New York Stock Exchange,
subject to official notice of issuance.

      4. The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.

      5. The execution, delivery, and performance of the Underwriting Agreement
and consummation of the transactions contemplated by the Underwriting Agreement,
the Registration Statement and the Prospectus do not and will not violate or
conflict with any provision of the certificate of incorporation, bylaws or other
organizational documents of the Company or any of its Subsidiaries or any
statute, rule or regulation of any regulatory or governmental agency or body
that is applicable to the Company.

                                       5
<PAGE>

      6. No consent, approval, authorization, order, registration, filing,
qualification, license or permit of or with any court or any judicial,
regulatory or other legal or governmental agency or body is required for the
execution, delivery and performance by the Company of the Underwriting Agreement
or consummation by the Company of the transactions contemplated by the
Underwriting Agreement, the Registration Statement and the Prospectus, except
for (a) such as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the Underwriters,
(b) such as have been made or obtained under the Securities Act, and (c) such as
may be required by the NASD.

      7. The Registration Statement and the Prospectus and any amendments
thereof or supplements thereto, including the documents filed under the Exchange
Act and incorporated by reference into the Registration Statement and the
Prospectus or any amendment thereof or supplement thereto, at the time such
documents were filed with the Commission (other than the financial statements
and schedules and other financial data included or incorporated by reference
therein, as to which no opinion is rendered), comply as to form in all material
respects with the requirements of the Securities Act, the Exchange Act and the
Rules and Regulations.

      8. The statements under the caption "Description of Capital Stock" in the
Prospectus, insofar as such statements constitute a summary of the legal matters
or documents referred to therein, are an accurate and fair presentation with
respect to such legal matters and documents in the context in which made in the
Prospectus.

      9. The Company is not and, after giving effect to the offering and sale of
the Shares and the application of the proceeds thereof as described in the
Registration Statement and the Prospectus, will not be, an "investment company"
as such term is defined in the Investment Company Act of 1940, as amended.

      10. The Registration Statement is effective under the Securities Act, and,
to the best of our knowledge, no stop-order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereof has been issued
and no proceedings therefor have been initiated or threatened by the Commission
and all filings required by Rule 424(b) and Rule 430A under the Securities Act
have been made.

      11. The Company has the requisite corporate power and authority to execute
and deliver the Underwriting Agreement and the Shares and to perform its
obligations thereunder, and all corporate actions required to be taken for the
due authorization, execution and delivery of the Underwriting Agreement and the
Shares and consummation of the transactions contemplated by the Underwriting
Agreement, the Registration Statement and the Prospectus and as described in the
Registration Statement and the Prospectus have been duly and validly taken.

      12. To the best of our knowledge, no contract or agreement is required to
be filed as an exhibit to the Registration Statement that is not so filed.

      Although we have not independently verified and are not passing upon, and
do not assume any responsibility for, the accuracy or completeness of the
information contained in the Registration Statement and the Prospectus (except
as and to the extent stated in paragraph 8 above), we have participated in
conferences with officers and representatives of the Company,

                                       6
<PAGE>

representatives of the independent public accountants for the Company and
representatives of the Underwriters at which the contents of the Registration
Statement and the Prospectus and related matters were discussed, and no facts
have come to our attention which would lead us to believe that either the
Registration Statement, at the time it became effective, or any amendment
thereof made prior to the Closing Date, as of the date of such amendment,
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus (including the documents
incorporated by reference therein), as of its date (or any amendment thereof or
supplement thereto made prior to the Closing Date, as of the date of such
amendment or supplement) and as of the Closing Date, contained or contains any
untrue statement of a material fact or omitted or omits to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading
(provided we are not expressing any view with respect to the financial
statements and schedules and other financial data included or incorporated by
reference therein).

      Whenever a statement in this opinion is qualified by "to the best of our
knowledge," such term is intended to indicate that those attorneys presently at
this firm who have worked on matters relating to the Company do not have actual
knowledge of the inaccuracy of such statement.

      This opinion is based solely upon the federal laws of the United States of
America and the General Corporation Law of the State of Delaware.

      This opinion speaks as of its date and we assume no obligation to advise
you of any events or circumstances occurring after this date that may change any
opinion or statement of belief expressed above. This opinion is rendered to you
solely for your benefit in connection with the transactions described above and
may not be relied upon for any other purpose or by any other person without our
prior written consent.

                                               Respectfully submitted,

                                       7
<PAGE>

                                                                  EXECUTION COPY

                                    ANNEX II

                                  May __, 2005

BEAR, STEARNS & CO. INC.
WACHOVIA SECURITIES
BB&T CAPITAL MARKETS
D.A. DAVIDSON & CO.
       As Representatives of the
       several Underwriters named in
       Schedule I attached hereto
c/o Bear, Stearns & Co. Inc.
383 Madison Avenue
New York, New York 10179

                         The Greenbrier Companies, Inc.

      We are counsel to The Greenbrier Companies, Inc. (the "Company"). We have
been asked to render this opinion with respect to certain matters specifically
set forth herein pertaining to the Settlement Agreement, dated as of April 20,
2005 (the "Settlement Agreement") and the Stock Purchase Agreement, dated as of
April 20, 2005 (the "Purchase Agreement"), each of such agreements being by and
among (a) George L. Chelius and Eric Epperson, as Executors of the Will and
Estate of Alan James and as Trustees (for convenience, the "Executors"), (b) the
Company and (c) William A. Furman. This opinion is delivered to you in
connection with the Closing of transactions contemplated by that certain
Underwriting Agreement, dated as of May ___, 2005 (the "Underwriting Agreement")
between and among the Company and Bear, Stearns & Co. Inc., BB&T Capital
Markets, D.A. Davidson & Co. and Wachovia Securities, as representatives of the
several Underwriters named in Schedule I to the Underwriting Agreement.

      We have not acted as primary counsel to the Company in connection with the
Underwriting Agreement or the transactions contemplated by the Underwriting
Agreement and we express no opinion with respect to the Underwriting Agreement
or the offer or sale of Shares of the Company's Common Stock under or pursuant
to the Underwriting Agreement. This opinion is subject to the assumptions,
qualifications, limitations and exceptions set forth in Exhibit A to this
letter. Initially capitalized terms used in this opinion but not otherwise
defined herein have the meanings set forth in the Underwriting Agreement.

      We have examined and relied upon the originals, or copies certified or
otherwise identified to our satisfaction, of (a) the Underwriting Agreement, (b)
the Settlement Agreement, (c) the Purchase Agreement, (d) the letter agreement
dated as of April 20, 2005 ("Letter Agreement") among the Company, Bear, Stearns
& Co., Inc., William A. Furman and the Executors and (e) such corporate records,
documents, certificates and other agreements and instruments (including, without
limitation, both official and unofficial databases and records available and
maintained by public officials) as we have deemed necessary or appropriate to
enable us to render the opinions hereinafter expressed. References in this
opinion to the Settlement Agreement or the Purchase Agreement shall be deemed to
refer to the Settlement Agreement or the Purchase Agreement as the same are
modified or supplemented by the Letter Agreement.

                                       1
<PAGE>

      Based upon and subject to the foregoing, and the qualifications and
exclusions set forth herein, we are of the opinion that:

      (1)  The Settlement Agreement has been validly authorized, executed and
delivered by the Company and constitutes the legal, valid and binding obligation
of the Company, enforceable in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
and except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).

      (2)  The Purchase Agreement has been validly authorized, executed and
delivered by the Company and constitutes the legal, valid and binding obligation
of the Company, enforceable in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
and except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).

      (3)  The execution, delivery, and performance by the Company of the
Settlement Agreement and the Purchase Agreement and consummation by the Company
of the transactions contemplated by the Settlement Agreement and the Purchase
Agreement do not: (A) result in a breach of any of the terms and provisions of,
or constitute a default (or an event which with notice or lapse of time, or
both, would constitute a default) under, or result in the creation or imposition
of any Lien upon any property or assets of the Company or any of its
Subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan agreement
or any other agreement, instrument, franchise, license or permit known to us to
which the Company or any of its Subsidiaries is a party or by which any of the
Company or any of its Subsidiaries or their respective properties or assets may
be bound; (B) violate or conflict with any provision of the certificate of
incorporation, by-laws or other organizational documents of the Company or any
of its Subsidiaries; or (C) to the best of our knowledge, any judgment, decree,
order, statute, rule or regulation of any court or any judicial, regulatory or
other legal or governmental agency or body that is applicable to the Company,
except, in the case of clauses (A) and (C), for breaches or violations that,
singly or in the aggregate, would not have a Material Adverse Effect.

      (4)  No consent, approval, authorization, order, registration, filing,
qualification, license or permit of or with any court or any judicial,
regulatory or other legal or governmental agency or body is required for the
execution, delivery and performance by the Company of the Settlement Agreement
and the Purchase Agreement or consummation by the Company of the transactions
contemplated by the Settlement Agreement and the Purchase Agreement, except for
such as may be required under state securities or Blue Sky laws, the Securities
Act of 1933 or by the National Association of Securities Dealers, Inc. in
connection with the purchase and distribution of the Shares by the Underwriters,
as to which matters we express no opinion.

      (5)  The statements under the caption "Recent Developments - Settlement
with the Estate of Alan James" in the Prospectus and in Item 15 of Part II of
the Registration Statement, insofar as such statements constitute a summary of
the legal matters or documents referred to therein, are an accurate and fair
presentation with respect to such legal matters and documents in the context in
which made in such Prospectus or Registration Statement.

      Our opinions are limited to the matters stated in this letter. No
additional opinion is implied or may be inferred beyond the matters expressly
stated in this letter. The opinions expressed herein are limited to the federal
law of the United States, the Applicable Law of the State of Oregon and the
General Corporation Law of the State of Delaware. "Applicable Law" means the
published judicial and

                                       2
<PAGE>

administrative decisions and the published rules and regulations of governmental
agencies, of the State of Oregon, in each case which are generally available
(i.e., in terms of access and distribution following publication or other
release) in a format that makes legal research reasonably feasible, but does not
include the statutes, ordinances, administrative decisions, rules or regulations
of counties, towns, municipalities or political subdivisions. Notwithstanding
the terms of the Settlement Agreement, the Purchase Agreement and the related
documents to the effect that any such agreement or instrument reflects the
entire understanding of the parties with respect to the subject matters therein,
courts may consider or entertain parol evidence.

      Whenever our opinion is based on circumstances "to our knowledge" or by
any other similar phrase, or where it is noted that nothing has been brought to
our attention, it means that the opinion stated is based solely on the conscious
awareness of facts or other information by Kenneth D. Stephens or Sherrill A.
Corbett or on certificates of officers (after discussion of the contents thereof
with such officers) of the Company or certificates of others as to the existence
or non-existence of the factual matters upon which such opinion is predicated.
We have not undertaken any investigation to determine the accuracy of the
matters covered by any such statement and any limited inquiry undertaken by us
during the preparation of this opinion letter should not be regarded as such an
investigation. No inference as to our knowledge of any matters bearing on the
accuracy of the facts underlying any such statement should be drawn from the
fact of our representation of the Company or any Subsidiary.

            This letter sets forth our opinion as of the date it bears. We do
not assume any obligation to provide you with any subsequent opinion or advice
by reason of any fact of which we did not have actual knowledge at that time, by
reason of any change subsequent to that time in any law covered by any of our
opinions, or for any other reason, even though the changes may affect a legal
analysis or conclusion or an information confirmation in this opinion letter.

      This opinion is rendered for your benefit, and may be relied upon only by
you, and only in connection with the transactions contemplated by the
Underwriting Agreement. Accordingly, neither this letter nor the opinions
expressed in it are to be relied upon by any other person or entity, or for any
other purpose, or used, circulated, quoted in whole or in part or otherwise
referred to in any document or (except as required by judicial or administrative
process or by other requirements of law) filed with any governmental or other
administrative agency or other person or by any other person or entity or for
any other purpose without in each instance our express, prior written consent.

                                               TONKON TORP LLP

                                       3
<PAGE>

                                    EXHIBIT A

A. ASSUMPTIONS

   We have relied, without investigation, upon the following assumptions:

            1.                 Each individual, other than the Company, signing
                  the Settlement Agreement, the Purchase Agreement and the
                  related documents has sufficient legal capacity to enter into
                  and perform the transactions contemplated by those agreements
                  (the "Transactions") and to carry out his or her role under
                  those documents.

            2.                 Each document submitted to us for review is
                  accurate and complete, each such document that is an original
                  is authentic, each such document that is a copy conforms to an
                  authentic original, and all signatures on each such document
                  are genuine.

            3.                 The Executors have satisfied those legal
                  requirements that are applicable to them to the extent
                  necessary to make the Settlement Agreement, the Purchase
                  Agreement and the related documents enforceable against them.

            4.                 Each party to the Settlement Agreement, the
                  Purchase Agreement and the related documents, other than the
                  Company, has complied with all legal requirements pertaining
                  to its status as such status relates to its rights to enforce
                  the Settlement Agreement, the Purchase Agreement and the
                  related documents against the Company.

            5.                 Each person that is a party to the Settlement
                  Agreement, the Purchase Agreement and the related documents,
                  other than the Company, has the power, authority and legal
                  right to execute and deliver, and to perform such person's
                  obligations under, the Settlement Agreement, the Purchase
                  Agreement and such other documents to which such person is a
                  party.

            6.                 Each person that is a party to the Settlement
                  Agreement, the Purchase Agreement and the related documents,
                  other than the Company, has duly authorized, executed and
                  delivered the Settlement Agreement, the Purchase Agreement and
                  such other documents to which such person is a party.

            7.                 The Settlement Agreement, the Purchase Agreement
                  and the related documents constitute legal, valid and binding
                  obligations of each party thereto, other than the Company,
                  enforceable against each such party in accordance with their
                  terms.

            8.                 The parties to the Settlement Agreement and the
                  Purchase Agreement have received the consideration to be
                  delivered to them at the Closing pursuant to the terms of such
                  agreements.

            9.                 No action has been taken nor will be taken by any
                  party, other than the Company, before the Closing that would
                  give rise to a defense by any other party that one or more
                  provisions of the Settlement Agreement, the Purchase Agreement
                  or the related documents are unenforceable.

                                       4
<PAGE>

            10.                There has not been any mutual mistake of fact or
                  misunderstanding, fraud, duress or undue influence in
                  connection with the Settlement Agreement, the Purchase
                  Agreement or the related documents.

            11.                The conduct of the parties to the Settlement
                  Agreement, the Purchase Agreement and the related documents
                  has complied with any requirement of good faith, fair dealing
                  and conscionability.

            12.                There are no agreements or understandings among
                  the parties, written or oral, and there is no usage of trade
                  or course of prior dealing among the parties that would, in
                  either case, define, supplement or qualify the terms of the
                  Settlement Agreement, the Purchase Agreement or the related
                  documents.

            13.                All conditions precedent to the effectiveness of
                  the Settlement Agreement, the Purchase Agreement and the
                  related documents have been satisfied or waived.

            14.                The constitutionality or validity of a relevant
                  statute, rule, regulation, or agency action is not in issue
                  unless a reported decision in the State of Delaware or Oregon
                  has specifically addressed but not resolved, or has
                  established, its unconstitutionality or invalidity.

            15.                All agreements and court orders, if any,
                  affecting the Company or any of its Subsidiaries would be
                  enforced as written.

B. EXCLUSIONS

      We express no opinion as to the legality, validity, binding effect, or
enforceability or unenforceability of provisions of the Settlement Agreement or
Purchase Agreement which may:

   1. Purport to require waivers or amendments to be in writing or signed by all
      parties;

   2. Purport to provide for exclusive jurisdiction in any venue;

   3. Relate to severability of any material invalid provision, or

   4. Provide for exculpation or indemnification (to the extent exculpation or
      indemnification may be limited by public policy), or which may purport to
      exculpate or indemnify a party from the consequences of its own
      negligence, breach of fiduciary duty, gross negligence, recklessness,
      willful misconduct, or unlawful conduct).

                                       5
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                                                                  EXECUTION COPY

                                    ANNEX III

                Form of Opinion of General Counsel of the Company

            (i) Each of the Company's subsidiaries (the "Subsidiaries") has been
duly organized and is validly existing and in good standing under the laws of
its jurisdiction of organization and has all necessary corporate power and
authority to own, lease and operate its property and to conduct its business as
described in the Registration Statement and the Prospectus. The Company owns,
directly or indirectly, all of the issued and outstanding shares of the
Subsidiaries free and clear of all Liens. The Company and each of the
Subsidiaries is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which the character or location of
its properties (owned, leased or licensed) or the nature or conduct of its
business makes such qualification necessary, except for those failures to be so
qualified or in good standing which would not (individually or when aggregated
with other such instances) have a material adverse effect on the business,
assets, properties, financial condition or results of operations of the Company
and its subsidiaries taken as a whole (a "Material Adverse Effect").

            (ii) All of the issued and outstanding shares of capital stock of
the Company have been duly authorized and validly issued, are fully paid and
nonassessable and are not subject to any preemptive or, to the best of such
counsel's knowledge, similar rights that entitle or will entitle any person to
acquire any Shares from the Company upon issuance or sale thereof. All of the
issued shares of capital stock of each of the Subsidiaries have been duly
authorized and validly issued, are fully paid and nonassessable.

            (iii) Neither the Company nor any of its Subsidiaries is in
violation of its respective charter or bylaws and, to such counsel's knowledge,
neither the Company nor any of its Subsidiaries is in default in the performance
of any obligation, agreement, covenant or condition contained in any indenture,
loan agreement, mortgage, lease or other agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which the Company or any of
its Subsidiaries or their respective property is bound, except for defaults
that, singly or in the aggregate, would not have a Material Adverse Effect.

            (iv) The execution, delivery, and performance of the Underwriting
Agreement and consummation of the transactions contemplated by the Underwriting
Agreement, the Registration Statement and the Prospectus do not and will not (a)
conflict with or result in a breach of any of the terms and provisions of, or
constitute a default (or an event which with notice or lapse of time, or both,
would constitute a default) under, or result in the creation or imposition of
any Lien upon any property or assets of the Company or any of its Subsidiaries
pursuant to, any indenture, mortgage, deed of trust, loan agreement or any other
agreement, instrument, franchise, license or permit to which the Company or any
of its Subsidiaries is a party or by which any of the Company or any of its
Subsidiaries or their respective properties or assets may be bound, (b) violate
or conflict with any provision of the certificate of incorporation, bylaws or
other organizational documents of the Company or any of its Subsidiaries, or (c)
violate any judgment, decree, order, statute, rule or regulation of any court or
any judicial, regulatory or other legal or governmental agency or body
applicable to the Company, except (in

                                       6
<PAGE>

the case of clauses (a) and (c)) for conflicts, breaches or violations that,
singly or in the aggregate, would not have a Material Adverse Effect.

            (v) Other than as set forth in the Prospectus, there are no
judicial, regulatory or other legal or governmental proceedings pending to which
the Company or any of its Subsidiaries is a party or of which any property of
the Company or any of its Subsidiaries is the subject which, if determined
adversely to the Company or any of its Subsidiaries, would singly or in the
aggregate have a Material Adverse Effect; and, to such counsel's knowledge, no
such proceedings are threatened or contemplated.

            (vi) Except as disclosed in the Prospectus, to such counsel's
knowledge, neither the Company nor any of its Subsidiaries has violated any
environmental law, any provisions of the Employee Retirement Income Security Act
of 1974, as amended, or any provisions of the Foreign Corrupt Practices Act, or
the rules and regulations promulgated thereunder, except for such violations
which, singly or in the aggregate, would not have a Material Adverse Effect.

            (vii) Each of the Company and its Subsidiaries has such
authorizations of, and has made all filings with and notices to, all
governmental or regulatory authorities and self-regulatory organizations and all
courts and other tribunals, including, without limitation, under any applicable
environmental laws, as are necessary to own, lease, license and operate its
respective properties and to conduct its business, except where the failure to
have any such authorization or to make any such filing or notice would not,
singly or in the aggregate, have a Material Adverse Effect; each such
authorization is valid and in full force and effect and each of the Company and
its Subsidiaries is in compliance with all the terms and conditions thereof and
with the rules and regulations of the authorities and governing bodies having
jurisdiction with respect thereto; and no event has occurred (including, without
limitation, the receipt of any notice from any authority or governing body)
which allows or, after notice or lapse of time or both, would allow, revocation,
suspension or termination of any such authorization or results or, after notice
or lapse of time or both, would result in any other impairment of the rights of
the holder of any such authorization; and such authorizations contain no
restrictions that are burdensome to the Company or any of its Subsidiaries;
except where such failure to be valid and in full force and effect or to be in
compliance, the occurrence of any such event or the presence of any such
restriction would not, singly or in the aggregate, have a Material Adverse
Effect.

            (viii) No consent or approval of, or notice to or filing with, the
Federal Railroad Administration or the Association of American Railroads under
any provision of applicable laws is required by the Company in connection with
the execution and delivery of the Underwriting Agreement or the offer, sale and
issuance of the Shares as contemplated by the Prospectus.

            (ix) The statements under the captions "Business - Legal Matters",
"Business - Environmental Matters" and "Certain Relationships and Related Party
Transactions" in the Prospectus, insofar as such statements constitute a summary
of the legal matters or documents referred to therein, are an accurate and fair
presentation with respect to such legal matters and documents in the context in
which made in the Prospectus.

                                       7
<PAGE>

                                  ANNEX III(A)

         Form of Opinion of Canadian Regulatory Counsel for the Company

(i) No consent or approval of, or notice to or filing with Transport Canada
under any provision of applicable laws is required by the Company in connection
with the execution and delivery of the Underwriting Agreement or the offer, sale
and issuance of the Shares as contemplated by the Prospectus.

                                       8
<PAGE>

                                    ANNEX IV

                                      [D&O]
                                Lock-Up Agreement

                                 April __, 2005

Bear, Stearns & Co. Inc.
      As Representative of the several
      Underwriters referred to below
c/o Bear, Stearns & Co. Inc.
383 Madison Avenue
New York, New York 10179
Attention: Equity Capital Markets

                The Greenbrier Companies, Inc. Lock-Up Agreement

Ladies and Gentlemen:

      This letter agreement (this "Agreement") relates to the proposed public
offering (the "Offering") by The Greenbrier Companies, Inc., a Delaware
corporation (the "Company"), of its common stock, $.001 par value (the "Stock").

      In order to induce you and the other underwriters for which you act as
representative (the "Underwriters") to underwrite the Offering, the undersigned
hereby agrees that, without the prior written consent of Bear, Stearns & Co.
Inc. ("Bear Stearns"), during the period from the date hereof until sixty (60)
days from the date of the final prospectus for the Offering (the "Lock-Up
Period"), the undersigned (a) will not, directly or indirectly, offer, sell,
agree to offer or sell, solicit offers to purchase, grant any call option or
purchase any put option with respect to, pledge, borrow or otherwise dispose of
any Relevant Security (as defined below), and (b) will not establish or increase
any "put equivalent position" or liquidate or decrease any "call equivalent
position" with respect to any Relevant Security (in each case within the meaning
of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder), or otherwise enter into any swap,
derivative or other transaction or arrangement that transfers to another, in
whole or in part, any economic consequence of ownership of a Relevant Security,
whether or not such transaction is to be settled by delivery of Relevant
Securities, other securities, cash or other consideration; provided, however,
that the foregoing restrictions shall not preclude or otherwise limit (i) the
exercise of an option to purchase Stock previously granted to the undersigned by
the Company, (ii) the transfer to the Company of Stock in connection with an
exercise of an option to purchase Stock solely to pay the option exercise price
or any taxes required to be withheld by the Company to the extent such transfer
is permitted to satisfy such obligations pursuant to the Company's equity
compensation plans or the agreement pursuant to which such option was granted
and so long as such transfer does not result in a sale of Stock to the public or
(iii) a bona fide gift of Stock approved by Bear Stearns so long as the
recipient of such Stock agrees in writing to be bound by the restrictions of
this Lock-Up Letter Agreement; provided as to (iii) above, each resulting
transferee of Relevant Securities executes and delivers to you an agreement
satisfactory to you certifying that such transferee is bound by the terms of
this Agreement and has been in compliance with the terms

<PAGE>

hereof since the date first above written as if it had been an original party
hereto. As used herein "Relevant Security" means the Stock, any other equity
security of the Company or any of its subsidiaries and any security convertible
into, or exercisable or exchangeable for, any Stock or other such equity
security.

      If:

            (1) during the period that begins on the date that is 15 calendar
      days plus 3 business days before the last day of the Lock-Up Period and
      ends on the last day of the Lock-Up Period, the Company issues a earnings
      release or material news or a material event relating to the Company
      occurs; or

            (2) prior to the expiration of the Lock-Up Period, the Company
      announces that it will release earnings results during the 16-day period
      beginning on the last day of the Lock-Up Period,

      the restrictions imposed by this Agreement shall continue to apply until
the expiration of the date that is 15 calendar days plus 3 business days after
the date on which the issuance of the earnings release or the material news or
material event occurs; provided, however, this paragraph will not apply if,
within 3 days of the termination of the Lock-Up Period, the Company delivers to
Bear Stearns a certificate, signed by the Chief Financial Officer or Chief
Executive Officer of the Company, certifying on behalf of the Company that the
Company's shares of Stock are, as of the date of delivery of such certificate,
"actively traded securities," as defined in Regulation M, 17 CFR 242.101(c)(1).

      The undersigned hereby authorizes the Company during the Lock-Up Period to
cause any transfer agent for the Relevant Securities to decline to transfer, and
to note stop transfer restrictions on the stock register and other records
relating to, Relevant Securities for which the undersigned is the record holder
and, in the case of Relevant Securities for which the undersigned is the
beneficial but not the record holder, agrees during the Lock-Up Period to cause
the record holder to cause the relevant transfer agent to decline to transfer,
and to note stop transfer restrictions on the stock register and other records
relating to, such Relevant Securities. The undersigned hereby further agrees
that, without the prior written consent of Bear Stearns, during the Lock-up
Period the undersigned (x) will not file or participate in the filing with the
Securities and Exchange Commission of any registration statement, or circulate
or participate in the circulation of any preliminary or final prospectus or
other disclosure document with respect to any proposed offering or sale of a
Relevant Security and (y) will not exercise any rights the undersigned may have
to require registration with the Securities and Exchange Commission of any
proposed offering or sale of a Relevant Security.

      The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Agreement and that this Agreement
constitutes the legal, valid and binding obligation of the undersigned,
enforceable in accordance with its terms. Upon request, the undersigned will
execute any additional documents necessary in connection with enforcement
hereof. Any obligations of the undersigned shall be binding upon the successors
and assigns of the undersigned from the date first above written.

                                       2
<PAGE>

      This Agreement shall be governed by and construed in accordance with the
laws of the State of New York. Delivery of a signed copy of this letter by
facsimile transmission shall be effective as delivery of the original hereof.

                                            Very truly yours,

                                            By: ________________________________

                                            Print Name: ________________________

                                       3
<PAGE>

                                     ANNEX V

                                    [Furman]
                                Lock-Up Agreement

                                 April __, 2005

Bear, Stearns & Co. Inc.
      As Representative of the several
      Underwriters referred to below
c/o Bear, Stearns & Co. Inc.
383 Madison Avenue
New York, New York 10179
Attention: Equity Capital Markets

                The Greenbrier Companies, Inc. Lock-Up Agreement

Ladies and Gentlemen:

      This letter agreement (this "Agreement") relates to the proposed public
offering (the "Offering") by The Greenbrier Companies, Inc., a Delaware
corporation (the "Company"), of its common stock, $.001 par value (the "Stock").

      In order to induce you and the other underwriters for which you act as
representative (the "Underwriters") to underwrite the Offering, the undersigned
hereby agrees that, without the prior written consent of Bear, Stearns & Co.
Inc. ("Bear Stearns"), during the period from the date hereof until ninety (90)
days from the date of the final prospectus for the Offering (the "Lock-Up
Period"), the undersigned (a) will not, directly or indirectly, offer, sell,
agree to offer or sell, solicit offers to purchase, grant any call option or
purchase any put option with respect to, pledge, borrow or otherwise dispose of
any Relevant Security (as defined below), and (b) will not establish or increase
any "put equivalent position" or liquidate or decrease any "call equivalent
position" with respect to any Relevant Security (in each case within the meaning
of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder), or otherwise enter into any swap,
derivative or other transaction or arrangement that transfers to another, in
whole or in part, any economic consequence of ownership of a Relevant Security,
whether or not such transaction is to be settled by delivery of Relevant
Securities, other securities, cash or other consideration; provided, however,
that the foregoing restrictions shall not preclude or otherwise limit (i) the
exercise of an option to purchase Stock previously granted to the undersigned by
the Company, (ii) the transfer to the Company of Stock in connection with an
exercise of an option to purchase Stock solely to pay the option exercise price
or any taxes required to be withheld by the Company to the extent such transfer
is permitted to satisfy such obligations pursuant to the Company's equity
compensation plans or the agreement pursuant to which such option was granted
and so long as such transfer does not result in a sale of Stock to the public or
(iii) a bona fide gift of Stock approved by Bear Stearns so long as the
recipient of such Stock agrees in writing to be bound by the restrictions of
this Lock-Up Letter Agreement; provided as to (iii) above, each resulting
transferee of Relevant Securities executes and delivers to you an agreement
satisfactory to you certifying that such transferee is bound by the terms of
this Agreement and has been in compliance with the terms

                                       4
<PAGE>

hereof since the date first above written as if it had been an original party
hereto. As used herein "Relevant Security" means the Stock, any other equity
security of the Company or any of its subsidiaries and any security convertible
into, or exercisable or exchangeable for, any Stock or other such equity
security.

      If:

            (1) during the period that begins on the date that is 15 calendar
      days plus 3 business days before the last day of the Lock-Up Period and
      ends on the last day of the Lock-Up Period, the Company issues a earnings
      release or material news or a material event relating to the Company
      occurs; or

            (2) prior to the expiration of the Lock-Up Period, the Company
      announces that it will release earnings results during the 16-day period
      beginning on the last day of the Lock-Up Period,

      the restrictions imposed by this Agreement shall continue to apply until
the expiration of the date that is 15 calendar days plus 3 business days after
the date on which the issuance of the earnings release or the material news or
material event occurs; provided, however, this paragraph will not apply if,
within 3 days of the termination of the Lock-Up Period, the Company delivers to
Bear Stearns a certificate, signed by the Chief Financial Officer or Chief
Executive Officer of the Company, certifying on behalf of the Company that the
Company's shares of Stock are, as of the date of delivery of such certificate,
"actively traded securities," as defined in Regulation M, 17 CFR 242.101(c)(1).

      The undersigned hereby authorizes the Company during the Lock-Up Period to
cause any transfer agent for the Relevant Securities to decline to transfer, and
to note stop transfer restrictions on the stock register and other records
relating to, Relevant Securities for which the undersigned is the record holder
and, in the case of Relevant Securities for which the undersigned is the
beneficial but not the record holder, agrees during the Lock-Up Period to cause
the record holder to cause the relevant transfer agent to decline to transfer,
and to note stop transfer restrictions on the stock register and other records
relating to, such Relevant Securities. The undersigned hereby further agrees
that, without the prior written consent of Bear Stearns, during the Lock-up
Period the undersigned (x) will not file or participate in the filing with the
Securities and Exchange Commission of any registration statement, or circulate
or participate in the circulation of any preliminary or final prospectus or
other disclosure document with respect to any proposed offering or sale of a
Relevant Security and (y) will not exercise any rights the undersigned may have
to require registration with the Securities and Exchange Commission of any
proposed offering or sale of a Relevant Security.

      The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Agreement and that this Agreement
constitutes the legal, valid and binding obligation of the undersigned,
enforceable in accordance with its terms. Upon request, the undersigned will
execute any additional documents necessary in connection with enforcement
hereof. Any obligations of the undersigned shall be binding upon the successors
and assigns of the undersigned from the date first above written.

                                       5
<PAGE>

      This Agreement shall be governed by and construed in accordance with the
laws of the State of New York. Delivery of a signed copy of this letter by
facsimile transmission shall be effective as delivery of the original hereof.

                                            Very truly yours,

                                            By: ________________________________

                                            Print Name: ________________________

                                       6
<PAGE>

                                    ANNEX VI

                                    [Estate]
                                Lock-Up Agreement

                                 April __, 2005

Bear, Stearns & Co. Inc.
      As Representative of the several
      Underwriters referred to below
c/o Bear, Stearns & Co. Inc.
383 Madison Avenue
New York, New York 10179
Attention: Equity Capital Markets

                The Greenbrier Companies, Inc. Lock-Up Agreement

Ladies and Gentlemen:

      This letter agreement (this "Agreement") relates to the proposed public
offering (the "Offering") by The Greenbrier Companies, Inc., a Delaware
corporation (the "Company"), of its common stock, $.001 par value (the "Stock").

      In order to induce you and the other underwriters for which you act as
representative (the "Underwriters") to underwrite the Offering, the undersigned
hereby agrees that, without the prior written consent of Bear, Stearns & Co.
Inc. ("Bear Stearns"), during the period from the date hereof (i) until ninety
(90) days from the date of the final prospectus for the Offering, or (ii) if the
date of the final prospectus for the Offering is not prior to June 19, 2005,
until June 19, 2005 (the "Lock-Up Period"), the undersigned (a) will not,
directly or indirectly, offer, sell, agree to offer or sell, solicit offers to
purchase, grant any call option or purchase any put option with respect to,
pledge, borrow or otherwise dispose of any Relevant Security (as defined below),
and (b) will not establish or increase any "put equivalent position" or
liquidate or decrease any "call equivalent position" with respect to any
Relevant Security (in each case within the meaning of Section 16 of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder), or otherwise enter into any swap, derivative or other
transaction or arrangement that transfers to another, in whole or in part, any
economic consequence of ownership of a Relevant Security, whether or not such
transaction is to be settled by delivery of Relevant Securities, other
securities, cash or other consideration; provided, however, that the foregoing
restrictions shall not preclude or otherwise limit (i) the exercise of an option
to purchase Stock previously granted to the undersigned by the Company, (ii) the
transfer to the Company of Stock in connection with an exercise of an option to
purchase Stock solely to pay the option exercise price or any taxes required to
be withheld by the Company to the extent such transfer is permitted to satisfy
such obligations pursuant to the Company's equity compensation plans or the
agreement pursuant to which such option was granted and so long as such transfer
does not result in a sale of Stock to the public, (iii) a bona fide gift of
Stock approved by Bear Stearns so long as the recipient of such Stock agrees in
writing to be bound by the restrictions of this Lock-Up Letter Agreement or,
(iv) the sale of Stock to the Company as contemplated by that certain Stock
Purchase Agreement among the undersigned, William A. Furman and the

                                       7
<PAGE>

Company, or (v) the pledge of up to 750,000 shares of Stock by the undersigned
to secure a loan of up to $5.0 million in principal amount; provided as to (iii)
above, each resulting transferee of Relevant Securities executes and delivers to
you an agreement satisfactory to you certifying that such transferee is bound by
the terms of this Agreement and has been in compliance with the terms hereof
since the date first above written as if it had been an original party hereto.
As used herein "Relevant Security" means the Stock, any other equity security of
the Company or any of its subsidiaries and any security convertible into, or
exercisable or exchangeable for, any Stock or other such equity security.

      The undersigned hereby authorizes the Company during the Lock-Up Period to
cause any transfer agent for the Relevant Securities to decline to transfer, and
to note stop transfer restrictions on the stock register and other records
relating to, Relevant Securities for which the undersigned is the record holder
and, in the case of Relevant Securities for which the undersigned is the
beneficial but not the record holder, agrees during the Lock-Up Period to cause
the record holder to cause the relevant transfer agent to decline to transfer,
and to note stop transfer restrictions on the stock register and other records
relating to, such Relevant Securities. The undersigned hereby further agrees
that, without the prior written consent of Bear Stearns, during the Lock-up
Period the undersigned (x) will not file or participate in the filing with the
Securities and Exchange Commission of any registration statement, or circulate
or participate in the circulation of any preliminary or final prospectus or
other disclosure document with respect to any proposed offering or sale of a
Relevant Security and (y) will not exercise any rights the undersigned may have
to require registration with the Securities and Exchange Commission of any
proposed offering or sale of a Relevant Security.

      The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Agreement and that this Agreement
constitutes the legal, valid and binding obligation of the undersigned,
enforceable in accordance with its terms. Upon request, the undersigned will
execute any additional documents necessary in connection with enforcement
hereof. Any obligations of the undersigned shall be binding upon the successors
and assigns of the undersigned from the date first above written.

      This Agreement shall be governed by and construed in accordance with the
laws of the State of New York. Delivery of a signed copy of this letter by
facsimile transmission shall be effective as delivery of the original hereof.

                               Very truly yours,

                               _________________________________

                                    George L. Chelius, not in his individual
                                    capacity but solely as Executor of the Will
                                    and Estate of Alan James

                               ________________________________

                                       8
<PAGE>

                                    Eric Epperson, not in his individual
                                    capacity but solely as Executor of the Will
                                    and Estate of Alan James

                                       9

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