Document:

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                                                                     EXHBIT 10.1

                                                                  Execution Copy

                          REGISTRATION RIGHTS AGREEMENT

                                   dated as of

                                  March 5, 2003

                                      among

                          SOUTHERN NATURAL GAS COMPANY

                                       and

                            SALOMON SMITH BARNEY INC.
                         CREDIT SUISSE FIRST BOSTON LLC
                              ABN AMRO INCORPORATED
                         BANC OF AMERICA SECURITIES LLC
                          BNP PARIBAS SECURITIES CORP.
                           J.P. MORGAN SECURITIES INC.

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                          REGISTRATION RIGHTS AGREEMENT

         THIS REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT") is made and
entered into as of March 5, 2003, by and among SOUTHERN NATURAL GAS COMPANY (the
"COMPANY"), a corporation duly organized and existing under the laws of the
State of Delaware, and the several initial purchasers listed on Schedule I
hereto, (the "INITIAL Purchasers").

         This Agreement is made pursuant to the Purchase Agreement dated
February 28, 2003, by and among the Company and the Initial Purchasers (the
"PURCHASE AGREEMENT"), which provides for the sale by the Company to the Initial
Purchasers of $300,000,000 principal amount of its 8 7/8% Senior Notes due 2010
(the "SECURITIES"). The Securities are to be issued pursuant to the provisions
of an Indenture dated as of March 5, 2003, (as amended, supplemented or
otherwise modified from time to time, the "INDENTURE") by and among the Company
and The Bank of New York, as trustee (the "TRUSTEE").

         In order to induce the Initial Purchasers to enter into the Purchase
Agreement, the Company has agreed to provide to each Initial Purchaser and its
direct and indirect transferees the registration rights with respect to the
Securities set forth in this Agreement. The execution of this Agreement is a
condition to the closing under the Purchase Agreement.

         In consideration of the foregoing, the parties hereto agree as follows:

         1. Definitions.

         As used in this Agreement, the following capitalized defined terms
shall have the following meanings:

         "1933 ACT" shall mean the Securities Act of 1933, as amended from time
to time.

         "1934 ACT" shall mean the Securities Exchange Act of 1934, as amended
from time to time.

         "AGREEMENT" shall have the meaning set forth in the preamble.

         "BUSINESS DAY" shall have the meaning set forth in Rule 13e-4(a)(3)
under the 1934 Act.

         "CLOSING DATE" shall mean the Closing Date as defined in the Purchase
Agreement.

         "COMPANY" shall have the meaning set forth in the preamble and shall
also include the Company's successors.

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         "EXCHANGE DATES" shall have the meaning set forth in Section 2(a)(ii).

         "EXCHANGE OFFER" shall mean the exchange offer by the Company of
Exchange Securities for all Securities that are Registrable Securities pursuant
to Section 2(a) hereof.

         "EXCHANGE OFFER REGISTRATION" shall mean a registration under the 1933
Act effected pursuant to Section 2(a) hereof.

         "EXCHANGE OFFER REGISTRATION STATEMENT" shall mean a registration
statement on Form S-4 (or, if applicable, on another appropriate form) relating
to an offering of Exchange Securities pursuant to an Exchange Offer and all
amendments and supplements to such registration statement, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.

         "EXCHANGE SECURITIES" shall mean any securities issued by the Company
to be offered to Holders in exchange for Securities (pursuant to the Exchange
Offer or otherwise) pursuant to an Exchange Offer Registration Statement
containing terms identical in all material respects to the Securities for which
they are exchanged (except that (i) interest thereon shall accrue from the last
date on which interest was paid on the Securities or, if no such interest has
been paid, from the date of issuance of the Securities, (ii) the Exchange
Securities will not contain the legend appearing on the face of the Securities
in the form recited in the Indenture and will not contain terms with respect to
transfer restrictions and (iii) the Exchange Securities will not contain terms
with respect to the payment of liquidated damages.

         "HOLDER" shall mean each Initial Purchaser, for so long as it owns any
Registrable Securities, and each of its successors, assigns and direct and
indirect transferees who become registered owners of Registrable Securities
under the Indenture; provided that for purposes of Sections 4 and 5 of this
Agreement, the term "Holder" shall include Participating Broker-Dealers (as
defined in Section 4(a)).

         "INDEMNIFIED PARTY" shall have the meaning set forth in Section 5(c).

         "INDEMNIFYING PARTY" shall have the meaning set forth in Section 5(c).

         "INDENTURE" shall have the meaning set forth in the preamble.

          "INITIAL PURCHASERS" shall have the meaning set forth in the preamble.

         "LIQUIDATED DAMAGES" shall have the meaning set forth in Section 2(e).

         "MAJORITY HOLDERS" shall mean the Holders of a majority of the
aggregate principal amount of outstanding Registrable Securities; provided that,
for purposes of Section 6(b), whenever the consent or approval of Holders of a
specified percentage of Registrable Securities is required hereunder,
Registrable Securities held by the

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Company or any of its affiliates (as such term is defined in Rule 405 under the
1933 Act) (other than the Initial Purchasers or subsequent Holders of
Registrable Securities if such subsequent Holders are deemed to be such
affiliates solely by reason of their holding of such Registrable Securities)
shall not be considered outstanding and shall not be counted in determining
whether such consent or approval was given by the Holders of such required
percentage or amount.

         "PARTICIPANT" shall have the meaning set forth in Section 5(a).

         "PARTICIPATING BROKER-DEALER" shall have the meaning set forth in
Section 4(a) hereof.

         "PERSON" shall mean an individual, partnership, limited liability
company, corporation, trust or unincorporated organization, or a government or
agency or political subdivision thereof.

         "PROSPECTUS" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Securities covered by a Shelf Registration Statement, and by all
other amendments and supplements to such prospectus, and in each case including
all material incorporated by reference therein.

         "PURCHASE AGREEMENT" shall have the meaning set forth in the preamble.

         "REGISTRABLE SECURITIES" shall mean the Securities; provided, however,
that the Securities shall cease to be Registrable Securities when (i) a
Registration Statement with respect to such Securities shall have been declared
effective under the 1933 Act and such Securities shall have been exchanged for
Exchange Securities pursuant to an Exchange Offer Registration Statement or
disposed of pursuant to a Shelf Registration Statement, as applicable, (ii) such
Securities have been sold to the public pursuant to Rule 144 under the 1933 Act
or are saleable pursuant to Rule 144(k)(or any similar provision then in force,
but not Rule 144A) under the 1933 Act or (iii) such Securities shall have ceased
to be outstanding.

         "REGISTRATION DEFAULT" shall have the meaning set forth in Section
2(e).

         "REGISTRATION EXPENSES" shall mean any and all expenses incident to
performance of or compliance by the Company with this Agreement, including
without limitation: (i) all SEC, stock exchange or National Association of
Securities Dealers, Inc. registration and filing fees, (ii) all fees and
expenses incurred in connection with compliance with state securities or blue
sky laws (including reasonable fees and disbursements of counsel for any
underwriters or Holders in connection with blue sky qualification of any of the
Exchange Securities or Registrable Securities), (iii) all expenses of any Person
in preparing or assisting in preparing, word processing, printing and
distributing any Registration Statement, any

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Prospectus, any amendments or supplements thereto, any underwriting agreements,
securities sales agreements and other documents relating to the performance of
and compliance with this Agreement, (iv) all rating agency fees, (v) all fees
and disbursements relating to the qualification of the Indenture under
applicable securities laws, (vi) the fees and disbursements of the Trustee and
its counsel, (vii) the fees and disbursements of counsel for the Company and, in
the case of a Shelf Registration Statement, the reasonable fees and
disbursements of one counsel for the Holders (which counsel shall be selected by
the Majority Holders and which counsel may also be counsel for the Initial
Purchasers) and (viii) the fees and disbursements of the independent public
accountants of the Company, including the expenses of any special audits or
"cold comfort" letters required by or incident to such performance and
compliance, but excluding fees of counsel to the Underwriters (other than the
fees and expenses set forth in clause (ii) above) and the Holders and
underwriting discounts and commissions and transfer taxes, if any, relating to
the sale or disposition of Registrable Securities by a Holder.

         "REGISTRATION STATEMENT" shall mean any registration statement of the
Company that covers any of the Exchange Securities or the Registrable Securities
pursuant to the provisions of this Agreement and all amendments and supplements
to any such Registration Statement, including post-effective amendments, in each
case including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.

         "SEC" shall mean the Securities and Exchange Commission.

         "SECURITIES" shall have the meaning set forth in the preamble.

         "SHELF REGISTRATION" shall mean a registration effected pursuant to
Section 2(b) hereof.

         "SHELF REGISTRATION STATEMENT" shall mean a "shelf" registration
statement of the Company pursuant to the provisions of Section 2(b) of this
Agreement which covers all of the Registrable Securities (but no other
securities unless approved by the Holders of a majority of the aggregate
principal amount of outstanding Registrable Securities that are covered by such
Shelf Registration Statement) on an appropriate form under Rule 415 under the
1933 Act, or any similar rule that may be adopted by the SEC, and all amendments
and supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.

         "TIA" shall have the meaning set forth in Section 3(1) hereof.

         "TRUSTEE" shall have the meaning set forth in the preamble.

         "UNDERWRITER" shall have the meaning set forth in Section 3 hereof.

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         "UNDERWRITTEN REGISTRATION OR UNDERWRITTEN OFFERING" shall mean a
registration in which Registrable Securities are sold to an Underwriter for
reoffering to the public.

           2.   Registration under the 1933 Act.

                  (a) To the extent not prohibited by any applicable law or
         applicable interpretation of the staff of the SEC, the Company shall
         (1) cause to be filed an Exchange Offer Registration Statement within
         90 days following the Closing Date covering the offer by the Company to
         the Holders to exchange all of the Registrable Securities for an equal
         aggregate principal amount of Exchange Securities and (2) use its
         reasonable best efforts to cause such Exchange Offer Registration
         Statement to become effective within 210 days following the Closing
         Date. The Company shall use its reasonable best efforts to have the
         Exchange Offer Registration Statement remain effective until the
         closing of the Exchange Offer. The Company shall commence the Exchange
         Offer promptly after the Exchange Offer Registration Statement has been
         declared effective by the SEC and use its reasonable best efforts to
         have the Exchange Offer consummated not later than 30 Business Days
         after such effective date. The Company shall commence the Exchange
         Offer by mailing the related exchange offer Prospectus and accompanying
         documents to each Holder stating, in addition to such other disclosures
         as are required by applicable law:

                           (i) that the Exchange Offer is being made pursuant to
                  this Agreement and that all Registrable Securities validly
                  tendered will be accepted for exchange;

                          (ii) the dates of acceptance for exchange (which shall
                  be a period of at least 20 Business Days from the date such
                  notice is mailed) (the "EXCHANGE DATES");

                         (iii) that any Registrable Security not tendered will
                  remain outstanding and continue to accrue interest, but will
                  not retain any rights under this Agreement;

                          (iv) that Holders electing to have a Registrable
                  Security exchanged pursuant to the Exchange Offer will be
                  required to surrender such Registrable Security, together with
                  the enclosed letters of transmittal, to the institution and at
                  the address specified in the notice prior to the close of
                  business on the last Exchange Date; and

                           (v) that Holders will be entitled to withdraw their
                  election, not later than the close of business on the last
                  Exchange Date, by sending to the institution and at the
                  address (located in the Borough of Manhattan, The City of New
                  York) specified in the notice, a telegram, telex, facsimile
                  transmission or letter setting forth the name

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                  of such Holder, the principal amount of Registrable Securities
                  delivered for exchange and a statement that such Holder is
                  withdrawing his election to have such Registrable Securities
                  exchanged.

                  As soon as practicable after the last Exchange Date, the
         Company shall:

                                    (A) accept for exchange Registrable
                           Securities or portions thereof tendered and not
                           validly withdrawn pursuant to the Exchange Offer; and

                                    (B) deliver, or cause to be delivered, to
                           the Trustee for cancellation all Registrable
                           Securities or portions thereof so accepted for
                           exchange by the Company and issue, and cause the
                           Trustee to promptly authenticate and mail to each
                           Holder, an Exchange Security equal in aggregate
                           principal amount to the aggregate principal amount of
                           the Registrable Securities surrendered by such
                           Holder.

                  The Company shall use its reasonable best efforts to complete
         the Exchange Offer as provided above and shall comply with the
         applicable requirements of the 1933 Act, the 1934 Act and other
         applicable laws and regulations in connection with the Exchange Offer.
         The Exchange Offer shall not be subject to any conditions, other than
         that the Exchange Offer does not violate applicable law or any
         applicable interpretation of the staff of the SEC. The Company shall
         inform the Initial Purchasers of the names and addresses of the Holders
         to whom the Exchange Offer is made, and the Initial Purchasers shall
         have the right, subject to applicable law, to contact such Holders and
         otherwise facilitate the tender of Registrable Securities in the
         Exchange Offer.

                  If, during the period the Exchange Offer Registration
         Statement is effective, an event occurs which makes any statement made
         in such Exchange Offer Registration Statement or the related Prospectus
         untrue in any material respect or which requires the making of any
         changes in such Exchange Offer Registration Statement in order to make
         the statements therein not misleading or in such Prospectus in order to
         make the statements therein, in the light of the circumstances under
         which they were made, not misleading, the Company shall use its
         reasonable best efforts to prepare and file with the SEC a supplement
         or post-effective amendment to the Exchange Offer Registration
         Statement or the related Prospectus or any document incorporated
         therein by reference or file any other required document so that, as
         thereafter delivered to the purchasers of the Registrable Securities,
         such Prospectus will not contain any untrue statement of a material
         fact or omit to state a material fact necessary to make the statements
         therein, in light of the circumstances under

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         which they were made, not misleading. The Company agrees to notify the
         Holders to suspend the exchange of the Registrable Securities as
         promptly as practicable after the occurrence of such an event, and the
         Holders hereby agree to suspend such exchange until the Company has
         amended or supplemented the Prospectus to correct such misstatement or
         omission.

                  (b) If (i) the Company determines that the Exchange Offer
         Registration provided for in Section 2(a) above is not available or may
         not be consummated as soon as practicable after the last Exchange Date
         because it would violate applicable law or the applicable
         interpretations of the staff of the SEC, (ii) the Exchange Offer is not
         for any other reason consummated within 260 days following the Closing
         Date or (iii) in the written opinion of counsel for the Holders a Shelf
         Registration Statement must be filed and a Prospectus must be delivered
         by any Holder in connection with any reoffering or resale of
         Registrable Securities, the Company shall (x) file with the SEC within
         75 days following such determination, date or notice of such opinion of
         counsel is given to the Company a Shelf Registration Statement
         providing for the resale by the Holders (other than those who fail to
         comply with the paragraph immediately following clause (p) of Section
         3) of all of their Registrable Securities and (y) use its reasonable
         best efforts to cause such Shelf Registration Statement to become
         effective within 60 days of the filing of such Shelf Registration
         Statement. If the Company is required to file a Shelf Registration
         Statement solely as a result of the matters referred to in clause (iii)
         of the preceding sentence, the Company shall use its reasonable best
         efforts to file and have declared effective by the SEC both an Exchange
         Offer Registration Statement pursuant to Section 2(a) with respect to
         all Registrable Securities and a Shelf Registration Statement (which
         may be a combined Registration Statement with the Exchange Offer
         Registration Statement) with respect to reoffers and resales of
         Registrable Securities held by the Holders who must deliver the related
         Prospectus. The Company agrees to use its reasonable best efforts to
         keep the Shelf Registration Statement continuously effective until the
         expiration of the period referred to in Rule 144(k) of the 1933 Act
         with respect to the Registrable Securities or such shorter period that
         will terminate when all of the Registrable Securities covered by the
         Shelf Registration Statement have been sold pursuant to the Shelf
         Registration Statement or cease to be Registrable Securities within the
         meaning of this Agreement. The Company further agrees to supplement or
         amend the Shelf Registration Statement if required by the rules,
         regulations or instructions applicable to the registration form used by
         the Company for such Shelf Registration Statement or by the 1933 Act or
         by any other rules and regulations thereunder for shelf registration or
         if reasonably requested by a Holder with respect to information
         relating to such Holder, and to use its reasonable best efforts to
         cause any such amendment to become effective and such Shelf
         Registration Statement to become usable as soon as thereafter
         practicable. The Company agrees to furnish to the Holders of
         Registrable

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         Securities copies of any such supplement or amendment promptly after
         its being used or filed with the SEC.

                  (c) The Company shall pay all Registration Expenses in
         connection with the registration pursuant to Section 2(a) or Section
         2(b). Each Holder shall pay all underwriting discounts, if any, and
         commissions and transfer taxes, if any, relating to the sale or
         disposition of such Holder's Registrable Securities pursuant to a Shelf
         Registration Statement.

                  (d) An Exchange Offer Registration Statement pursuant to
         Section 2(a) hereof or a Shelf Registration Statement pursuant to
         Section 2(b) hereof will not be deemed to have become effective unless
         it has been declared effective by the SEC; provided, however, that, if,
         after it has been declared effective, the offering of Registrable
         Securities pursuant to a Shelf Registration Statement is interfered
         with by any stop order, injunction or other order or requirement of the
         SEC or any other governmental agency or court, such Registration
         Statement will be deemed not to have become effective during the period
         of such interference until the offering of Registrable Securities
         pursuant to such Registration Statement may legally resume.

                  (e) The Company and the Initial Purchasers agree that the
         Holders will suffer damages if the Company fails to fulfill its
         obligations under Section 2(a) or Section 2(b) hereof and that it would
         not be feasible to ascertain the extent of such damages with precision.
         Accordingly, the Company agrees that if:

                           (i)   the Exchange Offer Registration Statement is
                  not filed with the SEC on or prior to the 90th day following
                  the Closing Date,

                           (ii)  the Exchange Offer Registration Statement is
                  not declared effective on or prior to the 210th day following
                  the Closing Date,

                           (iii) the Exchange Offer is not completed on or prior
                  to the 260th day following the Closing Date, or

                           (iv)  the Shelf Registration Statement is required to
                  be filed but is not filed or declared effective within the
                  time period set forth herein or is declared effective but
                  thereafter ceases to be effective or usable prior to the
                  expiration of the period referred to in Rule 144(k) with
                  respect to the Registrable Securities other than after the
                  Registrable Securities have been disposed of under the Shelf
                  Registration Statement or cease to be Registrable Securities,
                  without being succeeded within two Business Days by a
                  post-effective amendment which cures the failure and that is
                  itself immediately declared effective,

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                  (each such event referred to in clauses (i) through (iv) a
         "REGISTRATION DEFAULT"), liquidated damages ("LIQUIDATED DAMAGES") will
         accrue on the affected Registrable Securities and the affected Exchange
         Securities, as applicable. The rate of Liquidated Damages will be 0.25%
         per annum of the principal amount of Registrable Securities held by
         such Holder for the first 90-day period immediately following the
         occurrence of a Registration Default, increasing by 0.25% per annum
         with respect to each subsequent 90-day period, up to a maximum of 1.00%
         per annum, from and including the date on which any such Registration
         Default shall occur to, but excluding, the earlier of (1) the date on
         which all Registration Defaults have been cured or (2) the date on
         which all the Registrable Securities and Exchange Securities otherwise
         become freely transferable by Holders other than affiliates of the
         Securities without further registration under the 1933 Act.

                  Notwithstanding the foregoing, (1) the amount of Liquidated
         Damages payable shall not increase because more than one Registration
         Default has occurred and is pending and (2) a Holder of Registrable
         Securities or Exchange Securities who is not entitled to the benefits
         of the Shelf Registration Statement (i.e., such Holder has not elected
         to including information) shall not be entitled to Liquidated Damages
         with respect to a Registration Default that pertains to the Shelf
         Registration Statement.

                  (f) The Company shall notify the Trustee within one Business
         Day after each date on which an event occurs in respect of which
         Liquidated Damages are required to be paid. Any amounts of Liquidated
         Damages due pursuant to this Section 2 will be payable in addition to
         any other interest payable from time to time with respect to the
         Registrable Securities in cash semi-annually on the interest payment
         dates specified in the Indenture (to the holders of record as specified
         in the Indenture), commencing with the first such interest payment date
         occurring after any such Liquidated Damages commence to accrue. The
         amount of Liquidated Damages will be determined in a manner consistent
         with the calculation of interest under the Indenture.

                  (g) Without limiting the remedies available to the Holders,
         the Company acknowledges that any failure by the Company to comply with
         its obligations under Section 2(a) and Section 2(b) hereof may result
         in material irreparable injury to the Holders for which there is no
         adequate remedy at law, that it will not be possible to measure damages
         for such injuries precisely and that, in the event of any such failure,
         the Initial Purchasers or any Holder may obtain such relief as may be
         required to specifically enforce the Company's obligations under
         Section 2(a) and Section 2(b) hereof.

         3. Registration Procedures.

         In connection with the obligations of the Company with respect to the
Registration Statements pursuant to Section 2(a) and Section 2(b) hereof, the

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Company shall as expeditiously as possible (provided, however, that the Company
shall not be required to take actions more promptly than required by Sections
2(a) and 2(b)):

                  (a) prepare and file with the SEC a Registration Statement on
         the appropriate form under the 1933 Act, which form shall (x) be
         selected by the Company, (y) in the case of a Shelf Registration, be
         available for the sale of the Registrable Securities by the selling
         Holders thereof and (z) comply as to form in all material respects with
         the applicable requirements of the 1933 Act and rules and regulations
         promulgated thereunder and include all financial statements required by
         the SEC to be filed therewith, and use reasonable best efforts to cause
         such Registration Statement to become effective and remain effective in
         accordance with Section 2 hereof;

                  (b) prepare and file with the SEC such amendments and
         post-effective amendments to each Registration Statement as may be
         necessary to keep such Registration Statement effective for the
         applicable period and cause each Prospectus to be supplemented by any
         required prospectus supplement and, as so supplemented, to be filed
         pursuant to Rule 424 under the 1933 Act; and keep each Prospectus
         current during the period described under Section 4(3) and Rule 174
         under the 1933 Act that is applicable to transactions by brokers or
         dealers with respect to the Registrable Securities or Exchange
         Securities;

                  (c) in the case of a Shelf Registration, furnish to each
         Holder of Registrable Securities, to counsel for the Initial Purchasers
         and to counsel for the Holders and to each Underwriter of an
         Underwritten Offering of Registrable Securities, if any, without
         charge, as many copies of each Prospectus, including each preliminary
         Prospectus and any amendment or supplement thereto and such other
         documents as such Holder or Underwriter may reasonably request, in
         order to facilitate the public sale or other disposition of the
         Registrable Securities; and, subject to Section 3(i), the Company
         consents to the use of such Prospectus and any amendment or supplement
         thereto in accordance with applicable law by each of the selling
         Holders of Registrable Securities and any such Underwriters in
         connection with the offering and sale of the Registrable Securities
         covered by and in the manner described in such Prospectus or any
         amendment or supplement thereto in accordance with applicable law;

                  (d) use its reasonable best efforts to register or qualify the
         Registrable Securities under all applicable state securities or blue
         sky laws of such jurisdictions as any Holder of Registrable Securities
         covered by a Registration Statement shall reasonably request in writing
         by the time the applicable Registration Statement is declared effective
         by the SEC, and to cooperate with such Holders in connection with any
         filings required to be made with the National Association of Securities
         Dealers, Inc. and do any and all other acts and things which may be
         reasonably necessary or advisable to

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         enable such Holder to consummate the disposition in each such
         jurisdiction of such Registrable Securities owned by such Holder;
         provided, however, that the Company shall not be required to (i)
         qualify as a foreign corporation or as a dealer in securities in any
         jurisdiction where it would not otherwise be required to qualify but
         for this Section 3(d), (ii) file any general consent to service of
         process or (iii) subject itself to taxation in any such jurisdiction if
         it is not so subject;

                  (e) in the case of a Shelf Registration, notify each Holder of
         Registrable Securities, counsel for the Holders and counsel for the
         Initial Purchasers (or, if applicable, separate counsel for the
         Holders) promptly and, if requested by any such Holder or counsel,
         confirm such advice in writing, (i) when a Registration Statement has
         become effective and when any post-effective amendment thereto has been
         filed and becomes effective, (ii) of any request by the SEC or any
         state securities authority for amendments and supplements to a
         Registration Statement and Prospectus or for additional information
         after the Registration Statement has become effective, (iii) of the
         issuance by the SEC or any state securities authority of any stop order
         suspending the effectiveness of a Registration Statement or the
         initiation of any proceedings for that purpose, (iv) if, between the
         effective date of a Registration Statement and the closing of any sale
         of Registrable Securities covered thereby, the representations and
         warranties of the Company contained in any underwriting agreement,
         securities sales agreement or other similar agreement, if any, relating
         to the offering cease to be true and correct in all material respects
         or if the Company receives any notification with respect to the
         suspension of the qualification of the Registrable Securities for sale
         in any jurisdiction or the initiation of any proceeding for such
         purpose, (v) of the happening of any event during the period a Shelf
         Registration Statement is effective which makes any statement made in
         such Shelf Registration Statement or the related Prospectus untrue in
         any material respect or which requires the making of any changes in
         such Registration Statement in order to make the statements therein not
         misleading or in such Prospectus in order to make the statements
         therein, in the light of the circumstances under which they were made,
         not misleading and (vi) of any determination by the Company that a
         post-effective amendment to a Registration Statement would be
         appropriate;

                  (f) use its reasonable best efforts to obtain the withdrawal
         of any order suspending the effectiveness of a Registration Statement
         at the earliest possible moment and provide immediate notice to each
         Holder of the withdrawal of any such order;

                  (g) in the case of a Shelf Registration, furnish to each
         Holder of Registrable Securities, without charge, at least one
         conformed copy of each Registration Statement and any post-effective
         amendment thereto (without

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         documents incorporated therein by reference or exhibits thereto, unless
         requested in writing);

                  (h) in the case of a Shelf Registration, cooperate with the
         selling Holders of Registrable Securities to facilitate the timely
         preparation and delivery of certificates representing Registrable
         Securities to be sold and not bearing any restrictive legends (unless
         required by applicable securities laws) and enable such Registrable
         Securities to be in such denominations (consistent with the provisions
         of the Indenture) and registered in such names as the selling Holders
         may reasonably request at least two Business Days prior to the closing
         of any sale of Registrable Securities;

                  (i) in the case of a Shelf Registration, upon the occurrence
         of any event contemplated by Section 3(e)(v) hereof, use its reasonable
         best efforts to prepare and file with the SEC a supplement or
         post-effective amendment to a Registration Statement or the related
         Prospectus or any document incorporated therein by reference or file
         any other required document so that, as thereafter delivered to the
         purchasers of the Registrable Securities, such Prospectus will not
         contain any untrue statement of a material fact or omit to state a
         material fact necessary to make the statements therein, in the light of
         the circumstances under which they were made, not misleading. The
         Company agrees to notify the Holders to suspend use of the Prospectus
         as promptly as practicable after the occurrence of such an event, and
         the Holders hereby agree to suspend use of the Prospectus until the
         Company has amended or supplemented the Prospectus to correct such
         misstatement or omission and has furnished copies of the amended or
         supplemented Prospectus to the Holders or until the Company notifies
         the Holders that the sale of the Registrable Securities may be resumed;

                  (j) a reasonable time prior to the filing of any Registration
         Statement, any Prospectus, any amendment to a Registration Statement or
         amendment or supplement to a Prospectus, or any document which is to be
         incorporated by reference into a Registration Statement or Prospectus
         after the initial filing of a Registration Statement, provide copies of
         such document to the Initial Purchasers and their counsel (and, in the
         case of a Shelf Registration Statement, the Holders and their counsel)
         and make such of the representatives of the Company as shall be
         reasonably requested by the Initial Purchasers or their counsel (and,
         in the case of a Shelf Registration Statement, the Holders or their
         counsel) available for discussion of such document, and shall not at
         any time file or make any amendment to the Shelf Registration
         Statement, any Prospectus or any amendment of or supplement to a Shelf
         Registration Statement or a Prospectus or any document which is to be
         incorporated by reference into a Registration Statement or a
         Prospectus, of which the Initial Purchasers and their counsel (and, in
         the case of a Shelf Registration Statement, the Holders or their
         counsel) shall not have previously been advised and furnished a copy or
         to which the Initial

                                       12
<PAGE>

         Purchasers or their counsel (and, in the case of a Shelf Registration
         Statement, the Holders or their counsel) shall reasonably object;

                  (k) obtain a CUSIP number for all Exchange Securities or
         Registrable Securities, as the case may be, not later than the
         effective date of the applicable Registration Statement;

                  (l) cause the Indenture to be qualified under the Trust
         Indenture Act of 1939, as amended (the "TIA"), in connection with the
         registration of the Exchange Securities or Registrable Securities, as
         the case may be, and cooperate with the Trustee and the Holders to
         effect such changes to the Indenture as may be required for the
         Indenture to be so qualified in accordance with the terms of the TIA
         and execute, and use commercially reasonable best efforts to cause the
         Trustee to execute, all documents as may be required to effect such
         changes and all other forms and documents required to be filed with the
         SEC to enable the Indenture to be so qualified in a timely manner;

                  (m) in the case of a Shelf Registration, make available for
         inspection by a representative of the Holders of the Registrable
         Securities, any Underwriter participating in any disposition pursuant
         to such Shelf Registration Statement, and attorneys and accountants
         designated by the Holders, at reasonable times and in a reasonable
         manner, all relevant financial and other records, pertinent documents
         and properties of the Company, and cause the respective officers,
         directors and employees of the Company to supply all information
         reasonably requested by any such representative, Underwriter, attorney
         or accountant in connection with a Shelf Registration Statement, in
         each case that would customarily be reviewed or examined in connection
         with "due diligence" review of the Company;

                  (n) use its reasonable best efforts to cause the Exchange
         Securities to continue to be rated by two nationally recognized
         statistical rating organizations (as such term is defined in Rule
         436(g)(2) under the 1933 Act), if the Registrable Securities have been
         rated prior to the initial sale of such Registrable Securities;

                  (o) if reasonably requested by any Holder of Registrable
         Securities covered by a Registration Statement, (i) promptly
         incorporate in a Prospectus supplement or post-effective amendment such
         information with respect to such Holder as such Holder reasonably
         requests to be included therein and (ii) make all required filings of
         such Prospectus supplement or such post-effective amendment as soon as
         reasonably practicable after the Company has received notification of
         the matters to be incorporated in such filing; and

                  (p) in the case of a Shelf Registration, enter into such
         customary agreements and take all such other actions in connection
         therewith (including those reasonably requested by the Holders of a
         majority of the Registrable

                                       13
<PAGE>

         Securities being sold thereunder) in order to expedite or facilitate
         the disposition of such Registrable Securities thereunder including,
         but not limited to, pursuant to an Underwritten Offering and in such
         connection, (i) to the extent possible, make such representations and
         warranties to the Holders and any Underwriters of such Registrable
         Securities with respect to the business of the Company and its
         subsidiaries, the Registration Statement, Prospectus and documents
         incorporated by reference or deemed incorporated by reference, if any,
         in each case, in form, substance and scope as are customarily made by
         issuers to underwriters in underwritten offerings and confirm the same
         if and when requested, (ii) obtain opinions of counsel to the Company
         (which counsel and opinions, in form, scope and substance, shall be
         reasonably satisfactory to the Holders of a majority in principal
         amount of the Registrable Securities being sold under such Shelf
         Registration Statement, such Underwriters and their respective counsel)
         addressed to each selling Holder and Underwriter of Registrable
         Securities, covering the matters customarily covered in opinions
         requested in underwritten offerings, (iii) obtain "cold comfort"
         letters from the independent certified public accountants of the
         Company (and, if necessary, any other certified public accountant of
         any subsidiary of the Company, or of any business acquired by the
         Company for which financial statements and financial data are or are
         required to be included in the Registration Statement) addressed to
         each selling Holder and Underwriter of Registrable Securities, such
         letters to be in customary form and covering matters of the type
         customarily covered in "cold comfort" letters in connection with
         underwritten offerings, and (iv) deliver such documents and
         certificates as may be reasonably requested by the Holders of a
         majority in principal amount of the Registrable Securities being sold
         under such Shelf Registration Statement or by the Underwriters, and
         which are customarily delivered in underwritten offerings, to evidence
         the continued validity of the representations and warranties of the
         Company made pursuant to clause (i) above and to evidence compliance
         with any customary conditions contained in an underwriting agreement.

                  In the case of a Shelf Registration Statement, the Company may
         require each Holder of Registrable Securities to furnish to the Company
         such information regarding the Holder and the proposed distribution by
         such Holder of such Registrable Securities as the Company may from time
         to time reasonably request in writing. No Holder of Registrable
         Securities may include its Registrable Securities in such Shelf
         Registration Statement unless and until such Holder furnishes such
         information to the Company. Each Holder including Registrable
         Securities in a Shelf Registration Statement shall agree to furnish
         promptly to the Company all information regarding such Holder and the
         proposed distribution by such Holder of such Registrable Securities
         required to make the information previously furnished to the Company by
         such Holder not materially misleading.

                                       14
<PAGE>

                  In connection with an Exchange Offer Registration, each Holder
         exchanging Securities for Exchange Securities shall be required to
         represent that (i) the Exchange Securities are being obtained in the
         ordinary course of business of the Person receiving such Exchange
         Securities, whether or not such Person is a Holder, (ii) neither such
         Holder nor any such other Person has an arrangement or understanding
         with any Person to participate in the distribution of Securities or
         Exchange Securities, (iii) other than as set forth in Section 4, if the
         Holder is not a broker-dealer, or is a broker-dealer but will not
         receive Exchange Securities for its own account in exchange for
         Securities, neither the Holder nor any such other Person is engaged in
         or intends to participate in a distribution of the Exchange Securities
         and (iv) neither the Holder nor any such other Person is an "affiliate"
         of the Company within the meaning of Rule 405 under the 1933 Act or, if
         such Person is an "affiliate," that such Holder will comply with the
         registration and prospectus delivery requirements of the 1933 Act to
         the extent applicable.

                  In the case of a Shelf Registration Statement, each Holder
         agrees that, upon receipt of any notice from the Company of the
         happening of any event of the kind described in Section 3(e)(v) hereof,
         such Holder will forthwith discontinue disposition of Registrable
         Securities pursuant to a Registration Statement until such Holder's
         receipt of the copies of the supplemented or amended Prospectus
         contemplated by Section 3(i) hereof, and, if so directed by the
         Company, such Holder will destroy or deliver to the Company (at its
         expense) all copies in its possession, other than permanent file copies
         then in such Holder's possession, of the Prospectus covering such
         Registrable Securities current at the time of receipt of such notice.

                  If the Company shall give any such notice to suspend the
         disposition of Registrable Securities pursuant to a Registration
         Statement, the Company shall extend the period during which the
         Registration Statement shall be maintained effective pursuant to this
         Agreement by the number of days during the period from and including
         the date of the giving of such notice to and including the date when
         the Holders shall have received copies of the supplemented or amended
         Prospectus necessary to resume such dispositions. The Company may give
         such notice so long as there are no more than 90 days during any 365
         day period in which such suspensions are in effect.

                  The Holders of Registrable Securities covered by a Shelf
         Registration Statement who desire to do so may sell such Registrable
         Securities in an Underwritten Offering. In any such Underwritten
         Offering, the investment banker or investment bankers and manager or
         managers (the "UNDERWRITERS") that will administer the offering will be
         selected by the Majority Holders of the Registrable Securities included
         in such offering, provided that such Underwriters shall be reasonably
         acceptable to the Company.

                                       15
<PAGE>

         4. Participation of Broker-Dealers in Exchange Offer.

                  (a) The parties hereto understand that the staff of the SEC
         has taken the position that any broker-dealer that receives Exchange
         Securities for its own account in the Exchange Offer in exchange for
         Securities that were acquired by such broker-dealer as a result of
         market-making or other trading activities (a "PARTICIPATING
         BROKER-DEALER"), may be deemed to be an "underwriter" within the
         meaning of the 1933 Act and must deliver a prospectus meeting the
         requirements of the 1933 Act in connection with any resale of such
         Exchange Securities.

                  The Company understands that it is currently the staff's
         position that if the Prospectus contained in the Exchange Offer
         Registration Statement includes a plan of distribution containing a
         statement to the above effect and the means by which Participating
         Broker-Dealers may resell the Exchange Securities, without naming the
         Participating Broker-Dealers or specifying the amount of Exchange
         Securities owned by them, such Prospectus may be delivered by
         Participating Broker-Dealers to satisfy their prospectus delivery
         obligation under the 1933 Act in connection with resales of Exchange
         Securities for their own accounts, so long as the Prospectus otherwise
         meets the requirements of the 1933 Act.

                  (b) In light of the above, notwithstanding the other
         provisions of this Agreement, the Company agrees that the provisions of
         this Agreement as they relate to a Shelf Registration shall also apply
         to an Exchange Offer Registration to the extent, and with such
         reasonable modifications thereto as may be, reasonably requested by the
         Initial Purchasers or by one or more Participating Broker-Dealers, in
         each case as provided in clause (ii) below, in order to expedite or
         facilitate the disposition of any Exchange Securities by Participating
         Broker-Dealers consistent with the positions of the Staff recited in
         Section 4(a) above; provided that:

                           (i) the Company shall not be required to amend or
                  supplement the Prospectus contained in the Exchange Offer
                  Registration Statement, as would otherwise be contemplated by
                  Section 3(i), for a period exceeding 180 days after the last
                  Exchange Date (as such period may be extended pursuant to the
                  penultimate paragraph of Section 3 of this Agreement) and
                  Participating Broker-Dealers shall not be authorized by the
                  Company to deliver and shall not deliver such Prospectus after
                  such period in connection with the resales contemplated by
                  this Section 4; and

                           (ii) the application of the Shelf Registration
                  procedures set forth in Section 3 of this Agreement to an
                  Exchange Offer Registration, to the extent not required by the
                  positions of the staff of the SEC or the 1933 Act and the
                  rules and regulations thereunder, will be in conformity with
                  the reasonable request in

                                       16
<PAGE>

                  writing to the Company by the Initial Purchasers or with the
                  reasonable request in writing to the Company by one or more
                  broker-dealers who certify to the Initial Purchasers and the
                  Company in writing that they anticipate that they will be
                  Participating Broker-Dealers; and provided further that, in
                  connection with such application of the Shelf Registration
                  procedures set forth in Section 3 to an Exchange Offer
                  Registration, the Company shall be obligated (x) to deal only
                  with one entity representing the Participating Broker-Dealers,
                  which shall be Salomon Smith Barney Inc. unless it elects not
                  to act as such representative, (y) to pay the fees and
                  expenses of only one counsel representing the Participating
                  Broker-Dealers, which shall be counsel to the Initial
                  Purchasers unless such counsel elects not to so act and (z) to
                  cause to be delivered only one, if any, "cold comfort" letter
                  with respect to the Prospectus in the form existing on the
                  last Exchange Date and with respect to each subsequent
                  amendment or supplement, if any, effected during the period
                  specified in clause (i) above.

                  (c) The Initial Purchasers shall have no liability to the
         Company, other than as Holders in accordance with the terms hereof, or
         to any other Holder with respect to any request that they may make
         pursuant to Section 4(b) above.

         5. Indemnification and Contribution.

                  (a) The Company agrees to indemnify and hold harmless the
         Initial Purchasers, each Holder and each Person, if any, who controls
         the Initial Purchasers or any Holder within the meaning of either
         Section 15 of the 1933 Act or Section 20 of the 1934 Act, or is under
         common control with, or is controlled by, the Initial Purchasers or any
         Holder (each, a "PARTICIPANT"), from and against all losses, claims,
         damages and liabilities (including, without limitation, any legal fees
         or other expenses reasonably incurred by a Participant in connection
         with defending or investigating any such action or claim) caused by any
         untrue statement or alleged untrue statement of a material fact
         contained in any Registration Statement (or any amendment thereto)
         pursuant to which Exchange Securities or Registrable Securities were
         registered under the 1933 Act, including all documents incorporated
         therein by reference, or caused by any omission or alleged omission to
         state therein a material fact required to be stated therein or
         necessary to make the statements therein not misleading, or caused by
         any untrue statement or alleged untrue statement of a material fact
         contained in any Prospectus (as amended or supplemented if the Company
         shall have furnished any amendments or supplements thereto) forming a
         part of such Registration Statement, or caused by any omission or
         alleged omission to state therein a material fact necessary to make the
         statements therein in light of the circumstances under which they were
         made not misleading, except insofar as such losses, claims, damages or
         liabilities are caused by any such untrue statement or omission or
         alleged

                                       17
<PAGE>

         untrue statement or omission based upon and in conformity with
         information relating to the Initial Purchasers or any Holder furnished
         to the Company in writing by the Initial Purchasers or any selling
         Holder expressly for use therein; provided that the foregoing indemnity
         with respect to any Prospectus shall not inure to the benefit of any
         Holder from whom the Person asserting any such losses, claims, damages
         or liabilities purchased Securities, or any Person controlling such
         Holder, if a copy of the final Prospectus (as then amended or
         supplemented if the Company shall have furnished any amendments or
         supplements thereto) was not sent by, or delivered on behalf of, such
         Holder to such Person at or prior to the written confirmation of the
         sale of the Securities to such Person, if the final Prospectus (as so
         amended or supplemented) would have cured the defect giving rise to
         such loss, claim, damage or liability. In connection with any
         Underwritten Offering permitted by Section 3, the Company will also
         enter into an underwriting agreement pursuant to which the Company will
         agree to indemnify the Underwriters, if any, selling brokers, dealers
         and similar securities industry professionals participating in such
         Underwritten Offering, their officers and directors and each Person who
         controls such Persons (within the meaning of either Section 15 of the
         1933 Act or Section 20 of the 1934 Act) to the same extent as provided
         above with respect to the indemnification of the Holders, if requested
         in connection with any Registration Statement for such Underwritten
         Offering.

                  (b) Each Holder agrees, severally and not jointly, to
         indemnify and hold harmless the Company, the Initial Purchasers and the
         other selling Holders, and each of their respective directors and
         officers who sign the Registration Statement and each Person, if any,
         who controls the Company, the Initial Purchasers and any other selling
         Holder within the meaning of either Section 15 of the 1933 Act or
         Section 20 of the 1934 Act to the same extent as the foregoing
         indemnity from the Company to the Initial Purchasers and the Holders
         pursuant to Section 5(a), but only with reference to information
         relating to such Holder furnished to the Company in writing by such
         Holder expressly for use in any Registration Statement (or any
         amendment thereto) or any Prospectus (or any amendment or supplement
         thereto).

                  (c) In case any proceeding (including any governmental
         investigation) shall be instituted involving any Person in respect of
         which indemnity may be sought pursuant to either paragraph (a) or
         paragraph (b) above, such Person (the "INDEMNIFIED PARTY") shall
         promptly notify the Person against whom such indemnity may be sought
         (the "INDEMNIFYING PARTY") in writing, but the failure to so promptly
         notify the Indemnifying Party shall not negate the obligation to so
         indemnify such Indemnified Party unless the Indemnifying Party is
         materially prejudiced by such delay, and the Indemnifying Party, upon
         request of the Indemnified Party, shall retain counsel reasonably
         satisfactory to the Indemnified Party to represent the Indemnified
         Party and

                                       18
<PAGE>

         any others the Indemnifying Party may designate in such proceeding and
         shall pay the fees and expenses of such counsel related to such
         proceeding. In any such proceeding, any Indemnified Party shall have
         the right to retain its own counsel, but the fees and expenses of such
         counsel shall be at the expense of such Indemnified Party unless (i)
         the Indemnifying Party and the Indemnified Party shall have mutually
         agreed to the retention of such counsel or (ii) the named parties to
         any such proceeding (including any impleaded parties) include both the
         Indemnifying Party and the Indemnified Party and, in the opinion of
         counsel to the Indemnifying Party, representation of both parties by
         the same counsel would be inappropriate due to actual or potential
         differing interests between them. It is understood that the
         Indemnifying Party shall not, in connection with any proceeding or
         related proceedings in the same jurisdiction, be liable for (a) the
         fees and expenses of more than one separate firm (in addition to any
         local counsel) for the Initial Purchasers and all Persons, if any, who
         control the Initial Purchasers within the meaning of either Section 15
         of the 1933 Act or Section 20 of the 1934 Act, (b) the fees and
         expenses of more than one separate firm (in addition to any local
         counsel) for the Company, its directors, its officers who sign the
         Registration Statement and each Person, if any, who controls the
         Company within the meaning of either such Section and (c) the fees and
         expenses of more than one separate firm (in addition to any local
         counsel) for all Holders and all Persons, if any, who control any
         Holders within the meaning of either such Section, and that all such
         fees and expenses shall be reimbursed as they are incurred. In such
         case involving the Initial Purchasers and Persons who control the
         Initial Purchasers, such firm shall be designated in writing by the
         Initial Purchasers. In such case involving the Holders and such Persons
         who control Holders, such firm shall be designated in writing by the
         Majority Holders. In all other cases, such firm shall be designated by
         the Company. The Indemnifying Party shall not be liable for any
         settlement of any proceeding effected without its written consent but,
         if settled with such consent or if there be a final judgment for the
         plaintiff, the Indemnifying Party agrees to indemnify the Indemnified
         Party from and against any loss or liability by reason of such
         settlement or judgment. No Indemnifying Party shall, without the prior
         written consent of the Indemnified Party, effect any settlement of any
         pending or threatened proceeding in respect of which such Indemnified
         Party is or could have been a party and indemnity could have been
         sought hereunder by such Indemnified Party, unless such settlement
         includes an unconditional release of such Indemnified Party from all
         liability on claims that are the subject matter of such proceeding.

                  (d) If the indemnification provided for in paragraph (a) or
         paragraph (b) of this Section 5 is unavailable to an Indemnified Party
         or insufficient in respect of any losses, claims, damages or
         liabilities, then each Indemnifying Party under such paragraph, in lieu
         of indemnifying such Indemnified Party thereunder, shall contribute to
         the amount paid or payable by such Indemnified Party as a result of
         such losses, claims, damages or liabilities in

                                       19
<PAGE>

         such proportion as is appropriate to reflect the relative fault of the
         Indemnifying Party or parties on the one hand and of the Indemnified
         Party or parties on the other hand in connection with the statements or
         omissions that resulted in such losses, claims, damages or liabilities,
         as well as any other relevant equitable considerations. The relative
         fault of the Company and the Holders shall be determined by reference
         to, among other things, whether the untrue or alleged untrue statement
         of a material fact or the omission or alleged omission to state a
         material fact relates to information supplied by the Company or by the
         Holders and the parties' relative intent, knowledge, access to
         information and opportunity to correct or prevent such statement or
         omission. The Holders' respective obligations to contribute pursuant to
         this Section 5(d) are several in proportion to the respective principal
         amount of Registrable Securities of the applicable Holder that were
         registered pursuant to a Registration Statement.

                  (e) The Company and each Holder agree that it would not be
         just or equitable if contribution pursuant to this Section 5(d) were
         determined by pro rata allocation or by any other method of allocation
         that does not take account of the equitable considerations referred to
         in Section 5(d) above. The amount paid or payable by an Indemnified
         Party as a result of the losses, claims, damages and liabilities
         referred to in Section 5(d) above shall be deemed to include, subject
         to the limitations set forth above, any legal or other expenses
         reasonably incurred by such Indemnified Party in connection with
         investigating or defending any such action or claim. Notwithstanding
         the provisions of this Section 5, no Holder shall be required to
         indemnify or contribute any amount in excess of the amount by which the
         total price at which Registrable Securities were sold by such Holder
         exceeds the amount of any damages that such Holder has otherwise been
         required to pay by reason of such untrue or alleged untrue statement or
         omission or alleged omission. No Person guilty of fraudulent
         misrepresentation (within the meaning of Section 11(f) of the 1933 Act)
         shall be entitled to contribution from any Person who was not guilty of
         such fraudulent misrepresentation. The remedies provided for in this
         Section 5 are not exclusive and shall not limit any rights or remedies
         which may otherwise be available to any Indemnified Party at law or in
         equity.

                  The indemnity and contribution provisions contained in this
         Section 5 shall remain operative and in full force and effect
         regardless of (i) any termination of this Agreement, (ii) any
         investigation made by or on behalf of the Initial Purchasers, any
         Holder or any Person controlling the Initial Purchasers or any Holder,
         or by or on behalf of the Company, its officers or directors or any
         Person controlling the Company, (iii) acceptance of any of the Exchange
         Securities and (iv) any sale of Registrable Securities pursuant to a
         Shelf Registration Statement.

                                       20
<PAGE>
         6. Miscellaneous.

                  (a) No Inconsistent Agreements. The Company has not entered
         into, and on or after the date of this Agreement will not enter into,
         any agreement which is inconsistent with the rights granted to the
         Holders of Registrable Securities in this Agreement or otherwise
         conflicts with the provisions hereof. The rights granted to the Holders
         hereunder do not in any way conflict with and are not inconsistent with
         the rights granted to the holders of the Company's other issued and
         outstanding securities under any such agreements.

                  (b) Amendments and Waivers. The provisions of this Agreement,
         including the provisions of this sentence, may not be amended, modified
         or supplemented, and waivers or consents to departures from the
         provisions hereof may not be given unless the Company has obtained the
         written consent of Holders of at least a majority in aggregate
         principal amount of the outstanding Registrable Securities affected by
         such amendment, modification, supplement, waiver or consent; provided,
         however, that no amendment, modification, supplement, waiver or consent
         to any departure from the provisions of Section 5 hereof or this
         paragraph (b) shall be effective as against any Holder of Registrable
         Securities unless consented to in writing by such Holder.

                  (c) Notices. All notices and other communications provided for
         or permitted hereunder shall be made in writing by hand-delivery,
         registered first-class mail, telecopier, or any courier guaranteeing
         overnight delivery (i) if to a Holder, at the most current address
         given by such Holder to the Company by means of a notice given in
         accordance with the provisions of this Section 6(c), which address
         initially is, with respect to the Initial Purchasers, the address set
         forth in the Purchase Agreement; and (ii) if to the Company, initially
         at the Company's address set forth in the Purchase Agreement and
         thereafter at such other address, notice of which is given in
         accordance with the provisions of this Section 6(c).

                  All such notices and communications shall be deemed to have
         been duly given at the time delivered by hand, if personally delivered;
         five Business Days after being deposited in the mail, postage pre-paid,
         if mailed; when answered back, if telexed; when receipt is
         acknowledged, if telecopied; and on the next Business Day if timely
         delivered to an air courier guaranteeing overnight delivery.

                  Copies of all such notices, demands, or other communications
         shall be concurrently delivered by the Person giving the same to the
         Trustee, at the address specified in the Indenture.

                  (d) Successors and Assigns. This Agreement shall inure to the
         benefit of, and be binding upon, the successors, assigns and
         transferees of each of the parties, including, without limitation and
         without the need for an

                                       21
<PAGE>

         express assignment, subsequent Holders of Registrable Securities;
         provided that nothing herein shall be deemed to permit any assignment,
         transfer or other disposition of Registrable Securities in violation of
         the terms of the Securities and the Purchase Agreement. If any
         transferee of any Holder shall acquire Registrable Securities, in any
         manner, whether by operation of law or otherwise, such Registrable
         Securities shall be held subject to all of the terms of this Agreement,
         and by taking and holding such Registrable Securities such Person shall
         be conclusively deemed to have agreed to be bound by and to perform all
         of the terms and provisions of this Agreement and such Person shall be
         entitled to receive the benefits hereof. The Initial Purchasers shall
         have no liability or obligation to the Company with respect to any
         failure by a Holder to comply with, or any breach by any other Holder
         of, any of the obligations of such Holder under this Agreement.

                  (e) Purchases and Sales of Securities. The Company shall not,
         and shall use its reasonable best efforts to cause its affiliates (as
         defined in Rule 405 under the 1933 Act) not to, purchase and then
         resell or otherwise transfer any Securities.

                  (f) Third Party Beneficiary. Each Holder shall be a third
         party beneficiary to the agreements made hereunder between the Company,
         on the one hand, and the Initial Purchasers, on the other hand, shall
         be bound by all of the terms and provisions of this Agreement and shall
         have the right to enforce such agreements directly to the extent it
         deems such enforcement necessary or advisable to protect its rights or
         the rights of Holders hereunder.

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

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

                  (i) Governing Law This Agreement shall be governed by, and
         construed in accordance with, the laws of the State of New York.

                  (j) Severability. In the event that any one or more of the
         provisions contained herein, or the application thereof in any
         circumstance, is held invalid, illegal or unenforceable the validity,
         legality and enforceability of any such provision in every other
         respect and of the remaining provisions contained herein shall not be
         affected or impaired thereby.

                                       22
<PAGE>
         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.

                                       SOUTHERN NATURAL GAS COMPANY

                                       By: /s/ GREG G. GRUBER
                                          ------------------------------------
                                          Name: Greg G. Gruber
                                          Title: Senior Vice President, Chief
                                                 Financial Officer and Treasurer

Confirmed and accepted as of the
date first above written:

Salomon Smith Barney Inc.
Credit Suisse First Boston LLC
ABN AMRO Incorporated
Banc of America Securities LLC
BNP Paribas Securities Corp.
J.P. Morgan Securities Inc.

By: Salomon Smith Barney Inc.

By: /s/ PAUL SHARKEY
    -------------------------------------
    Name: Paul Sharkey
    Title: Vice President

                                       23
<PAGE>
                                   SCHEDULE I

Initial Purchasers

Salomon Smith Barney Inc.
Credit Suisse First Boston LLC
ABN AMRO Incorporated
Banc of America Securities LLC
BNP Paribas Securities Corp.
J.P. Morgan Securities Inc.

                                       1<PAGE>
                                                                     EXHIBIT 4.3

                                                                  CONFORMED COPY

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

                                KIRBY CORPORATION

                                    ---------
                         MASTER NOTE PURCHASE AGREEMENT
                                    ---------

                          Dated as of February 15, 2003

              Providing for the Issuance of Senior Notes in Series
                    Without Limitation as to Principal Amount

                               Initial Issuance of
                                  $250,000,000
                           Floating Rate Senior Notes
                      Series 2003-A, Due February 28, 2013

================================================================================
                                                                PPN: 497266 A* 7
<PAGE>
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
Section                                                                                 Page
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<S>                                                                                     <C>
1.   AUTHORIZATION OF NOTES.............................................................  1
     1.1.   Amount; Establishment of Series.............................................  1
     1.2.   The Series 2003-A Notes.....................................................  2

2.   SALE AND PURCHASE OF SERIES 2003-A NOTES...........................................  3

3.   CLOSING............................................................................  4

4.   CONDITIONS TO CLOSING..............................................................  4
     4.1.   Representations and Warranties..............................................  4
     4.2.   Performance; No Default.....................................................  4
     4.3.   Compliance Certificates.....................................................  4
     4.4.   Opinions of Counsel.........................................................  5
     4.5.   Purchase Permitted By Applicable Law, etc...................................  5
     4.6.   Sale of Other Series 2003-A Notes...........................................  5
     4.7.   Payment of Special Counsel Fees.............................................  5
     4.8.   Private Placement Number....................................................  5
     4.9.   Changes in Corporate Structure..............................................  6
     4.10.  Proceedings and Documents...................................................  6

5.   REPRESENTATIONS AND WARRANTIES OF THE COMPANY......................................  6
     5.1.   Organization; Power and Authority...........................................  6
     5.2.   Authorization, etc..........................................................  6
     5.3.   Disclosure..................................................................  7
     5.4.   Organization and Ownership of Shares of Subsidiaries; Affiliates............  7
     5.5.   Financial Statements........................................................  8
     5.6.   Compliance with Laws, Other Instruments, etc................................  8
     5.7.   Governmental Authorizations, etc............................................  8
     5.8.   Litigation; Observance of Agreements, Statutes and Orders...................  8
     5.9.   Taxes.......................................................................  9
     5.10.  Title to Property; Leases...................................................  9
     5.11.  Licenses, Permits, etc......................................................  9
     5.12.  Compliance with ERISA....................................................... 10
     5.13.  Private Offering by the Company............................................. 11
     5.14.  Use of Proceeds; Margin Regulations......................................... 11
     5.15.  Existing Debt; Future Liens................................................. 11
     5.16.  Foreign Assets Control Regulations, Anti-Terrorism Order, etc............... 12
     5.17.  Status under Certain Statutes............................................... 12
     5.18.  Environmental Matters....................................................... 12
</TABLE>

                                        i
<PAGE>
<TABLE>
<CAPTION>
Section                                                                                 Page
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<S>                                                                                     <C>
6.   REPRESENTATIONS OF THE PURCHASERS.................................................. 13
     6.1.   Purchase for Investment..................................................... 13
     6.2.   Source of Funds............................................................. 13

7.   INFORMATION AS TO COMPANY.......................................................... 15
     7.1.   Financial and Business Information.......................................... 15
     7.2.   Officer's Certificate....................................................... 17
     7.3.   Inspection.................................................................. 18

8.   PREPAYMENT OF THE NOTES............................................................ 19
     8.1.   No Scheduled Prepayments.................................................... 19
     8.2.   Optional Prepayments........................................................ 19
     8.3.   Allocation of Partial Prepayments........................................... 19
     8.4.   Maturity; Surrender, etc.................................................... 19
     8.5.   Purchase of Notes........................................................... 19
     8.6.   LIBOR Breakage Amount....................................................... 20

9.   AFFIRMATIVE COVENANTS.............................................................. 20
     9.1.   Compliance with Law......................................................... 20
     9.2.   Insurance................................................................... 20
     9.3.   Maintenance of Properties................................................... 21
     9.4.   Payment of Taxes and Claims................................................. 21
     9.5.   Corporate Existence, etc.................................................... 21

10.  NEGATIVE COVENANTS................................................................. 22
     10.1.  Debt; Priority Debt......................................................... 22
     10.2.  Interest Coverage........................................................... 22
     10.3.  Liens....................................................................... 22
     10.4.  Sale of Assets.............................................................. 23
     10.5.  Mergers, Consolidations, etc................................................ 24
     10.6.  Designation of Restricted and Unrestricted Subsidiaries..................... 25
     10.7.  Nature of Business.......................................................... 26
     10.8.  Transactions with Affiliates................................................ 26

11.  EVENTS OF DEFAULT.................................................................. 26

12.  REMEDIES ON DEFAULT, ETC........................................................... 28
     12.1.  Acceleration................................................................ 28
     12.2.  Other Remedies.............................................................. 29
     12.3.  Rescission.................................................................. 29
     12.4.  No Waivers or Election of Remedies, Expenses, etc........................... 29

13.  REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES...................................... 29
     13.1.  Registration of Notes....................................................... 29
     13.2.  Transfer and Exchange of Notes.............................................. 30
     13.3.  Replacement of Notes........................................................ 30
</TABLE>

                                       ii
<PAGE>
<TABLE>
<CAPTION>
Section                                                                                 Page
-------                                                                                 ----
<S>                                                                                     <C>
14.  PAYMENTS ON NOTES.................................................................. 31
     14.1.  Place of Payment............................................................ 31
     14.2.  Home Office Payment......................................................... 31

15.  EXPENSES, ETC...................................................................... 31
     15.1.  Transaction Expenses........................................................ 31
     15.2.  Survival.................................................................... 32

16.  SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT....................... 32

17.  AMENDMENT AND WAIVER............................................................... 32
     17.1.  Requirements................................................................ 32
     17.2.  Solicitation of Holders of Notes............................................ 33
     17.3.  Binding Effect, etc......................................................... 33
     17.4.  Series 2003-A Notes held by Company, etc.................................... 33

18.  NOTICES............................................................................ 34

19.  REPRODUCTION OF DOCUMENTS.......................................................... 34

20.  CONFIDENTIAL INFORMATION........................................................... 34

21.  SUBSTITUTION OF PURCHASER.......................................................... 35

22.  MISCELLANEOUS...................................................................... 36
     22.1.  Successors and Assigns...................................................... 36
     22.2.  Payments Due on Non-Business Days........................................... 36
     22.3.  Severability................................................................ 36
     22.4.  Construction................................................................ 36
     22.5.  Counterparts................................................................ 36
     22.6.  Governing Law............................................................... 36
     22.7.  Limitation on Interest...................................................... 37
</TABLE>

                                      iii
<PAGE>

<TABLE>
<S>               <C>
SCHEDULE A        --    Information Relating to Purchasers
SCHEDULE B        --    Defined Terms
SCHEDULE B-1      --    Existing Investments

SCHEDULE 4.9      --    Changes in Corporate Structure
SCHEDULE 5.3      --    Disclosure Materials
SCHEDULE 5.4      --    Subsidiaries; Affiliates
SCHEDULE 5.5      --    Financial Statements
SCHEDULE 5.8      --    Litigation
SCHEDULE 5.11     --    Licenses, Permits, etc.
SCHEDULE 5.14     --    Use of Proceeds
SCHEDULE 5.15     --    Existing Debt
SCHEDULE 10.3     --    Liens

EXHIBIT 1.1(a)    --    Form of Senior Note
EXHIBIT 1.1(b)    --    Form of Supplement
EXHIBIT 1.2       --    Form of Series 2003-A Senior Note
EXHIBIT 4.4(a)    --    Form of Opinion of Counsel for the Company
EXHIBIT 4.4(b)    --    Form of Opinion of Special Counsel for the Purchasers
</TABLE>

                                       iv
<PAGE>
                                KIRBY CORPORATION
                                 55 Waugh Drive
                                   Suite 1000
                              Houston, Texas 77007
                                 (713) 435-1000
                               Fax: (713) 435-1011

                         Senior Notes Issuable in Series
                    Without Limitation as to Principal Amount

                                  $250,000,000
                           Floating Rate Senior Notes
                      Series 2003-A, Due February 28, 2013

                                                   Dated as of February 15, 2003

TO EACH OF THE PURCHASERS LISTED IN
     THE ATTACHED SCHEDULE A:

Ladies and Gentlemen:

     KIRBY CORPORATION, a Nevada corporation (the "Company"), agrees with you as
follows:

1.   AUTHORIZATION OF NOTES.

1.1. AMOUNT; ESTABLISHMENT OF SERIES.

     The Company desires to provide for the issuance from time to time of Senior
Notes in series (the "Notes," such term to include any such Notes issued in
substitution therefor pursuant to Section 13 of this Agreement), without
limitation as to the aggregate principal amount that may be issued. The Notes
will be substantially in the form set out in Exhibit 1.1(a), with such changes
therefrom, if any, as may be approved by the purchasers of such Notes, or series
thereof, and the Company. Certain capitalized terms used in this Agreement are
defined in Schedule B; references to a "Schedule" or an "Exhibit" are, unless
otherwise specified, to a Schedule or an Exhibit attached to this Agreement.
Each series of Notes may consist of one or more tranches.

     Each series of Notes, other than the Series 2003-A Notes, will be issued
pursuant to a supplement to this Agreement (a "Supplement") in substantially the
form of Exhibit 1.1(b), and will be subject to the following terms and
conditions:
<PAGE>
          (a) the designation of each series of Notes shall distinguish the
     Notes of one series from the Notes of all other series;

          (b) the Notes of each series shall rank pari passu with each other
     series of the Notes and the Company's other outstanding senior unsecured
     Debt;

          (c) each series of Notes shall be dated the date of issue, bear
     interest at such rate or rates, mature on such date or dates, be subject to
     such mandatory prepayments, if any, on the dates and with the make-whole
     amounts, premiums or breakage amounts, if any, as are provided in the
     Supplement under which such Notes are issued, and shall have such
     additional or different conditions precedent to closing and such additional
     or different representations and warranties or, subject to Section 1.1(d),
     other terms and provisions as shall be specified in such Supplement;

          (d) except to the extent provided in foregoing clause (c), all of the
     provisions of this Agreement shall apply to the Notes of each series; and

          (e) the issuance of any subsequent series of Notes shall not dilute or
     otherwise affect the relative priority or other rights of the holders of
     the Series 2003-A Notes or in any way affect the percentages of Series
     2003-A Notes required to approve an amendment or effectuate a waiver under
     the provisions of Section 17 or the percentages of Series 2003-A Notes
     required to accelerate the Series 2003-A Notes or rescind such an
     acceleration under the provisions of Section 12.1 or 12.3.

1.2. THE SERIES 2003-A NOTES.

          (a) Amount; Designation. The Company has authorized, as the initial
     series of Notes hereunder, the issue and sale of $250,000,000 aggregate
     principal amount of Floating Rate Notes, Series 2003-A, due February 28,
     2013 (the "Series 2003-A Notes," such term to include any such Notes issued
     in substitution therefor pursuant to Section 13 of this Agreement). The
     Series 2003-A Notes shall be substantially in the form set out in Exhibit
     1.2, with such changes therefrom, if any, as may be approved by you and the
     Company. The Notes shall bear interest (computed on the basis of a 360-day
     year and the actual number of days elapsed) (i) on the unpaid principal
     thereof at a floating rate equal to the Adjusted LIBOR Rate from time to
     time, payable quarterly on each Interest Payment Date until the principal
     shall have become due and payable, and (ii) to the extent permitted by law
     on any overdue payment (including any overdue prepayment) of principal, any
     overdue payment of interest and any overdue payment of any LIBOR Breakage
     Amount at the Default Rate until paid.

          (b) Adjusted LIBOR Rate. "ADJUSTED LIBOR RATE" means, for each
     Interest Period, the rate per annum equal to 1.2% plus LIBOR for such
     Interest Period. For purposes of determining Adjusted LIBOR Rate, the
     following terms have the following meanings:

               "LIBOR" means, for any Interest Period, the rate per annum
          (rounded upwards, if necessary, to the next higher one
          hundred-thousandth of a percentage point) for deposits in U.S. Dollars
          for a 90-day period that appears on the

                                       2
<PAGE>
          Bloomberg Financial Markets Service Page BBAM-1 (or if such page is
          not available, the Reuters Screen LIBO Page) as of 11:00 a.m. (London,
          England time) on the date two Business Days before the commencement of
          such Interest Period (or three Business Days before the commencement
          of the first Interest Period).

               "REUTERS SCREEN LIBO PAGE" means the display designated as the
          "LIBO" page on the Reuters Monitory Money Rates Service (or such other
          page as may replace the LIBO page on that service or such other
          service as may be nominated by the British Bankers' Association as the
          information vendor for the purpose of displaying British Bankers'
          Association Interest Settlement Rates for U.S. Dollar deposits).

          (c) Determination of the Adjusted LIBOR Rate. The Adjusted LIBOR Rate
     shall be determined by the Company, and notice thereof shall be given to
     the holders of the Series 2003-A Notes, within two Business Days after the
     beginning of each Interest Period, together with (i) a copy of the relevant
     screen used for the determination of LIBOR, (ii) a calculation of the
     Adjusted LIBOR Rate for such Interest Period, (iii) the number of days in
     such Interest Period, (iv) the date on which interest for such Interest
     Period will be paid and (v) the amount of interest to be paid to each
     holder of Series 2003-A Notes on such date. If Required Holders do not
     concur with such determination by the Company, as evidenced by a single
     written notice delivered to the Company within 10 Business Days after
     receipt by such holders of the notice delivered by the Company pursuant to
     the immediately preceding sentence, the determination of the Adjusted LIBOR
     Rate shall be made by such holders of the Notes, and any such determination
     made in accordance with the provisions of this Agreement shall be
     conclusive and binding absent manifest error.

          (d) Interest Period. "INTEREST PERIOD" means for any period for which
     interest is to be calculated or paid, the period commencing on the date of
     an interest payment on the Series 2003-A Notes, or on the date of Closing
     in the case of the first such period, and ending on the next February 28,
     May 28, August 28 or November 28, as the case may be, or if such date is
     not a Business Day, the next succeeding Business Day.

2.   SALE AND PURCHASE OF SERIES 2003-A NOTES.

     Subject to the terms and conditions of this Agreement, the Company will
issue and sell to you and each of the other purchasers named in Schedule A (the
"Other Purchasers"), and you and the Other Purchasers will purchase from the
Company, at the Closing provided for in Section 3, Series 2003-A Notes of the
series and in the principal amount specified opposite your names in Schedule A
at the purchase price of 100% of the principal amount thereof. Your obligation
hereunder and the obligations of the Other Purchasers are several and not joint
obligations and you shall have no liability to any Person for the performance or
non-performance by any Other Purchaser hereunder.

                                       3
<PAGE>
3.   CLOSING.

     The sale and purchase of the Series 2003-A Notes to be purchased by you and
the Other Purchasers shall occur at the offices of Gardner, Carton & Douglas,
191 North Wacker Drive, Suite 3700, Chicago, Illinois 60606-1698, at 9:00 a.m.,
Chicago time, at a closing (the "Closing") on February 28, 2003 or on such other
Business Day thereafter on or prior to March 7, 2003 as may be agreed upon by
the Company and you and the Other Purchasers. At the Closing the Company will
deliver to you the Series 2003-A Notes to be purchased by you in the form of a
single Note (or such greater number of Series 2003-A Notes in denominations of
at least $100,000 as you may request) dated the date of the Closing and
registered in your name (or in the name of your nominee), against delivery by
you to the Company or its order of immediately available funds in the amount of
the purchase price therefor by wire transfer of immediately available funds for
the account of the Company to account number 00100359554 at JPMorgan Chase Bank,
712 Main Street, Houston, Texas 77002, ABA No. 113000609. If at the Closing the
Company fails to tender such Series 2003-A Notes to you as provided above in
this Section 3, or any of the conditions specified in Section 4 shall not have
been fulfilled to your satisfaction, you shall, at your election, be relieved of
all further obligations under this Agreement, without thereby waiving any rights
you may have by reason of such failure or such nonfulfillment.

4.   CONDITIONS TO CLOSING.

     Your obligation to purchase and pay for the Series 2003-A Notes to be sold
to you at the Closing is subject to the fulfillment to your satisfaction, prior
to or at the Closing, of the following conditions:

4.1. REPRESENTATIONS AND WARRANTIES.

     The representations and warranties of the Company in this Agreement shall
be correct when made and at the time of the Closing.

4.2. PERFORMANCE; NO DEFAULT.

     The Company shall have performed and complied with all agreements and
conditions contained in this Agreement required to be performed or complied with
by it prior to or at the Closing and after giving effect to the issue and sale
of the Series 2003-A Notes (and the application of the proceeds thereof as
contemplated by Schedule 5.14) no Default or Event of Default shall have
occurred and be continuing. Neither the Company nor any Restricted Subsidiary
shall have entered into any transaction since the date of the Memorandum that
would have been prohibited by Section 10 hereof had such Section applied since
such date.

4.3. COMPLIANCE CERTIFICATES.

          (a) Officer's Certificate. The Company shall have delivered to you an
     Officer's Certificate, dated the date of the Closing, certifying that the
     conditions specified in Sections 4.1, 4.2 and 4.9 have been fulfilled.

                                       4
<PAGE>

          (b) Secretary's Certificate. The Company shall have delivered to you a
     certificate certifying as to the resolutions attached thereto and other
     corporate proceedings relating to the authorization, execution and delivery
     of the Series 2003-A Notes and the Agreement.

4.4. OPINIONS OF COUNSEL.

     You shall have received opinions in form and substance satisfactory to you,
dated the date of the Closing (a) from Jenkens & Gilchrist, counsel to the
Company, covering the matters set forth in Exhibit 4.4(a) and covering such
other matters incident to the transactions contemplated hereby as you or your
counsel may reasonably request (and the Company instructs its counsel to deliver
such opinion to you) and (b) from Gardner Carton & Douglas LLC, your special
counsel in connection with such transactions, substantially in the form set
forth in Exhibit 4.4(b) and covering such other matters incident to such
transactions as you may reasonably request.

4.5. PURCHASE PERMITTED BY APPLICABLE LAW, ETC.

     On the date of the Closing your purchase of Series 2003-A Notes shall (i)
be permitted by the laws and regulations of each jurisdiction to which you are
subject, without recourse to provisions (such as Section 1405(a)(8) of the New
York Insurance Law) permitting limited investments by insurance companies
without restriction as to the character of the particular investment, (ii) not
violate any applicable law or regulation (including, without limitation,
Regulation U, T or X of the Board of Governors of the Federal Reserve System)
and (iii) not subject you to any tax, penalty or liability under or pursuant to
any applicable law or regulation, which law or regulation was not in effect on
the date hereof. If requested by you, you shall have received an Officer's
Certificate certifying as to such matters of fact as you may reasonably specify
to enable you to determine whether such purchase is so permitted.

4.6. SALE OF OTHER SERIES 2003-A NOTES.

     Contemporaneously with the Closing the Company shall sell to the Other
Purchasers and the Other Purchasers shall purchase the Series 2003-A Notes to be
purchased by them at the Closing as specified in Schedule A.

4.7. PAYMENT OF SPECIAL COUNSEL FEES.

     Without limiting the provisions of Section 15.1, the Company shall have
paid on or before the Closing the fees, charges and disbursements of your
special counsel referred to in Section 4.4, to the extent reflected in a
statement of such counsel rendered to the Company at least one Business Day
prior to the Closing.

4.8. PRIVATE PLACEMENT NUMBER.

     A Private Placement Number issued by Standard & Poor's CUSIP Service Bureau
(in cooperation with the Securities Valuation Office of the National Association
of Insurance

                                       5
<PAGE>
Commissioners) shall have been obtained by Gardner, Carton & Douglas for each
series of the Series 2003-A Notes.

4.9. CHANGES IN CORPORATE STRUCTURE.

     Except as specified in Schedule 4.9, the Company shall not have changed its
jurisdiction of incorporation or been a party to any merger or consolidation and
shall not have succeeded to all or any substantial part of the liabilities of
any other entity, at any time following the date of the most recent financial
statements referred to in Schedule 5.5.

4.10. PROCEEDINGS AND DOCUMENTS.

     All corporate and other proceedings in connection with the transactions
contemplated by this Agreement and all documents and instruments incident to
such transactions shall be satisfactory to you and your special counsel, and you
and your special counsel shall have received all such counterpart originals or
certified or other copies of such documents as you or they may reasonably
request.

5.   REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

          The Company represents and warrants to you that:

5.1. ORGANIZATION; POWER AND AUTHORITY.

     The Company is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and is duly
qualified as a foreign corporation and is in good standing in each jurisdiction
in which such qualification is required by law, other than those jurisdictions
as to which the failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. The Company has the corporate power and authority to own or hold
under lease the properties it purports to own or hold under lease, to transact
the business it transacts and proposes to transact, to execute and deliver this
Agreement and the Series 2003-A Notes and to perform the provisions hereof and
thereof.

5.2. AUTHORIZATION, ETC.

     This Agreement and the Series 2003-A Notes have been duly authorized by all
necessary corporate action on the part of the Company, and this Agreement
constitutes, and upon execution and delivery thereof each Note will constitute,
a legal, valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except as such enforceability may be
limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights generally and
(ii) general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).

                                       6
<PAGE>
5.3. DISCLOSURE.

     The Company, through its agent, Banc of America Securities LLC, has
delivered to you and each Other Purchaser a copy of a Private Placement
Memorandum, dated January 2003 (the "Memorandum"), relating to the transactions
contemplated hereby. The Memorandum fairly describes, in all material respects,
the general nature of the business and principal properties of the Company and
its Subsidiaries. Except as disclosed in Schedule 5.3, this Agreement, the
Memorandum, the documents, certificates or other writings delivered to you by or
on behalf of the Company in connection with the transactions contemplated hereby
and the financial statements listed in Schedule 5.5, taken as a whole, do not
contain any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein not misleading in light of the
circumstances under which they were made. Except as disclosed in the Memorandum
or as expressly described in Schedule 5.3, or in one of the documents,
certificates or other writings identified therein, or in the financial
statements listed in Schedule 5.5, since September 30, 2002, there has been no
change in the financial condition, operations, business or properties of the
Company or any Subsidiary except changes that individually or in the aggregate
could not reasonably be expected to have a Material Adverse Effect. There is no
fact known to the Company that could reasonably be expected to have a Material
Adverse Effect that has not been set forth herein or in the Memorandum or in the
other documents, certificates and other writings delivered to you by or on
behalf of the Company specifically for use in connection with the transactions
contemplated hereby.

5.4. ORGANIZATION AND OWNERSHIP OF SHARES OF SUBSIDIARIES; AFFILIATES.

          (a) Schedule 5.4 contains (except as noted therein) complete and
     correct lists of: (i) the Company's Subsidiaries, showing, as to each
     Subsidiary, the correct name thereof, the jurisdiction of its organization,
     and the percentage of shares of each class of its capital stock or similar
     equity interests outstanding owned by the Company and each other
     Subsidiary, (ii) the Company's Affiliates, other than Subsidiaries, and
     (iii) the Company's directors and senior officers. Each Subsidiary listed
     in Schedule 5.4 is designated a Restricted Subsidiary by the Company.

          (b) All of the outstanding shares of capital stock or similar equity
     interests of each Subsidiary shown in Schedule 5.4 as being owned by the
     Company and its Subsidiaries have been validly issued, are fully paid and
     nonassessable and are owned by the Company or another Subsidiary free and
     clear of any Lien (except as otherwise disclosed in Schedule 5.4).

          (c) Each Subsidiary identified in Schedule 5.4 is a corporation or
     other legal entity duly organized, validly existing and in good standing
     under the laws of its jurisdiction of organization, and is duly qualified
     as a foreign corporation or other legal entity and is in good standing in
     each jurisdiction in which such qualification is required by law, other
     than those jurisdictions as to which the failure to be so qualified or in
     good standing could not, individually or in the aggregate, reasonably be
     expected to have a Material Adverse Effect. Each such Subsidiary has the
     corporate or other power and authority to own or hold under lease the
     properties it purports to own or hold under lease and to transact the
     business it transacts and proposes to transact.

                                       7
<PAGE>
          (d) No Subsidiary is a party to, or otherwise subject to, any legal
     restriction or any agreement (other than this Agreement, the agreements
     listed on Schedule 5.4 and customary limitations imposed by corporate,
     limited liability company, limited partnership or similar statutes)
     restricting the ability of such Subsidiary to pay dividends out of profits
     or make any other similar distributions of profits to the Company or any of
     its Subsidiaries that owns outstanding shares of capital stock or similar
     equity interests of such Subsidiary.

5.5. FINANCIAL STATEMENTS.

     The Company has delivered to you and each Other Purchaser copies of the
financial statements of the Company and its Subsidiaries listed on Schedule 5.5.
All of said financial statements (including in each case the related schedules
and notes) fairly present in all material respects the consolidated financial
position of the Company and its Subsidiaries as of the respective dates
specified in such financial statements and the consolidated results of their
operations and cash flows for the respective periods so specified and have been
prepared in accordance with GAAP consistently applied throughout the periods
involved except as set forth in the notes thereto (subject, in the case of any
interim financial statements, to normal year-end adjustments).

5.6. COMPLIANCE WITH LAWS, OTHER INSTRUMENTS, ETC.

     The execution, delivery and performance by the Company of this Agreement
and the Series 2003-A Notes will not (i) contravene, result in any breach of, or
constitute a default under, or result in the creation of any Lien in respect of
any property of the Company or any Subsidiary under, any indenture, mortgage,
deed of trust, loan, purchase or credit agreement, lease, corporate charter or
by-laws, or any other agreement or instrument to which the Company or any
Subsidiary is bound or by which the Company or any Subsidiary or any of their
respective properties may be bound or affected, (ii) conflict with or result in
a breach of any of the terms, conditions or provisions of any order, judgment,
decree, or ruling of any court, arbitrator or Governmental Authority applicable
to the Company or any Subsidiary or (iii) violate any provision of any statute
or other rule or regulation of any Governmental Authority, including the USA
Patriot Act, applicable to the Company or any Subsidiary.

5.7. GOVERNMENTAL AUTHORIZATIONS, ETC.

     No consent, approval or authorization of, or registration, filing or
declaration with, any Governmental Authority is required in connection with the
execution, delivery or performance by the Company of this Agreement or the
Series 2003-A Notes.

5.8. LITIGATION; OBSERVANCE OF AGREEMENTS, STATUTES AND ORDERS.

          Except as disclosed in Schedule 5.8,

          (a) there are no actions, suits or proceedings pending or, to the
     knowledge of the Company, threatened against or affecting the Company or
     any Subsidiary or any property of the Company or any Subsidiary in any
     court or before any arbitrator of any

                                       8
<PAGE>
     kind or before or by any Governmental Authority that, individually or in
     the aggregate, could reasonably be expected to have a Material Adverse
     Effect; and

          (b) neither the Company nor any Subsidiary is in default under any
     term of any agreement or instrument to which it is a party or by which it
     is bound, or any order, judgment, decree or ruling of any court, arbitrator
     or Governmental Authority or is in violation of any applicable law,
     ordinance, rule or regulation (including Environmental Laws and the USA
     Patriot Act) of any Governmental Authority, which default or violation,
     individually or in the aggregate, could reasonably be expected to have a
     Material Adverse Effect.

5.9. TAXES.

     The Company and its Subsidiaries have filed all tax returns that are
required to have been filed in any jurisdiction, and have paid all taxes shown
to be due and payable on such returns and all other taxes and assessments levied
upon them or their properties, assets, income or franchises, to the extent such
taxes and assessments have become due and payable and before they have become
delinquent, except for any taxes and assessments (i) the amount of which is not
individually or in the aggregate Material or (ii) the amount, applicability or
validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which the Company or a Subsidiary, as the case
may be, has established adequate reserves in accordance with GAAP. The Company
knows of no basis for any other tax or assessment that could reasonably be
expected to have a Material Adverse Effect. The charges, accruals and reserves
on the books of the Company and its Subsidiaries in respect of Federal, state or
other taxes for all fiscal periods are adequate. The Federal income tax
liabilities of the Company and its Subsidiaries have been determined by the
Internal Revenue Service and paid for all fiscal years up to and including the
fiscal year ended December 31, 1998.

5.10. TITLE TO PROPERTY; LEASES.

     The Company and its Subsidiaries have good and sufficient title to their
respective properties that individually or in the aggregate are Material,
including all such properties reflected in the most recent audited balance sheet
referred to in Section 5.5 or purported to have been acquired by the Company or
any Subsidiary after said date (except as sold or otherwise disposed of in the
ordinary course of business), in each case free and clear of Liens prohibited by
this Agreement. All leases that individually or in the aggregate are Material
are valid and subsisting and are in full force and effect in all material
respects.

5.11. LICENSES, PERMITS, ETC.

          Except as disclosed in Schedule 5.11,

          (a) the Company and its Subsidiaries own or possess all licenses,
     permits, franchises, authorizations, patents, copyrights, service marks,
     trademarks and trade names, or rights thereto necessary for the conduct of
     their businesses without known conflict with the rights of others;

                                       9
<PAGE>
          (b) to the best knowledge of the Company, no product of the Company
     infringes any license, permit, franchise, authorization, patent, copyright,
     service mark, trademark, trade name or other right owned by any other
     Person; and

          (c) to the best knowledge of the Company, there is no violation by any
     Person of any right of the Company or any of its Subsidiaries with respect
     to any patent, copyright, service mark, trademark, trade name or other
     right owned or used by the Company or any of its Subsidiaries;

except, in each instance, for the lack of ownership or possession, conflicts or
violations that, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.

5.12. COMPLIANCE WITH ERISA.

          (a) The Company and each ERISA Affiliate have operated and
     administered each Plan in compliance with all applicable laws except for
     such instances of noncompliance as have not resulted in and could not
     reasonably be expected to result in a Material Adverse Effect. Neither the
     Company nor any ERISA Affiliate has incurred any liability pursuant to
     Title I or IV of ERISA or the penalty or excise tax provisions of the Code
     relating to employee benefit plans (as defined in Section 3 of ERISA), and
     no event, transaction or condition has occurred or exists that could
     reasonably be expected to result in the incurrence of any such liability by
     the Company or any ERISA Affiliate, or in the imposition of any Lien on any
     of the rights, properties or assets of the Company or any ERISA Affiliate,
     in either case pursuant to Title I or IV of ERISA or to such penalty or
     excise tax provisions or to Section 401(a)(29) or 412 of the Code, other
     than such liabilities or Liens as would not be individually or in the
     aggregate Material.

          (b) The present value of the aggregate benefit liabilities under each
     of the Plans (other than Multiemployer Plans), determined as of the end of
     such Plan's most recently ended plan year on the basis of the actuarial
     assumptions specified for funding purposes in such Plan's most recent
     actuarial valuation report, did not exceed the aggregate current value of
     the assets of such Plan allocable to such benefit liabilities by more than
     5% of consolidated stockholders equity of the Company and its Subsidiaries
     as reflected in the most recent balance sheet referred to in Schedule 5.5.
     The term "benefit liabilities" has the meaning specified in section 4001 of
     ERISA and the terms "current value" and "present value" have the meaning
     specified in section 3 of ERISA.

          (c) The Company and its ERISA Affiliates have not incurred withdrawal
     liabilities (and are not subject to contingent withdrawal liabilities)
     under section 4201 or 4204 of ERISA in respect of Multiemployer Plans that,
     individually or in the aggregate, could reasonably be expected to have a
     Material Adverse Effect.

          (d) The expected postretirement benefit obligation (determined as of
     the last day of the Company's most recently ended fiscal year in accordance
     with Financial Accounting Standards Board Statement No. 106, without regard
     to liabilities attributable to continuation coverage mandated by section
     4980B of the Code) of the Company and

                                       10
<PAGE>
     its Subsidiaries is not Material or is reflected in the most recent
     consolidated financial statements of the Company and its Subsidiaries
     reflected in Schedule 5.5.

          (e) The execution and delivery of this Agreement and the issuance and
     sale of the Series 2003-A Notes hereunder will not involve any transaction
     that is subject to the prohibitions of section 406 of ERISA or in
     connection with which a tax could be imposed pursuant to section
     4975(c)(1)(A)-(D) of the Code. The representation by the Company in the
     first sentence of this Section 5.12(e) is made in reliance upon and subject
     to the accuracy of your representation in Section 6.2 as to the sources of
     the funds used to pay the purchase price of the Series 2003-A Notes to be
     purchased by you.

5.13. PRIVATE OFFERING BY THE COMPANY.

     Neither the Company nor anyone acting on its behalf has offered the Series
2003-A Notes or any similar securities for sale to, or solicited any offer to
buy any of the same from, or otherwise approached or negotiated in respect
thereof with, any person other than you, the Other Purchasers and not more than
50 other Institutional Investors, each of which has been offered the Series
2003-A Notes at a private sale for investment. Neither the Company nor anyone
acting on its behalf has taken, or will take, any action that would subject the
issuance or sale of the Series 2003-A Notes to the registration requirements of
Section 5 of the Securities Act.

5.14. USE OF PROCEEDS; MARGIN REGULATIONS.

     The Company will apply the proceeds of the sale of the Series 2003-A Notes
for general corporate purposes, including to refinance Debt as set forth in
Schedule 5.14. No part of the proceeds from the sale of the Series 2003-A Notes
will be used, directly or indirectly, for the purpose of buying or carrying any
margin stock within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System (12 CFR 221), or for the purpose of buying or carrying or
trading in any securities under such circumstances as to involve the Company in
a violation of Regulation X of said Board (12 CFR 224) or to involve any broker
or dealer in a violation of Regulation T of said Board (12 CFR 220). Margin
stock does not constitute more than 10% of the value of the consolidated assets
of the Company and its Subsidiaries and the Company does not have any present
intention that margin stock will constitute more than 10% of the value of such
assets. As used in this Section, the terms "margin stock" and "purpose of buying
or carrying" shall have the meanings assigned to them in said Regulation U.

5.15. EXISTING DEBT; FUTURE LIENS.

          (a) Except as described therein, Schedule 5.15 sets forth a complete
     and correct list of all outstanding Debt of the Company and its
     Subsidiaries as of December 31, 2002, since which date there has been no
     Material change in the amounts, interest rates, sinking funds, installment
     payments or maturities of the Debt of the Company or its Subsidiaries.
     Neither the Company nor any Subsidiary is in default and no waiver of
     default is currently in effect, in the payment of any principal or interest
     on any Debt of the Company or such Subsidiary and no event or condition
     exists with respect to any Debt of the Company or any Subsidiary that is
     outstanding in an aggregate

                                       11
<PAGE>
     principal amount of $5,000,000 or more and that would permit (or that with
     notice or the lapse of time, or both, would permit) one or more Persons to
     cause such Debt to become due and payable before its stated maturity or
     before its regularly scheduled dates of payment.

          (b) Except as disclosed in Schedule 5.15, neither the Company nor any
     Subsidiary has agreed or consented to cause or permit in the future (upon
     the happening of a contingency or otherwise) any of its property, whether
     now owned or hereafter acquired, to be subject to a Lien not permitted by
     Section 10.3.

5.16. FOREIGN ASSETS CONTROL REGULATIONS, ANTI-TERRORISM ORDER, ETC.

     Neither the sale of the Series 2003-A Notes by the Company hereunder nor
its use of the proceeds thereof will violate (a) the Trading with the Enemy Act,
as amended, (b) any of the foreign assets control regulations of the United
States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any
enabling legislation or executive order relating thereto or (c) to the knowledge
of the Company, the Anti-Terrorism Order. Without limiting the foregoing,
neither Company nor any Subsidiary (i) is a blocked person described in Section
1 of the Anti-Terrorism Order or (ii) engages in any dealings or transactions,
or is otherwise associated, with any such person.

5.17. STATUS UNDER CERTAIN STATUTES.

     Neither the Company nor any Subsidiary is subject to regulation under the
Investment Company Act of 1940, as amended, the Public Utility Holding Company
Act of 1935, as amended, or the Federal Power Act, as amended. Neither the
Company nor any Subsidiary is subject to any regulation in any Material respect
under the Interstate Commerce Act, as amended by the ICC Termination Act, as
amended, and no approvals or consents are required to be obtained pursuant to
such Acts in connection with the issuance and sale of the Notes.

5.18. ENVIRONMENTAL MATTERS.

     Except as otherwise disclosed to you in writing, neither the Company nor
any Subsidiary has knowledge of any claim or has received any notice of any
claim, and no proceeding has been instituted raising any claim against the
Company or any of its Subsidiaries or any of their respective real properties
now or formerly owned, leased or operated by any of them or other assets,
alleging any damage to the environment or violation of any Environmental Laws,
except, in each case, such as could not reasonably be expected to result in a
Material Adverse Effect. Except as otherwise disclosed to you in writing,

          (a) neither the Company nor any Subsidiary has knowledge of any facts
     which would give rise to any claim, public or private, of violation of
     Environmental Laws or damage to the environment emanating from, occurring
     on or in any way related to real properties now or formerly owned, leased
     or operated by any of them or to other assets or their use, except, in each
     case, such as could not reasonably be expected to result in a Material
     Adverse Effect;

                                       12
<PAGE>
          (b) neither the Company nor any of its Subsidiaries has stored any
     Hazardous Materials on real properties now or formerly owned, leased or
     operated by any of them and has not disposed of any Hazardous Materials in
     a manner contrary to any Environmental Laws in each case in any manner that
     could reasonably be expected to result in a Material Adverse Effect; and

          (c) all buildings on all real properties now owned, leased or operated
     by the Company or any of its Subsidiaries are in compliance with applicable
     Environmental Laws, except where failure to comply could not reasonably be
     expected to result in a Material Adverse Effect.

6.   REPRESENTATIONS OF THE PURCHASERS.

6.1. PURCHASE FOR INVESTMENT.

     You represent that you are purchasing the Series 2003-A Notes for your own
account or for one or more separate accounts maintained by you or for the
account of one or more pension or trust funds and not with a view to the
distribution thereof, provided that the disposition of your or their property
shall at all times be within your or their control. You understand that the
Series 2003-A Notes have not been registered under the Securities Act and may be
resold only if registered pursuant to the provisions of the Securities Act or if
an exemption from registration is available, except under circumstances where
neither such registration nor such an exemption is required by law, and that the
Company is not required to register the Series 2003-A Notes. You represent that
you are an "accredited investor" as such term is defined in Rule 501(a) of
Regulation D under the Securities Act.

6.2. SOURCE OF FUNDS.

     You represent that at least one of the following statements is an accurate
representation as to each source of funds (a "Source") to be used by you to pay
the purchase price of the Series 2003-A Notes to be purchased by you hereunder:

          (a) the Source is an "insurance company general account" (as the term
     is defined in the United States Department of Labor's Prohibited
     Transaction Exemption ("PTE") 95-60) in respect of which the reserves and
     liabilities (as defined by the annual statement for life insurance
     companies approved by the National Association of Insurance Commissioners
     (the "NAIC Annual Statement") for the general account contract(s) held by
     or on behalf of any employee benefit plan together with the amount of the
     reserves and liabilities for the general account contract(s) held by or on
     behalf of any other employee benefit plans maintained by the same employer
     (or affiliate thereof as defined in PTE 95-60) or by the same employee
     organization in the general account do not exceed 10% of the total reserves
     and liabilities of the general account (exclusive of separate account
     liabilities) plus surplus as set forth in the NAIC Annual Statement filed
     with such Purchaser's state of domicile; or

          (b) the Source is a separate account that is maintained solely in
     connection with such Purchaser's fixed contractual obligations under which
     the amounts payable, or

                                       13
<PAGE>
     credited, to any employee benefit plan (or its related trust) that has any
     interest in such separate account (or to any participant or beneficiary of
     such plan (including any annuitant)) are not affected in any manner by the
     investment performance of the separate account; or

          (c) the Source is either (i) an insurance company pooled separate
     account, within the meaning of PTE 90-1 (issued January 29, 1990), or (ii)
     a bank collective investment fund, within the meaning of PTE 91-38 (issued
     July 12, 1991) and, except as you have disclosed to the Company in writing
     pursuant to this paragraph (c), no employee benefit plan or group of plans
     maintained by the same employer or employee organization beneficially owns
     more than 10% of all assets allocated to such pooled separate account or
     collective investment fund; or

          (d) the Source constitutes assets of an "investment fund" (within the
     meaning of Part V of PTE 84-14 (the "QPAM Exemption") managed by a
     "qualified professional asset manager" or "QPAM" (within the meaning of
     Part V of the QPAM Exemption), no employee benefit plan's assets that are
     included in such investment fund, when combined with the assets of all
     other employee benefit plans established or maintained by the same employer
     or by an affiliate (within the meaning of Section V(c)(1) of the QPAM
     Exemption) of such employer or by the same employee organization and
     managed by such QPAM, exceed 20% of the total client assets managed by such
     QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are
     satisfied, neither the QPAM nor a person controlling or controlled by the
     QPAM (applying the definition of "control" in Section V(e) of the QPAM
     Exemption) owns a 5% or more interest in the Company and (i) the identity
     of such QPAM and (ii) the names of all employee benefit plans whose assets
     are included in such investment fund have been disclosed to the Company in
     writing pursuant to this clause (d); or

          (e) the Source constitutes assets of a "plan(s)" (within the meaning
     of Section IV of PTE 96-23 (the "INHAM Exemption") managed by an "in-house
     asset manager" or "INHAM" (within the meaning of Part IV of the INHAM
     exemption), the conditions of Part I(a), (g) and (h) of the INHAM Exemption
     are satisfied, neither the INHAM nor a person controlling or controlled by
     the INHAM (applying the definition of "control" in Section IV(h) of the
     INHAM Exemption) owns a 5% or more interest in the Company and (i) the
     identity of such INHAM and (ii) the name(s) of the employee benefit plan(s)
     whose assets constitute the Source have been disclosed to the Company in
     writing pursuant to this clause (e); or

          (f) the Source is a governmental plan; or

          (g) the Source is one or more employee benefit plans, or a separate
     account or trust fund comprised of one or more employee benefit plans, each
     of which has been identified to the Company in writing pursuant to this
     paragraph (g); or

          (h) the Source does not include assets of any employee benefit plan,
     other than a plan exempt from the coverage of ERISA.

                                       14
<PAGE>
As used in this Section 6.2, the terms "employee benefit plan", "governmental
plan" and "separate account" shall have the respective meanings assigned to such
terms in Section 3 of ERISA.

7.   INFORMATION AS TO COMPANY.

7.1. FINANCIAL AND BUSINESS INFORMATION

          The Company will deliver to each holder of Notes that is an
     Institutional Investor:

          (a) Quarterly Statements -- within 60 days (or such other shorter
     period within which Quarterly Reports on Form 10-Q are required to be
     timely filed with the Securities and Exchange Commission, including any
     extension permitted by Rule 12b-25 of the Exchange Act) after the end of
     each quarterly fiscal period in each fiscal year of the Company (other than
     the last quarterly fiscal period of each such fiscal year), duplicate
     copies of,

               (i) consolidated balance sheet of the Company and its
          Subsidiaries as at the end of such quarter,

               (ii) consolidated statements of earnings and stockholders' equity
          of the Company and its Subsidiaries for such quarter and (in the case
          of the second and third quarters) for the portion of the fiscal year
          ending with such quarter, and

               (iii) consolidated statements of cash flows of the Company and
          its Subsidiaries for such quarter or (in the case of the second and
          third quarters) for the portion of the fiscal year ending with such
          quarter,

     setting forth in each case in comparative form the figures for the
     corresponding periods in the previous fiscal year, all in reasonable
     detail, prepared in accordance with GAAP applicable to quarterly financial
     statements generally, and certified by a Senior Financial Officer as fairly
     presenting, in all material respects, the financial position of the
     companies being reported on and their results of operations and cash flows,
     subject to changes resulting from year-end adjustments, provided that
     delivery within the time period specified above of copies of the Company's
     Quarterly Report on Form 10-Q prepared in compliance with the requirements
     therefor and filed with the Securities and Exchange Commission shall be
     deemed to satisfy the requirements of this Section 7.1(a);

          (b) Annual Statements -- within 105 days (or such other shorter period
     within which Annual Reports on Form 10-K are required to be timely filed
     with the Securities and Exchange Commission, including any extension
     permitted by Rule 12b-25 of the Exchange Act) after the end of each fiscal
     year of the Company, duplicate copies of,

               (i) consolidated balance sheet of the Company and its
          Subsidiaries, as at the end of such year, and

               (ii) consolidated statements of earnings, stockholders' equity
          and cash flows of the Company and its Subsidiaries, for such year,

                                       15
<PAGE>
     setting forth in each case in comparative form the figures for the previous
     fiscal year, all in reasonable detail, prepared in accordance with GAAP,
     and accompanied by an opinion of independent certified public accountants
     of recognized national standing, which opinion shall state that such
     financial statements present fairly, in all material respects, the
     financial position of the companies being reported upon and their results
     of operations and cash flows and have been prepared in conformity with
     GAAP, and that the examination of such accountants in connection with such
     financial statements has been made in accordance with generally accepted
     auditing standards, and that such audit provides a reasonable basis for
     such opinion in the circumstances, provided that the delivery within the
     time period specified above of the Company's Annual Report on Form 10-K for
     such fiscal year (together with the Company's annual report to
     shareholders, if any, prepared pursuant to Rule 14a-3 under the Exchange
     Act) prepared in accordance with the requirements therefor and filed with
     the Securities and Exchange Commission shall be deemed to satisfy the
     requirements of this Section 7.1(b);

          (c) Unrestricted Subsidiaries -- if, at the time of delivery of any
     financial statements pursuant to Section 7.1(a) or (b), Unrestricted
     Subsidiaries account for more than 10% of (i) the consolidated total assets
     of the Company and its Subsidiaries reflected in the balance sheet included
     in such financial statements or (ii) the consolidated revenues of the
     Company and its Subsidiaries reflected in the consolidated statement of
     income included in such financial statements, an unaudited balance sheet
     for all Unrestricted Subsidiaries taken as whole as at the end of the
     fiscal period included in such financial statements and the related
     unaudited statements of income, stockholders' equity and cash flows for
     such Unrestricted Subsidiaries for such period, together with consolidating
     statements reflecting all eliminations or adjustments necessary to
     reconcile such group financial statements to the consolidated financial
     statements of the Company and its Subsidiaries shall be delivered together
     with the financial statements required pursuant to Sections 7.1(a) and (b);

          (d) SEC and Other Reports -- promptly upon their becoming available,
     one copy of (i) each financial statement, report, notice or proxy statement
     sent by the Company or any Restricted Subsidiary to public securities
     holders generally, and (ii) each regular or periodic report, each
     registration statement (without exhibits except as expressly requested by
     such holder), other than registration statements on Form S-8, and each
     prospectus and all amendments thereto filed by the Company or any
     Restricted Subsidiary with the Securities and Exchange Commission and of
     all press releases and other statements made available generally by the
     Company or any Restricted Subsidiary to the public concerning developments
     that are Material;

          (e) Notice of Default or Event of Default -- promptly, and in any
     event within 10 days after a Responsible Officer becoming aware of the
     existence of any Default or Event of Default or that any Person has given
     any notice or taken any action with respect to a claimed default hereunder
     or that any Person has given notice or taken any action with respect to a
     claimed default of the type referred to in Section 11(f), a written notice
     specifying the nature and period of existence thereof and what action the
     Company is taking or proposes to take with respect thereto;

                                       16
<PAGE>
          (f) ERISA Matters -- promptly, and in any event within five Business
     Days after a Responsible Officer becoming aware of any of the following, a
     written notice setting forth the nature thereof and the action, if any,
     that the Company or an ERISA Affiliate proposes to take with respect
     thereto:

               (i) with respect to any Plan, any reportable event, as defined in
          section 4043(b) of ERISA and the regulations thereunder, for which
          notice thereof has not been waived pursuant to such regulations as in
          effect on the date hereof; or

               (ii) the taking by the PBGC of steps to institute, or the
          threatening by the PBGC of the institution of, proceedings under
          section 4042 of ERISA for the termination of, or the appointment of a
          trustee to administer, any Plan, or the receipt by the Company or any
          ERISA Affiliate of a notice from a Multiemployer Plan that such action
          has been taken by the PBGC with respect to such Multiemployer Plan; or

               (iii) any event, transaction or condition that could result in
          the incurrence of any liability by the Company or any ERISA Affiliate
          pursuant to Title I or IV of ERISA or the penalty or excise tax
          provisions of the Code relating to employee benefit plans, or in the
          imposition of any Lien on any of the rights, properties or assets of
          the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA
          or such penalty or excise tax provisions, if such liability or Lien,
          taken together with any other such liabilities or Liens then existing,
          could reasonably be expected to have a Material Adverse Effect;

          (g) Notices from Governmental Authority -- promptly, and in any event
     within 30 days of receipt thereof, copies of any notice to the Company or
     any Subsidiary from any Federal or state Governmental Authority relating to
     any order, ruling, statute or other law or regulation that could reasonably
     be expected to have a Material Adverse Effect;

          (h) Supplements -- if an additional series of Notes is issued under
     this Agreement (whether or not you are a purchaser thereof), promptly, and
     in any event within 10 Business Days after execution and delivery thereof,
     a copy of the Supplement pursuant to which such Notes were issued;
     and

          (i) Requested Information -- with reasonable promptness, such other
     data and information relating to the business, operations, affairs,
     financial condition, assets or properties of the Company or any of its
     Subsidiaries or relating to the ability of the Company to perform its
     obligations hereunder and under the Series 2003-A Notes as from time to
     time may be reasonably requested by any such holder of Notes.

7.2. OFFICER'S CERTIFICATE.

     Each set of financial statements delivered to a holder of Notes pursuant to
Section 7.1(a) or (b) shall be accompanied by a certificate of a Senior
Financial Officer setting forth:

                                       17
<PAGE>
          (a) Covenant Compliance -- the information (including detailed
     calculations) required in order to establish whether the Company was in
     compliance with the requirements of Section 10.1 through Section 10.8,
     inclusive, during the quarterly or annual period covered by the statements
     then being furnished (including with respect to each such Section, where
     applicable, the calculations of the maximum or minimum amount, ratio or
     percentage, as the case may be, permissible under the terms of such
     Sections, and the calculation of the amount, ratio or percentage then in
     existence); and

          (b) Event of Default -- a statement that such officer has reviewed the
     relevant terms hereof and has made, or caused to be made, under his or her
     supervision, a review of the transactions and conditions of the Company and
     its Subsidiaries from the beginning of the quarterly or annual period
     covered by the statements then being furnished to the date of the
     certificate and that such review has not disclosed the existence during
     such period of any condition or event that constitutes a Default or an
     Event of Default or, if any such condition or event existed or exists
     (including any such event or condition resulting from the failure of the
     Company or any Subsidiary to comply with any Environmental Law), specifying
     the nature and period of existence thereof and what action the Company
     shall have taken or proposes to take with respect thereto.

7.3. INSPECTION.

          The Company will permit the representatives of each holder of Notes
     that is an Institutional Investor:

          (a) No Default -- if no Default or Event of Default then exists, at
     the expense of such holder and upon reasonable prior notice to the Company,
     to visit the principal executive office of the Company, to discuss the
     affairs, finances and accounts of the Company and its Subsidiaries with the
     Company's officers, and (with the consent of the Company, which consent
     will not be unreasonably withheld) its independent public accountants, and
     (with the consent of the Company, which consent will not be unreasonably
     withheld) to visit the other offices and properties of the Company and each
     Restricted Subsidiary, all at such reasonable times and as often as may be
     reasonably requested in writing; and

          (b) Default -- if a Default or Event of Default then exists, at the
     expense of the Company, to visit and inspect any of the offices or
     properties of the Company or any Subsidiary, to examine all their
     respective books of account, records, reports and other papers, to make
     copies and extracts therefrom, and to discuss their respective affairs,
     finances, and accounts with their respective officers and independent
     public accountants (and by this provision the Company authorizes said
     accountants to discuss the affairs, finances and accounts of the Company
     and its Subsidiaries), all at such times and as often as may be requested.

                                       18
<PAGE>
8.   PREPAYMENT OF THE NOTES.

8.1. NO SCHEDULED PREPAYMENTS.

     No regularly scheduled prepayments are due on the Series 2003-A Notes prior
to their stated maturity.

8.2. OPTIONAL PREPAYMENTS.

     The Notes are not subject to prepayment at the option of the Company prior
to February 28, 2004. Thereafter, the Company may, at its option, upon notice as
provided below, prepay at any time all, or from time to time any part of, the
Series 2003-A Notes in an amount not less than $1,000,000 in the aggregate in
the case of a partial prepayment, at 100% of the principal amount so prepaid,
plus interest on such principal amount accrued to such prepayment date and, if
such prepayment is to occur on any date other than an Interest Payment Date, the
LIBOR Breakage Amount, if any. The Company will give each holder of Series
2003-A Notes written notice of each optional prepayment under this Section 8.2
not less than 30 days and not more than 60 days prior to the date fixed for such
prepayment. Each such notice shall specify such date, the aggregate principal
amount of the Notes to be prepaid on such date, the principal amount of each
Series 2003-A Note held by such holder to be prepaid (determined in accordance
with Section 8.3), and the interest to be paid on the prepayment date with
respect to such principal amount being prepaid.

8.3. ALLOCATION OF PARTIAL PREPAYMENTS.

     In the case of each partial prepayment of the Notes of a series pursuant to
this Section 8, the principal amount of the Notes of such series to be prepaid
shall be allocated among all of the Notes of such series at the time outstanding
in proportion, as nearly as practicable, to the respective unpaid principal
amounts thereof not theretofore called for prepayment.

8.4. MATURITY; SURRENDER, ETC.

     In the case of each prepayment of Notes pursuant to this Section 8, the
principal amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment, together with interest on such
principal amount accrued to such date and the applicable LIBOR Breakage Amount,
if any. From and after such date, unless the Company shall fail to pay such
principal amount when so due and payable, together with the interest and the
applicable LIBOR Breakage Amount, if any, as aforesaid, interest on such
principal amount shall cease to accrue. Any Note paid or prepaid in full shall
be surrendered to the Company and canceled and shall not be reissued, and no
Note shall be issued in lieu of any prepaid principal amount of any Note.

8.5. PURCHASE OF NOTES.

     The Company will not and will not permit any Affiliate to purchase, redeem,
prepay or otherwise acquire, directly or indirectly, any of the outstanding
Series 2003-A Notes except (a) upon the payment or prepayment of the Series
2003-A Notes in accordance with the

                                       19
<PAGE>
terms of this Agreement and the Series 2003-A Notes or (b) pursuant to an offer
to purchase made by the Company or an Affiliate pro rata to the holders of all
Series 2003-A Notes at the time outstanding upon the same terms and conditions.
Any such offer shall provide each holder with sufficient information to enable
it to make an informed decision with respect to such offer, and shall remain
open for at least 15 Business Days. The Company will promptly cancel all Series
2003-A Notes acquired by it or any Affiliate pursuant to any payment, prepayment
or purchase of Series 2003-A Notes pursuant to any provision of this Agreement
and no Series 2003-A Notes may be issued in substitution or exchange for any
such Series 2003-A Notes.

8.6. LIBOR BREAKAGE AMOUNT.

     The term "LIBOR BREAKAGE AMOUNT" means any loss, cost or expense reasonably
incurred by any holder of a Series 2003-A Note as a result of any payment or
prepayment of any Series 2003-A Note (whether voluntary, mandatory, automatic,
by reason of acceleration or otherwise) on a day other than an Interest Payment
Date for such Note or at scheduled maturity thereof, and any loss or expense
arising from the liquidation or reemployment of funds obtained by such holder or
from fees payable to terminate the deposits from which such funds were obtained;
provided that any such loss, cost or expense shall be limited to the time period
from the date of such prepayment through the earlier of (i) the next Interest
Payment Date or (ii) the maturity of the Series 2003-A Note. Each holder of a
Series 2003-A Note shall determine the LIBOR Breakage Amount with respect to the
principal amount of its Series 2003-A Notes then being paid or prepaid (or
required to be paid or prepaid) by written notice to the Company setting forth
such determination in reasonable detail not less than two Business Days prior to
the date of prepayment. Each such determination shall be conclusive absent
manifest error.

9.   AFFIRMATIVE COVENANTS.

          The Company covenants that so long as any of the Notes are
     outstanding:

9.1. COMPLIANCE WITH LAW.

     The Company will, and will cause each Subsidiary to, comply with all laws,
ordinances or governmental rules or regulations to which each of them is
subject, including, without limitation, Environmental Laws, and will obtain and
maintain in effect all licenses, certificates, permits, franchises and other
governmental authorizations necessary to the ownership of their respective
properties or to the conduct of their respective businesses, in each case to the
extent necessary to ensure that non-compliance with such laws, ordinances or
governmental rules or regulations or failures to obtain or maintain in effect
such licenses, certificates, permits, franchises and other governmental
authorizations could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

9.2. INSURANCE.

     The Company will, and will cause each Restricted Subsidiary to, maintain,
with financially sound and reputable insurers, insurance with respect to their
respective properties and businesses against such casualties and contingencies,
of such types, on such terms and in such

                                       20
<PAGE>
amounts (including deductibles, co-insurance and self-insurance, if adequate
reserves are maintained with respect thereto) as is customary in the case of
entities of established reputations engaged in the same or a similar business
and similarly situated, except for instances where the failure to maintain such
insurance could not reasonably be expected to have a Material Adverse Effect.

9.3. MAINTENANCE OF PROPERTIES.

     The Company will and will cause each Restricted Subsidiary to maintain and
keep, or cause to be maintained and kept, their respective properties in good
repair, working order and condition (other than ordinary wear and tear), so that
the business carried on in connection therewith may be properly conducted at all
times, provided that this Section shall not prevent the Company or any
Restricted Subsidiary from discontinuing the operation and the maintenance of
any of its properties if such discontinuance is desirable in the conduct of its
business and the Company has concluded that such discontinuance could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

9.4. PAYMENT OF TAXES AND CLAIMS.

     The Company will, and will cause each Subsidiary to, file all income tax or
similar tax returns required to be filed in any jurisdiction and to pay and
discharge all taxes shown to be due and payable on such returns and all other
taxes, assessments, governmental charges, or levies imposed on them or any of
their properties, assets, income or franchises, to the extent such taxes and
assessments have become due and payable and before they have become delinquent
and all claims for which sums have become due and payable that have or might
become a Lien on properties or assets of the Company or any Subsidiary, provided
that neither the Company nor any Subsidiary need pay any such tax or assessment
or claims if (i) the amount, applicability or validity thereof is contested by
the Company or such Subsidiary on a timely basis in good faith and in
appropriate proceedings, and the Company or a Subsidiary has established
adequate reserves therefor in accordance with GAAP on the books of the Company
or such Subsidiary or (ii) the nonpayment of all such taxes and assessments in
the aggregate could not reasonably be expected to have a Material Adverse
Effect.

9.5. CORPORATE EXISTENCE, ETC.

     Subject to Section 10.5, the Company will at all times preserve and keep in
full force and effect its corporate existence. Subject to Sections 10.4, 10.5
and 10.6, the Company will at all times preserve and keep in full force and
effect the corporate, partnership or limited liability company existence of each
of its Restricted Subsidiaries (unless merged into the Company or a Restricted
Subsidiary) and all rights and franchises of the Company and its Restricted
Subsidiaries unless, in the good faith judgment of the Company, the termination
of or failure to preserve and keep in full force and effect such corporate,
partnership or limited liability company existence, right or franchise could
not, individually or in the aggregate, have a Material Adverse Effect.

                                       21
<PAGE>
10.  NEGATIVE COVENANTS.

          The Company covenants that so long as any of the Notes are
     outstanding:

10.1. DEBT; PRIORITY DEBT.

          The Company will not at any time permit:

          (a) the ratio of Consolidated Debt (as of any date of determination)
     to Consolidated EBITDA (for the Company's then most recently completed four
     fiscal quarters) to be greater than 3.25 to 1.0; or

          (b) Priority Debt to exceed 20% of Adjusted Consolidated Net Worth.

10.2. INTEREST COVERAGE.

     The Company will not permit the ratio of Consolidated EBITDA to
Consolidated Interest Expense (in each case for the Company's then most recently
completed four fiscal quarters) to be less than 2.50 to 1.0 at any time.

10.3. LIENS.

     The Company will not, and will not permit any Restricted Subsidiary to,
permit to exist, create, assume or incur, directly or indirectly, any Lien on
its properties or assets, whether now owned or hereafter acquired, except:

          (a) Liens for taxes, assessments or governmental charges not then due
     and delinquent or the nonpayment of which is permitted by Section 9.4;

          (b) Liens incidental to the conduct of business or the ownership of
     properties and assets (including landlords', lessors', carriers',
     warehousemen's, mechanics', materialmen's and other similar Liens) and
     Liens to secure the performance of bids, tenders, leases or trade
     contracts, or to secure statutory obligations (including obligations under
     workers compensation, unemployment insurance and other social security
     legislation), surety or appeal bonds or other Liens of like general nature
     incurred in the ordinary course of business and not in connection with the
     borrowing of money;

          (c) any attachment or judgment Lien, unless the judgment it secures
     has not, within 60 days after the entry thereof, been discharged or
     execution thereof stayed pending appeal, or has not been discharged within
     60 days after the expiration of any such stay;

          (d) Liens securing Debt of a Restricted Subsidiary owed to the Company
     or to another Restricted Subsidiary;

          (e) Liens securing Debt existing on property or assets of the Company
     or any Restricted Subsidiary as of the date of this Agreement that are
     described in Schedule 10.3;

                                       22
<PAGE>
          (f) encumbrances in the nature of leases, subleases, zoning
     restrictions, easements, rights of way, minor survey exceptions and other
     rights and restrictions of record on the use of real property and defects
     in title arising or incurred in the ordinary course of business, which,
     individually and in the aggregate, do not materially impair the use of the
     property or assets subject thereto by the Company or such Restricted
     Subsidiary in their business or which relate only to assets that in the
     aggregate are not Material;

          (g) Liens (i) existing on property at the time of its acquisition by
     the Company or a Restricted Subsidiary and not created in contemplation
     thereof, whether or not the Debt secured by such Lien is assumed by the
     Company or a Restricted Subsidiary; or (ii) on property created
     contemporaneously with its acquisition or within 365 days of the
     acquisition or completion of construction or improvements thereof to secure
     or provide for all or a portion of the purchase price or cost of
     construction or improvements of such property after the date of Closing; or
     (iii) existing on property of a Person at the time such Person is merged or
     consolidated with, or becomes a Restricted Subsidiary of, or substantially
     all of its assets are acquired by, the Company or a Restricted Subsidiary
     and not created in contemplation thereof; provided in each case that such
     Liens do not extend to additional property of the Company or any Restricted
     Subsidiary (other than property that is an improvement to or is acquired
     for specific use in connection with the subject property) and that the
     aggregate principal amount of Debt secured by each such Lien does not
     exceed the cost of acquisition or construction of the property subject
     thereto;

          (h) Liens resulting from extensions, renewals or replacements of Liens
     permitted by paragraphs (d), (e) and (g), provided that (i) there is no
     increase in the principal amount or decrease in maturity of the Debt
     secured thereby at the time of such extension, renewal or replacement, (ii)
     any new Lien attaches only to the same property theretofore subject to such
     earlier Lien and (iii) immediately after such extension, renewal or
     replacement no Default or Event of Default would exist; and

          (i) Liens securing Debt not otherwise permitted by paragraphs (a)
     through (h) above, provided that, after giving effect to the incurrence of
     the Debt so secured, Priority Debt does not exceed 20% of Adjusted
     Consolidated Net Worth.

10.4. SALE OF ASSETS.

     Except as permitted by Section 10.5, the Company will not, and will not
permit any Restricted Subsidiary to, sell, lease, transfer or otherwise dispose
of, including by way of merger (collectively a "Disposition"), any assets,
including capital stock of Restricted Subsidiaries, in one or a series of
transactions, to any Person, other than:

          (a) Dispositions in the ordinary course of business;

          (b) Dispositions by the Company to a Restricted Subsidiary or by a
     Restricted Subsidiary to the Company or a Restricted Subsidiary; or

          (c) Dispositions not otherwise permitted by Section 10.4(a) or (b),
     provided that:

                                       23
<PAGE>
               (i) the aggregate net book value of all assets disposed of in any
          fiscal year pursuant to this Section 10.4(c) does not exceed 10% of
          Consolidated Total Assets as of the end of the immediately preceding
          fiscal year; and

               (ii) at the time of such Disposition and after giving effect
          thereto no Default or Event of Default shall have occurred and be
          continuing.

Notwithstanding the foregoing, the Company may, or may permit any Restricted
Subsidiary to, make a Disposition and the assets subject to such Disposition
shall not be subject to or included in the foregoing limitation and computation
contained in Section 10.4(c)(ii) of the preceding sentence if

          (A) such assets are leased back by the Company or any Restricted
     Subsidiary, as lessee, within 365 days of the original acquisition or
     construction thereof by the Company or such Restricted Subsidiary; or

          (B) the net proceeds from such Disposition are within 365 days of such
     Disposition:

               (i) reinvested in productive assets used in carrying on the
          business of the Company and its Restricted Subsidiaries; or

               (ii) applied to the payment or prepayment of any outstanding Debt
          of the Company or any Restricted Subsidiary that is pari passu with or
          senior to the Notes, including the Notes.

Any prepayment of Notes pursuant to this Section 10.4 shall be in accordance
with Sections 8.2 and 8.3, without regard to the minimum prepayment requirements
of Section 8.2 if such proceeds are less than such minimum.

10.5. MERGERS, CONSOLIDATIONS, ETC.

     The Company will not, and will not permit any Restricted Subsidiary to,
consolidate with or merge with any other Person or convey, transfer, sell or
lease all or substantially all of its assets in a single transaction or series
of transactions to any Person except that:

          (a) the Company may consolidate or merge with any other Person or
     convey, transfer, sell or lease all or substantially all of its assets in a
     single transaction or series of transactions to any Person, provided that:

               (i) the successor formed by such consolidation or the survivor of
          such merger or the Person that acquires by conveyance, transfer, sale
          or lease all or substantially all of the assets of the Company as an
          entirety, as the case may be, is a solvent corporation organized and
          existing under the laws of the United States or any state thereof
          (including the District of Columbia), and, if the Company is not such
          corporation, such corporation (y) shall have executed and delivered to
          each holder of any Notes its assumption of the due and punctual
          performance and

                                       24
<PAGE>
          observance of each covenant and condition of this Agreement and the
          Notes and (z) shall have caused to be delivered to each holder of any
          Notes an opinion of independent counsel reasonably satisfactory to the
          Required Holders, to the effect that all agreements or instruments
          effecting such assumption are enforceable in accordance with their
          terms and comply with the terms hereof; and

               (ii) immediately before and after giving effect to such
          transaction, no Default or Event of Default shall have occurred and be
          continuing; and

          (b) Any Restricted Subsidiary may (x) merge into the Company (provided
     that the Company is the surviving corporation) or a Restricted Subsidiary
     or (y) sell, transfer or lease all or any part of its assets to the Company
     or a Restricted Subsidiary, or (z) merge or consolidate with, or sell,
     transfer or lease all or substantially all of its assets to, any Person in
     a transaction that is permitted by Section 10.4 or, as a result of which,
     such Person becomes a Restricted Subsidiary; provided in each instance set
     forth in clauses (x) through (z) that, immediately before and after giving
     effect thereto, there shall exist no Default or Event of Default.

No such conveyance, transfer, sale or lease of all or substantially all of the
assets of the Company shall have the effect of releasing the Company or any
successor corporation that shall theretofore have become such in the manner
prescribed in this Section 10.5 from its liability under this Agreement or the
Notes.

10.6. DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES.

     The Company may designate any Restricted Subsidiary as an Unrestricted
Subsidiary and any Unrestricted Subsidiary as a Restricted Subsidiary by notice
in writing given to the holders of the Notes; provided that,

          (a) if such Subsidiary initially is designated a Restricted
     Subsidiary, then such Restricted Subsidiary may be subsequently designated
     as an Unrestricted Subsidiary and such Unrestricted Subsidiary may be
     subsequently designated as a Restricted Subsidiary, but no further changes
     in designation may be made;

          (b) if such Subsidiary initially is designated an Unrestricted
     Subsidiary, then such Unrestricted Subsidiary may be subsequently
     designated as a Restricted Subsidiary and such Restricted Subsidiary may be
     subsequently designated as an Unrestricted Subsidiary, but no further
     changes in designation may be made; and

          (c) the Company may not designate a Restricted Subsidiary as an
     Unrestricted Subsidiary unless: (i) such Restricted Subsidiary does not
     own, directly or indirectly, any Debt or capital stock of the Company or
     any other Restricted Subsidiary, (ii) such designation, considered as a
     sale of assets, is permitted pursuant to Section 10.4, and (iii)
     immediately before and after such designation there exists no Default or
     Event of Default.

                                       25
<PAGE>
10.7. NATURE OF BUSINESS.

     The Company will not, and will not permit any Restricted Subsidiary to,
engage in any business if, as a result, the general nature of the business in
which the Company and its Restricted Subsidiaries, taken as a whole, would then
be engaged would be substantially changed from the general nature of the
business in which the Company and its Restricted Subsidiaries, taken as a whole,
are engaged on the date of this Agreement as described in the Memorandum.

10.8. TRANSACTIONS WITH AFFILIATES.

     The Company will not and will not permit any Restricted Subsidiary to enter
into directly or indirectly any Material transaction or Material group of
related transactions (including without limitation the purchase, lease, sale or
exchange of properties of any kind or the rendering of any service) with any
Affiliate (other than the Company or another Restricted Subsidiary), except in
the ordinary course of the Company's or such Restricted Subsidiary's business
and upon fair and reasonable terms no less favorable to the Company or such
Restricted Subsidiary than would be obtainable in a comparable arm's-length
transaction with a Person not an Affiliate.

11.  EVENTS OF DEFAULT.

     An "Event of Default" shall exist if any of the following conditions or
events shall occur and be continuing:

          (a) the Company defaults in the payment of any principal or LIBOR
     Breakage Amount, if any, on any Series 2003-A Note when the same becomes
     due and payable, whether at maturity or at a date fixed for prepayment or
     by declaration or otherwise; or

          (b) the Company defaults in the payment of any interest on any Series
     2003-A Note for more than five Business Days after the same becomes due and
     payable; or

          (c) the Company defaults in the performance of or compliance with any
     term contained in Sections 10.1 through 10.5; or

          (d) the Company defaults in the performance of or compliance with any
     term contained herein (other than those referred to in paragraphs (a), (b)
     and (c) of this Section 11) and such default is not remedied within 30 days
     after the earlier of (i) a Responsible Officer obtaining actual knowledge
     of such default or (ii) the Company receiving written notice of such
     default from any holder of a Note; or

          (e) any representation or warranty made in writing by or on behalf of
     the Company or by any officer of the Company in this Agreement or in any
     writing furnished in connection with the transactions contemplated hereby
     or thereby proves to have been false or incorrect in any material respect
     on the date as of which made; or

          (f) (i) the Company or any Restricted Subsidiary is in default (as
     principal or as guarantor or other surety) in the payment of any principal
     of or premium or make-whole amount or interest in excess of $100,000 on any
     Debt that is outstanding in an

                                       26
<PAGE>
     aggregate principal amount greater than 5% of Adjusted Consolidated Net
     Worth beyond any period of grace provided with respect thereto, or (ii) the
     Company or any Restricted Subsidiary is in default in the performance of or
     compliance with any term of any evidence of any Debt that is outstanding in
     an aggregate principal amount greater than 5% of Adjusted Consolidated Net
     Worth or of any mortgage, indenture or other agreement relating thereto or
     any other condition exists, and as a consequence of such default or
     condition such Debt has become, or has been declared, due and payable
     before its stated maturity or before its regularly scheduled dates of
     payment, or (iii) as a consequence of the occurrence or continuation of any
     event or condition (other than the passage of time or the right of the
     holder of Debt to convert such Debt into equity interests), the Company or
     any Restricted Subsidiary has become obligated to purchase or repay Debt in
     an aggregate principal amount greater than 5% of Adjusted Consolidated Net
     Worth before its regular maturity or before its regularly scheduled dates
     of payment; or

          (g) the Company or any Material Subsidiary (i) is generally not
     paying, or admits in writing its inability to pay, its debts as they become
     due, (ii) files, or consents by answer or otherwise to the filing against
     it of, a petition for relief or reorganization or arrangement or any other
     petition in bankruptcy, for liquidation or to take advantage of any
     bankruptcy, insolvency, reorganization, moratorium or other similar law of
     any jurisdiction, (iii) makes an assignment for the benefit of its
     creditors, (iv) consents to the appointment of a custodian, receiver,
     trustee or other officer with similar powers with respect to it or with
     respect to any substantial part of its property, (v) is adjudicated as
     insolvent or to be liquidated, or (vi) takes corporate action for the
     purpose of any of the foregoing; or

          (h) a court or governmental authority of competent jurisdiction enters
     an order appointing, without consent by the Company or any Material
     Subsidiary, a custodian, receiver, trustee or other officer with similar
     powers with respect to it or with respect to any substantial part of its
     property, or constituting an order for relief or approving a petition for
     relief or reorganization or any other petition in bankruptcy or for
     liquidation or to take advantage of any bankruptcy or insolvency law of any
     jurisdiction, or ordering the dissolution, winding-up or liquidation of the
     Company or any Material Subsidiary, or any such petition shall be filed
     against the Company or any Material Subsidiary and such petition shall not
     be dismissed within 60 days; or

          (i) a final judgment or judgments for the payment of money aggregating
     more than 5% of Adjusted Consolidated Net Worth are rendered against one or
     more of the Company and its Restricted Subsidiaries, which judgments are
     not, within 60 days after entry thereof, bonded, discharged or stayed
     pending appeal, or are not discharged within 60 days after the expiration
     of such stay; or

          (j) if (i) any Plan shall fail to satisfy the minimum funding
     standards of ERISA or the Code for any plan year or part thereof or a
     waiver of such standards or extension of any amortization period is sought
     or granted under section 412 of the Code, (ii) a notice of intent to
     terminate any Plan shall have been or is reasonably expected to be filed
     with the PBGC or the PBGC shall have instituted proceedings under ERISA

                                       27
<PAGE>
     section 4042 to terminate or appoint a trustee to administer any Plan or
     the PBGC shall have notified the Company or any ERISA Affiliate that a Plan
     may become a subject of any such proceedings, (iii) the aggregate "amount
     of unfunded benefit liabilities" (within the meaning of section 4001(a)(18)
     of ERISA) under all Plans determined in accordance with Title IV of ERISA,
     shall be more than 5% of Adjusted Consolidated Net Worth, (iv) the Company
     or any ERISA Affiliate shall have incurred or is reasonably expected to
     incur any liability pursuant to Title I or IV of ERISA or the penalty or
     excise tax provisions of the Code relating to employee benefit plans, (v)
     the Company or any ERISA Affiliate withdraws from any Multiemployer Plan,
     or (vi) the Company or any Subsidiary establishes or amends any employee
     welfare benefit plan that provides post-employment welfare benefits in a
     manner that would increase the liability of the Company or any Subsidiary
     thereunder; and any such event or events described in clauses (i) through
     (vi) above, either individually or together with any other such event or
     events, could reasonably be expected to have a Material Adverse Effect.

As used in Section 11(j), the terms "employee benefit plan" and "employee
welfare benefit plan" shall have the respective meanings assigned to such terms
in Section 3 of ERISA.

12.  REMEDIES ON DEFAULT, ETC.

12.1. ACCELERATION.

          (a) If an Event of Default with respect to the Company described in
     paragraph (g) or (h) of Section 11 (other than an Event of Default
     described in clause (i) of paragraph (g) or described in clause (vi) of
     paragraph (g) by virtue of the fact that such clause encompasses clause (i)
     of paragraph (g)) has occurred, all the Series 2003-A Notes then
     outstanding shall automatically become immediately due and payable.

          (b) If any other Event of Default has occurred and is continuing,
     holders of a majority or more in principal amount of the Series 2003-A
     Notes at the time outstanding may at any time at its or their option, by
     notice or notices to the Company, declare all the Series 2003-A Notes then
     outstanding to be immediately due and payable.

          (c) If any Event of Default described in paragraph (a) or (b) of
     Section 11 has occurred and is continuing, any holder or holders of Notes
     at the time outstanding affected by such Event of Default may at any time,
     at its or their option, by notice or notices to the Company, declare all
     the Series 2003-A Notes held by it or them to be immediately due and
     payable.

     Upon any Series 2003-A Notes becoming due and payable under this Section
12.1, whether automatically or by declaration, such Series 2003-A Notes will
forthwith mature and the entire unpaid principal amount of such Series 2003-A
Notes, plus (x) all accrued and unpaid interest thereon and (y) any LIBOR
Breakage Amount determined in respect of such principal amount, shall all be
immediately due and payable, in each and every case without presentment, demand,
protest or further notice, all of which are hereby waived.

                                       28
<PAGE>
12.2. OTHER REMEDIES.

     If any Default or Event of Default has occurred and is continuing, and
irrespective of whether any Series 2003-A Notes have become or have been
declared immediately due and payable under Section 12.1, the holder of any
Series 2003-A Note at the time outstanding may proceed to protect and enforce
the rights of such holder by an action at law, suit in equity or other
appropriate proceeding, whether for the specific performance of any agreement
contained herein or in any Series 2003-A Note, or for an injunction against a
violation of any of the terms hereof or thereof, or in aid of the exercise of
any power granted hereby or thereby or by law or otherwise.

12.3. RESCISSION.

     At any time after any Series 2003-A Notes have been declared due and
payable pursuant to clause (b) or (c) of Section 12.1, the holders of a majority
in principal amount of the Series 2003-A Notes then outstanding, by written
notice to the Company, may rescind and annul any such declaration and its
consequences if (a) the Company has paid all overdue interest on the Series
2003-A Notes, all principal of, and LIBOR Breakage Amount, if any, on any Series
2003-A Notes that are due and payable and are unpaid other than by reason of
such declaration, and all interest on such overdue principal and LIBOR Breakage
Amount, if any, and (to the extent permitted by applicable law) any overdue
interest in respect of the Series 2003-A Notes, at the Default Rate, (b) all
Events of Default and Defaults, other than non-payment of amounts that have
become due solely by reason of such declaration, have been cured or have been
waived pursuant to Section 17, and (c) no judgment or decree has been entered
for the payment of any monies due pursuant hereto or to the Series 2003-A Notes.
No rescission and annulment under this Section 12.3 will extend to or affect any
subsequent Event of Default or Default or impair any right consequent thereon.

12.4. NO WAIVERS OR ELECTION OF REMEDIES, EXPENSES, ETC.

     No course of dealing and no delay on the part of any holder of any Series
2003-A Note in exercising any right, power or remedy shall operate as a waiver
thereof or otherwise prejudice such holder's rights, powers or remedies. No
right, power or remedy conferred by this Agreement or by any Series 2003-A Note
upon any holder thereof shall be exclusive of any other right, power or remedy
referred to herein or therein or now or hereafter available at law, in equity,
by statute or otherwise. Without limiting the obligations of the Company under
Section 15, the Company will pay to the holder of each Series 2003-A Note on
demand such further amount as shall be sufficient to cover all costs and
expenses of such holder incurred in any enforcement or collection under this
Section 12, including reasonable attorneys' fees, expenses and disbursements.

13.  REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.

13.1. REGISTRATION OF NOTES.

     The Company shall keep at its principal executive office a register for the
registration and registration of transfers of Notes of each series. The name and
address of each

                                       29
<PAGE>

holder of one or more Notes, each transfer thereof and the name and address of
each transferee of one or more Notes shall be registered in such register. Prior
to due presentment for registration of transfer, the Person in whose name any
Note shall be registered shall be deemed and treated as the owner and holder
thereof for all purposes hereof, and the Company shall not be affected by any
notice or knowledge to the contrary. The Company shall give to any holder of a
Note of a series that is an Institutional Investor, promptly upon request
therefor, a complete and correct copy of the names and addresses of all
registered holders of Notes of such series.

13.2. TRANSFER AND EXCHANGE OF NOTES.

     Upon surrender of any Note at the principal executive office of the Company
for registration of transfer or exchange (and in the case of a surrender for
registration of transfer, duly endorsed or accompanied by a written instrument
of transfer duly executed by the registered holder of such Note or his attorney
duly authorized in writing and accompanied by the address for notices of each
transferee of such Note or part thereof), the Company shall execute and deliver,
at the Company's expense (except as provided below), one or more new Notes (as
requested by the holder thereof) of the same series in exchange therefor, in an
aggregate principal amount equal to the unpaid principal amount of the
surrendered Note. Each such new Note shall be payable to such Person as such
holder may request and shall be substantially in the form of Exhibit 1(a). Each
such new Note shall be dated and bear interest from the date to which interest
shall have been paid on the surrendered Note or dated the date of the
surrendered Note if no interest shall have been paid thereon. The Company may
require payment of a sum sufficient to cover any stamp tax or governmental
charge imposed in respect of any such transfer of Notes. Notes shall not be
transferred in denominations of less than $500,000, provided that if necessary
to enable the registration of transfer by a holder of its entire holding of
Notes, one Note may be in a denomination of less than $500,000. Any transferee,
by its acceptance of a Note registered in its name (or the name of its nominee),
shall be deemed to have made the representations and agreement set forth in
Section 6.

13.3. REPLACEMENT OF NOTES.

     Upon receipt by the Company of evidence reasonably satisfactory to it of
the ownership of and the loss, theft, destruction or mutilation of any Note
(which evidence shall be, in the case of an Institutional Investor, notice from
such Institutional Investor of such ownership and such loss, theft, destruction
or mutilation), and

          (a) in the case of loss, theft or destruction, of indemnity reasonably
     satisfactory to it (provided that if the holder of such Note is, or is a
     nominee for, an original Purchaser or another Institutional Investor holder
     of a Note with a minimum net worth of at least $50,000,000, such Person's
     own unsecured agreement of indemnity shall be deemed to be satisfactory),
     or

          (b) in the case of mutilation, upon surrender and cancellation
     thereof,

the Company at its own expense shall execute and deliver, in lieu thereof, a new
Note of the same series, dated and bearing interest from the date to which
interest shall have been paid on

                                       30
<PAGE>

such lost, stolen, destroyed or mutilated Note or dated the date of such lost,
stolen, destroyed or mutilated Note if no interest shall have been paid thereon.

14.  PAYMENTS ON NOTES.

14.1. PLACE OF PAYMENT.

     Subject to Section 14.2, payments of principal, LIBOR Breakage Amount, if
any, and interest becoming due and payable on the Notes shall be made in
Chicago, Illinois at the principal office of Bank of America in such
jurisdiction. The Company may at any time, by notice to each holder of a Note,
change the place of payment of the Notes so long as such place of payment shall
be either the principal office of the Company in such jurisdiction or the
principal office of a bank or trust company in such jurisdiction.

14.2. HOME OFFICE PAYMENT.

     So long as you or your nominee shall be the holder of any Series 2003-A
Note, and notwithstanding anything contained in Section 14.1 or in such Series
2003-A Note to the contrary, the Company will pay all sums becoming due on such
Note for principal, LIBOR Breakage Amount, if any, and interest by the method
and at the address specified for such purpose below your name in Schedule A, or
by such other method or at such other address as you shall have from time to
time specified to the Company in writing for such purpose, without the
presentation or surrender of such Note or the making of any notation thereon,
except that upon written request of the Company made concurrently with or
reasonably promptly after payment or prepayment in full of any Note, you shall
surrender such Note for cancellation, reasonably promptly after any such
request, to the Company at its principal executive office or at the place of
payment most recently designated by the Company pursuant to Section 14.1. Prior
to any sale or other disposition of any Series 2003-A Note held by you or your
nominee you will, at your election, either endorse thereon the amount of
principal paid thereon and the last date to which interest has been paid thereon
or surrender such Note to the Company in exchange for a new Note or Notes
pursuant to Section 13.2. The Company will afford the benefits of this Section
14.2 to any Institutional Investor that is the direct or indirect transferee of
any Note purchased by you under this Agreement and that has made the same
agreement relating to such Note as you have made in this Section 14.2.

15.  EXPENSES, ETC.

15.1. TRANSACTION EXPENSES.

     Whether or not the transactions contemplated hereby are consummated, the
Company will pay all costs and expenses (including reasonable attorneys' fees of
one special counsel and, if reasonably required, local or other counsel)
incurred by you and each Other Purchaser or holder of a Series 2003-A Note in
connection with such transactions and in connection with any amendments, waivers
or consents under or in respect of this Agreement or the Series 2003-A Notes
(whether or not such amendment, waiver or consent becomes effective), including:
(a) the costs and expenses incurred in enforcing or defending (or determining
whether or how to enforce or defend) any rights under this Agreement or the
Series 2003-A Notes or in

                                       31
<PAGE>

responding to any subpoena or other legal process or informal investigative
demand issued in connection with this Agreement or the Series 2003-A Notes, or
by reason of being a holder of any Series 2003-A Note, and (b) the costs and
expenses, including financial advisors' fees, incurred in connection with the
insolvency or bankruptcy of the Company or any Subsidiary or in connection with
any work-out or restructuring of the transactions contemplated hereby and by the
Series 2003-A Notes. The Company will pay, and will save you and each other
holder of a Series 2003-A Note harmless from, all claims in respect of any fees,
costs or expenses if any, of brokers and finders (other than those retained by
you).

15.2. SURVIVAL.

     The obligations of the Company under this Section 15 will survive the
payment or transfer of any Series 2003-A Note, the enforcement, amendment or
waiver of any provision of this Agreement or the Series 2003-A Notes, and the
termination of this Agreement.

16.  SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.

     All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Series 2003-A Notes, the
purchase or transfer by you of any Series 2003-A Note or portion thereof or
interest therein and the payment of any Series 2003-A Note, and may be relied
upon by any subsequent holder of a Series 2003-A Note, regardless of any
investigation made at any time by or on behalf of you or any other holder of a
Series 2003-A Note. All statements contained in any certificate or other
instrument delivered by or on behalf of the Company pursuant to this Agreement
shall be deemed representations and warranties of the Company under this
Agreement. Subject to the preceding sentence, this Agreement and the Series
2003-A Notes embody the entire agreement and understanding between you and the
Company and supersede all prior agreements and understandings relating to the
subject matter hereof.

17.  AMENDMENT AND WAIVER.

17.1. REQUIREMENTS.

     This Agreement and the Series 2003-A Notes may be amended, and the
observance of any term hereof or of the Series 2003-A Notes may be waived
(either retroactively or prospectively), with (and only with) the written
consent of the Company and the Required Holders, except that (a) no amendment or
waiver of any of the provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any
defined term (as it is used therein), will be effective as to you unless
consented to by you in writing, and (b) no such amendment or waiver may, without
the written consent of the holder of each Series 2003-A Note at the time
outstanding affected thereby, (i) subject to the provisions of Section 12
relating to acceleration or rescission, change the amount or time of any
prepayment or payment of principal of, or reduce the rate or change the time of
payment or method of computation of interest or of the LIBOR Breakage Amount on,
the Notes, (ii) change the percentage of the principal amount of the Notes the
holders of which are required to consent to any such amendment or waiver, or
(iii) amend any of Sections 8, 11(a), 11(b), 12, 17 or 20.

                                       32
<PAGE>

17.2. SOLICITATION OF HOLDERS OF NOTES.

          (a) Solicitation. The Company will provide each holder of the Series
     2003-A Notes (irrespective of the amount of Series 2003-A Notes then owned
     by it) with sufficient information, sufficiently far in advance of the date
     a decision is required, to enable such holder to make an informed and
     considered decision with respect to any proposed amendment, waiver or
     consent in respect of any of the provisions hereof or of the Series 2003-A
     Notes. The Company will deliver executed or true and correct copies of each
     amendment, waiver or consent effected pursuant to the provisions of this
     Section 17 to each holder of outstanding Series 2003-A Notes promptly
     following the date on which it is executed and delivered by, or receives
     the consent or approval of, the requisite holders of Notes.

          (b) Payment. The Company will not directly or indirectly pay or cause
     to be paid any remuneration, whether by way of supplemental or additional
     interest, fee or otherwise, or grant any security, to any holder of Series
     2003-A Notes as consideration for or as an inducement to the entering into
     by any holder of Series 2003-A Notes or any waiver or amendment of any of
     the terms and provisions hereof unless such remuneration is concurrently
     paid, or security is concurrently granted, on the same terms, ratably to
     each holder of Notes then outstanding even if such holder did not consent
     to such waiver or amendment.

17.3. BINDING EFFECT, ETC.

     Any amendment or waiver consented to as provided in this Section 17 applies
equally to all holders of Series 2003-A Notes and is binding upon them and upon
each future holder of any Note and upon the Company without regard to whether
such Series 2003-A Note has been marked to indicate such amendment or waiver. No
such amendment or waiver will extend to or affect any obligation, covenant,
agreement, Default or Event of Default not expressly amended or waived or impair
any right consequent thereon. No course of dealing between the Company and the
holder of any Series 2003-A Note nor any delay in exercising any rights
hereunder or under any Series 2003-A Note shall operate as a waiver of any
rights of any holder of such Series 2003-A Note. As used herein, the term "this
Agreement" or "the Agreement" and references thereto shall mean this Agreement
as it may from time to time be amended or supplemented.

17.4. SERIES 2003-A NOTES HELD BY COMPANY, ETC.

     Solely for the purpose of determining whether the holders of the requisite
percentage of the aggregate principal amount of Series 2003-A Notes then
outstanding approved or consented to any amendment, waiver or consent to be
given under this Agreement or the Series 2003-A Notes, or have directed the
taking of any action provided herein or in the Notes to be taken upon the
direction of the holders of a specified percentage of the aggregate principal
amount of Series 2003-A Notes then outstanding, Series 2003-A Notes directly or
indirectly owned by the Company or any of its Affiliates shall be deemed not to
be outstanding.

                                       33
<PAGE>

18.  NOTICES.

     All notices and communications provided for hereunder shall be in writing
and sent (a) by facsimile if the sender on the same day sends a confirming copy
of such notice by a recognized overnight delivery service (charges prepaid), or
(b) by registered or certified mail with return receipt requested (postage
prepaid), or (c) by a recognized overnight delivery service (with charges
prepaid). Any such notice must be sent:

          (i) if to you or your nominee, to you or it at the address specified
     for such communications in Schedule A, or at such other address as you or
     it shall have specified to the Company in writing,

          (ii) if to any other holder of any Series 2003-A Note, to such holder
     at such address as such other holder shall have specified to the Company in
     writing, or

          (iii) if to the Company, to the Company at its address set forth at
     the beginning hereof to the attention of the Chief Financial Officer, or at
     such other address as the Company shall have specified to the holder of
     each Note in writing.

Notices under this Section 18 will be deemed given only when actually received.

19.  REPRODUCTION OF DOCUMENTS.

     This Agreement and all documents relating thereto, including (a) consents,
waivers and modifications that may hereafter be executed, (b) documents received
by you at the Closing (except the Series 2003-A Notes themselves), and (c)
financial statements, certificates and other information previously or hereafter
furnished to you, may be reproduced by you by any photographic, photostatic,
microfilm, microcard, miniature photographic or other similar process and you
may destroy any original document so reproduced. The Company agrees and
stipulates that, to the extent permitted by applicable law, any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by you in the regular
course of business) and any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence. This Section 19
shall not prohibit the Company or any other holder of Series 2003-A Notes from
contesting any such reproduction to the same extent that it could contest the
original, or from introducing evidence to demonstrate the inaccuracy of any such
reproduction.

20.  CONFIDENTIAL INFORMATION.

     For the purposes of this Section 20, "Confidential Information" means
information delivered to you by or on behalf of the Company or any Subsidiary in
connection with the transactions contemplated by or otherwise pursuant to this
Agreement that is proprietary or confidential in nature and that was clearly
marked or labeled or otherwise adequately identified when received by you as
being confidential information of the Company or such Subsidiary, provided that
such term does not include information that (a) was publicly known or

                                       34
<PAGE>

otherwise known to you prior to the time of such disclosure, (b) subsequently
becomes publicly known through no act or omission by you or any person acting on
your behalf, (c) otherwise becomes known to you other than through disclosure by
the Company or any Subsidiary or from a third party that was not known to you to
be prohibited from making such disclosure or (d) constitutes financial
statements delivered to you under Section 7.1 that are otherwise publicly
available. You will maintain the confidentiality of such Confidential
Information in accordance with procedures adopted by you in good faith to
protect confidential information of third parties delivered to you, provided
that you may deliver or disclose Confidential Information to (i) your directors,
trustees, officers, employees, agents, attorneys and affiliates (to the extent
such disclosure reasonably relates to the administration of the investment
represented by your Notes), (ii) your financial advisors and other professional
advisors who agree to hold confidential the Confidential Information
substantially in accordance with the terms of this Section 20, (iii) any other
holder of any Note, (iv) any Institutional Investor to which you sell or offer
to sell such Note or any part thereof or any participation therein (if such
Person has agreed in writing prior to its receipt of such Confidential
Information to be bound by the provisions of this Section 20), (v) any Person
from which you offer to purchase any security of the Company (if such Person has
agreed in writing prior to its receipt of such Confidential Information to be
bound by the provisions of this Section 20), (vi) any federal or state
regulatory authority having jurisdiction over you, (vii) the National
Association of Insurance Commissioners or any similar organization, or any
nationally recognized rating agency that requires access to information about
your investment portfolio or (viii) any other Person to which such delivery or
disclosure may be necessary or appropriate (w) to effect compliance with any
law, rule, regulation or order applicable to you, (x) in response to any
subpoena or other legal process, (y) in connection with any litigation to which
you are a party or (z) if an Event of Default has occurred and is continuing, to
the extent you may reasonably determine such delivery and disclosure to be
necessary or appropriate in the enforcement or for the protection of the rights
and remedies under your Notes and this Agreement. Each holder of a Note, by its
acceptance of a Note, will be deemed to have agreed to be bound by and to be
entitled to the benefits of this Section 20 as though it were a party to this
Agreement. On reasonable request by the Company in connection with the delivery
to any holder of a Note of information required to be delivered to such holder
under this Agreement or requested by such holder (other than a holder that is a
party to this Agreement or its nominee), such holder will enter into an
agreement with the Company embodying the provisions of this Section 20.

21.  SUBSTITUTION OF PURCHASER.

     You shall have the right to substitute any one of your Affiliates as the
purchaser of the Series 2003-A Notes that you have agreed to purchase hereunder,
by written notice to the Company, which notice shall be signed by both you and
such Affiliate, shall contain such Affiliate's agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in Section 6. Upon receipt
of such notice, wherever the word "you" is used in this Agreement (other than in
this Section 21), such word shall be deemed to refer to such Affiliate in lieu
of you. In the event that such Affiliate is so substituted as a purchaser
hereunder and such Affiliate thereafter transfers to you all of the Notes then
held by such Affiliate, upon receipt by the Company of notice of such transfer,
wherever the word "you" is used in this Agreement (other than in this Section
21), such

                                       35
<PAGE>

word shall no longer be deemed to refer to such Affiliate, but shall refer to
you, and you shall have all the rights of an original holder of the Notes under
this Agreement.

22.  MISCELLANEOUS.

22.1. SUCCESSORS AND ASSIGNS.

     All covenants and other agreements contained in this Agreement by or on
behalf of any of the parties hereto bind and inure to the benefit of their
respective successors and assigns (including any subsequent holder of a Series
2003-A Note) whether so expressed or not.

22.2. PAYMENTS DUE ON NON-BUSINESS DAYS.

     Anything in this Agreement or the Series 2003-A Notes to the contrary
notwithstanding, any payment of principal of, LIBOR Breakage Amount or interest
on, any Series 2003-A Note that is due on a date other than a Business Day shall
be made on the next succeeding Business Day without including the additional
days elapsed in the computation of the interest payable on such next succeeding
Business Day.

22.3. SEVERABILITY.

     Any provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.

22.4. CONSTRUCTION.

     Each covenant contained herein shall be construed (absent express provision
to the contrary) as being independent of each other covenant contained herein,
so that compliance with any one covenant shall not (absent such an express
contrary provision) be deemed to excuse compliance with any other covenant.
Where any provision herein refers to action to be taken by any Person, or which
such Person is prohibited from taking, such provision shall be applicable
whether such action is taken directly or indirectly by such Person.

22.5. COUNTERPARTS.

     This Agreement may be executed in any number of counterparts, each of which
shall be an original but all of which together shall constitute one instrument.
Each counterpart may consist of a number of copies hereof, each signed by less
than all, but together signed by all, of the parties hereto.

22.6. GOVERNING LAW.

     This Agreement shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of Illinois
excluding choice-of-law

                                       36
<PAGE>

principles of the law of such State that would require the application of the
laws of a jurisdiction other than such State.

22.7. Limitation on Interest.

     The Company and you intend to contract in strict compliance with applicable
usury laws in effect from time to time. None of the terms and provisions of this
Agreement or the Notes shall ever be construed to create a contract to pay, for
the use, forbearance or detention of money, interest in excess of the maximum
amount of interest permitted to be contracted for, charged or received under
applicable law in effect from time to time. This Agreement, the Notes and any
other agreement between the Company and you, whether now existing or hereafter
arising and whether written or oral, are hereby limited so that in no
contingency, whether by reason of demand for payment or acceleration of maturity
or otherwise, shall the interest contracted for, charged or received by any
holder of a Note exceed the maximum amount permissible under applicable law. If
for any reason, interest would otherwise be payable to any holder of a Note in
excess of the maximum lawful amount, the interest payable to such holder shall
be reduced to the maximum amount permitted under applicable law; and if for any
reason any holder of a Note shall ever receive anything of value deemed interest
under applicable law in excess of the maximum lawful amount, an amount equal to
any excessive interest shall be applied to the reduction of the principal of the
indebtedness and not to the payment of interest, or if such excessive interest
exceeds the unpaid principal balance, such excess shall be refunded to the
Company. In determining whether or not the interest paid or payable to any
holder of a Note, under any specific contingency, exceeds the maximum amount
permitted under applicable law, the Company (and any other payor) and such
holder shall to the greatest extent permitted under applicable law (a)
characterize any non-principal payment as an expense, fee or premium rather than
interest, (b) exclude voluntary prepayments and the effects thereof and (c)
amortize, prorate, allocate and spread the total amount of interest throughout
the entire period until payment in full of the principal (including the period
of any renewal or extension) in accordance with the amounts outstanding from
time to time in order to lawfully charge the maximum amount of interest
permitted under applicable law. The term "applicable law" as used herein shall
mean the law of the state that governs this Agreement and the Notes (or
applicable United States federal law, to the extent that it permits a holder of
a Note to contract for, charge or receive a greater amount of interest than
under applicable state law). The provisions of this section shall control all
agreements between the Company and you.

                                       37
<PAGE>
     If you are in agreement with the foregoing, please sign the form of
agreement on the accompanying counterpart of this Agreement and return it to the
Company, whereupon the foregoing shall become a binding agreement between you
and the Company.

                                          Very truly yours,

                                          KIRBY CORPORATION

                                          By: /s/ Norman W. Nolen
                                              --------------------------------
                                          Name:  Norman W. Nolen
                                          Title: Executive Vice President, Chief
                                                 Financial Officer and Treasurer

                                      S-1
<PAGE>

The foregoing is agreed
to as of the date thereof.

METROPOLITAN LIFE INSURANCE COMPANY

METLIFE BANK, NATIONAL ASSOCIATION
By: Metropolitan Life Insurance Company, as
    investment manager

By: /s/ Timothy L. Powell
    ------------------------------
Name:  Timothy L. Powell
Title: Director

(executed by Metropolitan Life Insurance Company
(i) as to itself as a Purchaser and (ii) as investment
manager to MetLife Bank, National Association, as
a Purchaser)

                                      S-2
<PAGE>

AIG SUNAMERICA LIFE ASSURANCE COMPANY

SUNAMERICA LIFE INSURANCE COMPANY

By: AIG Global Investment Corp.,
    investment adviser

    By: /s/ Victoria Y. Chin
        ------------------------------
    Name:  Victoria Y. Chin
    Title: Vice President

                                      S-3
<PAGE>

MONUMENTAL LIFE INSURANCE COMPANY

By: /s/ Bill Henricksen
    -----------------------------
Name:  Bill Henricksen
Title: Vice President

                                      S-4
<PAGE>

JACKSON NATIONAL LIFE INSURANCE
 COMPANY
By: PPM America, Inc., as attorney in fact, on
behalf of Jackson National Life Insurance Company

By: /s/ Chris Raub
    ---------------------------
Name:  Chris Raub
Title: Senior Managing Director

JACKSON NATIONAL LIFE INSURANCE
 COMPANY OF NEW YORK
By: PPM America, Inc., as attorney in fact, on
behalf of Jackson National Life Insurance Company
of New York

By: /s/ Chris Raub
    ---------------------------
Name:  Chris Raub
Title: Senior Managing Director

                                      S-5
<PAGE>

CONNECTICUT GENERAL LIFE INSURANCE COMPANY

By: CIGNA Investments, Inc. (authorized agent)

By: /s/ Deborah B. Wiacek
    ------------------------------
Name:  Deborah B. Wiacek
Title: Managing Director

                                      S-6
<PAGE>

HARTFORD LIFE INSURANCE COMPANY

By: Hartford Investment Services, Inc.
      Its Agent and Attorney-in-Fact

By: /s/ Kurt H. Nyman
    ---------------------------
Name:  Kurt H. Nyman
Title: Vice President

                                      S-7
<PAGE>

AMERICAN EXPRESS CERTIFICATE COMPANY

By: /s/ Lorraine R. Hart
    ------------------------
Name:  Lorraine R. Hart
Title: Vice President- Investments

                                      S-8
<PAGE>

UNITED OF OMAHA LIFE INSURANCE COMPANY

By: /s/ Edwin H. Garrison, Jr.
    --------------------------
Name:  Edwin H. Garrison, Jr.
Title: First Vice President

                                      S-9
<PAGE>
                                                                      SCHEDULE B

                                  DEFINED TERMS

          As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:

          "ADJUSTED CONSOLIDATED NET WORTH" means, as of any date, consolidated
stockholders' equity of the Company and its Restricted Subsidiaries on such
date, less (a) minority interests in Restricted Subsidiaries and (b) the amount
by which outstanding Restricted Investments on such date exceed 20% of
consolidated stockholders' equity of the Company and its Restricted Subsidiaries
on such date; provided, however, that the effects on consolidated stockholders'
equity of any changes recorded by the Company and its Restricted Subsidiaries
related to the impairment of goodwill and other intangibles as may be required
under Statement of Financial Accounting Standards No. 142 shall not be taken
into account in determining Adjusted Consolidated Net Worth.

          "ADJUSTED LIBOR RATE" is defined in Section 1.2(b).

          "AFFILIATE" means, at any time, and with respect to any Person, (a)
any other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person, and (b) any Person beneficially owning or holding, directly
or indirectly, 10% or more of any class of voting or equity interests of the
Company or any Subsidiary or any corporation of which the Company and its
Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly,
10% or more of any class of voting or equity interests. As used in this
definition, "CONTROL" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
Unless the context otherwise clearly requires, any reference to an "Affiliate"
is a reference to an Affiliate of the Company. Notwithstanding anything in the
foregoing to the contrary, a Person that (i) would be an Affiliate of the
Company solely by virtue of its ownership of voting or equity interests of the
Company and (ii) is eligible pursuant to Rule 13d-1(b) under the Exchange Act to
file a statement with the Securities and Exchange Commission on Schedule 13G,
shall not be deemed to be an Affiliate.

          "ANTI-TERRORISM ORDER" means Executive Order 13224 of September 23,
2001 Blocking Property and Prohibiting Transactions With Persons Who Commit,
Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)).

          "BUSINESS DAY" means (a) for the purposes of Section 8.6 only, any day
other than a Saturday, a Sunday or a day on which commercial banks in London,
England are required or authorized to be closed, and (b) for the purposes of any
other provision of this Agreement, any day other than a Saturday, a Sunday or a
day on which commercial banks in Chicago, Illinois or New York City are required
or authorized to be closed.

                                       1

                                   Schedule B

<PAGE>

          "CAPITAL LEASE" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.

          "CLOSING" is defined in Section 3.

          "CODE" means the Internal Revenue Code of 1986, as amended from time
to time, and the rules and regulations promulgated thereunder from time to time.

          "COMPANY" means Kirby Corporation, a Nevada corporation.

          "CONFIDENTIAL INFORMATION" is defined in Section 20.

          "CONSOLIDATED DEBT" means, as of any date, outstanding Debt of the
Company and its Restricted Subsidiaries as determined on a consolidated basis in
accordance with GAAP.

          "CONSOLIDATED EBITDA" means, for any period, the sum of Consolidated
Net Income for such period, plus, to the extent deducted in determining such
Consolidated Net Income, (i) federal, state, local and foreign income,
franchise, value added and similar taxes, (ii) Consolidated Interest Expense,
(iii) depreciation and amortization expense and (iv) other non-cash charges.
Solely for purposes of Section 10.1(a), if, during the period for which
Consolidated EBITDA is being calculated, the Company or a Restricted Subsidiary
has (i) acquired one or more Persons (or the assets thereof), Consolidated
EBITDA shall be calculated on a pro forma basis as if all of such acquisitions
(other than acquisitions by or resulting in Unrestricted Subsidiaries) had
occurred on the first day of such period.

          "CONSOLIDATED INTEREST EXPENSE" means, for any period, the
consolidated interest expense of the Company and its Restricted Subsidiaries for
such period determined in accordance with GAAP.

          "CONSOLIDATED NET INCOME" means, for any period, the net income or
loss of the Company and its Restricted Subsidiaries for such period (including,
without duplication, income attributed to minority interests) determined on a
consolidated basis in accordance with GAAP.

          "CONSOLIDATED TOTAL ASSETS" means, as of any date, the assets and
properties of the Company and its Restricted Subsidiaries determined on a
consolidated basis in accordance with GAAP.

          "DEBT" with respect to any Person means, at any time, without
duplication,

          (a) its liabilities for borrowed money;

          (b) its liabilities for the deferred purchase price of property
     acquired by such Person (excluding accounts payable and other accrued
     liabilities arising in the ordinary course of business but including all
     liabilities created or arising under any conditional sale or other title
     retention agreement with respect to any such property);

                                       2

                                   Schedule B

<PAGE>

          (c) all liabilities appearing on its balance sheet in accordance with
     GAAP in respect of Capital Leases;

          (d) all liabilities for borrowed money secured by any Lien with
     respect to any property owned by such Person (whether or not it has assumed
     or otherwise become liable for such liabilities); and

          (e) any Guaranty of such Person with respect to liabilities of a type
     described in any of clauses (a) through (d) hereof.

          "DEFAULT" means an event or condition the occurrence or existence of
which would, with the lapse of time or the giving of notice or both, become an
Event of Default.

          "DEFAULT RATE" means that rate of interest that is 2% per annum above
the rate of interest calculated pursuant to Section 1.2(c).

          "DISPOSITION" is defined in Section 10.4.

          "ENVIRONMENTAL LAWS" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.

          "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.

          "ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under section 414 of the Code.

          "EVENT OF DEFAULT" is defined in Section 11.

          "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

          "GAAP" means generally accepted accounting principles as in effect
from time to time in the United States of America.

          "GOVERNMENTAL AUTHORITY" means

          (a)  the government of

               (i) the United States of America or any State or other political
          subdivision thereof, or

                                       3

                                   Schedule B

<PAGE>

               (ii) any jurisdiction in which the Company or any Subsidiary
          conducts all or any part of its business, or which asserts
          jurisdiction over any properties of the Company or any Subsidiary, or

          (b) any entity exercising executive, legislative, judicial, regulatory
     or administrative functions of, or pertaining to, any such government.

          "GUARANTY" means, with respect to any Person, any obligation (except
the endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including (without limitation) obligations
incurred through an agreement, contingent or otherwise, by such Person:

          (a) to purchase such indebtedness or obligation or any property
     constituting security therefor;

          (b) to advance or supply funds (i) for the purchase or payment of such
     indebtedness or obligation, or (ii) to maintain any working capital or
     other balance sheet condition or any income statement condition of any
     other Person or otherwise to advance or make available funds for the
     purchase or payment of such indebtedness or obligation;

          (c) to lease properties or to purchase properties or services
     primarily for the purpose of assuring the owner of such indebtedness or
     obligation of the ability of any other Person to make payment of the
     indebtedness or obligation; or

          (d) otherwise to assure the owner of such indebtedness or obligation
     against loss in respect thereof.

In any computation of the indebtedness or other liabilities of the obligor under
any Guaranty, the indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.

          "HAZARDOUS MATERIAL" means any and all pollutants, toxic or hazardous
wastes or any other substances that might pose a hazard to health or safety, the
removal of which may be required or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, release, discharge, spillage, seepage, or filtration of which is
or shall be restricted, prohibited or penalized by any applicable law
(including, without limitation, asbestos, urea formaldehyde foam insulation and
polycholorinated biphenyls).

          "HOLDER" means, with respect to any Note, the Person in whose name
such Note is registered in the register maintained by the Company pursuant to
Section 13.1.

          "INHAM EXEMPTION" is defined in Section 6.2(e).

                                       4

                                   Schedule B

<PAGE>

          "INSTITUTIONAL INVESTOR" means (a) any original purchaser of a Note,
(b) any holder of more than $2,000,000 in aggregate principal amount of the
Notes at the time outstanding, and (c) any bank, trust company, savings and loan
association or other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form.

          "INTEREST PAYMENT DATE" means, with respect to any Note, the dates
specified in the form of such Note on which interest is to be paid and, with
respect to the Series 2003-A Notes, means the dates specified in Exhibit 1.2.

          "INTEREST PERIOD" is defined in Section 1.2(d).

          "INVESTMENTS" means all investments made, in cash or by delivery of
property, directly or indirectly, by any Person, in any other Person, whether by
acquisition of shares of capital stock, indebtedness or other obligations or
securities or by loan, Guaranty, advance, capital contribution or otherwise.

          "LIBOR" is defined in Section 1.2(b).

          "LIBOR BREAKAGE AMOUNT" is defined in Section 8.6.

          "LIEN" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement or Capital Lease, upon or
with respect to any property or asset of such Person (including in the case of
stock, stockholder agreements, voting trust agreements and all similar
arrangements).

          "MATERIAL" means material in relation to the business, operations,
affairs, financial condition, assets or properties of the Company and its
Restricted Subsidiaries taken as a whole.

          "MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and its Restricted Subsidiaries taken as a whole, or (b) the ability of
the Company to perform its obligations under this Agreement and the Notes, or
(c) the validity or enforceability of this Agreement or the Notes.

          "MATERIAL SUBSIDIARY" means, at any time, any Restricted Subsidiary
that would at such time account for more than 5% of (i) Consolidated Total
Assets as of the end of the most recently completed fiscal quarter or (ii)
consolidated revenue of the Company and its Restricted Subsidiaries for the four
fiscal quarters ending as of the end of the most recently completed fiscal
quarter.

          "MEMORANDUM" is defined in Section 5.3.

                                       5

                                   Schedule B

<PAGE>

          "MULTIEMPLOYER PLAN" means any Plan that is a "multiemployer plan" (as
such term is defined in section 4001(a)(3) of ERISA).

          "NOTES" is defined in Section 1.1.

          "OFFICER'S CERTIFICATE" means a certificate of a Senior Financial
Officer or of any other officer of the Company whose responsibilities extend to
the subject matter of such certificate.

          "OTHER PURCHASERS" is defined in Section 2.

          "PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.

          "PERSON" means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.

          "PLAN" means an "employee benefit plan" (as defined in section 3(3) of
ERISA) that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be made, by the Company or any ERISA Affiliate or
with respect to which the Company or any ERISA Affiliate may have any liability.

          "PRIORITY DEBT" means, as of any date, the sum (without duplication)
of (a) outstanding unsecured Debt of Restricted Subsidiaries other than (i) Debt
owed to the Company or another Restricted Subsidiary and (ii) Debt of a Person
that is not an Unrestricted Subsidiary outstanding at the time it becomes a
Restricted Subsidiary, provided that such Debt was not incurred in contemplation
of such Person becoming a Restricted Subsidiary and (b) Debt of the Company and
its Restricted Subsidiaries secured by Liens not otherwise permitted by Sections
10.3(a) through (h).

          "PROPERTY" or "PROPERTIES" means, unless otherwise specifically
limited, real or personal property of any kind, tangible or intangible, choate
or inchoate.

          "PURCHASER" means each purchaser listed in Schedule A.

          "QPAM EXEMPTION" means Prohibited Transaction Class Exemption 84-14
issued by the United States Department of Labor.

          "REQUIRED HOLDERS" means, at any time, the holders of at least a
majority in principal amount of the Series 2003-A Notes at the time outstanding
(exclusive of Series 2003-A Notes then owned by the Company or any of its
Affiliates).

                                       6

                                   Schedule B

<PAGE>

          "RESPONSIBLE OFFICER" means any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this Agreement.

          "RESTRICTED INVESTMENTS" means all Investments of the Company and its
Restricted Subsidiaries, other than:

          (a) property or assets to be used or consumed in the ordinary course
     of business;

          (b) current assets arising from the sale of goods or services in the
     ordinary course of business;

          (c) Investments in Restricted Subsidiaries or in any Person that, as a
     result thereof, becomes a Restricted Subsidiary;

          (d) Investments in common stock of the Company;

          (e) Investments existing as of the date of this Agreement that are
     listed in the attached Schedule B-1; and

          (f) Investments in:

               (i) obligations, maturing within one year from the date of
          acquisition, of or fully guaranteed by the United States of America,
          or an agency thereof, or Canada, or any province thereof;

               (ii) state, or municipal securities having an effective maturity
          within one year from the date of acquisition that are rated in one of
          the top two rating classifications by at least one nationally
          recognized rating agency;

               (iii) certificates of deposit or banker's acceptances maturing
          within one year from the date of acquisition of or issued by
          commercial banks whose long-term unsecured debt obligations (or the
          long-term unsecured debt obligations of the bank holding company
          owning all of the capital stock of such bank) are rated in one of the
          top two rating classifications by at least one nationally recognized
          rating agency;

               (iv) commercial paper maturing within 270 days from the date of
          issuance that, at the time of acquisition, is rated in one of the top
          two rating classifications by at least one credit rating agency of
          recognized national standing;

               (v) repurchase agreements; and

               (vi) money market instrument programs that are properly
          classified as current assets in accordance with GAAP.

                                       7

                                   Schedule B

<PAGE>

          "RESTRICTED SUBSIDIARY" means any Subsidiary (a) of which at least a
majority of the voting securities are owned by the Company and/or one or more
Restricted Subsidiaries and (b) that the Company has not designated an
Unrestricted Subsidiary by notice in writing given to the holders of the Notes
pursuant to Section 10.6.

          "REUTERS SCREEN LIBO PAGE" is defined in Section 1.2(b).

          "SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time.

          "SENIOR FINANCIAL OFFICER" means the chief financial officer,
principal accounting officer, treasurer or comptroller of the Company.

          "SERIES 2003-A NOTES" is defined in Section 1.2.

          "SOURCE" is defined in Section 6.2.

          "SUBSIDIARY" means, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership, limited liability
company or joint venture if more than a 50% interest in the profits or capital
thereof is owned by such Person or one or more of its Subsidiaries or such
Person and one or more of its Subsidiaries (unless such partnership, limited
liability company or joint venture can and does ordinarily take major business
actions without the prior approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any reference to a
"Subsidiary" is a reference to a Subsidiary of the Company.

          "THIS AGREEMENT" OR "THE AGREEMENT" is defined in Section 17.3.

          "USA PATRIOT ACT" means Public Law 107-56 of the United States of
America, United and Strengthening America by Providing Tools Required to
Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001.

          "UNRESTRICTED SUBSIDIARY" means any Subsidiary of the Company that has
been so designated by notice in writing given to the holders of the Notes.

                                       8

                                   Schedule B

<PAGE>
                                                                     EXHIBIT 1.2

                          [FORM OF SERIES 2003-A NOTE]

                                KIRBY CORPORATION

                            FLOATING RATE SENIOR NOTE
                      SERIES 2003-A, DUE FEBRUARY 28, 2013

No. [_____]                                                               [Date]
$[_______]                                                      PPN: 497266 A* 7

          FOR VALUE RECEIVED, the undersigned, KIRBY CORPORATION (herein called
the "Company"), a corporation organized and existing under the laws of the State
of Nevada, promises to pay to [ ], or registered assigns, the principal sum of
$[ ] on February 28, 2013, with interest (computed on the basis of a 360-day
year and the actual number of days elapsed) (a) on the unpaid principal thereof
at a floating rate equal to the Adjusted LIBOR Rate from time to time, payable
quarterly on each February 28, May 28, August 28 and November 28, commencing
with the February, May, August or November next succeeding the date hereof until
the principal shall have become due and payable, and (b) to the extent permitted
by law on any overdue payment (including any overdue prepayment) of principal,
any overdue payment of interest and any overdue payment of any LIBOR Breakage
Amount at the Default Rate until paid.

          Payments of principal of, interest on and any LIBOR Breakage Amount
with respect to this Note are to be made in lawful money of the United States of
America at the principal office of Bank of America in Chicago, Illinois or at
such other place as the Company shall have designated by written notice to the
holder of this Note as provided in the Note Purchase Agreement referred to
below.

          This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to a Note Purchase Agreement dated as of February 15,
2003 (as from time to time amended, the "Note Purchase Agreement"), between the
Company and the respective Purchasers named therein and is entitled to the
benefits thereof. Reference is made to the Note Purchase Agreement for the
definitions used herein and the method of calculating the interest and other
payments to be made or in respect of this Note. Each holder of this Note will be
deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
provisions set forth in Section 20 of the Note Purchase Agreement and (ii) to
have made the representations and agreement set forth in Section 6 of the Note
Purchase Agreement.

          This Note is a registered Note and, as provided in the Note Purchase
Agreement, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's

                                  Exhibit 1.2

<PAGE>

attorney duly authorized in writing, a new Note for a like principal amount will
be issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.

          This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreement but not otherwise.

          If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable LIBOR Breakage Amount) and with the effect provided in the Note
Purchase Agreement.

          Notwithstanding any other provision of this Note or the Note Purchase
Agreement, in no event shall the interest payable hereon, whether before or
after maturity, exceed the maximum interest that may be charged on this Note
under applicable law, and this Note is expressly made subject to the provisions
of the Note Purchase Agreement which more fully set out the limitations on how
interest may be accrued, charged or paid on this Note.

          This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of Illinois
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.

                                            KIRBY CORPORATION

                                            By:
                                                --------------------------------
                                            Name:
                                            Title:

                                       2

                                  Exhibit 1.2

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