Document:

EXHIBIT 4.5

                                                                [EXECUTION COPY]

                                CREDIT AGREEMENT
               ($500,000,000 Five Year Revolving Credit Facility)

                                   dated as of

                                January 24, 2002

                                      among

                                MEDTRONIC, INC.,

                                  as Borrower,

                          CERTAIN OF ITS SUBSIDIARIES,

                                 as Guarantors,

                            THE LENDERS PARTY HERETO,

                             BANK OF AMERICA, N.A.,

                             as Administrative Agent

                                       and

                         BANC OF AMERICA SECURITIES LLC,

                   as Sole Lead Arranger and Sole Book Manager

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                                <C>
ARTICLE I  Definitions..............................................................................1

         Section 1.01      Defined Terms............................................................1
                           -------------
         Section 1.02      Classification of Loans and Borrowings..................................16
                           --------------------------------------
         Section 1.03      Terms Generally.........................................................16
                           ---------------
         Section 1.04      Accounting Terms; GAAP..................................................16
                           ----------------------

ARTICLE II  The Credits............................................................................17
            -----------
         Section 2.01      Commitments.............................................................17
                           -----------
         Section 2.02      Revolving Loans and Revolving Borrowings................................17
                           ----------------------------------------
         Section 2.03      Requests for Revolving Borrowings.......................................18
                           ---------------------------------
         Section 2.04      Requests for Swingline Borrowings.......................................19
                           ---------------------------------
         Section 2.05      Letters of Credit.......................................................20
                           -----------------
         Section 2.06      Funding of Revolving Borrowings.........................................25
                           -------------------------------
         Section 2.07      Interest Elections......................................................26
                           ------------------
         Section 2.08      Termination and Reduction of Commitments................................27
                           ----------------------------------------
         Section 2.09      Repayment of Loans; Evidence of Debt....................................28
                           ------------------------------------
         Section 2.10      Prepayment of Loans.....................................................28
                           -------------------
         Section 2.11      Fees....................................................................29
                           ----
         Section 2.12      Interest................................................................30
                           --------
         Section 2.13      Alternate Rate of Interest..............................................32
                           --------------------------
         Section 2.14      Increased Costs.........................................................32
                           ---------------
         Section 2.15      Break Funding Payments..................................................33
                           ----------------------
         Section 2.16      Taxes...................................................................34
                           -----
         Section 2.17      Payments Generally; Pro Rata Treatment; Sharing of Set-offs.............35
                           -----------------------------------------------------------
         Section 2.18      Mitigation Obligations; Replacement of Lenders..........................37
                           ----------------------------------------------

ARTICLE III  Representations and Warranties........................................................38
             ------------------------------
         Section 3.01      Organization; Powers....................................................38
                           --------------------
         Section 3.02      Authorization; Enforceability...........................................38
                           -----------------------------
         Section 3.03      Governmental Approvals; No Conflicts....................................38
                           ------------------------------------
         Section 3.04      Financial Condition; No Material Adverse Change.........................39
                           -----------------------------------------------
         Section 3.05      Properties..............................................................39
                           ----------
         Section 3.06      Litigation and Environmental Matters....................................39
                           ------------------------------------
         Section 3.07      Compliance with Laws and Agreements.....................................40
                           -----------------------------------
         Section 3.08      Investment and Holding Company Status...................................40
                           -------------------------------------
         Section 3.09      Taxes...................................................................40
                           -----
         Section 3.10      ERISA...................................................................40
                           -----
         Section 3.11      Disclosure..............................................................41
                           ----------
         Section 3.12      Federal Regulations.....................................................41
                           -------------------
         Section 3.13      Purpose of Loans........................................................41
                           ----------------
         Section 3.14      Subsidiaries and Significant Subsidiaries...............................41
                           -----------------------------------------
</TABLE>

                                       i
<PAGE>

<TABLE>
<S>                                                                                                <C>
ARTICLE IV  Conditions.............................................................................42
            ----------
         Section 4.01      Closing Conditions......................................................42
                           ------------------
         Section 4.02      Each Credit Event.......................................................43
                           -----------------

ARTICLE V  Affirmative Covenants...................................................................43
           ---------------------
         Section 5.01      Financial Statements and Other Information..............................43
                           ------------------------------------------
         Section 5.02      Notices of Material Events..............................................45
                           --------------------------
         Section 5.03      Existence; Conduct of Business..........................................45
                           ------------------------------
         Section 5.04      Payment of Obligations..................................................45
                           ----------------------
         Section 5.05      Maintenance of Properties; Insurance....................................46
                           ------------------------------------
         Section 5.06      Books and Records; Inspection Rights....................................46
                           ------------------------------------
         Section 5.07      Compliance with Laws....................................................46
                           --------------------
         Section 5.08      Use of Proceeds.........................................................46
                           ---------------
         Section 5.09      Maintenance of Accreditation, Etc.......................................46
                           ---------------------------------
         Section 5.10      Additional Subsidiary Guarantors........................................47
                           --------------------------------

ARTICLE VI  Negative Covenants.....................................................................47
            ------------------
         Section 6.01      Consolidated Tangible Net Worth.........................................47
                           -------------------------------
         Section 6.02      Indebtedness............................................................47
                           ------------
         Section 6.03      Liens...................................................................48
                           -----
         Section 6.04      Fundamental Changes.....................................................48
                           -------------------
         Section 6.05      Transactions with Affiliates............................................49
                           ----------------------------
         Section 6.06      Restrictive Agreements..................................................49
                           ----------------------
         Section 6.07      Business Activity.......................................................49
                           -----------------
         Section 6.08      Restricted Payments.....................................................49
                           -------------------

ARTICLE VII  Events of Default.....................................................................50
             -----------------

ARTICLE VIII  The Administrative Agent.............................................................52
              ------------------------
         Section 8.01      Appointment and Authorization of Administrative Agent...................52
                           -----------------------------------------------------
         Section 8.02      Notice of Default.......................................................53
                           -----------------
         Section 8.03      Reliance by Administrative Agent........................................53
                           --------------------------------
         Section 8.04      Delegation of Duties....................................................53
                           --------------------
         Section 8.05      Successor Administrative Agent..........................................53
                           ------------------------------
         Section 8.06      Credit Decision; Disclosure of Information by Administrative Agent......54
                           ------------------------------------------------------------------
         Section 8.07      Indemnification of Administrative Agent.................................54
                           ---------------------------------------
         Section 8.08      Administrative Agent in its Individual Capacity.........................55
                           -----------------------------------------------

ARTICLE IX  Miscellaneous..........................................................................55
            -------------
         Section 9.01      Notices.................................................................55
                           -------
         Section 9.02      Waivers; Amendments.....................................................57
                           -------------------
         Section 9.03      Expenses; Indemnity; Damage Waiver......................................58
                           ----------------------------------
         Section 9.04      Successors and Assigns..................................................59
                           ----------------------
         Section 9.05      Survival................................................................62
                           --------
         Section 9.06      Counterparts; Integration; Effectiveness................................62
                           ----------------------------------------
         Section 9.07      Severability............................................................63
                           ------------
</TABLE>

                                       ii
<PAGE>

<TABLE>
<S>                                                                                                <C>
         Section 9.08      Right of Setoff.........................................................63
                           ---------------
         Section 9.09      Governing Law; Jurisdiction; Consent to Service of Process..............63
                           ----------------------------------------------------------
         Section 9.10      WAIVER OF JURY TRIAL....................................................64
                           --------------------
         Section 9.11      Headings................................................................64
                           --------
         Section 9.12      Confidentiality.........................................................64
                           ---------------

ARTICLE X  GUARANTY................................................................................65
           --------
         Section 10.1      The Guaranty............................................................65
                           ------------
         Section 10.2      Bankruptcy..............................................................66
                           ----------
         Section 10.3      Nature of Liability.....................................................66
                           -------------------
         Section 10.4      Independent Obligation..................................................66
                           ----------------------
         Section 10.5      Authorization...........................................................67
                           -------------
         Section 10.6      Reliance................................................................67
                           --------
         Section 10.7      Waiver..................................................................67
                           ------
         Section 10.8      Limitation on Enforcement...............................................68
                           -------------------------
         Section 10.9      Confirmation of Payment.................................................69
                           -----------------------
</TABLE>

                                      iii
<PAGE>

SCHEDULES:

Schedule 2.01 -- Commitments
Schedule 3.06 -- Disclosed Matters
Schedule 3.14 -- Subsidiaries and Significant Subsidiaries
Schedule 6.02 -- Existing Indebtedness
Schedule 6.03 -- Existing Liens

EXHIBITS:

Exhibit A -- Form of Assignment and Acceptance
Exhibit B -- Form of Joinder Agreement
Exhibit C -- Form of Revolving Borrowing Request
Exhibit D -- Form of Interest Election Request

                                       iv
<PAGE>

                                CREDIT AGREEMENT

         THIS FIVE YEAR CREDIT AGREEMENT (this "Credit Agreement" or
"Agreement"), dated as of January 24, 2002, among Medtronic, Inc., a Minnesota
corporation (the "Borrower"), the Subsidiaries of the Borrower listed on the
signature pages hereto (individually a "Guarantor", collectively the
"Guarantors"), the Lenders party hereto, and Bank of America, N.A., as
Administrative Agent, Issuing Bank and Swingline Lender.

                              W I T N E S S E T H:

         WHEREAS, the Borrower is party to the $3,000,000,000 Credit Agreement
dated as of August 27, 2001, as amended (the "Existing Credit Agreement"), among
the Borrower, certain Subsidiaries of the Borrower party thereto, the lenders
parties thereto and Bank of America, N.A., as Administrative Agent.

         WHEREAS, the Borrower desires to replace the Existing Credit Agreement
with this Agreement and the 364-Day Facility (as defined below) upon the terms,
and subject to the conditions, hereinafter set forth.

         NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

         SECTION 1.01 DEFINED TERMS.

         As used in this Credit Agreement, the following terms have the meanings
specified below:

                  "ABR", when used in reference to any Loan or Borrowing, refers
         to whether such Loan, or the Loans comprising such Borrowing, are
         bearing interest at a rate determined by reference to the Alternate
         Base Rate.

                  "Administrative Agent" means Bank of America, in its capacity
         as administrative agent for the Lenders hereunder, and its successors
         in such capacity.

                  "Administrative Questionnaire" means an Administrative
         Questionnaire in a form supplied by the Administrative Agent.

                  "Affiliate" means, with respect to a specified Person, another
         Person that directly, or indirectly through one or more intermediaries,
         Controls or is Controlled by or is under common Control with the Person
         specified.

                  "Agent-Related Persons" means the Administrative Agent
         (including any successor agent), together with its Affiliates
         (including, in the case of Bank of America in its capacity as the
         Administrative Agent, the Arranger), and the officers, directors,
         employees, agents and attorneys-in-fact of such Persons and Affiliates.

<PAGE>

                  "Alternate Base Rate" means, for any day, a rate per annum
         equal to the greater of (a) the Prime Rate in effect on such day and
         (b) the Federal Funds Effective Rate in effect on such day plus 1/2 of
         1%. Any change in the Alternate Base Rate due to a change in the Prime
         Rate or the Federal Funds Effective Rate shall be effective from and
         including the effective date of such change in the Prime Rate or the
         Federal Funds Effective Rate, respectively.

                  "Applicable Percentage" means, with respect to any Lender, the
         percentage of the total Commitments represented by such Lender's
         Commitment. If the Commitments have terminated or expired, the
         Applicable Percentages shall be determined based upon the Commitments
         most recently in effect, giving effect to any assignments.

                  "Applicable Rate" means, for any day, with respect to any
         Eurodollar Loan, or with respect to the facility fees or utilization
         fees payable hereunder, as the case may be, the applicable rate per
         annum set forth below (in basis points) under the caption "Eurodollar
         Spread", "Facility Fee Rate", or "Utilization Fee Rate", as the case
         may be, based upon the ratings by Moody's and S&P, respectively,
         applicable on such date to the Index Debt:

<TABLE>
<CAPTION>
         =======================================================================================================

          CATEGORY         MOODY'S/S&P RATING       EURODOLLAR SPREAD  FACILITY FEE RATE   UTILIZATION FEE RATE
                                                                                                (COMMITMENT
                                                                                          UTILIZATION PERCENTAGE
                                                                                             GREATER THAN 50%)
         -------------------------------------------------------------------------------------------------------
<S>                  <C>                                  <C>                <C>                   <C>
              I      Greater than or equal to Aa2/AA      12.25               6.5                   5.0

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

             II       Greater than or equal to Aa3/AA-    13.00               7.0                   7.5
                           but less than Aa2/AA

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

            III       Greater than or equal to A1/A+      19.50               8.0                   7.5
                           but less than Aa3/AA-

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

             IV       Greater than or equal to A2/A       25.00              10.0                  10.0
                           but less than A1/A+

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

              V              Less than A2/A               32.50              12.5                  12.5

         =======================================================================================================
</TABLE>

                  For purposes of the foregoing, (i) if either Moody's or S&P
         shall not have in effect a rating for the Index Debt (other than by
         reason of the circumstances referred to in the last sentence of this
         definition), then such rating agency shall be deemed to have
         established a rating in Category V; (ii) if the ratings established or
         deemed to have been established by Moody's and S&P for the Index Debt
         shall fall within different Categories, the Applicable Rate shall be
         based on the higher of the two ratings unless one of the two ratings is
         two or more Categories lower than the other, in which case the
         Applicable Rate shall be determined by reference to the Category next
         above that of the lower of the two

                                       2
<PAGE>

         ratings; and (iii) if the ratings established or deemed to have been
         established by Moody's and S&P for the Index Debt shall be changed
         (other than as a result of a change in the rating system of Moody's or
         S&P), such change shall be effective as of the date on which it is
         first announced by the applicable rating agency. Each change in the
         Applicable Rate shall apply during the period commencing on the
         effective date of such change and ending on the date immediately
         preceding the effective date of the next such change. If the rating
         system of Moody's or S&P shall change, or if either such rating agency
         shall cease to be in the business of rating corporate debt obligations,
         the Borrower and the Lenders shall negotiate in good faith to amend
         this definition to reflect such changed rating system or the
         unavailability of ratings from such rating agency and, pending the
         effectiveness of any such amendment, the Applicable Rate shall be
         determined by reference to the rating most recently in effect prior to
         such change or cessation.

                  "Approved Fund" means with respect to any Lender that is a
         fund that invests in commercial loans, any other fund that invests in
         commercial loans and is managed or advised by the same investment
         advisor as such Lender or by an Affiliate of such investment advisor.

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

                  "Assignment and Acceptance" means an assignment and acceptance
         entered into by a Lender and an assignee (with the consent of any party
         whose consent is required by Section 9.04), and accepted by the
         Administrative Agent, in the form of Exhibit A or any other form
         approved by the Administrative Agent.

                  "Availability Period" means the period from and including the
         Closing Date to but excluding the earlier of the Maturity Date and the
         date of termination of the Commitments.

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

                  "Board" means the Board of Governors of the Federal Reserve
         System of the United States of America.

                  "Borrower" means Medtronic, Inc., a Minnesota corporation.

                  "Borrowing" means a Revolving Borrowing or a Swingline
         Borrowing, as the case may be.

                  "Business Day" means any day that is not a Saturday, Sunday or
         other day on which commercial banks in Charlotte, North Carolina or New
         York, New York are authorized or required by law to remain closed;
         provided that, when used in connection with a Eurodollar Loan, the term
         "Business Day" shall also exclude any day on which banks are not open
         for dealings in dollar deposits in the London interbank market.

                                       3
<PAGE>

                  "Capital Lease Obligations" of any Person means the
         obligations of such Person to pay rent or other amounts under any lease
         of (or other arrangement conveying the right to use) real or personal
         property, or a combination thereof, which obligations are required to
         be classified and accounted for as capital leases on a balance sheet of
         such Person under GAAP, and the amount of such obligations shall be the
         capitalized amount thereof determined in accordance with GAAP.

                  "Capital Stock" means (i) in the case of a corporation,
         capital stock, (ii) in the case of an association or business entity,
         any and all shares, interests, participations, rights or other
         equivalents (however designated) of capital stock, (iii) in the case of
         a partnership, partnership interests (whether general or limited), (iv)
         in the case of a limited liability company, membership interests and
         (v) any other interest or participation that confers on a Person the
         right to receive a share of the profits and losses of, or distributions
         of assets of, the issuing Person.

                  "Cash Equivalents" shall mean (a) securities issued or
         directly and fully guaranteed or insured by the United States of
         America or any agency or instrumentality thereof (provided that the
         full faith and credit of the United States of America is pledged in
         support thereof) having maturities of not more than twelve months from
         the date of acquisition ("Government Obligations"), (b) U.S. dollar
         denominated (or foreign currency fully hedged) time deposits,
         certificates of deposit, Eurodollar time deposits and Eurodollar
         certificates of deposit of (y) any domestic commercial bank of
         recognized standing having capital and surplus in excess of
         $250,000,000 or (z) any bank whose short-term commercial paper rating
         from S&P is at least A-1 or the equivalent thereof or from Moody's is
         at least P-1 or the equivalent thereof (any such bank being an
         "Approved Bank"), in each case with maturities of not more than 364
         days from the date of acquisition, (c) commercial paper and variable or
         fixed rate notes issued by any Approved Bank (or by the parent company
         thereof) or commercial paper or any variable rate notes issued by, or
         guaranteed by any domestic corporation rated A-2 (or the equivalent
         thereof) or better by S&P or P-2 (or the equivalent thereof) or better
         by Moody's and maturing within six months of the date of acquisition,
         (d) repurchase agreements with a bank or trust company (including a
         Lender) or a recognized securities dealer having capital and surplus in
         excess of $500,000,000 for direct obligations issued by or fully
         guaranteed by the United States of America, (e) obligations of any
         state of the United States or any political subdivision thereof for the
         payment of the principal and redemption price of and interest on which
         there shall have been irrevocably deposited Government Obligations
         maturing as to principal and interest at times and in amounts
         sufficient to provide such payment and (f) auction preferred stock
         rated in the highest short-term credit rating category by S&P or
         Moody's.

                  "Change in Control" means (a) the acquisition of ownership,
         directly or indirectly, beneficially or of record, by any Person or
         group (within the meaning of the Securities Exchange Act of 1934 and
         the rules of the SEC thereunder as in effect on the date hereof), of
         shares representing more than 25% of the aggregate ordinary voting
         power represented by the issued and outstanding Capital Stock of the
         Borrower; (b) occupation of a majority of the seats (other than vacant
         seats) on the board of directors of the

                                       4
<PAGE>

         Borrower by Persons who were neither (i) nominated by the board of
         directors of the Borrower nor (ii) appointed by directors so nominated;
         or (c) the acquisition of direct or indirect Control of the Borrower by
         any Person or group.

                  "Change in Law" means (a) the adoption of any law, rule or
         regulation after the date of this Credit Agreement, (b) any change in
         any law, rule or regulation or in the interpretation or application
         thereof by any Governmental Authority after the date of this Credit
         Agreement or (c) compliance by any Lender or the Issuing Bank (or, for
         purposes of Section 2.14(b), by any lending office of such Lender or by
         such Lender's or the Issuing Bank's holding company, if any) with any
         request, guideline or directive (whether or not having the force of
         law) of any Governmental Authority made or issued after the date of
         this Credit Agreement.

                  "Closing Date" means the date hereof.

                  "Code" means the Internal Revenue Code of 1986, as amended
         from time to time.

                  "Commitment" means, with respect to each Lender, the
         commitment of such Lender to make Loans and to acquire participations
         in Swingline Loans and Letters of Credit hereunder, expressed as an
         amount representing the maximum aggregate amount of such Lender's
         Revolving Credit Exposure hereunder, as such commitment may be reduced
         from time to time pursuant to Section 2.08. The initial amount of each
         Lender's Commitment is set forth on Schedule 2.01, or in the Assignment
         and Acceptance pursuant to which such Lender shall have assumed its
         Commitment, as applicable.

                  "Commitment Utilization Percentage" means on any day the
         percentage equivalent of a fraction (a) the numerator of which is the
         sum of (i) the aggregate outstanding principal amount of Loans (but not
         including any Swingline Loans) hereunder plus the aggregate amount of
         LC Exposure hereunder plus (ii) the aggregate outstanding principal
         amount of "Loans" under the 364-Day Facility (as such term is defined
         therein) and (b) the denominator of which is the sum of (i) aggregate
         amount of the Commitments (or, on any day after termination of the
         Commitments, the aggregate amount of the Commitments in effect
         immediately preceding such termination) hereunder plus (ii) the
         aggregate amount of the Commitments (or, on any day after termination
         of the Commitments, the aggregate amount of the Commitments in effect
         immediately preceding such termination) under the 364-Day Facility (as
         such term is defined therein).

                  "Consolidated Assets" means the consolidated assets of the
         Borrower and its Subsidiaries, determined in accordance with GAAP.

                  "Consolidated Tangible Assets" means the Consolidated Assets
         less: (i) goodwill and (ii) other intangibles (other than patents,
         trademarks, licenses, copyrights and other intellectual property and
         prepaid assets).

                  "Consolidated Tangible Net Worth" means at any date,
         Consolidated Tangible Assets minus Consolidated Total Liabilities,
         determined in accordance with GAAP.

                                       5
<PAGE>

                  "Consolidated Total Liabilities" means at any date, with
         respect to the Borrower and its Subsidiaries on a consolidated basis,
         total liabilities, determined in accordance with GAAP.

                  "Control" means the possession, directly or indirectly, of the
         power to direct or cause the direction of the management or policies of
         a Person, whether through the ability to exercise voting power, by
         contract or otherwise. "Controlling" and "Controlled" have meanings
         correlative thereto.

                  "Credit Documents" means a collective reference to this Credit
         Agreement, the promissory notes, if any, each Joinder Agreement and all
         other related agreements and documents issued or delivered hereunder or
         thereunder or pursuant hereto or thereto (in each case as the same may
         be amended, modified, restated, supplemented, extended, renewed or
         replaced from time to time), and "Credit Document" means any one of
         them.

                  "Debt Issuance" means the issuance of any Indebtedness for
         borrowed money by the Borrower or any of its Subsidiaries.

                  "Default" means any event or condition which constitutes an
         Event of Default or which upon notice, lapse of time or both would,
         unless cured or waived, become an Event of Default.

                  "Disclosed Matters" means the actions, suits and proceedings
         and the environmental matters disclosed in Schedule 3.06.

                  "dollars" or "$" refers to lawful money of the United States
         of America.

                  "Environmental Laws" means all laws, rules, regulations,
         codes, ordinances, orders, decrees, judgments, injunctions, notices or
         binding agreements issued, promulgated or entered into by any
         Governmental Authority, relating in any way to the environment,
         preservation or reclamation of natural resources or the management,
         release or threatened release of any Hazardous Material.

                  "Environmental Liability" means any liability, contingent or
         otherwise (including any liability for damages, costs of environmental
         remediation, fines, penalties or indemnities), of the Borrower or any
         Subsidiary directly or indirectly resulting from or based upon (a)
         violation of any Environmental Law, (b) the generation, use, handling,
         transportation, storage, treatment or disposal of any Hazardous
         Materials, (c) exposure to any Hazardous Materials, (d) the release or
         threatened release of any Hazardous Materials into the environment or
         (e) any contract, agreement or other consensual arrangement pursuant to
         which liability is assumed or imposed with respect to any of the
         foregoing.

                  "Equity Issuance" means any issuance by the Borrower or any of
         its Subsidiaries to any Person of (a) shares of its Capital Stock other
         than (i) any shares of its Capital Stock pursuant to the exercise of
         options or warrants, (ii) any shares of its Capital Stock pursuant to
         the conversion of any debt securities to equity and (iii) in the case
         of Subsidiaries, any

                                       6
<PAGE>

         shares of its Capital Stock issued to the Borrower or any of its
         Subsidiaries or (b) any options or warrants relating to its Capital
         Stock. The term "Equity Issuance" shall not include (i) any Debt
         Issuance or (ii) the issuance of Capital Stock of the Borrower pursuant
         to any stock plans of the Borrower or its Subsidiaries.

                   "ERISA" means the Employee Retirement Income Security Act of
         1974, as amended from time to time.

                  "ERISA Affiliate" means any trade or business (whether or not
         incorporated) that, together with the Borrower, is treated as a single
         employer under Section 414(b) or (c) of the Code or, solely for
         purposes of Section 302 of ERISA and Section 412 of the Code, is
         treated as a single employer under Section 414 of the Code.

                  "ERISA Event" means (a) any "reportable event", as defined in
         Section 4043 of ERISA or the regulations issued thereunder with respect
         to a Plan (other than an event for which the 30-day notice period is
         waived); (b) the existence with respect to any Plan of an "accumulated
         funding deficiency" (as defined in Section 412 of the Code or Section
         302 of ERISA), whether or not waived; (c) the filing pursuant to
         Section 412(d) of the Code or Section 303(d) of ERISA of an application
         for a waiver of the minimum funding standard with respect to any Plan;
         (d) the incurrence by the Borrower or any of its ERISA Affiliates of
         any liability under Title IV of ERISA with respect to the termination
         of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate
         from the PBGC or a plan administrator of any notice relating to an
         intention to terminate any Plan or Plans or to appoint a trustee to
         administer any Plan; (f) the incurrence by the Borrower or any of its
         ERISA Affiliates of any liability with respect to the withdrawal or
         partial withdrawal from any Plan or Multiemployer Plan; or (g) the
         receipt by the Borrower or any ERISA Affiliate of any notice, or the
         receipt by any Multiemployer Plan from the Borrower or any ERISA
         Affiliate of any notice, concerning the imposition of Withdrawal
         Liability or a determination that a Multiemployer Plan is, or is
         expected to be, insolvent or in reorganization, within the meaning of
         Title IV of ERISA.

                  "Eurodollar", when used in reference to any Loan or Borrowing,
         refers to whether such Loan, or the Loans comprising such Borrowing,
         are bearing interest at a rate determined by reference to the LIBO
         Rate.

                  "Event of Default" has the meaning assigned to such term in
         Article VII.

                  "Excess Utilization Day" means each day on which the
         Commitment Utilization Percentage exceeds 50%.

                  "Excluded Taxes" means, with respect to the Administrative
         Agent, any Lender, the Issuing Bank or any other recipient of any
         payment to be made by or on account of any obligation of the Borrower
         hereunder, (a) income or franchise taxes imposed on (or measured by)
         its net income by the United States of America, or by the jurisdiction
         under the laws of which such recipient is organized or in which its
         principal office is located or, in the case of any Lender, in which its
         applicable lending office is located,

                                       7
<PAGE>

         (b) any branch profits taxes imposed by the United States of America or
         any similar tax imposed by any other jurisdiction in which any Lender
         is located and (c) in the case of a Foreign Lender (other than an
         assignee pursuant to a request by the Borrower under Section 2.18(b)),
         any withholding tax that is imposed on amounts payable to such Foreign
         Lender at the time such Foreign Lender becomes a party to this Credit
         Agreement or is attributable to such Foreign Lender's failure or
         inability to comply with Section 2.16(e), except to the extent that
         such Foreign Lender's assignor (if any) was entitled, at the time of
         assignment, to receive additional amounts from the Borrower with
         respect to such withholding tax pursuant to Section 2.16(a).

                  "Federal Funds Effective Rate" means, for any day, the
         weighted average (rounded upwards, if necessary, to the next 1/100 of
         1%) of the rates on overnight Federal funds transactions with members
         of the Federal Reserve System arranged by Federal funds brokers, as
         published on the next succeeding Business Day by the Federal Reserve
         Bank of New York, or, if such rate is not so published for any day that
         is a Business Day, the average (rounded upwards, if necessary, to the
         next 1/100 of 1%) of the quotations for such day for such transactions
         received by the Administrative Agent from three Federal funds brokers
         of recognized standing selected by it.

                  "Fee Letter" means the letter agreement dated December 14,
         2001 addressed to the Borrower from the Administrative Agent, as
         amended, modified, restated or otherwise supplemented from time to
         time.

                   "Financial Officer" means the chief financial officer,
         principal accounting officer, senior vice president of finance,
         treasurer, assistant treasurer, controller or assistant controller of
         the Borrower or any officer having substantially the same position for
         the Borrower.

                  "Foreign Lender" means any Lender that is organized under the
         laws of a jurisdiction other than that in which the Borrower is
         located. For purposes of this definition, the United States of America,
         each State thereof and the District of Columbia shall be deemed to
         constitute a single jurisdiction.

                  "GAAP" means generally accepted accounting principles in the
         United States of America.

                  "Governmental Authority" means the government of the United
         States of America, any other nation or any political subdivision
         thereof, whether state or local, and any agency, authority,
         instrumentality, regulatory body, court, central bank or other entity
         exercising executive, legislative, judicial, taxing, regulatory or
         administrative powers or functions of or pertaining to government.

                  "Guarantee" of or by any Person (the "guarantor") means any
         obligation, contingent or otherwise, of the guarantor guaranteeing or
         having the economic effect of guaranteeing any Indebtedness or other
         obligation of any other Person (the "primary obligor") in any manner,
         whether directly or indirectly, and including any obligation of the

                                       8
<PAGE>

         guarantor, direct or indirect, (a) to purchase or pay (or advance or
         supply funds for the purchase or payment of) such Indebtedness or other
         obligation or to purchase (or to advance or supply funds for the
         purchase of) any security for the payment thereof, (b) to purchase or
         lease property, securities or services for the purpose of assuring the
         owner of such Indebtedness or other obligation of the payment thereof,
         (c) to maintain working capital, equity capital or any other financial
         statement condition or liquidity of the primary obligor so as to enable
         the primary obligor to pay such Indebtedness or other obligation or (d)
         as an account party in respect of any letter of credit or letter of
         guaranty issued to support such Indebtedness or obligation; provided,
         that the term Guarantee shall not include endorsements for collection
         or deposit in the ordinary course of business.

                  "Guarantor" means each of the Persons identified as a
         "Guarantor" on the signature pages hereto and each Person which may
         hereafter execute a Joinder Agreement pursuant to Section 5.10,
         together with their successors and permitted assigns, and "Guarantor"
         means any one of them.

                  "Guaranty" shall mean the guaranty of the Guarantors set forth
         in Article X.

                  "Hazardous Materials" means all explosive or radioactive
         substances or wastes and all hazardous or toxic substances, wastes or
         other pollutants, including petroleum or petroleum distillates,
         asbestos or asbestos containing materials, polychlorinated biphenyls,
         radon gas, infectious or medical wastes and all other substances or
         wastes of any nature regulated pursuant to any Environmental Law.

                  "Hedging Agreement" means any interest rate protection
         agreement, foreign currency exchange agreement, commodity price
         protection agreement or other interest or currency exchange rate or
         commodity price hedging arrangement.

                  "Indebtedness" of any Person means, without duplication, (a)
         all obligations of such Person for borrowed money or with respect to
         similar cash advances (including, without limitation, all obligations
         pursuant to any sale or financing of receivables, but excluding any
         premiums, fees and deposits received in the ordinary course of
         business), (b) all obligations of such Person evidenced by bonds,
         debentures, notes or similar instruments, (c) all obligations of such
         Person under conditional sale or other title retention agreements
         relating to property acquired by such Person, (d) all obligations of
         such Person in respect of the deferred purchase price of property or
         services (excluding current accounts payable or other like obligations
         incurred in the ordinary course of business), (e) all Indebtedness of
         others secured by (or for which the holder of such Indebtedness has an
         existing right, contingent or otherwise, to be secured by) any Lien on
         property owned or acquired by such Person, whether or not the
         Indebtedness secured thereby has been assumed, (f) all Guarantees by
         such Person of Indebtedness of others, (g) all Capital Lease
         Obligations of such Person, (h) all obligations, contingent or
         otherwise, of such Person as an account party in respect of letters of
         credit and letters of guaranty and (i) all obligations, contingent or
         otherwise, of such Person in respect of bankers' acceptances. The
         Indebtedness of any Person shall include the Indebtedness of any other
         entity (including any partnership in which such Person is a general
         partner) to

                                       9
<PAGE>

         the extent such Person is liable therefor as a result of such Person's
         ownership interest in or other relationship with such entity, except to
         the extent the terms of such Indebtedness provide that such Person is
         not liable therefor. Notwithstanding the foregoing, Indebtedness shall
         exclude Indebtedness of the Borrower to any Subsidiary and of any
         Subsidiary to the Borrower or any other Subsidiary.

                  "Indemnified Liabilities" shall have the meaning assigned to
         such term in Section 9.03(b).

                  "Indemnified Taxes" means Taxes other than Excluded Taxes.

                  "Index Debt" means senior, unsecured, long-term indebtedness
         for borrowed money of the Borrower that is not guaranteed by any other
         Person or subject to any other credit enhancement.

                  "Interest Election Request" means a request by the Borrower to
         convert or continue a Revolving Borrowing in accordance with Section
         2.07, in substantially the form of Exhibit D.

                  "Interest Payment Date" means (a) with respect to any ABR Loan
         (including Swingline Loans), the last day of each March, June,
         September and December, and (b) with respect to any Eurodollar Loan,
         the last day of the Interest Period applicable to the Revolving
         Borrowing of which such Loan is a part and, in the case of a Eurodollar
         Borrowing with an Interest Period of more than three months' duration,
         each day prior to the last day of such Interest Period that occurs at
         intervals of three months' duration after the first day of such
         Interest Period.

                  "Interest Period" means with respect to any Eurodollar
         Borrowing, the period commencing on the date of such Eurodollar
         Borrowing and ending on the numerically corresponding day in the
         calendar month that is one, two, three or six months thereafter, as the
         Borrower may elect; provided, that (i) if any Interest Period would end
         on a day other than a Business Day, such Interest Period shall be
         extended to the next succeeding Business Day unless such next
         succeeding Business Day would fall in the next calendar month, in which
         case such Interest Period shall end on the immediately preceding
         Business Day and (ii) any Interest Period that commences on the last
         Business Day of a calendar month (or on a day for which there is no
         numerically corresponding day in the last calendar month of such
         Interest Period) shall end on the last Business Day of the last
         calendar month of such Interest Period.

                  "Issuing Bank" means Bank of America in its capacity as the
         issuer of Letters of Credit hereunder, and its successors in such
         capacity as provided in Section 2.05(j).

                  "Joinder Agreement" means a Joinder Agreement substantially in
         the form of Exhibit B hereto, executed and delivered by a new Guarantor
         in accordance with the provisions of Section 5.10.

                  "LC Commitment" means $50,000,000.

                                       10
<PAGE>

                  "LC Disbursement" means a payment made by the Issuing Bank
         pursuant to a Letter of Credit.

                  "LC Exposure" means, at any time, the sum of (a) the aggregate
         undrawn amount of all outstanding Letters of Credit at such time plus
         (b) the aggregate amount of all LC Disbursements that have not yet been
         reimbursed by or on behalf of the Borrower at such time. The LC
         Exposure of any Lender at any time shall be its Applicable Percentage
         of the total LC Exposure at such time.

                  "Lenders" means the Persons listed on Schedule 2.01 and any
         other Person that shall have become a party hereto pursuant to an
         Assignment and Acceptance, other than any such Person that ceases to be
         a party hereto pursuant to an Assignment and Acceptance.

                  "Letter of Credit" means any letter of credit issued pursuant
         to this Agreement.

                  "LIBO Rate" means, with respect to any Eurodollar Borrowing
         for any Interest Period, the rate appearing on Page 3750 of the
         Telerate screen (or on any successor or substitute page of such
         Service, or any successor to or substitute for such Service, providing
         rate quotations comparable to those currently provided on such page of
         such Service, as determined by the Administrative Agent from time to
         time for purposes of providing quotations of interest rates applicable
         to dollar deposits in the London interbank market) at approximately
         11:00 a.m., London time, two Business Days prior to the commencement of
         such Interest Period, as the rate for dollar deposits with a maturity
         comparable to such Interest Period. In the event that such rate is not
         available at such time for any reason, then the "LIBO Rate" with
         respect to such Eurodollar Borrowing for such Interest Period shall be
         the rate at which dollar deposits of $5,000,000 and for a maturity
         comparable to such Interest Period are offered by the principal London
         office of the Administrative Agent in immediately available funds in
         the London interbank market at approximately 11:00 a.m., London time,
         two Business Days prior to the commencement of such Interest Period.

                  "Lien" means, with respect to any asset (a) any mortgage, deed
         of trust, lien, pledge, hypothecation, encumbrance, charge or security
         interest in, on or of such asset, (b) the interest of a vendor or a
         lessor under any conditional sale agreement, capital lease or title
         retention agreement (or any financing lease having substantially the
         same economic effect as any of the foregoing) relating to such asset
         and (c) in the case of securities, any purchase option, call or similar
         right of a third party with respect to such securities.

                  "Loans" means the loans made by the Lenders to the Borrower
         pursuant to Article II of this Credit Agreement (including, without
         limitation, the Swingline Loans).

                  "Material Adverse Effect" means a material adverse effect on
         (a) the business, property, operations or financial condition of the
         Borrower and the Subsidiaries taken as a whole, (b) the ability of the
         Borrower to perform any of its obligations under this Credit Agreement
         or (c) the legal rights of or benefits available to the Lenders under
         this Credit Agreement.

                                       11
<PAGE>

                  "Material Indebtedness" means Indebtedness (other than the
         Loans), or obligations in respect of one or more Hedging Agreements, of
         any one or more of the Borrower and its Subsidiaries in an aggregate
         principal amount exceeding $100,000,000. For purposes of determining
         Material Indebtedness, the "principal amount" of the obligations of the
         Borrower or any Subsidiary in respect of any Hedging Agreement at any
         time shall be the maximum aggregate amount (giving effect to any
         netting agreements) that the Borrower or such Subsidiary would be
         required to pay if such Hedging Agreement were terminated at such time.

                  "Maturity Date" means the fifth anniversary of the Closing
         Date.

                  "Moody's" means Moody's Investors Service, Inc.

                  "Multiemployer Plan" means a multiemployer plan as defined in
         Section 4001(a)(3) of ERISA.

                  "Net Cash Proceeds" means the aggregate proceeds paid in cash
         or Cash Equivalents received by the Borrower or any of its Subsidiaries
         in respect of any Equity Issuance or Debt Issuance, net of (a) direct
         costs (including, without limitation, legal, accounting and investment
         banking fees, and sales commissions) and (b) taxes paid or payable as a
         result thereof; it being understood that "Net Cash Proceeds" shall
         include, without limitation, any cash or Cash Equivalents received upon
         the sale or other disposition of any non-cash consideration received by
         the Borrower or any Subsidiary of the Borrower in any Equity Issuance
         or Debt Issuance.

                  "Other Taxes" means any and all present or future stamp or
         documentary taxes or any other excise or property taxes, charges or
         similar levies arising from any payment made hereunder or from the
         execution, delivery or enforcement of, or otherwise with respect to,
         this Credit Agreement.

                  "PBGC" means the Pension Benefit Guaranty Corporation referred
         to and defined in ERISA and any successor entity performing similar
         functions.

                  "Permitted Encumbrances" means:

                  (a) Liens imposed by law for taxes that are not yet due or are
         being contested in compliance with Section 5.04;

                  (b) carriers', warehousemen's, mechanics', materialmen's,
         repairmen's and other like Liens imposed by law, arising in the
         ordinary course of business and securing obligations that are not
         overdue by more than 30 days or are being contested in compliance with
         Section 5.04;

                                       12
<PAGE>

                  (c) pledges and deposits made in the ordinary course of
         business in compliance with workers' compensation, unemployment
         insurance and other social security laws or regulations;

                  (d) deposits to secure the performance of bids, trade
         contracts, leases, statutory obligations, surety and appeal bonds,
         performance bonds and other obligations of a like nature, in each case
         in the ordinary course of business;

                  (e) Liens arising out of judgments or awards so long as an
         appeal or proceeding for review is being prosecuted in good faith and
         for the payment of which adequate reserves, bonds or other security
         reasonably acceptable to the Administrative Agent have been provided or
         are fully covered by insurance; and

                  (f) easements, zoning restrictions, rights-of-way and similar
         encumbrances on real property imposed by law or arising in the ordinary
         course of business that do not secure any monetary obligations and do
         not materially detract from the value of the affected property or
         interfere with the ordinary conduct of business of the Borrower or any
         Subsidiary;

         provided that the term "Permitted Encumbrances" shall not include any
         Lien securing Indebtedness.

                  "Person" means any natural person, corporation, limited
         liability company, trust, joint venture, association, company,
         partnership, Governmental Authority or other entity.

                  "Plan" means any employee pension benefit plan (other than a
         Multiemployer Plan) subject to the provisions of Title IV of ERISA or
         Section 412 of the Code or Section 302 of ERISA, and in respect of
         which the Borrower or any ERISA Affiliate is (or, if such plan were
         terminated, would under Section 4069 of ERISA be deemed to be) an
         "employer" as defined in Section 3(5) of ERISA.

                  "Prime Rate" means the rate of interest per annum publicly
         announced from time to time by Bank of America as its prime rate in
         effect at its principal office in Charlotte, North Carolina; each
         change in the Prime Rate shall be effective from and including the date
         such change is publicly announced as being effective.

                  "Property" means any interest in any kind of property or
         asset, whether real, personal or mixed, or tangible or intangible.

                  "Register" has the meaning set forth in Section 9.04(c).

                  "Related Parties" means, with respect to any specified Person,
         such Person's Affiliates and the respective directors, officers,
         employees, agents and advisors of such Person and such Person's
         Affiliates.

                                       13
<PAGE>

                  "Required Lenders" means, at any time, Lenders having
         Revolving Credit Exposures and unused Commitments representing more
         than 50% of the sum of the total Revolving Credit Exposures and unused
         Commitments at such time.

                  "Restricted Payment" means (i) any dividend or other
         distribution, direct or indirect, on account of any shares of any class
         of capital stock of the Borrower or any of its Subsidiaries, now or
         hereafter outstanding, (ii) any redemption, retirement, sinking fund or
         similar payment, purchase or other acquisition for value, direct or
         indirect, of any shares of any class of capital stock of the Borrower
         or any of its Subsidiaries, now or hereafter outstanding, and (iii) any
         payment made to retire, or to obtain the surrender of, any outstanding
         warrants, options or other rights to acquire shares of any class of
         capital stock of the Borrower or any of its Subsidiaries, now or
         hereafter outstanding.

                  "Revolving Borrowing" means Revolving Loans of the same Type,
         made, converted or continued on the same date and in the case of
         Eurodollar Loans, as to which a single Interest Period is in effect.

                  "Revolving Borrowing Request" means a request by the Borrower
         for a Revolving Borrowing in accordance with Section 2.03, in
         substantially the form of Exhibit C.

                  "Revolving Credit Exposure" means, with respect to any Lender
         at any time, the sum of the outstanding principal amount of such
         Lender's Loans, Swingline Exposure and LC Exposure at such time.

                  "Revolving Loan" means a Loan made pursuant to Section 2.03.

                  "SEC" means the United States Securities and Exchange
         Commission.

                  "S&P" means Standard & Poor's Ratings Services.

                  "Significant Subsidiary" means, at any particular time, any
         Subsidiary of the Borrower (or such Subsidiary and its Subsidiaries
         taken together) that would be a "significant subsidiary" of the
         Borrower within the meaning of Rule 1-02 under Regulation S-X
         promulgated by the SEC.

                  "Statutory Reserve Rate" means a fraction (expressed as a
         decimal), the numerator of which is the number one and the denominator
         of which is the number one minus the aggregate of the maximum reserve
         percentages (including any marginal, special, emergency or supplemental
         reserves) expressed as a decimal established by the Board to which the
         Administrative Agent or any Lender is subject for eurocurrency funding
         (currently referred to as "Eurocurrency Liabilities" in Regulation D of
         the Board). Such reserve percentages shall include those imposed
         pursuant to such Regulation D. Eurodollar Loans shall be deemed to
         constitute eurocurrency funding and to be subject to such reserve
         requirements without benefit of or credit for proration, exemptions or
         offsets that may be available from time to time to any Lender under
         such Regulation D or any comparable regulation. The Statutory Reserve
         Rate shall be adjusted automatically on and as of the effective date of
         any change in any reserve percentage.

                                       14
<PAGE>

                  "subsidiary" means, with respect to any Person (the "parent")
         at any date, any corporation, limited liability company, partnership,
         association or other entity the accounts of which would be consolidated
         with those of the parent in the parent's consolidated financial
         statements if such financial statements were prepared in accordance
         with GAAP as of such date, as well as any other corporation, limited
         liability company, partnership, association or other entity (a) of
         which securities or other ownership interests representing more than
         50% of the equity or more than 50% of the ordinary voting power or, in
         the case of a partnership, more than 50% of the general partnership
         interests are, as of such date, owned, Controlled or held, or (b) that
         is, as of such date, otherwise Controlled, by the parent or one or more
         subsidiaries of the parent or by the parent and one or more
         subsidiaries of the parent.

                  "Subsidiary" means any subsidiary of the Borrower.

                  "Swingline Borrowing" means a Swingline Loan made pursuant to
         Section 2.04(b).

                  "Swingline Commitment" means the commitment of the Swingline
         Lender to make Swingline Loans in an aggregate principal amount at any
         time outstanding of up to the Swingline Committed Amount.

                  "Swingline Committed Amount" shall have the meaning assigned
         to such term in Section 2.04(a).

                  "Swingline Exposure" means, at any time, the aggregate amount
         of all Swingline Loans outstanding at such time. The Swingline Exposure
         of any Lender at any time shall be its Applicable Percentage of the
         total Swingline Exposure at such time.

                  "Swingline Lender" means Bank of America, in its capacity as
         lender of Swingline Loans hereunder, and its successors in such
         capacity.

                  "Swingline Loan" means a Loan made pursuant to Section 2.04.

                  "Taxes" means any and all present or future taxes, levies,
         imposts, duties, deductions, charges or withholdings imposed by any
         Governmental Authority.

                  "Transactions" means the execution, delivery and performance
         by the Borrower of this Credit Agreement, the borrowing of Loans, the
         use of the proceeds thereof and the issuance of Letters of Credit
         hereunder.

                  "Type", when used in reference to any Loan or Borrowing,
         refers to whether the rate of interest on such Loan, or on the Loans
         comprising such Borrowing, is determined by reference to the LIBO Rate
         or the Alternate Base Rate.

                                       15
<PAGE>

                  "Used Commitment" means the aggregate outstanding principal
         amount of Loans (but not including any Swingline Loans) hereunder plus
         the aggregate amount of LC Exposure hereunder.

                  "Withdrawal Liability" means liability to a Multiemployer Plan
         as a result of a complete or partial withdrawal from such Multiemployer
         Plan, as such terms are defined in Part I of Subtitle E of Title IV of
         ERISA.

                  "364-Day Facility" means the Credit Agreement ($750,000,000
         364-Day Revolving Credit Facility), dated as of the date hereof, among
         the Borrower, the subsidiaries of the Borrower party thereto, the
         lenders parties thereto and Bank of America, as administrative agent,
         providing for a $750,000,000 revolving credit facility for a 364-day
         period, as amended or extended from time to time.

         SECTION 1.02 CLASSIFICATION OF LOANS AND BORROWINGS.

         For purposes of this Agreement, Loans may be classified and referred to
by Type (e.g., a "Eurodollar Loan"). Borrowings also may be classified and
referred to by Type (e.g., a "Eurodollar Borrowing").

         SECTION 1.03 TERMS GENERALLY.

         The definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words
"include", "includes" and "including" shall be deemed to be followed by the
phrase "without limitation". The word "will" shall be construed to have the same
meaning and effect as the word "shall". Unless the context requires otherwise
(a) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument or
other document as from time to time amended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set forth herein), (b) any reference herein to any Person shall be construed to
include such Person's successors and assigns, (c) the words "herein", "hereof"
and "hereunder", and words of similar import, shall be construed to refer to
this Credit Agreement in its entirety and not to any particular provision
hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules
shall be construed to refer to Articles and Sections of, and Exhibits and
Schedules to, this Credit Agreement and (e) the words "asset" and "property"
shall be construed to have the same meaning and effect and to refer to any and
all tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.

         SECTION 1.04 ACCOUNTING TERMS; GAAP.

         Except as otherwise expressly provided herein, all terms of an
accounting or financial nature shall be construed in accordance with GAAP, as in
effect from time to time; provided that, if the Borrower notifies the
Administrative Agent that the Borrower requests an amendment to any provision
hereof to eliminate the effect of any change occurring after the date hereof in
GAAP or in the application thereof on the operation of such provision (or if the
Administrative Agent notifies the Borrower that the Required Lenders request an
amendment to any provision

                                       16
<PAGE>

hereof for such purpose), regardless of whether any such notice is given before
or after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.

                                   ARTICLE II

                                   THE CREDITS

         SECTION 2.01 COMMITMENTS.

         Subject to the terms and conditions set forth herein, each Lender
agrees to make Loans to the Borrower from time to time during the Availability
Period in an aggregate principal amount that will not result in (a) the
aggregate principal amount of such Lender's Revolving Credit Exposure exceeding
such Lender's Commitment or (b) the total Revolving Credit Exposures exceeding
the total Commitments. Within the foregoing limits and subject to the terms and
conditions set forth herein, the Borrower may borrow, prepay and reborrow Loans.

         SECTION 2.02 REVOLVING LOANS AND REVOLVING BORROWINGS.

                  (a) Each Revolving Loan shall be made as part of a Revolving
         Borrowing consisting of Revolving Loans made by the Lenders ratably in
         accordance with their respective Commitments. The failure of any Lender
         to make any Revolving Loan required to be made by it shall not relieve
         any other Lender of its obligations hereunder; provided that the
         Commitments of the Lenders are several and no Lender shall be
         responsible for any other Lender's failure to make Revolving Loans as
         required.

                  (b) Subject to Section 2.13, each Revolving Borrowing shall be
         comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may
         request in accordance herewith. Each Swingline Loan shall be an ABR
         Loan. Each Lender at its option may make any Eurodollar Loan by causing
         any domestic or foreign branch or Affiliate of such Lender to make such
         Loan; provided that any exercise of such option shall not affect the
         obligation of the Borrower to repay such Loan in accordance with the
         terms of this Credit Agreement.

                  (c) At the commencement of each Interest Period for any
         Eurodollar Borrowing or on the date of any ABR Borrowing, such
         Revolving Borrowing shall be in a minimum aggregate amount of
         $5,000,000 and integral multiples of $500,000 in excess thereof;
         provided that an ABR Borrowing may be in an aggregate amount that is
         equal to the entire unused balance of the total Commitments. Revolving
         Borrowings of more than one Type may be outstanding at the same time;
         provided that there shall not at any time be more than an aggregate
         total of ten Eurodollar Borrowings outstanding.

                  (d) Notwithstanding any other provision of this Credit
         Agreement, the Borrower shall not be entitled to request, or to elect
         to convert or continue, any Revolving Borrowing if the Interest Period
         requested with respect thereto would end after the Maturity Date.

                                       17
<PAGE>

         SECTION 2.03 REQUESTS FOR REVOLVING BORROWINGS.

         To request a Revolving Borrowing, the Borrower shall notify the
Administrative Agent of such request by telephone (a) in the case of a
Eurodollar Borrowing, not later than 12:00 noon (Charlotte, North Carolina
time), three Business Days before the date of the proposed Revolving Borrowing
or (b) in the case of an ABR Borrowing, not later than 12:00 noon (Charlotte,
North Carolina time), on the date of the proposed Revolving Borrowing, including
any such notice of an ABR Borrowing to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.05(e). Each such telephonic Revolving
Borrowing Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Revolving
Borrowing Request signed by a Financial Officer of the Borrower. Each such
telephonic and written Revolving Borrowing Request shall specify the following
information in compliance with Section 2.02:

                           (i) the aggregate amount of the requested Revolving
                  Borrowing;

                           (ii) the date of such Revolving Borrowing, which
                  shall be a Business Day;

                           (iii) whether such Revolving Borrowing is to be an
                  ABR Borrowing or a Eurodollar Borrowing;

                           (iv) in the case of a Eurodollar Borrowing, the
                  initial Interest Period to be applicable thereto, which shall
                  be a period contemplated by the definition of the term
                  "Interest Period"; and

                           (v) the location and number of the Borrower's account
                  to which funds are to be disbursed, which shall comply with
                  the requirements of Section 2.06.

         If no election as to the Type of Revolving Borrowing is specified, then
the requested Revolving Borrowing shall be an ABR Borrowing. If no Interest
Period is specified with respect to any requested Eurodollar Borrowing, then the
Borrower shall be deemed to have selected an Interest Period of one month's
duration. Promptly following receipt of a Revolving Borrowing Request in
accordance with this Section, the Administrative Agent shall advise each Lender
of the details thereof and of the amount of such Lender's Loan to be made as
part of the requested Revolving Borrowing.

                                       18
<PAGE>

         SECTION 2.04 REQUESTS FOR SWINGLINE BORROWINGS.

                  (a) Subject to the terms and conditions set forth herein, the
         Swingline Lender agrees to make Swingline Loans to the Borrower from
         time to time during the Availability Period; provided that (i) the
         aggregate principal amount of Swingline Loans outstanding at any time
         shall not exceed $50,000,000 (the "Swingline Committed Amount"), and
         (ii) the sum of the total Revolving Credit Exposures shall not exceed
         the total Commitments. Subject to the terms and conditions set forth
         herein, the Borrower may borrow, prepay and reborrow Swingline Loans.

                  (b) Whenever the Borrower desires a Swingline Loan hereunder
         it shall give written notice (or telephonic notice promptly confirmed
         in writing), signed by a Financial Officer of the Borrower, to the
         Swingline Lender not later than 1:00 P.M., (Charlotte, North Carolina
         time), on the Business Day of the requested Swingline Loan. Each such
         notice shall be irrevocable and shall specify (i) that a Swingline Loan
         is requested, (ii) the date of the requested Swingline Loan (which
         shall be a Business Day) and (iii) the principal amount of the
         Swingline Loan requested. Each Swingline Loan shall be made as an ABR
         Loan and shall have such maturity date as set forth in paragraph (d)
         below. The Swingline Lender shall make each Swingline Loan available to
         the Borrower by 3:00 P.M., (Charlotte, North Carolina time), on the
         Business Day of the requested Swingline Borrowing.

                  (c) Each Swingline Loan shall be in a minimum principal amount
         of $1,000,000 and integral multiples of $100,000 in excess thereof (or
         the remaining amount of the Swingline Committed Amount, if less).

                  (d) The principal amount of all Swingline Loans shall be due
         and payable on the earlier of (i) a date not more than seven (7)
         Business Days from the date of advance thereof or (ii) the Maturity
         Date. The Borrower may prepay all or a portion of any Swingline Loan at
         any time without premium or penalty. The Swingline Lender may, at any
         time, in its sole discretion, upon one Business Day's prior written
         notice to the Borrower and the Lenders, demand repayment of any
         Swingline Loan by way of a Revolving Borrowing, in which case the
         Borrower shall be deemed to have requested a Revolving Borrowing
         comprised solely of ABR Loans in the amount of such Swingline Loan.
         Each Lender hereby irrevocably agrees to make a Loan ratably in
         accordance with its respective Commitment as set forth in Section
         2.02(a) in the amount, in the manner and on the date specified in the
         preceding sentence notwithstanding (i) the amount of such Revolving
         Borrowing may not comply with the minimum amount for ABR Borrowings
         otherwise required hereunder, (ii) whether any conditions specified in
         Section 4.02 are then satisfied, (iii) whether a Default or an Event of
         Default then exists, (iv) failure of any such request or deemed request
         for an ABR Borrowing to be made by the time otherwise required
         hereunder, (v) whether the date of such Revolving Borrowing is a date
         on which ABR Borrowings are otherwise permitted to be made hereunder or
         (vi) any termination of the Commitments relating thereto immediately
         prior to or contemporaneously with such Revolving Borrowing. In the
         event that any Revolving Borrowing cannot for any reason be made on the
         date otherwise required above (including, without limitation, as a
         result of the commencement of a proceeding under

                                       19
<PAGE>

         any federal, state or foreign bankruptcy, insolvency, receivership or
         similar law now or hereafter in effect), then each Lender hereby agrees
         that it shall forthwith purchase (as of the date such Revolving
         Borrowing would otherwise have occurred, but adjusted for any payments
         received from the Borrower on or after such date and prior to such
         purchase) from the Swingline Lender its Applicable Percentage of the
         outstanding Swingline Loans as shall be necessary to cause each such
         Lender to share in such Swingline Loans ratably based upon its
         Applicable Percentage (determined before giving effect to any
         termination of the Commitments pursuant to Section 2.08), provided that
         (i) all interest payable on the Swingline Loans shall be for the
         account of the Swingline Lender until the date as of which the
         respective interests in the outstanding Swingline Loans are purchased
         and (ii) at the time any purchase of the respective interests in the
         outstanding Swingline Loans pursuant to this sentence is actually made,
         the purchasing Lender shall be required to pay to the Swingline Lender,
         to the extent not paid to the Swingline Lender by the Borrower in
         accordance with Section 2.12, interest on the principal amount of the
         outstanding Swingline Loans purchased for each day from and including
         the day upon which such Revolving Borrowing would otherwise have
         occurred to but excluding the date of payment for such purchase, at the
         rate equal to the Federal Funds Effective Rate.

         SECTION 2.05 LETTERS OF CREDIT.

                  (a) General. Subject to the terms and conditions set forth
         herein, the Borrower may request the issuance (or the amendment,
         renewal or extension) of Letters of Credit for its own account or the
         account of any Subsidiary, in a form acceptable to the Issuing Bank, at
         any time and from time to time during the Availability Period. In the
         event of any inconsistency between the terms and conditions of this
         Agreement and the terms and conditions of any form of letter of credit
         application or other agreement submitted by the Borrower to, or entered
         into by the Borrower with, the Issuing Bank relating to any Letter of
         Credit, the terms and conditions of this Agreement shall control.
         Notwithstanding any language in a letter of credit application or other
         agreement, no Lien shall be granted by the Borrower or any Subsidiary
         pursuant to such application or agreement.

                  (b) Notice of Issuance, Amendment, Renewal, Extension; Certain
         Conditions. To request the issuance of a Letter of Credit (or the
         amendment, renewal or extension of an outstanding Letter of Credit),
         the Borrower shall hand deliver or telecopy (or transmit by electronic
         communication, if arrangements for doing so have been approved by the
         Issuing Bank) to the Issuing Bank and the Administrative Agent (not
         less than 2 Business Days in advance of the requested date of issuance,
         amendment, renewal or extension) a letter of credit application on the
         Issuing Bank's standard form and signed by a Financial Officer of the
         Borrower requesting the issuance of a Letter of Credit, or identifying
         the Letter of Credit to be amended, renewed or extended, and specifying
         the date of issuance, amendment, renewal or extension, the date on
         which such Letter of Credit is to expire (which shall comply with
         paragraph (c) of this Section), the amount of such Letter of Credit,
         the name and address of the beneficiary thereof and such other
         information as shall be necessary to prepare, amend, renew or extend
         such Letter of Credit. A Letter of Credit shall be issued, amended,
         renewed or extended only if (and upon issuance,

                                       20
<PAGE>

         amendment, renewal or extension of each Letter of Credit the Borrower
         shall be deemed to represent and warrant that), after giving effect to
         such issuance, amendment, renewal or extension, (i) the total Revolving
         Credit Exposures shall not exceed the total Commitments and (ii) the LC
         Exposure shall not exceed the LC Commitment.

                  (c) Expiration Date. No Letter of Credit shall (i) have an
         original expiry date more than one year from the date of issuance
         (provided that any such Letter of Credit may contain customary
         "evergreen" provisions pursuant to which the expiry date is
         automatically extended by a specific time period unless the Issuing
         Bank gives notice to the beneficiary of such Letter of Credit at least
         a specified time period prior to the expiry date then in effect) and
         (ii) as originally issued or extended, have an expiry date extending
         beyond the date that is five Business Days prior to the Maturity Date.

                  (d) Participations. By the issuance of a Letter of Credit (or
         an amendment to a Letter of Credit increasing the amount thereof) and
         without any further action on the part of the Issuing Bank or the
         Lenders, the Issuing Bank hereby grants to each Lender, and each Lender
         hereby acquires from the Issuing Bank, a participation in such Letter
         of Credit equal to such Lender's Applicable Percentage of the aggregate
         amount available to be drawn under such Letter of Credit. In
         consideration and in furtherance of the foregoing, each Lender hereby
         absolutely and unconditionally agrees to pay to the Administrative
         Agent, for the account of the Issuing Bank, such Lender's Applicable
         Percentage of each LC Disbursement made by the Issuing Bank and not
         reimbursed as provided in paragraph (e) of this Section, or of any
         reimbursement payment required to be refunded to the Borrower for any
         reason. Each Lender acknowledges and agrees that its obligation to
         acquire participations pursuant to this paragraph in respect of Letters
         of Credit is absolute and unconditional and shall not be affected by
         any circumstance whatsoever, including any amendment, renewal or
         extension of any Letter of Credit or the occurrence and continuance of
         a Default or reduction or termination of the Commitments, and that each
         such payment shall be made without any offset, abatement, withholding
         or reduction whatsoever.

                  (e) Reimbursement. If the Issuing Bank shall make any LC
         Disbursement in respect of a Letter of Credit, the Borrower shall
         reimburse such LC Disbursement by paying to the Administrative Agent an
         amount equal to such LC Disbursement not later than 12:00 noon,
         (Charlotte, North Carolina time), on the date that such LC Disbursement
         is made, if the Borrower shall have received notice of such LC
         Disbursement prior to 10:00 a.m., (Charlotte, North Carolina time), on
         such date, and otherwise such payment shall be made not later than
         12:00 noon, (Charlotte, North Carolina time), on the Business Day
         immediately following the day such notice is received by the Borrower.
         Unless the Borrower shall immediately notify the Issuing Bank and the
         Administrative Agent of its intent to otherwise reimburse the Issuing
         Bank for an LC Disbursement, the Borrower shall be deemed to have
         requested a Revolving Borrowing in the amount of the LC Disbursement as
         provided in paragraph (f) below, the proceeds of which will be used to
         satisfy its reimbursement obligation. If the LC Disbursement is not
         reimbursed as provided above, the Administrative Agent shall notify
         each Lender of the applicable LC Disbursement, the payment then due
         from the Borrower in respect thereof and such

                                       21
<PAGE>

         Lender's Applicable Percentage thereof. Promptly following receipt of
         such notice, each Lender shall pay to the Administrative Agent its
         Applicable Percentage of the payment then due from the Borrower, in the
         same manner as provided in Section 2.06 with respect to Loans made by
         such Lender (and Section 2.06 shall apply, mutatis mutandis, to the
         payment obligations of the Lenders), and the Administrative Agent shall
         promptly pay to the Issuing Bank the amounts so received by it from the
         Lenders. Promptly following receipt by the Administrative Agent of any
         payment from the Borrower pursuant to this paragraph, the
         Administrative Agent shall distribute such payment to the Issuing Bank
         or, to the extent that Lenders have made payments pursuant to this
         paragraph to reimburse the Issuing Bank, then to such Lenders and the
         Issuing Bank as their interests may appear. Any payment made by a
         Lender pursuant to this paragraph to reimburse the Issuing Bank for any
         LC Disbursement (other than the funding of a Revolving Borrowing as
         contemplated in paragraph (f) below) shall not constitute a Loan and
         shall not relieve the Borrower of its obligation to reimburse such LC
         Disbursement.

                  (f) Repayment with Revolving Loans. On any day on which the
         Borrower shall have requested, or been deemed to have requested, a
         Revolving Borrowing to reimburse an LC Disbursement, the Administrative
         Agent shall give notice to the Lenders that a Revolving Borrowing has
         been requested or deemed requested in connection with an LC
         Disbursement, in which case a Revolving Borrowing comprised entirely of
         ABR Loans (each such Borrowing, a "Mandatory Borrowing") shall be
         immediately made (without giving effect to any termination of the
         Commitments hereunder) ratably by the Lenders based on each Lender's
         respective Applicable Percentage of the total Commitments (determined
         before giving effect to any termination of the Commitments hereunder)
         and the proceeds thereof shall be paid directly to the Administrative
         Agent, for the benefit of the Issuing Bank, for application to the
         applicable LC Disbursement. Each Lender hereby irrevocably agrees to
         make its Revolving Loan immediately upon any such request or deemed
         request on account of each Mandatory Borrowing in the amount and in the
         manner specified in the preceding sentence and on the same date
         notwithstanding (i) the amount of the Mandatory Borrowing may not
         comply with the minimum amount for ABR Borrowings otherwise required
         hereunder, (ii) whether any conditions specified in Section 4.02 are
         then satisfied, (iii) whether a Default or Event of Default then
         exists, (iv) failure of any such request or deemed request for an ABR
         Borrowing to be made by the time otherwise required hereunder, (v) the
         date of the Mandatory Borrowing or (vi) any reduction in the total
         Commitments after any such Letter of Credit may have been drawn upon.

                  (g) Obligations Absolute. The Borrower's obligation to
         reimburse LC Disbursements as provided in paragraph (e) of this Section
         shall be absolute, unconditional and irrevocable, and shall be
         performed strictly in accordance with the terms of this Agreement under
         any and all circumstances whatsoever and irrespective of:

                           (i) any lack of validity or enforceability of any
                  Letter of Credit or this Credit Agreement, or any term or
                  provision therein;

                                       22
<PAGE>

                           (ii) any amendment or waiver of or any consent to
                  departure from all or any of the provisions of any Letter of
                  Credit or this Credit Agreement;

                           (iii) the existence of any claim, setoff, defense or
                  other right that the Borrower, any other party guaranteeing,
                  or otherwise obligated with, the Borrower, any Subsidiary or
                  other Affiliate thereof or any other Person may at any time
                  have against the beneficiary under any Letter of Credit, the
                  Issuing Bank, the Administrative Agent or any Lender or any
                  other Person, whether in connection with this Agreement or any
                  other related or unrelated agreement or transaction;

                           (iv) any draft or other document presented under a
                  Letter of Credit proving to be forged, fraudulent or invalid
                  in any respect or any statement therein being untrue or
                  inaccurate in any respect;

                           (v) payment by the Issuing Bank under a Letter of
                  Credit against presentation of a draft or other document that
                  does not comply with the terms of such Letter of Credit; and

                           (vi) any other act or omission to act or delay of any
                  kind of the Issuing Bank, the Lenders, the Administrative
                  Agent or any other Person or any other event or circumstance
                  whatsoever, whether or not similar to any of the foregoing,
                  that might, but for the provisions of this Section, constitute
                  a legal or equitable discharge of the Borrower's obligations
                  hereunder.

provided that (i) the Borrower shall not be obligated to reimburse the Issuing
Bank for any payment or indemnify the Issuing Bank for any wrongful dishonor or
any other matter to the extent resulting from acts or omissions constituting
gross negligence or willful misconduct by the Issuing Bank, (ii) the Borrower
shall not be obligated to reimburse any Lender for any payment or indemnify any
Lender for any matter to the extent resulting from acts or omissions
constituting gross negligence or willful misconduct by such Lender and (iii) the
Lenders shall not be obligated to reimburse the Issuing Bank for any payment or
indemnify the Issuing Bank for any wrongful dishonor or any other matter to the
extent resulting from acts or omissions constituting gross negligence or willful
misconduct by the Issuing Bank.

Nothing in this Agreement shall be construed to excuse the Issuing Bank from
liability to the Borrower to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby waived by the
Borrower to the extent permitted by applicable law) suffered by the Borrower
that are caused by the Issuing Bank's failure to exercise the agreed standard of
care (as set forth below) in determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof. The parties
hereto expressly agree that the Issuing Bank shall have exercised the agreed
standard of care in the absence of gross negligence or willful misconduct on the
part of the Issuing Bank and if performed in accordance with the standards of
care specified in the Uniform Commercial Code of the State of New York and The
Uniform Customs and Practice for Documentary Credits.

                                       23
<PAGE>

                  (h) Disbursement Procedures. The Issuing Bank shall, promptly
         following its receipt thereof, examine all documents purporting to
         represent a demand for payment under a Letter of Credit. The Issuing
         Bank shall promptly notify the Administrative Agent and the Borrower by
         telephone (confirmed by telecopy) of such demand for payment and
         whether the Issuing Bank has made or will make an LC Disbursement
         thereunder; provided that any failure to give or delay in giving such
         notice shall not relieve the Borrower of its obligation to reimburse
         the Issuing Bank and the Lenders with respect to any such LC
         Disbursement.

                  (i) Interim Interest. If the Issuing Bank shall make any LC
         Disbursement, then, unless the Borrower shall reimburse such LC
         Disbursement in full on the date such LC Disbursement is made, the
         unpaid amount thereof shall bear interest, for each day from and
         including the date such LC Disbursement is made to but excluding the
         date that such LC Disbursement is reimbursed, at the rate per annum
         then applicable to ABR Loans. Interest accrued pursuant to this
         paragraph shall be for the account of the Issuing Bank, except that
         interest accrued on and after the date of payment by any Lender
         pursuant to paragraph (e) of this Section to reimburse the Issuing Bank
         shall be for the account of such Lender to the extent of such payment.

                  (j) Replacement of the Issuing Bank. The Issuing Bank may be
         replaced at any time by written agreement among the Borrower, the
         Administrative Agent, the replaced Issuing Bank and the successor
         Issuing Bank. The Administrative Agent shall notify the Lenders of any
         such replacement of the Issuing Bank. At the time any such replacement
         shall become effective, the Borrower shall pay all unpaid fees accrued
         for the account of the replaced Issuing Bank pursuant to Section
         2.11(c). From and after the effective date of any such replacement, (i)
         the successor Issuing Bank shall have all the rights and obligations of
         the Issuing Bank under this Agreement with respect to Letters of Credit
         to be issued thereafter and (ii) references herein to the term "Issuing
         Bank" shall be deemed to refer to such successor or to any previous
         Issuing Bank, or to such successor and all previous Issuing Banks, as
         the context shall require. After the replacement of an Issuing Bank
         hereunder, the replaced Issuing Bank shall remain a party hereto and
         shall continue to have all the rights and obligations of an Issuing
         Bank under this Agreement with respect to Letters of Credit issued by
         it prior to such replacement, but shall not be required to issue
         additional Letters of Credit.

                  (k) Cash Collateralization. If any Event of Default shall
         occur and be continuing, on the Business Day that the Borrower receives
         notice from the Administrative Agent or the Required Lenders (or, if
         the maturity of the Loans has been accelerated, Lenders with LC
         Exposure representing greater than 50% of the total LC Exposure)
         demanding the deposit of cash collateral pursuant to this paragraph,
         the Borrower shall deposit in an account with the Administrative Agent,
         in the name of the Administrative Agent and for the benefit of the
         Lenders, an amount in cash equal to the LC Exposure as of such date
         plus any accrued and unpaid interest and fees thereon; provided that
         the obligation to deposit such cash collateral shall become effective
         immediately, and such deposit shall become immediately due and payable,
         without demand or other notice of any kind, upon the occurrence of any
         Event of Default with

                                       24
<PAGE>

         respect to the Borrower described in clause (h) or (i) of Article VII.
         Such deposit shall be held by the Administrative Agent as collateral
         for the payment and performance of the obligations of the Borrower
         under this Agreement. The Administrative Agent shall have exclusive
         dominion and control, including the exclusive right of withdrawal, over
         such account. Other than any income earned on the investment of such
         deposits in Cash Equivalents, which investments the Administrative
         Agent agrees to make at the Borrower's risk and expense, such deposits
         shall not otherwise bear interest. Interest or profits, if any, on such
         investments shall accumulate in such account. Moneys in such account
         shall be applied by the Administrative Agent to reimburse the Issuing
         Bank for LC Disbursements for which it has not been reimbursed and, to
         the extent not so applied, shall be held for the satisfaction of the
         reimbursement obligations of the Borrower for the LC Exposure at such
         time (including, without limitation, reimbursement of the Lenders with
         LC Exposure), or, if the maturity of the Loans has been accelerated
         (but subject to the consent of Lenders with LC Exposure representing
         greater than 50% of the total LC Exposure), be applied to satisfy other
         obligations of the Borrower under this Agreement. If the Borrower is
         required to provide an amount of cash collateral hereunder as a result
         of the occurrence of an Event of Default, such amount (to the extent
         not applied as aforesaid) shall be returned to the Borrower within two
         Business Days after all Events of Default have been cured or waived.

         SECTION 2.06 FUNDING OF REVOLVING BORROWINGS.

                  (a) Each Lender shall make each Loan to be made by it
         hereunder on the proposed date thereof by wire transfer of immediately
         available funds by 2:00 p.m. (Charlotte, North Carolina time), to the
         account of the Administrative Agent most recently designated by it for
         such purpose by notice to the Lenders; provided that Swingline Loans
         shall be made as provided in Section 2.04. The Administrative Agent
         will make such Loans available to the Borrower by promptly crediting
         the amounts so received, in like funds, to an account of the Borrower
         maintained with the Administrative Agent in Charlotte, North Carolina
         and designated by the Borrower in the applicable Revolving Borrowing
         Request.

                   (b) Unless the Administrative Agent shall have received
         notice from a Lender prior to the proposed date of any Revolving
         Borrowing that such Lender will not make available to the
         Administrative Agent such Lender's share of such Revolving Borrowing,
         the Administrative Agent may assume that such Lender has made such
         share available on such date in accordance with paragraph (a) of this
         Section and may, in reliance upon such assumption, make available to
         the Borrower a corresponding amount. In such event, if a Lender has not
         in fact made its share of the applicable Revolving Borrowing available
         to the Administrative Agent, then the applicable Lender and the
         Borrower severally agree to pay to the Administrative Agent forthwith
         on demand such corresponding amount with interest thereon, for each day
         from and including the date such amount is made available to the
         Borrower to but excluding the date of payment to the Administrative
         Agent, at (i) in the case of such Lender, the Federal Funds Effective
         Rate or (ii) in the case of the Borrower, the interest rate applicable
         to ABR Loans. If such Lender pays such amount to the Administrative
         Agent, then such amount shall constitute such Lender's Loan included in
         such Revolving Borrowing.

                                       25
<PAGE>

         SECTION 2.07 INTEREST ELECTIONS.

                  (a) Each Revolving Borrowing initially shall be of the Type
         specified in the applicable Revolving Borrowing Request and, in the
         case of a Eurodollar Borrowing, shall have an initial Interest Period
         as specified in such Revolving Borrowing Request. Thereafter, the
         Borrower may elect to convert such Revolving Borrowing to a different
         Type or to continue such Revolving Borrowing and, in the case of a
         Eurodollar Borrowing, may elect Interest Periods therefore, all as
         provided in this Section. The Borrower may elect different options with
         respect to different portions of the affected Revolving Borrowing, in
         which case each such portion shall be allocated ratably among the
         Lenders holding the Loans comprising such Revolving Borrowing, and the
         Loans comprising each such portion shall be considered a separate
         Revolving Borrowing. This Section shall not apply to Swingline
         Borrowings, which may not be converted or continued.

                  (b) To make an election pursuant to this Section, the Borrower
         shall notify the Administrative Agent of such election by telephone by
         the time that a Revolving Borrowing Request would be required under
         Section 2.03 if the Borrower were requesting a Revolving Borrowing of
         the Type resulting from such election to be made on the effective date
         of such election. Each such telephonic Interest Election Request shall
         be irrevocable and shall be confirmed promptly by hand delivery or
         telecopy to the Administrative Agent of a written Interest Election
         Request signed by a Financial Officer of the Borrower.

                  (c) Each telephonic and written Interest Election Request
         shall specify the following information in compliance with Section
         2.02:

                           (i) the Revolving Borrowing to which such Interest
                  Election Request applies and, if different options are being
                  elected with respect to different portions thereof, the
                  portions thereof to be allocated to each resulting Revolving
                  Borrowing (in which case the information to be specified
                  pursuant to clauses (iii) and (iv) below shall be specified
                  for each resulting Revolving Borrowing);

                           (ii) the effective date of the election made pursuant
                  to such Interest Election Request, which shall be a Business
                  Day;

                           (iii) whether the resulting Revolving Borrowing is to
                  be an ABR Borrowing or a Eurodollar Borrowing; and

                           (iv) if the resulting Revolving Borrowing is a
                  Eurodollar Borrowing, the Interest Period to be applicable
                  thereto after giving effect to such election, which shall be a
                  period contemplated by the definition of the term "Interest
                  Period."

                                       26
<PAGE>

         If any such Interest Election Request requests a Eurodollar Borrowing
         but does not specify an Interest Period, then the Borrower shall be
         deemed to have selected an Interest Period of one month's duration.

                  (d) Promptly following receipt of an Interest Election
         Request, the Administrative Agent shall advise each Lender of the
         details thereof and of such Lender's portion of each resulting
         Revolving Borrowing.

                  (e) If the Borrower fails to deliver a timely Interest
         Election Request with respect to a Eurodollar Borrowing prior to the
         end of the Interest Period applicable thereto, then, unless such
         Revolving Borrowing is repaid as provided herein, at the end of such
         Interest Period such Revolving Borrowing shall be continued as a
         Eurodollar Borrowing with an Interest Period of one month's duration.
         Notwithstanding any contrary provision hereof, if an Event of Default
         has occurred and is continuing and the Administrative Agent, at the
         request of the Required Lenders, so notifies the Borrower, then, so
         long as an Event of Default is continuing (i) no outstanding Revolving
         Borrowing may be converted to or continued as a Eurodollar Borrowing
         and (ii) unless repaid, each Eurodollar Borrowing shall be converted to
         an ABR Borrowing at the end of the Interest Period applicable thereto.

         SECTION 2.08 TERMINATION AND REDUCTION OF COMMITMENTS.

                  (a) Unless previously terminated, the Commitments shall
         terminate on the Maturity Date.

                  (b) The Borrower may at any time terminate, or from time to
         time reduce, the Commitments in whole or in part; provided that (i)
         each reduction of the Commitments shall be in an aggregate amount not
         less than $50,000,000 and integral multiples of $10,000,000 in excess
         thereof and (ii) the Borrower shall not terminate or reduce the
         Commitments if, after giving effect to any concurrent prepayment of the
         Loans in accordance with Section 2.10, the Revolving Credit Exposures
         would exceed the total Commitments.

                  (c) The Borrower shall notify the Administrative Agent of any
         election to terminate or reduce the Commitments under paragraph (b) of
         this Section at least three Business Days prior to the effective date
         of such termination or reduction, specifying such election and the
         effective date thereof. Promptly following receipt of any notice, the
         Administrative Agent shall advise the Lenders of the contents thereof.
         Each notice delivered by the Borrower pursuant to this Section shall be
         irrevocable; provided that a notice of termination of the Commitments
         delivered by the Borrower may state that such notice is conditioned
         upon the effectiveness of other credit facilities, in which case such
         notice may be revoked by the Borrower (by notice to the Administrative
         Agent on or prior to the specified effective date) if such condition is
         not satisfied. Any termination or reduction of the Commitments shall be
         permanent. Each reduction of the Commitments shall be made ratably
         among the Lenders in accordance with their respective Commitments.

                                       27
<PAGE>

         SECTION 2.09 REPAYMENT OF LOANS; EVIDENCE OF DEBT.

                  (a) The Borrower hereby unconditionally promises to pay (i) to
         the Administrative Agent for the account of each Lender the then unpaid
         principal amount of each Revolving Loan and all interest, fees and
         other amounts payable hereunder on the Maturity Date and (ii) to the
         Swingline Lender, the then unpaid principal amount of each Swingline
         Loan on the maturity thereof.

                  (b) Each Lender shall maintain in accordance with its usual
         practice an account or accounts evidencing the indebtedness of the
         Borrower to such Lender resulting from each Loan made by such Lender,
         including the amounts of principal and interest payable and paid to
         such Lender from time to time hereunder.

                  (c) The Administrative Agent shall maintain accounts in which
         it shall record (i) the amount of each Loan made hereunder, the Type
         thereof and the Interest Period applicable thereto, (ii) the amount of
         any principal or interest due and payable or to become due and payable
         from the Borrower to each Lender hereunder and (iii) the amount of any
         sum received by the Administrative Agent hereunder for the account of
         the Lenders and each Lender's share thereof.

                  (d) The entries made in the accounts maintained pursuant to
         paragraph (b) or (c) of this Section shall be conclusive (absent
         manifest error) evidence of the existence and amounts of the
         obligations recorded therein; provided that the failure of any Lender
         or the Administrative Agent to maintain such accounts or any error
         therein shall not in any manner affect the obligation of the Borrower
         to repay the Loans in accordance with the terms of this Credit
         Agreement.

                  (e) Any Lender may request that Loans made by it be evidenced
         by a promissory note. In such event, the Borrower shall prepare,
         execute and deliver to such Lender a promissory note payable to the
         order of such Lender and in a form approved by the Administrative Agent
         and the Borrower. Thereafter, the Loans evidenced by such promissory
         note and interest thereon shall at all times (including after
         assignment pursuant to Section 9.04) be represented by one or more
         promissory notes in such form payable to the order of the payee named
         therein.

         SECTION 2.10 PREPAYMENT OF LOANS.

                  (a) The Borrower shall have the right at any time and from
         time to time to prepay any Borrowing in whole or in part, without
         premium or penalty, subject to Section 2.15 and subject to prior notice
         in accordance with paragraph (b) of this Section.

                  (b) The Borrower shall notify the Administrative Agent by
         telephone (confirmed by telecopy) of any prepayment hereunder (A) in
         the case of prepayment of a Eurodollar Borrowing, not later than 12:00
         noon (Charlotte, North Carolina time), three Business Days before the
         date of prepayment, (B) in the case of prepayment of an ABR Borrowing,
         not later than 12:00 noon (Charlotte, North Carolina time), on the date
         of prepayment or (C) in the case of prepayment of a Swingline Loan, not
         later than

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<PAGE>

         12:00 noon (Charlotte, North Carolina time), on the date of prepayment.
         Each such notice shall be irrevocable and shall specify the prepayment
         date and the principal amount of each Borrowing or portion thereof to
         be prepaid; provided that, if a notice of prepayment is given in
         connection with a conditional notice of termination of the Commitments
         as contemplated by Section 2.08, then such notice of prepayment may be
         revoked if such notice of termination is revoked in accordance with
         Section 2.08. Promptly following receipt of any such notice relating to
         a Borrowing, the Administrative Agent shall advise the Lenders of the
         contents thereof. Each partial prepayment of any Borrowing shall be in
         an amount that would be permitted in the case of an advance of a
         Borrowing of the same Type as provided in Section 2.02. Each prepayment
         of a Borrowing shall be applied ratably to the Loans included in the
         prepaid Borrowing. Prepayments shall be accompanied by accrued interest
         to the extent required by Section 2.12.

         SECTION 2.11 FEES.

                  (a) The Borrower agrees to pay to the Administrative Agent for
         the account of each Lender a facility fee, which shall accrue at the
         Applicable Rate on the daily amount of the Commitment of such Lender
         (whether used or unused) during the period from and including the
         Closing Date to but excluding the date on which such Commitment
         terminates; provided that, if such Lender continues to have any
         Revolving Credit Exposure after its Commitment terminates, then such
         facility fee shall continue to accrue on the daily amount of such
         Lender's Revolving Credit Exposure from and including the date on which
         its Commitment terminates to but excluding the date on which such
         Lender ceases to have any Revolving Credit Exposure. Accrued facility
         fees shall be payable in arrears on the last day of March, June,
         September and December of each year and on the date on which the
         Commitments terminate, commencing on the first such date to occur after
         the date hereof; provided that any facility fees accruing after the
         date on which the Commitments terminate shall be payable on demand. All
         facility fees shall be computed on the basis of a year of 360 days and
         shall be payable for the actual number of days elapsed (including the
         first day but excluding the last day).

                  (b) The Borrower agrees to pay to the Administrative Agent for
         the account of each Lender a utilization fee equal to the Applicable
         Rate in effect from time to time for each day on which the Commitment
         Utilization Percentage exceeds 50%, which fee shall accrue on the daily
         amount of the Used Commitment of such Lender for each Excess
         Utilization Day during the period from and including the Closing Date
         to but excluding the date on which such Lender's Commitment terminates;
         provided that, if such Lender continues to have any Revolving Credit
         Exposure after its Commitment terminates, then such utilization fee
         shall continue to accrue on the daily amount of such Lender's Revolving
         Credit Exposure for each Excess Utilization Day from and including the
         date on which its Commitment terminates to but excluding the date on
         which such Lender ceases to have any Revolving Credit Exposure. Accrued
         utilization fees shall be payable in arrears on the last day of March,
         June, September and December of each year and on the date on which the
         Commitments terminate, commencing on the first such date to occur after
         the date hereof; provided that any utilization fees accruing after the
         date on which the Commitments terminate shall be payable on demand. All
         utilization fees shall be computed on the basis of a year of 360 days
         and shall be payable for the actual number of days elapsed (including
         the first day but excluding the last day).

                                       29
<PAGE>

                  (c) The Borrower agrees to pay (i) to the Administrative Agent
         for the account of each Lender a participation fee with respect to its
         participations in Letters of Credit, which shall accrue at a rate per
         annum equal to the Applicable Rate for Eurodollar Spreads (as defined
         under "Applicable Rate") on the average daily amount of such Lender's
         LC Exposure (excluding any portion thereof attributable to unreimbursed
         LC Disbursements) during the period from and including the Closing Date
         to but excluding the later of the date on which such Lender's
         Commitment terminates and the date on which such Lender ceases to have
         any LC Exposure, and (ii) to the Issuing Bank a fronting fee, which
         shall accrue at the rate of 0.125% per annum on the average daily
         amount of the LC Exposure (excluding any portion thereof attributable
         to unreimbursed LC Disbursements) during the period from and including
         the Closing Date to but excluding the later of the date of termination
         of the Commitments and the date on which there ceases to be any LC
         Exposure, as well as the Issuing Bank's standard fees with respect to
         the issuance, amendment, renewal or extension of any Letter of Credit
         or processing of drawings thereunder. Participation fees and fronting
         fees accrued through and including the last day of March, June,
         September and December of each year shall be payable on the third
         Business Day following such last day, commencing on the first such date
         to occur after the Closing Date; provided that all such fees shall be
         payable on the date on which the Commitments terminate and any such
         fees accruing after the date on which the Commitments terminate shall
         be payable on demand. Any other fees payable to the Issuing Bank
         pursuant to this paragraph shall be payable within 10 days after
         demand. All participation fees and fronting fees shall be computed on
         the basis of a year of 360 days and shall be payable for the actual
         number of days elapsed (including the first day but excluding the last
         day).

                  (d) The Borrower agrees to pay to the Administrative Agent,
         for its own account, fees payable in the amounts and at the times
         separately agreed upon between the Borrower and the Administrative
         Agent.

                  (e) All fees payable hereunder shall be paid on the dates due,
         in immediately available funds, to the Administrative Agent (or to the
         Issuing Bank, in the case of fees payable to it) for distribution, in
         the case of facility fees, utilization fees and participation fees, to
         the Lenders. Fees paid shall not be refundable under any circumstances.

         SECTION 2.12 INTEREST.

                  (a) The Loans comprising each ABR Borrowing shall bear
         interest at a rate per annum equal to the Alternate Base Rate.

                  (b) The Loans comprising each Eurodollar Borrowing shall bear
         interest at a rate per annum equal to the LIBO Rate for the Interest
         Period in effect for such Borrowing plus the Applicable Rate.

                                       30
<PAGE>

                  (c) Notwithstanding the foregoing, if any principal of or
         interest on any Loan or any fee or other amount payable by the Borrower
         hereunder is not paid when due (following the expiration of any grace
         period specified in Article VII), whether at stated maturity, upon
         acceleration or otherwise, such overdue amount shall bear interest,
         after as well as before judgment, at a rate per annum equal to (i) in
         the case of overdue principal of any Loan, 2% plus the rate otherwise
         applicable to such Loan as provided above or (ii) in the case of any
         other amount, 2% plus the rate applicable to ABR Loans as provided
         above.

                  (d) Accrued interest on each Loan shall be payable in arrears
         on each Interest Payment Date for such Loan; provided that (i) interest
         accrued pursuant to paragraph (c) of this Section shall be payable on
         demand, (ii) in the event of any repayment or prepayment of any Loan
         (other than a prepayment of an ABR Loan prior to the end of the
         Availability Period), accrued interest on the principal amount repaid
         or prepaid shall be payable on the date of such repayment or
         prepayment, (iii) in the event of any conversion of any Eurodollar Loan
         prior to the end of the current Interest Period therefore, accrued
         interest on such Loan shall be payable on the effective date of such
         conversion and (iv) all accrued interest shall be payable upon
         termination of the Commitments.

                  (e) All interest hereunder shall be computed on the basis of a
         year of 360 days, except that interest computed by reference to the
         Alternate Base Rate at times when the Alternate Base Rate is based on
         the Prime Rate shall be computed on the basis of a year of 365 days (or
         366 days in a leap year), and in each case shall be payable for the
         actual number of days elapsed (including the first day but excluding
         the last day). The applicable Alternate Base Rate or LIBO Rate shall be
         determined by the Administrative Agent, and such determination shall be
         conclusive absent manifest error.

                  (f) If any Lender shall be required under the regulations of
         the Board to maintain reserves with respect to liabilities or assets
         consisting of, or including, Eurocurrency Liabilities (as defined in
         Regulation D of the Board), the Borrower shall pay to the
         Administrative Agent for the account of such Lender, additional
         interest on the unpaid principal amount of each Eurodollar Loan made to
         the Borrower by such Lender, from the date of such Loan until such Loan
         is paid in full, at an interest rate per annum equal at all times
         during the Interest Period for such Eurodollar Loan to the remainder
         obtained by subtracting (i) the LIBO Rate for such Interest Period from
         (ii) the rate obtained by multiplying LIBO Rate as referred to in
         clause (i) above by the Statutory Reserve Rate applicable to such
         Lender for such Interest Period. Such additional interest shall be
         determined by such Lender and notified to the Borrower (with a copy to
         the Administrative Agent) not later than five Business Days before the
         next Interest Payment Date for such Eurodollar Loan, and such
         additional interest so notified to the Borrower by any Lender shall be
         payable to the Administrative Agent for the account of such Lender on
         each Interest Payment Date for such Eurodollar Loan.

                                       31
<PAGE>

         SECTION 2.13 ALTERNATE RATE OF INTEREST.

         If prior to the commencement of any Interest Period for a Eurodollar
Borrowing:

                  (a) the Administrative Agent reasonably determines (which
         determination shall be conclusive absent manifest error) that adequate
         and reasonable means do not exist for ascertaining the LIBO Rate for
         such Interest Period; or

                  (b) the Administrative Agent is advised by the Required
         Lenders that the LIBO Rate for such Interest Period will not, in their
         reasonable judgment, adequately and fairly reflect the cost to such
         Lenders of making or maintaining their Loans included in such Revolving
         Borrowing for such Interest Period;

         then the Administrative Agent shall give notice thereof to the Borrower
         and the Lenders by telephone or telecopy as promptly as practicable
         thereafter and, until the Administrative Agent notifies the Borrower
         and the Lenders that the circumstances giving rise to such notice no
         longer exist, (i) any Interest Election Request that requests the
         conversion of any Revolving Borrowing to, or continuation of any
         Revolving Borrowing as, a Eurodollar Borrowing shall be ineffective,
         and (ii) if any Revolving Borrowing Request requests a Eurodollar
         Borrowing, such Revolving Borrowing shall be made as an ABR Borrowing;
         provided that if the circumstances giving rise to such notice affect
         only one Type of Revolving Borrowings, then the other Type of Revolving
         Borrowings shall be permitted.

         SECTION 2.14 INCREASED COSTS.

                  (a) If any Change in Law shall:

                           (i) impose, modify or deem applicable any reserve,
                  special deposit or similar requirement against assets of,
                  deposits with or for the account of, or credit extended by,
                  any Lender or the Issuing Bank (other than any reserves
                  included in the Statutory Reserve Rate); or

                           (ii) impose on any Lender or the Issuing Bank or the
                  London interbank market any other condition affecting this
                  Credit Agreement or Eurodollar Loans or any Letter of Credit
                  or participation therein;

         and the result of any of the foregoing shall be to increase the cost
         (except with respect to Excluded Taxes) to such Lender of making or
         maintaining any Eurodollar Loan (or of maintaining its obligation to
         make any such Loan) or to increase the cost (except with respect to
         Excluded Taxes) to such Lender or the Issuing Bank of participating in,
         issuing or maintaining any Letter of Credit or to reduce the amount of
         any sum received or receivable (except to the extent caused by Excluded
         Taxes) by such Lender or the Issuing Bank hereunder (whether of
         principal, interest or otherwise) by an amount deemed by such Lender or
         the Issuing Bank to be material, then the Borrower will pay to such
         Lender or the Issuing Bank, as the case may be, such additional amount
         or amounts as will compensate such Lender or the Issuing Bank, as the
         case may be, for such additional costs incurred or reduction suffered.

                                       32
<PAGE>

                  (b) If any Lender or the Issuing Bank reasonably determines
         that any Change in Law regarding capital requirements has or would have
         the effect of reducing the rate of return on such Lender's or the
         Issuing Bank's capital or on the capital of such Lender's or the
         Issuing Bank's holding company, if any, as a consequence of this Credit
         Agreement or the Loans made by, or participations in Letters of Credit
         held by, such Lender, or the Letters of Credit issued by the Issuing
         Bank, to a level below that which such Lender or the Issuing Bank or
         such Lender's or the Issuer Bank's holding company could have achieved
         but for such Change in Law (taking into consideration such Lender's or
         the Issuing Bank's policies and the policies of such Lender's or the
         Issuing Bank's holding company with respect to capital adequacy), then
         from time to time the Borrower will pay to such Lender or the Issuing
         Bank, as the case may be, such additional amount or amounts as will
         compensate such Lender or the Issuing Bank or such Lender's or the
         Issuing Bank's holding company for any such reduction suffered.

                  (c) A certificate of a Lender or the Issuing Bank setting
         forth the amount or amounts necessary to compensate such Lender or the
         Issuing Bank or its holding company, as the case may be, as specified
         in paragraph (a) or (b) of this Section and the method of calculating
         such amounts, in reasonable detail, shall be delivered to the Borrower
         and shall be conclusive absent manifest error. The Borrower shall pay
         such Lender or the Issuing Bank, as the case may be, the amount shown
         as due on any such certificate within 10 days after receipt thereof.

                  (d) Failure or delay on the part of any Lender or the Issuing
         Bank to demand compensation pursuant to this Section shall not
         constitute a waiver of such Lender's or the Issuing Bank's right to
         demand such compensation; provided that the Borrower shall not be
         required to compensate a Lender or the Issuing Bank pursuant to this
         Section for any increased costs or reductions incurred more than six
         months prior to the date that such Lender or the Issuing Bank, as the
         case may be, notifies the Borrower of the Change in Law giving rise to
         such increased costs or reductions and of such Lender's or the Issuing
         Bank's intention to claim compensation therefore; provided further
         that, if the Change in Law giving rise to such increased costs or
         reductions is retroactive, then the six-month period referred to above
         shall be extended to include the period of retroactive effect thereof.

         SECTION 2.15 BREAK FUNDING PAYMENTS.

         In the event of (a) the payment of any principal of any Eurodollar Loan
other than on the last day of an Interest Period applicable thereto (including
as a result of an Event of Default), (b) the conversion of any Eurodollar Loan
other than on the last day of the Interest Period applicable thereto, (c) the
failure to borrow, convert, continue or prepay any Loan on the date specified in
any notice delivered pursuant hereto (regardless of whether such notice is
permitted to be revocable under Section 2.10(b) if such notice is revoked in
accordance herewith two Business Days or less before the specified effective
date), (d) the assignment of any Eurodollar

                                       33
<PAGE>

Loan other than on the last day of the Interest Period applicable thereto as a
result of a request by the Borrower pursuant to Section 2.18, then, in any such
event, the Borrower shall compensate each Lender for the loss, cost and expense
(but not loss of profit) attributable to such event. In the case of a Eurodollar
Loan, the loss to any Lender attributable to any such event shall be deemed to
include an amount reasonably determined by such Lender to be equal to the
excess, if any, of (i) the amount of interest that such Lender would pay for a
deposit equal to the principal amount of such Loan for the period from the date
of such payment, conversion, failure or assignment to the last day of the then
current Interest Period for such Loan (or, in the case of a failure to borrow,
convert or continue, the duration of the Interest Period that would have
resulted from such borrowing, conversion or continuation) if the interest rate
payable on such deposit were equal to the LIBO Rate for such Interest Period,
over (ii) the amount of interest that such Lender would earn on such principal
amount for such period if such Lender were to invest such principal amount for
such period at the interest rate that would be bid by such Lender (or an
affiliate of such Lender) for dollar deposits from other banks in the eurodollar
market at the commencement of such period. A certificate of any Lender setting
forth any amount or amounts that such Lender is entitled to receive pursuant to
this Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender the amount shown as due on
any such certificate within 10 days after receipt thereof.

         SECTION 2.16 TAXES.

                  (a) Any and all payments by or on account of any obligation of
         the Borrower hereunder shall be made free and clear of and without
         deduction for any Indemnified Taxes or Other Taxes; provided that if
         the Borrower shall be required to deduct any Indemnified Taxes or Other
         Taxes from such payments, then (i) the sum payable shall be increased
         as necessary so that after making all required deductions (including
         deductions applicable to additional sums payable under this Section)
         the Administrative Agent, Lender or Issuing Bank (as the case may be)
         receives an amount equal to the sum it would have received had no such
         deductions been made, (ii) the Borrower shall make such deductions and
         (iii) the Borrower shall pay the full amount deducted to the relevant
         Governmental Authority in accordance with applicable law.

                  (b) In addition, the Borrower shall pay any Other Taxes to the
         relevant Governmental Authority in accordance with applicable law.

                  (c) The Borrower shall indemnify the Administrative Agent,
         each Lender, and the Issuing Bank within 10 days after written demand
         therefore, for the full amount of any Indemnified Taxes or Other Taxes
         (including Indemnified Taxes or Other Taxes imposed or asserted on or
         attributable to amounts payable under this Section) paid by the
         Administrative Agent, such Lender or the Issuing Bank, as the case may
         be, and any penalties, interest and reasonable expenses arising
         therefrom or with respect thereto, whether or not such Indemnified
         Taxes or Other Taxes were correctly or legally imposed or asserted by
         the relevant Governmental Authority. A certificate as to the amount of
         such payment or liability delivered to the Borrower by a Lender or the
         Issuing Bank, or by the Administrative Agent on its own behalf or on
         behalf of a Lender or the Issuing Bank, shall be conclusive absent
         manifest error.

                                       34
<PAGE>

                  (d) As soon as practicable after any payment of Indemnified
         Taxes or Other Taxes by the Borrower to a Governmental Authority, the
         Borrower shall deliver to the Administrative Agent the original or a
         certified copy of a receipt issued by such Governmental Authority
         evidencing such payment, a copy of the return reporting such payment or
         other evidence of such payment reasonably satisfactory to the
         Administrative Agent.

                  (e) Each Foreign Lender, on or prior to the date of its
         execution and delivery of this Credit Agreement or on the date of the
         Assignment and Acceptance pursuant to which it becomes a Lender, as
         applicable, shall provide the Borrower with any form or certificate
         that is required by any taxing authority (including, if applicable, a
         copy of Internal Revenue Service Forms W-9, W-8BEN or W-8ECI, as
         appropriate, or any successor or other form prescribed by the Internal
         Revenue Service), certifying that such Lender is exempt from or
         entitled to a reduced rate of withholding taxes on payments pursuant to
         this Credit Agreement. Thereafter, each such Lender shall provide
         additional forms or certificates (i) to the extent a form or
         certificate previously provided has been inaccurate, invalid or
         otherwise ceases to be effective or (ii) as requested in writing by the
         Borrower or the Administrative Agent. If any Foreign Lender fails to
         comply with the provisions of this Section, the Borrower, may, as
         required by law, deduct and withhold federal income tax payments from
         payments to such Lender under this Credit Agreement. The obligation of
         the Lenders under this Section shall survive the payment of all
         obligations and the resignation or replacement of the Administrative
         Agent.

                  (f) Any Lender claiming any additional amounts payable
         pursuant to this Section 2.16 agrees to use reasonable efforts
         (consistent with its internal policy and legal and regulatory
         restrictions) to select or change the jurisdiction of its applicable
         lending office if the making of such a selection or change would avoid
         the need for, or reduce the amount of, any such additional amounts that
         may thereafter accrue and would not, in the reasonable judgment of such
         Lender, be otherwise economically disadvantageous to such Lender.

                  (g) If any Lender or the Administrative Agent, as the case may
         be, obtains a refund of any Tax for which payment has been made
         pursuant to this Section 2.16, which refund in the good faith judgment
         of such Lender or the Administrative Agent, as the case may be, (and
         without any obligation to disclose its tax records) is allocable to
         such payment made under this Section 2.16, the amount of such refund
         (together with any interest received thereon and reduced by reasonable
         costs incurred in obtaining such refund) promptly shall be paid to the
         Borrower to the extent payment has been made in full by the Borrower
         pursuant to this Section 2.16.

         SECTION 2.17 PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF
SET-OFFS.

                  (a) The Borrower shall make each payment required to be made
         by it hereunder (whether of principal, interest, fees or reimbursement
         of LC Disbursements, or under Section 2.14, 2.15 or 2.16, or otherwise)
         prior to 1:00 P.M. (Charlotte, North Carolina time), on the date when
         due, in immediately available funds, without set-off or

                                       35
<PAGE>

         counterclaim. Any amounts received after such time on any date may, in
         the discretion of the Administrative Agent, be deemed to have been
         received on the next succeeding Business Day for purposes of
         calculating interest thereon. All such payments shall be made to the
         Administrative Agent at its offices at 100 North Tryon, Charlotte,
         North Carolina, except payments to be made directly to the Issuing Bank
         as expressly provided herein and except that payments pursuant to
         Sections 2.14, 2.15, 2.16 and 9.03 shall be made directly to the
         Persons entitled thereto. The Administrative Agent shall distribute any
         such payments received by it for the account of any other Person to the
         appropriate recipient promptly following receipt thereof. If any
         payment hereunder shall be due on a day that is not a Business Day, the
         date for payment shall be extended to the next succeeding Business Day,
         and, in the case of any payment accruing interest, interest thereon
         shall be payable for the period of such extension. All payments
         hereunder shall be made in dollars.

                  (b) If at any time insufficient funds are received by and
         available to the Administrative Agent to pay fully all amounts of
         principal, unreimbursed LC Disbursements, interest and fees then due
         hereunder, such funds shall be applied (i) first, to pay interest and
         fees then due hereunder, ratably among the parties entitled thereto in
         accordance with the amounts of interest and fees then due to such
         parties, and (ii) second, to pay principal and unreimbursed LC
         Disbursements then due hereunder, ratably among the parties entitled
         thereto in accordance with the amounts of principal and unreimbursed LC
         Distributions then due to such parties.

                  (c) If any Lender shall, by exercising any right of set-off or
         counterclaim or otherwise, obtain payment in respect of any principal
         of or interest on any of its Loans or participations in LC
         Disbursements resulting in such Lender receiving payment of a greater
         proportion of the aggregate amount of its Loans and participations in
         LC Disbursements and accrued interest thereon than the proportion
         received by any other Lender, then the Lender receiving such greater
         proportion shall purchase (for cash at face value) participations in
         the Loans and participations in LC Disbursements of other Lenders to
         the extent necessary so that the benefit of all such payments shall be
         shared by the Lenders ratably in accordance with the aggregate amount
         of principal of and accrued interest on their respective Loans and
         participations in LC Disbursements; provided that (i) if any such
         participations are purchased and all or any portion of the payment
         giving rise thereto is recovered, such participations shall be
         rescinded and the purchase price restored to the extent of such
         recovery, without interest, and (ii) the provisions of this paragraph
         shall not be construed to apply to any payment made by the Borrower
         pursuant to and in accordance with the express terms of this Credit
         Agreement or any payment obtained by a Lender as consideration for the
         assignment of or sale of a participation in any of its Loans or
         participations in LC Disbursements to any assignee or participant,
         other than to the Borrower or any Subsidiary or Affiliate thereof (as
         to which the provisions of this paragraph shall apply). The Borrower
         consents to the foregoing and agrees, to the extent it may effectively
         do so under applicable law, that any Lender acquiring a participation
         pursuant to the foregoing arrangements may exercise against the
         Borrower rights of set-off and counterclaim with respect to such
         participation as fully as if such Lender were a direct creditor of the
         Borrower in the amount of such participation.

                                       36
<PAGE>

                  (d) Unless the Administrative Agent shall have received notice
         from the Borrower prior to the date on which any payment is due to the
         Administrative Agent for the account of the Lenders or the Issuing
         Bank, as the case may be, hereunder that the Borrower will not make
         such payment, the Administrative Agent may assume that the Borrower has
         made such payment on such date in accordance herewith and may, in
         reliance upon such assumption, distribute to the Lenders the amount
         due. In such event, if the Borrower has not in fact made such payment,
         then each of the Lenders or the Issuing Bank, as the case may be,
         severally agrees to repay to the Administrative Agent forthwith on
         demand the amount so distributed to such Lender or Issuing Bank with
         interest thereon, for each day from and including the date such amount
         is distributed to it to but excluding the date of payment to the
         Administrative Agent, at the Federal Funds Effective Rate.

                  (e) If any Lender shall fail to make any payment required to
         be made by it pursuant to Section 2.05(d) or (e), 2.06(a) or 2.17(d),
         then the Administrative Agent may, in its discretion (notwithstanding
         any contrary provision hereof), apply any amounts thereafter received
         by the Administrative Agent for the account of such Lender to satisfy
         such Lender's obligations under such Sections until all such
         unsatisfied obligations are fully paid.

         SECTION 2.18 MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS.

                  (a) If any Lender requests compensation under Section 2.14, or
         if the Borrower is required to pay any additional amount to any Lender
         or any Governmental Authority for the account of any Lender pursuant to
         Section 2.16, then such Lender shall use reasonable efforts to
         designate a different lending office for funding or booking its Loans
         hereunder or to assign its rights and obligations hereunder to another
         of its offices, branches or affiliates, if, in the judgment of such
         Lender, such designation or assignment (i) would eliminate or reduce
         amounts payable pursuant to Section 2.14 or 2.16, as the case may be,
         in the future and (ii) would not subject such Lender to any
         unreimbursed cost or expense and would not otherwise be economically
         disadvantageous to such Lender. The Borrower hereby agrees to pay all
         reasonable costs and expenses incurred by any Lender in connection with
         any such designation or assignment.

                  (b) If any Lender requests compensation under Section 2.14, or
         if the Borrower is required to pay any additional amount to any Lender
         or any Governmental Authority for the account of any Lender pursuant to
         Section 2.16, or if any Lender defaults in its obligation to fund Loans
         hereunder, then the Borrower may, at its sole expense and effort, upon
         notice to such Lender and the Administrative Agent, require such Lender
         to assign and delegate, without recourse (in accordance with and
         subject to the restrictions contained in Section 9.04), all its
         interests, rights and obligations under this Credit Agreement to an
         assignee that shall assume such obligations (which assignee may be
         another Lender, if a Lender accepts such assignment); provided that (i)
         the Borrower shall have received the prior written consent of the
         Administrative Agent, which consent shall not unreasonably be withheld,
         (ii) such Lender shall have received payment of an amount equal to the
         outstanding principal of its Loans and participations in

                                       37
<PAGE>

         LC Disbursements, accrued interest thereon, accrued fees and all other
         amounts payable to it hereunder, from the assignee (to the extent of
         such outstanding principal and accrued interest and fees) or the
         Borrower (in the case of all other amounts) and (iii) in the case of
         any such assignment resulting from a claim for compensation under
         Section 2.14 or payments required to be made pursuant to Section 2.16,
         such assignment will result in a reduction in such compensation or
         payments. A Lender shall not be required to make any such assignment
         and delegation if, prior thereto, as a result of a waiver by such
         Lender or otherwise, the circumstances entitling the Borrower to
         require such assignment and delegation cease to apply.

                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

         The Borrower represents and warrants to the Lenders that:

         SECTION 3.01 ORGANIZATION; POWERS.

         Each of the Borrower and its Subsidiaries is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, has all requisite power and authority to carry on its business as
now conducted and, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, is qualified to do business in, and is in good standing in, every
jurisdiction where such qualification is required.

         SECTION 3.02 AUTHORIZATION; ENFORCEABILITY.

         The Transactions are within the Borrower's corporate powers and have
been duly authorized by all necessary corporate and, if required, shareholder
action. This Credit Agreement and each promissory note, if any, has been duly
executed and delivered by the Borrower and constitutes a legal, valid and
binding obligation of the Borrower, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors' rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.

         SECTION 3.03 GOVERNMENTAL APPROVALS; NO CONFLICTS.

         The Transactions (a) do not require any material consent or approval
of, registration or filing with, or any other action by, any Governmental
Authority, except such as have been obtained or made and are in full force and
effect, (b) will not violate any applicable law or regulation or the charter,
by-laws or other organizational documents of the Borrower or any of its
Subsidiaries or any order of any Governmental Authority, (c) will not violate or
result in a default under any material indenture, agreement or other instrument
binding upon the Borrower or any of its Subsidiaries or any of their respective
assets, or give rise to a right thereunder to require any payment to be made by
the Borrower or any of its Subsidiaries, and (d) will not result in the creation
or imposition of any Lien on any asset of the Borrower or any of its
Subsidiaries.

                                       38
<PAGE>

         SECTION 3.04 FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE.

                  (a) The Borrower has heretofore furnished to the Lenders (i)
         its consolidated balance sheet and statements of operations,
         shareholders' equity and cash flows as of and for the fiscal year ended
         April 27, 2001, reported on by PricewaterhouseCoopers LLP, independent
         public accountants, and (ii) its consolidated balance sheet and
         statements of operations and cash flows as of and for the fiscal
         quarters ended July 27, 2001 and October 26, 2001, signed by its chief
         financial officer. Such financial statements present fairly, in all
         material respects, the financial position and results of operations and
         cash flows of the Borrower and its consolidated Subsidiaries as of such
         dates and for such periods in accordance with GAAP, subject to year-end
         audit adjustments and the absence of footnotes in the case of the
         statements referred to in clause (ii) above.

                  (b) There has been no material adverse change in the business,
         assets, operations, or financial condition of the Borrower and its
         Subsidiaries, taken as a whole, from those disclosed in the Borrower's
         Form 10-K for the fiscal year ended April 27, 2001, other than as
         disclosed in the Borrower's quarterly report on Form 10-Q for its
         fiscal quarters ending on July 27, 2001 and October 26, 2001 and the
         Borrower's current report on Form 8-K dated September 5, 2001 and the
         amendment to such Form 8-K dated November 13, 2001, each as filed with
         the SEC prior to the date hereof.

         SECTION 3.05 PROPERTIES.

                  (a) Each of the Borrower and its Subsidiaries has good title
         to, or valid leasehold interests in, all its real and personal property
         material to its business, except for minor defects in title that do not
         interfere with its ability to conduct its business as currently
         conducted or to utilize such properties for their intended purposes.

                  (b) Each of the Borrower and its Subsidiaries owns, or is
         licensed to use, all trademarks, tradenames, copyrights, patents and
         other intellectual property material to its business, and the use
         thereof by the Borrower and its Subsidiaries does not infringe upon the
         rights of any other Person, except for any such infringements that,
         individually or in the aggregate, could not reasonably be expected to
         result in a Material Adverse Effect.

         SECTION 3.06 LITIGATION AND ENVIRONMENTAL MATTERS.

                  (a) There are no actions, suits or proceedings by or before
         any arbitrator or Governmental Authority pending against or, to the
         knowledge of the Borrower, threatened against or affecting the Borrower
         or any of its Subsidiaries (i) as to which there is a reasonable
         possibility of an adverse determination and that, if adversely
         determined, could reasonably be expected, individually or in the
         aggregate, to result in a Material Adverse Effect (other than the
         Disclosed Matters) or (ii) which in any manner draws into question the
         validity or enforceability of this Credit Agreement.

                                       39
<PAGE>

                  (b) Except for the Disclosed Matters or except with respect to
         any other matters that, individually or in the aggregate, could not
         reasonably be expected to result in a Material Adverse Effect, neither
         the Borrower nor any of its Subsidiaries (i) has failed to comply with
         any Environmental Law or to obtain, maintain or comply with any permit,
         license or other approval required under any Environmental Law, (ii)
         has become subject to any Environmental Liability, (iii) has received
         notice of any claim with respect to any Environmental Liability or (iv)
         knows of any basis for any Environmental Liability.

                  (c) Since the date of this Credit Agreement, there has been no
         change in the status of the Disclosed Matters that, individually or in
         the aggregate, has resulted in, or could reasonably be expected to
         result in a Material Adverse Effect.

         SECTION 3.07 COMPLIANCE WITH LAWS AND AGREEMENTS.

                  (a) Each of the Borrower and its Subsidiaries is in compliance
         with all indentures, agreements and other instruments binding upon it
         or its property, except where the failure to do so, individually or in
         the aggregate, could not reasonably be expected to result in a Material
         Adverse Effect. No Default has occurred and is continuing.

                  (b) Neither the Borrower nor any Subsidiary is in violation of
         any law, rule or regulation, or in default with respect to any
         judgment, writ, injunction or decree of any Governmental Authority,
         where such violation or default would be reasonably be expected to
         result in a Material Adverse Effect.

         SECTION 3.08 INVESTMENT AND HOLDING COMPANY STATUS.

         Neither the Borrower nor any of its Subsidiaries is (a) an "investment
company" as defined in, or subject to regulation under, the Investment Company
Act of 1940 or (b) a "holding company" as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 1935.

         SECTION 3.09 TAXES.

         Each of the Borrower and its Subsidiaries has timely filed or caused to
be filed all Tax returns and reports required to have been filed (taking into
account any extensions granted by the applicable taxing authority) and has paid
or caused to be paid all Taxes required to have been paid by it, except (a)
Taxes that are being contested in good faith by appropriate proceedings and for
which the Borrower or such Subsidiary, as applicable, has set aside on its books
adequate reserves or (b) to the extent that the failure to do so could not
reasonably be expected to result in a Material Adverse Effect.

         SECTION 3.10 ERISA.

         No ERISA Event has occurred or is reasonably expected to occur that,
when taken together with all other such ERISA Events for which liability is
reasonably expected to occur, could reasonably be expected to result in a

                                       40
<PAGE>

Material Adverse Effect. The present value of all accumulated benefit
obligations under each Plan (based on the assumptions used for purposes of
Statement of Financial Accounting Standards No. 87) did not, as of the date of
the most recent financial statements reflecting such amounts, exceed by more
than $100,000,000 the fair market value of the assets of such Plan, and the
present value of all accumulated benefit obligations of all underfunded Plans
(based on the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed by more than $100,000,000 the fair
market value of the assets of all such underfunded Plans.

         SECTION 3.11 DISCLOSURE.

         The Borrower has disclosed (which disclosure includes all filings by
the Borrower pursuant to the Securities Exchange Act of 1934) to the Lenders all
agreements, instruments and corporate or other restrictions to which it or any
of its Subsidiaries is subject, and all other matters known to it, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. None of the reports, financial statements, certificates
or other information furnished in writing by or on behalf of the Borrower to the
Administrative Agent or any Lender for use specifically in connection with the
negotiation of this Credit Agreement or delivered hereunder (as modified or
supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that, with respect to projected financial
information, the Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.

         SECTION 3.12 FEDERAL REGULATIONS.

         No part of the proceeds of any Loans will be used in any transaction or
for any purpose which violates the provisions of Regulation T, U or X of the
Board of Governors of the Federal Reserve System, as now and from time to time
hereafter in effect. If requested by any Lender or the Administrative Agent, the
Borrower will furnish to the Administrative Agent and each Lender a statement to
the foregoing effect in conformity with the requirements of Form FR U-1 referred
to in said Regulation U.

         SECTION 3.13 PURPOSE OF LOANS.

         The proceeds of the Loans and Letters of Credit shall be used to (i)
refinance the Existing Credit Agreement and (ii) finance any lawful general
corporate purpose, including acquisitions, and working capital.

         SECTION 3.14 SUBSIDIARIES AND SIGNIFICANT SUBSIDIARIES.

         Set forth on Schedule 3.14 is a complete and accurate list of all
Subsidiaries and all Significant Subsidiaries as of the Closing Date.

                                       41
<PAGE>

                                   ARTICLE IV

                                   CONDITIONS

         SECTION 4.01 CLOSING CONDITIONS.

         This Credit Agreement shall become effective on the date on which each
of the following conditions is satisfied (or waived in accordance with Section
9.02):
                  (a) The Administrative Agent (or its counsel) shall have
         received from each party hereto either (i) a counterpart of this Credit
         Agreement signed on behalf of such party or (ii) written evidence
         satisfactory to the Administrative Agent (which may include telecopy
         transmission of a signed signature page of this Credit Agreement) that
         such party has signed a counterpart of this Credit Agreement.

                  (b) The Administrative Agent shall have received a favorable
         written opinion or opinions (addressed to the Administrative Agent and
         the Lenders and dated the Closing Date) of (i) Fredrickson & Bryon,
         P.A., counsel for the Borrower and the Guarantors, (ii) Sullivan &
         Cromwell, special counsel for the Borrower and the Guarantors, (iii)
         Henderson, Daily, Withrow & DeVoe, special counsel for the Borrower and
         the Guarantors and (iv) of Senior Legal Counsel to the Borrower and the
         Guarantors, and covering such other matters relating to the Borrower,
         the Guarantors, this Credit Agreement or the Transactions as the
         Required Lenders shall reasonably request. The Borrower hereby requests
         such counsel to deliver such opinion.

                  (c) The Administrative Agent shall have received such
         documents and certificates as the Administrative Agent or its counsel
         may reasonably request relating to the organization, existence and good
         standing of the Borrower and each of the Guarantors, the authorization
         of the Transactions and any other legal matters relating to the
         Borrower, the Guarantors, this Agreement or the Transactions, all in
         form and substance satisfactory to the Administrative Agent and its
         counsel.

                  (d) The Administrative Agent shall have received a
         certificate, dated the Closing Date and signed by the President, a Vice
         President or a Financial Officer of the Borrower, confirming compliance
         with the conditions set forth in paragraphs (a) and (b) of Section
         4.02.

                  (e) The Administrative Agent shall have received all fees and
         other amounts due and payable on or prior to the Closing Date,
         including, without limitation the fees set forth in the Fee Letter and,
         to the extent invoiced, the reimbursement or payment of all
         out-of-pocket expenses required to be reimbursed or paid by the
         Borrower hereunder.

                  (f) The commitments under the Existing Credit Agreement shall
         have been terminated and all amounts owing thereunder shall have been
         paid.

                                       42
<PAGE>

         SECTION 4.02 EACH CREDIT EVENT.

                  The obligation of each Lender to make a Loan on the occasion
         of any Revolving Borrowing, the Issuing Bank to issue, amend, renew or
         extend any Letter of Credit and the Swingling Lender to make a
         Swingline Loan on the occasion of any Swingline Borrowing is subject to
         the satisfaction of the following conditions:

                  (a) The representations and warranties of the Borrower set
         forth in this Credit Agreement shall be true and correct in all
         material respects on and as of the date of, and after giving effect to,
         such Borrowing and after giving effect to, the issuance, amendment,
         renewal or extension of such Letter of Credit, as applicable; provided,
         that, the representations and warranties contained in Sections 3.04(b),
         3.06, 3.07(a) and 3.10 shall be deemed made, and shall be required to
         be true and correct, only on the Closing Date.

                  (b) At the time of and immediately after giving effect to such
         Borrowing or the issuance, amendment, renewal or extension of such
         Letter of Credit, as applicable, no Default shall have occurred and be
         continuing.

        Each Borrowing and each issuance, amendment, renewal or extension of a
Letter of Credit shall be deemed to constitute a representation and warranty by
the Borrower on the date thereof as to the matters specified in paragraphs (a)
and (b) of this Section.

                                    ARTICLE V

                              AFFIRMATIVE COVENANTS

         Until the Commitments have expired or been terminated and the principal
of and interest on each Loan and all fees payable hereunder shall have been paid
in full, and all Letters of Credit shall have expired or terminated and all LC
Disbursements shall have been reimbursed, the Borrower covenants and agrees with
the Lenders that:

         SECTION 5.01 FINANCIAL STATEMENTS AND OTHER INFORMATION.

         The Borrower will furnish to the Administrative Agent (with copies for
each Lender):

                  (a) within 100 days after the end of each fiscal year of the
         Borrower, its audited consolidated balance sheet and related statements
         of operations, shareholders' equity and cash flows as of the end of and
         for such year, setting forth in each case in comparative form the
         figures for the previous fiscal year, all reported on by
         PricewaterhouseCoopers LLP or other independent public accountants of
         recognized national standing (without a "going concern" or like
         qualification or exception and without any qualification or exception
         as to the scope of such audit) to the effect that such consolidated
         financial statements present fairly in all material respects the
         financial condition and results of operations of the Borrower and its
         consolidated Subsidiaries on a consolidated basis in accordance with

                                       43
<PAGE>

         GAAP (the Lenders agree that the Borrower's obligations under this
         paragraph (a) will be satisfied in respect of any fiscal year by
         delivery to the Administrative Agent, with copies for each Lender,
         within 100 days after the end of such fiscal year of its annual report
         for such fiscal year on Form 10-K as filed with the SEC);

                  (b) within 55 days after the end of each of the first three
         fiscal quarters of each fiscal year of the Borrower (including the
         fiscal quarter ending on January 25, 2002), its consolidated balance
         sheet and related statements of operations and cash flows as of the end
         of and for such fiscal quarter and the then elapsed portion of the
         fiscal year, setting forth in each case in comparative form the figures
         for the corresponding period or periods of (or, in the case of the
         balance sheet, as of the end of) the previous fiscal year, all
         certified by one of its Financial Officers as presenting fairly in all
         material respects the financial condition and results of operations of
         the Borrower and its consolidated Subsidiaries on a consolidated basis
         in accordance with GAAP consistently applied, subject to normal
         year-end audit adjustments and the absence of footnotes (the Lenders
         agree that the Borrower's obligations under this paragraph (b) will be
         satisfied in respect of any fiscal quarter by delivering to the
         Administrative Agent, with copies for each Lender, within 55 days after
         the end of such fiscal quarter of its quarterly report for such fiscal
         quarter on Form 10-Q as filed with the SEC);

                  (c) concurrently with any delivery of financial statements
         under paragraph (a) or (b) above, a certificate of a Financial Officer
         of the Borrower (i) certifying as to whether a Default has occurred
         and, if a Default has occurred, specifying the details thereof and any
         action taken or proposed to be taken with respect thereto, (ii) setting
         forth reasonably detailed calculations demonstrating compliance with
         Section 6.01 and (iii) stating whether any change in GAAP or in the
         application thereof has occurred since the date of the audited
         financial statements referred to in Section 3.04(a)(i) and, if any such
         change has occurred, specifying the effect of such change on the
         financial statements accompanying such certificate;

                  (d) promptly after the same become publicly available or upon
         transmission or receipt thereof, copies of all periodic and other
         reports, proxy statements and other materials filed by the Borrower or
         any Subsidiary with the SEC, or any Governmental Authority succeeding
         to any or all of the functions of the SEC, or with any national
         securities exchange, or distributed by the Borrower to its shareholders
         generally, as the case may be, provided that, with respect to materials
         filed with any national securities exchange, only material filings
         shall be required to be delivered pursuant to this paragraph (d); and

                  (e) promptly following any request therefor, such other
         information regarding the operations, business affairs and financial
         condition of the Borrower or any Subsidiary, or compliance with the
         terms of this Credit Agreement, as the Administrative Agent or any
         Lender (acting through the Administrative Agent) may reasonably
         request.

                                       44
<PAGE>

         SECTION 5.02 NOTICES OF MATERIAL EVENTS.

         The Borrower will furnish to the Administrative Agent and each Lender
prompt written notice of, but in any event not later than five Business Days
after, the following:

                  (a) the occurrence of any Default;

                  (b) the occurrence of any ERISA Event that, alone or together
         with any other ERISA Events that have occurred, could reasonably be
         expected to result in liability of the Borrower and its Subsidiaries in
         an aggregate amount exceeding $100,000,000;

                  (c) the non-compliance with any contractual obligation or
         requirement of law that is not currently being contested in good faith
         by appropriate proceedings if all such non-compliance in the aggregate
         could reasonably be expected to have a Material Adverse Effect;

                  (d) the revocation of any license, permit, authorization,
         certificate, qualification or accreditation of the Borrower or any
         Subsidiary by any Governmental Authority if all such revocations in the
         aggregate could reasonably be expected to have a Material Adverse
         Effect;

                  (e) a change in rating for the Index Debt by either Moody's or
         S & P; and

                  (f) any other development that results in, or could reasonably
         be expected to result in, a Material Adverse Effect.

         Each notice delivered under this Section shall be accompanied by a
statement of a Financial Officer or other executive officer of the Borrower
setting forth the details of the event or development requiring such notice and
any action taken or proposed to be taken with respect thereto.

         SECTION 5.03 EXISTENCE; CONDUCT OF BUSINESS.

         The Borrower will, and will cause each of its Subsidiaries to, do or
cause to be done all things necessary to preserve, renew and keep in full force
and effect its legal existence and the rights, licenses, permits, privileges and
franchises material to the conduct of its business; provided that the foregoing
shall not prohibit any merger, consolidation, liquidation, dissolution or stock
or asset sale permitted under Section 6.04.

         SECTION 5.04 PAYMENT OF OBLIGATIONS.

         The Borrower will, and will cause each of its Subsidiaries to, pay its
obligations, including Tax liabilities, that, if not paid, could result in a
Material Adverse Effect before the same shall become delinquent or in default,
except where (a) the validity or amount thereof is being contested in good faith
by appropriate proceedings, (b) the Borrower or such Subsidiary has set aside on
its books adequate reserves with respect thereto in accordance with GAAP and (c)
the failure to make payment pending such contest could not reasonably be
expected to result in a Material Adverse Effect.

                                       45
<PAGE>

         SECTION 5.05 MAINTENANCE OF PROPERTIES; INSURANCE.

         The Borrower will, and will cause each of its Subsidiaries to, (a) keep
and maintain all property material to the conduct of its business in good
working order and condition, ordinary wear and tear excepted, and (b) maintain,
with financially sound and reputable insurance companies, insurance in such
amounts and against such risks as are customarily maintained by companies
engaged in the same or similar businesses operating in the same or similar
locations or maintain a system or systems of self-insurance or assumption of
risk which accords with the practices of similar businesses.

         SECTION 5.06 BOOKS AND RECORDS; INSPECTION RIGHTS.

         The Borrower will, and will cause each of its Subsidiaries to, keep
proper books of record and account in which full, true and correct entries are
made of all dealings and transactions in relation to its business and
activities. The Borrower will, and will cause each of its Subsidiaries to,
permit any representatives designated by the Administrative Agent or any Lender,
upon reasonable prior notice, to visit and inspect its properties, to examine
and make extracts from its books and records, and to discuss its affairs,
finances and condition with its officers and independent accountants, all at
such reasonable times and as often as reasonably requested.

         SECTION 5.07 COMPLIANCE WITH LAWS.

         The Borrower will, and will cause each of its Subsidiaries to, comply
with all laws, rules, regulations and orders of any Governmental Authority
applicable to it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.

         SECTION 5.08 USE OF PROCEEDS.

         The proceeds of the Loans will be used for the purposes described in
Section 3.13. No part of the proceeds of any Loan will be used, whether directly
or indirectly, for any purpose that entails a violation of any of the
Regulations of the Board, including Regulations U and X.

         SECTION 5.09 MAINTENANCE OF ACCREDITATION, ETC.

         The Borrower will preserve and maintain, and cause each of its
Subsidiaries to preserve and maintain, all licenses, permits, authorizations,
certifications and qualifications (including, without limitation, those
qualifications with respect to solvency and capitalization) required, except
where the failure to do so would not result in a Material Adverse Effect.

                                       46
<PAGE>

         SECTION 5.10 ADDITIONAL SUBSIDIARY GUARANTORS.

         The Borrower will cause each of its Significant Subsidiaries, whether
newly formed, after acquired or otherwise existing, to promptly become a
Guarantor hereunder by way of execution of a Joinder Agreement in the form of
Exhibit B.

                                   ARTICLE VI

                               NEGATIVE COVENANTS

         Until the Commitments have expired or terminated and the principal of
and interest on each Loan and all fees payable hereunder have been paid in full
and all Letters of Credit have expired or terminated and all LC Disbursements
shall have been reimbursed, the Borrower covenants and agrees with the Lenders
that:

         SECTION 6.01 CONSOLIDATED TANGIBLE NET WORTH.

         The Consolidated Tangible Net Worth shall at all times be greater than
or equal to $1,040,400,000, increased by an amount equal to 100% of the Net Cash
Proceeds from any Equity Issuance occurring after the Closing Date.

         SECTION 6.02 INDEBTEDNESS.

         The Borrower will not, and will not permit any Subsidiary to, create,
incur, assume or permit to exist any other Indebtedness or liability on account
of borrowed money, represented by any notes, bonds, debentures or similar
obligations, or on account of the deferred purchase price of any property, or
any other deposits, advance or progress payments under contracts, except:

                  (a) Indebtedness arising or existing under this Credit
         Agreement and the other Credit Documents;

                  (b) Indebtedness existing on the date hereof and set forth in
         Schedule 6.02 and extensions, renewals and replacements of any such
         Indebtedness that do not increase the outstanding principal amount
         thereof;

                  (c) Indebtedness of the Borrower and its Subsidiaries incurred
         after the Closing Date consisting of Capital Lease Obligations or
         Indebtedness incurred to provide all or a portion of the purchase price
         or cost of construction of an asset provided that (i) such Indebtedness
         when incurred shall not exceed the purchase price or cost of
         construction of such asset and (ii) no such Indebtedness shall be
         refinanced for a principal amount in excess of the principal balance
         outstanding thereon at the time of such refinancing;

                  (d) Indebtedness of any Subsidiary to the Borrower or any
         other Subsidiary;

                  (e) Indebtedness secured by Liens to the extent permitted
         under Section 6.03;

                                       47
<PAGE>

                  (f) other unsecured Indebtedness of the Borrower and its
         Subsidiaries; provided that such Indebtedness is not senior in right of
         payment to the payment of the Indebtedness arising or existing under
         this Credit Agreement and the other Credit Documents.

         SECTION 6.03 LIENS.

         The Borrower will not, and will not permit any Subsidiary to, create,
incur, assume or permit to exist any Lien on any property or asset now owned or
hereafter acquired by it, or assign or sell any income or revenues (including
accounts receivable) or rights in respect of any thereof, except:

                  (a) Permitted Encumbrances;

                  (b) any Lien on any property or asset of the Borrower or any
         Subsidiary existing on the date hereof and set forth in Schedule 6.03;
         provided that (i) such Lien shall not apply to any other property or
         asset of the Borrower or any Subsidiary and (ii) such Lien shall secure
         only those obligations which it secures on the date hereof and
         extensions, renewals and replacements thereof that do not increase the
         outstanding principal amount thereof;

                  (c) any Lien existing on any property or asset prior to the
         acquisition thereof by the Borrower or any Subsidiary or existing on
         any property or asset of any Person that becomes a Subsidiary after the
         date hereof prior to the time such Person becomes a Subsidiary;
         provided that (i) such Lien is not created in contemplation of or in
         connection with such acquisition or such Person becoming a Subsidiary,
         as the case may be, (ii) such Lien shall not apply to any other
         property or assets of the Borrower or any Subsidiary and (iii) such
         Lien shall secure only those obligations which it secures on the date
         of such acquisition or the date such Person becomes a Subsidiary, as
         the case may be and extensions, renewals and replacements thereof that
         do not increase the outstanding principal amount thereof; and

                  (d) Liens not otherwise permitted under this Section securing
         obligations in an aggregate amount not exceeding at any time 20% of
         Consolidated Tangible Net Worth as at the end of the immediately
         preceding fiscal quarter of the Borrower.

                  SECTION 6.04 FUNDAMENTAL CHANGES.

         The Borrower will not, and will not permit any Subsidiary to, merge
into or consolidate with any other Person, or permit any other Person to merge
into or consolidate with it, or sell, transfer, lease or otherwise dispose of
(in one transaction or in a series of transactions) all or substantially all of
its assets, or all or substantially all of the stock of any of its Subsidiaries
(in each case, whether now owned or hereafter acquired), or liquidate or
dissolve, except that, if at the time thereof and immediately after giving
effect thereto no Default shall have occurred and be continuing (i) any Person
may merge into the Borrower in a transaction in which the Borrower is the
surviving corporation, (ii) any Person, including any Affiliate, may merge with
any Subsidiary in a transaction in which the surviving entity is a Subsidiary,
(iii) any Subsidiary

                                       48
<PAGE>

may sell, transfer, lease or otherwise dispose of its assets or stock to the
Borrower or to another Subsidiary, (iv) any Subsidiary may liquidate or dissolve
or the Borrower or any Subsidiary may sell, transfer, lease or otherwise dispose
of the assets or stock of any Subsidiary if, in each case, the Borrower
determines in good faith that such liquidation or dissolution is in the best
interests of the Borrower and is not materially disadvantageous to the Lenders,
(v) the Borrower and its Subsidiaries may sell immaterial businesses, including
Subsidiaries, in the ordinary course of business and (vi) any Subsidiary formed
for the purpose of acquiring a Person or a minority interest in any Person may
merge into such Person.

         SECTION 6.05 TRANSACTIONS WITH AFFILIATES.

         The Borrower will not, and will not permit any of its Subsidiaries to,
sell, lease or otherwise transfer any property or assets to, or purchase, lease
or otherwise acquire any property or assets from, or otherwise engage in any
other transactions with, any of its Affiliates, except (a) in the ordinary
course of business at prices and on terms and conditions not less favorable to
the Borrower or such Subsidiary than could be obtained on an arm's-length basis
from unrelated third parties, (b) transactions between or among the Borrower and
its Subsidiaries not involving any other Affiliates, (c) contributions to the
Medtronic Foundation in amounts consistent with past practices or (d) as
otherwise permitted by this Credit Agreement.

         SECTION 6.06 RESTRICTIVE AGREEMENTS.

         The Borrower will not, and will not permit any of its Subsidiaries to,
directly or indirectly, enter into, incur or permit to exist any agreement or
other arrangement that prohibits, restricts or imposes any condition upon the
ability of the Borrower or any Subsidiary to grant a lien on its properties or
assets whether now owned or hereafter acquired or the ability of any Subsidiary
to pay dividends or other distributions with respect to any shares of its
capital stock or to make or repay loans or advances to the Borrower or any other
Subsidiary or to Guarantee Indebtedness of the Borrower or any other Subsidiary;
provided that (i) the foregoing shall not apply to restrictions and conditions
imposed by law, rule, regulation or regulatory administrative agreement or
determination or by this Credit Agreement, and (ii) the foregoing shall not
apply to customary restrictions and conditions contained in agreements relating
to the sale of a Subsidiary pending such sale, provided such restrictions and
conditions apply only to the Subsidiary that is to be sold and such sale is
permitted hereunder.

         SECTION 6.07 BUSINESS ACTIVITY.

         The Borrower will not, nor will it permit any Significant Subsidiary
to, alter the character of its business in any material respect from that
conducted as of the Closing Date.

         SECTION 6.08 RESTRICTED PAYMENTS.

         The Borrower will not, nor will it permit any Subsidiary to, directly
or indirectly, declare, order, make or set apart any sum for or pay any
Restricted Payment, except (a) to make dividends payable solely in the same
class of capital stock of such Person, (b) to make dividends or other
distributions payable to the Borrower (directly or indirectly through
Subsidiaries) and ratably to minority shareholders and (c) other distributions
in respect of the capital stock of such Person or the redemption, retirement,

                                       49
<PAGE>

purchase or other acquisition of the capital stock of such Person (or any
warrant, option or other rights with respect to any shares of capital stock (now
or hereafter outstanding) of such Person) if no Default has occurred and is
continuing or would result from such action.

                                   ARTICLE VII

                                EVENTS OF DEFAULT

         If any of the following events ("Events of Default") shall occur:

                  (a) the Borrower shall fail to pay any principal of any Loan
         or any reimbursement obligation in respect to any LC Disbursement when
         and as the same shall become due and payable, whether at the due date
         thereof or at a date fixed for prepayment thereof or otherwise (or any
         Guarantor shall fail to pay on the Guaranty in respect of any of the
         foregoing or in respect of any other Guaranty obligations thereunder);

                  (b) the Borrower shall fail to pay any interest on any Loan or
         any fee or any other amount (other than an amount referred to in clause
         (a) of this Article) payable under this Credit Agreement, when and as
         the same shall become due and payable, and such failure shall continue
         unremedied for a period of five Business Days;

                  (c) any representation or warranty made or deemed made by or
         on behalf of the Borrower or any Subsidiary in or in connection with
         this Credit Agreement or any amendment or modification hereof, or in
         any report, certificate, financial statement or other document
         furnished pursuant to or in connection with this Credit Agreement or
         any amendment or modification hereof, shall prove to have been
         incorrect in any material respect when made or deemed made;

                  (d) the Borrower shall fail to observe or perform any
         covenant, condition or agreement contained in Section 5.02, 5.03 (with
         respect to the Borrower's existence) or 5.08 or in Article VI;

                  (e) the Borrower shall fail to observe or perform any
         covenant, condition or agreement contained in this Credit Agreement
         (other than those specified in clause (a), (b) or (d) of this Article),
         and such failure shall continue unremedied for a period of 30 days
         after notice thereof from the Administrative Agent (given at the
         request of any Lender) to the Borrower;

                  (f) the Borrower or any Subsidiary shall fail to make any
         payment (whether of principal or interest and regardless of amount) in
         respect of any Material Indebtedness, when and as the same shall become
         due and payable (subject to any applicable grace periods or notice
         requirements);

                  (g) any event or condition occurs that results in any Material
         Indebtedness becoming due prior to its scheduled maturity or that
         enables or permits (with the giving of notice if required) the holder

                                       50
<PAGE>

         or holders of any Material Indebtedness or any trustee or agent on its
         or their behalf to cause any Material Indebtedness to become due, or to
         require the prepayment, repurchase, redemption or defeasance thereof,
         prior to its scheduled maturity; provided that this clause (g) shall
         not apply to (i) secured Indebtedness that becomes due as a result of
         the voluntary sale or transfer of the property or assets securing such
         Indebtedness or (ii) the Indebtedness under this Agreement or the
         364-Day Facility;

                  (h) an involuntary proceeding shall be commenced or an
         involuntary petition shall be filed seeking (i) liquidation,
         reorganization or other relief in respect of the Borrower or any
         Significant Subsidiary or its debts, or of a substantial part of its
         assets, under any Federal, state or foreign bankruptcy, insolvency,
         receivership or similar law now or hereafter in effect or (ii) the
         appointment of a receiver, trustee, custodian, sequestrator,
         conservator or similar official for the Borrower or any Significant
         Subsidiary or for a substantial part of its assets, and, in any such
         case, such proceeding or petition shall continue undismissed for 60
         days or an order or decree approving or ordering any of the foregoing
         shall be entered;

                  (i) the Borrower or any Significant Subsidiary shall (i)
         voluntarily commence any proceeding or file any petition seeking
         liquidation, reorganization or other relief under any Federal, state or
         foreign bankruptcy, insolvency, receivership or similar law now or
         hereafter in effect, (ii) consent to the institution of, or fail to
         contest in a timely and appropriate manner, any proceeding or petition
         described in clause (h) of this Article, (iii) apply for or consent to
         the appointment of a receiver, trustee, custodian, sequestrator,
         conservator or similar official for the Borrower or any Significant
         Subsidiary or for a substantial part of its assets, (iv) file an answer
         admitting the material allegations of a petition filed against it in
         any such proceeding, (v) make a general assignment for the benefit of
         creditors or (vi) take any action for the purpose of effecting any of
         the foregoing;

                  (j) an Event of Default shall occur and be continuing under
         the 364-Day Facility;

                  (k) the Borrower or any Significant Subsidiary shall become
         unable, admit in writing its inability to pay, or fail generally to pay
         its debts as they become due;

                  (l) one or more judgments or decrees shall be rendered against
         the Borrower, any Significant Subsidiary or any combination thereof and
         the same shall not have been paid, vacated, discharged, stayed or
         bonded pending appeal within 60 days from the entry thereof that
         involves in the aggregate a liability (not paid or fully covered by
         insurance) of $50,000,000 or more;

                  (m) an ERISA Event shall have occurred that, in the opinion of
         the Required Lenders, when taken together with all other ERISA Events
         that have occurred, could reasonably be expected to result in a
         Material Adverse Effect;

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<PAGE>

                  (n) a Change in Control of the Borrower shall occur; or

                  (o) the Guaranty or any provision thereof shall cease to be in
         full force and effect (other than in accordance with its terms) or any
         Guarantor or any Person acting by or on behalf of any Guarantor shall
         deny or disaffirm any Guarantor's obligations under the Guaranty;

         then, and in every such event (other than an event with respect to the
         Borrower described in clause (h) or (i) of this Article), and at any
         time thereafter during the continuance of such event, the
         Administrative Agent may, and at the request of the Required Lenders
         shall, by notice to the Borrower, take either or both of the following
         actions, at the same or different times: (i) terminate the Commitments,
         and thereupon the Commitments shall terminate immediately, and (ii)
         declare the Loans then outstanding to be due and payable in whole (or
         in part, in which case any principal not so declared to be due and
         payable may thereafter be declared to be due and payable), and
         thereupon the principal of the Loans so declared to be due and payable,
         together with accrued interest thereon and all fees and other
         obligations of the Borrower accrued hereunder, shall become due and
         payable immediately (and the Commitments shall terminate), without
         presentment, demand, protest or other notice of any kind, all of which
         are hereby waived by the Borrower; and in case of any event with
         respect to the Borrower described in clause (h) or (i) of this Article,
         the Commitments shall automatically terminate and the principal of the
         Loans then outstanding, together with accrued interest thereon and all
         fees and other obligations of the Borrower accrued hereunder, shall
         automatically become due and payable, without presentment, demand,
         protest or other notice of any kind, all of which are hereby waived by
         the Borrower.

                                  ARTICLE VIII

                            THE ADMINISTRATIVE AGENT

         SECTION 8.01 APPOINTMENT AND AUTHORIZATION OF ADMINISTRATIVE AGENT.

         Each of the Lenders and the Issuing Bank hereby irrevocably appoints
the Administrative Agent as its agent and authorizes the Administrative Agent to
take such actions on its behalf and to exercise such powers as are delegated to
the Administrative Agent by the terms hereof, together with such actions and
powers as are reasonably incidental thereto.

         The Administrative Agent shall not have any duties or obligations
except those expressly set forth herein. Without limiting the generality of the
foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is
continuing, (b) the Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby that the Administrative Agent is
required to exercise in writing by the Required Lenders, and (c) except as
expressly set forth herein, the Administrative Agent shall not have any duty to
disclose, and shall not be liable for the failure to disclose, any information
relating to the Borrower or any of its Subsidiaries that is communicated to or

                                       52
<PAGE>

obtained by the bank serving as Administrative Agent or any of its Affiliates in
any capacity. The Administrative Agent shall not be liable for any action taken
or not taken by it with the consent or at the request of the Required Lenders or
in the absence of its own gross negligence or willful misconduct.

         SECTION 8.02 NOTICE OF DEFAULT.

         The Administrative Agent shall be deemed not to have knowledge of any
Default unless and until written notice thereof is given to the Administrative
Agent by the Borrower or a Lender, and the Administrative Agent shall not be
responsible for or have any duty to ascertain or inquire into (i) any statement,
warranty or representation made in or in connection with this Credit Agreement,
(ii) the contents of any certificate, report or other document delivered
hereunder or in connection herewith, (iii) the performance or observance of any
of the covenants, agreements or other terms or conditions set forth herein, (iv)
the validity, enforceability, effectiveness or genuineness of this Credit
Agreement or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article IV or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.

         SECTION 8.03 RELIANCE BY ADMINISTRATIVE AGENT.

         The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.

         SECTION 8.04 DELEGATION OF DUTIES.

         The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.

         SECTION 8.05 SUCCESSOR ADMINISTRATIVE AGENT.

         The Administrative Agent may resign as Administrative Agent upon 30
days' notice to the Lenders. If the Administrative Agent resigns under this
Agreement, the Required Lenders shall appoint from among the Lenders a successor
administrative agent for the Lenders which successor administrative agent shall

                                       53
<PAGE>

be consented to by the Borrower at all times other than during the existence of
an Event of Default (which consent of the Borrower shall not be unreasonably
withheld or delayed). If no successor administrative agent is appointed prior to
the effective date of the resignation of the Administrative Agent, the
Administrative Agent may appoint, after consulting with the Lenders and the
Borrower, a successor administrative agent from among the Lenders. Upon the
acceptance of its appointment as successor administrative agent hereunder, such
successor administrative agent shall succeed to all the rights, powers and
duties of the retiring Administrative Agent and the term "Administrative Agent"
shall mean such successor administrative agent and the retiring Administrative
Agent's appointment, powers and duties as Administrative Agent shall be
terminated. After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Article and Section 9.03 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent under this Agreement. If no successor administrative
agent has accepted appointment as Administrative Agent by the date which is 30
days following a retiring Administrative Agent's notice of resignation, the
retiring Administrative Agent's resignation shall nevertheless thereupon become
effective and the Lenders shall perform all of the duties of the Administrative
Agent hereunder until such time, if any, as the Required Lenders appoint a
successor agent as provided for above.

         SECTION 8.06 CREDIT DECISION; DISCLOSURE OF INFORMATION BY
ADMINISTRATIVE AGENT.

         Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Credit Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Credit
Agreement, any related agreement or any document furnished hereunder or
thereunder.

         SECTION 8.07 INDEMNIFICATION OF ADMINISTRATIVE AGENT.

         Whether or not the transactions contemplated hereby are consummated,
the Lenders shall indemnify upon demand each Agent-Related Person (to the extent
not reimbursed by or on behalf of the Borrower or any Guarantor and without
limiting the obligation of the Borrower or any Guarantor to do so), pro rata,
and hold harmless each Agent-Related Person from and against any and all
Indemnified Liabilities incurred by it; provided, however, that no Lender shall
be liable for the payment to any Agent-Related Person of any portion of such
Indemnified Liabilities resulting from such Person's gross negligence or willful
misconduct; provided, however, that no action taken in accordance with the
directions of the Required Lenders shall be deemed to constitute gross
negligence or willful misconduct for purposes of this Section. Without
limitation of the foregoing, each Lender shall reimburse the Administrative
Agent upon demand for its ratable share of any costs or out-of-pocket expenses
(including attorney costs) incurred by the Administrative Agent in connection
with the preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,

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<PAGE>

this Credit Agreement, any other Credit Document, or any document contemplated
by or referred to herein, to the extent that the Administrative Agent is not
reimbursed for such expenses by or on behalf of the Borrower. The undertaking in
this Section shall survive termination of the Commitments, the payment of all
obligations hereunder and the resignation or replacement of the Administrative
Agent.

         SECTION 8.08 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY.

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

                                   ARTICLE IX

                                  MISCELLANEOUS

         SECTION 9.01 NOTICES.

         Except in the case of notices and other communications expressly
permitted to be given by telephone, all notices and other communications
provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by
telecopy, as follows:

                  (a) if to the Borrower:

                                 Medtronic, Inc.
                                 710 Medtronic Parkway
                                 Minneapolis, MN 55432-5604,
                                 Attention: Treasury Department, Mail Stop LC480
                                 Telecopy No. (763) 505-2700

                           with a copy to:

                                 Medtronic, Inc.
                                 710 Medtronic Parkway
                                 Minneapolis, MN 55432-5604,
                                 Attention: General Counsel, Mail Stop LC400
                                 Telecopy No. (763) 572-5459

                                       55
<PAGE>

                  (b) if to the Administrative Agent, Issuing Bank and/or
         Swingline Lender (for notices regarding borrowings, payments,
         conversions, fees, interest, and other administrative matter):

                                 Bank of America, N.A.
                                 Independence Center, 15th Floor
                                 NC1-001-15-04, 101 North Tryon Street
                                 Charlotte, North Carolina 28255
                                 Attn: Agency Services - Neal Hendrix
                                 Telephone: 704-386-4220
                                 Telecopy: 704-409-0017

                  (c) if to the Administrative Agent for all other notices
         (including with respect to delivery of financial statements, compliance
         certificates, Defaults and Events of Default, amendments, waivers and
         modifications of the Credit Documents and assignments):

                                  Bank of America, N.A.
                                  Agency Management
                                  1455 Market Street, CA5-704-05-19
                                  San Francisco, CA 94801
                                  Attention: Aamir Saleem
                                  Telephone: (415) 436-2769
                                  Telecopy: (415) 503-5089

                           with a copy to:

                                  Bank of America, N. A.
                                  Location Code: NC1-007-17-11
                                  100 North Tryon, 17th Floor
                                  Charlotte, North Carolina 28202
                                  Attention: Phil Durand
                                  Telephone: (704) 386-4955
                                  Telecopy: (704) 388-6002

                  (d) if to any other Lender, to it at its address (or telecopy
         number) set forth in its Administrative Questionnaire.

         Any party hereto may change its address or telecopy number for notices
         and other communications hereunder by notice to the other parties
         hereto. All notices and other communications given to any party hereto
         in accordance with the provisions of this Credit Agreement shall be
         deemed to have been given on the date of receipt.

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<PAGE>

         SECTION 9.02 WAIVERS; AMENDMENTS.

                  (a) No failure or delay by the Administrative Agent, the
         Issuing Bank or any Lender in exercising any right or power hereunder
         shall operate as a waiver thereof, nor shall any single or partial
         exercise of any such right or power, or any abandonment or
         discontinuance of steps to enforce such a right or power, preclude any
         other or further exercise thereof or the exercise of any other right or
         power. The rights and remedies of the Administrative Agent, the Issuing
         Bank and the Lenders hereunder are cumulative and are not exclusive of
         any rights or remedies that they would otherwise have. No waiver of any
         provision of this Credit Agreement or consent to any departure by the
         Borrower or any Guarantor therefrom shall in any event be effective
         unless the same shall be permitted by paragraph (b) of this Section,
         and then such waiver or consent shall be effective only in the specific
         instance and for the purpose for which given. Without limiting the
         generality of the foregoing, the making of a Loan or issuance of a
         Letter of Credit shall not be construed as a waiver of any Default,
         regardless of whether the Administrative Agent, any Lender or the
         Issuing Bank may have had notice or knowledge of such Default at the
         time.

                  (b) Neither this Credit Agreement nor any provision hereof may
         be waived, amended or modified except pursuant to an agreement or
         agreements in writing entered into by the Borrower and the Required
         Lenders or by the Borrower and the Administrative Agent with the
         consent of the Required Lenders; provided that no such agreement shall
         (i) increase the Commitment of any Lender without the written consent
         of such Lender, (ii) reduce the principal amount of any Loan or LC
         Disbursement or reduce the rate of interest thereon, or reduce any fees
         payable hereunder, without the written consent of each Lender directly
         affected thereby, (iii) postpone the scheduled date of payment of the
         principal amount of any Loan or LC Disbursement, or any interest
         thereon, or any fees payable hereunder, or reduce the amount of, waive
         or excuse any such payment, or postpone the scheduled date of
         expiration of any Commitment, without the written consent of each
         Lender directly affected thereby, (iv) change Section 2.17(b) or (c) in
         a manner that would alter the pro rata sharing of payments required
         thereby, without the written consent of each Lender, (v) change any of
         the provisions of this Section or the definition of "Required Lenders"
         or any other provision hereof specifying the number or percentage of
         Lenders required to waive, amend or modify any rights hereunder or make
         any determination or grant any consent hereunder, without the written
         consent of each Lender, (vi) release all or substantially all of the
         Guarantors from their obligations under this Credit Agreement, without
         the written consent of each Lender or (vii) change or amend Section
         2.04 without the consent of the Swingline Lender; provided further that
         no such agreement shall amend, modify or otherwise affect the rights or
         duties of the Administrative Agent or the Issuing Bank hereunder
         without the prior written consent of the Administrative Agent or the
         Issuing Bank, as the case may be.

                                       57
<PAGE>

         SECTION 9.03 EXPENSES; INDEMNITY; DAMAGE WAIVER.

                  (a) The Borrower shall pay (i) all reasonable out-of-pocket
         expenses incurred by the Administrative Agent and its Affiliates,
         including the reasonable fees, charges and disbursements of outside
         counsel for the Administrative Agent, in connection with the
         syndication of the credit facilities provided for herein, the
         preparation and administration of this Credit Agreement or any
         amendments, modifications or waivers of the provisions hereof (whether
         or not the transactions contemplated hereby or thereby shall be
         consummated), (ii) all reasonable out-of-pocket expenses incurred by
         the Issuing Bank in connection with the issuance, amendment, renewal or
         extension of any Letter of Credit or any demand for payment thereunder
         and (iii) all reasonable out-of-pocket expenses incurred by the
         Administrative Agent, the Issuing Bank or any Lender, including the
         fees and disbursements of any outside counsel for the Administrative
         Agent, the Issuing Bank or any Lender, in connection with the
         enforcement or protection of its rights in connection with this Credit
         Agreement, including its rights under this Section, or in connection
         with the Loans made or Letters of Credit issued hereunder, including in
         connection with any workout, restructuring or negotiations in respect
         thereof.

                  (b) The Borrower shall indemnify the Administrative Agent, the
         Issuing Bank and each Lender, and each Related Party of any of the
         foregoing Persons (each such Person being called an "Indemnitee")
         against, and hold each Indemnitee harmless from, any and all losses,
         claims, damages, liabilities and related expenses, including the fees
         and disbursements of any outside counsel for any Indemnitee, incurred
         by or asserted against any Indemnitee arising out of, in connection
         with, or as a result of (i) the execution or delivery of this Credit
         Agreement or any agreement or instrument contemplated hereby, the
         performance by the parties hereto of their respective obligations
         hereunder or the consummation of the Transactions or any other
         transactions contemplated hereby, (ii) any Loan or Letter of Credit or
         the actual or proposed use of the proceeds therefrom (including any
         refusal by the Issuing Bank to honor a demand for payment under a
         Letter of Credit if the documents presented in connection with such
         demand do not strictly comply with the terms of such Letter of Credit),
         (iii) any actual or alleged presence or release of Hazardous Materials
         on or from any property owned or operated by the Borrower or any of its
         Subsidiaries, or any Environmental Liability related in any way to the
         Borrower or any of its Subsidiaries, or (iv) any actual or prospective
         claim, litigation, investigation or proceeding relating to any of the
         foregoing, whether based on contract, tort or any other theory and
         regardless of whether any Indemnitee is a party thereto (all of the
         foregoing, collectively, the "Indemnified Liabilities"); provided that
         such indemnity shall not, as to any Indemnitee, be available to the
         extent that such losses, claims, damages, liabilities or related
         expenses are determined by a court of competent jurisdiction to have
         resulted from the gross negligence or willful misconduct of such
         Indemnitee.

                  (c) To the extent that the Borrower fails to pay any amount
         required to be paid by it to the Administrative Agent or the Issuing
         Bank under paragraph (a) or (b) of this Section, each Lender severally
         agrees to pay to the Administrative Agent or the Issuing Bank as the
         case may be, such Lender's Applicable Percentage (determined as of the
         time that the applicable unreimbursed expense or indemnity payment is
         sought) of such unpaid amount; provided that the unreimbursed expense
         or indemnified loss, claim, damage, liability or related expense, as
         the case may be, was incurred by or asserted against the Administrative
         Agent or the Issuing Bank in its capacity as such.

                                       58
<PAGE>

                  (d) To the extent permitted by applicable law, the Borrower
         shall not assert, and hereby waives, any claim against any Indemnitee,
         on any theory of liability, for special, indirect, consequential or
         punitive damages (as opposed to direct or actual damages) arising out
         of, in connection with, or as a result of, this Credit Agreement or any
         agreement or instrument contemplated hereby, the Transactions, any
         Loan, Letter of Credit or the use of the proceeds thereof.

                  (e) All amounts due under this Section shall be payable
         promptly after written demand therefor.

         SECTION 9.04 SUCCESSORS AND ASSIGNS.

                  (a) The provisions of this Credit Agreement shall be binding
         upon and inure to the benefit of the parties hereto and their
         respective successors and assigns permitted hereby, except that neither
         the Borrower nor any Guarantor may assign or otherwise transfer any of
         its rights or obligations hereunder without the prior written consent
         of each Lender (and any attempted assignment or transfer by the
         Borrower or any Guarantor without such consent shall be null and void);
         provided, however, that no such consent shall be required for any
         transaction permitted under Section 6.04. Nothing in this Credit
         Agreement, expressed or implied, shall be construed to confer upon any
         Person (other than the parties hereto, their respective successors and
         assigns permitted hereby and, to the extent expressly contemplated
         hereby, the Related Parties of each of the Administrative Agent, the
         Issuing Bank and the Lenders) any legal or equitable right, remedy or
         claim under or by reason of this Credit Agreement.

                  (b) Any Lender may assign to one or more assignees all or a
         portion of its rights and obligations under this Credit Agreement
         (including all or a portion of its Commitment and the Loans at the time
         owing to it); provided that (i) except in the case of an assignment to
         a Lender, an Affiliate of a Lender or an Approved Fund with respect
         thereto, each of the Borrower and the Administrative Agent (and, in the
         case of an assignment of all or a portion of a Commitment or any
         Lender's obligations in respect of its LC Exposure, the Issuing Bank)
         must give their prior written consent to such assignment (which consent
         shall not be unreasonably withheld), (ii) except in the case of an
         assignment to a Lender, an Affiliate of a Lender, an Approved Fund with
         respect thereto or an assignment of the entire remaining amount of the
         assigning Lender's Commitment, the amount of the Commitment of the
         assigning Lender subject to each such assignment (determined as of the
         date the Assignment and Acceptance with respect to such assignment is
         delivered to the Administrative Agent) shall not be less than
         $5,000,000, except in the case of an assignment of the entire remaining
         amount of the assigning Lender's Commitment, unless each of the
         Borrower and the Administrative Agent otherwise consent and, after
         giving effect to such assignment, the assigning Lender and its

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         Affiliates and the Approved Funds with respect to such Lender shall
         have a Commitment of at least $5,000,000 unless each of the Borrower
         and the Administrative Agent otherwise consents, (iii) each partial
         assignment shall be made as an assignment of a proportionate part of
         all the assigning Lender's rights and obligations under this Credit
         Agreement, (iii) the parties to each assignment shall execute and
         deliver to the Administrative Agent an Assignment and Acceptance,
         together with a processing and recordation fee of $3,500, (iv) such
         assigning Lender shall simultaneously assign an identical percentage of
         the loans and commitments of such Lender under the 364-Day Facility to
         such assignee, and (v) the assignee, if it shall not be a Lender, shall
         deliver to the Administrative Agent an Administrative Questionnaire;
         provided further that any consent of the Borrower otherwise required
         under this paragraph shall not be required if an Event of Default has
         occurred and is continuing. Upon acceptance and recording pursuant to
         paragraph (d) of this Section, from and after the effective date
         specified in each Assignment and Acceptance, the assignee thereunder
         shall be a party hereto and, to the extent of the interest assigned by
         such Assignment and Acceptance, have the rights and obligations of a
         Lender under this Credit Agreement, and the assigning Lender thereunder
         shall, to the extent of the interest assigned by such Assignment and
         Acceptance, be released from its obligations under this Credit
         Agreement (and, in the case of an Assignment and Acceptance covering
         all of the assigning Lender's rights and obligations under this Credit
         Agreement, such Lender shall cease to be a party hereto but shall
         continue to be entitled to the benefits of Sections 2.14, 2.15, 2.16
         and 9.03). Any assignment or transfer by a Lender of rights or
         obligations under this Credit Agreement that does not comply with this
         paragraph shall be treated for purposes of this Credit Agreement as a
         sale by such Lender of a participation in such rights and obligations
         in accordance with paragraph (e) of this Section.

                  (c) The Administrative Agent, acting for this purpose as an
         agent of the Borrower, shall maintain at one of its offices in
         Charlotte, North Carolina a copy of each Assignment and Acceptance
         delivered to it and a register for the recordation of the names and
         addresses of the Lenders, and the Commitment of, and principal amount
         of the Loans and LC Disbursements owing to, each Lender pursuant to the
         terms hereof from time to time (the "Register"). The entries in the
         Register shall be conclusive (absent manifest error), and the Borrower,
         the Administrative Agent, the Issuing Bank and the Lenders may treat
         each Person whose name is recorded in the Register pursuant to the
         terms hereof as a Lender hereunder for all purposes of this Credit
         Agreement, notwithstanding notice to the contrary.

                  (d) Upon its receipt of a duly completed Assignment and
         Acceptance executed by an assigning Lender and an assignee, the
         assignee's completed Administrative Questionnaire (unless the assignee
         shall already be a Lender hereunder), the processing and recordation
         fee referred to in paragraph (b) of this Section and any written
         consent to such assignment required by paragraph (b) of this Section,
         the Administrative Agent shall accept such Assignment and Acceptance
         and record the information contained therein in the Register. No
         assignment shall be effective for purposes of this Credit Agreement
         unless it has been recorded in the Register as provided in this
         paragraph.

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                  (e) Any Lender may, without the consent of the Borrower, the
         Administrative Agent or the Issuing Bank, sell participations to one or
         more banks or other entities (a "Participant") in all or a portion of
         such Lender's rights and obligations under this Credit Agreement
         (including all or a portion of its Commitment and the Loans owing to
         it); provided that (i) such Lender's obligations under this Credit
         Agreement shall remain unchanged, (ii) such Lender shall remain solely
         responsible to the other parties hereto for the performance of such
         obligations and (iii) the Borrower, the Administrative Agent, the
         Issuing Bank and the other Lenders shall continue to deal solely and
         directly with such Lender in connection with such Lender's rights and
         obligations under this Credit Agreement. Any agreement or instrument
         pursuant to which a Lender sells such a participation shall provide
         that such Lender shall retain the sole right to enforce this Credit
         Agreement and to approve any amendment, modification or waiver of any
         provision of this Credit Agreement; provided that such agreement or
         instrument may provide that such Lender will not, without the consent
         of the Participant, agree to any amendment, modification or waiver
         described in the first proviso to Section 9.02(b) that affects such
         Participant. Subject to paragraph (f) of this Section, the Borrower
         agrees that each Participant shall be entitled to the benefits of
         Sections 2.14, 2.15 and 2.16 to the same extent as if it were a Lender
         and had acquired its interest by assignment pursuant to paragraph (b)
         of this Section.

                  (f) A Participant shall not be entitled to receive any greater
         payment under Section 2.14 or 2.16 than the applicable Lender would
         have been entitled to receive with respect to the participation sold to
         such Participant, unless the sale of the participation to such
         Participant is made with the Borrower's prior written consent. A
         Participant that would be a Foreign Lender if it were a Lender shall
         not be entitled to the benefits of Section 2.16 unless the Borrower is
         notified of the participation sold to such Participant and such
         Participant agrees, for the benefit of the Borrower, to comply with
         Section 2.16(e) as though it were a Lender.

                  (g) Any Lender may at any time pledge or assign a security
         interest in all or any portion of its rights under this Credit
         Agreement to secure obligations of such Lender, including any such
         pledge or assignment to a Federal Reserve Bank, and this Section shall
         not apply to any such pledge or assignment of a security interest;
         provided that no such pledge or assignment of a security interest shall
         release a Lender from any of its obligations hereunder or substitute
         any such assignee for such Lender as a party hereto.

                  (h) Notwithstanding anything to the contrary contained herein,
         any Lender (a "Granting Lender") may grant to a special purpose funding
         vehicle (an "SPC") of such Granting Lender, identified as such in
         writing from time to time by the Granting Lender to the Administrative
         Agent and the Borrower, the option to provide to the Borrower all or
         any part of any Loan that such Granting Lender would otherwise be
         obligated to make to the Borrower pursuant to Section 2.01; provided
         that (i) nothing herein shall constitute a commitment to make any Loan
         by any SPC and (ii) if an SPC elects not to exercise such option or
         otherwise fails to provide all or any part of such Loan, the Granting
         Lender shall be obligated to make such Loan pursuant to the terms
         hereof. The making of a Loan by an SPC hereunder shall utilize the

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         Commitment of the Granting Lender to the same extent, and as if, such
         Loan were made by the Granting Lender. Each party hereto hereby agrees
         that no SPC shall be liable for any payment under this Credit Agreement
         for which a Lender would otherwise be liable, for so long as, and to
         the extent, the related Granting Lender makes such payment. In
         furtherance of the foregoing, each party hereto hereby agrees that,
         prior to the date that is one year and one day after the payment in
         full of all outstanding senior indebtedness of any SPC, it will not
         institute against, or join any other person in instituting against,
         such SPC any bankruptcy, reorganization, arrangement, insolvency or
         liquidation proceedings or similar proceedings under the laws of the
         United States or any State thereof. In addition, notwithstanding
         anything to the contrary contained in this Section 9.04 or in Section
         9.12, any SPC may (i) with notice to, but without the prior written
         consent of, the Borrower or the Administrative Agent and without paying
         any processing fee therefor, assign all or a portion of its interests
         in any Loans to its Granting Lender or to any financial institutions
         providing liquidity and/or credit facilities to or for the account of
         such SPC to fund the Loans made by such SPC or to support the
         securities (if any) issued by such SPC to fund such Loans and (ii)
         disclose on a confidential basis any non-public information relating to
         its Loans to any rating agency, commercial paper dealer or provider of
         a surety, guarantee or credit or liquidity enhancement to such SPC.

         SECTION 9.05 SURVIVAL.

         All covenants, agreements, representations and warranties made by the
Borrower herein and in the certificates or other instruments delivered in
connection with or pursuant to this Credit Agreement shall be considered to have
been relied upon by the other parties hereto and shall survive the execution and
delivery of this Credit Agreement and the making of any Loans and issuance of
Letters of Credit, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that the Administrative Agent, the Issuing
Bank or any Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Credit Agreement is outstanding and unpaid or any Letter of Credit is
outstanding and so long as the Commitments have not expired or terminated. The
provisions of Sections 2.14, 2.15, 2.16 and 9.03 and Article VIII shall survive
and remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the expiration or
termination of the Letters of Credit and the Commitments or the termination of
this Credit Agreement or any provision hereof.

         SECTION 9.06 COUNTERPARTS; INTEGRATION; EFFECTIVENESS.

         This Credit Agreement may be executed in counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract. This Credit Agreement and any separate letter agreements with respect
to fees payable to the Administrative Agent constitute the entire contract among
the parties relating to the subject matter hereof and supersede any and all
previous agreements and understandings, oral or written, relating to the subject
matter hereof. Except as provided in Section 4.01, this Credit Agreement shall

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become effective when it shall have been executed by the Administrative Agent
and when the Administrative Agent shall have received counterparts hereof which,
when taken together, bear the signatures of each of the other parties hereto,
and thereafter shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns. Delivery of an executed
counterpart of a signature page of this Credit Agreement by telecopy shall be
effective as delivery of a manually executed counterpart of this Credit
Agreement.

         SECTION 9.07 SEVERABILITY.

         Any provision of this Credit Agreement held to be invalid, illegal or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity, illegality or unenforceability without
affecting the validity, legality and enforceability of the remaining provisions
hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.

         SECTION 9.08 RIGHT OF SETOFF.

         If an Event of Default shall have occurred and be continuing, each
Lender is hereby authorized at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender to or for the credit or the
account of the Borrower against any of and all the obligations of the Borrower
now or hereafter existing under this Credit Agreement held by such Lender,
irrespective of whether or not such Lender shall have made any demand under this
Credit Agreement and although such obligations may be unmatured. The rights of
each Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.

         SECTION 9.09 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF
PROCESS.

                  (a) This Credit Agreement shall be construed in accordance
         with and governed by the law of the State of New York.

                  (b) Each of the Borrower and the Guarantors hereby irrevocably
         and unconditionally submits, for itself and its property, to the
         nonexclusive jurisdiction of the Supreme Court of the State of New York
         sitting in New York County and of the United States District Court of
         the Southern District of New York, and any appellate court from any
         thereof, in any action or proceeding arising out of or relating to this
         Credit Agreement, or for recognition or enforcement of any judgment,
         and each of the parties hereto hereby irrevocably and unconditionally
         agrees that all claims in respect of any such action or proceeding may
         be heard and determined in such New York State court or, to the extent
         permitted by law, in such Federal court. Each of the parties hereto
         agrees that a final judgment in any such action or proceeding shall be
         conclusive and may be enforced in other jurisdictions by suit on the
         judgment or in any other manner provided by law. Nothing in this Credit
         Agreement shall affect any right that the Administrative Agent, the
         Issuing Bank or any Lender may otherwise have to bring any action or
         proceeding relating to this Credit Agreement against the Borrower or
         any Guarantor or their respective properties in the courts of any
         jurisdiction.

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                  (c) Each of the Borrower and the Guarantors hereby irrevocably
         and unconditionally waives, to the fullest extent it may legally and
         effectively do so, any objection which it may now or hereafter have to
         the laying of venue of any suit, action or proceeding arising out of or
         relating to this Credit Agreement in any court referred to in paragraph
         (b) of this Section. Each of the parties hereto hereby irrevocably
         waives, to the fullest extent permitted by law, the defense of an
         inconvenient forum to the maintenance of such action or proceeding in
         any such court.

                  (d) Each party to this Credit Agreement irrevocably consents
         to service of process in the manner provided for notices in Section
         9.01. Nothing in this Credit Agreement will affect the right of any
         party to this Credit Agreement to serve process in any other manner
         permitted by law.

         SECTION 9.10 WAIVER OF JURY TRIAL.

         EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION.

         SECTION 9.11 HEADINGS.

         Article and Section headings and the Table of Contents used herein are
for convenience of reference only, are not part of this Credit Agreement and
shall not affect the construction of, or be taken into consideration in
interpreting, this Credit Agreement.

         SECTION 9.12 CONFIDENTIALITY.

         Each of the Administrative Agent, the Issuing Bank and the Lenders
agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to its and its Affiliates' and its
Approved Funds' directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority, (c) to
the extent, and only to the extent, required by applicable laws or regulations
or by any subpoena or similar legal process, provided that the Person required

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to disclose such information shall take reasonable efforts (at Borrower's
expense) to ensure that any Information so disclosed shall be afforded
confidential treatment, (d) to any other party to this Credit Agreement, (e) in
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Credit Agreement or the enforcement of rights
hereunder, (f) subject to an agreement containing provisions substantially the
same as those of this Section, to any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations
under this Credit Agreement, (g) with the consent of the Borrower or (h) to the
extent such Information (i) becomes publicly available other than as a result of
a breach of this Section or (ii) becomes available to the Administrative Agent,
the Issuing Bank or any Lender on a nonconfidential basis from a source other
than the Borrower who is not, to the knowledge of the Administrative Agent, the
Issuing Bank or such Lender, under an obligation of confidentiality to Borrower
with respect to such Information. For the purposes of this Section,
"Information" means all information received from the Borrower relating to the
Borrower or its business, other than any such information that is available to
the Administrative Agent, the Issuing Bank or any Lender on a nonconfidential
basis prior to disclosure by the Borrower; provided that, in the case of
information received from the Borrower after the date hereof, such information
is clearly identified at the time of delivery as confidential. Any Person
required to maintain the confidentiality of Information as provided in this
Section shall be considered to have complied with its obligation to do so if
such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.

                                    ARTICLE X

                                    GUARANTY

         SECTION 10.1 THE GUARANTY.

         In order to induce the Lenders and the Issuing Bank to enter into this
Credit Agreement and the other Credit Documents and to extend credit hereunder
and in recognition of the direct benefits to be received by the Guarantors from
the Borrowings and Letters of Credit hereunder, each of the Guarantors hereby
agrees with the Administrative Agent and the Lenders as follows: the Guarantor
hereby unconditionally and irrevocably jointly and severally guarantees as
primary obligor and not merely as surety the full and prompt payment when due,
whether upon maturity, by acceleration or otherwise, of any and all obligations
of the Borrower to the Administrative Agent, the Issuing Bank and the Lenders.
If any or all of the obligations of the Borrower to the Administrative Agent,
the Issuing Bank and the Lenders becomes due and payable hereunder, each
Guarantor unconditionally promises to pay such indebtedness to the
Administrative Agent, the Issuing Bank and the Lenders, on order, or demand,
together with any and all reasonable expenses which may be incurred by the
Administrative Agent, the Issuing Bank or the Lenders in collecting any of the
obligations.

         Notwithstanding any provision to the contrary contained herein, to the
extent the obligations of a Guarantor shall be adjudicated to be invalid or
unenforceable for any reason (including, without limitation, because of any
applicable state or federal law relating to fraudulent conveyances or transfers)
then the obligations of each such Guarantor hereunder shall be limited to the
maximum amount that is permissible under applicable law (whether federal or
state).

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         SECTION 10.2 BANKRUPTCY.

         Additionally, each of the Guarantors unconditionally and irrevocably
guarantees jointly and severally the payment of any and all indebtedness of the
Borrower to the Administrative Agent, the Issuing Bank and Lenders whether or
not due or payable by the Borrower upon the occurrence of any of the Event of
Default specified in Article VII, subsection (i), and unconditionally promises
to pay such obligations to the Administrative Agent for the account of itself,
the Issuing Bank and the Lenders, or order, on demand, in lawful money of the
United States. Each of the Guarantors further agrees that to the extent that the
Borrower or a Guarantor shall make a payment or a transfer of an interest in any
property to the Administrative Agent or any Lender, which payment or transfer or
any part thereof is subsequently invalidated, declared to be fraudulent or
preferential, or otherwise is avoided, and/or required to be repaid to the
Borrower or a Guarantor, the estate of the Borrower or a Guarantor, a trustee,
receiver or any other party under any bankruptcy law, state or federal law,
common law or equitable cause, then to the extent of such avoidance or
repayment, the obligation or part thereof intended to be satisfied shall be
revived and continued in full force and effect as if said payment had not been
made.

         SECTION 10.3 NATURE OF LIABILITY.

         The liability of each Guarantor hereunder is exclusive and independent
of any security for or other guaranty of the indebtedness of the Borrower
whether executed by any such Guarantor, any other guarantor or by any other
party, and no Guarantor's liability hereunder shall be affected or impaired by
(a) any direction as to application of payment by the Borrower or by any other
party, or (b) any other continuing or other guaranty, undertaking or maximum
liability of a guarantor or of any other party as to the indebtedness of the
Borrower, or (c) any payment on or in reduction of any such other guaranty or
undertaking, or (d) any dissolution, termination or increase, decrease or change
in personnel by the Borrower, or (e) any payment made to the Administrative
Agent or the Lenders on the indebtedness which the Administrative Agent or such
Lenders repay the Borrower pursuant to court order in any bankruptcy,
reorganization, arrangement, moratorium or other debtor relief proceeding, and
each of the Guarantors waives any right to the deferral or modification of its
obligations hereunder by reason of any such proceeding.

         SECTION 10.4 INDEPENDENT OBLIGATION.

         The obligations of each Guarantor hereunder are independent of the
obligations of any other guarantor or the Borrower, and a separate action or
actions may be brought and prosecuted against each Guarantor whether or not
action is brought against any other guarantor or the Borrower and whether or not
any other Guarantor or the Borrower is joined in any such action or actions.

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         SECTION 10.5 AUTHORIZATION.

         Each of the Guarantors authorizes the Administrative Agent, the Issuing
Bank and each Lender without notice or demand (except as shall be required by
applicable statute and cannot be waived), and without affecting or impairing its
liability hereunder, from time to time to (a) renew, compromise, extend,
increase, accelerate or otherwise change the time for payment of, or otherwise
change the terms of the indebtedness or any part thereof in accordance with this
Credit Agreement, including any increase or decrease of the rate of interest
thereon, (b) take and hold security from any guarantor or any other party for
the payment of this Guaranty or the indebtedness and exchange, enforce waive and
release any such security, (c) apply such security and direct the order or
manner of sale thereof as the Administrative Agent and the Lenders in their
discretion may determine and (d) release or substitute any one or more
endorsers, guarantors, the Borrower or other obligors.

         SECTION 10.6 RELIANCE.

         It is not necessary for the Administrative Agent, the Issuing Bank or
the Lenders to inquire into the capacity or powers of the Borrower or the
officers, directors, members, partners or agents acting or purporting to act on
its behalf, and any indebtedness made or created in reliance upon the professed
exercise of such powers shall be guaranteed hereunder.

         SECTION 10.7 WAIVER.

                  (a) Each of the Guarantors waives any right (except as shall
         be required by applicable statute and cannot be waived) to require the
         Administrative Agent, the Issuing Bank or any Lender to (i) proceed
         against the Borrower, any other guarantor or any other party, (ii)
         proceed against or exhaust any security held from the Borrower, any
         other guarantor or any other party, or (iii) pursue any other remedy in
         the Administrative Agent's, the Issuing Bank's or any Lender's power
         whatsoever. Each of the Guarantors waives any defense based on or
         arising out of any defense of the Borrower, any other guarantor or any
         other party other than payment in full of the indebtedness, including
         without limitation any defense based on or arising out of the
         disability of the Borrower, any other guarantor or any other party, or
         the unenforceability of the indebtedness or any part thereof from any
         cause, or the cessation from any cause of the liability of the Borrower
         other than payment in full of the indebtedness. The Administrative
         Agent, the Issuing Bank or any of the Lenders may, at their election,
         foreclose on any security held by the Administrative Agent, the Issuing
         Bank or a Lender by one or more judicial or nonjudicial sales, whether
         or not every aspect of any such sale is commercially reasonable (to the
         extent such sale is permitted by applicable law), or exercise any other
         right or remedy the Administrative Agent, the Issuing Bank or any
         Lender may have against the Borrower or any other party, or any
         security, without affecting or impairing in any way the liability of
         any Guarantor hereunder except to the extent the indebtedness has been
         paid. Each of the Guarantors waives any defense arising out of any such
         election by the Administrative Agent, the Issuing Bank or any of the
         Lenders, even though such election operates to impair or extinguish any
         right of reimbursement or subrogation or other right or remedy of the
         Guarantors against the Borrower or any other party or any security.

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                  (b) Each of the Guarantors waives all presentments, demands
         for performance, protests and notices, including without limitation
         notices of nonperformance, notice of protest, notices of dishonor,
         notices of acceptance of this Guaranty, and notices of the existence,
         creation or incurring of new or additional indebtedness. Each Guarantor
         assumes all responsibility for being and keeping itself informed of the
         Borrower's financial condition and assets, and of all other
         circumstances bearing upon the risk of nonpayment of the indebtedness
         and the nature, scope and extent of the risks which such Guarantor
         assumes and incurs hereunder, and agrees that none of the
         Administrative Agent, the Issuing Bank and the Lenders shall have any
         duty to advise such Guarantor of information known to it regarding such
         circumstances or risks.

                  (c) Each of the Guarantors hereby agrees it will not exercise
         any rights of subrogation which it may at any time otherwise have as a
         result of this Guaranty (whether contractual, under Section 509 of the
         U.S. Bankruptcy Code, or otherwise) to the claims of the Administrative
         Agent, the Issuing Bank and the Lenders against the Borrower or any
         other guarantor of the indebtedness of the Borrower owing to the
         Administrative Agent, the Issuing Bank and the Lenders (collectively,
         the "Other Parties") and all contractual, statutory or common law
         rights of reimbursement, contribution or indemnity from any Other Party
         which it may at any time otherwise have as a result of this Guaranty
         until such time as the Loans and the reimbursement obligations in
         respect of LC Disbursements hereunder shall have been paid and the
         Commitments have been terminated and no Letters of Credit are
         outstanding. Each of the Guarantors hereby further agrees not to
         exercise any right to enforce any other remedy which the Administrative
         Agent, the Issuing Bank and the Lenders now have or may hereafter have
         against any Other Party, any endorser or any other guarantor of all or
         any part of the indebtedness of the Borrower and any benefit of, and
         any right to participate in, any security or collateral given to or for
         the benefit of the Issuing Bank and the Lenders to secure payment of
         the indebtedness of the Borrower until such time as the Loans and the
         reimbursement obligations in respect of LC Disbursements hereunder
         shall have been paid and the Commitments have been terminated and no
         Letters of Credit are outstanding.

         SECTION 10.8 LIMITATION ON ENFORCEMENT.

         The Lenders and the Issuing Bank agree that this Guaranty may be
enforced only by the action of the Administrative Agent acting upon the
instructions of the Required Lenders and that none of the Lenders and the
Issuing Bank shall have any right individually to seek to enforce or to enforce
this Guaranty, it being understood and agreed that such rights and remedies may
be exercised by the Administrative Agent for the benefit of itself, the Issuing
Bank and the Lenders under the terms of this Credit Agreement. The
Administrative Agent, the Issuing Bank and the Lenders further agree that this
Guaranty may not be enforced against any director, officer, employee or
stockholder or other equityholder of the Guarantors.

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<PAGE>

         SECTION 10.9 CONFIRMATION OF PAYMENT.

         The Administrative Agent, the Issuing Bank and the Lenders will, upon
request after payment of the indebtedness and obligations which are the subject
of this Guaranty and termination of the Commitments relating thereto and the
expiration or the termination of all Letters of Credit, confirm to the Borrower,
the Guarantors or any other Person that such indebtedness and obligations have
been paid and the Commitments relating thereto terminated, subject to the
provisions of Section 10.2.

                                       69
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Credit
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written

BORROWER:                               MEDTRONIC, INC,
--------                                a Minnesota corporation

                                        By:    /s/ Robert L. Ryan
                                           -------------------------------------
                                        Name:  Robert L. Ryan
                                             -----------------------------------
                                        Title: Vice-President and Chief
                                               Financial Officer
                                              ----------------------------------

GUARANTORS:                             MEDTRONIC MINIMED, INC.,
----------                              a Delaware corporation

                                        By:    /s/ Robert L. Ryan
                                           -------------------------------------
                                        Name:  Robert L. Ryan
                                             -----------------------------------
                                        Title: Vice-President and Chief
                                               Financial Officer
                                              ----------------------------------

                                        MEDTRONIC INTERNATIONAL, LTD,
                                        a Delaware corporation

                                        By:    /s/ Robert L. Ryan
                                           -------------------------------------
                                        Name:  Robert L. Ryan
                                             -----------------------------------
                                        Title: Vice-President and Chief
                                               Financial Officer
                                              ----------------------------------

                                        MEDTRONIC AVE, INC.,
                                        a Delaware corporation

                                        By:    /s/ Robert L. Ryan
                                           -------------------------------------
                                        Name:  Robert L. Ryan
                                             -----------------------------------
                                        Title: Vice-President and Chief
                                               Financial Officer
                                              ----------------------------------

                                        MEDTRONIC INTERNATIONAL
                                        TECHNOLOGY, INC.,
                                        a Minnesota corporation

                                        By:    /s/ Robert L. Ryan
                                           -------------------------------------
                                        Name:  Robert L. Ryan
                                             -----------------------------------
                                        Title: Vice-President and Chief
                                               Financial Officer
                                              ----------------------------------

                                       70
<PAGE>

                                        MEDTRONIC SOFAMOR DANEK, INC.,
                                        an Indiana corporation

                                        By:    /s/ Robert L. Ryan
                                           -------------------------------------
                                        Name:  Robert L. Ryan
                                             -----------------------------------
                                        Title: Vice-President and Chief
                                               Financial Officer
                                              ----------------------------------

                                        MEDTRONIC USA, INC.,
                                        a Minnesota corporation

                                        By:    /s/ Robert L. Ryan
                                           -------------------------------------
                                        Name:  Robert L. Ryan
                                             -----------------------------------
                                        Title: Vice-President and Chief
                                               Financial Officer
                                              ----------------------------------

                                       71
<PAGE>

                                        BANK OF AMERICA, N.A.,
                                        individually in its capacity as
                                        Administrative Agent

                                        By:    /s/ Christine Cordi
                                           -------------------------------------
                                        Name:  Christine Cordi
                                             -----------------------------------
                                        Title: Vice-President
                                              ----------------------------------

LENDERS:                                BANK OF AMERICA, N.A.,
                                        As Lender

                                        By:    /s/ Philip S. Durand
                                           -------------------------------------
                                        Name:  Philip S. Durand
                                             -----------------------------------
                                        Title: Principal
                                              ----------------------------------

                                        BANK OF AMERICA, N.A.,
                                        As Swingline Lender

                                        By:    /s/ Philip S. Durand
                                           -------------------------------------
                                        Name:  Philip S. Durand
                                             -----------------------------------
                                        Title: Principal
                                              ----------------------------------

                                        BANK OF AMERICA, N.A.,
                                        As Letter of Credit Issuer

                                        By:    /s/ Philip S. Durand
                                           -------------------------------------
                                        Name:  Philip S. Durand
                                             -----------------------------------
                                        Title: Principal
                                              ----------------------------------

                                       72
<PAGE>

LENDERS:                                BANK ONE, N.A.,
                                        As Lender

                                        By:    /s/ Anthony F. Maggiore
                                           -------------------------------------
                                        Name:  Anthony F. Maggiore
                                             -----------------------------------
                                        Title: Director, Capital Markets
                                              ----------------------------------

                                        THE BANK OF TOKYO-MITSUBISHI,
                                        LTD., CHICAGO BRANCH
                                        As Lender

                                        By:    /s/ Patrick McCue
                                           -------------------------------------
                                        Name:  Patrick McCue
                                             -----------------------------------
                                        Title: Vice President & Manager
                                              ----------------------------------

                                        BNP PARIBAS,
                                        As Lender

                                        By:    /s/ Thomas H. Ambrose
                                           -------------------------------------
                                        Name:  Thomas H. Ambrose
                                             -----------------------------------
                                        Title: Director
                                              ----------------------------------

                                        By:    /s/ Christine L. Howatt
                                           -------------------------------------
                                        Name:  Christine L. Howatt
                                             -----------------------------------
                                        Title: Vice President
                                              ----------------------------------

                                        CITICORP USA, INC.
                                        As Lender

                                        By:    /s/ Mary O'Connell
                                           -------------------------------------
                                        Name:  Mary O'Connell
                                             -----------------------------------
                                        Title: Vice President
                                              ----------------------------------

                                       73
<PAGE>

                                        DEUTSCHE BANK AG, NEW YORK
                                        BRANCH
                                        As Lender

                                        By:    /s/ Iain Stewart
                                           -------------------------------------
                                        Name:  Iain Stewart
                                             -----------------------------------
                                        Title: Director
                                              ----------------------------------

                                        By:    /s/ Jean M. Hannigan
                                           -------------------------------------
                                        Name:  Jean M. Hannigan
                                             -----------------------------------
                                        Title: Director
                                              ----------------------------------

                                        FIRST UNION NATIONAL
                                        BANK,
                                        As Lender

                                        By:    /s/ Paige Mesaros
                                           -------------------------------------
                                        Name:  Paige Mesaros
                                             -----------------------------------
                                        Title: Vice President
                                              ----------------------------------

                                        FLEET NATIONAL BANK, N.A.
                                        As Lender

                                        By:    /s/ Gordon B. Coughlin
                                           -------------------------------------
                                        Name:  Gordon B. Coughlin
                                             -----------------------------------
                                        Title: Vice President
                                              ----------------------------------

                                        THE FUJI BANK, LTD.
                                        As Lender

                                        By:    /s/ Peter L. Chinnici
                                           -------------------------------------
                                        Name:  Peter L. Chinnici
                                             -----------------------------------
                                        Title: Senior Vice President & Group
                                               Head
                                              ----------------------------------

                                       74
<PAGE>

                                        KEYBANK NATIONAL
                                        ASSOCIATION,
                                        As Lender

                                        By:    /s/ Frank J. Jancar
                                           -------------------------------------
                                        Name:  Frank J. Jancar
                                             -----------------------------------
                                        Title: Vice President
                                              ----------------------------------

                                        ROYAL BANK OF CANADA,
                                        As Lender

                                        By:    /s/ Gordon C. MacArthur
                                           -------------------------------------
                                        Name:  Gordon C. MacArthur
                                             -----------------------------------
                                        Title: Senior Manager
                                              ----------------------------------

                                        SUNTRUST BANK,
                                        As Lender

                                        By:    /s/ Cathy Hunnicutt
                                           -------------------------------------
                                        Name:  Cathy Hunnicutt
                                             -----------------------------------
                                        Title: Assistant Vice President
                                              ----------------------------------

                                        UBS AG, STAMFORD BRANCH,
                                        As Lender

                                        By:    /s/ Wilfred V. Saint
                                           -------------------------------------
                                        Name:  Wilfred V. Saint
                                             -----------------------------------
                                        Title: Associate Director Banking
                                               Products Services, US
                                              ----------------------------------

                                        By:    /s/ Lynne B. Alfarone
                                           -------------------------------------
                                        Name:  Lynne B. Alfarone
                                             -----------------------------------
                                        Title: Associate Director Banking
                                               Products Services, US
                                              ----------------------------------

                                       75
<PAGE>

                                        U.S. BANK NATIONAL
                                        ASSOCIATION,
                                        As Lender

                                        By:    /s/ Karen Weathers
                                           -------------------------------------
                                        Name:  Karen Weathers
                                             -----------------------------------
                                        Title: Vice President
                                              ----------------------------------

                                        WELLS FARGO BANK,
                                        NATIONAL ASSOCIATION
                                        As Lender

                                        By:    /s/ Christopher A. Cudak
                                           -------------------------------------
                                        Name:  Christopher A. Cudak
                                             -----------------------------------
                                        Title: Vice President
                                               Wells Fargo Bank, National
                                               Association
                                              ----------------------------------

                                        By:    /s/ James D. Heinz
                                           -------------------------------------
                                        Name:  James D. Heinz
                                             -----------------------------------
                                        Title: Senior Vice President
                                              ----------------------------------

                                       76EXHIBIT 4.3

                          HOSPITALITY PROPERTIES TRUST

                                       TO

                            ________________________

                                     Trustee

                                    Indenture

                          Dated as of __________, 200_

                       Junior Subordinated Debt Securities

<PAGE>

<TABLE>
<CAPTION>
                                                 TABLE OF CONTENTS1

                                                                                                               PAGE

<S>                                                                                                              <C>
         PARTIES...............................................................................................   1

         RECITALS..............................................................................................   1

ARTICLE ONE                DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION ............................   1
         SECTION 101.  Definitions. ...........................................................................   1
         SECTION 102.  Compliance Certificates and Opinions. ..................................................   8
         SECTION 103.  Form of Documents Delivered to Trustee. ................................................   8
         SECTION 104.  Acts of Holders. .......................................................................   8
         SECTION 105.  Notices, etc., to Trustee and Company. .................................................  10
         SECTION 106.  Notice to Holders; Waiver. .............................................................  10
         SECTION 107.  Effect of Headings and Table of Contents. ..............................................  11
         SECTION 108.  Successors and Assigns. ................................................................  11
         SECTION 109.  Separability Clause. ...................................................................  11
         SECTION 110.  Benefits of Indenture. .................................................................  11
         SECTION 111.  Governing Law. .........................................................................  11
         SECTION 112.  Legal Holidays. ........................................................................  11
         SECTION 113.  No Personal Liability. .................................................................  11
ARTICLE TWO                SECURITIES FORMS ...................................................................  12
         SECTION 201.  Forms of Securities. ...................................................................  12
         SECTION 202.  Form of Trustee's Certificate of Authentication. .......................................  12
         SECTION 203.  Securities Issuable in Global Form. ....................................................  12
ARTICLE THREE              THE SECURITIES .....................................................................  13
         SECTION 301.  Amount Unlimited; Issuable in Series. ..................................................  13
         SECTION 302.  Denominations. .........................................................................  16
         SECTION 303.  Execution, Authentication, Delivery and Dating. ........................................  16
         SECTION 304.  Temporary Securities. ..................................................................  18
         SECTION 305.  Registration, Registration of Transfer and Exchange. ...................................  20
         SECTION 306.  Mutilated, Destroyed, Lost and Stolen Securities. ......................................  22
         SECTION 307.  Payment of Interest; Interest Rights Preserved. ........................................  23
         SECTION 308.  Persons Deemed Owners. .................................................................  24
         SECTION 309.  Cancellation. ..........................................................................  25
         SECTION 310.  Computation of Interest. ...............................................................  25
ARTICLE FOUR               SATISFACTION AND DISCHARGE .........................................................  25
         SECTION 401.  Satisfaction and Discharge of Indenture. ...............................................  25
         SECTION 402.  Application of Trust Funds. ............................................................  26
ARTICLE FIVE               REMEDIES ...........................................................................  27
         SECTION 501.  Events of Default. .....................................................................  27
         SECTION 502.  Acceleration of Maturity; Rescission and Annulment. ....................................  28
         SECTION 503.  Collection of Indebtedness and Suits for Enforcement by Trustee. .......................  29
         SECTION 504.  Trustee May File Proofs of Claim. ......................................................  30
         SECTION 505.  Trustee May Enforce Claims Without Possession of Securities or Coupons. ................  30

<FN>
--------------------
1   This Table of Contents shall not, for any purpose, be deemed to be part of this Indenture.
</FN>
</TABLE>

<PAGE>

<TABLE>
<S>                                                                                                              <C>
         SECTION 506.  Application of Money Collected. ........................................................  30
         SECTION 507.  Limitation on Suits. ...................................................................  31
         SECTION 508.  Unconditional Right of Holders to Receive Principal, Premium, if any,
                           Interest and Additional Amounts. ...................................................  31
         SECTION 509.  Restoration of Rights and Remedies. ....................................................  31
         SECTION 510.  Rights and Remedies Cumulative. ........................................................  32
         SECTION 511.  Delay or Omission Not Waiver. ..........................................................  32
         SECTION 512.  Control by Holders of Securities. ......................................................  32
         SECTION 513.  Waiver of Past Defaults. ...............................................................  32
         SECTION 514.  Waiver of Usury, Stay or Extension Laws. ...............................................  32
         SECTION 515.  Undertaking for Costs. .................................................................  33
ARTICLE SIX                THE TRUSTEE ........................................................................  33
         SECTION 601.  Notice of Defaults. ....................................................................  33
         SECTION 602.  Certain Rights of Trustee. .............................................................  33
         SECTION 603.  Not Responsible for Recitals or Issuance of Securities. ................................  34
         SECTION 604.  May Hold Securities. ...................................................................  34
         SECTION 605.  Money Held in Trust. ...................................................................  34
         SECTION 606.  Compensation and Reimbursement. ........................................................  34
         SECTION 607.  Corporate Trustee Required; Eligibility; Conflicting Interests. ........................  35
         SECTION 608.  Resignation and Removal; Appointment of Successor. .....................................  35
         SECTION 609.  Acceptance of Appointment by Successor. ................................................  36
         SECTION 610.  Merger, Conversion, Consolidation or Succession to Business. ...........................  37
         SECTION 611.  Appointment of Authentication Agent. ...................................................  37
ARTICLE SEVEN              HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY ..................................  39
         SECTION 701.  Disclosure of Names and Addresses of Holders. ..........................................  39
         SECTION 702.  Reports by Trustee. ....................................................................  39
         SECTION 703.  Reports by Company. ....................................................................  39
         SECTION 704.  Company to Furnish to Trustee Names and Addresses of Holders. ..........................  39
ARTICLE EIGHT              CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE ...................................  40
         SECTION 801.  Consolidations and Mergers of Company and Sales, Leases and Conveyances Permitted
                           Subject to Certain Conditions. .....................................................  40
         SECTION 802.  Rights and Duties of Successor Corporation. ............................................  40
         SECTION 803.  Officers' Certificate and Opinion of Counsel. ..........................................  40
ARTICLE NINE               SUPPLEMENTAL INDENTURES ............................................................  41
         SECTION 901.  Supplemental Indentures Without Consent of Holders. ....................................  41
         SECTION 902.  Supplemental Indentures with Consent of Holders. .......................................  42
         SECTION 903.  Execution of Supplemental Indentures. ..................................................  43
         SECTION 904.  Effect of Supplemental Indentures. .....................................................  43
         SECTION 905.  Conformity with Trust Indenture Act. ...................................................  43
         SECTION 906.  Reference in Securities to Supplemental Indentures. ....................................  43
ARTICLE TEN                COVENANTS ..........................................................................  43
         SECTION 1001.  Payment of Principal, Premium, if any, Interest and Additional Amounts. ...............  43
         SECTION 1002.  Maintenance of Office or Agency. ......................................................  43
         SECTION 1003.  Money for Securities Payments to Be Held in Trust. ....................................  45
         SECTION 1004.  Existence. ............................................................................  46
         SECTION 1005.  Provision of Financial Information. ...................................................  46
         SECTION 1006.  Statement as to Compliance. ...........................................................  46
         SECTION 1007.  Additional Amounts. ...................................................................  46
         SECTION 1008.  Waiver of Certain Covenants. ..........................................................  47
ARTICLE ELEVEN             REDEMPTION OF SECURITIES ...........................................................  47
         SECTION 1101.  Applicability of Article. .............................................................  47
</TABLE>

                                     -ii-
<PAGE>

<TABLE>
<S>                                                                                                              <C>
         SECTION 1102.  Election to Redeem; Notice to Trustee. ................................................  47
         SECTION 1103.  Selection by Trustee of Securities to Be Redeemed. ....................................  47
         SECTION 1104.  Notice of Redemption. .................................................................  48
         SECTION 1105.  Deposit of Redemption Price. ..........................................................  49
         SECTION 1106.  Securities Payable on Redemption Date. ................................................  49
         SECTION 1107.  Securities Redeemed in Part. ..........................................................  50
ARTICLE TWELVE             SINKING FUNDS ......................................................................  50
         SECTION 1201.  Applicability of Article. .............................................................  50
         SECTION 1202.  Satisfaction of Sinking Fund Payments with Securities. ................................  50
         SECTION 1203.  Redemption of Securities for Sinking Fund. ............................................  50
ARTICLE THIRTEEN           REPAYMENT AT THE OPTION OF HOLDERS .................................................  51
         SECTION 1301.  Applicability of Article. .............................................................  51
         SECTION 1302.  Repayment of Securities. ..............................................................  51
         SECTION 1303.  Exercise of Option. ...................................................................  51
         SECTION 1304.  When Securities Presented for Repayment Become Due and Payable. .......................  52
         SECTION 1305.  Securities Repaid in Part. ............................................................  52
ARTICLE FOURTEEN           DEFEASANCE AND COVENANT DEFEASANCE .................................................  53
         SECTION 1401.  Applicability of Article; Company's Option to Effect Defeasance or Covenant Defeasance.  53
         SECTION 1402.  Defeasance and Discharge. .............................................................  53
         SECTION 1403.  Covenant Defeasance. ..................................................................  53
         SECTION 1404.  Conditions to Defeasance or Covenant Defeasance. ......................................  54
         SECTION 1405.  Deposited Money and Government Obligations to Be Held in Trust; Other Miscellaneous
                           Provisions. ........................................................................  55
ARTICLE FIFTEEN            MEETINGS OF HOLDERS OF SECURITIES ..................................................  56
         SECTION 1501.  Purposes for Which Meetings May Be Called. ............................................  56
         SECTION 1502.  Call, Notice and Place of Meetings. ...................................................  56
         SECTION 1503.  Persons Entitled to Vote at Meetings. .................................................  56
         SECTION 1504.  Quorum; Action. .......................................................................  56
         SECTION 1505. Determination of Voting Rights; Conduct and Adjournment of Meetings. ...................  57
         SECTION 1506.  Counting Votes and Recording Action of Meetings. ......................................  58

         TESTIMONIUM...........................................................................................  58
         SIGNATURES AND SEALS..................................................................................  58
         ACKNOWLEDGMENTS.......................................................................................  58
         EXHIBIT A -- FORMS OF CERTIFICATION
</TABLE>

                                      -iii-
<PAGE>
                          HOSPITALITY PROPERTIES TRUST

         Reconciliation  and tie between Trust Indenture Act of 1939, as amended
(the "TIA"), and Indenture, dated as of __________, 200_.

                          TIA Section Indenture Section

                 Sec. 310(a)(1).......................                607
                         (a)(2).......................                607
                         (b)..........................             607, 608
                 Sec. 312(a)..........................                704
                 Sec. 312(c)..........................                701
                 Sec. 313(a)..........................                702
                         (c)..........................                702
                 Sec. 314(a)..........................                703
                         (a)(4).......................               1006
                         (c)(1).......................                102
                         (c)(2).......................                102
                         (e)..........................                102
                 Sec. 315(b)..........................                601
                         (c)..........................                602
                 Sec. 316(a) (last sentence)..........       101 ("Outstanding")
                         (a)(1)(A)....................                512
                         (a)(1)(B)....................                513
                         (b)..........................                508
                 Sec. 317(a)(1).......................                503
                         (b)..........................               1003
                         (a)(2).......................                504
                 Sec. 318(a)..........................                111
                         (c)..........................                111

-------------------
NOTE:    This reconciliation and tie shall not, for any purpose, be deemed to be
         a part of the Indenture.

         Attention  should also be directed to Section  318(c) of the TIA, which
provides that the provisions of Sections 310 to and including 317 of the TIA are
a part of and  govern  every  qualified  indenture,  whether  or not  physically
contained therein.

                                      -iv-
<PAGE>
         INDENTURE,   dated  as  of  ___________,   200_,  between   HOSPITALITY
PROPERTIES  TRUST, a Maryland real estate investment trust  (hereinafter  called
the  "Company"),  having  its  principal  office at 400 Centre  Street,  Newton,
Massachusetts  02158  and,  _____________________________,   a  ___________,  as
Trustee  hereunder  (hereinafter  called  the  "Trustee"),  having  its  initial
Corporate Trust Office at _____________________________________.

                             RECITALS OF THE COMPANY

                  The Company  deems it necessary to issue from time to time for
lawful   purposes  its  unsecured  debt  securities   (hereinafter   called  the
"Securities") evidencing its unsecured indebtedness, and has duly authorized the
execution  and delivery of this  Indenture to provide for the issuance from time
to time of the Securities, unlimited as to principal amount, to bear interest at
the rates or formulas, to mature at such times and to have such other provisions
as shall be fixed as hereinafter provided.

                  This  Indenture  is  subject  to the  provisions  of the Trust
Indenture Act of 1939, as amended,  that are deemed to be incorporated into this
Indenture by such Act, and shall, to the extent applicable,  be governed by such
provisions.

                  All things  necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done.

                  NOW, THEREFORE, THIS INDENTURE WITNESSETH:

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

                                   ARTICLE ONE

             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

                  SECTION 101. Definitions.  For all purposes of this Indenture,
except as otherwise expressly provided or unless the context otherwise requires:

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

                  (2) all other terms used herein  which are defined in the TIA,
either  directly or by reference  therein,  have the  meanings  assigned to them
therein, and the terms "cash transaction" and "self-liquidating  paper", as used
in TIA Section 311, shall have the meanings assigned to them in the rules of the
Commission adopted under the TIA;

                  (3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP; and

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

                  Certain terms,  used  principally  in Article  Three,  Article
Five, Article Six and Article Ten, are defined in those Articles.

                                       1
<PAGE>
                  "Act",  when used with respect to any Holder,  has the meaning
specified in Section 104.

                  "Additional  Amounts" means any  additional  amounts which are
required  by a  Security  or  by  or  pursuant  to  a  Board  Resolution,  under
circumstances specified therein, to be paid by the Company in respect of certain
taxes imposed on certain Holders and which are owing to such Holders.

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

                  "Authenticating   Agent"   means  any   authenticating   agent
appointed by the Trustee pursuant to Section 611.

                  "Authorized  Newspaper"  means  a  newspaper,  printed  in the
English  language  or in an official  language  of the  country of  publication,
customarily  published  on  each  Business  Day,  whether  or not  published  on
Saturdays,  Sundays or  holidays,  and of general  circulation  in each place in
connection  with which the term is used or in the  financial  community  of each
such  place.  Whenever  successive  publications  are  required  to be  made  in
Authorized Newspapers, the successive publications may be made in the same or in
different  Authorized   Newspapers  in  the  same  city  meeting  the  foregoing
requirements and in each case on any Business Day.

                  "Bankruptcy Law" has the meaning specified in Section 501.

                  "Bearer Security" means any Security  established  pursuant to
Section 201 which is payable to bearer.

                  "Board"  means the board of  trustees  of the  Company  or any
committee of that board duly authorized to act hereunder.

                  "Board  Resolution" means a copy of a resolution  certified by
the Secretary or an Assistant Secretary of the Company to have been duly adopted
by  the  Board  and  to be in  full  force  and  effect  on  the  date  of  such
certification, and delivered to the Trustee.

                  "Business Day", when used with respect to any Place of Payment
or any  other  particular  location  referred  to in  this  Indenture  or in the
Securities,  means,  unless  otherwise  specified with respect to any Securities
pursuant  to Section  301,  any day,  other than a Saturday  or Sunday,  that is
neither a legal holiday nor a day on which banking institutions in that Place of
Payment or particular  location are authorized or required by law, regulation or
executive order to close.

                  "Clearstream" means Clearstream  Banking,  societe anonyme, or
its successor.

                  "Commission" means the Securities and Exchange Commission,  as
from time to time  constituted,  created  under the  Securities  Exchange Act of
1934, or, if at any time after  execution of this  instrument such Commission is
not  existing  and  performing  the  duties now  assigned  to it under the Trust
Indenture Act, then the body performing such duties on such date.

                  "Common Depositary" has the meaning specified in Section 304.

                                       2
<PAGE>
                  "Company" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor.

                  "Company  Request" and "Company Order" mean,  respectively,  a
written request or order signed in the name of the Company by the President or a
Vice President,  and by its Treasurer, an Assistant Treasurer,  the Secretary or
an Assistant Secretary, of the Company, and delivered to the Trustee.

                  "Conversion Event" means the cessation of use of (i) a Foreign
Currency  both by the  government  of the country which issued such currency and
for the settlement of transactions by a central bank or other public institution
of or within the international banking community, or (iii) any currency unit (or
composite currency) for the purposes for which it was established.

                  "Corporate  Trust  Office"  means the office of the Trustee at
which, at any particular time, its corporate trust business shall be principally
administered, which office at the date hereof is located at ____________________
________________________.

                  "corporation" includes corporations,  associations,  companies
and business trusts.

                  "coupon" means any interest  coupon  appertaining  to a Bearer
Security.

                  "Custodian" has the meaning specified in Section 501.

                  "Declaration" has the meaning specified in Section 113.

                  "Defaulted Interest" has the meaning specified in Section 307.

                  "Dollar"  or "$"  means a dollar or other  equivalent  unit in
such coin or  currency  of the United  States of America as at the time shall be
legal tender for the payment of public and private debts.

                  "DTC" means The  Depository  Trust  Company,  or any successor
thereto.

                  "Euroclear"  means Morgan  Guaranty Trust Company of New York,
Brussels Office, or its successor as operator of the Euroclear System.

                  "European  Communities" means the European Economic Community,
the European Coal and Steel Community and the European Atomic Energy Community.

                  "European  Monetary System" means the European Monetary System
established by the Resolution of December 5, 1978 of the Council of the European
Communities.

                  "Event of Default" has the meaning specified in Article Five.

                  "Exchange Date" has the meaning specified in Section 304.

                  "Foreign  Currency"  means  any  currency,  currency  unit  or
composite currency, issued by the government of one or more countries other than
the United States of America or by any recognized  confederation  or association
of such governments.

                                       3
<PAGE>
                  "Funds from  Operations" for any period means the consolidated
net income of the Company and its  Subsidiaries  for such period  without giving
effect to  depreciation  and  amortization,  gains or losses from  extraordinary
items,  gains or losses on sales of real estate,  gains or losses on investments
in marketable  securities  and any  provision/benefit  for income taxes for such
period,  plus  funds from  operations  of  unconsolidated  joint  ventures,  all
determined on a consistent basis in accordance with GAAP.

                  "GAAP"  means  generally  accepted  accounting  principles  in
effect from time to time as used in the United  States  applied on a  consistent
basis.

                  "Government Obligations" means securities which are (i) direct
obligations of the United States of America or the  government  which issued the
Foreign Currency in which the Securities of a particular series are payable,
for the  payment  of  which  its  full  faith  and  credit  is  pledged  or (ii)
obligations  of a Person  controlled or supervised by and acting as an agency or
instrumentality  of the United States of America or such government which issued
the Foreign  Currency in which the  Securities  of such series are payable,  the
payment  of which is  unconditionally  guaranteed  as a full  faith  and  credit
obligation by the United States of America or such other  government,  which, in
either case, are not callable or redeemable at the option of the issuer thereof,
and shall also include a depository receipt issued by a bank or trust company as
custodian with respect to any such Government  Obligation or a specific  payment
of interest  on or  principal  of any such  Government  Obligation  held by such
custodian for the account of the holder of a depository  receipt;  provided that
(except  as  required  by law)  such  custodian  is not  authorized  to make any
deduction from the amount payable to the holder of such depository  receipt from
any amount received by the custodian in respect of the Government  Obligation or
the specific  payment of interest on or principal of the  Government  Obligation
evidenced by such depository receipt.

                  "Holder"  means,  in the case of a  Registered  Security,  the
Person in whose name a Security is registered  in the Security  Register and, in
the case of a Bearer Security, the bearer thereof and, when used with respect to
any coupon, shall mean the bearer thereof.

                  "Indenture" means this instrument as originally executed or as
it may from time to time be  supplemented  or amended by one or more  indentures
supplemental  hereto entered into pursuant to the applicable  provisions hereof,
and shall include the terms of particular  series of Securities  established  as
contemplated by Section 301; provided,  however,  that, if at any time more than
one Person is acting as Trustee under this instrument,  "Indenture"  shall mean,
with  respect to any one or more series of  Securities  for which such Person is
Trustee,  this instrument as originally  executed or as it may from time to time
be supplemented or amended by one or more applicable provisions hereof and shall
include the terms of the or those particular series of Securities for which such
Person is  Trustee  established  as  contemplated  by  Section  301,  exclusive,
however,  of any  provisions  or terms which  relate  solely to other  series of
Securities  for which such Person is Trustee,  regardless  of when such terms or
provisions  were adopted,  and  exclusive of any  provisions or terms adopted by
means of one or more indentures supplemental hereto executed and delivered after
such Person had become such Trustee but to which such Person,  as such  Trustee,
was not a party.

                  "Indexed Security" means a Security the terms of which provide
that the principal amount thereof payable at Stated Maturity may be more or less
than the principal face amount thereof at original issuance.

                  "interest",  when  used  with  respect  to an  Original  Issue
Discount  Security which by its terms bears interest only after Maturity,  shall
mean interest payable after Maturity,  and, when used with respect to a Security
which provides for the payment of Additional  Amounts  pursuant to Section 1007,
includes such Additional Amounts.

                  "Interest  Payment  Date",  when  used  with  respect  to  any
Security,  means the Stated  Maturity  of an  installment  of  interest  on such
Security.

                                       4
<PAGE>
                  "Maturity",  when used with respect to any Security, means the
date on which the  principal  of such  Security or an  installment  of principal
becomes  due and  payable as therein or herein  provided,  whether at the Stated
Maturity or by declaration  of  acceleration,  notice of  redemption,  notice of
option to elect repayment or otherwise.

                  "Officers'  Certificate"  means a  certificate  signed  by the
President or a Vice President and by the Treasurer, an Assistant Treasurer,  the
Secretary  or an  Assistant  Secretary  of the  Company,  and  delivered  to the
Trustee.

                  "Opinion of Counsel" means a written  opinion of counsel,  who
may be counsel  for the  Company  (including  counsel  who is an employee of the
Company) and who shall be acceptable to the Trustee.

                  "Original  Issue Discount  Security"  means any Security which
provides  for an amount  less than the  principal  amount  thereof to be due and
payable upon a declaration of acceleration of the Maturity  thereof  pursuant to
Section 502.

                  "Outstanding", when used with respect to Securities, means, as
of the date of  determination,  all  Securities  theretofore  authenticated  and
delivered under this Indenture, except:

                  (i)  Securities   theretofore  cancelled  by  the  Trustee  or
delivered to the Trustee for cancellation;

                  (ii)  Securities,  or portions  thereof,  for whose payment or
redemption  or  repayment  at the  option of the Holder  money in the  necessary
amount has been  theretofore  deposited  with the  Trustee  or any Paying  Agent
(other than the  Company) in trust or set aside and  segregated  in trust by the
Company  (if the Company  shall act as its own Paying  Agent) for the Holders of
such  Securities and any coupons  appertaining  thereto;  provided that, if such
Securities  are to be redeemed,  notice of such  redemption  has been duly given
pursuant to this Indenture or provision therefor satisfactory to the Trustee has
been made;

                  (iii)  Securities,  except to the extent  provided in Sections
1402 and 1403, with respect to which the Company has effected  defeasance and/or
covenant defeasance as provided in Article Fourteen;

                  (iv)  Securities  which have been paid pursuant to Section 306
or in exchange for or in lieu of which other Securities have been  authenticated
and  delivered  pursuant to this  Indenture,  other than any such  Securities in
respect  of  which  there  shall  have  been  presented  to  the  Trustee  proof
satisfactory  to it that such  Securities  are held by a bona fide  purchaser in
whose hands such Securities are valid obligations of the Company; and

                  (v) Securities converted into Common Shares,  Preferred Shares
or other  securities  of the  Company  pursuant  to or in  accordance  with this
Indenture if the terms of such Securities provide for convertibility pursuant to
Section 301;

provided,  however,  that in  determining  whether the Holders of the  requisite
principal amount of the Outstanding  Securities have given any request,  demand,
authorization,  direction, notice, consent or waiver hereunder or are present at
a meeting of  Holders  for quorum  purposes,  and for the  purpose of making the
calculations  required  by TIA  Section  313,  (i) the  principal  amount  of an
Original   Issue   Discount   Security  that  may  be  counted  in  making  such
determination or calculation and that shall be deemed to be Outstanding for such
purpose  shall be equal to the  amount of  principal  thereof  that would be (or
shall  have  been  declared  to be)  due  and  payable,  at  the  time  of  such
determination,  upon a  declaration  of  acceleration  of the  maturity  thereof
pursuant to Section 502, (ii) the principal  amount of any Security  denominated
in a Foreign  Currency  that may be  counted  in making  such  determination  or
calculation and that shall be deemed Outstanding for such purpose shall be equal
to the Dollar equivalent, determined pursuant to Section 301 as of the date such
Security is originally  issued by the Company,  of the principal  amount (or, in
the case of an Original Issue  Discount  Security,  the Dollar  equivalent as of
such date of original  issuance of the amount  determined  as provided in clause
(i) above) of such Security,  (iii) the principal amount of any Indexed Security
that may be counted in making

                                       5
<PAGE>
such  determination or calculation and that shall be deemed outstanding for such
purpose shall be equal to the principal face amount of such Indexed  Security at
original  issuance,  unless  otherwise  provided  with respect to such  Security
pursuant to Section 301, and (iv)  Securities  owned by the Company or any other
obligor  upon the  Securities  or any  Affiliate of the Company or of such other
obligor shall be disregarded and deemed not to be  Outstanding,  except that, in
determining whether the Trustee shall be protected in making such calculation or
in relying upon any such  request,  demand,  authorization,  direction,  notice,
consent or waiver,  only Securities which the Trustee knows to be so owned shall
be so disregarded. Securities so owned which have been pledged in good faith may
be regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's  right so to act with respect to such  Securities and that
the pledgee is not the Company or any other  obligor upon the  Securities or any
Affiliate of the Company or of such other obligor.

                  "Paying  Agent" means any Person  authorized by the Company to
pay the  principal of (and  premium,  if any) or interest on any  Securities  or
coupons on behalf of the Company.

                  "Person" means any individual, corporation, partnership, joint
venture,  association,  joint-stock  company,  trust, limited liability company,
unincorporated organization or government or any agency or political subdivision
thereof.

                  "Place of Payment",  when used with respect to the  Securities
of or within any series,  means the place or places where the  principal of (and
premium,  if any) and  interest on such  Securities  are payable as specified as
contemplated by Sections 301 and 1002.

                  "Predecessor  Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such  particular  Security;  and,  for the purposes of this  definition,  any
Security  authenticated  and  delivered  under Section 306 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security or a Security to which a
mutilated,  destroyed,  lost or  stolen  coupon  appertains  shall be  deemed to
evidence the same debt as the mutilated,  destroyed,  lost or stolen Security or
the  Security  to  which  the  mutilated,   destroyed,  lost  or  stolen  coupon
appertains.

                  "Redemption  Date",  when used with respect to any Security to
be redeemed, in whole or in part, means the date fixed for such redemption by or
pursuant to this Indenture.

                  "Redemption  Price", when used with respect to any Security to
be  redeemed,  means the price at which it is to be  redeemed  pursuant  to this
Indenture.

                  "Registered  Security"  shall  mean any  Security  established
pursuant to Section 201 which is registered in the Security Register.

                  "Regular Record Date" for the interest payable on any Interest
Payment Date on the Registered Securities of or within any series means the date
specified  for that purpose as  contemplated  by Section  301,  whether or not a
Business Day.

                  "Repayment Date" means, when used with respect to any Security
to be repaid at the option of the Holder,  the date fixed for such  repayment by
or pursuant to this Indenture.

                  "Responsible Officer",  when used with respect to the Trustee,
means the chairman or vice-chairman  of the board of directors,  the chairman or
vice-chairman  of  the  executive  committee  of the  board  of  directors,  the
president,  any vice president  (whether or not designated by a number or a word
or words added before or after the title "vice president"),  the secretary,  any
assistant secretary,  the treasurer,  any assistant treasurer,  the cashier, any
assistant cashier, any trust officer, the controller or any other officer of the
Trustee  customarily  performing  functions similar to those performed by any of
the above  designated  officers  and also  means with  respect  to a  particular
corporate  trust

                                       6
<PAGE>
matter,  any other  officer  to whom such  matter is  referred  because  of such
officer's knowledge and familiarity with the particular subject.

                  "Security" has the meaning stated in the first recital of this
Indenture and, more particularly, means any Security or Securities authenticated
and delivered  under this  Indenture;  provided,  however,  that, if at any time
there  is  more  than  one  Person  acting  as  Trustee  under  this  Indenture,
"Securities"  with  respect to the  Indenture as to which such Person is Trustee
shall have the meaning  stated in the first recital of this  Indenture and shall
more  particularly  mean  Securities  authenticated  and  delivered  under  this
Indenture,  exclusive,  however,  of  Securities  of any series as to which such
Person is not Trustee.

                  "Security   Register"  and  "Security   Registrar"   have  the
respective meanings specified in Section 305.

                  "Significant  Subsidiary"  means  any  Subsidiary  which  is a
"significant  subsidiary" (as defined in Article I, Rule 1-02 of Regulation S-X,
promulgated under the Securities Act of 1933, as amended) of the Company.

                  "Special  Record  Date"  for  the  payment  of  any  Defaulted
Interest on the Registered Securities of or within any series means a date fixed
by the Trustee pursuant to Section 307.

                  "Stated  Maturity",  when used with respect to any Security or
any  installment  of  principal  thereof  or  interest  thereon,  means the date
specified in such Security or a coupon representing such installment of interest
as the fixed date on which the principal of such Security or such installment of
principal or interest is due and payable.

                  "Subsidiary" means a corporation a majority of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries of the Company.  For the purposes of this definition,
"voting  stock" means stock having  voting power for the election of  directors,
whether at all times or only so long as no senior class of stock has such voting
power by reason of any contingency.

                  "Trust  Indenture Act" or "TIA" means the Trust  Indenture Act
of 1939,  as amended and as in force at the date as of which this  Indenture was
executed, except as provided in Section 905.

                  "Trustee" means the Person named as the "Trustee" in the first
paragraph of this  Indenture  until a successor  Trustee  shall have become such
pursuant  to  the  applicable  provisions  of  this  Indenture,  and  thereafter
"Trustee"  shall mean or include  each  Person who is then a Trustee  hereunder;
provided,  however,  that if at any  time  there is more  than one such  Person,
"Trustee" as used with respect to the  Securities  of any series shall mean only
the Trustee with respect to Securities of that series.

                  "United States" means, unless otherwise specified with respect
to any  Securities  pursuant  to  Section  301,  the  United  States of  America
(including  the states and the  District  of  Columbia),  its  territories,  its
possessions and other areas subject to its jurisdiction.

                  "United States person" means,  unless otherwise specified with
respect to any  Securities  pursuant  to Section  301,  an  individual  who is a
citizen or resident of the United States,  a  corporation,  partnership or other
entity created  organized in or under the laws of the United States or an estate
or trust the income of which is subject to United States federal income taxation
regardless of its source.

                  "Yield to Maturity"  means the yield to maturity,  computed at
the time of  issuance  of a Security  (or,  if  applicable,  at the most  recent
redetermination  of interest on such Security) and as set forth in such Security
in accordance  with  generally  accepted  United  States bond yield  computation
principles.

                                       7
<PAGE>
                  SECTION 102.  Compliance  Certificates and Opinions.  Upon any
application  or request by the Company to the  Trustee to take any action  under
any  provision of this  Indenture,  the Company  shall furnish to the Trustee an
Officers'  Certificate stating that all conditions  precedent,  if any, provided
for in this  Indenture  relating to the proposed  action have been complied with
and an Opinion of Counsel  stating  that in the opinion of such counsel all such
conditions  precedent,  if any, have been complied with, except that in the case
of any such  application or request as to which the furnishing of such documents
is  specifically  required by any provision of this  Indenture  relating to such
particular  application or request, no additional certificate or opinion need be
furnished.

                  Every certificate or opinion with respect to compliance with a
condition or covenant  provided for in this  Indenture  (including  certificates
delivered pursuant to Section 1006) shall include:

                           (1) a statement  that each  individual  signing  such
         certificate  or opinion has read such  condition  or  covenant  and the
         definitions herein relating thereto;

                           (2) a brief  statement  as to the nature and scope of
         the examination or investigation  upon which the statements or opinions
         contained in such certificate or opinion are based;

                           (3) a  statement  that,  in the  opinion of each such
         individual,  he  has  made  such  examination  or  investigation  as is
         necessary to enable him to express an informed opinion as to whether or
         not such condition or covenant has been complied with; and
                           (4) a statement as to whether, in the opinion of each
         such individual, such condition or covenant has been complied with.

                  SECTION 103.  Form of Documents  Delivered to Trustee.  In any
case where  several  matters are  required to be  certified  by or covered by an
opinion of any specified  Person,  it is not necessary  that all such matters be
certified  by, or covered by the opinion of, only one such Person,  or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion as to some  matters and one or more other such  Persons as to
other  matters,  and any such  Person may  certify or give an opinion as to such
matters in one or several documents.

                  Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters,  upon an Opinion of Counsel, or a
certificate of or representations  by counsel,  unless such officer knows, or in
the exercise of reasonable  care should know,  that the opinion,  certificate or
representations  with  respect  to the  matters  upon which his  certificate  or
opinion is based are  erroneous.  Any such  Opinion of Counsel,  certificate  or
representations may be based,  insofar as it relates to factual matters,  upon a
certificate or opinion of, or representations  by, an officer or officers of the
Company  or any  Subsidiary  stating  that the  information  as to such  factual
matters is in the  possession  of the  Company or such  Subsidiary,  unless such
counsel  knows that the  certificate  or opinion or  representations  as to such
matters are erroneous.

                  Where any Person is required  to make,  give or execute two or
more applications,  requests, consents,  certificates,  statements,  opinions or
other instruments under this Indenture,  they may, but need not, be consolidated
and form one instrument.

                  SECTION  104.  Acts  of  Holders.  (a)  Any  request,  demand,
authorization,  direction,  notice,  consent, waiver or other action provided by
this Indenture to be given or taken by Holders of the Outstanding  Securities of
all series or one or more  series,  as the case may be, may be  embodied  in and
evidenced by one or more  instruments of  substantially  similar tenor signed by
such Holders in person or by agents duly appointed in writing.  If Securities of
a series are issuable as Bearer Securities, any request, demand,  authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders of Securities of such series may, alternatively, be
embodied in and  evidenced by the record of Holders of Securities of such series
voting  in favor  thereof,  either in person

                                        8
<PAGE>
or by proxies duly appointed in writing, at any meeting of Holders of Securities
of such series duly called and held in accordance with the provisions of Article
Fifteen,  or a combination of such  instruments  and any such record.  Except as
herein  otherwise  expressly  provided,  such action shall become effective when
such  instrument or  instruments  or record or both are delivered to the Trustee
and, where it is hereby expressly required,  to the Company.  Such instrument or
instruments and any such record (and the action  embodied  therein and evidenced
thereby) are herein  sometimes  referred to as the "Act" of the Holders  signing
such  instrument  or  instruments  or so  voting at any such  meeting.  Proof of
execution of any such  instrument or of a writing  appointing any such agent, or
of the holding by any Person of a Security,  shall be sufficient for any purpose
of this Indenture and conclusive in favor of the Trustee and the Company and any
agent of the  Trustee or the  Company,  if made in the manner  provided  in this
Section.  The record of any meeting of Holders of Securities  shall be proved in
the manner provided in Section 1506.

                  (b) The fact and date of the  execution  by any  Person of any
such  instrument  or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer  authorized by
law to take  acknowledgments  of deeds,  certifying that the individual  signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution  is by a  signer  acting  in a  capacity  other  than  his  individual
capacity,  such certificate or affidavit shall also constitute  sufficient proof
of his authority.  The fact and date of the execution of any such  instrument or
writing,  or the authority of the Person  executing the same, may also be proved
in any other reasonable manner which the Trustee deems sufficient.

                  (c) The ownership of Registered  Securities shall be proved by
the Security Register.

                  (d) The  ownership of Bearer  Securities  may be proved by the
production  of  such  Bearer  Securities  or  by  a  certificate   executed,  as
depositary,  by any trust company,  bank, banker or other  depositary,  wherever
situated, if such certificate shall be deemed by the Trustee to be satisfactory,
showing that at the date therein  mentioned such Person had on deposit with such
depositary, or exhibited to it, the Bearer Securities therein described; or such
facts may be proved by the  certificate  or affidavit of the Person holding such
Bearer Securities,  if such certificate or affidavit is deemed by the Trustee to
be  satisfactory.  The Trustee and the Company may assume that such ownership of
any Bearer Security continues until (1) another certificate or affidavit bearing
a later date issued in respect of the same Bearer  Security is produced,  or (2)
such Bearer  Security is  produced to the Trustee by some other  Person,  or (3)
such Bearer  Security is surrendered in exchange for a Registered  Security,  or
(4) such  Bearer  Security is no longer  Outstanding.  The  ownership  of Bearer
Securities  may also be proved  in any other  manner  which  the  Trustee  deems
sufficient.

                  (e)  If  the  Company   shall  solicit  from  the  Holders  of
Registered Securities any request,  demand,  authorization,  direction,  notice,
consent,  waiver or other Act, the Company may, at its option, in or pursuant to
a Board  Resolution,  fix in  advance  a record  date for the  determination  of
Holders entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Company shall have no obligation to do so.
Notwithstanding  TIA Section  316(c),  such record date shall be the record date
specified  in or  pursuant to such Board  Resolution,  which shall be a date not
earlier  than  the date 30 days  prior  to the  first  solicitation  of  Holders
generally in connection  therewith and not later than the date such solicitation
is  completed.   If  such  a  record  date  is  fixed,  such  request,   demand,
authorization,  direction,  notice,  consent,  waiver  or other Act may be given
before or after such record date, but only the Holders of record at the close of
business on such  record date shall be deemed to be Holders for the  purposes of
determining   whether  Holders  of  the  requisite   proportion  of  Outstanding
Securities  have  authorized  or agreed or  consented to such  request,  demand,
authorization,  direction,  notice,  consent,  waiver or other Act, and for that
purpose the  Outstanding  Securities  shall be computed as of such record  date;
provided that no such authorization, agreement or consent by the Holders on such
record date shall be deemed effective unless it shall become effective  pursuant
to the  provisions  of this  Indenture  not later than eleven  months  after the
record date.

                  (f) Any request,  demand,  authorization,  direction,  notice,
consent,  waiver or other Act of the  Holder of any  Security  shall  bind every
future Holder of the same Security and the Holder of every Security  issued upon

                                        9
<PAGE>
the registration of transfer thereof or in exchange  therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee,  any
Security Registrar, any Paying Agent, any Authenticating Agent or the Company in
reliance  thereon,  whether  or not  notation  of such  action is made upon such
Security.

                  SECTION  105.  Notices,  etc.,  to Trustee  and  Company.  Any
request,  demand,  authorization,  direction,  notice, consent, waiver or Act of
Holders or other  document  provided or permitted  by this  Indenture to be made
upon, given or furnished to, or filed with,

                           (1) the Trustee by any Holder or by the Company shall
         be sufficient for every purpose hereunder if made, given,  furnished or
         filed in writing to or with the Trustee at its Corporate  Trust Office,
         Attention: ______________________, or

                           (2) the Company by the Trustee or by any Holder shall
         be sufficient  for every purpose  hereunder  (unless  otherwise  herein
         expressly  provided)  if in writing  and mailed,  first  class  postage
         prepaid, to the Company addressed to it at the address of its principal
         office  specified in the first  paragraph  of this  Indenture or at any
         other  address  previously  furnished  in writing to the Trustee by the
         Company.

                  SECTION 106. Notice to Holders;  Waiver.  Where this Indenture
provides  for  notice of any event to Holders of  Registered  Securities  by the
Company  or the  Trustee,  such  notice  shall  be  sufficiently  given  (unless
otherwise  herein  expressly  provided)  if in writing and  mailed,  first-class
postage  prepaid,  to each such Holder affected by such event, at his address as
it appears in the Security  Register,  not later than the latest  date,  and not
earlier than the earliest date, prescribed for the giving of such notice. In any
case where notice to Holders of Registered  Securities is given by mail, neither
the failure to mail such notice,  nor any defect in any notice so mailed, to any
particular  Holder shall affect the  sufficiency  of such notice with respect to
other  Holders of  Registered  Securities  or the  sufficiency  of any notice to
Holders of Bearer  Securities given as provided  herein.  Any notice mailed to a
Registered Holder in the manner herein  prescribed shall be conclusively  deemed
to have been  received  by such  Holder,  whether  or not such  Holder  actually
receives such notice.

                  If by reason of the suspension of or irregularities in regular
mail service or by reason of any other cause it shall be  impracticable  to give
such notice by mail, then such notification to Holders of Registered  Securities
as shall be made with the approval of the Trustee shall  constitute a sufficient
notification to such Holders for every purpose hereunder.

                  Except as  otherwise  expressly  provided  herein or otherwise
specified  with respect to any  Securities  pursuant to Section 301,  where this
Indenture provides for notice to Holders of Bearer Securities of any event, such
notice shall be  sufficiently  given if published in an Authorized  Newspaper in
The City of New York and in such  other  city or cities as may be  specified  in
such  Securities on a Business Day,  such  publication  to be not later than the
latest date, and not earlier than the earliest  date,  prescribed for the giving
of such  notice.  Any such notice shall be deemed to have been given on the date
of such  publication  or, if published  more than once, on the date of the first
such publication.

                  If  by  reason  of  the   suspension  of  publication  of  any
Authorized Newspaper or Authorized Newspapers or by reason of any other cause it
shall be impracticable to publish any notice to Holders of Bearer  Securities as
provided above,  then such notification to Holders of Bearer Securities as shall
be given with the approval of the Trustee shall constitute  sufficient notice to
such Holders for every purpose hereunder.  Neither the failure to give notice by
publication to any particular Holder of Bearer Securities as provided above, nor
any defect in any notice so  published,  shall  affect the  sufficiency  of such
notice with respect to other Holders of Bearer  Securities or the sufficiency of
any notice to Holders of Registered Securities given as provided herein.

                                       10
<PAGE>
                  Any request, demand, authorization, direction, notice, consent
or waiver  required or permitted  under this  Indenture  shall be in the English
language, except that any published notice may be in an official language of the
country of publication.

                  Where this Indenture  provides for notice in any manner,  such
notice may be waived in writing by the Person  entitled to receive  such notice,
either  before or after the event,  and such waiver shall be the  equivalent  of
such notice.  Waivers of notice by Holders shall be filed with the Trustee,  but
such filing  shall not be a condition  precedent  to the  validity of any action
taken in reliance upon such waiver.

                  SECTION 107.  Effect of Headings  and Table of  Contents.  The
Article  and  Section  headings  herein  and  the  Table  of  Contents  are  for
convenience only and shall not affect the construction hereof.

                  SECTION  108.  Successors  and  Assigns.   All  covenants  and
agreements  in this  Indenture  by the  Company  shall bind its  successors  and
assigns, whether so expressed or not.

                  SECTION 109.  Separability  Clause.  In case any  provision in
this  Indenture  or in any  Security  or coupon  shall be  invalid,  illegal  or
unenforceable,  the  validity,  legality  and  enforceability  of the  remaining
provisions shall not in any way be affected or impaired thereby.

                  SECTION 110. Benefits of Indenture.  Nothing in this Indenture
or in the Securities or coupons,  express or implied,  shall give to any Person,
other than the parties hereto,  any Security  Registrar,  any Paying Agent,  any
Authenticating  Agent and their successors hereunder and the Holders any benefit
or any legal or equitable right, remedy or claim under this Indenture.

                  SECTION 111.  Governing Law. This Indenture and the Securities
and coupons shall be governed by and construed in accordance with the law of The
Commonwealth  of  Massachusetts.  This Indenture is subject to the provisions of
the TIA that are required to be part of this Indenture and shall,  to the extent
applicable, be governed by such provisions.

                  SECTION 112.  Legal  Holidays.  In any case where any Interest
Payment Date, Redemption Date, Repayment Date, sinking fund payment date, Stated
Maturity or Maturity of any Security shall not be a Business Day at any Place of
Payment,  then  (notwithstanding  any other  provision of this  Indenture or any
Security or coupon other than a provision in the  Securities of any series which
specifically states that such provision shall apply in lieu hereof),  payment of
interest or any Additional Amounts or principal (and premium, if any) or sinking
fund payment need not be made at such Place of Payment on such date,  but may be
made on the next succeeding  Business Day at such Place of Payment with the same
force and  effect as if made on the  Interest  Payment  Date,  Redemption  Date,
Repayment  Date or sinking  fund  payment  date,  or at the Stated  Maturity  or
Maturity;  provided  that no interest  shall accrue on the amount so payable for
the period from and after such Interest Payment Date, Redemption Date, Repayment
Date,  sinking fund payment date,  Stated Maturity or Maturity,  as the case may
be.

                  SECTION 113. No Personal  Liability.  THE DECLARATION OF TRUST
OF THE  COMPANY,  AS AMENDED AND  RESTATED ON AUGUST 21,  1995, A COPY OF WHICH,
TOGETHER WITH ALL AMENDMENTS THERETO (THE  "DECLARATION"),  IS DULY FILED IN THE
OFFICE OF THE DEPARTMENT OF  ASSESSMENTS  AND TAXATION OF THE STATE OF MARYLAND,
PROVIDES  THAT THE NAME  "HOSPITALITY  PROPERTIES  TRUST" REFERS TO THE TRUSTEES
UNDER  THE  DECLARATION  COLLECTIVELY  AS  TRUSTEES,  BUT  NOT  INDIVIDUALLY  OR
PERSONALLY, AND THAT NO TRUSTEE, OFFICER, SHAREHOLDER,  EMPLOYEE OR AGENT OF THE
COMPANY SHALL BE HELD TO ANY PERSONAL LIABILITY,  JOINTLY OR SEVERALLY,  FOR ANY
OBLIGATION  OF, OR CLAIM  AGAINST,  THE  COMPANY.  ALL PERSONS  DEALING WITH THE
COMPANY,  IN ANY WAY,

                                       11
<PAGE>
SHALL LOOK ONLY TO THE ASSETS OF THE  COMPANY  FOR THE PAYMENT OF ANY SUM OR THE
PERFORMANCE OF ANY OBLIGATION.

                                   ARTICLE TWO

                                SECURITIES FORMS

                  SECTION 201. Forms of Securities.  The Registered  Securities,
if any,  of each  series and the Bearer  Securities,  if any, of each series and
related coupons shall be in  substantially  the forms as shall be established in
one or more indentures  supplemental  hereto or approved from time to time by or
pursuant to a Board  Resolution in accordance  with Section 301, shall have such
appropriate  insertions,  omissions,  substitutions  and other variations as are
required or permitted by this  Indenture or any indenture  supplemental  hereto,
and may  have  such  letters,  numbers  or  other  marks  of  identification  or
designation and such legends or  endorsements  placed thereon as the Company may
deem  appropriate  and as are  not  inconsistent  with  the  provisions  of this
Indenture,  or as may be  required  to  comply  with any law or with any rule or
regulation  made  pursuant  thereto  or  with  any  rule  or  regulation  of any
securities  exchange  on which the  Securities  may be listed,  or to conform to
usage.

                  Unless  otherwise  specified as  contemplated  by Section 301,
Bearer Securities shall have interest coupons attached.

                  The  definitive  Securities  and  coupons  shall  be  printed,
lithographed  or engraved or produced by any  combination  of these methods on a
steel engraved border or steel engraved  borders or may be produced in any other
manner,  all  as  determined  by the  officers  of the  Company  executing  such
Securities  or coupons,  as evidenced by their  execution of such  Securities or
coupons.

                  SECTION 202. Form of Trustee's  Certificate of Authentication.
Subject to Section 611, the Trustee's  certificate of authentication shall be in
substantially the following form:

         This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.

                           ________________________________
                                                as Trustee

                           By______________________________
                                        Authorized Officer

                  SECTION 203. Securities Issuable in Global Form. If Securities
of or within a series  are  issuable  in global  form,  as  specified  in and as
contemplated by Section 301, then, notwithstanding clause (8) of Section 301 and
the  provisions of Section 302, any such Security  shall  represent  such of the
Outstanding  Securities  of such  series as shall be  specified  therein and may
provide that it shall represent the aggregate  amount of Outstanding  Securities
of such series from time to time endorsed  thereon and that the aggregate amount
of Outstanding  Securities of such series  represented  thereby may from time to
time be  increased  or  decreased to reflect  exchanges.  Any  endorsement  of a
Security in global form to reflect  the amount,  or any  increase or decrease in
the amount, of Outstanding  Securities  represented thereby shall be made by the
Trustee in such manner and upon instructions  given by such Person or Persons as
shall be  specified  therein  or in the  Company  Order to be  delivered  to the
Trustee pursuant to Section 303 or 304. Subject to the provisions of Section 303
and, if  applicable,  Section 304, the Trustee  shall  deliver and redeliver any
Security in permanent global form in the manner and upon  instructions  given by
the Person or Persons specified therein or in the applicable Company Order. If a
Company  Order  pursuant to Section 303 or 304 has been, or  simultaneously  is,
delivered,  any  instructions

                                       12
<PAGE>
by the Company  with  respect to  endorsement  or delivery  or  redelivery  of a
Security in global form shall be in writing but need not comply with Section 102
and need not be accompanied by an Opinion of Counsel.

                  The provisions of the last sentence of Section 303 shall apply
to any Security  represented  by a Security in global form if such  Security was
never issued and sold by the Company and the Company delivers to the Trustee the
Security in global  form  together  with  written  instructions  (which need not
comply with  Section 102 and need not be  accompanied  by an Opinion of Counsel)
with regard to the reduction in the principal  amount of Securities  represented
thereby,  together with the written statement  contemplated by the last sentence
of Section 303.

                  Notwithstanding   the   provisions  of  Section  307,   unless
otherwise  specified as contemplated by Section 301, payment of principal of and
any premium and interest on any Security in permanent  global form shall be made
to the Person or Persons specified therein.

                  Notwithstanding  the  provisions  of Section 308 and except as
provided in the preceding  paragraph,  the Company, the Trustee and any agent of
the Company and the Trustee shall treat as the Holder of such  principal  amount
of Outstanding  Securities represented by a permanent global Security (i) in the
case of a permanent  global  Security  in  registered  form,  the Holder of such
permanent  global Security in registered form or (ii) in the case of a permanent
global Security in bearer form, Euroclear or Clearstream.

                                  ARTICLE THREE

                                 THE SECURITIES

                  SECTION  301.  Amount  Unlimited;   Issuable  in  Series.  The
aggregate  principal  amount  of  Securities  which  may  be  authenticated  and
delivered under this Indenture is unlimited.

                  The  Securities  may be  issued in one or more  series.  There
shall be established  in one or more Board  Resolutions or pursuant to authority
granted by one or more Board Resolutions and, subject to Section 303, set forth,
or  determined  in  the  manner  provided,  in  an  Officers'  Certificate,   or
established in one or more indentures supplemental hereto, prior to the issuance
of Securities of any series, any or all of the following, as applicable (each of
which (except for the matters set forth in clauses (1), (2) and (14) below),  if
so provided,  may be determined from time to time by the Company with respect to
unissued Securities of the series when issued from time to time):

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

                           (2) any limit upon the aggregate  principal amount of
         the  Securities of the series that may be  authenticated  and delivered
         under this Indenture (except for Securities authenticated and delivered
         upon  registration  of transfer of, or in exchange  for, or in lieu of,
         other  Securities of the series pursuant to Section 304, 305, 306, 906,
         1107 or 1305);

                           (3) the date or dates,  or the  method by which  such
         date or  dates  will be  determined,  on  which  the  principal  of the
         Securities of the series shall be payable;

                           (4) the rate or rates at which the  Securities of the
         series shall bear interest, if any, or the method by which such rate or
         rates shall be  determined,  the date or dates from which such interest
         shall  accrue  or the  method  by which  such  date or  dates  shall be
         determined,  the Interest  Payment Dates on which such interest will be
         payable and the Regular  Record Date, if any, for the interest  payable
         on any Registered  Security

                                       13
<PAGE>
         on any Interest Payment Date, or the method by which such date shall be
         determined,  and the basis upon which  interest  shall be calculated if
         other than that of a 360-day year of twelve 30-day months;

                           (5) the place or places where the  principal  of, any
         premium and interest on and any Additional  Amounts  payable in respect
         of,  Securities  of  the  series  shall  be  payable,   any  Registered
         Securities  of  the  series  may be  surrendered  for  registration  of
         transfer,  exchange or conversion and notices or demands to or upon the
         Company in respect of the  Securities of the series and this  Indenture
         may be served;

                           (6) the period or periods within which or the date or
         dates on which,  the price or  prices  at  which,  and other  terms and
         conditions  upon which  Securities  of the series may be  redeemed,  in
         whole or in part,  at the option of the  Company,  if the Company is to
         have the option;

                           (7) the obligation, if any, of the Company to redeem,
         repay or purchase Securities of the series pursuant to any sinking fund
         or analogous  provision or at the option of a Holder  thereof,  and the
         period or periods within which or the date or dates on which, the price
         or  prices  at  which,  and  other  terms  and  conditions  upon  which
         Securities  of the series shall be redeemed,  repaid or  purchased,  in
         whole or in part, pursuant to such obligation;

                           (8) if other  than  denominations  of $1,000  and any
         integral  multiple  thereof,  the denominations in which any Registered
         Securities  of the series  shall be issuable  and the  denomination  or
         denominations  in which any Bearer  Securities  of the series  shall be
         issuable;

                           (9) if other than  Dollars,  the Foreign  Currency or
         Currencies in which payment of the principal of (and premium,  if any),
         interest, if any, on, and Additional Amounts, if any, on the Securities
         of the series shall be payable,  in which the  Securities of the series
         shall be redeemed or purchased or in which the Securities of the series
         shall be denominated;

                           (10) if other than the principal amount thereof,  the
         portion of the principal  amount of Securities of the series that shall
         be payable upon  declaration of  acceleration  of the Maturity  thereof
         pursuant to Section 502 or, if applicable, the portion of the principal
         amount of  Securities of the series that is  convertible  in accordance
         with the  provisions  of this  Indenture,  or the  method by which such
         portion shall be determined;

                           (11)  whether the amount of payments of  principal of
         (and  premium,  if any) or interest,  if any, on the  Securities of the
         series may be determined  with reference to an index,  formula or other
         method  (which  index,   formula  or  method  may  be  based,   without
         limitation,  on one  or  more  currencies,  currency  units,  composite
         currencies,  commodities,  equity  indices or other  indices),  and the
         manner in which such amounts shall be determined;

                           (12) whether the principal of (and  premium,  if any)
         or interest, if any on or Additional Amounts, if any, on the Securities
         of the series are to be  payable,  at the  election of the Company or a
         Holder thereof, in a currency or currencies,  currency unit or units or
         composite  currency  or  currencies  other  than  that  in  which  such
         Securities  are  denominated  or stated to be  payable,  the  period or
         periods  within which,  and the terms and conditions  upon which,  such
         election  may be made,  and the time and manner of, and identity of the
         exchange rate agent with  responsibility  for  determining the exchange
         rate  between the  currency or  currencies, currency  unit or units or
         composite  currency or  currencies  in which such  Securities  are
         denominated  or  stated to be  payable  and the currency or currencies,
         currency unit or units or composite currency or currencies in which
         such Securities are to be paid;

                           (13) provisions,  if any,  granting special rights to
         the Holders of  Securities  of the series upon the  occurrence  of such
         events as may be specified;

                                       14
<PAGE>

                           (14)  any  deletions   from,   modifications   of  or
         additions  to the Events of Default or  covenants  of the  Company  set
         forth in this  Indenture  with  respect  to  Securities  of the  series
         (whether or not such Events of Default or covenants are consistent with
         the Events of Default or covenants set forth herein);

                           (15)  whether  Securities  of  the  series  are to be
         issuable as Registered  Securities,  Bearer Securities (with or without
         coupons) or both,  any  restrictions  applicable to the offer,  sale or
         delivery  of  Bearer   Securities  and  the  terms  upon  which  Bearer
         Securities of the series may be exchanged for Registered  Securities of
         the  series  and  vice  versa  (if  permitted  by  applicable  laws and
         regulations),  whether any  Securities of the series are to be issuable
         initially in temporary  global form and whether any  Securities  of the
         series are to be  issuable  in  permanent  global  form with or without
         coupons and, if so, whether  beneficial owners of interests in any such
         permanent global Security may exchange such interests for Securities of
         such series and of like tenor of any authorized  form and  denomination
         and the  circumstances  under which any such  exchanges  may occur,  if
         other than in the manner  provided in Section 305,  and, if  Registered
         Securities of the series are to be issuable as a global  Security,  the
         identity of the depositary for such series;

                           (16) the date as of which any  Bearer  Securities  of
         the series and any temporary global Security  representing  Outstanding
         Securities  of the  series  shall be  dated  if other  than the date of
         original issuance of the first Security of the series to be issued;

                           (17)  the  Person  to  whom  any   interest   on  any
         Registered  Security of the series shall be payable,  if other than the
         Person  in  whose  name  that  Security  (or  one or  more  Predecessor
         Securities)  is  registered  at the close of  business  on the  Regular
         Record Date for such  interest,  the manner in which,  or the Person to
         whom,  any  interest  on any Bearer  Security  of the  series  shall be
         payable,  if  otherwise  than upon  presentation  and  surrender of the
         coupons  appertaining  thereto as they severally mature, and the extent
         to which, or the manner in which,  any interest  payable on a temporary
         global Security on an Interest  Payment Date will be paid if other than
         in the manner provided in Section 304;

                           (18) the  applicability,  if any,  of  Sections  1402
         and/or  1403 to the  Securities  of the  series and any  provisions  in
         modification  of, in addition to or in lieu of any of the provisions of
         Article Fourteen;

                           (19)  if the  Securities  of  such  series  are to be
         issuable  in  definitive  form  (whether  upon  original  issue or upon
         exchange of a temporary  Security of such  series) only upon receipt of
         certain  certificates  or  other  documents  or  satisfaction  of other
         conditions, then the form and/or terms of such certificates,  documents
         or conditions;

                           (20) if the Securities of the series are to be issued
         upon the  exercise  of  warrants,  the time,  manner and place for such
         Securities to be authenticated and delivered;

                           (21) whether and under what circumstances the Company
         will pay  Additional  Amounts as  contemplated  by Section  1007 on the
         Securities  of the  series  to any  Holder  who is not a United  States
         person  (including any  modification to the definition of such term) in
         respect of any tax,  assessment  or  governmental  charge  and,  if so,
         whether  the  Company  will have the option to redeem  such  Securities
         rather  than pay such  Additional  Amounts  (and the  terms of any such
         option);

                           (22) the obligation, if any, of the Company to permit
         the  conversion of the  Securities of such series into Common Shares or
         Preferred  Shares of the Company or other  securities,  as the case may
         be, and the terms and conditions upon  which such  conversion  shall be
         effected (including,  without limitation,  the initial conversion price
         or rate,  the  conversion  period,  any  adjustment  of the  applicable
         conversion  price and any  requirements  relative to the reservation of
         such shares for purposes of conversion);

                                       15
<PAGE>
                           (23) the terms and  conditions,  if any,  upon  which
         payment of the Securities of such series shall be  subordinated  to the
         Securities  of  another  series or other  indebtedness  of the  Company
         (including, without limitation, indebtedness which ranks senior to such
         Securities;  restrictions  on  payments  to Holders of such  Securities
         while a default with respect to such senior indebtedness is continuing;
         restrictions,  if any, on  payments  to the Holders of such  Securities
         following an Event of Default; and any requirements for Holders of such
         Securities  to remit  certain  payments  to the  holders of such senior
         indebtedness);

                           (24)  if  the  Securities  of  the  series  are to be
         guaranteed, the term and conditions of such guarantee;

                           (25) if other than the Trustee,  the identity of each
         Security Registrar and/or Paying Agent for the series; and

                           (26) any other terms of the series (which terms shall
         not be inconsistent with the provisions of this Indenture).

                  All Securities of any one series and the coupons  appertaining
to any Bearer Securities of such series shall be substantially identical except,
in the case of  Registered  Securities,  as to  denominations  and except as may
otherwise be provided in or pursuant to the Board  Resolution  establishing  the
series (subject to Section 303) and set forth in an Officers'  Certificate or in
any indenture  supplemental hereto. All Securities of any one series need not be
issued  at the same  time  and,  unless  otherwise  provided,  a  series  may be
reopened,  without the  consent of the  Holders,  for  issuances  of  additional
Securities of such series.

                  If any of  the  terms  of the  Securities  of any  series  are
established by action taken pursuant to one or more Board Resolutions, a copy of
an appropriate  record of such action(s)  shall be certified by the Secretary or
an Assistant  Secretary of the Company and  delivered to the Trustee at or prior
to the  delivery of the  Officers'  Certificate  setting  forth the terms of the
Securities of such series.

                  SECTION  302.  Denominations.  The  Securities  of each series
shall be issuable in such denominations as shall be specified as contemplated by
Section 301. With respect to Securities of any series denominated in Dollars, in
the absence of any such  provisions,  the Registered  Securities of such series,
other than  Registered  Securities  issued in global  form  (which may be of any
denomination),  shall be issuable in  denominations  of $1,000 and any  integral
multiple thereof.

                  SECTION 303. Execution,  Authentication,  Delivery and Dating.
The Securities and any coupons  appertaining thereto shall be executed on behalf
of the Company by its  President or one of its Vice  Presidents,  under its seal
reproduced  thereon,  and  attested  by its  Secretary  or one of its  Assistant
Secretaries.  The  signature  of any of these  officers  on the  Securities  and
coupons may be manual or facsimile  signatures of the present or any future such
authorized  officer  and  may  be  imprinted  or  otherwise  reproduced  on  the
Securities.

                  Securities   or  coupons   bearing  the  manual  or  facsimile
signatures  of  individuals  who  were at any time the  proper  officers  of the
Company shall bind the Company,  notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the  authentication  and delivery
of such  Securities or did not hold such offices at the date of such  Securities
or coupons.

                  At any time and from  time to time  after  the  execution  and
delivery of this  Indenture,  the Company may deliver  Securities of any series,
together with any coupon  appertaining  thereto,  executed by the Company to the
Trustee for authentication, together with a Company Order for the authentication
and delivery of such Securities,  and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities;  provided,  however,

                                       16
<PAGE>
that, in connection  with its original  issuance,  no Bearer  Security  shall be
mailed or otherwise delivered to any location in the United States; and provided
further  that,  unless  otherwise  specified  with  respect  to  any  series  of
Securities  pursuant  to Section  301, a Bearer  Security  may be  delivered  in
connection  with its original  issuance  only if the Person  entitled to receive
such Bearer Security shall have furnished a certificate in the form set forth in
Exhibit A-1 to this Indenture or such other certificate as may be specified with
respect to any series of  Securities  pursuant to Section 301,  dated no earlier
than 15 days prior to the earlier of the date on which such  Bearer  Security is
delivered  and  the  date  on  which  any  temporary   Security   first  becomes
exchangeable  for such  Bearer  Security  in  accordance  with the terms of such
temporary Security and this Indenture. If any Security shall be represented by a
permanent global Bearer Security, then, for purposes of this Section and Section
304,  the  notation of a  beneficial  owner's  interest  therein  upon  original
issuance of such  Security or upon  exchange of a portion of a temporary  global
Security shall be deemed to be delivery in connection with its original issuance
of such beneficial owner's interest in such permanent global Security. Except as
permitted  by Section 306, the Trustee  shall not  authenticate  and deliver any
Bearer Security  unless all  appurtenant  coupons for interest then matured have
been detached and  cancelled.  If all the Securities of any series are not to be
issued  at one  time  and if the  Board  Resolution  or  supplemental  indenture
establishing  such  series  shall so permit,  such  Company  Order may set forth
procedures  acceptable  to the Trustee for the issuance of such  Securities  and
determining the terms of particular  Securities of such series, such as interest
rate or formula,  maturity  date,  date of issuance and date from which interest
shall accrue.  In authenticating  such Securities,  and accepting the additional
responsibilities  under this  Indenture  in  relation  to such  Securities,  the
Trustee  shall be entitled  to receive,  and  (subject  to TIA  Sections  315(a)
through 315(d)) shall be fully protected in relying upon,

                           (i) an Opinion of Counsel stating that

                                    (a) the form or forms of such Securities and
                  any  coupons  have been  established  in  conformity  with the
                  provisions of this Indenture;

                                    (b) the  terms  of such  Securities  and any
                  coupons  have  been   established   in  conformity   with  the
                  provisions of this Indenture; and

                                    (c)  such  Securities,   together  with  any
                  coupons  appertaining  thereto,  when completed by appropriate
                  insertions  and executed  and  delivered by the Company to the
                  Trustee for  authentication in accordance with this Indenture,
                  authenticated  and delivered by the Trustee in accordance with
                  this  Indenture  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 applicable bankruptcy,  insolvency,  reorganization
                  and other similar laws of general applicability relating to or
                  affecting the enforcement of creditors'  rights  generally and
                  to general equitable principles; and

                           (ii)  an  Officers'   Certificate  stating  that  all
         conditions  precedent  provided for in this  Indenture  relating to the
         issuance of the  Securities  have been  complied  with and that, to the
         best of the knowledge of the signers of such  certificate,  no Event of
         Default with respect to any of the  Securities  shall have occurred and
         be continuing.

If such  form or terms  have  been so  established,  the  Trustee  shall  not be
required  to  authenticate  such  Securities  if the  issue  of such  Securities
pursuant  to this  Indenture  will  affect the  Trustee's  own  rights,  duties,
obligations  or immunities  under the Securities and this Indenture or otherwise
in a manner which is not reasonably acceptable to the Trustee.

                  Notwithstanding  the  provisions  of  Section  301  and of the
preceding paragraph, if all the Securities of any series are not to be issued at
one  time,  it shall  not be  necessary  to  deliver  an  Officers'  Certificate
otherwise  required pursuant to Section 301 or a Company Order, or an Opinion of
Counsel or an Officers' Certificate otherwise required pursuant to the preceding
paragraph  at the time of issuance of each  Security  of such  series,  but such
order,

                                       17
<PAGE>
opinion and  certificates,  with appropriate  modifications to cover such future
issuances,  shall be  delivered  at or before the time of  issuance of the first
Security of such series. Each Registered Security shall be dated the date of its
authentication  and each Bearer Security shall be dated as of the date specified
as contemplated by Section 301.

                  No Security or coupon  shall be entitled to any benefit  under
this Indenture or be valid or obligatory for any purpose unless there appears on
such  Security  or Security to which such coupon  appertains  a  certificate  of
authentication  substantially  in the form  provided for herein duly executed by
the Trustee by manual signature of an authorized  officer,  and such certificate
upon any Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered  hereunder and is entitled to
the benefits of this Indenture.  Notwithstanding the foregoing,  if any Security
shall have been authenticated and delivered  hereunder but never issued and sold
by the Company,  and the Company  shall deliver such Security to the Trustee for
cancellation as provided in Section 309 together with a written statement (which
need not comply with  Section 102 and need not be  accompanied  by an Opinion of
Counsel)  stating  that such  Security  has never  been  issued  and sold by the
Company,  for all purposes of this Indenture such Security shall be deemed never
to have been  authenticated and delivered  hereunder and shall never be entitled
to the benefits of this Indenture.

                  SECTION 304. Temporary Securities. (a) Pending the preparation
of  definitive  Securities  of any series,  the Company  may  execute,  and upon
Company Order the Trustee shall authenticate and deliver,  temporary  Securities
which  are  printed,  lithographed,   typewritten,   mimeographed  or  otherwise
produced,  in any  authorized  denomination,  substantially  of the tenor of the
definitive  Securities in lieu of which they are issued, in registered form, or,
if authorized,  in bearer form with one or more coupons or without coupons,  and
with such appropriate insertions, omissions,  substitutions and other variations
as the  officers  executing  such  Securities  may  determine,  as  conclusively
evidenced by their  execution of such  Securities.  In the case of Securities of
any series, such temporary Securities may be in global form.

                  Except in the case of  temporary  Securities  in  global  form
(which  shall be  exchanged in  accordance  with Section  304(b) or as otherwise
provided in or pursuant to a Board Resolution),  if temporary  Securities of any
series are issued,  the Company will cause definitive  Securities of that series
to be prepared without  unreasonable  delay. After the preparation of definitive
Securities  of such series,  the  temporary  Securities  of such series shall be
exchangeable  for  definitive  Securities  of such series upon  surrender of the
temporary  Securities of such series at the office or agency of the Company in a
Place of Payment for that series,  without charge to the Holder.  Upon surrender
for  cancellation  of any  one  or  more  temporary  Securities  of  any  series
(accompanied by any non-matured coupons appertaining thereto), the Company shall
execute and the Trustee shall  authenticate  and deliver in exchange  therefor a
like principal amount of definitive  Securities of the same series of authorized
denominations;  provided,  however,  that no definitive Bearer Security shall be
delivered in exchange for a temporary Registered Security;  and provided further
that a definitive Bearer Security shall be delivered in exchange for a temporary
Bearer Security only in compliance with the conditions set forth in Section 303.
Until so exchanged, the temporary Securities of any series shall in all respects
be entitled to the same benefits under this  Indenture as definitive  Securities
of such series.

                  (b)  Unless  otherwise  provided  in or  pursuant  to a  Board
Resolution,   this  Section  304(b)  shall  govern  the  exchange  of  temporary
Securities  issued in global form other than through the  facilities  of DTC. If
any such temporary Security is issued in global form, then such temporary global
Security shall,  unless otherwise  provided therein,  be delivered to the London
office of a depositary or common depositary (the "Common  Depositary"),  for the
benefit of Euroclear and Clearstream,  for credit to the respective  accounts of
the beneficial  owners of such Securities (or to such other accounts as they may
direct).

                  Without  unnecessary delay but in any event not later than the
date  specified in, or determined  pursuant to the terms of, any such  temporary
global Security (the "Exchange Date"),  the Company shall deliver to the

                                       18
<PAGE>
Trustee  definitive  Securities,  in  aggregate  principal  amount  equal to the
principal amount of such temporary global Security,  executed by the Company. On
or after the Exchange  Date,  such global  Security  shall be surrendered by the
Common Depositary to the Trustee, as the Company's agent for such purpose, to be
exchanged,  in whole or from  time to time in part,  for  definitive  Securities
without charge, and the Trustee shall authenticate and deliver,  in exchange for
each portion of such temporary  global  Security,  an equal aggregate  principal
amount of definitive  Securities of the same series of authorized  denominations
and of like  tenor  as the  portion  of such  temporary  global  Security  to be
exchanged.  The  definitive  Securities to be delivered in exchange for any such
temporary global Security shall be in bearer form,  registered  form,  permanent
global  bearer form or permanent  global  registered  form,  or any  combination
thereof,  as specified as  contemplated  by Section 301, and, if any combination
thereof is so specified, as requested by the beneficial owner thereof; provided,
however,  that,  unless  otherwise  specified in such temporary global Security,
upon such presentation by the Common Depositary,  such temporary global Security
is accompanied by a certificate dated the Exchange Date or a subsequent date and
signed by Euroclear as to the portion of such temporary global Security held for
its account then to be exchanged and a certificate  dated the Exchange Date or a
subsequent  date and signed by  Clearstream  as to the portion of such temporary
global Security held for its account then to be exchanged,  each in the form set
forth  in  Exhibit  A-2 to  this  Indenture  or in  such  other  form  as may be
established pursuant to Section 301; and provided further that definitive Bearer
Securities  shall be delivered  in exchange for a portion of a temporary  global
Security only in compliance with the requirements of Section 303.

                  Unless otherwise  specified in such temporary global Security,
the  interest of a  beneficial  owner of  Securities  of a series in a temporary
global Security shall be exchanged for definitive  Securities of the same series
and of like tenor following the Exchange Date when the account holder  instructs
Euroclear or  Clearstream,  as the case may be, to request such  exchange on his
behalf  and  delivers  to  Euroclear  or  Clearstream,  as the  case  may be,  a
certificate  in the form set forth in Exhibit A-1 to this  Indenture (or in such
other forms as may be  established  pursuant to Section  301),  dated no earlier
than 15 days prior to the Exchange Date,  copies of which  certificate  shall be
available  from the offices of  Euroclear  and  Clearstream,  the  Trustee,  any
Authenticating  Agent  appointed for such series of  Securities  and each Paying
Agent.  Unless otherwise  specified in such temporary global Security,  any such
exchange shall be made free of charge to the beneficial owners of such temporary
global Security,  except that a Person receiving definitive Securities must bear
the cost of insurance,  postage,  transportation and the like unless such Person
takes  delivery  of such  definitive  Securities  in  person at the  offices  of
Euroclear or Clearstream.  Definitive  Securities in bearer form to be delivered
in exchange for any portion of a temporary  global  Security  shall be delivered
only outside the United States.

                  Until exchanged in full as hereinabove provided, the temporary
Securities  of any series shall in all respects be entitled to the same benefits
under this  Indenture as  definitive  Securities  of the same series and of like
tenor  authenticated  and delivered  hereunder,  except that,  unless  otherwise
specified as contemplated by Section 301, interest payable on a temporary global
Security on an Interest  Payment Date for  Securities  of such series  occurring
prior  to the  applicable  Exchange  Date  shall be  payable  to  Euroclear  and
Clearstream  on such  Interest  Payment  Date upon  delivery  by  Euroclear  and
Clearstream  to the Trustee of a  certificate  or  certificates  in the form set
forth  in  Exhibit  A-2 to this  Indenture  (or in such  other  forms  as may be
established  pursuant to Section 301), for credit without further interest on or
after such Interest  Payment Date to the respective  accounts of persons who are
the beneficial owners of such temporary global Security on such Interest Payment
Date and who have each  delivered to Euroclear or  Clearstream,  as the case may
be, a  certificate  dated no earlier than 15 days prior to the Interest  Payment
Date occurring  prior to such Exchange Date in the form set forth as Exhibit A-1
to this  Indenture  (or in such other  forms as may be  established  pursuant to
Section 301).  Notwithstanding  anything to the contrary herein  contained,  the
certifications  made pursuant to this paragraph shall satisfy the  certification
requirements  of the preceding two paragraphs of this Section 304 (b) and of the
third  paragraph  of Section  303 of this  Indenture  and the  interests  of the
Persons  who are the  beneficial  owners of a  temporary  global  Security  with
respect to which such  certification  was made will be exchanged for  definitive
Securities of the same series and of like tenor on the Exchange Date or the date
of  certification  if such date occurs after the Exchange Date,  without further
act or deed by such  beneficial  owners.  Except as  otherwise  provided in this
paragraph,  no  payments  of  principal  or  interest  owing  with  respect to a
beneficial interest in a temporary global Security will be made unless and until
such interest in such temporary global Security shall have been exchanged for an
interest

                                       19
<PAGE>
in a definitive Security.  Any interest so received by Euroclear and Clearstream
and not paid as herein  provided  shall be returned to the Trustee  prior to the
expiration of two years after such  Interest  Payment Date in order to be repaid
to the Company.

                  SECTION  305.  Registration,   Registration  of  Transfer  and
Exchange.  The Company shall cause to be kept at the  Corporate  Trust Office of
the  Trustee or in any  office or agency of the  Company in a Place of Payment a
register for each series of Securities (the registers  maintained in such office
or in any such  office or  agency of the  Company  in a Place of  Payment  being
herein sometimes referred to collectively as the "Security  Register") in which,
subject to such  reasonable  regulations as it may prescribe,  the Company shall
provide for the  registration  of  Registered  Securities  and of  transfers  of
Registered  Securities.  The Security  Register  shall be in written form or any
other form  capable of being  converted  into  written  form within a reasonable
time. The Trustee,  at its Corporate Trust Office, is hereby initially appointed
"Security  Registrar" for the purpose of registering  Registered  Securities and
transfers of Registered Securities on such Security Register as herein provided.
In the event that the Trustee  shall cease to be  Security  Registrar,  it shall
have the right to examine the Security Register at all reasonable times.

                  Subject to the  provisions of this Section 305, upon surrender
for  registration  of transfer of any  Registered  Security of any series at any
office or agency of the  Company  in a Place of  Payment  for that  series,  the
Company shall execute,  and the Trustee shall  authenticate and deliver,  in the
name of the  designated  transferee or  transferees,  one or more new Registered
Securities of the same series,  of any  authorized  denominations  and of a like
aggregate principal amount, bearing a number not contemporaneously  outstanding,
and containing identical terms and provisions.

                  Subject to the  provisions  of this Section 305, at the option
of the Holder,  Registered  Securities  of any series may be exchanged for other
Registered  Securities of the same series,  of any  authorized  denomination  or
denominations  and of a like aggregate  principal amount,  containing  identical
terms  and  provisions,  upon  surrender  of  the  Registered  Securities  to be
exchanged at any such office or agency.  Whenever any such Registered Securities
are so  surrendered  for exchange,  the Company shall  execute,  and the Trustee
shall  authenticate  and deliver,  the  Registered  Securities  which the Holder
making the  exchange is entitled to receive.  Unless  otherwise  specified  with
respect to any series of  Securities  as  contemplated  by Section  301,  Bearer
Securities may not be issued in exchange for Registered Securities.

                  If (but only if) permitted by the applicable  Board Resolution
and (subject to Section 303) set forth in the applicable Officers'  Certificate,
or in any indenture  supplemental  hereto,  delivered as contemplated by Section
301,  at the  option of the  Holder,  Bearer  Securities  of any  series  may be
exchanged  for  Registered  Securities  of the  same  series  of any  authorized
denominations and of a like aggregate principal amount and tenor, upon surrender
of the Bearer Securities to be exchanged at any such office or agency,  with all
unmatured  coupons and all matured coupons in default thereto  appertaining.  If
the Holder of a Bearer  Security is unable to produce any such unmatured  coupon
or coupons or matured coupon or coupons in default,  any such permitted exchange
may be effected if the Bearer  Securities  are  accompanied  by payment in funds
acceptable  to the Company in an amount equal to the face amount of such missing
coupon or coupons,  or the  surrender of such  missing  coupon or coupons may be
waived  by the  Company  and the  Trustee  if there is  furnished  to them  such
security  or  indemnity  as they may require to save each of them and any Paying
Agent harmless. If thereafter the Holder of such Security shall surrender to any
Paying  Agent any such missing  coupon in respect of which such a payment  shall
have been made,  such  Holder  shall be  entitled  to receive the amount of such
payment; provided,  however, that, except as otherwise provided in Section 1002,
interest  represented  by coupons  shall be payable only upon  presentation  and
surrender  of those  coupons at an office or agency  located  outside the United
States.  Notwithstanding the foregoing,  in case a Bearer Security of any series
is  surrendered  at any such  office  or agency in a  permitted  exchange  for a
Registered  Security  of the same  series  and like  tenor  after  the  close of
business at such office or agency on (i) any Regular  Record Date and before the
opening of business at such office or agency on the  relevant  Interest  Payment
Date, or (ii) any Special Record Date and before the opening of business at such
office or agency on the related proposed date for payment of Defaulted Interest,
such Bearer  Security shall be surrendered

                                       20
<PAGE>
without the coupon  relating to such Interest  Payment Date or proposed date for
payment, as the case may be, and interest or Defaulted Interest, as the case may
be,  will not be payable on such  Interest  Payment  Date or  proposed  date for
payment,  as the case may be, in respect of the  Registered  Security  issued in
exchange  for such Bearer  Security,  but will be payable  only to the Holder of
such  coupon  when due in  accordance  with the  provisions  of this  Indenture.
Whenever any Bearer  Securities  are so  surrendered  for exchange,  the Company
shall execute,  and the Trustee shall  authenticate and deliver,  the Securities
which the Holder making the exchange is entitled to receive.

                  Notwithstanding  the foregoing,  except as otherwise specified
as  contemplated  by  Section  301,  any  permanent  global  Security  shall  be
exchangeable  only as  provided in this  paragraph.  If the  depositary  for any
permanent global Security is DTC, then, unless the terms of such global Security
expressly  permit such global  Security to be  exchanged in whole or in part for
definitive Securities, a global Security may be transferred, in whole but not in
part, only to a nominee of DTC, or by a nominee of DTC to DTC, or to a successor
to DTC for such  global  Security  selected  or  approved by the Company or to a
nominee of such  successor  to DTC. If at any time DTC notifies the Company that
it is unwilling or unable to continue as depositary  for the  applicable  global
Security  or  Securities  or if at any time DTC ceases to be a  clearing  agency
registered under the Securities Exchange Act of 1934, as amended, if so required
by  applicable  law  or  regulation,  the  Company  shall  appoint  a  successor
depositary  with  respect  to  such  global  Security  or  Securities.  If (x) a
successor  depositary for such global Security or Securities is not appointed by
the  Company  within 90 days after the Company  receives  such notice or becomes
aware of such unwillingness, inability or ineligibility, (y) an Event of Default
has occurred and is continuing and the beneficial owners representing a majority
in principal amount of the applicable  series of Securities  represented by such
global Security or Securities  advise DTC to cease acting as depositary for such
global  Security  or  Securities  or (z) the  Company,  in its sole  discretion,
determines at any time that all  Outstanding  Securities (but not less than all)
of any series  issued or issuable  in the form of one or more global  Securities
shall no longer be represented by such global  Security or Securities,  then the
Company  shall  execute,   and  the  Trustee  shall  authenticate  and  deliver,
definitive  Securities of like series,  rank, tenor and terms in definitive form
in an aggregate  principal  amount equal to the principal  amount of such global
Security or Securities.  If any  beneficial  owner of an interest in a permanent
global  Security is otherwise  entitled to exchange such interest for Securities
of such series and of like tenor and principal amount of another authorized form
and denomination,  as specified as contemplated by Section 301 and provided that
any applicable  notice provided in the permanent global Security shall have been
given,  then  without  unnecessary  delay  but in any  event no  later  than the
earliest  date on which such  interest may be so  exchanged,  the Company  shall
execute, and the Trustee shall authenticate and deliver,  definitive  Securities
in aggregate  principal  amount equal to the principal amount of such beneficial
owner's  interest in such permanent  global  Security.  On or after the earliest
date on which such interests may be so exchanged, such permanent global Security
shall be  surrendered  for exchange by DTC or such other  depositary as shall be
specified  in the Company  Order with  respect  thereto to the  Trustee,  as the
Company's agent for such purpose; provided,  however, that no such exchanges may
occur  during a period  beginning  at the opening of business 15 days before any
selection of  Securities  to be redeemed  and ending on the relevant  Redemption
Date if the Security for which exchange is requested may be among those selected
for  redemption;  and  provided  further  that no Bearer  Security  delivered in
exchange  for a  portion  of a  permanent  global  Security  shall be  mailed or
otherwise  delivered  to any  location  in the United  States.  If a  Registered
Security is issued in exchange  for any portion of a permanent  global  Security
after the close of business at the office or agency where such  exchange  occurs
on (i) any Regular Record Date and before the opening of business at such office
or agency on the relevant Interest Payment Date, or (ii) any Special Record Date
and  before the  opening of  business  at such  office or agency on the  related
proposed date for payment of Defaulted Interest, interest or Defaulted Interest,
as the case  may be,  will  not be  payable  on such  Interest  Payment  Date or
proposed  date for  payment,  as the case may be, in respect of such  Registered
Security, but will be payable on such Interest Payment Date or proposed date for
payment,  as the case may be, only to the Person to whom  interest in respect of
such portion or such permanent global Security is payable in accordance with the
provisions of this Indenture.

                  All  Securities  issued upon any  registration  of transfer or
exchange of Securities shall be the valid obligations of the Company, evidencing
the same debt,  and entitled to the same benefits under this  Indenture,  as the
Securities surrendered upon such registration of transfer or exchange.

                                       21
<PAGE>
                  Every  Registered   Security   presented  or  surrendered  for
registration of transfer or for exchange or redemption  shall (if so required by
the Company or the Security Registrar) be duly endorsed,  or be accompanied by a
written  instrument  of  transfer  in form  satisfactory  to the Company and the
Security  Registrar,  duly  executed by the Holder  thereof or his attorney duly
authorized in writing.

                  No  service  charge  shall  be made  for any  registration  of
transfer or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental  charge that may be imposed in
connection with any  registration  of transfer or exchange of Securities,  other
than  exchanges  pursuant to Section 304,  906,  1107 or 1305 not  involving any
transfer.

                  The  Company  or the  Trustee,  as  applicable,  shall  not be
required (i) to issue, register the transfer of or exchange any Security if such
Security may be among those selected for redemption during a period beginning at
the  opening of  business  15 days  before  selection  of the  Securities  to be
redeemed  under  Section 1103 and ending at the close of business on (A) if such
Securities are issuable only as Registered Securities, the day of the mailing of
the relevant  notice of redemption  and (B) if such  Securities  are issuable as
Bearer  Securities,  the day of the first  publication of the relevant notice of
redemption or, if such Securities are also issuable as Registered Securities and
there is no publication,  the mailing of the relevant  notice of redemption,  or
(ii) to register the transfer of or exchange any Registered Security so selected
for  redemption  in  whole  or in part,  except,  in the case of any  Registered
Security to be redeemed in part,  the  portion  thereof not to be  redeemed,  or
(iii) to exchange  any Bearer  Security so selected for  redemption  except that
such a Bearer Security may be exchanged for a Registered Security of that series
and  of  like  tenor;   provided  that  such   Registered   Security   shall  be
simultaneously  surrendered  for  redemption,  or (iv) to  issue,  register  the
transfer of or exchange any Security which has been surrendered for repayment at
the option of the Holder, except that portion, if any, of such Security which is
not to be so repaid.

                  SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security or a Security with a mutilated coupon  appertaining to
it is surrendered to the Trustee or the Company, together with, in proper cases,
such  security or  indemnity as may be required by the Company or the Trustee to
save each of them or any agent of either of them  harmless,  the  Company  shall
execute and the Trustee shall  authenticate  and deliver in exchange  therefor a
new Security of the same series and principal amount, containing identical terms
and  provisions  and bearing a number not  contemporaneously  outstanding,  with
coupons  corresponding to the coupons,  if any,  appertaining to the surrendered
Security.

                  If there shall be  delivered to the Company and to the Trustee
(i)  evidence to their  satisfaction  of the  destruction,  loss or theft of any
Security or coupon,  and (ii) such  security or  indemnity as may be required by
them to save each of them and any agent of either of them harmless, then, in the
absence of written  notice to the Company or the Trustee  that such  Security or
coupon has been acquired by a bona fide purchaser, the Company shall execute and
upon its request the Trustee shall authenticate and deliver, in lieu of any such
destroyed,  lost or stolen  Security or in exchange  for the Security to which a
destroyed,  lost or stolen coupon  appertains (with all appurtenant  coupons not
destroyed,  lost or stolen),  a new  Security  of the same series and  principal
amount,  containing  identical  terms and  provisions  and  bearing a number not
contemporaneously  outstanding,  with coupons  corresponding to the coupons,  if
any, appertaining to such destroyed,  lost or stolen Security or to the Security
to which such destroyed, lost or stolen coupon appertains.

                  Notwithstanding the provisions of the previous two paragraphs,
in case any such  mutilated,  destroyed,  lost or stolen  Security or coupon has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, with coupons corresponding to the coupons, if
any, appertaining to such destroyed,  lost or stolen Security or to the Security
to which such destroyed, lost or stolen coupon appertains,  pay such Security or
coupon;  provided,  however, that payment of principal of (and premium, if any),
any interest on and any  Additional  Amounts with respect to, Bearer  Securities
shall,  except as  otherwise  provided in Section  1002,  be payable  only at an

                                       22
<PAGE>
office or agency  located  outside  the  United  States  and,  unless  otherwise
specified as  contemplated  by Section  301,  any interest on Bearer  Securities
shall  be  payable  only  upon   presentation   and  surrender  of  the  coupons
appertaining thereto.

                  Upon the issuance of any new Security under this Section,  the
Company may require  the payment of a sum  sufficient  to cover any tax or other
governmental  charge  that may be  imposed  in  relation  thereto  and any other
expenses (including the fees and expenses of the Trustee) connected therewith.

                  Every new  Security  of any series with its  coupons,  if any,
issued  pursuant  to  this  Section  in lieu of any  destroyed,  lost or  stolen
Security,  or in exchange  for a Security to which a  destroyed,  lost or stolen
coupon  appertains,   shall  constitute  an  original   additional   contractual
obligation of the Company, whether or not the destroyed, lost or stolen Security
and its coupons, if any, or the destroyed, lost or stolen coupon shall be at any
time  enforceable  by anyone,  and shall be entitled to all the benefits of this
Indenture equally and proportionately  with any and all other Securities of that
series and their coupons, if any, duly issued hereunder.

                  The  provisions  of  this  Section  are  exclusive  and  shall
preclude (to the extent  lawful) all other  rights and remedies  with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities or
coupons.

                  SECTION 307. Payment of Interest;  Interest Rights  Preserved.
Except  as  otherwise  specified  with  respect  to a series  of  Securities  in
accordance  with the  provisions  of Section  301,  interest  on any  Registered
Security that is payable,  and is  punctually  paid or duly provided for, on any
Interest  Payment  Date shall be paid to the Person in whose name that  Security
(or one or more  Predecessor  Securities) is registered at the close of business
on the  Regular  Record  Date for such  interest  at the office or agency of the
Company maintained for such purpose pursuant to Section 1002; provided, however,
that  each  installment  of  interest  on  any  Registered  Security  may at the
Company's option be paid by (i) mailing a check for such interest, payable to or
upon the written order of the Person entitled  thereto  pursuant to Section 308,
to the  address of such  Person as it appears on the  Security  Register or (ii)
transfer to an account maintained by the payee located inside the United States.

                  Unless otherwise  provided as contemplated by Section 301 with
respect to the Securities of any series, payment of interest may be made, in the
case of a Bearer  Security,  by transfer to an account  maintained  by the payee
with a bank located outside the United States.

                  Unless  otherwise  provided as  contemplated  by Section  301,
every permanent  global Security will provide that interest,  if any, payable on
any Interest Payment Date will be paid to DTC, Euroclear and/or Clearstream,  as
the case may be, with respect to that portion of such permanent  global Security
held for its account by Cede & Co. or the Common Depositary, as the case may be,
for the purpose of permitting  such party to credit the interest  received by it
in respect of such permanent  global  Security to the accounts of the beneficial
owners thereof.

                  In case a Bearer  Security  of any  series is  surrendered  in
exchange  for a  Registered  Security of such series after the close of business
(at an office or agency in a Place of Payment  for such  series) on any  Regular
Record Date and before the opening of business (at such office or agency) on the
next succeeding Interest Payment Date, such Bearer Security shall be surrendered
without the coupon relating to such Interest  Payment Date and interest will not
be payable on such Interest  Payment Date in respect of the Registered  Security
issued in exchange  for such Bearer  Security,  but will be payable  only to the
Holder  of such  coupon  when  due in  accordance  with the  provisions  of this
Indenture.

                  Except as  otherwise  specified  with  respect  to a series of
Securities in accordance with the provisions of Section 301, any interest on any
Registered Security of any series that is payable, but is not punctually paid or
duly  provided  for, on any  Interest  Payment Date  (herein  called  "Defaulted
Interest") shall forthwith cease to be payable to the registered  Holder thereof
on the relevant  Regular  Record Date by virtue of having been such Holder,  and
such  Defaulted  Interest  may be paid by the  Company,  at its election in each
case, as provided in clause (1) or (2) below:

                                       23
<PAGE>
                  (1) The  Company  may elect to make  payment of any  Defaulted
         Interest  to the Persons in whose names the  Registered  Securities  of
         such series (or their respective Predecessor Securities) are registered
         at the close of  business  on a Special  Record Date for the payment of
         such Defaulted Interest,  which shall be fixed in the following manner.
         The  Company  shall  notify  the  Trustee  in  writing of the amount of
         Defaulted  Interest proposed to be paid on each Registered  Security of
         such series and the date of the  proposed  payment  (which shall not be
         less than 20 days after such notice is received by the Trustee), and at
         the same time the Company  shall  deposit with the Trustee an amount of
         money  in the  currency  or  currencies,  currency  unit  or  units  or
         composite currency or currencies in which the Securities of such series
         are payable (except as otherwise  specified pursuant to Section 301 for
         the Securities of such series) equal to the aggregate  amount  proposed
         to be  paid in  respect  of  such  Defaulted  Interest  or  shall  make
         arrangements  satisfactory  to the Trustee for such deposit on or prior
         to the date of the proposed  payment,  such money when  deposited to be
         held in trust for the benefit of the Persons entitled to such Defaulted
         Interest as in this clause provided.  Thereupon the Trustee shall fix a
         Special  Record Date for the payment of such  Defaulted  Interest which
         shall not be more  than 15 days and not less than 10 days  prior to the
         date of the  proposed  payment  and not  less  than 10 days  after  the
         receipt  by the  Trustee  of the notice of the  proposed  payment.  The
         Trustee shall  promptly  notify the Company of such Special Record Date
         and, in the name and at the expense of the Company,  shall cause notice
         of the  proposed  payment of such  Defaulted  Interest  and the Special
         Record Date therefor to be mailed, first-class postage prepaid, to each
         Holder of  Registered  Securities  of such  series at his address as it
         appears in the  Security  Register  not less than 10 days prior to such
         Special  Record Date. The Trustee may, in its  discretion,  in the name
         and at the  expense  of the  Company,  cause  a  similar  notice  to be
         published  at least once in an  Authorized  Newspaper  in each Place of
         Payment,  but such publications  shall not be a condition  precedent to
         the  establishment of such Special Record Date.  Notice of the proposed
         payment of such Defaulted Interest and the Special Record Date therefor
         having been mailed as aforesaid,  such Defaulted Interest shall be paid
         to the Persons in whose names the Registered  Securities of such series
         (or their  respective  Predecessor  Securities)  are  registered at the
         close of  business on such  Special  Record Date and shall no longer be
         payable pursuant to the following clause (2). In case a Bearer Security
         of any series is surrendered  for transfer or exchange at the office or
         agency  in a Place  of  Payment  for such  series  after  the  close of
         business at such office or agency on any Special Record Date and before
         the  opening  of  business  at such  office or  agency  on the  related
         proposed date for payment of Defaulted  Interest,  such Bearer Security
         shall be surrendered  without the coupon relating to such proposed date
         of payment and Defaulted  Interest will not be payable on such proposed
         date of  payment  in  respect  of the  Registered  Security  issued  in
         exchange  for such  Bearer  Security,  but will be payable  only to the
         Holder of such coupon when due in  accordance  with the  provisions  of
         this Indenture.

                  (2) The Company may make payment of any Defaulted  Interest on
         the Registered  Securities of any series in any other lawful manner not
         inconsistent with the requirements of any securities  exchange on which
         such Securities may be listed,  and upon such notice as may be required
         by such exchange,  if, after notice given by the Company to the Trustee
         of the proposed payment pursuant to this clause, such manner of payment
         shall be deemed practicable by the Trustee.

                  Subject  to the  foregoing  provisions  of  this  Section  and
Section 305, each Security  delivered under this Indenture upon  registration of
transfer of or in exchange for or in lieu of any other  Security shall carry the
rights to interest accrued and unpaid, and to accrue, which were carried by such
other Security.

                  SECTION 308.  Persons Deemed Owners.  Prior to due presentment
of a Registered Security for registration of transfer,  the Company, the Trustee
and any agent of the  Company or the  Trustee may treat the Person in whose name
such  Registered  Security is  registered  as the owner of such Security for the
purpose of receiving payment of principal of (and premium, if any), and (subject
to Sections 305 and 307) interest on, such Registered Security and for all other
purposes  whatsoever,  whether or not such Registered  Security is overdue,  and
neither  the  Company,  the  Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.

                                       24
<PAGE>
                  Title to any  Bearer  Security  and any  coupons  appertaining
thereto  shall pass by delivery.  The Company,  the Trustee and any agent of the
Company  or the  Trustee  may treat the Holder of any  Bearer  Security  and the
Holder of any coupon as the  absolute  owner of such  Security or coupon for the
purpose of  receiving  payment  thereof or on account  thereof and for all other
purposes  whatsoever,  whether or not such  Security or coupon is  overdue,  and
neither  the  Company,  the  Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.

                  None of the  Company,  the  Trustee,  any Paying  Agent or the
Security  Registrar will have any  responsibility or liability for any aspect of
the  records  relating to or payments  made on account of  beneficial  ownership
interests  of a  Security  in global  form or for  maintaining,  supervising  or
reviewing any records relating to such beneficial ownership interests.

                  Notwithstanding  the  foregoing,  with  respect  to any global
Security, 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 any  depositary,  as a Holder,  with
respect to such global Security or impair, as between such depositary and owners
of  beneficial  interests in such global  Security,  the  operation of customary
practices  governing  the  exercise  of the  rights of such  depositary  (or its
nominee) as Holder of such global Security.

                  SECTION  309.   Cancellation.   All   Securities  and  coupons
surrendered  for  payment,  redemption,  repayment  at the option of the Holder,
registration  of transfer or  exchange  or for credit  against any sinking  fund
payment shall, if surrendered to any Person other than the Trustee, be delivered
to the Trustee,  and any such  Securities and coupons and Securities and coupons
surrendered  directly  to the  Trustee  for any such  purpose  shall be promptly
cancelled  by it.  The  Company  may at any  time  deliver  to the  Trustee  for
cancellation any Securities  previously  authenticated  and delivered  hereunder
which the Company may have acquired in any manner whatsoever, and may deliver to
the  Trustee  (or  to  any  other  Person  for  delivery  to  the  Trustee)  for
cancellation any Securities previously authenticated hereunder which the Company
has not issued and sold,  and all  Securities  so  delivered  shall be  promptly
cancelled by the Trustee. If the Company shall so acquire any of the Securities,
however,  such acquisition  shall not operate as a redemption or satisfaction of
the  indebtedness  represented by such Securities  unless and until the same are
surrendered   to  the  Trustee  for   cancellation.   No  Securities   shall  be
authenticated in lieu of or in exchange for any Securities cancelled as provided
in this  Section,  except as expressly  permitted by this  Indenture.  Cancelled
Securities and coupons held by the Trustee shall be destroyed by the Trustee and
the Trustee  shall  deliver a certificate  of such  destruction  to the Company,
unless by a Company Order the Company directs their return to it.

                  SECTION  310.  Computation  of  Interest.  Except as otherwise
specified  as  contemplated  by Section 301 with  respect to  Securities  of any
series, interest on the Securities of each series shall be computed on the basis
of a 360-day year consisting of twelve 30-day months.

                                  ARTICLE FOUR

                           SATISFACTION AND DISCHARGE

                  SECTION 401.  Satisfaction  and Discharge of  Indenture.  This
Indenture  shall upon Company Request cease to be of further effect with respect
to any series of Securities  specified in such Company Request (except as to any
surviving  rights of  registration of transfer or exchange of Securities of such
series  herein  expressly  provided  for and any  right  to  receive  Additional
Amounts,  as provided  in Section  1007),  and the  Trustee,  upon  receipt of a
Company  Order,  and at  the  expense  of  the  Company,  shall  execute  proper
instruments  acknowledging  satisfaction  and discharge of this  Indenture as to
such series when

                           (1)  either

                                       25
<PAGE>
                                    (A)   all    Securities   of   such   series
                  theretofore  authenticated  and delivered and all coupons,  if
                  any, appertaining thereto (other than (i) coupons appertaining
                  to Bearer  Securities  surrendered for exchange for Registered
                  Securities and maturing after such exchange,  whose  surrender
                  is not required or has been waived as provided in Section 305,
                  (ii)  Securities  and coupons of such  series  which have been
                  destroyed, lost or stolen and which have been replaced or paid
                  as provided in Section  306,  (iii)  coupons  appertaining  to
                  Securities  called  for  redemption  and  maturing  after  the
                  relevant  Redemption  Date, whose surrender has been waived as
                  provided in Section 1106,  and (iv)  Securities and coupons of
                  such  series  for whose  payment  money has  theretofore  been
                  deposited  in  trust  or  segregated  and held in trust by the
                  Company and  thereafter  repaid to the  Company or  discharged
                  from such  trust,  as  provided  in  Section  1003)  have been
                  delivered to the Trustee for cancellation; or

                                    (B) all  Securities  of such  series and, in
                  the  case  of (i) or  (ii)  below,  any  coupons  appertaining
                  thereto,   not  theretofore   delivered  to  the  Trustee  for
                  cancellation

                                            (i)       have    become   due   and
                                                      payable, or

                                            (ii)      will    become   due   and
                                                      payable  at  their  Stated
                                                      Maturity  within one year,
                                                      or

                                            (iii)    if redeemable at the option
                                                     of the  Company,  are to be
                                                     called    for    redemption
                                                     within   one   year   under
                                                     arrangements   satisfactory
                                                     to  the   Trustee  for  the
                                                     giving    of    notice   of
                                                     redemption  by the  Trustee
                                                     in  the  name,  and  at the
                                                     expense, of the Company,

                  and the Company,  in the case of (i), (ii) or (iii) above, has
                  irrevocably  deposited  or  caused  to be  deposited  with the
                  Trustee  as funds in trust for such  purpose  an amount in the
                  currency or  currencies,  currency  unit or units or composite
                  currency or currencies in which the  Securities of such series
                  are  payable,  sufficient  to pay  and  discharge  the  entire
                  indebtedness   on  such   Securities   and  such  coupons  not
                  theretofore  delivered  to the Trustee for  cancellation,  for
                  principal  (and  premium,  if  any)  and  interest,   and  any
                  Additional  Amounts with respect thereto,  to the date of such
                  deposit (in the case of  Securities  which have become due and
                  payable) or to the Stated Maturity or Redemption  Date, as the
                  case may be;

                           (2) the  Company  has paid or  caused  to be paid all
         other sums payable hereunder by the Company; and

                           (3) the  Company  has  delivered  to the  Trustee  an
         Officers'  Certificate and an Opinion of Counsel, each stating that all
         conditions  precedent  herein provided for relating to the satisfaction
         and  discharge of this  Indenture as to such series have been  complied
         with.

The obligations of the Company to the Trustee and any predecessor  Trustee under
Section 606, the  obligations of the Company to any  Authenticating  Agent under
Section 611 and, if money shall have been deposited with and held by the Trustee
pursuant to subclause (B) of clause (1) of this Section,  the obligations of the
Trustee under  Section 402 and the last  paragraph of Section 1003 shall survive
the satisfaction and discharge of this Indenture.

                  SECTION  402.  Application  of  Trust  Funds.  Subject  to the
provisions of the last paragraph of Section 1003,  all money  deposited with the
Trustee  pursuant  to Section  401 shall be held in trust and  applied by it, in
accordance  with  the  provisions  of  the  Securities,  the  coupons  and  this
Indenture,  to  the  payment,  either  directly  or

                                       26
<PAGE>
through any Paying Agent  (including the Company acting as its own Paying Agent)
as the Trustee may determine,  to the Persons entitled thereto, of the principal
(and premium, if any), and any interest and Additional Amounts for whose payment
such money has been  deposited  with or received by the Trustee,  but such money
need not be segregated from other funds except to the extent required by law.

                                  ARTICLE FIVE

                                    REMEDIES

                  SECTION 501. Events of Default.  "Event of Default",  wherever
used herein with respect to any particular  series of Securities,  means any one
of the  following  events  (whatever  the reason  for such Event of Default  and
whether or not it shall be voluntary or  involuntary or be effected by operation
of law or pursuant to any  judgment,  decree or order of any court or any order,
rule or regulation of any administrative or governmental body):

                           (1)  default in the payment of any  interest  upon or
         any  Additional  Amounts  payable in respect  of any  Security  of that
         series or of any  coupon  appertaining  thereto,  when  such  interest,
         Additional  Amounts or coupon becomes due and payable,  and continuance
         of such default for a period of 30 days; or

                           (2)  default in the payment of the  principal  of (or
         premium,  if any,  on) any  Security of that series when it becomes due
         and payable at its Maturity; or

                           (3)  default  in  the  deposit  of any  sinking  fund
         payment,  when and as due by the terms of any  Security of that series;
         or

                           (4) default in the  performance of, or breach of, any
         covenant  of the  Company in this  Indenture  (other  than a covenant a
         default  in whose  performance  or whose  breach is  elsewhere  in this
         Section specifically dealt with or which has been expressly included in
         this Indenture  solely for the benefit of a series of Securities  other
         than that  series),  and  continuance  of such  default or breach for a
         period  of 60 days  after there has been given,  by registered or
         certified  mail, to the Company by the  Trustee or to the  Company and
         the Trustee by the Holders of at least a majority in principal  amount
         of the Outstanding  Securities of that  series a written  notice
         specifying  such  default or breach and requiring  it to be remedied
         and stating that such notice is a "Notice of Default" hereunder; or

                           (5) a  default  under any  bond,  debenture,  note or
         other evidence of indebtedness  of the Company,  or under any mortgage,
         indenture or other instrument of the Company  (including a default with
         respect to Securities of any series other than that series) under which
         there may be issued or by which there may be secured  any  indebtedness
         of the  Company  (or by any  Subsidiary,  the  repayment  of which  the
         Company has guaranteed or for which the Company is directly responsible
         or liable as obligor  or  guarantor),  whether  such  indebtedness  now
         exists or shall hereafter be created,  which default shall constitute a
         failure to pay an aggregate  principal amount exceeding  $__________ of
         such  indebtedness  when due and payable  after the  expiration  of any
         applicable grace period with respect thereto and shall have resulted in
         such   indebtedness  in  an  aggregate   principal   amount   exceeding
         $__________  becoming or being  declared  due and payable  prior to the
         date on which it would  otherwise have become due and payable,  without
         such indebtedness  having been discharged,  or such acceleration having
         been  rescinded  or  annulled,  within a period of 10 days after  there
         shall have been given,  by registered or certified mail, to the Company
         by the  Trustee or to the  Company and the Trustee by the Holders of at
         least a majority in principal  amount of the Outstanding  Securities of
         that series a written notice  specifying such default and requiring the
         Company  to cause  such  indebtedness  to be  discharged  or cause such
         acceleration  to be  rescinded or annulled and stating that such notice
         is a "Notice of Default" hereunder; or

                                       27
<PAGE>

                           (6)  the  Company  or  any   Significant   Subsidiary
         pursuant to or within the meaning of any Bankruptcy Law:

                                    (A) commences a voluntary case,

                                    (B)  consents  to the  entry of an order for
                  relief against it in an involuntary case,

                                    (C)  consents  to  the   appointment   of  a
                  Custodian  of it or  for  all  or  substantially  all  of  its
                  property, or

                                    (D)  makes  a  general  assignment  for  the
                  benefit of its creditors; or

                           (7) a court of competent jurisdiction enters an order
         or decree under any Bankruptcy Law that:

                                    (A) is for relief against the Company or any
                  Significant Subsidiary in an involuntary case,

                                    (B)  appoints a Custodian  of the Company or
                  any Significant  Subsidiary or for all or substantially all of
                  either of its property, or

                                    (C) orders the liquidation of the Company or
                  any  Significant  Subsidiary,  and the order or decree remains
                  unstayed and in effect for 90 days; or

                           (8) any other Event of Default  provided with respect
         to Securities of that series.

As used in this Section 501, the term "Bankruptcy Law" means Title 11, U.S. Code
or any  similar  Federal  or State law for the  relief of  debtors  and the term
"Custodian" means any receiver,  trustee, assignee,  liquidator or other similar
official under any Bankruptcy Law.

                  SECTION  502.   Acceleration   of  Maturity;   Rescission  and
Annulment.  If an Event of Default with respect to  Securities  of any series at
the time  Outstanding  occurs and is continuing  (other than an Event of Default
described in Section 501(6) or 501(7)),  then and in every such case the Trustee
or  the  Holders  of not  less  than  a  majority  in  principal  amount  of the
Outstanding  Securities  of that series may declare  the  principal  (or, if any
Securities are Original Issue Discount  Securities or Indexed  Securities,  such
portion of the  principal as may be  specified in the terms  thereof) of all the
Securities  of that  series to be due and  payable  immediately,  by a notice in
writing to the Company  (and to the Trustee if given by the  Holders),  and upon
any such  declaration  such principal or specified  portion thereof shall become
immediately due and payable.  If an Event of Default described in Section 501(6)
or 501(7)  with  respect to any  series of  Securities  at the time  outstanding
occurs, the principal amount of all of the Securities of that series (or, in the
case of any such Original Issue Discount Securities or Indexed Securities,  such
portion  of the  principal  as may be  specified  in  the  terms  thereof)  will
automatically,  and  without  any action by the  Trustee or any Holder  thereof,
become immediately due and payable.

                  At any time  after such a  declaration  of  acceleration  with
respect to  Securities  of any  series  has been made and  before a judgment  or
decree  for  payment  of the  money  due has been  obtained  by the  Trustee  as
hereinafter  in this  Article  provided,  the Holders of a majority in principal
amount of the  Outstanding  Securities of that series,  by written notice to the
Company  and the  Trustee,  may  rescind  and  annul  such  declaration  and its
consequences if:

                                       28
<PAGE>
                           (1) the  Company  has  paid  or  deposited  with  the
         Trustee  a sum  sufficient  to pay in the  currency,  currency  unit or
         composite  currency in which the  Securities of such series are payable
         (except  as  otherwise  specified  pursuant  to  Section  301  for  the
         Securities of such series):

                                    (A) all overdue  installments of interest on
                  and  any  Additional   Amounts   payable  in  respect  of  all
                  Outstanding Securities of that series and any related coupons,

                                    (B) the principal of (and  premium,  if any,
                  on) any  Outstanding  Securities  of that  series  which  have
                  become due otherwise than by such  declaration of acceleration
                  and interest thereon at the rate or rates borne by or provided
                  for in such Securities,

                                    (C) to  the  extent  that  payment  of  such
                  interest is lawful,  interest  upon  overdue  installments  of
                  interest and any Additional Amounts at the rate or rates borne
                  by or provided for in such Securities, and

                                    (D) all sums paid or advanced by the Trustee
                  hereunder   and   the   reasonable   compensation,   expenses,
                  disbursements  and  advances  of the  Trustee,  its agents and
                  counsel; and

                           (2) all Events of Default with respect to  Securities
         of that  series,  other than the  nonpayment  of the  principal  of (or
         premium,  if any) or interest on  Securities  of that series which have
         become due solely by such declaration of acceleration,  have been cured
         or waived as provided in Section 513.

No such  rescission  shall  affect  any  subsequent  default or impair any right
consequent thereon.

                  SECTION  503.   Collection  of  Indebtedness   and  Suits  for
Enforcement by Trustee. The Company covenants that if:

                           (1) default is made in the payment of any installment
         of  interest or  Additional  Amounts,  if any,  on any  Security of any
         series and any related  coupon when such interest or Additional  Amount
         becomes due and payable and such default  continues  for a period of 30
         days, or

                           (2) default is made in the  payment of the  principal
         of (or premium, if any, on) any Security of any series at its Maturity,

then the Company will, upon demand of the Trustee,  pay to the Trustee,  for the
benefit of the Holders of such Securities of such series and coupons,  the whole
amount then due and payable on such  Securities  and coupons for principal  (and
premium, if any) and interest and Additional Amounts thereon, with interest upon
any overdue  principal (and premium,  if any) and, to the extent that payment of
such interest shall be legally  enforceable,  upon any overdue  installments  of
interest or Additional Amounts thereon, if any, at the rate or rates borne by or
provided for in such Securities,  and, in addition thereto,  such further amount
as shall be sufficient to cover the costs and expenses of collection,  including
the  reasonable  compensation,  expenses,  disbursements  and  advances  of  the
Trustee, its agents and counsel.

                  If the Company fails to pay such amounts  forthwith  upon such
demand,  the Trustee,  in its own name and as trustee of an express  trust,  may
institute  a  judicial  proceeding  for the  collection  of the  sums so due and
unpaid,  and may prosecute such proceeding to judgment or final decree,  and may
enforce the same against the Company or any other  obligor upon such  Securities
of such series and  collect the moneys  adjudged or decreed to be payable in the
manner  provided by law out of the property of the Company or any other  obligor
upon such Securities of such series, wherever situated.

                                       29
<PAGE>
                  If an Event of  Default  with  respect  to  Securities  of any
series occurs and is continuing,  the Trustee may in its  discretion  proceed to
protect and enforce  its rights and the rights of the Holders of  Securities  of
such series and any related coupons by such appropriate  judicial proceedings as
the Trustee  shall deem most  effectual  to protect and enforce any such rights,
whether  for the  specific  enforcement  of any  covenant or  agreement  in this
Indenture or in aid of the exercise of any power granted  herein,  or to enforce
any other proper remedy.

                  SECTION 504.  Trustee May File Proofs of Claim. In case of the
pendency   of   any   receivership,    insolvency,   liquidation,    bankruptcy,
reorganization,   arrangement,   adjustment,   composition   or  other  judicial
proceeding  relative to the Company or any other obligor upon the  Securities or
the  property of the Company or of such other  obligor or their  creditors,  the
Trustee  (irrespective  of whether the principal of the Securities of any series
shall  then be due  and  payable  as  therein  expressed  or by  declaration  or
otherwise and  irrespective of whether the Trustee shall have made any demand on
the  Company  for the payment of overdue  principal  of, or premium,  if any, or
interest on, the Securities) shall be entitled and empowered, by intervention in
such proceeding or otherwise:

                           (i) to file and prove a claim  for the whole  amount,
         or such lesser amount as may be provided for in the  Securities of such
         series, of principal (and premium,  if any) and interest and Additional
         Amount,  if any,  owing and unpaid in respect of the  Securities and to
         file such other papers or documents as may be necessary or advisable in
         order to have the claims of the  Trustee  (including  any claim for the
         reasonable  compensation,  expenses,  disbursements and advances of the
         Trustee,  its agents and  counsel)  and of the Holders  allowed in such
         judicial proceeding, and

                           (ii) to  collect  and  receive  any  moneys  or other
         property  payable or  deliverable  on any such claims and to distribute
         the same;

and any custodian,  receiver,  assignee, trustee,  liquidator,  sequestrator (or
other similar official) in any such judicial  proceeding is hereby authorized by
each Holder of  Securities  of such series and coupons to make such  payments to
the Trustee,  and in the event that the Trustee  shall  consent to the making of
such payments  directly to the Holders,  to pay to the Trustee any amount due to
it for the reasonable compensation,  expenses, disbursements and advances of the
Trustee and any  predecessor  Trustee,  their agents and counsel,  and any other
amounts due the Trustee or any predecessor Trustee under Section 606.

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

                  SECTION 505. Trustee May Enforce Claims Without  Possession of
Securities or Coupons.  All rights of action and claims under this  Indenture or
any of the  Securities or coupons may be prosecuted  and enforced by the Trustee
without the  possession of any of the  Securities  or coupons or the  production
thereof in any proceeding relating thereto,  and any such proceeding  instituted
by the Trustee shall be brought in its own name as trustee of an express  trust,
and any  recovery  of judgment  shall,  after  provision  for the payment of the
reasonable  compensation,  expenses,  disbursements and advances of the Trustee,
its agents and counsel,  be for the ratable benefit of the Holders of Securities
and coupons in respect of which such judgment has been recovered.

                  SECTION  506.  Application  of  Money  Collected.   Any  money
collected  by the  Trustee  pursuant  to this  Article  shall be  applied in the
following  order,  at the date or dates fixed by the Trustee and, in case of the
distribution  of such money on  account of  principal  (or  premium,  if any) or
interest and any  Additional  Amounts,  upon  presentation  of the Securities or
coupons, or both, as the case may be, and the notation thereon of the payment if
only partially paid and upon surrender thereof if fully paid:

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<PAGE>
                           FIRST:  To  the  payment  of all  amounts  due to the
         Trustee and any predecessor Trustee under Section 606;

                           SECOND:  To the payment of the  amounts  then due and
         unpaid upon the Securities  and coupons for principal (and premium,  if
         any) and interest and any  Additional  Amounts  payable,  in respect of
         which  or for the  benefit  of which  such  money  has been  collected,
         ratably,  without preference or priority of any kind,  according to the
         aggregate  amounts due and payable on such  Securities  and coupons for
         principal  (and  premium,  if any),  interest and  Additional  Amounts,
         respectively; and

                           THIRD:  To the payment of the  remainder,  if any, to
         the Company.

                  SECTION 507. Limitation on Suits. No Holder of any Security of
any  series  or any  related  coupon  shall  have  any  right to  institute  any
proceeding,  judicial or otherwise,  with respect to this Indenture,  or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless:

                           (1) such Holder has  previously  given written notice
         to the Trustee of a  continuing  Event of Default  with  respect to the
         Securities of that series;

                           (2)  the  Holders  of not  less  than a  majority  in
         principal  amount of the  Outstanding  Securities  of that series shall
         have made written  request to the Trustee to institute  proceedings  in
         respect of such Event of Default in its own name as Trustee hereunder;

                           (3)  such  Holder  or  Holders  have  offered  to the
         Trustee   reasonable   indemnity   against  the  costs,   expenses  and
         liabilities to be incurred in compliance with such request;

                           (4) the Trustee for 60 days after its receipt of such
         notice, request and offer of indemnity has failed to institute any such
         proceeding; and

                           (5)  no  direction  inconsistent  with  such  written
         request has been given to the Trustee  during such 60-day period by the
         Holders of a majority in principal amount of the Outstanding Securities
         of that series;

it being  understood and intended that no one or more of such Holders shall have
any right in any manner  whatever by virtue of, or by availing of, any provision
of this  Indenture to affect,  disturb or  prejudice  the rights of any other of
such Holders,  or to obtain or to seek to obtain priority or preference over any
other of such  Holders or to enforce any right under this  Indenture,  except in
the manner  herein  provided  and for the equal and ratable  benefit of all such
Holders.

                  SECTION  508.   Unconditional  Right  of  Holders  to  Receive
Principal, Premium, if any, Interest and Additional Amounts. Notwithstanding any
other  provision in this  Indenture,  the Holder of any Security or coupon shall
have the right which is absolute  and  unconditional  to receive  payment of the
principal  of (and  premium,  if any)  and  (subject  to  Sections  305 and 307)
interest on, and any Additional  Amounts in respect of, such Security or payment
of such coupon on the respective due dates  expressed in such Security or coupon
(or, in the case of redemption,  on the  Redemption  Date) and to institute suit
for the  enforcement of any such payment,  and such rights shall not be impaired
without the consent of such Holder.

                  SECTION  509.  Restoration  of  Rights  and  Remedies.  If the
Trustee or any Holder of a Security or coupon has  instituted  any proceeding to
enforce any right or remedy under this  Indenture and such  proceeding  has been
discontinued or abandoned for any reason,  or has been  determined  adversely to
the  Trustee or to such  Holder,  then and in every such case the  Company,  the
Trustee  and the  Holders  of  Securities  and  coupons  shall,  subject  to any
determination  in such  proceeding,  be restored  severally and  respectively to
their former  positions  hereunder and

                                       31
<PAGE>
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.

                  SECTION  510.  Rights  and  Remedies  Cumulative.   Except  as
otherwise  provided  with respect to the  replacement  or payment of  mutilated,
destroyed, lost or stolen Securities or coupons in the last paragraph of Section
306, no right or remedy herein  conferred  upon or reserved to the Trustee or to
the Holders of  Securities  or coupons is intended to be  exclusive of any other
right or remedy,  and every right and remedy shall,  to the extent  permitted by
law,  be  cumulative  and in  addition  to every  other  right and remedy  given
hereunder or now or  hereafter  existing at law or in equity or  otherwise.  The
assertion or employment of any right or remedy  hereunder,  or otherwise,  shall
not prevent the  concurrent  assertion or  employment  of any other  appropriate
right or remedy.

                  SECTION  511.  Delay  or  Omission  Not  Waiver.  No  delay or
omission of the  Trustee or of any Holder of any  Security or coupon to exercise
any right or remedy  accruing  upon any Event of Default  shall  impair any such
right or  remedy  or  constitute  a waiver of any such  Event of  Default  or an
acquiescence therein.  Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised  from time to time,  and as often
as may be deemed  expedient,  by the Trustee or by the Holders of  Securities or
coupons, as the case may be.

                  SECTION 512. Control by Holders of Securities.  The Holders of
not less than a majority in principal  amount of the  Outstanding  Securities of
any  series  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 that

                           (1) such direction  shall not be in conflict with any
         rule of law or with this Indenture,

                           (2) the  Trustee  may take any  other  action  deemed
         proper by the Trustee which is not  inconsistent  with such  direction,
         and

                           (3) the Trustee  need not take any action which might
         expose it to personal liability or be unduly prejudicial to the Holders
         of Securities of such series not joining therein.

                  SECTION 513. Waiver of Past Defaults.  The Holders of not less
than a majority in principal amount of the Outstanding  Securities of any series
may on  behalf of the  Holders  of all the  Securities  of such  series  and any
related coupons waive any past default hereunder with respect to such series and
its consequences, except a default

                           (1) in the payment of the  principal  of (or premium,
         if any) or interest on or Additional  Amounts payable in respect of any
         Security of such series or any related coupons, or

                           (2) in  respect  of a covenant  or  provision  hereof
         which under  Article  Nine  cannot be  modified or amended  without the
         consent  of the  Holder of each  Outstanding  Security  of such  series
         affected.

         Upon any such waiver,  such default shall cease to exist, and any Event
of  Default  arising  therefrom  shall be deemed to have been  cured,  for every
purpose of this Indenture;  but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.

                  SECTION  514.  Waiver of Usury,  Stay or Extension  Laws.  The
Company covenants (to the extent that it may lawfully do so) that it will not at
any time insist upon, or plead,  or in any manner  whatsoever  claim or take the
benefit or advantage of, any usury, stay or extension law wherever enacted,  now
or at any time  hereafter  in  force,  which may  affect  the  covenants  or the
performance  of this  Indenture;  and the  Company  (to the  extent  that it may
lawfully do so) hereby  expressly  waives all benefit or  advantage  of any such
law, and covenants that it will not hinder,

                                       32
<PAGE>
delay or impede the  execution of any power herein  granted to the Trustee,  but
will suffer and permit the  execution  of every such power as though no such law
had been enacted.

                  SECTION  515.  Undertaking  for  Costs.  All  parties  to this
Indenture agree, and each Holder of any Security 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 Indenture,  or in any
suit against the Trustee for any action  taken or omitted by it as Trustee,  the
filing by any party  litigant in such suit of an undertaking to pay the costs of
such suit, and that such court may in its discretion  assess  reasonable  costs,
including  reasonable  attorneys' fees,  against any party litigant in such suit
having due regard to the merits and good faith of the claims or defenses made by
such party  litigant;  but the provisions of this Section shall not apply to any
suit instituted by the Trustee,  to any suit instituted by any Holder,  or group
of Holders, holding in the aggregate more than a majority in principal amount of
the  Outstanding  Securities,  or to any suit  instituted  by any Holder for the
enforcement of the payment of the principal of (or premium,  if any) or interest
on any Security on or after the respective Stated  Maturities  expressed in such
Security (or, in the case of redemption, on or after the Redemption Date).

                                   ARTICLE SIX

                                   THE TRUSTEE

                  SECTION  601.  Notice of  Defaults.  Within 90 days  after the
occurrence  of any  default  hereunder  with  respect to the  Securities  of any
series,  the Trustee shall transmit in the manner and to the extent  provided in
TIA Section  313(c),  notice of such  default  hereunder  known to the  Trustee,
unless such default shall have been cured or waived;  provided,  however,  that,
except in the case of a default in the payment of the  principal of (or premium,
if any) or interest on or any  Additional  Amounts or sinking  fund  installment
with respect to the Securities of such series, the Trustee shall be protected in
withholding such notice if and so long as Responsible Officers of the Trustee in
good faith  determine that the  withholding of such notice is in the interest of
the Holders of the Securities and coupons of such series;  and provided  further
that in the case of any default or breach of the character  specified in Section
501(4) with respect to the Securities and coupons of such series, no such notice
to Holders shall be given until at least 60 days after the  occurrence  thereof.
For the purpose of this Section, the term "default" means any event which is, or
after  notice or lapse of time or both would  become,  an Event of Default  with
respect to the Securities of such series.

                  SECTION  602.  Certain  Rights  of  Trustee.  Subject  to  the
provisions of TIA Section 315(a) through 315(d):

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

                           (2) any request or direction of the Company mentioned
         herein shall be sufficiently  evidenced by a Company Request or Company
         Order (other than delivery of any  Security,  together with any coupons
         appertaining  thereto,  to the Trustee for  authentication and delivery
         pursuant  to  Section  303 which  shall be  sufficiently  evidenced  as
         provided  therein) and any  resolution of the Board of Directors may be
         sufficiently evidenced by a Board Resolution;

                           (3) whenever in the  administration of this Indenture
         the  Trustee  shall  deem it  desirable  that a  matter  be  proved  or
         established  prior to taking,  suffering or omitting to take any action
         hereunder,  the Trustee (unless other evidence be herein specifically
         prescribed) may, in the absence of bad faith  on its  part,  rely  upon
         an  Officers' Certificate;

                                       33
<PAGE>

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

                           (5) the  Trustee  shall  be under  no  obligation  to
         exercise any of the rights or powers vested in it by this  Indenture at
         the request or  direction  of any of the Holders of  Securities  of any
         series or any related coupons  pursuant to this Indenture,  unless such
         Holders  shall  have  offered to the  Trustee  reasonable  security  or
         indemnity  against the costs,  expenses and liabilities  which might be
         incurred by it in compliance with such request or direction;

                           (6) the  Trustee  shall  not be  bound  to  make  any
         investigation  into the  facts or  matters  stated  in any  resolution,
         certificate,  statement,  instrument, opinion, report, notice, request,
         direction, consent, order, bond, debenture, note, coupon or other paper
         or document, but the Trustee, in its discretion,  may make such further
         inquiry or investigation  into such facts or matters as it may see fit,
         and, if the Trustee  shall  determine to make such  further  inquiry or
         investigation,  it shall be entitled to examine the books,  records and
         premises of the Company, personally or by agent or attorney;

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

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

                  The  Trustee  shall not be  required to expend or risk its own
funds or otherwise  incur any financial  liability in the  performance of any of
its duties hereunder, or in the exercise of any of its rights or powers.

                  SECTION  603.  Not  Responsible  for  Recitals  or Issuance of
Securities.  The recitals  contained  herein and in the  Securities,  except the
Trustee's  certificate of  authentication,  and in any coupons shall be taken as
the  statements of the Company,  and neither the Trustee nor any  Authenticating
Agent assumes any  responsibility  for their  correctness.  The Trustee makes no
representations  as to the validity or  sufficiency  of this Indenture or of the
Securities  or  coupons,  except  that the  Trustee  represents  that it is duly
authorized to execute and deliver this  Indenture,  authenticate  the Securities
and   perform   its   obligations   hereunder.   Neither  the  Trustee  nor  the
Authenticating  Agent shall be  accountable  for the use or  application  by the
Company of Securities or the proceeds thereof.

                  SECTION 604.  May Hold  Securities.  The  Trustee,  any Paying
Agent,  Security  Registrar,  Authenticating  Agent  or any  other  agent of the
Company,  in its  individual  or any other  capacity,  may  become  the owner or
pledgee of Securities and coupons and,  subject to TIA Sections  310(b) and 311,
may  otherwise  deal with the  Company  with the same rights it would have if it
were not Trustee, Paying Agent, Security Registrar, Authenticating Agent or such
other agent.

                  SECTION 605. Money Held in Trust. Money held by the Trustee in
trust  hereunder  need not be  segregated  from other funds except to the extent
required by law.  The Trustee  shall be under no  liability  for interest on any
money received by it hereunder except as otherwise agreed with the Company.

                  SECTION  606.  Compensation  and  Reimbursement.  The  Company
agrees:

                                       34
<PAGE>
                           (1)  to  pay  to  the  Trustee   from  time  to  time
         reasonable  compensation  for all  services  rendered  by it  hereunder
         (which  compensation  shall not be limited by any  provision  of law in
         regard to the compensation of a trustee of an express trust);

                           (2) except as otherwise expressly provided herein, to
         reimburse  each of the Trustee  and any  predecessor  Trustee  upon its
         request  for  all  reasonable  expenses,   disbursements  and  advances
         incurred or made by the Trustee in  accordance  with any  provision  of
         this Indenture (including the reasonable  compensation and the expenses
         and disbursements of its agents and counsel),  except any such expense,
         disbursement or advance as may be attributable to its negligence or bad
         faith; and

                           (3)  to  indemnify   each  of  the  Trustee  and  any
         predecessor  Trustee  for, and to hold it harmless  against,  any loss,
         liability or expense  incurred  without  negligence or bad faith on its
         own  part,  arising  out of or in  connection  with the  acceptance  or
         administration  of the trust or trusts  hereunder,  including the costs
         and  expenses of  defending  itself  against any claim or  liability in
         connection  with the  exercise or  performance  of any of its powers or
         duties hereunder.

                  When the  Trustee  incurs  expenses  or  renders  services  in
connection  with an Event of  Default  specified  in  Section  501(6) or Section
501(7),  the  expenses  (including  the  reasonable  charges and expenses of its
counsel)  and the  compensation  for the  services  are  intended to  constitute
expenses of  administration  under any applicable  Federal or state  bankruptcy,
insolvency or other similar law.

                  As security  for the  performance  of the  obligations  of the
Company  under  this  Section,  the  Trustee  shall  have  a lien  prior  to the
Securities upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the payment of principal of (or premium,  if any)
or interest on particular Securities or coupons.

                  The  provisions of this Section shall survive the  termination
of this Indenture.

                  SECTION  607.   Corporate   Trustee   Required;   Eligibility;
Conflicting  Interests.  There shall at all times be a Trustee  hereunder  which
shall be eligible to act as Trustee under TIA Section 310(a)(1) and shall have a
combined  capital  and  surplus  of at least  $50,000,000.  If such  corporation
publishes  reports  of  condition  at  least  annually,  pursuant  to law or the
requirements of Federal, state,  Territorial or District of Columbia supervising
or  examining  authority,  then for the purposes of this  Section,  the combined
capital  and  surplus  of such  corporation  shall be deemed to be its  combined
capital  and  surplus as set forth in its most  recent  report of  condition  so
published.  If at any time the Trustee  shall cease to be eligible in accordance
with the provisions of this Section,  it shall resign  immediately in the manner
and with the effect hereinafter specified in this Article.

                  SECTION  608.   Resignation   and  Removal;   Appointment   of
Successor.  (a) No resignation or removal of the Trustee and no appointment of a
successor  Trustee  pursuant to this Article  shall become  effective  until the
acceptance  of  appointment  by the  successor  Trustee in  accordance  with the
applicable requirements of Section 609.

                  (b) The  Trustee  may  resign at any time with  respect to the
Securities  of one or more  series  by  giving  written  notice  thereof  to the
Company.  If an instrument  of acceptance by a successor  Trustee shall not have
been  delivered to the Trustee within 30 days after the giving of such notice of
resignation,   the  resigning  Trustee  may  petition  any  court  of  competent
jurisdiction for the appointment of a successor Trustee.

                  (c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series delivered to the Trustee and to the
Company.

                  (d) If at any time:

                                       35
<PAGE>
                           (1)  the  Trustee  shall  fail  to  comply  with  the
         provisions of TIA Section 310(b) after written request  therefor by the
         Company or by any Holder of a Security  who has been a bona fide Holder
         of a Security for at least six months, or

                           (2) the  Trustee  shall  cease to be  eligible  under
         Section 607(a) and shall fail to resign after written request  therefor
         by the Company or by any Holder of a Security  who has been a bona fide
         Holder of a Security for at least six months, or

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

then, in any such case, (i) the Company by or pursuant to a Board Resolution may
remove  the  Trustee  and  appoint  a  successor  Trustee  with  respect  to all
Securities,  or (ii) subject to TIA Section 315(e), any Holder of a Security who
has been a bona fide Holder of a Security for at least six months may, on behalf
of himself and all others  similarly  situated,  petition any court of competent
jurisdiction  for the removal of the Trustee with respect to all  Securities and
the appointment of a successor Trustee or Trustees.

                  (e)  If  the  Trustee  shall  resign,  be  removed  or  become
incapable  of acting,  or if a vacancy  shall occur in the office of Trustee for
any reason with respect to the Securities of one or more series, the Company, by
or pursuant to a Board Resolution, shall promptly appoint a successor Trustee or
Trustees  with  respect  to the  Securities  of that or those  series  (it being
understood that any such successor  Trustee may be appointed with respect to the
Securities of one or more or all of such series and that at any time there shall
be only one Trustee with respect to the  Securities of any  particular  series).
If,  within one year after such  resignation,  removal or  incapability,  or the
occurrence of such vacancy,  a successor  Trustee with respect to the Securities
of any  series  shall  be  appointed  by Act of the  Holders  of a  majority  in
principal  amount of the Outstanding  Securities of such series delivered to the
Company and the retiring  Trustee,  the  successor  Trustee so appointed  shall,
forthwith upon its acceptance of such appointment,  become the successor Trustee
with respect to the  Securities of such series and to that extent  supersede the
successor Trustee appointed by the Company. If no successor Trustee with respect
to the  Securities  of any series shall have been so appointed by the Company or
the Holders of Securities  and accepted  appointment  in the manner  hereinafter
provided  any Holder of a Security who has been a bona fide Holder of a Security
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
appointment of a successor Trustee with respect to Securities of such series.

                  (f) The Company shall give notice of each resignation and each
removal of the Trustee  with  respect to the  Securities  of any series and each
appointment of a successor  Trustee with respect to the Securities of any series
in the manner  provided for notices to the Holders of Securities in Section 106.
Each notice shall include the name of the successor  Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.

                  SECTION 609.  Acceptance of Appointment  by Successor.  (a) In
case of the  appointment  hereunder  of a successor  Trustee with respect to all
Securities,  every such successor Trustee shall execute, acknowledge and deliver
to  the  Company  and to the  retiring  Trustee  an  instrument  accepting  such
appointment,  and thereupon the  resignation or removal of the retiring  Trustee
shall become effective and such successor Trustee, without any further act, deed
or  conveyance,  shall  become  vested with all the rights,  powers,  trusts and
duties  of the  retiring  Trustee;  but,  upon  request  of the  Company  or the
successor  Trustee,  such retiring  Trustee shall,  upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights,  powers  and trusts of the  retiring  Trustee,  and shall  duly  assign,
transfer  and deliver to such  successor  Trustee all property and money held by
such retiring  Trustee  hereunder,  subject  nevertheless  to its claim, if any,
provided for in Section 606.

                                       36
<PAGE>
                  (b)  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 retiring  Trustee and each  successor  Trustee with respect to the
Securities  of one or  more  series  shall  execute  and  deliver  an  indenture
supplemental  hereto,  pursuant to Article Nine hereof,  wherein each  successor
Trustee  shall  accept  such  appointment  and  which  (1)  shall  contain  such
provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, each successor Trustee all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series to which
the appointment of such successor  Trustee relates,  (2) if the retiring Trustee
is not retiring with respect to all Securities, shall contain such provisions as
shall be deemed  necessary or desirable to confirm that all the rights,  powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series as to which the retiring  Trustee is not retiring shall continue
to be vested in the retiring Trustee,  and (3) shall add to or change any of the
provisions of this  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;  and upon
the execution and delivery of such  supplemental  indenture the  resignation  or
removal of the retiring  Trustee shall become  effective to the extent  provided
therein  and each such  successor  Trustee,  without any  further  act,  deed or
conveyance,  shall become vested with all the rights,  powers, trusts and duties
of the retiring  Trustee with respect to the  Securities of that or those series
to which the appointment of such successor  Trustee relates;  but, on request of
the Company or any successor  Trustee,  such retiring Trustee shall duly assign,
transfer  and deliver to such  successor  Trustee all property and money held by
such retiring Trustee  hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates.

                  (c) Upon request of any such  successor  Trustee,  the Company
shall execute any and all instruments  for more fully and certainly  vesting in,
and  confirming  to such  successor  Trustee all such rights,  powers and trusts
referred to in paragraph (a) or (b) of this Section, as the case may be.

                  (d) No successor  Trustee shall accept its appointment  unless
at the time of such  acceptance  such  successor  Trustee shall be qualified and
eligible under this Article.

                  SECTION 610. Merger,  Conversion,  Consolidation or Succession
to Business.  Any corporation  into which the Trustee may be merged or converted
or with which it may be  consolidated,  or any  corporation  resulting  from any
merger,  conversion or  consolidation  to which the Trustee shall be a party, or
any corporation  succeeding to all or  substantially  all of the corporate trust
business  of the  Trustee,  shall be the  successor  of the  Trustee  hereunder;
provided such corporation  shall be otherwise  qualified and eligible under this
Article,  without the execution or filing of any paper or any further act on the
part of any of the parties hereto.  In case any Securities or coupons shall have
been  authenticated,  but not  delivered,  by the  Trustee  then in office,  any
successor by merger,  conversion or consolidation to such authenticating Trustee
may  adopt  such  authentication  and  deliver  the  Securities  or  coupons  so
authenticated  with the same  effect as if such  successor  Trustee  had  itself
authenticated  such  Securities  or coupons.  In case any  Securities or coupons
shall  not  have  been  authenticated  by such  predecessor  Trustee,  any  such
successor  Trustee may authenticate  and deliver such Securities or coupons,  in
either its own name or that of its predecessor Trustee,  with the full force and
effect which this Indenture  provides for the certificate of  authentication  of
the Trustee.

                  SECTION 611. Appointment of Authentication  Agent. At any time
when any of the  Securities  remain  Outstanding,  the  Trustee  may  appoint an
Authenticating  Agent or Agents with respect to one or more series of Securities
which  shall be  authorized  to act on behalf  of the  Trustee  to  authenticate
Securities  of such series  issued upon  exchange,  registration  of transfer or
partial redemption or repayment thereof,  and Securities so authenticated  shall
be entitled to the benefits of this  Indenture and shall be valid and obligatory
for  all  purposes  as if  authenticated  by the  Trustee  hereunder.  Any  such
appointment  shall  be  evidenced  by  an  instrument  in  writing  signed  by a
Responsible Officer of the Trustee, a copy of which instrument shall be promptly
furnished to the Company.  Wherever  reference

                                       37
<PAGE>
is made in this  Indenture to the  authentication  and delivery of Securities by
the Trustee or the Trustee's certificate of authentication, such reference shall
be deemed to include  authentication and delivery on behalf of the Trustee by an
Authenticating  Agent and a certificate of authentication  executed on behalf of
the  Trustee by an  Authenticating  Agent.  Each  Authenticating  Agent shall be
acceptable to the Company and,  except as may otherwise be provided  pursuant to
Section  301,  shall  at all  times be a bank or trust  company  or  corporation
organized and doing  business and in good standing  under the laws of the United
States of America or of any State or the District of Columbia,  authorized under
such laws to act as Authenticating  Agent, having a combined capital and surplus
of not less than  $50,000,000  and  subject to  supervision  or  examination  by
federal or state authorities.  If such Authenticating Agent publishes reports of
condition  at  least  annually,  pursuant  to  law or  the  requirements  of the
aforesaid  supervising  or  examining  authority,  then for the purposes of this
Section,  the combined capital and surplus of such Authenticating Agent shall be
deemed to be its  combined  capital  and surplus as set forth in its most recent
report of condition so published.  In case at any time an  Authenticating  Agent
shall cease to be eligible in  accordance  with the  provisions of this Section,
such  Authenticating  Agent shall resign  immediately in the manner and with the
effect specified in this Section.

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

                  An  Authenticating  Agent for any series of Securities  may at
any time resign by giving  written notice of resignation to the Trustee for such
series and to the Company.  The Trustee for any series of Securities  may at any
time terminate the agency of an Authenticating Agent by giving written notice of
termination to such Authenticating Agent and to the Company. Upon receiving such
a notice of resignation or upon such a termination,  or in case at any time such
Authenticating  Agent  shall  cease  to  be  eligible  in  accordance  with  the
provisions of this Section,  the Trustee for such series may appoint a successor
Authenticating  Agent  which shall be  acceptable  to the Company and shall give
notice of such  appointment  to all  Holders of  Securities  of the series  with
respect to which such Authenticating Agent will serve in the manner set forth in
Section  106.  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  herein.  No  successor   Authenticating  Agent  shall  be
appointed unless eligible under the provisions of this Section.

                  The Company  agrees to pay to each  Authenticating  Agent from
time to time reasonable  compensation including  reimbursement of its reasonable
expenses for its services under this Section.

                  If an  appointment  with respect to one or more series is made
pursuant  to this  Section,  the  Securities  of such  series may have  endorsed
thereon,   in  addition  to  or  in  lieu  of  the  Trustee's   certificate   of
authentication,  an alternate certificate of authentication substantially in the
following form:

                  This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.

                           ____________________________________
                                                    as Trustee

                           By:_________________________________
                                       as Authenticating Agent

                           By:__________________________________
                                             Authorized Officer

                                       38
<PAGE>

                                  ARTICLE SEVEN

                HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

                  SECTION  701.  Disclosure  of Names and  Addresses of Holders.
Every Holder of Securities or coupons, by receiving and holding the same, agrees
with the Company and the  Trustee  that  neither the Company nor the Trustee nor
any  Authenticating  Agent nor any Paying Agent nor any Security Registrar shall
be held  accountable  by reason of the  disclosure of any  information as to the
names and addresses of the Holders of Securities in accordance  with TIA Section
312, regardless of the source from which such information was derived,  and that
the Trustee  shall not be held  accountable  by reason of mailing  any  material
pursuant to a request made under TIA Section 312(b).

                  SECTION 702.  Reports by Trustee.  Within 60 days after May 15
of each year  commencing  with the first  May 15 after  the  first  issuance  of
Securities pursuant to this Indenture, the Trustee shall transmit by mail to all
Holders of Securities as provided in TIA Section  313(c) a brief report dated as
of such May 15 if required by TIA Section 313(a).

                  SECTION 703.  Reports by Company.  The Company will:

                           (1) file with the  Trustee,  within 15 days after the
         Company is required to file the same with the Commission, copies of the
         annual reports and of the information,  documents and other reports (or
         copies of such portions of any of the foregoing as the  Commission  may
         from time to time by rules and regulations prescribe) which the Company
         may be required to file with the  Commission  pursuant to Section 13 or
         Section  15(d)  of the  Securities  Exchange  Act of 1934;  or,  if the
         Company  is not  required  to file  information,  documents  or reports
         pursuant to either of such Sections, then it will file with the Trustee
         and the Commission, in accordance with rules and regulations prescribed
         from  time to time by the  Commission,  such of the  supplementary  and
         periodic  information,  documents  and  reports  which may be  required
         pursuant  to  Section  13 of the  Securities  Exchange  Act of  1934 in
         respect of a security  listed and  registered on a national  securities
         exchange  as may be  prescribed  from  time to time in such  rules  and
         regulations;

                           (2) file  with the  Trustee  and the  Commission,  in
         accordance with rules and  regulations  prescribed from time to time by
         the Commission, such additional information, documents and reports with
         respect to compliance by the Company with the  conditions and covenants
         of this  Indenture  as may be required  from time to time by such rules
         and regulations; and

                           (3)  transmit by mail to the  Holders of  Securities,
         within 30 days after the filing thereof with the Trustee, in the manner
         and to the extent provided in TIA Section 313(c), such summaries of any
         information,  documents and reports required to be filed by the Company
         pursuant to  paragraphs  (1) and (2) of this section as may be required
         by  rules  and  regulations   prescribed  from  time  to  time  by  the
         Commission.

                  SECTION 704. Company to Furnish to Trustee Names and Addresses
of Holders. The Company will furnish or cause to be furnished to the Trustee:

                  (a)  semi-annually,  not later than 25 days after the  Regular
Record Date for interest for each series of Securities,  a list, in such form as
the Trustee may reasonably require, of the names and addresses of the Holders of
Registered Securities of such series as of such Regular Record Date, or if there
is  no  Regular  Record  Date  for  interest

                                       39
<PAGE>
for such series of Securities, semiannually, upon such dates as are set forth in
the Board Resolution or indenture  supplemental  hereto authorizing such series,
and

                  (b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such  request,  a list of
similar  form and  content  as of a date not more than 15 days prior to the time
such list is furnished;

provided,  however,  that, so long as the Trustee is the Security Registrar,  no
such list shall be required to be furnished.

                                  ARTICLE EIGHT

                CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE

                  SECTION 801.  Consolidations and Mergers of Company and Sales,
Leases and Conveyances Permitted Subject to Certain Conditions.  The Company may
consolidate  with,  or sell,  lease or convey  all or  substantially  all of its
assets to, or merge  with or into any other  corporation;  provided  that in any
such case,  (i) either the Company shall be the continuing  corporation,  or the
successor  corporation  shall be a corporation  organized and existing under the
laws of the United  States or a State  thereof  and such  successor  corporation
shall  expressly  assume the due and punctual  payment of the  principal of (and
premium,  if any) and any interest  (including all Additional  Amounts,  if any,
payable  pursuant to Section 1007) on all of the Securities,  according to their
tenor,  and  the due  and  punctual  performance  and  observance  of all of the
covenants  and  conditions  of this  Indenture to be performed by the Company by
supplemental indenture,  complying with Article Nine hereof, satisfactory to the
Trustee,  executed  and  delivered to the Trustee by such  corporation  and (ii)
immediately   after  giving  effect  to  such   transaction   and  treating  any
indebtedness  which becomes an obligation of the Company or any  Subsidiary as a
result thereof as having been incurred by the Company or such  Subsidiary at the
time of such transaction,  no Event of Default, and no event which, after notice
or the lapse of time,  or both,  would  become an Event of  Default,  shall have
occurred and be continuing.

                  SECTION 802.  Rights and Duties of Successor  Corporation.  In
case of any such consolidation,  merger,  sale, lease or conveyance 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  party  of  the  first  part,  and  the  predecessor
corporation,  except in the event of a lease,  shall be  relieved of any further
obligation under this Indenture and the Securities.  Such successor  corporation
thereupon may cause to be signed, and may issue either in its own name or in the
name of the  Company,  any or all of the  Securities  issuable  hereunder  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
Indenture  prescribed,  the Trustee  shall  authenticate  and shall  deliver any
Securities 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 shall in all respects
have the same legal rank and  benefit  under this  Indenture  as the  Securities
theretofore or thereafter  issued in accordance with the terms of this Indenture
as though all of such  Securities  had been issued at the date of the  execution
hereof.

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

                  SECTION 803. Officers' Certificate and Opinion of Counsel. Any
consolidation,  merger, sale, lease or conveyance permitted under Section 801 is
also subject to the condition that the Trustee receive an Officers'  Certificate
and an Opinion of Counsel  to the effect  that any such  consolidation,  merger,
sale, lease or conveyance, and the assumption of the Company's obligations under
this  Indenture by any successor  corporation,  complies with the

                                       40
<PAGE>
provisions of this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with.

                                  ARTICLE NINE

                             SUPPLEMENTAL INDENTURES

                  SECTION  901.  Supplemental   Indentures  Without  Consent  of
Holders.  Without  the  consent of any Holders of  Securities  or  coupons,  the
Company, when authorized by or pursuant to a Board Resolution,  and the Trustee,
at any  time  and  from  time to time,  may  enter  into one or more  indentures
supplemental  hereto,  in  form  satisfactory  to the  Trustee,  for  any of the
following purposes:

                           (1) to evidence the  succession of another  Person to
         the Company and the  assumption by any such  successor of the covenants
         of the Company herein and in the Securities contained; or

                           (2) to add to the  covenants  of the  Company for the
         benefit of the Holders of all or any series of Securities  (and if such
         covenants  are to be for  the  benefit  of  less  than  all  series  of
         Securities,  stating that such  covenants are expressly  being included
         solely for the  benefit of such  series) or to  surrender  any right or
         power herein conferred upon the Company; or

                           (3) to add any  additional  Events of Default for the
         benefit of the Holders of all or any series of Securities  (and if such
         Events of Default  are to be for the benefit of less than all series of
         Securities,  stating  that such Events of Default are  expressly  being
         included  solely for the benefit of such  series);  provided,  however,
         that  in  respect  of  any  such  additional  Events  of  Default  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 or may limit the right of the Holders of
         a majority in  aggregate  principal  amount of that or those  series of
         Securities  to which such  additional  Events of Default apply to waive
         such default; or

                           (4) to add to or change any of the provisions of this
         Indenture to provide that Bearer  Securities  may be  registrable as to
         principal,  to change or eliminate any  restrictions  on the payment of
         principal of or any premium or interest on Bearer Securities, to permit
         Bearer  Securities to be issued in exchange for Registered  Securities,
         to  permit  Bearer  Securities  to be  issued in  exchange  for  Bearer
         Securities of other authorized denominations or to permit or facilitate
         the issuance of Securities in uncertificated form;  provided,  that any
         such action shall not adversely  affect the interests of the Holders of
         Securities  of  any  series  or any  related  coupons  in any  material
         respect; or

                           (5) to change or eliminate  any of the  provisions of
         this  Indenture;  provided  that any such change or  elimination  shall
         become  effective  only when there is no  Security  Outstanding  of any
         series  created prior to the execution of such  supplemental  indenture
         which is entitled to the benefit of such provision; or

                           (6) to secure the Securities; or

                           (7) to establish  the form or terms of  Securities of
         any series and any related  coupons as  permitted  by Sections  201 and
         301,  including the provisions  and  procedures  relating to Securities
         convertible into Common Shares or Preferred  Shares of the Company,  as
         the case may be; or

                                       41
<PAGE>
                           (8) to evidence  and provide  for the  acceptance  of
         appointment  hereunder  by a  successor  Trustee  with  respect  to the
         Securities  of one or more  series  and to add to or change  any of the
         provisions  of this  Indenture  as shall be necessary to provide for or
         facilitate the  administration of the trusts hereunder by more than one
         Trustee; or

                           (9) to cure any  ambiguity,  to correct or supplement
         any provision  herein which may be defective or  inconsistent  with any
         other provision herein, or to make any other provisions with respect to
         matters or questions  arising under this  Indenture  which shall not be
         inconsistent  with the  provisions  of this  Indenture;  provided  such
         provisions  shall not adversely  affect the interests of the Holders of
         Securities  of  any  series  or any  related  coupons  in any  material
         respect; or

                           (10)  to  supplement  any of the  provisions  of this
         Indenture to such extent as shall be necessary to permit or  facilitate
         the  defeasance  and discharge of any series of Securities  pursuant to
         Sections  401,  1402 and 1403;  provided that any such action shall not
         adversely  affect the  interests of the Holders of  Securities  of such
         series and any related coupons or any other series of Securities in any
         material respect.

                  SECTION 902. Supplemental  Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in principal  amount
of all Outstanding Securities affected by such supplemental indenture, by Act of
said  Holders  delivered  to the  Company and the  Trustee,  the  Company,  when
authorized by or pursuant to a Board Resolution,  and the Trustee may enter into
an indenture  or  indentures  supplemental  hereto for the purpose of adding any
provisions to or changing in any manner or eliminating  any of the provisions of
this  Indenture  or of  modifying  in any manner  the  rights of the  Holders of
Securities and any related coupons under this Indenture; provided, however, that
no such supplemental  indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby:

                           (1) change the Stated  Maturity of the  principal  of
         (or premium, if any, on) or any installment of principal of or interest
         on, any Security; or reduce the principal amount thereof or the rate or
         amount of interest thereon or any Additional Amounts payable in respect
         thereof,  or any premium payable upon the redemption thereof, or change
         any  obligation of the Company to pay  Additional  Amounts  pursuant to
         Section 1007 (except as contemplated by Section 801(i) and permitted by
         Section  901(1)),  or reduce the amount of the principal of an Original
         Issue  Discount   Security  that  would  be  due  and  payable  upon  a
         declaration of acceleration of the Maturity thereof pursuant to Section
         502 or the amount  thereof  provable in bankruptcy  pursuant to Section
         504, or  adversely  affect any right of  repayment at the option of the
         Holder of any Security,  or change any Place of Payment  where,  or the
         currency or currencies, currency unit or units or composite currency or
         currencies  in which,  any  Security  or any  premium  or the  interest
         thereon  is  payable,  or impair  the right to  institute  suit for the
         enforcement of any such payment on or after the Stated Maturity thereof
         (or,  in the case of  redemption  or  repayment  at the  option  of the
         Holder,  on or after the Redemption  Date or the Repayment Date, as the
         case may be), or

                           (2) reduce the percentage in principal  amount of the
         Outstanding  Securities of any series,  the consent of whose Holders is
         required for any such supplemental  indenture,  or the consent of whose
         Holders is  required  for any waiver  with  respect to such  series (or
         compliance  with  certain  provisions  of  this  Indenture  or  certain
         defaults  hereunder  and  their  consequences)  provided  for  in  this
         Indenture,  or reduce the  requirements  of Section  1504 for quorum or
         voting, or

                           (3) modify  any of the  provisions  of this  Section,
         Section 513 or Section 1008, except to increase the required percentage
         to effect such action or to provide that certain  other  provisions  of
         this Indenture  cannot be modified or waived without the consent of the
         Holder of each Outstanding Security affected thereby.

                                       42
<PAGE>
                  It shall not be  necessary  for any Act of Holders  under this
Section to approve the particular form of any proposed  supplemental  indenture,
but it shall be sufficient if such Act shall approve the substance thereof.

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

                  SECTION  903.   Execution  of  Supplemental   Indentures.   In
executing,  or accepting  the  additional  trusts  created by, any  supplemental
indenture  permitted by this Article or the  modification  thereby of the trusts
created by this Indenture,  the Trustee shall be entitled to receive,  and shall
be fully  protected  in relying  upon,  an Opinion of Counsel  stating  that the
execution  of such  supplemental  indenture is  authorized  or permitted by this
Indenture.  The Trustee may, but shall not be obligated  to, enter into any such
supplemental  indenture  which  affects  the  Trustee's  own  rights,  duties or
immunities under this Indenture or otherwise.

                  SECTION  904.  Effect  of  Supplemental  Indentures.  Upon the
execution of any supplemental indenture under this Article, this Indenture shall
be modified in accordance therewith and such supplemental indenture shall form a
part  of this  Indenture  for all  purposes;  and  every  Holder  of  Securities
theretofore  or  thereafter  authenticated  and  delivered  hereunder and of any
coupon appertaining thereto shall be bound thereby.

                  SECTION  905.  Conformity  with  Trust  Indenture  Act.  Every
supplemental  indenture  executed  pursuant to this Article shall conform to the
requirements of the Trust Indenture Act as then in effect.

                  SECTION  906.   Reference  in   Securities   to   Supplemental
Indentures.  Securities  of any series  authenticated  and  delivered  after the
execution of any supplemental indenture pursuant to this Article may, and shall,
if required by the Trustee,  bear a notation in form  approved by the Trustee as
to any matter provided for in such supplemental  indenture. If the Company shall
so determine,  new  Securities  of any series so modified as to conform,  in the
opinion of the Trustee and the Company,  to any such supplemental  indenture may
be prepared and executed by the Company and  authenticated  and delivered by the
Trustee in exchange for Outstanding Securities of such series.

                                   ARTICLE TEN

                                    COVENANTS

                  SECTION 1001. Payment of Principal,  Premium, if any, Interest
and Additional Amounts.  The Company covenants and agrees for the benefit of the
Holders of each series of Securities  that it will duly and  punctually  pay the
principal of (and premium,  if any) and interest on and any  Additional  Amounts
payable in respect of the Securities of that series in accordance with the terms
of such  series  of  Securities,  any  coupons  appertaining  thereto  and  this
Indenture.  Unless  otherwise  specified  as  contemplated  by Section  301 with
respect to any series of  Securities,  any  interest  due on and any  Additional
Amounts  payable in respect of Bearer  Securities on or before  Maturity,  other
than Additional  Amounts, if any, payable as provided in Section 1007 in respect
of principal of (or premium, if any, on) such a Security,  shall be payable only
upon  presentation  and  surrender  of the  several  coupons  for such  interest
installments as are evidenced thereby as they severally mature. Unless otherwise
specified  with respect to Securities of any series  pursuant to Section 301, at
the option of the Company, all payments of principal may be paid by check to the
registered  Holder of the Registered  Security or other person entitled  thereto
against surrender of such Security.

                  SECTION 1002.  Maintenance of Office or Agency.  If Securities
of a series are  issuable  only as  Registered  Securities,  the  Company  shall
maintain  in each Place of Payment  for any  series of  Securities  an office or
agency  where  Securities  of that series may be presented  or  surrendered  for
payment or conversion,  where  Securities of that series may be surrendered  for
registration  of transfer or exchange,  and where notices and demands to or upon
the

                                       43
<PAGE>
Company in respect of the  Securities  of that series and this  Indenture may be
served. If Securities of a series are issuable as Bearer Securities, the Company
will maintain: (A) in the Borough of Manhattan,  The City of New York, an office
or agency  where any  Registered  Securities  of that series may be presented or
surrendered for payment or conversion,  where any Registered  Securities of that
series may be surrendered for registration of transfer, where Securities of that
series may be surrendered for exchange, where notices and demands to or upon the
Company in respect of the  Securities  of that series and this  Indenture may be
served and where  Bearer  Securities  of that series and related  coupons may be
presented  or  surrendered  for  payment  or  conversion  in  the  circumstances
described in the following  paragraph  (and not  otherwise);  (B) subject to any
laws or regulations  applicable  thereto,  in a Place of Payment for that series
which is located outside the United States, an office or agency where Securities
of that series and related  coupons may be presented and surrendered for payment
(including  payment of any  Additional  Amounts  payable on  Securities  of that
series pursuant to Section 1007) or conversion;  provided,  however, that if the
Securities  of that series are listed on the  Luxembourg  Stock  Exchange or any
other stock exchange  located  outside the United States and such stock exchange
shall so require, the Company will maintain a Paying Agent for the Securities of
that series in Luxembourg or any other required city located  outside the United
States,  as the case may be, so long as the Securities of that series are listed
on such exchange; and (C) subject to any laws or regulations applicable thereto,
in a Place of Payment  for that  series  located  outside  the United  States an
office  or  agency  where  any  Registered  Securities  of  that  series  may be
surrendered for registration of transfer, where Securities of that series may be
surrendered for exchange and where notices and demands to or upon the Company in
respect of the Securities of that series and this  Indenture may be served.  The
Company will give prompt written notice to the Trustee of the location,  and any
change in the  location,  of each  such  office  or  agency.  If at any time the
Company shall fail to maintain any such required  office or agency or shall fail
to furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the  Corporate  Trust Office of the
Trustee,  except that Bearer  Securities of that series and the related  coupons
may  be  presented  and  surrendered  for  payment  (including  payment  of  any
Additional  Amounts  payable on Bearer  Securities  of that  series  pursuant to
Section 1007) or conversion at the offices  specified in the Security in London,
England,  and the Company hereby  appoints the same as its agent to receive such
respective  presentations,  surrenders,  notices  and  demands,  and the Company
hereby  appoints  the  Trustee  its  agent to  receive  all such  presentations,
surrenders, notices and demands.

                  Unless  otherwise  specified  with  respect to any  Securities
pursuant  to Section  301,  no payment of  principal,  premium or interest on or
Additional  Amounts in respect of Bearer  Securities shall be made at any office
or agency of the Company in the United  States or by check mailed to any address
in the United States or by transfer to an account maintained with a bank located
in the United States; provided, however, that, if the Securities of a series are
payable in Dollars,  payment of principal of and any premium and interest on any
Bearer Security  (including any Additional Amounts payable on Securities of such
series  pursuant to Section  1007) shall be made at the office of the  Company's
Paying  Agent in the City of Boston,  if (but only if) payment in Dollars of the
full amount of such principal,  premium,  interest or Additional Amounts, as the
case may be, at all offices or agencies outside the United States maintained for
such purpose by the Company in  accordance  with this  Indenture,  is illegal or
effectively precluded by exchange controls or other similar restrictions.

                  The Company may from time to time  designate one or more other
offices or agencies  where the Securities of one or more series may be presented
or  surrendered  for any or all of such  purposes,  and  may  from  time to time
rescind  such  designation;  provided,  however,  that  no such  designation  or
rescission shall in any manner relieve the Company of its obligation to maintain
an office or agency in  accordance  with the  requirements  set forth  above for
Securities of any series for such purposes. The Company will give prompt written
notice to the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency. Unless otherwise specified with
respect to any  Securities  pursuant to Section 301 with  respect to a series of
Securities,  the Company hereby designates as a Place of Payment for each series
of  Securities  the office or agency of the  Company in the City of Boston,  and
initially  appoints the Trustee at its Corporate Trust Office as Paying Agent in
such  city and as its  agent to  receive  all  such  presentations,  surrenders,
notices and demands.

                                       44
<PAGE>
                  Unless  otherwise  specified  with  respect to any  Securities
pursuant to Section 302, if and so long as the  Securities of any series (i) are
denominated in a Foreign  Currency or (ii) may be payable in a Foreign  Currency
or so long as it is required under any other provision of this  Indenture,  then
the Company will maintain with respect to each such series of Securities,  or as
so required, at least one exchange rate agent.

                  SECTION  1003.  Money for  Securities  Payments  to Be Held in
Trust. If the Company shall at any time act as its own Paying Agent with respect
to any series of any  Securities and any related  coupons,  it will, by no later
than 11:00 am (Boston  time) on each due date of the  principal of (and premium,
if any),  or  interest  on or  Additional  Amounts  in  respect  of,  any of the
Securities  of that series,  segregate  and hold in trust for the benefit of the
Persons entitled  thereto a sum in the currency or currencies,  currency unit or
units or composite currency or currencies in which the Securities of such series
are  payable  (except as  otherwise  specified  pursuant  to Section 301 for the
Securities of such series) sufficient to pay the principal (and premium, if any)
or interest or Additional  Amounts so becoming due until such sums shall be paid
to such Persons or otherwise  disposed of as herein provided,  and will promptly
notify the Trustee of its action or failure so to act.

                  Whenever the Company  shall have one or more Paying Agents for
any series of Securities and any related coupons, it will, on or before each due
date of the  principal of (and  premium,  if any),  or interest on or Additional
Amounts in respect of, any  Securities  of that  series,  deposit  with a Paying
Agent a sum (in the currency or currencies,  currency unit or units or composite
currency or currencies described in the preceding  paragraph)  sufficient to pay
the  principal  (and  premium,  if any) or interest or  Additional  Amounts,  so
becoming  due,  such  sum to be held in trust  for the  benefit  of the  Persons
entitled  to such  principal,  premium or  interest  or  Additional  Amounts and
(unless such Paying Agent is the Trustee) the Company will  promptly  notify the
Trustee of its action or failure so to act.

                  The  Company  will  cause  each  Paying  Agent  other than the
Trustee to execute and deliver to the Trustee an instrument in which such Paying
Agent shall agree with the Trustee,  subject to the  provisions of this Section,
that such Paying Agent will

                           (1)  hold  all  sums  held by it for the  payment  of
         principal of (and  premium,  if any) or interest on Securities in trust
         for the benefit of the Persons  entitled  thereto until such sums shall
         be paid to such Persons or otherwise disposed of as herein provided;

                           (2) give the  Trustee  notice of any  default  by the
         Company (or any other obligor upon the Securities) in the making of any
         such payment of principal (and premium, if any) or interest; and

                           (3) at any time  during the  continuance  of any such
         default, upon the written request of the Trustee,  forthwith pay to the
         Trustee all sums so held in trust by such Paying Agent.

                  The Company may at any time,  for the purpose of obtaining the
satisfaction  and discharge of this Indenture or for any other purpose,  pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying  Agent,  such sums to be held by the Trustee
upon the same  trusts as those upon which such sums were held by the  Company or
such Paying  Agent;  and,  upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further  liability  with respect to
such sums.

                  Except as otherwise  provided in the Securities of any series,
any money  deposited  with the Trustee or any Paying Agent,  or then held by the
Company,  in trust for the payment of the principal of (and premium,  if any) or
interest on, or any Additional Amounts in respect of, any Security of any series
and remaining  unclaimed  for two years after such  principal  (and premium,  if
any), interest or Additional Amounts has become due and payable shall be paid to
the  Company  upon  Company  Request or (if then held by the  Company)  shall be
discharged from such trust; and the Holder of such Security shall thereafter, as
an  unsecured  general  creditor,  look only to the  Company for payment of such
principal of (and premium,  if any) or interest on, or any Additional Amounts in
respect of, such Security,

                                       45
<PAGE>
without interest thereon,  and all liability of the Trustee or such Paying Agent
with  respect to such trust money,  and all  liability of the Company as trustee
thereof,  shall thereupon  cease;  provided,  however,  that the Trustee or such
Paying  Agent,  before  being  required to make any such  repayment,  may at the
expense of the Company cause to be published  once, in an Authorized  Newspaper,
notice  that such  money  remains  unclaimed  and that,  after a date  specified
therein, which shall not be less than 30 days from the date of such publication,
any  unclaimed  balance  of such  money  then  remaining  will be  repaid to the
Company.

                  SECTION 1004. Existence. Subject to Article Eight, the Company
will do or cause to be done all things  necessary  to preserve  and keep in full
force  and  effect  its  existence,   rights  (declaration  and  statutory)  and
franchises;  provided,  however,  that the  Company  shall  not be  required  to
preserve  any  right  or  franchise  if  the  Board  shall  determine  that  the
preservation  thereof is no longer  desirable  in the conduct of the business of
the Company.

                  SECTION 1005. Provision of Financial  Information.  Whether or
not the Company is subject to Section 13 or 15(d) of the Securities Exchange Act
of 1934,  as  amended,  the  Company  will,  to the extent  permitted  under the
Securities Exchange Act of 1934, as amended, file with the Commission the annual
reports, quarterly reports and other documents which the Company would have been
required to file with the  Commission  pursuant to such Section 13 or 15(d) (the
"Financial  Statements")  if the Company were so subject,  such  documents to be
filed with the  Commission on or prior to the  respective  dates (the  "Required
Filing  Dates") by which the  Company  would have been  required so to file such
documents if the Company were so subject.

                  The Company  will also in any event (x) within 15 days of each
Required  Filing Date (i)  transmit by mail to all  Holders,  as their names and
addresses appear in the Security  Register,  without cost to such Holders copies
of the annual  reports and  quarterly  reports which the Company would have been
required  to file with the  Commission  pursuant  to  Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended, if the Company were subject to such
Sections, and (ii) file with the Trustee copies of the annual reports, quarterly
reports and other  documents  which the Company would have been required to file
with the Commission  pursuant to Section 13 or 15(d) of the Securities  Exchange
Act of 1934, as amended, if the Company were subject to such Sections and (y) if
filing such documents by the Company with the Commission is not permitted  under
the Securities  Exchange Act of 1934, as amended,  promptly upon written request
and payment of the reasonable cost of duplication and delivery, supply copies of
such documents to any prospective Holder.

                  SECTION  1006.  Statement as to  Compliance.  The Company will
deliver to the  Trustee,  within 120 days after the end of each fiscal  year,  a
brief  certificate from the principal  executive  officer,  principal  financial
officer  or  principal  accounting  officer  as to his or her  knowledge  of the
Company's compliance with all conditions and covenants under this Indenture and,
in the event of any noncompliance,  specifying such noncompliance and the nature
and status thereof.  For purposes of this Section 1006, such compliance shall be
determined  without regard to any period of grace or requirement of notice under
this Indenture.

                  SECTION  1007.  Additional  Amounts.  If any  Securities  of a
series  provide for the payment of Additional  Amounts,  the Company will pay to
the Holder of any  Security  of such series or any coupon  appertaining  thereto
Additional  Amounts as may be specified as contemplated by Section 301. Whenever
in this  Indenture  there is  mentioned,  in any  context  except in the case of
Section  502(1),  the payment of the principal of or any premium or interest on,
or in respect of, any Security of any series or payment of any related coupon or
the net proceeds received on the sale or exchange of any Security of any series,
such  mention  shall be deemed to include  mention of the payment of  Additional
Amounts provided by the terms of such series established pursuant to Section 301
to the extent that,  in such context,  Additional  Amounts are, were or would be
payable in respect  thereof  pursuant to such terms and  express  mention of the
payment of Additional Amounts (if applicable) in any provisions hereof shall not
be construed as excluding  Additional  Amounts in those provisions  hereof where
such express mention is not made.

                  Except as otherwise  specified as contemplated by Section 301,
if the Securities of a series provide for the payment of Additional  Amounts, at
least 20 days  prior to the first  Interest  Payment  Date with  respect to that
series
                                       46
<PAGE>
of Securities  (or if the Securities of that series will not bear interest prior
to Maturity,  the first day on which a payment of  principal  and any premium is
made),  and at least 10 days prior to each date of payment of principal  and any
premium or interest if there has been any change with respect to the matters set
forth in the below-mentioned Officers' Certificate, the Company will furnish the
Trustee and the Company's principal Paying Agent or Paying Agents, if other than
the Trustee,  with an  Officers'  Certificate  instructing  the Trustee and such
Paying  Agent or Paying  Agents  whether  such  payment of  principal of and any
premium or interest on the Securities of that series shall be made to Holders of
Securities  of that  series or any  related  coupons  who are not United  States
persons without  withholding  for or on account of any tax,  assessment or other
governmental  charge  described  in the  Securities  of the series.  If any such
withholding shall be required,  then such Officers' Certificate shall specify by
country the  amount,  if any,  required to be withheld on such  payments to such
Holders of Securities of that series or related coupons and the Company will pay
to the Trustee or such Paying Agent the Additional Amounts required by the terms
of such  Securities.  In the event that the Trustee or any Paying Agent,  as the
case may be,  shall not so receive  the  above-mentioned  certificate,  then the
Trustee  or such  Paying  Agent  shall be  entitled  (i) to assume  that no such
withholding or deduction is required with respect to any payment of principal or
interest with respect to any Securities of a series or related  coupons until it
shall  have  received  a  certificate  advising  otherwise  and (ii) to make all
payments of principal and interest with respect to the Securities of a series or
related coupons without  withholding or deductions until otherwise advised.  The
Company covenants to indemnify the Trustee and any Paying Agent for, and to hold
them  harmless  against,  any loss,  liability  or expense  reasonably  incurred
without  negligence  or bad faith on their part arising out of or in  connection
with  actions  taken or omitted by any of them or in reliance  on any  Officers'
Certificate  furnished  pursuant to this Section or in reliance on the Company's
not furnishing such an Officers' Certificate.

                  SECTION  1008.  Waiver of Certain  Covenants.  The Company may
omit in any particular instance to comply with any term,  provision or condition
set  forth  in  Sections  1004 or 1005,  if  before  or after  the time for such
compliance  the  Holders  of at least a  majority  in  principal  amount  of all
outstanding Securities of such series, by Act of such Holders, either waive such
compliance in such instance or generally waive  compliance with such covenant or
condition,  but no such  waiver  shall  extend to or  affect  such  covenant  or
condition except to the extent so expressly waived, and, until such waiver shall
become  effective,  the obligations of the Company and the duties of the Trustee
in respect of any such term,  provision or condition  shall remain in full force
and effect.

                                 ARTICLE ELEVEN

                            REDEMPTION OF SECURITIES

                  SECTION  1101.  Applicability  of Article.  Securities  of any
series which are redeemable  before their Stated Maturity shall be redeemable in
accordance  with their terms and (except as otherwise  specified as contemplated
by Section 301 for Securities of any series) in accordance with this Article.

                  SECTION  1102.  Election  to Redeem;  Notice to  Trustee.  The
election  of the  Company  to redeem any  Securities  shall be  evidenced  by or
pursuant to a Board Resolution. In case of any redemption at the election of the
Company of less than all of the Securities of any series,  the Company shall, at
least 45 days prior to the giving of the notice of  redemption  in Section  1104
(unless a shorter  notice  shall be  satisfactory  to the  Trustee),  notify the
Trustee of such  Redemption  Date and of the  principal  amount of Securities of
such series to be redeemed. In the case of any redemption of Securities prior to
the expiration of any  restriction on such  redemption  provided in the terms of
such  Securities or elsewhere in this  Indenture,  the Company shall furnish the
Trustee  with  an  Officers'   Certificate   evidencing   compliance  with  such
restriction.

                  SECTION  1103.  Selection  by  Trustee  of  Securities  to  Be
Redeemed.  If less than all the  Securities of any series issued on the same day
with the same terms are to be redeemed, the particular Securities to be redeemed
shall be  selected  not more than 60 days  prior to the  Redemption  Date by the
Trustee, from the Outstanding Securities of such series issued on such date with
the same terms not  previously  called  for  redemption,  by such  method as the

                                       47
<PAGE>
Trustee shall deem fair and  appropriate and which may provide for the selection
for redemption of portions  (equal to the minimum  authorized  denomination  for
Securities  of that series or any integral  multiple  thereof) of the  principal
amount of  Securities of such series of a  denomination  larger than the minimum
authorized denomination for Securities of that series.

                  The Trustee shall promptly notify the Company and the Security
Registrar  (if other than  itself) in writing  of the  Securities  selected  for
redemption and, in the case of any Securities  selected for partial  redemption,
the principal amount thereof to be redeemed.

                  For  all  purposes  of  this  Indenture,  unless  the  context
otherwise  requires,  all  provisions  relating to the  redemption of Securities
shall  relate,  in the case of any Security  redeemed or to be redeemed  only in
part, to the portion of the principal  amount of such Security which has been or
is to be redeemed.

                  SECTION 1104. Notice of Redemption. Notice of redemption shall
be given in the manner  provided in Section 106 and as may be further  specified
in an indenture supplemental hereto, not less than 30 days nor more than 60 days
prior to the Redemption Date,  unless a shorter period is specified by the terms
of such series established pursuant to Section 301, to each Holder of Securities
to be redeemed, but failure to give such notice in the manner herein provided to
the Holder of any Security  designated  for redemption as a whole or in part, or
any defect in the notice to any such  Holder,  shall not affect the  validity of
the  proceedings  for the  redemption  of any other  such  Security  or  portion
thereof.

                  Any  notice  that  is  mailed  to the  Holders  of  Registered
Securities in the manner herein provided shall be conclusively  presumed to have
been duly given, whether or not such Holders receive such notice.

                  All notices of redemption shall state:

                           (1) the Redemption Date,

                           (2) the  Redemption  Price,  accrued  interest to the
         Redemption  Date  payable as  provided  in Section  1106,  if any,  and
         Additional Amounts, if any,

                           (3) if less than all  Outstanding  Securities  of any
         series are to be  redeemed,  the  identification  (and,  in the case of
         partial redemption, the principal amount) of the particular Security or
         Securities to be redeemed,

                           (4) in case any  Security  is to be  redeemed in part
         only, the notice which relates to such Security shall state that on and
         after the Redemption Date, upon surrender of such Security,  the holder
         will  receive,   without  charge,  a  new  Security  or  Securities  of
         authorized  denominations  for the principal  amount thereof  remaining
         unredeemed,

                           (5) that on the Redemption Date the Redemption  Price
         and accrued  interest  to the  Redemption  Date  payable as provided in
         Section  1106,  if any,  will  become  due and  payable  upon each such
         Security,  or the portion  thereof,  to be redeemed and, if applicable,
         that interest thereon shall cease to accrue on and after said date,

                           (6)  the  Place  or  Places  of  Payment  where  such
         Securities,  together in the case of Bearer Securities with all coupons
         appertaining  thereto,  if any, maturing after the Redemption Date, are
         to be  surrendered  for  payment of the  Redemption  Price and  accrued
         interest, if any, or for conversion,

                           (7) that the  redemption  is for a sinking  fund,  if
         such is the case,

                                       48
<PAGE>
                           (8) that unless  otherwise  specified in such notice,
         Bearer  Securities of any series,  if any,  surrendered  for redemption
         must  be  accompanied  by  all  coupons  maturing   subsequent  to  the
         Redemption  Date or the  amount of any such  missing  coupon or coupons
         will  be  deducted  from  the  Redemption  Price,  unless  security  or
         indemnity  satisfactory to the Company, the Trustee for such series and
         any Paying Agent is furnished,

                           (9) if  Bearer  Securities  of any  series  are to be
         redeemed  and any  Registered  Securities  of such series are not to be
         redeemed, and if such Bearer Securities may be exchanged for Registered
         Securities not subject to redemption on this  Redemption  Date pursuant
         to Section  305 or  otherwise,  the last  date,  as  determined  by the
         Company, on which such exchanges may be made,

                           (10) the CUSIP number of such Security, if any, and

                           (11) if  applicable,  that a Holder of Securities who
         desires  to  convert   Securities  for  redemption   must  satisfy  the
         requirements  for  conversion  contained in such  Securities,  the then
         existing  conversion  price  or rate,  and the  date and time  when the
         option to convert shall expire.

                  Notice of redemption  of  Securities  to be redeemed  shall be
given by the Company or, at the  Company's  request,  by the Trustee in the name
and at the expense of the Company.

                  SECTION  1105.  Deposit of  Redemption  Price.  On or prior to
11:00 am (Boston time) on any  Redemption  Date,  the Company shall deposit with
the  Trustee  or with a Paying  Agent (or,  if the  Company is acting as its own
Paying  Agent,  which it may not do in the case of a sinking fund payment  under
Article  Twelve,  segregate  and hold in trust as provided  in Section  1003) an
amount  of  money  in the  currency  or  currencies,  currency  unit or units or
composite  currency or  currencies  in which the  Securities  of such series are
payable  (except  as  otherwise  specified  pursuant  to  Section  301  for  the
Securities  of  such  series)  sufficient  to  pay on the  Redemption  Date  the
Redemption  Price of, and  (except if the  Redemption  Date shall be an Interest
Payment Date) accrued  interest on, all the Securities or portions thereof which
are to be redeemed on that date.

                  SECTION 1106. Securities Payable on Redemption Date. Notice of
redemption  having been given as  aforesaid,  the  Securities  so to be redeemed
shall, on the Redemption  Date,  become due and payable at the Redemption  Price
therein  specified  in the  currency or  currencies,  currency  unit or units or
composite  currency or  currencies  in which the  Securities  of such series are
payable  (except  as  otherwise  specified  pursuant  to  Section  301  for  the
Securities  of such  series)  (together  with accrued  interest,  if any, to the
Redemption Date), and from and after such date (unless the Company shall default
in the payment of the Redemption  Price and accrued  interest)  such  Securities
shall, if the same were interest-bearing, cease to bear interest and the coupons
for such  interest  appertaining  to any Bearer  Securities  so to be  redeemed,
except to the extent provided  below,  shall be void. Upon surrender of any such
Security  for  redemption  in  accordance  with said notice,  together  with all
coupons, if any,  appertaining  thereto maturing after the Redemption Date, such
Security  shall be paid by the Company at the  Redemption  Price,  together with
accrued  interest,  if any, to the  Redemption  Date;  provided,  however,  that
installments  of interest on Bearer  Securities  whose Stated  Maturity is on or
prior to the  Redemption  Date  shall be  payable  only at an  office  or agency
located outside the United States (except as otherwise provided in Section 1002)
and,  unless  otherwise  specified as  contemplated  by Section  301,  only upon
presentation  and surrender of coupons for such interest;  and provided  further
that, except as otherwise  provided with respect to Securities  convertible into
Common Shares or Preferred  Shares of the Company,  installments  of interest on
Registered  Securities  whose Stated  Maturity is on or prior to the  Redemption
Date  shall  be  payable  to the  Holders  of  such  Securities,  or one or more
Predecessor  Securities,  registered  as such at the  close of  business  on the
relevant  Record Dates  according to their terms and the  provisions  of Section
307.

                  If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant  coupons maturing after the Redemption Date, such
Security may be paid after  deducting from the Redemption  Price an amount equal
to the face amount of all such missing coupons, or the surrender of such missing
coupon or  coupons

                                       49
<PAGE>
may be waived by the Company and the Trustee if there be  furnished to them such
security  or  indemnity  as they may require to save each of them and any Paying
Agent harmless. If thereafter the Holder of such Security shall surrender to the
Trustee  or any  Paying  Agent any such  missing  coupon in  respect  of which a
deduction shall have been made from the Redemption  Price,  such Holder shall be
entitled to receive the amount so deducted;  provided,  however,  that  interest
represented  by  coupons  shall be payable  only at an office or agency  located
outside the United  States  (except as otherwise  provided in Section 1002) and,
unless   otherwise   specified  as   contemplated  by  Section  301,  only  upon
presentation and surrender of those coupons.

                   If any Security  called for  redemption  shall not be so paid
upon  surrender  thereof for  redemption,  the principal  (and premium,  if any)
shall,  until paid,  bear interest from the Redemption Date at the rate borne by
the Security.

                  SECTION  1107.  Securities  Redeemed in Part.  Any  Registered
Security  which is to be redeemed  only in part  (pursuant to the  provisions of
this Article or of Article  Twelve) shall be  surrendered  at a Place of Payment
therefor (with,  if the Company or the Trustee so requires,  due endorsement by,
or a written  instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by, the Holder thereof or his attorney duly  authorized in
writing) and the Company shall execute and the Trustee  shall  authenticate  and
deliver to the Holder of such Security  without service charge a new Security or
Securities of the same series,  of any authorized  denomination  as requested by
such Holder in  aggregate  principal  amount  equal to and in  exchange  for the
unredeemed portion of the principal of the Security so surrendered.

                                 ARTICLE TWELVE

                                  SINKING FUNDS

                  SECTION 1201. Applicability of Article. The provisions of this
Article shall be applicable to any sinking fund for the retirement of Securities
of a series  except as otherwise  specified as  contemplated  by Section 301 for
Securities of such series.

                  The minimum amount of any sinking fund payment provided for by
the terms of  Securities  of any series 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  of any series is herein  referred to as an
"optional sinking fund payment".  If provided for by the terms of any Securities
of any series,  the cash amount of any  mandatory  sinking  fund  payment may be
subject to  reduction  as provided in Section  1202.  Each  sinking fund payment
shall be applied to the  redemption  of Securities of any series as provided for
by the terms of Securities of such series.

                  SECTION  1202.  Satisfaction  of Sinking  Fund  Payments  with
Securities. The Company may, in satisfaction of all or any part of any mandatory
sinking fund payment with  respect to the  Securities  of a series,  (1) deliver
Outstanding  Securities  of such series  (other than any  previously  called for
redemption)  together in the case of any Bearer  Securities  of such series with
all unmatured coupons  appertaining thereto and (2) apply as a credit Securities
of such series  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,  as
provided  for by the terms of such  Securities,  or which  have  otherwise  been
acquired by the Company;  provided that such  Securities so delivered or applied
as a credit have not been  previously  so  credited.  Such  Securities  shall be
received  and  credited  for  such  purpose  by the  Trustee  at the  applicable
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.

                  SECTION 1203.  Redemption of Securities  for Sinking Fund. Not
less than 60 days prior to each sinking fund payment date for  Securities of any
series,  the  Company  will  deliver  to the  Trustee an  Officers'  Certificate

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<PAGE>
specifying  the amount of the next  ensuing  mandatory  sinking fund payment for
that series pursuant to the terms of that series,  the portion thereof,  if any,
which is to be  satisfied  by payment  of cash in the  currency  or  currencies,
currency  unit or  units or  composite  currency  or  currencies  in  which  the
Securities of such series are payable (except as otherwise specified pursuant to
Section 301 for the Securities of such series) and the portion thereof,  if any,
which is to be satisfied by delivering  and crediting  Securities of that series
pursuant to Section 1202, and the optional  amount,  if any, to be added in cash
to the next ensuing mandatory sinking fund payment, and will also deliver to the
Trustee any  Securities  to be so  delivered  and  credited.  If such  Officers'
Certificate  shall  specify an  optional  amount to be added in cash to the next
ensuing mandatory sinking fund payment, the Company shall thereupon be obligated
to pay the amount  therein  specified.  Not less than 30 days  before  each such
sinking fund payment date the Trustee shall select the Securities to be redeemed
upon such sinking fund payment date in the manner  specified in Section 1103 and
cause  notice of the  redemption  thereof  to be given in the name of and at the
expense of the  Company in the manner  provided  in Section  1104.  Such  notice
having been duly given, the redemption of such Securities shall be made upon the
terms and in the manner stated in Sections 1106 and 1107.

                                ARTICLE THIRTEEN

                       REPAYMENT AT THE OPTION OF HOLDERS

                  SECTION   1301.   Applicability   of  Article.   Repayment  of
Securities of any series  before their Stated  Maturity at the option of Holders
thereof shall be made in accordance with the terms of such  Securities,  if any,
and  (except as  otherwise  specified  by the terms of such  series  established
pursuant to Section 301) in accordance with this Article.

                  SECTION  1302.  Repayment  of  Securities.  Securities  of any
series  subject to  repayment  in whole or in part at the option of the  Holders
thereof will,  unless  otherwise  provided in the terms of such  Securities,  be
repaid at a price equal to the principal amount thereof, together with interest,
if any,  thereon  accrued to the Repayment  Date specified in or pursuant to the
terms of such Securities.  The Company covenants that on or before the Repayment
Date it will deposit with the Trustee or with a Paying Agent (or, if the Company
is acting as its own Paying  Agent,  segregate  and hold in trust as provided in
Section 1003) an amount of money in the currency or currencies, currency unit or
units or composite currency or currencies in which the Securities of such series
are  payable  (except as  otherwise  specified  pursuant  to Section 301 for the
Securities of such series)  sufficient to pay the principal  (or, if so provided
by the terms of the Securities of any series, a percentage of the principal) of,
and (except if the  Repayment  Date shall be an Interest  Payment  Date) accrued
interest on, all the Securities or portions  thereof,  as the case may be, to be
repaid on such date.

                  SECTION  1303.  Exercise of Option.  Securities  of any series
subject  to  repayment  at the option of the  Holders  thereof  will  contain an
"Option to Elect Repayment" form on the reverse of such Securities. In order for
any Security to be repaid at the option of the Holder,  the Trustee must receive
at the Place of Payment therefor  specified in the terms of such Security (or at
such other place or places of which the  Company  shall from time to time notify
the Holders of such  Securities) not earlier than 60 days nor later than 30 days
prior to the  Repayment  Date (1) the Security so providing  for such  repayment
together with the "Option to Elect  Repayment"  form on the reverse thereof duly
completed by the Holder or by the Holder's  attorney duly  authorized in writing
or (2) a telegram,  telex, facsimile transmission or a letter from a member of a
national securities exchange, or the National Association of Securities Dealers,
Inc.  ("NASD"),  or a  commercial  bank or trust  company in the  United  States
setting  forth the name of the Holder of the Security,  the principal  amount of
the  Security,  the  principal  amount of the  Security to be repaid,  the CUSIP
number,  if any,  or a  description  of the tenor and terms of the  Security,  a
statement that the option to elect  repayment is being  exercised  thereby and a
guarantee that the Security to be repaid,  together with the duly completed form
entitled  "Option to Elect  Repayment" on the reverse of the  Security,  will be
received by the Trustee not later than the fifth  Business Day after the date of
such telegram, telex, facsimile transmission or letter; provided,  however, that
such telegram,  telex,  facsimile transmission or letter shall only be effective
if such  Security  and form duly  completed  are received by the Trustee by such
fifth Business Day. If less than the entire principal amount of such Security is
to be

                                       51
<PAGE>
repaid in accordance  with the terms of such Security,  the principal  amount of
such  Security  to be repaid,  in  increments  of the minimum  denomination  for
Securities of such series, and the denomination or denominations of the Security
or Securities to be issued to the Holder for the portion of the principal amount
of such Security  surrendered that is not to be repaid,  must be specified.  The
principal  amount of any security  providing  for repayment at the option of the
Holder  thereof  may not be repaid in part if,  following  such  repayment,  the
unpaid  principal  amount  of such  Security  would  be less  than  the  minimum
authorized denomination of Securities of the series of which such Security to be
repaid  is a part.  Except  as  otherwise  may be  provided  by the terms of any
Security  providing for repayment at the option of the Holder thereof,  exercise
of the repayment option by the Holder shall be irrevocable  unless waived by the
Company.

                  SECTION 1304. When Securities  Presented for Repayment  Become
Due and Payable.  If  Securities  of any series  providing  for repayment at the
option of the Holders  thereof shall have been  surrendered  as provided in this
Article and as provided  by or  pursuant to the terms of such  Securities,  such
Securities  or the  portions  thereof,  as the case may be, to be  repaid  shall
become due and payable and shall be paid by the  Company on the  Repayment  Date
therein  specified,  and on and after such  Repayment  Date  (unless the Company
shall  default in the payment of such  Securities on such  Repayment  Date) such
Securities shall, if the same were interest-bearing,  cease to bear interest and
the coupons for such  interest  appertaining  to any Bearer  Securities so to be
repaid,  except to the extent provided  below,  shall be void. Upon surrender of
any such  Security for repayment in accordance  with such  provisions,  together
with all coupons,  if any,  appertaining  thereto  maturing  after the Repayment
Date, the principal amount of such Security so to be repaid shall be paid by the
Company,  together  with  accrued  interest,  if  any,  to the  Repayment  Date;
provided,  however,  that coupons  whose  Stated  Maturity is on or prior to the
Repayment Date shall be payable only at an office or agency located  outside the
United  States  (except  as  otherwise  provided  in Section  1002) and,  unless
otherwise  specified  pursuant  to  Section  301,  only  upon  presentation  and
surrender of such coupons;  and provided further that, in the case of Registered
Securities,  installments  of interest,  if any, whose Stated  Maturity is on or
prior to the  Repayment  Date shall be payable  (but without  interest  thereon,
unless the Company shall default in the payment  thereof) to the Holders of such
Securities,  or one or more  Predecessor  Securities,  registered as such at the
close of business on the relevant  Record Dates according to their terms and the
provisions of Section 307.

                  If any Bearer Security  surrendered for repayment shall not be
accompanied by all appurtenant  coupons  maturing after the Repayment Date, such
Security  may be paid  after  deducting  from the  amount  payable  therefor  as
provided in Section  1302 an amount equal to the face amount of all such missing
coupons, or the surrender of such missing coupon or coupons may be waived by the
Company and the Trustee if there be furnished to them such security or indemnity
as they may  require  to save each of them and any  Paying  Agent  harmless.  If
thereafter  the Holder of such  Security  shall  surrender to the Trustee or any
Paying Agent any such missing coupon in respect of which a deduction  shall have
been made as provided in the preceding  sentence,  such Holder shall be entitled
to receive the amount so deducted;  provided, however, that interest represented
by coupons  shall be payable  only at an office or agency  located  outside  the
United  States  (except  as  otherwise  provided  in Section  1002) and,  unless
otherwise  specified as contemplated by Section 301, only upon  presentation and
surrender of those coupons.

                  If the  principal  amount  of  any  Security  surrendered  for
repayment shall not be so repaid upon surrender  thereof,  such principal amount
(together with interest,  if any, thereon accrued to such Repayment Date) shall,
until paid,  bear interest  from the  Repayment  Date at the rate of interest or
Yield to Maturity (in the case of Original Issue Discount  Securities) set forth
in such Security.

                  SECTION 1305. Securities Repaid in Part. Upon surrender of any
Registered  Security  which is to be  repaid in part  only,  the  Company  shall
execute and the  Trustee  shall  authenticate  and deliver to the Holder of such
Security,  without  service  charge  and at the  expense of the  Company,  a new
Registered  Security  or  Securities  of the  same  series,  of  any  authorized
denomination  specified by the Holder, in an aggregate principal amount equal to
and in exchange for the portion of the principal of such Security so surrendered
which is not to be repaid.

                                       52
<PAGE>
                                ARTICLE FOURTEEN

                       DEFEASANCE AND COVENANT DEFEASANCE

                  SECTION 1401.  Applicability  of Article;  Company's Option to
Effect Defeasance or Covenant Defeasance. If, pursuant to Section 301, provision
is made for either or both of (a)  defeasance  of the  Securities of or within a
series under  Section 1402 or (b) covenant  defeasance  of the  Securities of or
within a series  under  Section  1403,  then the  provisions  of such Section or
Sections, as the case may be, together with the other provisions of this Article
(with such  modifications  thereto as may be  specified  pursuant to Section 301
with respect to any Securities),  shall be applicable to such Securities and any
coupons  appertaining  thereto,  and the  Company  may at its  option  by  Board
Resolution,  at any  time,  with  respect  to such  Securities  and any  coupons
appertaining thereto, elect to have Section 1402 (if applicable) or Section 1403
(if  applicable)  be  applied to such  Outstanding  Securities  and any  coupons
appertaining thereto upon compliance with the conditions set forth below in this
Article.

                  SECTION 1402.  Defeasance  and  Discharge.  Upon the Company's
exercise of the above  option  applicable  to this  Section  with respect to any
Securities  of or  within a  series,  the  Company  shall be deemed to have been
discharged from its obligations with respect to such Outstanding  Securities and
any coupons appertaining thereto on the date the conditions set forth in Section
1404  are  satisfied  (hereinafter,   "defeasance").   For  this  purpose,  such
defeasance  means that the Company  shall be deemed to have paid and  discharged
the entire  indebtedness  represented  by such  Outstanding  Securities  and any
coupons   appertaining   thereto,   which  shall  thereafter  be  deemed  to  be
"Outstanding"  only for the purposes of Section  1405 and the other  Sections of
this Indenture  referred to in clauses (A) and (B) below,  and to have satisfied
all of its other obligations under such Securities and any coupons  appertaining
thereto  and  this  Indenture   insofar  as  such  Securities  and  any  coupons
appertaining  thereto  are  concerned  (and the  Trustee,  at the expense of the
Company,  shall execute proper instruments  acknowledging the same),  except for
the  following  which shall  survive  until  otherwise  terminated or discharged
hereunder:  (A) the  rights of Holders of such  Outstanding  Securities  and any
coupons appertaining thereto to receive, solely from the trust fund described in
Section 1404 and as more fully set forth in such Section, payments in respect of
the principal of (and premium, if any) and interest,  if any, on such Securities
and any  coupons  appertaining  thereto  when  such  payments  are due,  (B) the
Company's  obligations  with respect to such Securities under Sections 305, 306,
1002 and 1003 and with respect to the payment of Additional  Amounts, if any, on
such Securities as contemplated by Section 1007, (C) the rights, powers, trusts,
duties and  immunities of the Trustee  hereunder and (D) this Article  Fourteen.
Subject to compliance with this Article  Fourteen,  the Company may exercise its
option under this Section notwithstanding the prior exercise of its option under
Section  1403 with  respect  to such  Securities  and any  coupons  appertaining
thereto.

                  SECTION 1403. Covenant Defeasance. Upon the Company's exercise
of the above option applicable to this Section with respect to any Securities of
or within a series,  the Company  shall be released from its  obligations  under
Sections  1004  and  1005  and,  if  specified  pursuant  to  Section  301,  its
obligations  under  any  other  covenant,   with  respect  to  such  Outstanding
Securities  and any  coupons  appertaining  thereto  on and  after  the date the
conditions  set forth in  Section  1404 are  satisfied  (hereinafter,  "covenant
defeasance"),  and such  Securities and any coupons  appertaining  thereto shall
thereafter be deemed to be not  "Outstanding" for the purposes of any direction,
waiver,  consent or declaration or Act of Holders (and the  consequences  of any
thereof) in connection with Sections 1004 and 1005 or such other  covenant,  but
shall continue to be deemed "Outstanding" for all other purposes hereunder.  For
this  purpose,  such  covenant  defeasance  means  that,  with  respect  to such
Outstanding  Securities and any coupons  appertaining  thereto,  the Company may
omit to  comply  with and  shall  have no  liability  in  respect  of any  term,
condition or  limitation  set forth in any such Section or such other  covenant,
whether directly or indirectly,  by reason of any reference  elsewhere herein to
any such  Section or such other  covenant or by reason of  reference in any such
Section or such other  covenant  to any other  provision  herein or in any other
document and such omission to comply shall not  constitute a default or an Event
of Default under Section 501(4) or 501(9) or otherwise,  as the case may be, but
except as specified  above,  the remainder of this Indenture and such Securities
and any coupons appertaining thereto shall be unaffected thereby.

                                       53
<PAGE>

                  SECTION 1404. Conditions to Defeasance or Covenant Defeasance.
The following  shall be the conditions to application of Section 1402 or Section
1403 to any  Outstanding  Securities  of or  within  a  series  and any  coupons
appertaining thereto:

                           (a) The Company shall  irrevocably  have deposited or
         caused to be deposited with the Trustee (or another trustee  satisfying
         the  requirements  of Section  607 who shall  agree to comply  with the
         provisions of this Article Fourteen applicable to it) as trust funds in
         trust for the purpose of making the  following  payments,  specifically
         pledged as security  for, and  dedicated  solely to, the benefit of the
         Holders of such Securities and any coupons appertaining thereto, (1) an
         amount in such  currency,  currencies  or  currency  unit in which such
         Securities and any coupons  appertaining  thereto are then specified as
         payable at Stated  Maturity)  which  through the  scheduled  payment of
         principal  and  interest in respect  thereof in  accordance  with their
         terms will  provide,  not later than one day before the due date of any
         payment of principal of (and premium, if any) and interest,  if any, on
         such Securities and any coupons appertaining thereto, or (2) Government
         Obligations  applicable  to such  Securities  and coupons  appertaining
         thereto  (determined  on the  basis  of  the  currency,  currencies  or
         currency unit in which such Securities and coupons appertaining thereto
         are then  specified as payable at Stated  Maturity)  which  through the
         scheduled  payment of  principal  and  interest  in respect  thereof in
         accordance with their terms will provide, not later than one day before
         the due date of any payment of principal of (and  premium,  if any) and
         interest,  if any,  on such  Securities  and any  coupons  appertaining
         thereto, money in an amount, or (3) a combination thereof in an amount,
         sufficient,   in  the  opinion  of  a  nationally  recognized  firm  of
         independent  public  accountants  expressed in a written  certification
         thereof delivered to the Trustee, to pay and discharge, and which shall
         be applied by the  Trustee  (or other  qualifying  trustee)  to pay and
         discharge,  (i) the principal of (and premium, if any) and interest, if
         any,  on  such  Outstanding  Securities  and any  coupons  appertaining
         thereto on the Stated  Maturity of such  principal  or  installment  of
         principal or interest and (ii) any  mandatory  sinking fund payments or
         analogous  payments  applicable to such Outstanding  Securities and any
         coupons  appertaining thereto on the day on which such payments are due
         and payable in accordance  with the terms of this Indenture and of such
         Securities and any coupons appertaining thereto.

                           (b) Such defeasance or covenant  defeasance shall not
         result in a breach or violation of, or constitute a default under, this
         Indenture or any other  material  agreement or  instrument to which the
         Company is a party or by which it is bound.

                           (c) No Event of Default or event which with notice or
         lapse of time or both would  become an Event of Default with respect to
         such  Securities  and  any  coupons  appertaining  thereto  shall  have
         occurred and be continuing  on the date of such deposit or,  insofar as
         Sections 501(6) and 501(7) are concerned, at any time during the period
         ending  on the  91st  day  after  the date of such  deposit  (it  being
         understood that this condition shall not be deemed  satisfied until the
         expiration of such period).

                           (d) In the case of an election  under  Section  1402,
         the Company  shall have  delivered to the Trustee an Opinion of Counsel
         stating  that (i) the  Company  has  received  from,  or there has been
         published by, the Internal Revenue Service a ruling,  or (ii) since the
         date of  execution  of this  Indenture,  there has been a change in the
         applicable  Federal  income tax law, in either case to the effect that,
         and based thereon such opinion shall confirm that,  the Holders of such
         Outstanding  Securities and any coupons  appertaining  thereto will not
         recognize  income,  gain or loss for Federal  income tax  purposes as a
         result of such  defeasance and will be subject to Federal income tax on
         the same  amounts,  in the same  manner  and at the same times as would
         have been the case if such defeasance had not occurred.

                           (e) In the case of an election  under  Section  1403,
         the Company  shall have  delivered to the Trustee an Opinion of Counsel
         to the effect that the Holders of such  Outstanding  Securities and any

                                       54
<PAGE>
         coupons  appertaining  thereto will not recognize income,  gain or loss
         for Federal income tax purposes as a result of such covenant defeasance
         and will be subject to Federal  income tax on the same amounts,  in the
         same  manner  and at the same times as would have been the case if such
         covenant defeasance had not occurred.

                           (f) The Company  shall have  delivered to the Trustee
         an Officers'  Certificate and an Opinion of Counsel,  each stating that
         all conditions  precedent to the  defeasance  under Section 1402 or the
         covenant  defeasance  under Section 1403 (as the case may be) have been
         complied  with and an Opinion of Counsel to the effect  that either (i)
         as a result  of a  deposit  pursuant  to  subsection  (a) above and the
         related  exercise of the Company's option under Section 1402 or Section
         1403 (as the  case may be),  registration  is not  required  under  the
         Investment  Company  Act of 1940,  as  amended,  by the  Company,  with
         respect to the trust funds  representing such deposit or by the Trustee
         for such trust funds or (ii) all necessary registrations under said Act
         have been effected.

                           (g)  Notwithstanding  any  other  provisions  of this
         Section,  such defeasance or covenant  defeasance  shall be effected in
         compliance  with any  additional  or  substitute  terms,  conditions or
         limitations which may be imposed on the Company in connection therewith
         pursuant to Section 301.

                  SECTION 1405. Deposited Money and Government Obligations to Be
Held in Trust; Other Miscellaneous Provisions.  Subject to the provisions of the
last paragraph of Section 1003, all money and Government  Obligations  (or other
property as may be provided  pursuant to Section  301)  (including  the proceeds
thereof) deposited with the Trustee (or other qualifying  trustee,  collectively
for purposes of this Section 1405,  the  "Trustee")  pursuant to Section 1404 in
respect of any Outstanding Securities of any series and any coupons appertaining
thereto shall be held in trust and applied by the Trustee,  in  accordance  with
the provisions of such Securities and any coupons  appertaining thereto and this
Indenture,  to  the  payment,  either  directly  or  through  any  Paying  Agent
(including  the  Company  acting as its own  Paying  Agent) as the  Trustee  may
determine,  to the  Holders  of such  Securities  and any  coupons  appertaining
thereto of all sums due and to become due thereon in respect of  principal  (and
premium,  if any) and interest and  Additional  Amounts,  if any, but such money
need not be segregated from other funds except to the extent required by law.

                  Unless  otherwise  specified  with  respect  to  any  Security
pursuant to Section 301, if, after a deposit  referred to in Section 1404(a) has
been made,  (a) the Holder of a Security  in respect of which such  deposit  was
made is  entitled  to, and does,  elect  pursuant to Section 301 or the terms of
such Security to receive  payment in a currency or currency unit other than that
in which the  deposit  pursuant  to Section  1404(a) has been made in respect of
such  Security,  or (b) a Conversion  Event occurs in respect of the currency or
currency  unit in which the deposit  pursuant to Section  1404(a) has been made,
the  indebtedness  represented  by such  Security  and any coupons  appertaining
thereto  shall  be  deemed  to have  been,  and will be,  fully  discharged  and
satisfied  through the payment of the  principal of (and premium,  if any),  and
interest,  if any, on such  Security as the same becomes due out of the proceeds
yielded by converting  (from time to time as specified  below in the case of any
such  election)  the  amount or other  property  deposited  in  respect  of such
Security  into the  currency or  currency  unit in which such  Security  becomes
payable as a result of such election or Conversion Event based on the applicable
market  exchange rate for such currency or currency unit in effect on the second
Business Day prior to each payment  date,  in the case of such an election,  or,
the applicable market exchange rate in effect for such currency or currency unit
(as nearly as feasible), in the case of such Conversion Event.

                  The Company shall pay and  indemnify  the Trustee  against any
tax,  fee  or  other  charge  imposed  on or  assessed  against  the  Government
Obligations  deposited  pursuant to Section 1404 or the  principal  and interest
received in respect  thereof  other than any such tax, fee or other charge which
by law is for the account of the Holders of such Outstanding  Securities and any
coupons appertaining thereto.

                  Anything in this Article to the contrary notwithstanding,  the
Trustee  shall  deliver  or pay to the  Company  from time to time upon  Company
Request any money or Government  Obligations (or other property and any

                                       55
<PAGE>
proceeds therefrom) held by it as provided in Section 1404 which, in the opinion
of a nationally recognized firm of independent public accountants expressed in a
written  certification  thereof  delivered to the Trustee,  are in excess of the
amount  thereof  which  would  then be  required  to be  deposited  to  effect a
defeasance  or covenant  defeasance,  as  applicable,  in  accordance  with this
Article.

                                 ARTICLE FIFTEEN

                        MEETINGS OF HOLDERS OF SECURITIES

                  SECTION  1501.  Purposes for Which  Meetings May Be Called.  A
meeting  of Holders  of  Securities  of any series may be called at any time and
from time to time  pursuant to this  Article to make,  give or take any request,
demand,  authorization,  direction,  notice,  consent,  waiver  or other  action
provided by this  Indenture to be made,  given or taken by Holders of Securities
of such series.

                  SECTION  1502.  Call,  Notice and Place of  Meetings.  (a) The
Trustee  may at any time call a meeting of Holders of  Securities  of any series
for any purpose  specified in Section  1501, to be held at such time and at such
place in the City of Boston, or in London as the Trustee shall determine. Notice
of every meeting of Holders of Securities of any 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,  in the manner  provided in Section 106,
not less than 21 nor more than 180 days prior to the date fixed for the meeting.

                  (b) In case  at any  time  the  Company,  pursuant  to a Board
Resolution,  or  the  Holders  of at  least  25%  in  principal  amount  of  the
Outstanding  Securities of any series shall have requested the Trustee to call a
meeting of the Holders of Securities of such series for any purpose specified in
Section 1501, by written request  setting forth in reasonable  detail the action
proposed to be taken at the  meeting,  and the  Trustee  shall not have made the
first  publication of the notice of such meeting within 21 days after receipt of
such request or shall not thereafter  proceed to cause the meeting to be held as
provided herein, then the Company or the Holders of Securities of such series in
the amount above  specified,  as the case may be, may determine the time and the
place in the City of  Boston,  or in London for such  meeting  and may call such
meeting for such purposes by giving notice thereof as provided in subsection (a)
of this Section.

                  SECTION  1503.  Persons  Entitled to Vote at  Meetings.  To be
entitled to vote at any meeting of Holders of Securities of any series, a Person
shall be (1) a Holder of one or more Outstanding  Securities of such series,  or
(2) a Person  appointed  by an  instrument  in  writing as proxy for a Holder or
Holders of one or more  Outstanding  Securities of such series by such Holder or
Holders. The only Persons who shall be entitled to be present or to speak at any
meeting of Holders of Securities of any series shall be the Persons  entitled to
vote at such meeting and their counsel,  any  representatives of the Trustee and
its counsel and any representatives of the Company and its counsel.

                  SECTION 1504.  Quorum;  Action. The Persons entitled to vote a
majority in principal  amount of the  Outstanding  Securities  of a series shall
constitute  a quorum  for a meeting of Holders  of  Securities  of such  series;
provided,  however,  that if any  action  is to be  taken at such  meeting  with
respect to a consent or waiver which this  Indenture  expressly  provides may be
given by the Holders of not less than a specified percentage in principal amount
of the  Outstanding  Securities of a series,  the Persons  entitled to vote such
specified  percentage in principal amount of the Outstanding  Securities of such
series shall  constitute a quorum.  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 Holders of Securities of such series, be dissolved.  In any other
case  the  meeting  may be  adjourned  for a  period  of not  less  than 10 days
determined  by the  chairman of the  meeting  prior to the  adjournment  of such
meeting.  In the  absence  of a  quorum  at any  such  adjourned  meeting,  such
adjourned meeting may be further adjourned for a period of not less than 10 days
as determined by the chairman of the meeting  prior to the  adjournment  of such
adjourned  meeting.  Notice of the reconvening of any

                                       56
<PAGE>
adjourned  meeting  shall be given as provided in Section  1502(a),  except that
such notice need be given only once not less than five days prior to the date on
which the meeting is scheduled to be  reconvened.  Notice of the  reconvening of
any adjourned  meeting shall state expressly the percentage,  as provided above,
of the principal amount of the Outstanding Securities of such series which shall
constitute a quorum.

                  Except  as  limited  by  the  proviso  to  Section   902,  any
resolution  presented to a meeting or adjourned meeting duly reconvened at which
a quorum is present as aforesaid may be adopted by the  affirmative  vote of the
Holders of a majority in principal amount of the Outstanding  Securities of that
series;  provided,  however,  that,  except as limited by the proviso to Section
902,  any  resolution  with  respect  to  any  request,  demand,  authorization,
direction,  notice,  consent,  waiver  or  other  action  which  this  Indenture
expressly  provides  may be made,  given or taken by the  Holders of a specified
percentage,  which  is  less  than  a  majority,  in  principal  amount  of  the
Outstanding  Securities  of a series may be adopted at a meeting or an adjourned
meeting  duly  reconvened  and at which a quorum is present as  aforesaid by the
affirmative vote of the Holders of such specified percentage in principal amount
of the Outstanding Securities of that series.

                  Any  resolution  passed or  decision  taken at any  meeting of
Holders of Securities  of any series duly held in  accordance  with this Section
shall be binding on all the Holders of Securities of such series and the related
coupons, whether or not present or represented at the meeting.

                  Notwithstanding the foregoing provisions of this Section 1504,
if any action is to be taken at a meeting of Holders of Securities of any series
with respect to any request, demand, authorization,  direction, notice, consent,
waiver or other action that this Indenture expressly provides may be made, given
or taken by the Holders of a specified  percentage  in  principal  amount of all
Outstanding  Securities  affected thereby,  or of the Holders of such series and
one or more additional series:

                           (i) there shall be no minimum quorum  requirement for
         such meeting; and

                           (ii)  the   principal   amount  of  the   Outstanding
         Securities of such series that vote in favor of such  request,  demand,
         authorization, direction, notice, consent, waiver or other action shall
         be taken into  account in  determining  whether such  request,  demand,
         authorization,  direction,  notice, consent, waiver or other action has
         been made, given or taken under this Indenture.

                  SECTION  1505.  Determination  of Voting  Rights;  Conduct and
Adjournment of Meetings.  (a)  Notwithstanding any provisions of this Indenture,
the Trustee may make such  reasonable  regulations  as it may deem advisable for
any  meeting  of  Holders  of  Securities  of a series in regard to proof of the
holding of  Securities of such series and of the  appointment  of proxies and in
regard to the appointment and duties of inspectors of votes,  the submission and
examination  of proxies,  certificates  and other evidence of the right to vote,
and such other  matters  concerning  the conduct of the meeting as it shall deem
appropriate.  Except as otherwise permitted or required by any such regulations,
the holding of Securities shall be proved in the manner specified in Section 104
and the  appointment  of any proxy  shall be proved in the manner  specified  in
Section  104 or by  having  the  signature  of the  Person  executing  the proxy
witnessed or  guaranteed  by any trust  company,  bank or banker  authorized  by
Section 104 to certify to the holding of Bearer Securities. Such regulations may
provide that written instruments appointing proxies,  regular on their face, may
be presumed  valid and genuine  without  the proof  specified  in Section 104 or
other proof.

                  (b) 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 Holders of Securities as provided in Section 1502(b), in which
case the Company or the Holders of Securities of the series calling the meeting,
as the case  may be,  shall in like  manner  appoint  a  temporary  chairman.  A
permanent chairman and a permanent  secretary of the meeting shall be elected by
vote of the  Persons  entitled  to vote a majority  in  principal  amount of the
Outstanding Securities of such series represented at the meeting.

                                       57
<PAGE>
                  (c) At any meeting each Holder of a Security of such series or
proxy  shall be entitled  to one vote for each  $1,000  principal  amount of the
Outstanding  Securities  of such series held or  represented  by him;  provided,
however,  that no vote shall be cast or counted at any meeting in respect of any
Security  challenged as not Outstanding and ruled by the chairman of the meeting
to be not Outstanding.  The chairman of the meeting shall have no right to vote,
except as a Holder of a Security of such series or proxy.

                  (d) Any  meeting of Holders of  Securities  of any series duly
called  pursuant to Section  1502 at which a quorum is present may be  adjourned
from time to time by Persons  entitled to vote a majority in principal amount of
the Outstanding  Securities of such series  represented at the meeting,  and the
meeting may be held as so adjourned without further notice.

                  SECTION 1506. Counting Votes and Recording Action of Meetings.
The vote upon any  resolution  submitted to any meeting of Holders of Securities
of any series  shall be by  written  ballots on which  shall be  subscribed  the
signatures   of  the  Holders  of   Securities   of  such  series  or  of  their
representatives  by proxy and the  principal  amounts and serial  numbers of the
Outstanding Securities of such series held or represented by them. The permanent
chairman of the meeting  shall  appoint two  inspectors of votes who shall count
all votes cast at the meeting for or against any  resolution  and who shall make
and file with the secretary of the meeting  their  verified  written  reports in
duplicate of all votes cast at the meeting. A record, at least in duplicate,  of
the  proceedings of each meeting of Holders of Securities of any Series 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
fact,  setting  forth a copy of the notice of the meeting and showing  that said
notice was given as provided in Section 1502 and, if  applicable,  Section 1504.
Each copy  shall be signed  and  verified  by the  affidavits  of the  permanent
chairman  and  secretary  of the meeting and one such copy shall be delivered to
the  Company  and another to the Trustee to be  preserved  by the  Trustee,  the
latter to have attached thereto the ballots voted at the meeting.  Any record so
signed and verified shall be conclusive evidence of the matters therein stated.

                  This Indenture may be executed in any number of  counterparts,
each of which when so executed  shall be deemed to be an original,  but all such
counterparts shall together constitute but one and the same Indenture.

                  IN WITNESS  WHEREOF,  the  parties  hereto  have  caused  this
Indenture to be duly  executed,  as an instrument  under seal, all as of the day
and year first above written.

                                             HOSPITALITY PROPERTIES TRUST

                                             By:___________________________
                                                Title:

                                             ______________________________

                                             By:___________________________
                                                Title:

                                       58
<PAGE>
                                    EXHIBIT A

                             FORMS OF CERTIFICATION

                                   EXHIBIT A-1

               FORM OF CERTIFICATE TO BE GIVEN BY PERSON ENTITLED
                TO RECEIVE BEARER SECURITY OR TO OBTAIN INTEREST
                       PAYABLE PRIOR TO THE EXCHANGE DATE

[Insert title or sufficient description of Securities to be delivered]

                  This is to certify that, as of the date hereof,  and except as
set forth below, the above-captioned  Securities held by you for our account (i)
are owned by person(s)  that are not citizens or residents of the United States,
domestic  partnerships,  domestic corporations or any estate or trust the income
of which is subject to United States federal income  taxation  regardless of its
source ("United States  person(s)"),  (ii) are owned by United States  person(s)
that are (a) foreign branches of United States financial institutions (financial
institutions,   as  defined  in  United  States  Treasury   Regulations  Section
2.165-12(c)(1)(v) are herein referred to as "financial institutions") purchasing
for their own account or for resale, or (b) United States person(s) who acquired
the Securities through foreign branches of United States financial  institutions
and who hold the Securities through such United States financial institutions on
the  date  hereof  (and in  either  case (a) or (b),  each  such  United  States
financial  institutions  hereby agrees,  on its own behalf or through its agent,
that you may advise Health and Rehabilitation Properties Trust or its agent that
such  financial  institutions  will  comply  with the  requirements  of  Section
165(j)(3)(A),  (B) or (C) of the United States Internal Revenue Code of 1986, as
amended, and the regulations thereunder), or (iii) are owned by United States or
foreign  financial  institution(s)  for purposes of resale during the restricted
period   (as   defined   in   United   States   Treasury   Regulations   Section
1.163-5(c)(1)(i)(D)(7),  and, in  addition,  if the owner is a United  States or
foreign financial  institutions  described in clause (iii) above (whether or not
also  described  in clause (i) or (ii)),  this is to further  certify  that such
financial  institutions  has not acquired the  Securities for purposes of resale
directly  or  indirectly  to a United  States  person or to a person  within the
United States or its possessions.

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

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

                  This  certificate  excepts  and does  not  relate  to  (U.S.$)
_______________ of such interest in the above-captioned Securities in respect of
which we are not able to certify and as to which we  understand  an exchange for
an interest in a Permanent  Global  Security or an exchange  for and delivery of
definitive  Securities (or, if relevant,  collection of any interest)  cannot be
made until we do so certify.

                  We  understand  that  this  certificate  may  be  required  in
connection with certain tax legislation in the United States.  If administrative
or legal  proceedings  are commenced or threatened in connection with which this
certificate  is or would be relevant,  we  irrevocably  authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.

Dated: __________________, 20__

<PAGE>
[To be  dated no  earlier  than the 15th day prior
to  (i)  the  Exchange   Date  or  (ii)  the
relevant  Interest  Payment  Date  occurring
prior to the Exchange Date, as applicable]

                                        [Name of Person Making Certification]

                                        _____________________________________
                                        (Authorized Signatory)
                                        Name:
                                        Title:

                                       2

<PAGE>
                                  EXHIBIT A-2

                  FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR
               AND CLEARSTREAM IN CONNECTION WITH THE EXCHANGE OF
                 A PORTION OF A TEMPORARY GLOBAL SECURITY OR TO
               OBTAIN INTEREST PAYABLE PRIOR TO THE EXCHANGE DATE

                                   CERTIFICATE

[Insert title or sufficient description of Securities to be delivered]

                  This  is  to   certify   that,   based   solely   on   written
certifications  that  we  have  received  in  writing,  by  tested  telex  or by
electronic  transmission  from each of the persons  appearing  in our records as
persons  entitled  to a portion of the  principal  amount  set forth  below (our
"Member  Organizations")  substantially in the form attached  hereto,  as of the
date hereof,  [U.S.$) principal amount of the above-captioned  Securities (i) is
owned by person(s)  that are not  citizens or  residents  of the United  States,
domestic  partnerships,  domestic corporations or any estate or trust the income
of which is subject to United States Federal income  taxation  regardless of its
source ("United  States  person(s)"),  (ii) is owned by United States  person(s)
that are (a) foreign branches of United States financial institutions (financial
institutions,  as defined in U.S. Treasury Regulations Section 1.165-12(c)(1)(v)
are herein  referred to as "financial  institutions")  purchasing  for their own
account  or  for  resale,  or (b)  United  States  person(s)  who  acquired  the
Securities through foreign branches of United States financial  institutions and
who hold the Securities through such United States financial institutions on the
date  hereof (and in either case (a) or (b),  each such  financial  institutions
will comply with the  requirements  of Section  165(j)(3)(A),  (B) or (C) of the
Internal Revenue Code of 1986, as amended, and the regulations  thereunder),  or
(iii) is owned by United States or foreign financial institution(s) for purposes
of resale during the  restricted  period (as defined in United  States  Treasury
Regulations  Section  1.163-5(c)(2)(i)(D)(7)),  and, to the further effect, that
financial  institutions  described  in clause  (iii) above  (whether or not also
described in clause (i) or (ii)) have  certified that they have not acquired the
Securities  for purposes of resale  directly or  indirectly  to a United  States
person or to a person within the United States or its possessions.

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

                  We  further  certify  that  (i) we are  not  making  available
herewith for exchange (or, if relevant,  collection of any interest) any portion
of the temporary  global Security  representing the  above-captioned  Securities
excepted in the  above-referenced  certificates of Member Organizations and (ii)
as of the date  hereof we have not  received  any  notification  from any of our
Member  Organizations  to the effect  that the  statements  made by such  Member
Organizations  with  respect to any portion of the part  submitted  herewith for
exchange  (or, if relevant,  collection  of any interest) are no longer true and
cannot be relied upon as of the date hereof.

                  We  understand   that  this   certification   is  required  in
connection with certain tax legislation in the United States.  If administrative
or legal  proceedings  are commenced or threatened in connection with which this
certificate  is or would be relevant,  we  irrevocably  authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.

<PAGE>

Date: ______________ 20__

[To be dated no  earlier  than the  Exchange
Date or the relevant  Interest  Payment Date
occurring  prior to the  Exchange  Date,  as
applicable]

                     [Morgan Guaranty Trust Company  New York, Brussels Office,]
                                            as Operator of the Euroclear System
                                            [Clearstream]

                                       2

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