10-K

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C.  20549

                                   FORM 10-K

   (Mark One)

   [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934

   For the fiscal year ended December 31, 2002

   Commission File Number 1-1169

                               THE TIMKEN COMPANY
              ______________________________________________________
              (Exact name of registrant as specified in its charter)

             Ohio                                             34-0577130
  ________________________________________                ___________________
  (State or other jurisdiction of                          (I.R.S. Employer
   incorporation or organization)                         Identification No.)

  1835 Dueber Avenue, S.W., Canton, Ohio                       44706-2798
  ________________________________________                ___________________
  (Address of principal executive offices)                      (Zip Code)

  Registrants telephone number, including area code          (330)438-3000
                                                          ___________________

  Securities registered pursuant to Section 12(b) of the Act:

                                                      Name of Each Exchange
        Title of Each Class                              on Which Registered

  Common Stock without par value                      New York Stock Exchange
  ______________________________                      _______________________

  Securities registered pursuant to Section 12(g) of the Act:  None.

  Indicate by check mark whether the registrant (1) has filed all reports
  required to be filed by Section 13 or 15(d) of the Securities Exchange Act
  of 1934 during the preceding 12 months, and (2) has been subject to such
  filing requirements for the past 90 days.
  YES [X]       NO [ ]

  Indicate by check mark if disclosure of delinquent filers pursuant to Item
  405 of Regulation S-K is not contained herein, and will not be contained,
  to the best of registrant's knowledge, in definitive proxy or information
  statements incorporated by reference in Part III of this Form 10-K or any
  amendment to this Form 10-K. [ ].

  Indicate by check mark whether the registrant is an accelerated filer (as
  defined in Exchange Act Rule 12b-2).  YES [X]       NO [ ]
                                                                        i

The aggregate market value of the voting stock held by all shareholders
other than shareholders identified under Item 12 of this Form 10-K as of
June 30, 2002, was $1,097,999,327 (representing 49,171,488 shares).

Indicate the number of shares outstanding of each of the registrant's classes
of Common Stock, as of June 30, 2002.

Common Stock without par value--60,421,178 shares (representing a market
value of $1,349,204,905).

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Annual Report to Shareholders for the year ended
December 31, 2002, are incorporated by reference into Parts I and II.

Portions of the proxy statement for the annual meeting of shareholders to
be held on April 15, 2003, are incorporated by reference into Parts III
and IV.

Exhibit Index may be found on Pages 22 through 28.


                                                                         ii

                               THE TIMKEN COMPANY

                           INDEX TO FORM 10-K REPORT

                                                                          PAGE
                                                                          ----
I.   PART I.

     Item 1.  Description of Business....................................   1
                General..................................................   2
                Products.................................................   3
                Geographical Financial Information.......................   5
                Sales and Distribution...................................   5
                Industry Segments........................................   6
                Competition..............................................   7
                New Joint Ventures.......................................   9
                Backlog..................................................   9
                Raw Materials............................................   9
                Research.................................................  10
                Environmental Matters....................................  10
                Patents, Trademarks and Licenses.........................  11
                Employment...............................................  11
                Available Information....................................  11

     Item 2.  Properties.................................................  12
     Item 3.  Legal Proceedings..........................................  13
     Item 4.  Submission of Matters to a Vote of Security Holders........  13
     Item 4A. Executive Officers of the Registrant.......................  13

II.  PART II.

     Item 5.  Market for Registrant's Common Equity and Related
              Stockholder Matters........................................  17
     Item 6.  Selected Financial Data....................................  17
     Item 7.  Management's Discussion and Analysis of Financial
              Condition and Results of Operations........................  17
     Item 7A. Quantitative and Qualitative Disclosures about Market Risk.  17
     Item 8.  Financial Statements and Supplementary Data................  18
     Item 9   Changes in and Disagreements with Accountants on Accounting
              and Financial Disclosure...................................  18

III. Part III.

     Item 10. Directors and Executive Officers of the Registrant.........  19
     Item 11. Executive Compensation.....................................  19
     Item 12. Security Ownership of Certain Beneficial Owners and
              Management.................................................  19
     Item 13. Certain Relationships and Related Transactions.............  21
     Item 14. Controls and Procedures....................................  21

IV.  Part IV.

     Item 15. Exhibits, Financial Statement Schedules and Reports on
              Form 8-K...................................................  22

PART 1                                                                   1
 ______
  Item 1.  Description of Business
  ________________________________
  Certain statements set forth in this document (including the company's fore-
  casts, beliefs and expectations) that are not historical in nature are
  "forward-looking" statements within the meaning of the Private Securities
  Litigation Reform Act of 1995.  The company cautions readers that actual
  results may differ materially from those projected or implied in forward-
  looking statements made by or on behalf of the company due to a variety of
  important factors, such as:

   a)  risks associated with the acquisition of Torrington, including the
       uncertainties in both timing and amount of actual benefits, if any,
       that may be realized as a result of the integration of the Torrington
       business with the company's operations and the timing and amount of
       the resources required to achieve those benefits; risks associated
       with diversion of management's attention from routine operations
       during the integration process; and risks associated with the higher
       level of debt associated with the acquisition.

   b)  changes in world economic conditions, including additional adverse
       effects from terrorism or hostilities.  This includes, but is not
       limited to, political risks associated with the potential instability
       of governments and legal systems in countries in which the company or
       its customers conduct business and significant changes in currency
       valuations.

   c)  the effects of changes in customer demand on sales, product mix and
       prices in the industries in which the company operates.  This includes
       the effects of customer strikes, the impact of changes in industrial
       business cycles and whether conditions of fair trade continue in the
       U.S. market.

   d)  competitive factors, including changes in market penetration,
       increasing price competition by existing or new foreign and domestic
       competitors, the introduction of new products by existing and new
       competitors and new technology that may impact the way the company's
       products are sold or distributed.

   e)  changes in operating costs.  This includes the effect of changes in
       the company's manufacturing processes; changes in costs associated
       with varying levels of operations; changes resulting from inventory
       management and cost reduction initiatives and different levels of
       customer demands; the effects of unplanned work stoppages; changes in
       the cost of labor and benefits; and the cost and availability of raw
       materials and energy.

   f)  the success of the company's operating plans, including its ability to
       achieve the benefits from its global restructuring, manufacturing
       transformation, and administrative cost reduction initiatives as well
       as its ongoing continuous improvement and rationalization programs; the
       ability of acquired companies to achieve satisfactory operating
       results; and its ability to maintain appropriate relations with unions
       that represent company associates in certain locations in order to
       avoid disruptions of business.
                                                                        2

   g)  unanticipated litigation, claims or assessments.  This includes, but
       is not limited to, claims or problems related to intellectual property,
       product liability or warranty and environmental issues.

   h)  changes in worldwide financial markets, including interest rates to the
       extent they affect the company's ability to raise capital or increase
       the company's cost of funds, have an impact on the overall performance
       of the company's pension fund investments and/or cause changes in the
       economy which affect customer demand.

   i)  additional factors described in greater detail on pages S-18 to S-27 in
       the Company's Registration Statement and Prospectus Supplement dated
       February 11, 2003 relating to the offering of the Company's common
       shares.

  Additional risks relating to the company's business, the industries in which
  the company operates or the company's common stock may be described from
  time to time in the company's filings with the SEC.  All of these risk
  factors are difficult to predict, are subject to material uncertainties that
  may affect actual results and may be beyond the company's control.

  Except as required by the federal securities laws, the company undertakes no
  obligation to publicly update or revise any forward-looking statement,
  whether as a result of new information, future events or otherwise.

  General
  _______

  As used herein, the term "Timken" or the "company" refers to The Timken
  Company and its subsidiaries unless the context otherwise requires.  Timken,
  an outgrowth of a business originally founded in 1899, was incorporated
  under the laws of the state of Ohio in 1904.

  Timken is a leading global manufacturer of highly engineered bearings, alloy
  and specialty steel and related components.  The company is the world's
  largest manufacturer of tapered roller bearings and alloy seamless mechani-
  cal steel tubing and the largest North American-based bearings manufacturer.
  Timken had facilities in 27 countries on six continents, and employed approx-
  imately 18,000 people, as of December 31, 2002.

  On February 18, 2003, the company completed the acquisition of the Engineered
  Solutions business of Ingersoll-Rand Company Limited,  including certain of
  its joint venture interests, operating assets and subsidiaries, including
  The Torrington Company.  This business, referred to as Torrington, is a
  leading worldwide producer of needle roller, heavy-duty roller and ball
  bearings and motion control components and assemblies.  Timken paid
  $700 million in cash, subject to adjustment, and approximately $140 million
  in common shares for Torrington.  The company financed the $700 million cash
  component of the Torrington acquisition through a public offering of
  12.65 million common shares, an offering of $250 million seven-year senior
  unsecured notes, a five-year revolving credit facility and a $125 million
  securitized accounts receivable facility.

                                                                        3

  Torrington has been a leader in the bearing industry for over 100 years and
  is a leading manufacturer of needle roller bearings. It produces a wide range
  of bearings sold under a number of brand names, including Torrington needle
  roller bearings, Torrington heavy-duty roller bearings, Nadella precision
  needle roller bearings and linear motion solutions and Fafnir ball bearings
  and housed units.  Torrington also produces a variety of precision motion
  control components and assemblies, such as steering shaft assemblies and
  steering column shafts. Torrington sells its products directly or through
  authorized distributors to automotive and industrial manufacturers, as well
  as to aftermarket users throughout the world.

  Torrington had net sales of $1.2 billion for the year ended December 31,
  2002, and, as of December 31, 2002, employed approximately 10,000 people and
  operated 27 plants throughout the world.  Torrington has two business
  divisions: automotive engineered solutions and industrial engineered
  solutions.

  The Torrington automotive business manufactures a variety of products,
  including roller and needle bearings and other components used in an auto-
  mobile's transmission, chassis, steering column and engine. Many of these
  products, such as column locks and rotary tilt products for steering
  columns, are highly engineered with precision technology, and are specially
  designed through collaborative efforts between Torrington and its customers.
  These products are primarily sold to original equipment manufacturers, or
  OEMs, including large automobile manufacturers, and their principal
  suppliers.

  The Torrington industrial business produces a broad range of products,
  including roller bearings, needle bearings, wider inner ring ball bearings
  and housed units, radial ball bearings, super precision ball bearings,
  airframe control bearings, precision machined bearings and precision
  components and assemblies. These products are sold to OEMs, as well as
  through a global aftermarket network.

  Products
  ________

  The Timken Company manufactures two basic product lines:  anti-friction
  bearings and steel products.  Differentiation in these two product lines
  comes in two different ways:  (1) differentiation by bearing type or steel
  type, and (2) differentiation in the applications of bearings and steel.

  In the bearing industry, Timken is best known for the tapered roller
  bearing, which was originally patented by the company founder, Henry Timken.
  The tapered roller bearing is Timken's principal product in the anti-friction
  industry segment.  It consists of four components:  (1) the cone or inner
  race, (2) the cup or outer race, (3) the tapered rollers, which roll between
  the cup and cone, and (4) the cage, which serves as a retainer and maintains
  proper spacing between the rollers.  Timken manufactures or purchases these
  four components and then sells them in a wide variety of configurations and
  sizes.

 
                                                                         4
  Products (cont.)
  ________________

  The tapered rollers permit ready absorption of both radial and axial load
  combinations.  For this reason, tapered roller bearings are particularly well
  adapted to reducing friction where shafts, gears or wheels are used.  The
  applications for tapered roller bearings have diversified from the original
  application on horse-drawn wagons to applications on passenger cars, light
  and heavy trucks, and trains, as well as a wide range of industrial applica-
  tions, ranging from very small gear drives to bearings over two meters in
  diameter for wind energy machines.  Further differentiation has come in the
  form of adding sensors to these bearings, which measure parameters such as
  speed, load, temperature or overall bearing condition.

  Matching bearings to the specific requirements of customers' applications
  requires engineering, and often sophisticated analytical techniques.  The
  design of Timken's tapered roller bearing permits distribution of unit
  pressures over the full length of the roller.  This fact, combined with high
  precision tolerance, proprietary internal geometry and premium quality
  material, provides Timken bearings with high load carrying capacity,
  excellent friction-reducing qualities and long life.

  Precision Cylindrical and Ball Bearings.  Timken's aerospace and super pre-
  cision facilities produce high-performance ball and cylindrical bearings for
  ultra high-speed and/or high-accuracy applications in the aerospace, medical
  and dental, computer disk drive and other industries.  These bearings
  utilize ball and straight rolling elements and are in the super precision
  end of the general ball and straight roller bearing product range in the
  bearing industry.  A majority of Timken's aerospace and super precision
  bearings products are custom-designed bearings and spindle assemblies.  They
  often involve specialized materials and coatings for use in applications
  that subject the bearings to extreme operating conditions of speed and temp-
  erature.

  Spherical and Cylindrical Bearings.  Timken Romania produces spherical and
  cylindrical roller bearings for large gear drives, rolling mills and other
  process industry and infrastructure development applications.  Timken
  anticipates that its cylindrical and spherical roller bearing capability will
  be significantly enhanced with the acquisition of Torrington's broad range of
  spherical and heavy-duty cylindrical roller bearings for standard industrial
  and specialized applications.  These products are sold worldwide to OEMs, and
  industrial distributors serving major industries, including construction and
  mining, natural resources, defense, pulp and paper production, rolling mills
  and general industrial goods.

  Needle Bearings.  With the acquisition of Torrington, the company expects to
  become a leading global producer of highly engineered needle roller bearings.
  Torrington produces a broad range of radial and thrust needle roller
  bearings, as well as bearing assemblies, which are sold to OEMs and
  industrial distributors worldwide. Major applications include products for
  the automotive, consumer product, construction and agriculture and general
  industrial goods industries.

                                                                        5
  Products (cont.)
  ________________

  Bearing Reconditioning.  A small part of the business involves providing
  bearing reconditioning services for industrial and railroad customers, both
  internationally and domestically.  These services account for less than 5%
  of the company's net sales for the year ended December 31, 2002.

  Steel products include steels of low and intermediate alloy, vacuum-processed
  alloys, tool steel and some carbon grades.  These products are available in a
  wide range of solid and tubular sections with a variety of lengths and
  finishes.  These steel products are used in a wide array of applications, in-
  cluding bearings, automotive transmissions, engine crankshafts, oil drilling,
  aerospace and other similarly demanding applications.  Approximately 15% of
  Timken's steel production is consumed in its bearing operations.

  Timken also produces custom-made steel products, including alloy and steel
  components for automotive and industrial customers.  This business has pro-
  vided the company with the opportunity to further expand its market for
  tubing and capture higher value-added steel sales.  This also enables
  Timken's traditional tubing customers in the automotive and bearing
  industries to take advantage of higher performing components that cost less
  than current alternative products.  Customizing of products is a growing
  portion of the company's steel business.

  Geographical Financial Information
  __________________________________

  Information appearing under the caption "Geographic Financial Information,"
  on Page 44 of the Annual Report to Shareholders for the year ended
  December 31, 2002 is incorporated herein by reference.

  Sales and Distribution
  ______________________

  Timken's products in the Automotive Bearings and Industrial Bearings
  segments are sold principally by its own internal sales organization.
  Timken's sales organization consists of a separate sales force for each bus-
  iness segment.  The combined bearings sales forces accounted for
  approximately 80% of the total sales force in 2002.

  Traditionally, a main focus of the company's sales strategy has consisted of
  collaborative projects with customers.  For this reason, Timken's sales
  forces are primarily located in close proximity to its customers rather than
  at production sites.  In some instances, the sales forces are located inside
  customer facilities.  Timken's sales force is highly trained and knowledge-
  able regarding all bearings products and associates assist customers during
  the development and implementation phases and provide support on an ongoing
  basis.  Torrington has also located its sales force in close proximity to its
  customers. This will facilitate the integration of the two sales forces as
  well as the necessary cross-training efforts.

  A major portion of the customer shipments are made directly from Timken's
  warehouses located in a number of cities in the United States, Canada, the
  United Kingdom, France, Mexico, Singapore, Argentina and Australia.
  However, a growing number of shipments are made directly from plant
 

                                                                         6
  Sales and Distribution (cont.)
  ______________________________

  locations.  The warehouse inventories are augmented by authorized distrib-
  utor and jobber inventories throughout the world that provide local avail-
  ability when service is required.  The majority of Torrington shipments are
  made directly from plant locations.

  The company has a joint venture in North America focused on joint logistics
  and e-business services.  This alliance is called Colinx, and was founded by
  Timken, SKF, INA and Rockwell Automation.  The e-business service was
  launched in April 2001, and is focused on information and business services
  for authorized distributors in the Industrial Bearings segment.  The company
  also has another e-business joint venture in Europe which focuses on infor-
  mation and business services for authorized distributors in the Industrial
  Bearings segment.  This alliance, which Timken founded together with SKF AB,
  Sandvik AB, Industriewerk Schaffler INA-Ingenieurdienst GmBH and Reliance is
  called Endorsia.com International AB.

  Timken's steel products are sold principally by its own sales organization.
  Most orders are customized to satisfy customer-specific applications and are
  shipped directly to customers from Timken's steel manufacturing plants.
  Approximately 15% of Timken's steel production is consumed in its bearing
  operations.  In addition, sales are made to other anti-friction bearing com-
  panies and to the aircraft, automotive and truck, construction,
  forging, oil and gas drilling, and tooling industries.  Sales are also made
  to steel service centers.

  Timken has entered into individually negotiated contracts with some of
  its customers in its Automotive Bearings, Industrial Bearings and Steel
  segments.  These contracts may extend for one or more years and, if a price
  is fixed for any period extending beyond current shipments, customarily
  include a commitment by the customer to purchase a designated percentage
  of its requirements from Timken.  Contracts extending beyond one year that
  are not subject to price adjustment provisions do not represent a material
  portion of Timken's sales.  Timken does not believe that there is any
  significant loss of earnings risk associated with any given contract.

  Industry Segments
  _________________

  The company has three reportable segments:  Automotive Bearings, Industrial
  Bearings and Steel.  Segment information in Note 14 of the Notes to
  Consolidated Financial Statements on pages 44 and 45 of the Annual Report
  to Shareholders for the year ended December 31, 2002, is incorporated
  herein by reference.  Export sales from the U.S. and Canada are less than
  10% of revenue.  The company's Automotive and Industrial Bearings' businesses
  have historically participated in the global bearing industry, while Steel
  has concentrated primarily on U.S. customers.  However, over the past few
  years, Steel has acquired non-U.S. companies, such as Timken Alloy Steel -
  Europe, in Leicester, England, which specializes in the manufacturing of
  seamless mechanical tubing, and Lecheres Industries SAS, the parent company
  of Bamarec S.A., a precision component manufacturer based in France.

 
                                                                         7
  Industry Segments (cont.)
  _________________________

  Timken's non-U.S. operations are subject to normal international business
  risks not generally applicable to domestic business.  These risks include
  currency fluctuation, changes in tariff restrictions, and restrictive
  regulations by foreign governments, including price and exchange controls.

  Competition
  ___________

  The anti-friction bearing business is intensely competitive in every country
  in which Timken sells products.  Substantial downward pricing pressures exist
  in the United States and other countries even during periods of significant
  demand.  Timken competes primarily based on price, quality, timeliness of
  delivery and design and the ability to provide engineering support and ser-
  vice on a global basis.  The company competes with domestic manufacturers and
  many foreign manufacturers of anti-friction bearings, including SKF, INA-
  Holding Schaeffler KG, NTN Corporation, Koyo Seiko Co., Ltd. and NSK Ltd.

  Competition within the steel industry, both domestically and globally, is
  intense and is expected to remain so.  More than 30 U.S. steel companies have
  declared bankruptcy in recent years and have either ceased production or,
  more often, been acquired by other companies.  Global production overcapacity
  is also likely to continue, which, combined with the high levels of steel
  imports into the United States, has exerted downward pressure on domestic
  steel prices and has resulted in, at times, a dramatic narrowing, or with
  many companies, the elimination, of gross margins.  Timken's worldwide
  competitors for seamless mechanical tubing include Copperweld, Plymouth Tube,
  V & M Tube, Sanyo Special Steel, Ovako Steel and Tenaris.  Competitors for
  steel bar products include North American producers such as Republic
  Engineered Products, Mac Steel, North Star Steel and a wide variety of off-
  shore steel producers who import into North America.  Competitors in the pre-
  cision steel market include Metaldyne, Linamar and overseas companies such as
  Showa Seiko, SKF and FormFlo.  In the specialty steel category, manufacturers
  compete for sales of high-speed, tool and die and aerospace steels.  High-
  speed steel competitors in North America and Europe include Erasteel, Bohler
  and Crucible.  Tool and die steel competitors include Crucible, Carpenter
  Technologies and Thyssen.  The principal competitors for Timken's aerospace
  products include Ellwood Specialty, Slater/Atlas and Patriot (formerly
  Republic Technologies, Inc.).

  Maintaining high standards of product quality and reliability while keeping
  production costs competitive is essential to Timken's ability to compete
  with domestic and foreign manufacturers in both the anti-friction bearing
  and steel businesses.

   Trade Law Enforcement

  In the second quarter of 2000, the U.S. International Trade Commission (ITC)
  voted to revoke the bearing industry's anti-dumping orders on imports of
  tapered roller bearings from Japan, Romania and Hungary.  The ITC determined
  that revocation of the anti-dumping duty orders on tapered roller bearings
  from those countries was not likely to lead to continuation or recurrence of
  material injury to the domestic industry within a reasonably foreseeable

                                                                        8
  Competition (cont.)
  ___________________

  time.  The company has filed an appeal of the ITC's decision regarding Japan,
  which is still pending.  The ITC upheld the anti-dumping duty order against
  China.

  In June 2001, President Bush directed the ITC to initiate an investigation on
  steel imports under Section 201 of the U.S. Trade Act,  and called for
  multilateral negotiations to reduce global excess steel capacity and to
  address market-distorting factors in the world steel trade.  In late October
  2001, the ITC voted and affirmed that injury had been caused by surges of
  low-priced imports of hot-rolled and cold-finished steel bars.  Hot-rolled
  bars are a major product line for the company's Steel business, which also
  manufactures some cold-finished bar products.  On March 5, 2002, President
  Bush signed a proclamation imposing tariffs on hot and cold-finished bar
  imports.  The relief granted with respect to these product categories was to
  establish three years of tariffs at 30%, 24% and 18%.  The ITC vote on the
  presence of injury with respect to tool steels was 3-3, and as a consequence,
  no relief was granted with respect to tool steels, which is a major product
  line for the Latrobe Steel subsidiary in Latrobe, Pennsylvania.  Steel made
  in Mexico, Canada and developing nations is generally exempt from the tariffs
  announced.

  While the President's decision to implement a Section 201 remedy is not
  appealable to U.S. courts, foreign governments may appeal, and some have
  appealed, to the World Trade Organization (WTO).  The European Union, Japan
  and other countries are currently prosecuting these appeals.  These dispute
  settlement proceedings at the WTO and further appeals to the Appellate Body
  of the WTO generally take 15 to 24 months.  Moreover, a number of affected
  countries have imposed or threatened to impose various retaliatory tariffs
  on U.S. steel or other products or have sought various product exemptions
  from the imposition of the tariffs.

   Continued Dumping and Subsidy Offset Act

  In December 2002 and 2001, the company received gross amounts of approx-
  imately $54 million and $31 million, respectively, from the U.S. Treasury
  Department under the Continued Dumping and Subsidy Offset Act (CDSOA).  The
  CDSOA payments for 2002 and 2001, net of expenses, were $50.2 million and
  $29.6 million, respectively.  These payments resulted from the requirement
  in the CDSOA that dumping duties collected by the U.S. Customs Service be
  distributed to qualifying domestic producers and are related to the
  company's Automotive and Industrial Bearings' segments.  In September 2002,
  the WTO ruled that such payments violate international trade rules.  The
  U.S. Trade Representative appealed this ruling; however, the WTO upheld the
  ruling on January 16, 2003.  The company may not receive payments under the
  CDSOA in 2003 or future years, and the company cannot predict the amount of
  any such payments it may receive.

  Torrington received gross payments of approximately $62 million under the
  CDSOA in 2001 and approximately $72 million in 2002.  Ingersoll-Rand retained
  100% of all such payments received in 2001 and 2002.  Under the purchase
  agreement with Ingersoll-Rand, the Company will be obligated to pay to
  Ingersoll-Rand 80% of any payments Torrington receives under the CDSOA in 2003
  and 2004.
                                                                        9

  New Joint Ventures
  ___________________

  On April 8, 2002, Timken announced an agreement with NSK Ltd. to form Timken-
  NSK Bearings (Suzhou) Co. Ltd. to build a plant near Shanghai, China to manu-
  facture certain tapered roller bearing product lines.  Construction of the
  plant began in December 2002, and production is expected to begin in the
  first quarter of 2004.  Ownership of this joint venture is divided evenly
  between NSK Ltd. and Timken.

  On June 27, 2002, Timken announced an agreement with two Japan-based com-
  panies, Sanyo Special Steel Co., Ltd. and Showa Seiko Co., Ltd., to form
  Advanced Green Components, LLC to supply forged and machined rings for
  bearing manufacture.  The joint venture operates as an independent manu-
  facturing business.  It acquired the assets of the company's Winchester,
  Kentucky plant and commenced operations at the beginning of November 2002.

  Backlog
  _______

  The backlog of orders of Timken's domestic and overseas operations is
  estimated to have been $1.05 billion at December 31, 2002, and $1.01 billion
  at December 31, 2001.  Actual shipments are dependent upon ever-changing
  production schedules of the customer.  Accordingly, Timken does not believe
  that its backlog data and comparisons thereof as of different dates are
  reliable indicators of future sales or shipments.

  Raw Materials
  _____________

  The principal raw materials used by Timken in its North American bearing
  plants to manufacture bearings are its own steel tubing and bars, purchased
  strip steel and energy resources. Outside North America, the company
  purchases raw materials from local sources with whom it has worked closely
  to assure steel quality according to its demanding specifications.  In
  addition, Timken Alloy Steel Europe in Leicester, England is a major source
  of raw materials for the Timken plants in Western Europe.

  The principal raw materials used by Timken in steel manufacturing are scrap
  metal, nickel and other alloys.  The availability and prices of raw
  materials and energy resources is subject to curtailment or change due to,
  among other things, new laws or regulations, suppliers' allocations to other
  purchasers, interruptions in production by suppliers, changes in exchange
  rates and prevailing price levels.  For example, the weighted average price
  of scrap metal increased 12.5% from 1999 to 2000, decreased 19.6% from 2000
  to 2001, and increased 8.1% from 2001 to 2002.

  Moreover, disruptions in the supply of raw materials or energy resources
  could temporarily impair the company's ability to manufacture its products
  for its customers or require the company to pay higher prices in order to
  obtain these raw materials or energy resources from other sources, and could
  thereby affect the company's sales and profitability.  Any increase in the
  prices for such raw materials or energy resources could materially affect
  the company's costs and therefore its earnings.

                                                                        10

  Raw Materials (cont.)
  _____________________

  Timken believes that the availability of raw materials and alloys are
  adequate for its needs, and, in general, it is not dependent on any single
  source of supply.

  Research
  ________

  Timken's major research center, located in Canton, Ohio near its world head-
  quarters, is engaged in research on bearings, steels, manufacturing methods
  and related matters.  Research facilities are also located
  at the Timken Aerospace & Super Precision Bearings New Hampshire plants; the
  Colmar, France plant; the Latrobe, Pennsylvania plant; the Ploiesti, Romania
  plant; and the facility in Bangelore, India.  Expenditures for research,
  development and testing amounted to approximately $53 million in 2002,
  $54 million in 2001, and $52 million in 2000.  The company's research program
  is committed to the development of new and improved bearing and steel
  products, as well as more efficient manufacturing processes and techniques
  and the expansion of applications for existing products.

  Environmental Matters
  _____________________

  The company continues to protect the environment and comply with environ-
  mental protection laws.  Additionally, it has invested in pollution control
  equipment and updated plant operational practices.  The company is committed
  to implementing a documented environmental management system worldwide and
  to becoming certified under the ISO 14001 standard to meet or exceed
  customer requirements.  By the end of 2002, 11 of the company's plants had
  obtained ISO 14001 certification.  Six additional plants are on schedule to
  be certified by July of 2003.

  It is difficult to assess the possible effect of compliance with future
  requirements that differ from existing ones.  As previously reported,
  the company is unsure of the future financial impact to the company that
  could result from the United States Environmental Protection Agency's
  (EPA's) final rules to tighten the National Ambient Air Quality Standards
  for fine particulate and ozone.

  The company and certain of its U.S. subsidiaries have been designated as
  potentially responsible parties by the EPA for site investigation and
  remediation at certain sites under the Comprehensive Environmental Response,
  Compensation and Liability Act (Superfund).  The claims for remediation
  have been asserted against numerous other entities, which are believed to
  be financially solvent and are expected to fulfill their proportionate share
  of the obligation.  Management believes any ultimate liability with respect
  to all pending actions will not materially affect the company's operations,
  cash flows or consolidated financial position.  Furthermore, the company
  believes it has established adequate reserves to cover its environmental
  expenses and has a well-established environmental compliance audit program,
  which includes a proactive approach to bringing its domestic and
  international units to higher standards of environmental performance.  This
  program measures performance against local laws as well as standards that
  have been established for all units worldwide.
                                                                        11

  Patents, Trademarks and Licenses
  ________________________________

  Timken owns a number of U. S. and foreign patents, trademarks and licenses
  relating to certain of its products.  While Timken regards these as items
  of importance, it does not deem its business as a whole, or any industry
  segment, to be materially dependent upon any one item or group of items.

  Employment
  __________

  At December 31, 2002, Timken had approximately 18,000 associates. Thirty-one
  percent of Timken's U.S. associates are covered under collective bargaining
  agreements.  None of Timken's U.S. associates are covered under
  collective bargaining agreements that expire within one year.

  As of December 31, 2002, Torrington had approximately 10,000 employees.
  Approximately 4% of Torrington's U.S. associates are covered under collective
  bargaining agreements.

  Available Information
  _____________________

  Timken's annual report on Form 10-K, quarterly reports on Form 10-Q, current
  reports on Form 8-K, and amendments to those reports filed or furnished
  pursuant to Section 13(a) or 15(d) of the Exchange Act are available on
  Timken's website at www.timken.com as soon as reasonably practicable after
  electronically filing such material with the Securities and Exchange
  Commission.

                                                                        12
  Item 2.  Properties
  ___________________

  Timken has Automotive and Industrial Bearing and Steel manufacturing
  facilities at multiple locations in the United States.  Timken also has
  Automotive and Industrial Bearing and Steel manufacturing facilities in a
  number of countries outside the United States.  The aggregate floor area of
  these facilities worldwide is approximately 13,153,000 square feet, all of
  which, except for approximately 834,000 square feet, is owned in fee.  The
  facilities not owned in fee are leased.  The buildings occupied by Timken
  are principally made of brick, steel, reinforced concrete and concrete block
  construction.  All buildings are in satisfactory operating condition in
  which to conduct business.

  Timken's Automotive and Industrial Bearing manufacturing facilities in the
  United States are located in Bucyrus, Canton, New Philadelphia, and Niles
  Ohio; Altavista, Virginia; Randleman and Iron Station, North Carolina;
  Carlyle, Illinois; South Bend, Indiana; Gaffney, South Carolina; Keene and
  Lebanon, New Hampshire; Mascot, Tennessee; Lenexa, Kansas; Ogden, Utah;
  Orange, California; and Sanford, Florida.  These facilities, including the
  research facility in Canton, Ohio, and warehouses at plant locations, have an
  aggregate floor area of approximately 4,195,000 square feet.  As part of the
  manufacturing strategy initiative announced in April 2001, the company sold
  its tooling plant in Ashland, Ohio effective June 20, 2002.  The sale of the
  plant decreased floor area by approximately 54,000 square feet.  In
  connection with the Advanced Green Components, LLC, joint venture, the
  company contributed the Winchester, Kentucky plant assets to the joint
  venture.  This transaction decreased floor area by approximately 75,000
  square feet.

  Timken's Automotive and Industrial Bearing manufacturing plants outside the
  United States are located in Benoni, South Africa; Brescia, Italy; Colmar,
  France; Northampton and Wolverhampton, England; Medemblik, The Netherlands;
  Ploiesti, Romania; Mexico City, Mexico; Sao Paulo, Brazil; Singapore;
  Jamshedpur, India; Sosnowiec, Poland; St. Thomas, Canada and Yantai, China.
  The facilities, including warehouses at plant locations, have an aggregate
  floor area of approximately 2,961,000 square feet.  As part of the manu-
  facturing strategy initiative announced in April 2001, the company ceased
  manufacturing operations at the Duston, England plant in November 2002,
  which decreased floor area by approximately 656,000 square feet.

  Timken's Steel manufacturing facilities in the United States are located
  in Canton, Eaton, Wauseon, Wooster, and Vienna, Ohio; Columbus, North
  Carolina; White House, Tennessee; and Franklin and Latrobe, Pennsylvania.
  These facilities have an aggregate floor area of approximately 5,253,000
  square feet.

  Timken's Steel manufacturing facilities outside the United States are
  located in Leicester and Sheffield, England; and Fougeres and Marnaz, France.
  These facilities have an aggregate floor of approximately 743,000 square
  feet.

  In addition to the manufacturing and distribution facilities discussed
  above, Timken owns warehouses and steel distribution facilities in the
  United States, United Kingdom, France, Singapore, Mexico, Argentina and
  Australia, and leases several relatively small warehouse facilities in
  cities throughout the world.
                                                                        13

  Properties (cont.)
  __________________

  During 2002, the widespread incentive programs on light-trucks and changing
  environmental regulations on heavy trucks drove the increase in North
  American demand.  Automotive bearing plant utilization was higher in 2002
  compared to 2001 as a result of this demand.  Additionally, plant utilization
  was impacted by the closing of the Duston, England, plant, resulting in
  operating inefficiencies and costs incurred to meet higher-than-expected
  customer demand.  Industrial bearing plant utilization was comparable to
  2001.  In 2002, steel plant utilization was between 70% and 80%, varying by
  business and product, which was slightly better than 2001.

  Item 3.  Legal Proceedings
  __________________________

  Not Applicable

  Item 4.  Submission of Matters to a Vote of Security Holders
  ____________________________________________________________

  No matters were submitted to a vote of security holders during the
  fourth quarter of the fiscal year ended December 31, 2002.

  Item 4A.  Executive Officers of the Registrant
  ______________________________________________

  The officers are elected by the Board of Directors normally for a term
  of one year and until the election of their successors.  All officers,
  except for two, have been employed by Timken or by a subsidiary of the
  company during the past five-year period.  The Executive Officers of the
  company as of February 14, 2003, are as follows:

                                       Current Position and Previous
   Name                Age             Positions During Last Five Years
   ___________________ ___     ____________________________________________

   W. R. Timken, Jr.   64      1997  Chairman, President and Chief
                                        Executive Officer; Director;
                               1999  Chairman and Chief Executive Officer;
                                        Director;
                               2002  Chairman - Board of Directors; Director;
                                        Officer since 1968.

   J. W. Griffith      49      1997  Vice President - Bearings - North
                                        American Automotive, Rail, Asia
                                        Pacific and Latin America;
                               1998  Group Vice President - Bearings -
                                        North American Automotive, Asia
                                        Pacific and Latin America;
                               1999  President and Chief Operating Officer;
                                        Director;
                               2002  President and Chief Executive Officer;
                                        Director; Officer since 1996.

                                                                        14

  Executive Officers of the Registrant (cont.)
  ____________________________________________

                                       Current Position and Previous
   Name                Age             Positions During Last Five Years
   ___________________ ___     ____________________________________________

   B. J. Bowling       61      1997  Executive Vice President, Chief
                                        Operating Officer and President -
                                        Steel; Officer since 1996.
                                                                                                                     - Steel; Officer since 1996.
   C. J. Andersson     41      1997  General Manager - Mexico Sourcing and
                                        Business Development, GE International
                                        Mexico (General Electric Company);
                               1999  General Manager - Aviation Information
                                        Services, GE Aircraft Engines (General
                                        Electric Company);
                               2000  Senior Vice President - e-Business, The
                                        Timken Company;
                               2001  Senior Vice President - e-Business and
                                        Lean Six Sigma, The Timken Company;
                               2002  Senior Vice President - Industrial
                                        Integration, The Timken Company;
                                        Officer since 2000.

   M. C. Arnold        46      1997  Director - Bearing Business Process
                                        Advancement;
                               1998  Vice President - Bearings - Business
                                        Process Advancement;
                               2000  President - Industrial; Officer since
                                        2000.

   S. B. Bailey        43      1997  Director - Finance;
                               1999  Director - Finance and Treasurer;
                               2000  Treasurer;
                               2001  Corporate Controller;
                               2002  Senior Vice President - Finance and
                                        Controller; Officer since 1999.

   W. R. Burkhart      37      1997  Legal Counsel - Europe, Africa and West
                                        Asia;
                               1998  Director of Affiliations and Acquisitions;
                               2000  Senior Vice President and General Counsel;
                                        Officer since 2000.

   D. J. Demerling     52      1997  President - MPB Corporation;
                               2000  President - Aerospace and Super Precision;
                               2002  Senior Vice President - Supply Chain Trans-
                                        formation; Officer since 2000.

                                                                        15

  Executive Officers of the Registrant (cont.)
  ____________________________________________

                                       Current Position and Previous
   Name                Age             Positions During Last Five Years
   ___________________ ___     ____________________________________________

   G. A. Eisenberg     41      1997  Executive Vice President and Chief
                                        Financial Officer, United Dominion
                                        Industries;
                               1998  President - Test Instrumentation Segment;
                                        Executive Vice President and Chief
                                        Financial Officer, United Dominion
                                        Industries;
                               1999  President and Chief Operating Officer,
                                        United Dominion Industries;
                               2002  Executive Vice President - Finance and
                                        Administration, The Timken Company;
                                        Officer since 2002.

   J. T. Elsasser      50      1997  Vice President - Bearings - Europe,
                                        Africa and West Asia;
                               1998  Group Vice President - Bearings -
                                        Rail, Europe, Africa and West Asia;
                               1999  Senior Vice President - Corporate
                                        Development;
                               2002  Senior Vice President - e-Business and
                                        Corporate Planning; Officer since 1996.

   K. P. Kimmerling    45      1997  Vice President - Manufacturing -
                                        Steel;
                               1998  Group Vice President - Alloy Steel;
                               1999  President - Automotive; Officer since
                                        1998.

   S. J. Miraglia, Jr. 52      1997  Vice President - Bearings - North
                                        American Industrial and Super
                                        Precision;
                               1998  Group Vice President - Bearings -
                                        North American Industrial and Super
                                        Precision;
                               1999  Senior Vice President - Technology;
                                        Officer since 1996.

   H. J. Sack          49      1997  President - Latrobe Steel Company;
                               1998  Group Vice President - Specialty Steel
                                        and President - Latrobe Steel
                                        Company;
                               1999  Group Vice President - Specialty Steel
                                        and President - Timken Latrobe Steel;
                               2000  President - Specialty Steel; Officer
                                        since 1998.
                                                                        16

  Executive Officers of the Registrant (cont.)
  ____________________________________________

                                       Current Position and Previous
   Name                Age             Positions During Last Five Years
   ___________________ ___     ____________________________________________

   M. J. Samolczyk     47      1997  Vice President - Sales and Marketing -
                                        Industrial - Original Equipment;
                               1998  Vice President and General Manager -
                                        Precision Steel Components;
                               2000  President - Precision Steel Components;
                               2002  Senior Vice President - Automotive
                                        Integration; Officer since 2000.

   S. A. Scherff       49      1997  Director - Legal Services and Assistant
                                        Secretary;
                               1999  Corporate Secretary;
                               2000  Corporate Secretary and Assistant General
                                        Counsel; Officer since 1999.

   W. J. Timken        60      1997  Vice President; Director; Officer
                                        since 1992.

   W. J. Timken, Jr.   35      1997  Market Manager - Original Equipment
                                        Distribution - Europe, Africa and West
                                        Asia;
                               1998  Vice President - Latin America;
                               2000  Corporate Vice President - Office of the
                                        Chairman;
                               2002  Corporate Vice President - Office of the
                                        Chairman; Director; Officer since 2000.

                                                                        17
PART II
_______

  Item 5.  Market for Registrant's Common Equity and Related Stockholder
  ______________________________________________________________________
           Matters
           _______

  The company's common stock is traded on the New York Stock Exchange (TKR).
  The estimated number of record holders of the company's common stock at
  December 31, 2002, was 7,719.  The estimated number of shareholders at
  December 31, 2002, was 44,057.

  High and low stock prices and dividends for the last two fiscal years are
  presented in the Quarterly Financial Data schedule on Page 1 of the Annual
  Report to Shareholders for the year ended December 31, 2002, and are
  incorporated herein by reference.

  Information regarding the company's stock compensation plans is presented in
  Note 10 to the Consolidated Financial Statements on Page 41 of the Annual
  Report to Shareholders for the year ended December 31, 2002, and is incor-
  porated herein by reference.  Information regarding disclosure of the
  company's equity compensation plans approved by shareholders is presented in
  Item 12.

  Item 6.  Selected Financial Data
  ________________________________

  The Summary of Operations and Other Comparative Data on Pages 48-49 of the
  Annual Report to Shareholders for the year ended December 31, 2002, is
  incorporated herein by reference.

  Item 7.  Management's Discussion and Analysis of Financial Condition and
  ________________________________________________________________________
           Results of Operations
           _____________________

  Management's Discussion and Analysis of Financial Condition and Results of
  Operations on Pages 22-31 of the Annual Report to Shareholders for the year
  ended December 31, 2002, is incorporated herein by reference.

  On March 20, 2003, the company announced the closing of the bearing plant in
  Darlington, England.  This plant was acquired as part of the company's
  acquisition of Ingersoll-Rand's Engineered Solutions business, which was
  effective February 16, 2003.  Operations at the Darlington plant are
  expected to be phased out during the next 8 to 12 months.

  Item 7A.  Quantitative and Qualitative Disclosures About Market Risk
  ____________________________________________________________________

  Information appearing under the caption "Management's Discussion and
  Analysis of Other Information" appearing on Page 29-31 of the Annual
  Report to Shareholders for the year ended December 31, 2002, is
  incorporated herein by reference.


                                                                         18

  Item 8.  Financial Statements and Supplementary Data
  ____________________________________________________

  The Quarterly Financial Data schedule included on Page 1, the
  Consolidated Financial Statements of the registrant and its subsidiaries
  on Pages 22-32, the Notes to Consolidated Financial Statements on Pages
  33-46 and the Report of Independent Auditors on Page 47 of the Annual
  Report to Shareholders for the year ended December 31, 2002, are
  incorporated herein by reference.

  Item 9.  Changes in and Disagreements with Accountants on Accounting
  ____________________________________________________________________
           and Financial Disclosure
           ________________________

  Not applicable.


                                                                         19

PART III
________

  Item 10.  Directors and Executive Officers of the Registrant
  ____________________________________________________________

  Required information is set forth under the captions "Election of Directors"
  on Pages 4-7 and "Section 16(a) Beneficial Ownership Report Compliance" on
  Page 25 of the proxy statement filed in connection with the annual meeting
  of shareholders to be held April 15, 2003, and is incorporated herein by
  reference.  Information regarding the executive officers of the registrant
  is included in Part I hereof.

  Item 11.  Executive Compensation
  ________________________________

  Required information is set forth under the captions "Executive Compensation"
  on Pages 11-22 and "Comparison of Five Year Cumulative Total Return" on
  Page 23 of the proxy statement filed in connection with the annual meeting
  of shareholders to be held April 15, 2003, and is incorporated herein by
  reference.

  In addition, Joseph F. Toot, Jr., retired President and CEO of the company,
  and currently a Director, was paid $100,000 in 2002, for services provided
  by Mr. Toot pursuant to the Consulting Agreement between Mr. Toot and the
  company effective January 1, 2001, and filed with the Commission on
  March 30, 2001.  That agreement expired on December 31, 2002.  Currently,
  Mr. Toot is provided office space and secretarial support, and the company
  pays travel and entertainment expenses incurred by Mr. Toot in connection
  with maintaining certain company customer relationships.  Mr. Toot also
  receives a pension from the company.

  Item 12.  Security Ownership of Certain Beneficial Owners and Management and
  ____________________________________________________________________________

            Related Stockholder Matters
            ___________________________

  Required information, including with respect to institutional investors
  owning more than 5% of the company's Common Stock, is set forth under the
  caption "Beneficial Ownership of Common Stock" on Pages 9-10 of the proxy
  statement filed in connection with the annual meeting of shareholders to be
  held April 15, 2003, and is incorporated herein by reference.


                                                                         20

  Item 12.  Security Ownership of Certain Beneficial Owners and Management
  ________________________________________________________________________

            Related Stockholder Matters (cont.)
            ___________________________________

                      Equity Compensation Plan Information

  The table below sets forth certain information regarding the following equity
  compensation plans of the Company as of December 31, 2002:  The Timken
  Company Long-Term Incentive Plan (As Amended and Restated as of January 30,
  2002) (the "LTIP"), and The 1985 Incentive Plan of The Timken Company (the
  "Incentive Plan"), pursuant to which the Company has made equity compensation
  available to eligible persons. Both plans have been approved by shareholders.

                                                                Number of
                                                           securities remaining
                     Number of                             available for future
                   securities to be     Weighted-average      issuance under
                 issued upon exercise    exercise price     equity compensation
                   of outstanding        of outstanding      plans (excluding
Plan category     options, warrants    options, warrants  securities reflected
                     and rights             and rights        in column (a))

                         (a)                  (b)                   (c)
Equity compensation
 plans approved by
 security holders...  7,310,026             $21.21            2,675,200 (1)/(2)

  (1)  The Common Shares set forth in column c represent those remaining
  available under the LTIP, which authorizes the Compensation Committee to make
  awards of Option Rights, Appreciation Rights, Restricted Shares, Deferred
  Shares, Performance Shares, and Performance Units.  Awards may be credited
  with dividend equivalents payable in the form of Company Common Shares.  In
  addition, under the LTIP nonemployee directors are entitled to awards of
  Restricted Shares, Common Shares and Option Rights pursuant to a formula set
  forth in that plan.  The maximum number of Common Shares that may be issued
  under the LTIP as Restricted Shares and Deferred Shares cannot (after taking
  any forfeitures into account and excluding automatic awards of Restricted
  Shares to non-employee directors) exceed 10% of the 11,700,000 Common Shares
  previously authorized for issuance under the LTIP.  As of December 31, 2002,
  736,300 Common Shares remained available for future issuance as Restricted
  Shares or Deferred Shares.

  (2)  The Company also maintains the Director Deferred Compensation Plan and
  the Deferred Compensation Plan pursuant to which directors and employees,
  respectively, may defer receipt of Company Common Shares authorized for
  issuance under either the LTIP or the Incentive Plan.  The table does not
  include separate information about these plans because they merely provide
  for the deferral, rather than the issuance, of Company Common Shares.


                                                                         21

  Item 13.  Certain Relationships and Related Transactions
  ________________________________________________________

  Required information is set forth under the captions "Election of Directors"
  on Pages 4-7 and "Executive Loan" on Page 17 of the proxy statement issued in
  connection with the annual meeting of shareholders to be held April 15, 2003,
  and is incorporated herein by reference.

  Item 14.  Controls and Procedures
  _________________________________

         (a).  Evaluation of disclosure controls and procedures.  Timken
               maintains a set of disclosure controls and procedures designed
               to ensure that information required to be disclosed by the
               company in reports that it files or submits under the Securities
               Exchange Act of 1934, as amended, is recorded, processed,
               summarized and reported within the time periods specified in
               Securities and Exchange Commission rules and forms.  Within the
               90-day period prior to the filing of this Form 10-K, an
               evaluation was carried out under the supervision and with the
               participation of the company's management, including the
               principal executive officer and principal financial officer, of
               the effectiveness of the company's disclosure controls and
               procedures (as defined in Rule 13a-14(c) and 15(d)-14(c) of the
               Securities Exchange Act of 1934, as amended).  Based on that
               evaluation, the principal executive officer and principal
               financial officer of the company have each concluded that such
               disclosure controls and procedures are effective.

         (b).  Changes in internal controls.  Subsequent to the date of their
               evaluation, there have not been any significant changes in the
               company's internal controls or in other factors that could
               significantly affect these controls, including any corrective
               action with regard to significant deficiencies and material
               weaknesses.

                                                                        22
PART IV
_______

  Item 15.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
  ___________________________________________________________________________

  (a)(1) and (2) - The response to this portion of Item 15 is submitted
                    as a separate section of this report.

  Schedules I, III, IV and V are not applicable to the company and, therefore,
  have been omitted.

    (3)  Listing of Exhibits

             Exhibit
             _______

        (3)(i)  Amended Articles of Incorporation of The Timken Company
                (Effective April 16, 1996) were filed with Form S-8 dated
                April 16, 1996 (Registration Number 333-02553) and are
                incorporated herein by reference.

        (3)(ii) Amended Regulations of The Timken Company effective April 21,
                1987, were filed on March 29, 1993 with Form 10-K (Commission
                File Number 1-1169), and are incorporated herein by reference.

        (4)     Credit Agreement dated as of December 31, 2002 among The Timken
                Company, as Borrower, Various Financial Institutions, as Banks,
                and Bank of America, N.A. and Keybank National Association, as
                Co-Administrative Agents.

        (4.1)   Credit Agreement dated as of July 10, 1998 among The Timken
                Company, as Borrower, Various Financial Institutions, as Banks,
                and Keybank National Association, as Agent was filed on
                August 13, 1998 with Form 10-Q (Commission File Number 1-1169),
                and is incorporated herein by reference.

        (4.2)   Indenture dated as of April 24, 1998, between The Timken
                Company and The Bank of New York, which was filed with
                Timken's Form S-3 registration statement which became
                effective April 24, 1998 (Registration Number 333-45791),
                and is incorporated herein by reference.

        (4.3)   Indenture dated as of July 1, 1990, between Timken and
                Ameritrust Company of New York, which was filed with
                Timken's Form S-3 registration statement dated July 12,
                1990 (Registration Number 333-35773), and is incorporated
                herein by reference.

        (4.4)   First Supplemental Indenture, dated as of July 24, 1996,
                by and between The Timken Company and Mellon Bank, N.A.
                was filed on November 13, 1996 with Form 10-Q (Commission
                File Number 1-1169), and is incorporated herein by
                reference.


                                                                         23

   Listing of Exhibits (cont.)
   ___________________________

        (4.5)   First Amendment Agreement dated as of January 1, 2002 among
                The Timken Company, as Borrower, Various Financial
                Institutions, as Banks, and Keybank National Association, as
                Agent was filed on March 28, 2002 with Form 10-K (Commission
                File Number 1-1169), and is incorporated herein by reference.

        (4.6)   Second Amendment Agreement dated as of among The Timken
                Company, as Borrower, Various Financial Institutions, as Banks,
                and Keybank National Association, as Agent.

        (4.7)   Indenture dated as of February 18, 2003, between The Timken
                Company and The Bank of New York, as Trustee, Providing for
                Issuance of Notes in Series.

        (4.8)   The company is also a party to agreements with respect to other
                long-term debt in total amount less than 10% of the
                registrant's consolidated total assets.  The registrant agrees
                to furnish a copy of such agreements upon request.

                Management Contracts and Compensation Plans
                ___________________________________________

        (10)    The Management Performance Plan of The Timken Company for
                Officers and Certain Management Personnel, as revised on
                December 18, 2002.

        (10.1)  The form of Deferred Compensation Agreement entered into with
                James W. Griffith, W. R. Timken, Jr., R. L. Leibensperger and
                B. J. Bowling was filed on November 13, 1995 with Form 10-Q
                (Commission File Number 1-1169), and is incorporated herein
                by reference.

        (10.2)  The Timken Company 1996 Deferred Compensation Plan for officers
                and other key employees, amended and restated as of April 20,
                1999 was filed on May 13, 1999 with Form 10-Q (Commission File
                Number 1-1169), and is incorporated herein by reference.

        (10.3)  The Timken Company Long-Term Incentive Plan for directors,
                officers and other key employees as amended and restated as of
                January 30, 2002 and approved by shareholders on April 16, 2002
                was filed as Appendix A to Proxy Statement filed on
                February 22, 2002 (Commission File Number 1-1169), and is
                incorporated herein by reference.

        (10.4)  The 1985 Incentive Plan of The Timken Company for Officers and
                other key employees as amended through December 17, 1997 was
                filed on March 20, 1998 with Form 10-K (Commission File Number
                1-1169), and is incorporated herein by reference.

        (10.5)  The form of Severance Agreement entered into with all Executive
                Officers of the company was filed on March 27, 1997 with
                Form 10-K (Commission File Number 1-1169), and is incorporated
                herein by reference.  Each differs only as to name and date
                executed.
                                                                        24

   Listing of Exhibits (cont.)
   ___________________________

                Management Contracts and Compensation Plans (cont.)
                ___________________________________________________

        (10.6)  The form of Death Benefit Agreement entered into with all
                Executive Officers of the company was filed on March 30, 1994
                with Form 10-K (Commission File Number 1-1169), and is
                incorporated herein by reference.  Each differs only as to name
                and date executed.

        (10.7)  The form of Indemnification Agreements entered into with all
                Directors who are not Executive Officers of the company was
                filed on April 1, 1991 with Form 10-K (Commission File Number
                1-1169), and is incorporated herein by reference.  Each differs
                only as to name and date executed.

        (10.8)  The form of Indemnification Agreements entered into with
                all Executive Officers of the company who are not Directors
                of the company was filed on April 1, 1991 with Form 10-K
                (Commission File Number 1-1169), and is incorporated herein
                by reference.  Each differs only as to name and date
                executed.

        (10.9)  The form of Indemnification Agreements entered into with
                all Executive Officers of the company who are also
                Directors of the company was filed on April 1, 1991 with
                Form 10-K (Commission File Number 1-1169), and is
                incorporated herein by reference.  Each differs only as to
                name and date executed.

        (10.10) The form of Employee Excess Benefits Agreement entered into
                with all active Executive Officers, certain retired
                Executive Officers, and certain other key employees of the
                company was filed on March 27, 1992 with Form 10-K
                (Commission File Number 1-1169), and is incorporated herein
                by reference.  Each differs only as to name and date
                executed.

        (10.11) The Amended and Restated Supplemental Pension Plan of
                The Timken Company as adopted March 16, 1998 was filed
                on March 20, 1998 with Form 10-K (Commission File Number
                1-1169), and is incorporated herein by reference.

        (10.12) Amendment to the Amended and Restated Supplemental Pension
                Plan of the Timken Company executed on December 29, 1998
                was filed on March 30, 1999 with Form 10-K (Commission File
                Number 1-1169), and is incorporated herein by reference.

        (10.13) The form of The Timken Company Nonqualified Stock Option
                Agreement for nontransferable options as adopted on April
                18, 2000 was filed on May 12, 2000 with Form 10-Q
                (Commission File Number 1-1169), and is incorporated herein
                by reference.
                                                                        25

   Listing of Exhibits (cont.)
   ___________________________

                Management Contracts and Compensation Plans (cont.)
                ___________________________________________________

        (10.14) The form of The Timken Company Nonqualified Stock Option
                Agreement for transferable options as adopted on April 16,
                2002 was filed on May 14, 2002 with Form 10-Q (Commission
                File Number 1-1169), and is incorporated herein by
                reference.

        (10.15) The form of The Timken Company Nonqualified Stock Option
                Agreement for special award options as adopted on April 18,
                2000 was filed on May 12, 2000 with Form 10-Q (Commission
                File Number 1-1169), and is incorporated herein by
                reference.

        (10.16) The Timken Company Deferral of Stock Option Gains Plan
                effective as of April 21, 1998 was filed on May 14, 1998
                with Form 10-Q (Commission File Number 1-1169), and is
                incorporated herein by reference.

        (10.17) The form of The Timken Company Performance Share Agreement
                entered into with W. R. Timken, Jr., R. L. Leibensperger
                and B. J. Bowling was filed on March 20, 1998 with Form
                10-K (Commission File Number 1-1169), and is incorporated
                herein by reference.

        (10.18) The Timken Company Senior Executive Management Performance
                Plan effective January 1, 1999, and approved by shareholders
                April 20, 1999 was filed as Appendix A to Proxy Statement
                filed on February 29, 1999 (Commission File Number 1-1169),
                and is incorporated herein by reference.

        (10.19) The Timken Company Nonqualified Stock Option Agreement entered
                into with James W. Griffith and adopted on December 16, 1999
                was filed on March 29, 2000 with Form 10-K (Commission File
                Number 1-1169), and is incorporated herein by reference.

        (10.20) The Timken Company Promissory Note entered into with James W.
                Griffith and dated December 17, 1999 was filed on March 29,
                2000 with Form 10-K (Commission File Number 1-1169), and is
                incorporated herein by reference.

        (10.21) The Timken Company Director Deferred Compensation Plan
                effective as of February 4, 2000 was filed on May 12, 2000 with
                Form 10-Q (Commission File Number 1-1169), and is incorporated
                herein by reference.

        (10.22) The form of The Timken Company Deferred Shares Agreement as
                adopted on April 18, 2000 was filed on May 12, 2000 with Form
                10-Q (Commission File Number 1-1169), and is incorporated
                herein by reference.


                                                                         26
   Listing of Exhibits (cont.)
   ___________________________

                Management Contracts and Compensation Plans (cont.)
                ___________________________________________________

        (10.23) Amendment to Employee Excess Benefits Agreement was filed on
                May 12, 2000 with Form 10-Q (Commission File Number 1-1169),
                and is incorporated herein by reference.

        (10.24) The form of The Timken Company Nonqualified Stock Option
                Agreement for nontransferable options without dividend credit
                as adopted on April 17, 2001 was filed on May 14, 2001 with
                Form 10-Q (Commission File Number 1-1169), and is incorporated
                herein by reference.

        (10.25) Restricted Shares Agreement entered into with Glenn A.
                Eisenberg was filed on March 28, 2002 with Form 10-K
                (Commission File Number 1-1169), and is incorporated herein
                by reference.

        (10.26) Restricted Shares Agreement entered into with Curt J.
                Andersson was filed on March 28, 2002 with Form 10-K
                (Commission File Number 1-1169), and is incorporated herein
                by reference.

        (10.27) The form of The Timken Company 1996 Deferred Compensation Plan
                Election Agreement as adopted on April 16, 2002.  Each differs
                only as to name and date executed and was filed on May 14, 2002
                with Form 10-Q (Commission File Number 1-1169), and is
                incorporated herein by reference.

        (10.28) The form of The Timken Company Restricted Shares Agreement as
                adopted on April 16, 2002 was filed on May 14, 2002 with
                Form 10-Q (Commission File Number 1-1169), and is incorporated
                herein by reference.

        (10.29) The form of The Timken Company Performance Unit Agreement as
                adopted on April 16, 2002 was filed on May 14, 2002 with
                Form 10-Q (Commission File Number 1-1169), and is incorporated
                herein by reference.

        (10.30) The form of The Timken Company 1996 Deferred Compensation Plan
                Election Agreement for Deferral of Restricted Shares was filed
                on August 13, 2002 with Form 10-Q (Commission File Number
                1-1169), and is incorporated herein by reference.

        (10.31) Retirement Agreement entered into as of June 30, 2002 between
                the company and Gene E. Little was filed on August 13, 2002
                with Form 10-Q (Commission File Number 1-1169), and is
                incorporated herein by reference.
                                                                        27

   Listing of Exhibits (cont.)
   ___________________________

                Management Contracts and Compensation Plans (cont.)
                ___________________________________________________

        (10.32) The Consulting Agreement entered into with Joseph F. Toot, Jr.,
                effective January 1, 2001 was filed on March 30, 2001 with
                Form 10-K (Commission File Number 1-1169), and is incorporated
                herein by reference.

        (10.33) Executive Severance Agreement entered into with Glenn A.
                Eisenberg.

        (12)    Ratio of Earnings to Fixed Charges.

        (13)    Annual Report to Shareholders for the year ended December 31,
                2002 (only to the extent expressly incorporated herein by
                reference).

        (21)    A list of subsidiaries of the registrant.

        (23)    Consent of Independent Auditors.

        (24)    Power of Attorney

        (99.1)  Certification Pursuant to 18 U.S.C. Section 1350, As Adopted
                Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
                signed on March 28, 2003 by the President and Chief Executive
                Officer and the Executive Vice President - Finance and
                Administration

        (99.2)  The Consulting Agreement entered into with e-Solutions.biz, LLC
                (Thomas W. Strouble, Owner and principal) was filed on
                November 13, 2002 with Form 10-Q (Commission File Number
                1-1169), and is incorporated herein by reference.

   (b)  Reports on Form 8-K:

        On February 18, 2003, the company filed a Form 8-K regarding
        Acquisition or Disposition of Assets, which contained information
        regarding the company's completion of the acquisition of the Engineered
        Solutions Business of Ingersoll-Rand Company Limited.  Financial state-
        ments for the company and the Engineered Solutions business of
        Ingersoll-Rand Company Limited were incorporated by reference into this
        Form 8-K.

        On February 13, 2003, the company filed a Form 8-K regarding Other
        Events and Regulation FD disclosure, which contained a press release
        announcing the offering of $250 million of 5.75% notes due 2010.  No
        financial statements were filed.

        On February 12, 2003, the company filed a Form 8-K regarding Other
        Events and Regulation FD disclosure, which contained a press release
        announcing the pricing of the offering of 11 million shares of the
        company's common stock.  No financial statements were filed.


                                                                         28
   Listing of Exhibits (cont.)
   ___________________________

   (b)  Reports on Form 8-K (cont.):

        On February 7, 2003, the company filed a Form 8-K regarding Other
        Events, which contained information regarding the company's pending
        acquisition of the Engineered Solutions business of Ingersoll-Rand
        Company Limited.  Audited combined financial statements of Ingersoll-
        Rand Engineered Solutions Business for the years ended December 31,
        2002, 2001 and 2000 were filed.

        On January 29, 2003, the company filed a Form 8-K regarding Other
        Events and Regulation FD disclosure, which contained a press release
        announcing the company's first quarter and full year 2003 outlook.  No
        financial statements were filed.

        On January 22, 2003, the company filed a Form 8-K regarding Other
        Events and Regulation FD disclosure, which contained a press release
        announcing the company's fourth quarter and 2002 results.  No financial
        statements were filed.

        On December 24, 2002, the company filed a Form 8-K regarding Other
        Events, which contained information regarding the company's pending
        acquisition of the Engineered Solutions business of Ingersoll-Rand
        Company Limited.  Audited combined financial statements of Ingersoll-
        Rand Engineered Solutions Business for the years ended December 31,
        2001, 2000 and 1999 and for the nine months ended September 30, 2002
        and 2001 were filed.  In addition, unaudited pro forma financial
        information for the company and the Ingersoll-Rand Engineered Solutions
        Business for the year ended December 31, 2001 and the nine months ended
        September 30, 2002 was filed.

        On December 24, 2002, the company filed a Form 8-K regarding Other
        Events, which contained informatin regarding the company's change in
        method of accounting in accordance with the adoption of Statement of
        Financial Accounting Standards No. 142, "Goodwill and Other Intangible
        Assets."  No financial statements were filed.

        On November 19, 2002, the company filed a Form 8-K regarding Other
        Events and Regulation FD disclosure, which contained estimated market
        data and industry trend information relating to a number of industry
        segments in which the company sells bearing and steel products.  No
        financial statements were filed.

  (c)  The exhibits are contained in a separate section of this report.

                                SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the company has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

                             THE TIMKEN COMPANY

By   /s/ James W. Griffith              By  /s/ Glenn A. Eisenberg
     ________________________________       ________________________________
     James W. Griffith                      Glenn A. Eisenberg
     Chief Executive Officer and            Executive Vice President - Finance
     Director                               and Administration (Principal
                                            Financial Officer
Date          March 27, 2003            Date            March 27, 2003
     ________________________________        _______________________________

                                        By  /s/ Sallie B. Bailey
                                             ________________________________
                                             Sallie B. Bailey
                                             Senior Vice President - Finance
                                             (Principal Accounting Officer)
                                        Date            March 27, 2003
                                             _______________________________

Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed by the following persons on behalf of the registrant
and in the capacities and on the dates indicated.

By  /s/ Stanley C. Gault*                By  /s/ Ward J. Timken, Jr.*
    ______________________________           _______________________________
    Stanley C. Gault      Director           Ward J. Timken, Jr.    Director
Date          March 27, 2003             Date           March 27, 2003

By  /s/ John A. Luke, Jr.*               By  /s/ W. R. Timken, Jr.*
    ______________________________           _______________________________
    John A. Luke, Jr.     Director           W. R. Timken, Jr.      Director
Date          March 27, 2003             Date           March 27, 2003

    /s/ Robert W. Mahoney*               By /s/ Joseph F. Toot, Jr.*
    ______________________________           _______________________________
    Robert W. Mahoney     Director           Joseph F. Toot, Jr.    Director
Date          March 27, 2003             Date           March 27, 2003

By  /s/ Jay A. Precourt*                 By  /s/ Martin D. Walker*
    ______________________________           _______________________________
    Jay A. Precourt       Director           Martin D. Walker       Director
Date          March 27, 2003             Date           March 27, 2003

By  /s/ John M. Timken, Jr.              By  /s/ Jacqueline F. Woods*
    ______________________________           _______________________________
    John M. Timken, Jr.   Director           Jacqueline F. Woods,   Director
Date          March 27, 2003             Date           March 27, 2003

By  /s/ Ward J. Timken
    ______________________________
    Ward J. Timken        Director
Date          March 27, 2003

                                         By  /s/ Glenn A. Eisenberg
                                         ___________________________________
                                         Glenn A. Eisenberg, attorney-in-fact
                                         By authority of Power of Attorney
                                         filed as Exhibit 24 hereto
                                         Date           March 27, 2003

                                CERTIFICATIONS

I, James W. Griffith, certify that:

1.  I have reviewed this annual report on Form 10-K of The Timken Company;

2.  Based on my knowledge, this annual report does not contain any untrue
    statement of a material fact or omit to state a material fact necessary to
    make the statements made, in light of the circumstances under which such
    statements were made, not misleading with respect to the period covered by
    this annual report;

3.  Based on my knowledge, the financial statements, and other financial
    information included in this annual report, fairly present in all material
    respects the financial condition, results of operations and cash flows of
    the registrant as of, and for, the periods presented in this annual report;

4.  The registrant's other certifying officers and I are responsible for
    establishing and maintaining disclosure controls and procedures (as defined
    in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

    a) designed such disclosure controls and procedures to ensure that material
       information relating to the registrant, including its consolidated sub-
       sidiaries, is made known to us by others within those entities, particu-
       larly during the period in which this annual report is being prepared;

    b) evaluated the effectiveness of the registrant's disclosure controls and
       procedures as of a date within 90 days prior to the filing date of this
       annual report (the "Evaluation Date"); and

    c) presented in this annual report our conclusions about the effectiveness
       of the disclosure controls and procedures based on our evaluation as of
       the Evaluation Date;

5.  The registrant's other certifying officers and I have disclosed, based on
    our most recent evaluation, to the registrant's auditors and the audit
    committee of registrant's board of directors (or persons performing the
    equivalent functions):

    a) all significant deficiencies in the design or operation of internal con-
       trols which could adversely affect the registrant's ability to record,
       process, summarize and report financial data and have identified for the
       registrant's auditors any material weaknesses in internal controls; and

    b) any fraud, whether or not material, that involves management or other
       employees who have a significant role in the registrant's internal
       controls; and

6.  The registrant's other certifying officers and I have indicated in this
    annual report whether there were significant changes in internal controls
    or in other factors that could significantly affect internal controls
    subsequent to the date of our most recent evaluation, including any
    corrective actions with regard to significant deficiencies and material
    weaknesses.

    Date:  March 27, 2003               BY   /s/ James W. Griffith
                                        ______________________________________
                                        James W. Griffith,
                                        Chief Executive Officer,
                                        President and Director


I, Glenn A. Eisenberg, certify that:

1.  I have reviewed this annual report on Form 10-K of The Timken Company;

2.  Based on my knowledge, this annual report does not contain any untrue
    statement of a material fact or omit to state a material fact necessary to
    make the statements made, in light of the circumstances under which such
    statements were made, not misleading with respect to the period covered by
    this annual report;

3.  Based on my knowledge, the financial statements, and other financial
    information included in this annual report, fairly present in all material
    respects the financial condition, results of operations and cash flows of
    the registrant as of, and for, the periods presented in this annual report;

4.  The registrant's other certifying officers and I are responsible for
    establishing and maintaining disclosure controls and procedures (as defined
    in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

    a) designed such disclosure controls and procedures to ensure that material
       information relating to the registrant, including its consolidated sub-
       sidiaries, is made known to us by others within those entities, particu-
       larly during the period in which this annual report is being prepared;

    b) evaluated the effectiveness of the registrant's disclosure controls and
       procedures as of a date within 90 days prior to the filing date of this
       annual report (the "Evaluation Date"); and

    c) presented in this annual report our conclusions about the effectiveness
       of the disclosure controls and procedures based on our evaluation as of
       the Evaluation Date;

5.  The registrant's other certifying officers and I have disclosed, based on
    our most recent evaluation, to the registrant's auditors and the audit
    committee of registrant's board of directors (or persons performing the
    equivalent functions):

    a) all significant deficiencies in the design or operation of internal con-
       trols which could adversely affect the registrant's ability to record,
       process, summarize and report financial data and have identified for the
       registrant's auditors any material weaknesses in internal controls; and

    b) any fraud, whether or not material, that involves management or other
       employees who have a significant role in the registrant's internal
       controls; and

6.  The registrant's other certifying officers and I have indicated in this
    annual report whether there were significant changes in internal controls
    or in other factors that could significantly affect internal controls
    subsequent to the date of our most recent evaluation, including any
    corrective actions with regard to significant deficiencies and material
    weaknesses.

    Date:  March 27, 2003
                                        BY   /s/ Glenn A. Eisenberg
                                        ______________________________________
                                        Glenn A. Eisenberg
                                        Executive Vice President - Finance and
                                        Administration

                           ANNUAL REPORT ON FORM 10-K

                       ITEM 15(a)(1) AND (2), (c) AND (d)

                        LIST OF FINANCIAL STATEMENTS AND
                          FINANCIAL STATEMENT SCHEDULE

                                CERTAIN EXHIBITS

                          FINANCIAL STATEMENT SCHEDULE

                          YEAR ENDED DECEMBER 31, 2002

                               THE TIMKEN COMPANY

                                  CANTON, OHIO

FORM 10-K-ITEM 15(a)(1) AND (2)

THE TIMKEN COMPANY AND SUBSIDIARIES

LIST OF FINANCIAL STATEMENTS AND
FINANCIAL STATEMENT SCHEDULE

The following consolidated financial statements of The Timken Company and
subsidiaries, included in the annual report of the registrant to its
shareholders for the year ended December 31, 2002, are incorporated by
reference in Item 8:

 Consolidated statements of operations-Years ended December 31, 2002, 2001 and
  2000

 Consolidated balance sheets-December 31, 2002 and 2001

 Consolidated statements of cash flows-Years ended December 31, 2002, 2001
  and 2000

 Consolidated statements of shareholders' equity-Years ended December 31, 2002,
  2001 and 2000

 Notes to consolidated financial statements-December 31, 2002

The consolidated financial statement Schedule II-Valuation and qualifying
accounts of The Timken Company and subsidiaries is included in Item 15(d).

All other schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required under
the related instructions or are inapplicable, and therefore have been omitted.

                         Report of Independent Auditors

To the Board of Directors and Shareholders of
The Timken Company

We have audited the accompanying consolidated balance sheets of The Timken
Company and subsidiaries as of December 31, 2002 and 2001, and the related
consolidated statements of operations, shareholders' equity and cash flows for
each of the three years in the period ended December 31, 2002.  Our audits
also included the financial statement schedule listed in the index at Item
15(a).  These financial statements and schedule are the responsibility of
the company's management.  Our responsibility is to express an opinion on
these financial statements and schedule based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States.  Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements and schedule.  An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement and schedule presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of The Timken
Company and subsidiaries at December 31, 2002 and 2001, and the consolidated
results of their operations and their cash flows for each of the three years
in the period ended December 31, 2002, in conformity with accounting principles
generally accepted in the United States.  Also, in our opinion, the related
financial statement schedule, when considered in relation to the basic
financial statements taken as a whole, presents fairly in all material respects
the information set forth therein.

As discussed in Note 6 to the consolidated financial statements, "Change in
Method of Accounting," The Timken Company adopted Statement of Financial
Accounting Standards No. 142, "Goodwill and Other Intangible Assets" effective
January 1, 2002.

                                                      /s/  ERNST & YOUNG LLP

Canton, Ohio
February 18, 2003
                                       II--VALUATION AND QUALIFYING ACCOUNTS

                                      THE TIMKEN COMPANY AND SUBSIDIARIES

         COL. A               COL. B                 COL. C                COL. D        COL. E
                                                    Additions
                             Balance at    Charged to   Charged to Other
                            Beginning of    Costs and      Accounts--    Deductions--  Balance at End
       Description             Period       Expenses       Describe         Describe     of Period
                                                     (Thousands of dollars)
Year ended December 31, 2002:
 Reserves and allowances
  deducted from asset accounts:
   Allowance for
     uncollectible accounts $ 14,976     $  4,752  (1)                   $  5,342  (3)   $ 14,386
   Valuation allowance
     on deferred tax assets   34,756        2,547  (2)                     19,179  (4)     18,124
                              ______        ______                         ______          ______
                            $ 49,732     $  7,299                        $ 24,521        $ 32,510
                              ======        ======                         ======          ======
Year ended December 31, 2001:
 Reserves and allowances
  deducted from asset accounts:
   Allowance for
     uncollectible accounts $ 11,259      $ 10,025 (1)                   $  6,308 (3)    $ 14,976
   Valuation allowance
     on deferred tax assets   18,084        20,219 (2)                      3,547 (4)      34,756
                              ______        ______                         ______          ______
                            $ 29,343      $ 30,244                       $  9,855        $ 49,732
                              ======        ======                         ======          ======
Year ended December 31, 2000:
 Reserves and allowances
  deducted from asset accounts:
   Allowance for
     uncollectible accounts $  9,497      $  2,406 (1)                   $    644 (3)    $ 11,259
   Valuation allowance
     on deferred tax assets   15,041        11,543 (2)                      8,500 (4)      18,084
                              ______        ______                         ______          ______
                            $ 24,538      $ 13,949                       $  9,144        $ 29,343
                              ======        ======                         ======          ======
(1)  Provision for uncollectible accounts included in expenses.
(2)  Increase in valuation allowance is recorded as a component of the provision for income taxes.
(3)  Actual accounts written off against the allowance--net of recoveries.
(4)  Reduction in valuation allowance due to utilization of foreign net operating losses previously
     reserved or write-off of deferred tax assets that are not realizable in future years.

EX-4

                                   EXHIBIT 4

                                                                 EXECUTION COPY

                               CREDIT AGREEMENT

                         Dated as of December 31, 2002

                                    among

                              THE TIMKEN COMPANY,
                                as the Borrower,

              BANK OF AMERICA, N.A. and KEYBANK NATIONAL ASSOCIATION,
                          as Co-Administrative Agents,

      MERRILL LYNCH & CO., MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
                              as Syndication Agent,

                               MORGAN STANLEY BANK,
                              as Documentation Agent,

                           KEYBANK NATIONAL ASSOCIATION,
                     as Paying Agent and as Swing Line Lender,

                           KEYBANK NATIONAL ASSOCIATION
                  And the Other Letter of Credit Issuers Hereto,
                            as Appropriate L/C Issuers,

                                      and

                         The Other Lenders Party Hereto

           BANC OF AMERICA SECURITIES LLC and KEYBANK NATIONAL ASSOCIATION,

                                      as

                   Joint Lead Arrangers and Joint Book Managers

                                 TABLE OF CONTENTS

Section                                                                    Page

                                    ARTICLE I
                         DEFINITIONS AND ACCOUNTING TERMS

1.01  Defined Terms ......................................................... 1
1.02  Other Interpretive Provisions..........................................25
1.03  Accounting Terms.......................................................25
1.04  Rounding...............................................................26
1.05  References to Agreements and Laws......................................26
1.06  Times of Day...........................................................26
1.07  Letter of Credit Amounts...............................................26
1.08  Currency Equivalents Generally.........................................26

                                    ARTICLE II
                       THE COMMITMENTS AND CREDIT EXTENSIONS

2.01  The Loans..............................................................26
2.02  Borrowings, Conversions and Continuations of Loans.....................27
2.03  Letters of Credit......................................................28
2.04  Swing Line Loans.......................................................35
2.05  Prepayments............................................................38
2.06  Termination or Reduction of Commitments................................40
2.07  Repayment of Loans.....................................................41
2.08  Interest...............................................................41
2.09  Fees...................................................................42
2.10  Computation of Interest and Fees.......................................42
2.11  Evidence of Indebtedness...............................................42
2.12  Payments Generally.....................................................43
2.13  Sharing of Payments....................................................45

                                    ARTICLE III
                       TAXES, YIELD PROTECTION AND ILLEGALITY

3.01  Taxes..................................................................46
3.02  Illegality.............................................................47
3.03  Inability to Determine Rates...........................................48
3.04  Increased Cost and Reduced Return; Capital Adequacy; Reserves on
      Eurocurrency Rate Loans................................................48
3.05  Funding Losses.........................................................49
3.06  Matters Applicable to All Requests for Compensation....................49
3.07  Survival...............................................................49

                                    ARTICLE IV
                     CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

4.01  Conditions to Documentation Closing Date...............................50
4.02  Conditions of Initial Credit Extensions................................51


                                      ii

4.03  Conditions to all Credit Extensions....................................53

                                    ARTICLE V
                         REPRESENTATIONS AND WARRANTIES

5.01  Existence, Qualification and Power; Compliance with Laws...............54
5.02  Authorization; No Contravention........................................54
5.03  Governmental Authorization; Other Consents.............................55
5.04  Binding Effect.........................................................55
5.05  Financial Statements; No Material Adverse Effect.......................55
5.06  Litigation.............................................................55
5.07  No Default.............................................................56
5.08  Ownership of Property; Liens...........................................56
5.09  Environmental Compliance...............................................56
5.10  Insurance..............................................................57
5.11  Taxes..................................................................57
5.12  ERISA Compliance..............................Error!Bookmark not defined.
5.13  Subsidiaries; Equity Interests.........................................57
5.14  Margin Regulations; Investment Company Act; Public Utility Holding
      Company Act............................................................58
5.15  Disclosure.............................................................58
5.16  Compliance with Laws...................................................58
5.17  Intellectual Property; Licenses, Etc...................................59
5.18  Solvency...............................................................59

                                    ARTICLE VI
                              AFFIRMATIVE COVENANTS

6.01  Financial Statements...................................................59
6.02  Certificates; Other Information........................................60
6.03  Notices................................................................61
6.04  Payment o Obligations..................................................61
6.05  Preservation of Existence, Etc.........................................62
6.06  Maintenance of Properties..............................................62
6.07  Maintenance of Insurance...............................................62
6.08  Compliance with Laws...................................................62
6.09  Books and Records......................................................62
6.10  Inspection Rights......................................................62
6.11  Use of Proceeds........................................................63
6.12  Convenant to Guarantee Oblications.....................................63
6.13  Compliance with Environmental Laws.....................................63
6.14  Further Assurances.....................................................63

                                    ARTICLE VII
                                NEGATIVE COVENANTS
7.01  Liens..................................................................64
7.02  Investments............................................................65
7.03  Indebtedness...........................................................67
7.04  Fundamental Changes....................................................69
7.05  Dispositions...........................................................70
7.06  Restricted Payments....................................................71


                                        iii

7.07  Change in Nature of Business...........................................71
7.08  Transactions with Affiliates...........................................71
7.09  Burdensome Agreements..................................................72
7.10  Use of Proceeds........................................................72
7.11  Financial Convenants...................................................72
7.12  Amendments of Organization Documents...................................73
7.13  Prepayments, Etc., of Indebtedness.....................................73

                                    ARTICLE VIII
                           EVENTS OF DEFAULT AND REMEDIES

8.01  Events of Default......................................................73
8.02  Remedies upon Event of Default.........................................75
8.03  Application of Funds...................................................76

                                    ARTICLE IX
                                      AGENTS

9.01  Appointment and Authorization of Agents................................76
9.02  Delegation of Duties...................................................77
9.03  Liability of Agents....................................................77
9.04  Reliance by Agents.....................................................77
9.05  Notice of Default......................................................78
9.06  Credit Decision; Disclosure of Information by Agents...................78
9.07  Indemnification of Agents..............................................79
9.08  Agents in Their Individual Capacities..................................79
9.09  Successor Agents.......................................................79
9.10  Co-Administrative Agents May File Proofs of Claim......................80
9.11  Guaranty Matters.......................................................81
9.12  Other Agents; Arrangers and Managers...................................81

                                    ARTICLE X
                                  MISCELLANEOUS

10.01 Amendments, Etc........................................................81
10.02 Notices and Other Communications;Facsimile Copies......................82
10.03 No Waiver; Cumulative Remedies.........................................83
10.04 Attorney Costs, Expenses and Taxes.....................................84
10.05 Indemnification by the Borrower........................................84
10.06 Payments Set Aside.....................................................85
10.07 Successors and Assigns.................................................85
10.08 Confidentiality........................................................88
10.09 Setoff.................................................................89
10.10 Interest Rate Limitation...............................................89
10.11 Counterparts...........................................................90
10.12 Integration............................................................90
10.13 Survival of Representations and Warranties.............................90
10.14 Severability...........................................................90
10.15 Tax Forms..............................................................90
10.16 Replacement of Lenders.................................................92
10.17 Judgment...............................................................92


                                       iv

10.18 Substitution of Currency...............................................92
10.19 Governing Law..........................................................93
10.20 Waiver of Right to Trial by Jury.......................................93
10.21 Binding Effect.........................................................93
SIGNATURES..................................................................S-1

                                       v

SCHEDULES

      I   Guarantors
     II   Certain Timken Stockholders
    III   Maximum Impairment, Restructuring, Reorganization and Implementation
          Charges
     IV   Material Subsidiaries
      V   Existing Letters of Credit and Appropriate L/C Issuers
   2.01   Commitments and Pro Rata Shares
   5.06   Disclosed Litigation
   5.08(b)Existing Liens
   5.09   Environmental Matters
   5.12   Pension Plans
   5.13   Subsidiaries and Other Equity Investments
   5.15   Projected Financial Information
   7.02(f)Existing Investments
   7.03   Existing Indebtedness
   7.08   Transactions with Affiliates
   7.09   Burdensome Agreements
  10.02   Paying Agent's Office, Certain Addresses for Notices
  10.22   Post-Closing Restructuring

EXHIBITS

  Form of

      A   Committed Loan Notice
      B   Swing Line Loan Notice
      C-1 Term Note
      C-2 Revolving Credit Note
      D   Compliance Certificate
      E   Assignment and Assumption
      F   Guaranty
      G-1 Opinion Matters - Counsel to Loan Parties with respect to Loan
          Documents
      G-2 Opinion Matters - In-House Counsel to Loan Parties

                                 CREDIT AGREEMENT

         This CREDIT AGREEMENT ("Agreement") is entered into as of December  31,
2002,among THE  TIMKEN COMPANY,  an Ohio  corporation (the  "Borrower"), BANK OF
AMERICA, N.A.  and KEYBANK  NATIONAL ASSOCIATION,  as Co-Administrative  Agents,
MERRILL LYNCH  & CO.,  MERRILL LYNCH,  PIERCE, FENNER  & SMITH  INCORPORATED, as
Syndication Agent, MORGAN STANLEY BANK, as Documentation Agent, KEYBANK NATIONAL
ASSOCIATION,  as  Paying  Agent,  BANC  OF  AMERICA  SECURITIES  LLC and KEYBANK
NATIONAL ASSOCIATION,  as Joint  Lead Arrangers  and Joint  Book Managers,  each
lender  from  time  to  time  party  hereto  (collectively,  the  "Lenders"  and
individually, a "Lender"), KEYBANK  NATIONAL ASSOCIATION, as an  Appropriate L/C
Issuer and  Swing Line  Lender, and  the other  Letter of  Credit issuers  party
hereto, each as an Appropriate L/C Issuer.

PRELIMINARY STATEMENTS:

         Pursuant to the Stock and Asset Purchase Agreement dated as of  October
16, 2002 (as amended, supplemented or otherwise modified in accordance with  its
terms,to  the  extent  permitted  in  accordance  with  the  Loan  Documents (as
hereinafter  defined),  together  with  all  schedules and exhibits thereto, the
"Purchase  Agreement")  among  Ingersoll-Rand  Company  Limited,  a  corporation
organized under the laws of Bermuda ("IR"), on behalf of itself,  Ingersoll-Rand
European Holding Company  B.V. with respect  to Industria Cuscinetti  S.p.A. and
the other stock sellers  set forth on Schedule  A thereto (the "Stock  Sellers")
and the asset sellers set forth on Schedule A thereto (the "Asset Sellers";  and
collectively with IR and the other Stock Sellers,the "Sellers"),and the Borrower
on  behalf  of  itself  and  the  other  buyers  set forth on Schedule F thereto
(collectively with the Borrower, the "Buyers"),the Buyers have agreed to acquire
(the  "Acquisition")  from  the  Sellers  the  Business (as hereinafter defined)
through the acquisition from  Sellers of the Shares  of the Sold Companies,  the
Venture  Interests  and  the  Separate  Assets  (each as defined in the Purchase
Agreement).

         The Borrower has requested that (a) in connection with the Acquisition,
the Lenders provide commitments to the Borrower of (i) $375,000,000 in the  form
of a term loan and (ii) $500,000,000  in the form of a revolving credit  loan to
finance,in  part,the  Acquisition,to  pay  transaction  fees and expenses,and to
refinance certain Indebtedness of the Borrower and its Subsidiaries,and (b) from
time to  time,the Lenders  make loans  to the  Borrower and  the Appropriate L/C
Issuers  (as  hereinafter  defined)  issue  Letters  of  Credit  (as hereinafter
defined)for  the  account  of  the  Borrower  or  any  Subsidiary  pursuant to a
revolving credit facility  for the Borrower  and its Subsidiaries.   The Lenders
have indicated their willingness  to agree to so  lend, and the Appropriate  L/C
Issuers have indicated their willingness to so issue such Letters of Credit,  in
each case, on the terms and subject to the conditions of this Agreement.

         In  consideration  of  the  mutual  covenants  and  agreements   herein
contained, the parties hereto covenant and agree as follows:

                                  ARTICLE I
                      DEFINITIONS AND ACCOUNTING TERMS

         1.01 Defined  Terms.   As used  in this  Agreement, the following terms
shall have the meanings set forth below:

         "Acquisition" has the meaning  specified in the Preliminary  Statements
to this Agreement.


                                       2

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

         "Adjusted Foreign Subsidiaries/Joint Venture Basket" means at any  time
for each fiscal year, an amount equal to the Foreign Subsidiaries/Joint  Venture
Basket for such fiscal year, plus the Foreign Subsidiaries/Joint Venture  Basket
in  effect  at  the  end  of  the  immediately  preceding  fiscal year, it being
understood that no Foreign Subsidiaries/Joint Venture Basket may be carried over
for more than  one fiscal year  and that the  Foreign Subsidiaries/Joint Venture
Basket for  a fiscal  year shall  be fully  used in  such fiscal year before any
Foreign Subsidiaries/Joint Venture Basket  for the immediately preceding  fiscal
year is used.

         "Affiliate"  means,  with  respect  to  any Person, another Person that
directly,  or  indirectly  through  one  or  more intermediaries, Controls or is
Controlled by or is under common  Control with the Person specified.   "Control"
means the possession, directly  or indirectly, of the  power to direct or  cause
the direction of  the management or  policies of a  Person, whether through  the
ability to exercise voting power,  by contract or otherwise.   "Controlling" and
"Controlled" have meanings correlative thereto.  Without limiting the generality
of the foregoing, a Person shall be deemed to be Controlled by another Person if
such other Person possesses, directly or  indirectly, power to vote 10% or  more
of the securities  having ordinary voting  power for the  election of directors,
managing general partners or the equivalent.

         "Agents"   means,   collectively,   the   Co-Administrative  Agents,the
Syndication  Agent,  the  Documentation  Agent,  the  Paying  Agent and the Lead
Arrangers.

         "Agent-Related  Persons"  means   the  Co-Administrative  Agents,   the
Syndication  Agent,  the  Documentation  Agent,  the  Paying  Agent and the Lead
Arrangers,together with their respective Affiliates,and the  officers,directors,
employees, agents and attorneys-in-fact of such Persons and Affiliates.

         "Aggregate Commitments" means the Commitments of all the Lenders.

         "Aggregate Credit  Exposures" means,  at any  time, the  sum of (i) the
unused  portion  of  the  Revolving  Credit  Commitment then in effect, (ii) the
unused  portion  of  each  Term  Commitment  then  in effect and (iii) the Total
Outstandings at such time.

         "Agreement" means this Credit Agreement.

         "Annualized" means, for any period,

         (a)   with respect to Consolidated EBITDA,(i) if such period ends on or
    after the first anniversary of  the Documentation Closing Date, Consolidated
    EBITDA for the prior four fiscal quarters,and (ii) if such period ends prior
    to the first anniversary of the Documentation Closing Date, LTM EBITDA,

         (b) with respect to Capital Expenditures,(i) if such period ends on  or
    after the first anniversary of  the  Documentation  Closing  Date,   Capital
    Expenditures  made  by or  on  behalf of the  Borrower  and its Subsidiaries
    during the prior four fiscal quarters, (ii) if such period is for the  first
    full  fiscal  quarter  after  the   Documentation   Closing  Date,   Capital
    Expenditures made by or on behalf  of  the  Borrower  and  its  Subsidiaries
    during such fiscal quarter multiplied by four, (iii) if such  period  is for
    the first two full fiscal  quarters  after  the Documentation Closing  Date,
    Capital   Expenditures  made  by or  on  behalf  of  the  Borrower  and  its
    Subsidiaries during such fiscal quarters multiplied by two, and (iv) if such
    period is for the first three full fiscal quarters  after  the Documentation


                                       3

    Closing Date, Capital Expenditures made by or on behalf of the Borrower  and
    its Subsidiaries during such fiscal quarters  multiplied by four and divided
    by three, and

         (c) with respect  to Consolidated Interest  Charges,(i) if such  period
    ends on or after the  first  anniversary  of the Documentation Closing Date,
    Consolidated  Interest Charges for the  prior four fiscal quarters, (ii)  if
    such period is for the  first full  fiscal quarter  after the  Documentation
    Closing   Date,  Consolidated  Interest   Charges  for  such  fiscal quarter
    multiplied by four, (iii) if such period is for  the  first  two full fiscal
    quarters  after  the  Documentation   Closing  Date,  Consolidated  Interest
    Charges for such fiscal quarters multiplied  by two, and (iv) if such period
    is for the first three full fiscal quarters after the Documentation  Closing
    Date, Consolidated Interest  Charges for  such fiscal quarters multiplied by
    four and divided by three.

         "Applicable Rate" means, from  time to time, the  following percentages
per annum, based upon the Debt Rating as set forth below:

                              Applicable Rate
                                                    Eurocurrency
                                                    Rate +

   Pricing   Debt Ratings                           Letter of
   Level     S&P/Moody's          Commitment Fee    Credit        Base Rate +

   1         BBB+/Baa1 or higher      0.150%          1.000%         0.000%
   2         BBB/Baa2                 0.200%          1.250%         0.250%
   3         BBB-/Baa3                0.250%          1.500%         0.500%
   4         BB+/Ba1                  0.375%          1.750%         0.750%
   5         BB/Ba2 or lower          0.500%          2.500%         1.500%

         Initially, the Applicable Rate shall be determined based upon the  Debt
Rating  specified  in  the  certificate  delivered  pursuant to Section 4.01(h).
Thereafter,  each  change  in  the  Applicable  Rate  resulting  from a publicly
announced  change  in  the  Debt  Rating  shall  be  effective during the period
commencing on the date of the public announcement thereof and ending on the date
immediately preceding the  effective date of  the next such  change.  If  at any
time no Debt Rating shall then be  in effect, then the Applicable Rate shall  be
at Pricing Level 5 from and after such time and until such time as a Debt Rating
shall be in effect.

         "Appropriate L/C Issuer" means, at  any time, (a) with respect  to each
Existing Letter of  Credit, Bank One,  NA, Wachovia Bank  or The Northern  Trust
Company, as applicable,  in its capacity  as issuer of  such Existing Letter  of
Credit, and (b)  with respect to  each other Letter  of Credit, KeyBank,  in its
capacity as issuer of  such other Letter of  Credit, or any successor  issuer of
such other Letters of Credit hereunder.

         "Appropriate Lender" means, at any  time, (a) with respect to  the Term
Facility or the Revolving Credit Facility,  a Lender that has a Commitment  with
respect to such Facility at such time, (b) with respect to the Letter of  Credit
Sublimit, (i) the Appropriate L/C Issuers and (ii) if any Letters of Credit have
been  issued,  or  have  been  deemed  to  have been issued, pursuant to Section
2.03(a), the Revolving Credit  Lenders, and (c) with  respect to the Swing  Line
Sublimit,  (i)  the  Swing  Line  Lender  and  (ii)  if any Swing Line Loans are
outstanding pursuant to Section 2.04(a), the Revolving Credit Lenders.

         "Approved Fund" has the meaning specified in Section 10.07(g).

                                       4

         "Asset Sellers" has the meaning specified in the Preliminary Statements
to this Agreement.

         "Assignment  and  Assumption"   means  an  Assignment   and  Assumption
substantially in the form of Exhibit E.

         "Attorney Costs" means and  includes all reasonable fees,  expenses and
disbursements  of  any  law  firm   or  other  external  counsel  and,   without
duplication, the allocated cost of internal legal services and all expenses  and
disbursements of internal counsel.

         "Attributable Indebtedness" means, on any  date, (a) in respect of  any
capital lease of any Person, the capitalized amount thereof that would appear on
a balance sheet of such Person prepared as of such date in accordance with GAAP,
and (b) in respect of any Synthetic Lease Obligation, the capitalized amount  of
the remaining lease  payments under the  relevant lease that  would appear on  a
balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a capital lease.

         "Audited Financial Statements"  means the audited  consolidated balance
sheet of the Borrower  and its Subsidiaries for  the fiscal year ended  December
31,  2001,  and  the  related  consolidated  statements of income or operations,
shareholders' equity and cash flows for such fiscal year of the Borrower and its
Subsidiaries, including the notes thereto.

         "Auto-Renewal Letter of  Credit" has the  meaning specified in  Section
2.03(b)(iii).

         "Availability Period" means the  period from and including  the Funding
Date to the earliest  of (a) the Maturity  Date, (b) the date  of termination of
the  Aggregate  Commitments  pursuant  to  Section  2.06,  and  (c)  the date of
termination of the commitment of each Lender to make Loans and of the obligation
of each Appropriate L/C Issuer to make L/C Credit Extensions pursuant to Section
8.02.

         "Bank of America" means Bank of America, N.A. and its successors.

         "BAS" means Banc of America Securities  LLC  and its successors.

         "Base Rate"  means a  rate per  annum equal  to the  greater of (a) the
Prime Rate  and (b)  one-half of  one percent  (0.50%) in  excess of the Federal
Funds  Effective  Rate.    Any  change  in  the  Base  Rate  shall  be effective
immediately from and after such change in the Base Rate.

         "Base  Rate  Loan"  means  a  Loan  denominated  in  Dollars that bears
interest based on the Base Rate.

         "Borrower"  has  the  meaning  specified  in the introductory paragraph
hereto.

         "Borrowing" means a Revolving Credit Borrowing, a Swing Line  Borrowing
or a Term Borrowing, as the context may require.

         "Business" has the meaning specified in the Purchase Agreement.

         "Business Day" means any day other than a Saturday, Sunday or other day
on which commercial banks are authorized to  close under the Laws of, or are  in
fact closed in,the state where the Paying Agent's Office is located and, if such
day relates to any Eurocurrency Rate Loan, means any such day on which  dealings
are conducted by and between banks in the London interbank market and banks  are
open for business in London and in the country of issue of the currency of  such

                                       5

Eurocurrency Rate Loan (or,in the case  of a Loan denominated in Euro,  on which
the  Trans-European  Automated  Real-Time  Gross  Settlement  Express   Transfer
(TARGET) System is open).

         "Buyers" has  the meaning  specified in  the Preliminary  Statements to
this Agreement.

         "Capital  Expenditures"  means,  with  respect  to  any  Person for any
period, any expenditure in respect of  the purchase or other acquisition of  any
fixed or capital asset (excluding normal replacements and maintenance which  are
properly charged to current operations).   For purposes of this  definition, the
purchase price of equipment that  is purchased simultaneously with the  trade-in
of existing equipment  or with insurance  proceeds shall be  included in Capital
Expenditures only to the extent of the gross amount by which such purchase price
exceeds the credit  granted by the  seller of such  equipment for the  equipment
being traded in at  such time or the  amount of such insurance  proceeds, as the
case may be.

         "Cash Collateralize" has the meaning specified in Section 2.03(g).

         "Cash Equivalents" means any  of the following types  of Investments,to
the extent owned by  the Borrower or any  of its Subsidiaries free  and clear of
all Liens:

         (a)  readily  marketable  obligations  issued  or  directly  and  fully
    guaranteed or insured by the  United  States  of  America  or  any agency or
    instrumentality thereof having maturities of not more than 360 days from the
    date of acquisition thereof; provided that the full faith and  credit of the
    United States of America is pledged in support thereof;

         (b) readily marketable obligations issued by the District of  Columbia,
    any  state  of the  United States  of  America  or any political subdivision
    thereof (i) having maturities of  not more  than 360 days  from the date  of
    acquisition thereof,  (ii)  rated  at  least A  by  S&P  and  at least A2 by
    Moody's, and (iii) in  an amount  not to  exceed  $20,000,000 per  issuer or
    $100,000,000 in the aggregate;

         (c)  time   deposits  or   repurchase  agreements   with,  or   insured
    certificates of deposit or bankers' acceptances of, any commercial bank that
    (i) (A)is a Lender or (B) is organized  under the laws of  the United States
    of America,  any  state  thereof  or the  District  of  Columbia  or  is the
    principal banking subsidiary of  a bank holding company organized under  the
    laws of the United States of America, any  state  thereof or the District of
    Columbia, and is a member  of the  Federal Reserve  System, (ii)  issues (or
    the parent of which issues)  commercial  paper rated as  described in clause
    (d) of  this  definition and  (iii) has  combined  capital and surplus of at
    least $1,000,000,000, in each case with maturities of not more than 180 days
    from the date of acquisition thereof;

         (d) commercial  paper or  master notes  issued by  any Person organized
    under  the  laws of any state of  the United States of America and rated  at
    least "Prime-1" (or the then equivalent grade) by Moody's  or at least "A-1"
    (or the then equivalent  grade)  by S&P, in each case with maturities of not
    more than 90 days from the date of acquisition thereof;

         (e) obligations issued  by any Person  organized under the  laws of any
    state of the United States of America (i) having maturities of not more than
    365 days from the date of  acquisition thereof  and (ii) rated at least A by
    S&P and at least A2 by Moody's;

         (f) Investments, classified in  accordance with GAAP as  Current Assets
    of the  Borrower  or  any  of  its  Subsidiaries, in money market investment
    programs  registered  under the  Investment  Company Act  of 1940 which  are
    administered  by  financial  institutions  that   have  the  highest  rating
    obtainable  from  either  Moody's  or S&P, and the  portfolios  of which are

                                       6

    limited  solely  to  Investments  of  the  character,  quality and  maturity
    described in clauses (a),(b),(c),(d) and (e) of this definition; and

         (g)  with  respect  to  Foreign  Subsidiaries,  the approximate foreign
    equivalent of any of clauses (a) through (f) above.

         "CERCLA" means the  Comprehensive Environmental Response,  Compensation
and Liability Act of 1980.

         "CERCLIS" means the Comprehensive Environmental Response,  Compensation
and  Liability  Information  System  maintained  by  the  U.S.     Environmental
Protection Agency.

         "Change of Control" means, an event or series of events by which:

         (a) any "person" or "group" (as  such terms are used in Sections  13(d)
    and 14(d) of the Securities Exchange Act of 1934, but excluding any employee
    benefit  plan of  such  person or its subsidiaries, and any person or entity
    acting in its capacity as trustee, agent or other fiduciary or administrator
    of any such plan), other than those  Persons  listed  on Schedule II and the
    heirs,   administrators  or  executors  of  any  such  Persons and any trust
    established by or for the benefit of  such Persons, becomes the  "beneficial
    owner" (as defined  in Rules 13d-3  and 13d-5 under the  Securities Exchange
    Act of 1934,  except  that  a  person  or  group  shall  be  deemed  to have
    "beneficial ownership" of all securities that such person or  group has  the
    right to  acquire  (such right,  an  "option right"), whether  such right is
    exercisable  immediately  or only  after  the  passage of time), directly or
    indirectly, of 30% or more of the equity securities of the Borrower entitled
    to vote for members of the  board of directors or equivalent governing  body
    of such Person on a fully-diluted basis  (and taking  into account all  such
    securities  that such  person or group has  the right to acquire pursuant to
    any option right); or

         (b)  during  any  period  of  24  consecutive months, a majority of the
    members of the board of directors or other equivalent governing  body of the
    Borrower  cease to  be  composed of individuals (i) who were members of that
    board or equivalent governing body on  the  first  day  of such period, (ii)
    whose election or nomination to that board or equivalent governing body  was
    approved by  individuals referred to in clause (i) above constituting at the
    time of such  election  or  nomination  at least a majority of that board or
    equivalent  governing  body or (iii)  whose  election or  nomination to that
    board or  other  equivalent  governing  body   was  approved by  individuals
    referred to in clauses (i) and (ii) above  constituting at the time of  such
    election or  nomination  at least  a majority  of  that  board or equivalent
    governing body (excluding, in the case of both clause (ii) and clause (iii),
    any individual whose initial nomination for,  or  assumption of office as, a
    member of that board or equivalent governing body occurs as  a result  of an
    actual or threatened solicitation of proxies or consents for the election or
    removal  of one  or  more  directors  by  any  person or  group other than a
    solicitation  for the  election of one or  more directors by or on behalf of
    the board of directors), or

         (c) any Person  or two or  more Persons acting  in concert, other  than
    those Persons listed on Schedule  II,  shall  have  acquired  by contract or
    otherwise, or shall have  entered into  a contract or arrangement that, upon
    consummation thereof,  will result in its or their  acquisition of the power
    to exercise,  directly or  indirectly,  a  controlling  influence  over  the
    management  or  policies of  the   Borrower, or  control   over  the  equity
    securities  of  such Person  entitled  to vote  for members of  the board of
    directors  or  equivalent governing  body of such Person on a  fully-diluted
    basis (and taking into account all such securities that such person or group

                                       7

    has the right to acquire pursuant to any option right)  representing 30%  or
    more of the combined voting power of such securities.

         "Co-Administrative Agent" means each of Bank of America and KeyBank  in
its capacity as a  co-administrative agent under any  of the Loan Documents,  or
any successor co-administrative agent.

         "Code" means the Internal Revenue Code of 1986.

         "Commitment" means a Term Commitment or a Revolving Credit  Commitment,
as the context may require.

         "Committed  Currencies"  means   Canadian  dollars,  pounds   sterling,
Japanese yen, Euros and other freely transferable currencies satisfactory to the
Revolving Credit Lenders in their sole discretion.

         "Committed Currency  Sublimit" means  an amount  equal to $100,000,000.
The  Committed  Currency  Sublimit  is  part  of,  and  not  in addition to, the
Revolving Credit Facility.

         "Committed Loan Notice"  means a notice  of (a) a  Term Loan Borrowing,
(b) a Revolving Credit Borrowing, (c) a conversion of Loans from one Type to the
other, or  (d) a  continuation of  Eurocurrency Rate  Loans, pursuant to Section
2.02(a), which, if in writing, shall be substantially in the form of Exhibit A.

         "Compensation Period"has the meaning specified in Section 2.12(c)(ii).

         "Compliance Certificate" means a certificate substantially in the  form
of Exhibit D.

         "Consolidated EBITDA" means, for any  period, for the Borrower and  its
Subsidiaries on a consolidated basis, an amount equal to Consolidated Net Income
before cumulative  effect of  accounting changes  for such  period plus  (a) the
following to the  extent deducted in  calculating such Consolidated  Net Income:
(i)  Consolidated  Interest  Charges  for  such  period,  (ii) the provision for
federal, state, local and foreign income taxes for such period, (iii) the amount
of  depreciation   and  amortization   expense  deducted   in  determining  such
Consolidated Net Income, (iv) other  non-recurring expenses of the Borrower  and
its Subsidiaries reducing such Consolidated Net Income which do not represent  a
cash item in such period or any future period, (v) any losses realized upon  the
Disposition of  assets outside  the ordinary  course of  business, and  (vi) the
aggregate amount of impairment, restructuring, reorganization and implementation
charges for such period of the  type disclosed in the Borrower's report  on Form
10- Q for the fiscal quarter  ended September 30, 2002 or otherwise  incurred in
connection with the Acquisition in an amount incurred for all periods after  the
date hereof not to exceed the amount set forth on Schedule III and minus (b) the
sum of (i)  all non- recurring  material non-cash items  increasing Consolidated
Net Income  for such  period, (ii)  any gains  realized upon  the Disposition of
assets  outside  the  ordinary  course  of  business, and (iii) payments (net of
expenses) received  with respect  to the  United States  - Continued Dumping and
Subsidy Offset Act of 2000.

         "Consolidated Fixed Charge Coverage  Ratio" means, for any  period, the
ratio of (a) (i) Annualized Consolidated  EBITDA for such period, less (ii)  the
aggregate amount of all Annualized Capital Expenditures made by or on behalf  of
the  Borrower  and  its  Subsidiaries  during  such  period  to  (b)  Annualized
Consolidated Interest Charges for such period.

         "Consolidated  Funded   Indebtedness"  means,   as  of   any  date   of
determination, for the  Borrower and its  Subsidiaries on a  consolidated basis,
the sum  of (a)  the outstanding  principal amount  of all  obligations, whether

                                       8

current or long-term, for  borrowed money (including Obligations  hereunder) and
all obligations evidenced by bonds, debentures, notes, loan agreements or  other
similar  instruments,  (b)  all  purchase  money  Indebtedness,  (c)  all direct
obligations arising under letters of credit (including standby and  commercial),
bankers' acceptances, bank guaranties, surety bonds and similar instruments, (d)
all  obligations  in  respect  of  the  deferred  purchase  price of property or
services (other than trade accounts payable in the ordinary course of business),
(e) Attributable Indebtedness in respect  of capital leases and Synthetic  Lease
Obligations, (f) all  Off- Balance Sheet  Liabilities, (g) without  duplication,
all Guarantees with respect to outstanding Indebtedness (other than Indebtedness
that is contingent in nature) of the types specified in clauses (a) through  (f)
above  of  Persons  other  than  the  Borrower  or  any  Subsidiary, and (h) all
Indebtedness of the types  referred to in clauses  (a) through (g) above  of any
partnership  or  joint  venture  (other  than  a  joint venture that is itself a
corporation or limited liability company) in which the Borrower or a  Subsidiary
is a general  partner or joint  venturer, unless such  Indebtedness is expressly
made non-recourse to the Borrower or such Subsidiary.

         "Consolidated Interest Charges" means, for any period, for the Borrower
and its  Subsidiaries on  a consolidated  basis, the  sum of  (a) all  interest,
premium  payments,  debt  discount,  fees,  charges  and related expenses of the
Borrower  and  its  Subsidiaries  in  connection  with borrowed money (including
capitalized  interest)  or  in  connection  with  the deferred purchase price of
assets, in each case to the extent treated as interest in accordance with  GAAP,
net of interest income, and (b) the portion of rent expense of the Borrower  and
its  Subsidiaries  with  respect  to  such  period  under capital leases that is
treated as interest in accordance with GAAP.

         "Consolidated Leverage Ratio" means,  as of any date  of determination,
the  ratio  of  (a)  Consolidated  Funded  Indebtedness  as  of such date to (b)
Annualized Consolidated EBITDA for such period.

         "Consolidated Net Income" means, for  any period, for the Borrower  and
its Subsidiaries on a consolidated basis, the net income of the Borrower and its
Subsidiaries (excluding extraordinary gains  and extraordinary losses) for  that
period.

         "Consolidated Net Worth"  means, as of  any date of  determination, the
consolidated net worth  of the Borrower  and its Subsidiaries,  determined as of
such  date  in  accordance  with  GAAP;  provided,  however, that there shall be
excluded from consolidated  net worth any  adjustments made to  consolidated net
worth as a result of the effects of FAS 87, provided that the cumulative  amount
of such  adjustments for  periods on  or after  January 1,  2003 may  not exceed
$150,000,000.

         "Contractual Obligation" means, as to any Person, any provision of  any
security  issued  by  such  Person  or  of  any  agreement,  instrument or other
undertaking  to  which  such  Person  is  a  party  or by which it or any of its
property is bound.

         "Control" has the meaning specified in the definition of "Affiliate."

         "Credit Extension" means  each of the  following:  (a)  a Borrowing and
(b) an L/C Credit Extension.

         "Current Assets" means, with respect to any Person, all assets of  such
Person that, in accordance with GAAP,  would be classified as current assets  on
the balance sheet of a company conducting  a business the same as or similar  to
that of such Person, after deducting appropriate and adequate reserves therefrom
in each case in which a reserve is proper in accordance with GAAP.

                                       9

         "Debt Rating"  means, as  of any  date of  determination, the rating as
determined (x) by  S&P of the  Borrower's long term  corporate credit or  (y) by
Moody's of the Borrower's senior unsecured long term debt, in each of clause (x)
and (y) on a non- credit enhanced  basis; provided that if (i) a Debt  Rating is
issued by each  of the foregoing  rating agencies, then  the lower of  such Debt
Ratings shall apply (with the Debt Rating for Pricing Level 1 being the  highest
and the Debt Rating for Pricing Level 5 being the lowest) and (ii) either S&P or
Moody's shall  change the  basis on  which ratings  are established  by it, each
reference to the Debt Rating announced by S&P or Moody's shall refer to the then
equivalent rating by S&P or Moody's, as the case may be.

         "Debtor Relief Laws"  means the Bankruptcy  Code of the  United States,
and  all  other  liquidation,  conservatorship,  bankruptcy,  assignment for the
benefit  of  creditors,  moratorium,  rearrangement,  receivership,  insolvency,
reorganization, or  similar debtor  relief Laws  of the  United States  or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally.

         "Default" means  any event  or condition  that constitutes  an Event of
Default or that, with  the giving of any  notice, the passage of  time, or both,
would be an Event of Default.

         "Default Rate" means an interest rate equal to (a) the Applicable Rate,
if  any,  applicable  to  Base  Rate  Loans  plus  (b) 2.0% per annum; provided,
however, that with respect to a  Eurocurrency Rate Loan, the Default Rate  shall
be an interest rate  equal to the Applicable  Rate otherwise applicable to  such
Loan  plus  2.0%  per  annum,  in  each  case to the fullest extent permitted by
applicable Laws.

         "Defaulting Lender" means  any Lender that  (a) has failed  to fund any
portion  of  the  Term  Loans,  Revolving  Credit  Loans,  participations in L/C
Obligations or participations in  Swing Line Loans required  to be funded by  it
hereunder  within  one  Business  Day  of  the  date required to be funded by it
hereunder, (b) has otherwise failed to pay over to the Paying Agent or any other
Lender any other amount required to be paid by it hereunder within one  Business
Day of the date when due, unless the subject of a good faith dispute, or (c) has
been  deemed  insolvent  or  becomes  the  subject of a bankruptcy or insolvency
proceeding.

         "Determination Date" has the meaning specified in Section 2.14(a).

         "Disclosed Litigation" has the meaning specified in Section 5.06.

         "Disposition" or "Dispose" means the sale, transfer, license, lease  or
other disposition (including any sale and leaseback transaction) of any property
by any Person, including any sale, assignment, transfer or other disposal,  with
or without  recourse, of  any notes  or accounts  receivable or  any rights  and
claims associated therewith.

         "Documentation  Agent"  means  Morgan  Stanley  in  its  capacity  as a
documentation  agent  under  any  of  the  Loan  Documents,  or  any   successor
documentation agent.

         "Documentation Closing Date" has the meaning specified in Section 4.01.

         "Dollar" and "$" mean lawful money of the United States.

         "Domestic Subsidiary" means any Subsidiary that is organized under  the
laws of any political subdivision of the United States.

         "Eligible Assignee" has the meaning specified in Section 10.07(g).

                                       10

         "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
those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.

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

         "Environmental  Permit"  means  any  permit,  approval,  identification
number, license or other authorization required under any Environmental Law.

         "Equity Documents" means the documents effecting the IR Equity Issuance
and the documents effecting the Public Equity Issuance.

         "Equity Interests" means, with respect to any Person, all of the shares
of capital stock of (or other ownership or profit interests in) such Person, all
of the warrants, options  or other rights for  the purchase or acquisition  from
such  Person  of  shares  of  capital  stock  of  (or  other ownership or profit
interests  in)  such  Person,  all   of  the  securities  convertible  into   or
exchangeable  for  shares  of  capital  stock  of  (or other ownership or profit
interests in) such  Person or warrants,  rights or options  for the purchase  or
acquisition from such Person of such  shares (or such other interests), and  all
of the other  ownership or profit  interests in such  Person (including, without
limitation, partnership, member or  trust interests therein), whether  voting or
nonvoting, and whether  or not such  shares, warrants, options,  rights or other
interests are outstanding on any date of determination.

         "Equivalent" in Dollars of any Committed Currency on any date means the
equivalent in Dollars of such Committed Currency determined by using the  quoted
spot  rate  at  which  Bank  of  America's  principal office in London offers to
exchange  Dollars  for  such  Committed  Currency  in  London prior to 4:00 P.M.
(London time)  (unless otherwise  indicated by  the terms  of this Agreement) on
such  date  as  is  required  pursuant  to  the terms of this Agreement, and the
"Equivalent" in any Committed Currency  of Dollars means the equivalent  in such
Committed Currency of Dollars determined by using the quoted spot rate at  which
Bank of America's principal office  in London offers to exchange  such Committed
Currency  for  Dollars  in  London  prior  to  4:00  P.M.  (London time) (unless
otherwise indicated by the terms of this Agreement) on such date as is  required
pursuant to the terms of this Agreement.

         "ERISA" means the Employee Retirement Income Security Act of 1974.

         "ERISA  Affiliate"  means  any  trade  or  business  (whether  or   not
incorporated)  under  common  control  with  the  Borrower within the meaning of
Section 414(b) or (c) of the Code  (and Sections 414(m) and (o) of the  Code for
purposes of provisions relating to Section 412 of the Code).

         "ERISA Event" means  (a) a Reportable  Event with respect  to a Pension
Plan; (b) a  withdrawal by the  Borrower or any  ERISA Affiliate from  a Pension
Plan subject  to Section  4063 of  ERISA during  a plan  year in  which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a  cessation
of operations  that is  treated as  such a  withdrawal under  Section 4062(e) of

                                       11

ERISA;  (c)  a  complete  or  partial  withdrawal  by  the Borrower or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in  reorganization;  (d)  the  filing  of  a  notice of intent to terminate, the
treatment of a Plan amendment as  a termination under Sections 4041 or  4041A of
ERISA, or the  commencement of proceedings  by the PBGC  to terminate a  Pension
Plan or Multiemployer Plan; (e) an event or condition which constitutes  grounds
under Section  4042 of  ERISA for  the termination  of, or  the appointment of a
trustee  to  administer,  any  Pension  Plan  or  Multiemployer Plan; or (f) the
imposition  of  any  liability  under  Title  IV  of  ERISA, other than for PBGC
premiums due but not delinquent under  Section 4007 of ERISA, upon the  Borrower
or any ERISA Affiliate.

         "EURIBO Rate"  means the  rate appearing  on Page  248 of  the Telerate
Service  (or  on  any  successor  or  substitute  page  of  such Service, or any
successor  to  or  substitute  for  such  Service,  providing  rate   quotations
comparable  to  those  currently  provided  on  such  page  of  such Service, as
determined by  the Paying  Agent from  time to  time for  purposes of  providing
quotations of interest rates applicable to deposits in Euro by reference to  the
Banking Federation of the European Union Settlement Rates for deposits in  Euro)
at  approximately  10:00  a.m.,  London  time,  two  Business  Days prior to the
commencement of the applicable Interest Period, as the rate for deposits in Euro
with a maturity comparable  to such Interest Period  or, if for any  reason such
rate is not available, the average (rounded upward to the nearest whole multiple
of  1/16  of  1%  per  annum,  if  such  average  is not such a multiple) of the
respective  rates  per  annum  at  which  deposits  in  Euros are offered by the
principal office  of Bank  of America  in London  to prime  banks in  the London
interbank market at 11:00 A.M.  (London time) two Business Days before the first
day of  such Interest  Period in  an amount  substantially equal  to the  Paying
Agent's (in its capacity as a Lender) Eurocurrency Rate Loan comprising part  of
such Revolving Credit  Borrowing to be  outstanding during such  Interest Period
and  for  a  period  equal  to  such  Interest  Period (subject, however, to the
provisions of Section 3.03).

         "Euro" means the lawful currency  of the European Union as  constituted
by the Treaty of Rome which  established the European Community, as such  treaty
may be amended from time to time and as referred to in the EMU legislation.

         "Eurocurrency Rate" means (a) for  any Interest Period with respect  to
any Eurocurrency  Rate Loan  denominated in  Dollars or  any Committed  Currency
other than Euro:

         (i) the rate per  annum equal to the  offered rate that appears  on the
    page of the Telerate screen (or  any successor  thereto)  that  displays  an
    average British Bankers Association Interest Settlement Rate for deposits in
    Dollars  or the applicable Committed Currency (for delivery on the first day
    of such Interest Period)  with a term  equivalent to  such  Interest Period,
    determined as of  approximately 11:00 a.m.   (London time) two Business Days
    prior to the first day of such Interest Period, or

         (ii) if the rate referenced in the preceding clause (i) does not appear
    on such page or service or such page or  service shall not be available, the
    rate per annum equal to the rate determined by the  Paying Agent to  be  the
    offered rate on such other page  or  other  service that displays an average
    British Bankers Association Interest Settlement Rate for deposits in Dollars
    or the applicable Committed Currency (for delivery on the first day  of such
    Interest  Period)  with  a  term   equivalent  to   such   Interest  Period,
    determined as of approximately 11:00 a.m.   (London  time) two Business Days
    prior to the first day of such Interest Period, or

         (iii) if the rates referenced in the preceding clauses (i) and (ii) are
    not available, the rate per annum determined by the Paying Agent as the rate
    of  interest at  which  deposits  in  Dollars  or the  applicable  Committed
    Currency  for delivery on  the first day of such Interest Period in same day
    funds in the  approximate  amount of the  Eurocurrency Rate Loan being made,

                                       12

    continued or converted by Bank of America and with a term equivalent to such
    Interest Period would be offered by Bank of America's London Branch to major
    banks in  the  London  interbank  Eurocurrency  market at  their  request at
    approximately 4:00 p.m.  (London time) two Business  Days prior to the first
    day of such Interest Period; and

         (b) for any Interest Period with respect to any Eurocurrency Rate Loan
denominated in Euros, the EURIBO Rate

         "Eurocurrency  Rate  Loan"  means  a  Loan  denominated in Dollars or a
Committed Currency that bears interest at a rate based on the Eurocurrency Rate.

         "Event of Default" has the meaning specified in Section 8.01.

         "Existing Credit Agreement" means  that certain Credit Agreement  dated
as  of  July  10,  1998,  as  amended,  among  the  Borrower,  various financial
institutions, as Banks, and KeyBank, as Agent.

         "Existing  Letter  of  Credit"  means  each  letter of credit listed on
Schedule V, issued by the Appropriate L/C Issuer identified thereon with respect
to such letter of credit, and each letter of credit extending or replacing  such
letter of credit if such extending  or replacement letter of credit is  with the
same Appropriate L/C Issuer  and is in a  principal amount not in  excess of the
principal  amount  of  the  extended  or  replaced  letter  of credit; provided,
however, that  no letter  of credit  shall be  or become  an Existing  Letter of
Credit  if  on  or  prior  to  the  Funding Date the Appropriate L/C Issuer with
respect to such letter  of credit shall have  notified the Paying Agent  and the
Borrower that such Appropriate L/C Issuer has elected to not have such letter of
credit be or become an Existing Letter of Credit.

         "Extraordinary Receipt" means  any cash received  by or paid  to or for
the account of any Person not in the ordinary course of business, in  connection
with  proceeds  of  insurance  (other  than  proceeds  of  business interruption
insurance to the extent such proceeds constitute compensation for lost earnings)
and condemnation awards (and payments in lieu thereof); provided, however,  that
an Extraordinary Receipt shall not include cash receipts received from  proceeds
of insurance or condemnation awards (or payments in lieu thereof) to the  extent
that such  proceeds or  awards (a)  in respect  of loss  or damage to equipment,
fixed assets or real  property are applied to  replace or repair the  equipment,
fixed assets or real property in respect of which such proceeds were received in
accordance with  the terms  of Section  2.05(b)(i), or  (b) are  received by any
Person in respect of  any third party claim  against such Person and  applied to
pay (or to reimburse  such Person for its  prior payment of) such  claim and the
costs and expenses of such Person with respect thereto.

         "Facility" means the Term Facility, the Revolving Credit Facility,  the
Swing  Line  Sublimit  or  the  Letter  of  Credit  Sublimit, as the context may
require.

         "Federal Funds Rate"  means, for any  day, the rate  per annum (rounded
upward to the nearest one one-hundredth of one percent (1/100 of 1%))  announced
by the Federal Reserve Bank of New York (or any successor) on such day as  being
the  weighted  average  of  the  rates  on  overnight federal funds transactions
arranged by federal funds brokers on  the previous trading day, as computed  and
announced by such Federal Reserve  Bank (or any successor) in  substantially the
same manner  as such  Federal Reserve  Bank computes  and announces the weighted
average it refers  to as the  "Federal Funds Effective  Rate" as of  the Funding
Date.

         "Fee Letter" means the letter agreement, dated October 15, 2002,  among
the Borrower, Bank of America, BAS, KeyBank, Merrill Lynch and Morgan Stanley.

                                       13

         "Foreign Lender" has the meaning specified in Section 10.15(a)(i).

         "Foreign  Subsidiary"  means  any  Subsidiary  that  is  not a Domestic
Subsidiary.

         "Foreign Subsidiaries/Joint Venture Basket" means at any time for  each
fiscal year an amount equal to  (a) $150,000,000, plus (b) the aggregate  amount
of dividends and other distributions made in cash during such fiscal year by any
Foreign Subsidiary or joint venture with  respect to any capital stock or  other
Equity Interest of any Loan Party, plus (c) the aggregate amount of payments  or
prepayments made in cash  during such fiscal year  by any Foreign Subsidiary  or
joint venture to  any Loan Party  with respect to  any intercompany Indebtedness
owed by such Foreign  Subsidiary or joint venture  to such Loan Party,  plus (d)
the aggregate amount of payments or prepayments made in cash during such  fiscal
year by any  Foreign Subsidiary to  any Person (other  than the Borrower  or any
Subsidiary) with respect to any Indebtedness owed by such Foreign Subsidiary  to
such Person,  minus (e)  the aggregate  amount of  Investments made  by any Loan
Party  in  any  Foreign  Subsidiary  or  joint  venture  during such fiscal year
pursuant  to  Section  7.02(j)  or  7.02(k),  minus  (f) the aggregate amount of
Indebtedness incurred by any Foreign Subsidiary in such fiscal year pursuant  to
Section 7.03(d)(A)

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

         "Fund" has the meaning specified in Section 10.07(g).

         "Funding Date"  means the  first date  on which  all of  the conditions
precedent in Sections 4.02 and 4.03  are satisfied or waived in accordance  with
Sections 4.02 and 4.03.

         "GAAP" means  generally accepted  accounting principles  in the  United
States set forth in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and  statements
and pronouncements  of the  Financial Accounting  Standards Board  or such other
principles  as  may  be  approved  by  a  significant  segment of the accounting
profession in the United States, that are applicable to the circumstances as  of
the date of determination, consistently applied.

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

         "Granting Lender" has the meaning specified in Section 10.07(h).

         "Guarantors"  means,  collectively,  the  Subsidiaries  of the Borrower
listed on Schedule  I and each  other Subsidiary of  the Borrower that  shall be
required to execute  and deliver a  guaranty or guaranty  supplement pursuant to
Section 6.12.

         "Guaranty" means, collectively, the Guaranty made by the Guarantors  in
favor of the Paying Agent on behalf of the Lenders, substantially in the form of
Exhibit F, together with each  other guaranty and guaranty supplement  delivered
pursuant to Section 6.12.

         "Guarantee" means, as to any Person, any (a) any obligation, contingent
or otherwise, of such Person  guaranteeing any Indebtedness or other  obligation
payable or performable by another Person (the "primary obligor") in any  manner,
whether directly  or indirectly,  and including  any obligation  of such Person,
direct or indirect, (i) to purchase or  pay (or advance or supply funds for  the

                                       14

purchase or payment of) such Indebtedness or other obligation, (ii) to  purchase
or  lease  property,  securities  or  services  for  the purpose of assuring the
obligee in respect of  such Indebtedness or other  obligation of the payment  or
performance of such Indebtedness or other obligation, (iii) to maintain  working
capital, equity capital or any other financial statement condition or  liquidity
or level  of income  or cash  flow of  the primary  obligor so  as to enable the
primary obligor to  pay such Indebtedness  or other obligation,  or (iv) entered
into for the purpose of assuring in  any other manner the obligee in respect  of
such Indebtedness or other obligation  of the payment or performance  thereof or
to protect such obligee against loss  in respect thereof (in whole or  in part),
or (b) any Lien on any assets of such Person securing any Indebtedness or  other
obligation  of  any  other  Person,  whether  or  not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise,  of
any holder of  such Indebtedness to  obtain any such  Lien).  The  amount of any
Guarantee shall be deemed  to be an amount  equal to the stated  or determinable
amount of  the related  primary obligation,  or portion  thereof, in  respect of
which such  Guarantee is  made or,  if not  stated or  determinable, the maximum
reasonably  anticipated  liability  in  respect  thereof  as  determined  by the
guaranteeing  Person  in  good  faith.    The  term  "Guarantee" as a verb has a
corresponding meaning.

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

         "High  Grade  Notes"  means  unsecured  notes  of  the Borrower due not
earlier than one year after the Maturity Date for the Revolving Credit Facility;
provided that, unless  the Lead Arrangers  otherwise consent in  writing, (a) no
Person (other than  a Loan Party)  shall guaranty any  such notes, and  any such
guaranties shall be pari passu with  or subordinate to the Guaranty, and  (b) no
document relating to such notes shall contain any provision requiring  principal
payments or the application of a sinking fund (or comparable provision) prior to
the scheduled Maturity  Date for the  Revolving Credit Facility,  other than any
customary  provision  in  any  such  documents  that  would  require  payment or
prepayment upon the occurrence  of a change of  control of the Borrower  or upon
the Disposition of assets of the Borrower  or any Loan Party (but solely to  the
extent that the Net Cash Proceeds from any such Disposition are not required  to
be used to prepay Loans or Cash Collateralize Letters of Credit).

         "High Grade Notes Documents" means  the High Grade Notes and  all other
agreements, instruments  and other  documents pursuant  to which  the High Grade
Notes have been or  will be issued or  otherwise setting forth the  terms of the
High Grade Notes, in each case  as such agreement, instrument or other  document
may be amended, supplemented or otherwise modified from time to time.

         "Honor Date" has the meaning specified in Section 2.03(c)(i).

         "ICC" has the meaning specified in Section 2.03(h).

         "Indebtedness" means, as  to any Person  at a particular  time, without
duplication, all of  the following, whether  or not included  as indebtedness or
liabilities in accordance with GAAP:

         (a)  all  obligations  of  such  Person  for  borrowed  money  and  all
    obligations of such  Person evidenced by  bonds,  debentures,  notes,   loan
    agreements or other similar instruments;

         (b) all direct or contingent  obligations of such Person arising  under
    letters  of credit (including standby and commercial), bankers' acceptances,
    bank guaranties, surety bonds and similar instruments;

                                       15

         (c) net obligations of such Person under any Swap Contract;

         (d) all obligations of such  Person to pay the deferred  purchase price
    of property or services  (other than  trade accounts payable in the ordinary
    course of business on customary terms);

         (e) indebtedness (excluding prepaid interest thereon) secured by a Lien
    on property owned or being purchased by such Person (including  indebtedness
    arising  under  conditional   sales or  other  title  retention agreements),
    whether or not such  indebtedness shall  have been assumed by such Person or
    is limited in recourse;

         (f) capital leases, Off-Balance  Sheet Liabilities and Synthetic  Lease
    Obligations;

         (g) all  obligations of  such Person  to mandatorily  purchase, redeem,
    retire,  defease or  otherwise  make  any payment,  in each case in cash, in
    respect of any Equity Interests in such  Person or  any other  Person or any
    warrants, rights or  options to  acquire such  Equity Interests,  valued, in
    the case of redeemable preferred interests, at the  greater of its voluntary
    or involuntary liquidation preference plus accrued and unpaid dividends; and

         (h) all Guarantees of such Person in respect of any of the foregoing.

         For all purposes hereof, the  Indebtedness of any Person shall  include
the Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such  Person
is a general partner or a joint venturer, unless such Indebtedness is  expressly
made non-recourse to such  Person.  The amount  of any net obligation  under any
Swap Contract  on any  date shall  be deemed  to be  the Swap  Termination Value
thereof as of  such date.   The amount of  any capital lease  or Synthetic Lease
Obligation as  of any  date shall  be deemed  to be  the amount  of Attributable
Indebtedness in respect thereof as of such date.

         "Indemnified Liabilities" has the meaning set forth in Section 10.05.

         "Indemnitees" has the meaning set forth in Section 10.05.

         "Information" has the meaning specified in Section 10.08.

         "Interest Payment Date"  means, (a) as  to any Loan  other than a  Base
Rate Loan, the last day of each Interest Period applicable to such Loan and  the
Maturity Date; provided, however, that if any Interest Period for a Eurocurrency
Rate  Loan  exceeds  three  months,  the  respective dates that fall every three
months  after  the  beginning  of  such  Interest  Period shall also be Interest
Payment Dates; and (b) as to any  Base Rate Loan (including a Swing Line  Loan),
the  last  Business  Day  of  each  March,  June, September and December and the
Maturity Date.

         "Interest Period" means, as to each Eurocurrency Rate Loan, the  period
commencing on the date such Eurocurrency Rate Loan is disbursed or converted  to
or continued as a Eurocurrency Rate Loan and ending on the date one, two,  three
or six  months thereafter,  as selected  by the  Borrower in  its Committed Loan
Notice; provided that:

         (a) any Interest Period that would otherwise end on a day that is not a
    Business Day  shall be  extended to  the next succeeding Business Day unless
    such  Business  Day  falls  in  another  calendar  month, in which case such
    Interest Period shall end on the immediately preceding Business Day;

                                       16

         (b) any  Interest Period  that begins  on the  last Business  Day of  a
    calendar month (or on a day for which there  is no numerically corresponding
    day in  the calendar month at  the end of such Interest Period) shall end on
    the last  Business Day  of  the calendar  month at the  end of such Interest
    Period; and

         (c) no Interest Period shall extend beyond the Maturity Date.

         "Investment"  means,  as  to   any  Person,  any  direct   or  indirect
acquisition or investment by such Person,  whether by means of (a) the  purchase
or other acquisition of capital stock or other securities of another Person, (b)
a loan, advance or capital contribution to, Guarantee or assumption of debt  of,
or purchase or other  acquisition of any other  debt or equity participation  or
interest in, another Person, including any partnership or joint venture interest
in  such  other  Person,  or  (c)  the  purchase  or  other  acquisition (in one
transaction  or  a  series  of  transactions)  of  assets of another Person that
constitute a business unit or all or a substantial part of the business of, such
Person.  For purposes of covenant compliance, the amount of any Investment shall
be the amount actually invested, without adjustment for subsequent increases  or
decreases in the value of such Investment.

         "IP Rights" has the meaning set forth in Section 5.17.

         "IR" has the  meaning specified in  the Preliminary Statements  to this
Agreement.

         "IR Equity Issuance" has the meaning specified in Section 4.02(g).

         "IRS" means the United States Internal Revenue Service.

         "KeyBank" means KeyBank National Association and its successors.

         "Laws" means, collectively, all international, foreign, Federal,  state
and  local  statutes,  treaties,  rules,  regulations,  ordinances,  codes   and
administrative   or   judicial   precedents   or   authorities,   including  the
interpretation or administration thereof  by any Governmental Authority  charged
with the enforcement, interpretation or administration thereof.

         "L/C Advance" means, with respect to each Revolving Credit Lender, such
Lender's funding of  its participation in  any L/C Borrowing  in accordance with
its Pro Rata Share.

         "L/C Borrowing" means an extension  of credit resulting from a  drawing
under any Letter of Credit which has  not been reimbursed on the date when  made
or refinanced as a Revolving Credit Borrowing.

         "L/C Credit Extension" means, with respect to any Letter of Credit, the
issuance (or deemed issuance) thereof  or extension of the expiry  date thereof,
or the renewal or increase of the amount thereof.

         "L/C Obligations" means, as at any date of determination, the aggregate
undrawn amount of all  outstanding Letters of Credit  plus the aggregate of  all
Unreimbursed Amounts, including all L/C Borrowings.

         "Lead Arranger"  means each  of BAS  and KeyBank  in its  capacity as a
joint lead arranger and joint book  manager under any of the Loan  Documents, or
any successor joint lead arranger and joint book manager.

                                       17

         "Lender" has the meaning specified in the introductory paragraph hereto
and, as the context requires, includes each Appropriate L/C Issuer and the Swing
Line Lender.

         "Lending Office" means, as to any Lender, the office or offices of such
Lender described as such in such Lender's Administrative Questionnaire, or  such
other office or offices  as a Lender may  from time to time  notify the Borrower
and the Paying Agent.

         "Letter of  Credit" means  any letter  of credit  issued hereunder,  or
deemed  to  have  been  issued  hereunder,  including,  without  limitation, all
Existing Letters of Credit.   A Letter of  Credit may be a  commercial letter of
credit or a standby letter of credit.

         "Letter of Credit Application"  means an application and  agreement for
the issuance or amendment of a Letter of Credit in the form from time to time in
use by the Appropriate L/C Issuer.

         "Letter of  Credit Expiration  Date" means  the day  that is seven days
prior to the  Maturity Date then  in effect (or,  if such day  is not a Business
Day, the next preceding Business Day).

         "Letter of Credit Sublimit" means an amount equal to $150,000,000.  The
Letter of  Credit Sublimit  is part  of, and  not in  addition to, the Revolving
Credit Facility.

         "Lien" means any  mortgage, pledge, hypothecation,  assignment, deposit
arrangement,  encumbrance,  lien  (statutory  or  other), charge, or preference,
priority or other security interest  or preferential arrangement of any  kind or
nature  whatsoever  (including  any  conditional  sale  or other title retention
agreement, any  easement, right  of way  or other  encumbrance on  title to real
property, and any financing lease having substantially the same economic  effect
as any of the foregoing).

         "Loan" means an extension of credit  by a Lender to the Borrower  under
Article II in the form of a Term  Loan, a Revolving Credit Loan or a Swing  Line
Loan.

         "Loan  Documents"  means,  collectively,  (a)  for  purposes  of   this
Agreement and  the Notes  and any  amendment, supplement  or other  modification
hereof or  thereof and  for all  other purposes  other than  for purposes of the
Guaranty, (i) this Agreement, (ii) the  Notes, (iii) the Guaranty, (iv) the  Fee
Letter and (v) each  Letter of Credit Application,  and (b) for purposes  of the
Guaranty, (i) this Agreement, (ii) the  Notes, (iii) the Guaranty, (iv) the  Fee
Letter, (v) each Swap Contract between a Loan Party and a Lender, and (vi)  each
Letter of Credit Application.

         "Loan Parties" means, collectively, the Borrower and each Guarantor.

         "LTM EBITDA" has the meaning specified in Section 4.02(m).

         "Material Adverse Effect" means (a) a material adverse change in, or  a
material  adverse  effect  upon,  the  business,  assets, liabilities (actual or
contingent), operations, condition (financial or otherwise) or prospects of  the
Borrower and its Subsidiaries taken as a whole; (b) a material impairment of the
rights and remedies of  any Agent or any  Lender under any Loan  Document, or of
the ability of any Loan Party to perform its obligations under any Loan Document
to which  it is  a party;  or (c)  a material  adverse effect upon the legality,
validity, binding effect  or enforceability against  any Loan Party  of any Loan
Document to which it is a party.

         "Material Subsidiary" means each  Subsidiary now existing or  hereafter
acquired or formed,  and each successor  thereto, which, after  giving pro forma
effect to such acquisition  or formation, accounts for  more than 5% of  (i) the
Consolidated  gross  revenues  of  the  Borrower  and  its  Subsidiaries,   (ii)

                                       18

Consolidated EBITDA, or  (iii) the Consolidated  assets of the  Borrower and its
Subsidiaries, in each case,  as of the last  day of the most  recently completed
fiscal quarter of the Borrower with respect to which, pursuant to clauses (a) or
(b) of Section  6.01, financial statements  have been, or  are required to  have
been,  delivered  by  the  Borrower,  and  in  any  event  includes  all  of the
Subsidiaries listed on Schedule IV.

         "Maturity  Date"  means  (a)  with  respect  to  the Term Facility, the
earlier of (i) the  first anniversary of the  Funding Date and (ii)  the date of
termination  in  whole  of  the  Term  Commitments  pursuant  to Section 2.06 or
8.02(b), and (b) with respect to  the Revolving Credit Facility, the earlier  of
(i) the fifth anniversary of the  Funding Date and (ii) the date  of termination
in whole of the Revolving Credit Commitments, the Letter of Credit Sublimit, and
the Swing Line Sublimit pursuant to Section 2.06 or 8.02(b).

         "Maximum Rate" has the meaning specified in Section 10.10.

         "Merrill  Lynch"  means  Merrill  Lynch  &  Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated and its successors.

         "Moody's"  means  Moody's  Investors  Service,  Inc.  and any successor
thereto.

         "Morgan Stanley" means Morgan Stanley Bank and its successors.

         "Multiemployer  Plan"  means  any  employee  benefit  plan  of the type
described in Section  4001(a)(3) of ERISA,  to which the  Borrower or any  ERISA
Affiliate makes or is obligated  to make contributions, or during  the preceding
five plan years, has made or been obligated to make contributions.

         "Net Cash Proceeds" means:

         (a) with respect to the sale of  any asset by any Loan Party or  any of
    its  Subsidiaries, the  excess, if any,  of (i)  the  sum  of  cash and Cash
    Equivalents  received in  connection with  such sale  (including any cash or
    Cash  Equivalents  received  by way  of deferred  payment pursuant to, or by
    monetization  of, a note  receivable or  otherwise,  but only as and when so
    received) over (ii) the sum of (A) the  principal amount of any Indebtedness
    that is  secured by  such  asset  and  that  is  required  to be   repaid in
    connection with  the sale  thereof  (other than  Indebtedness under the Loan
    Documents), (B) out-of-pocket  expenses,  brokerage  commissions  and  other
    direct fees and expenses (including legal  expenses and the  expenses of any
    financial advisor)  incurred by  such  Loan  Party  or such   Subsidiary  in
    connection with such sale and (C) income, franchise, transfer or other taxes
    paid in  connection with the  relevant asset sale as a result of the sale or
    any gain recognized in connection therewith; and

         (b) with respect to the  incurrence or issuance of any  Indebtedness by
    the Borrower  or any of its  Subsidiaries, the excess of (i) the sum  of the
    cash and Cash  Equivalents received  in connection  with such  incurrence or
    issuance  over (ii) the  underwriting  discounts and  commissions, and other
    out-of-pocket expenses, incurred by the Borrower  in  connection  with  such
    incurrence or issuance.

         "Nonrenewal  Notice  Date"  has   the  meaning  specified  in   Section
2.03(b)(iii).

         "Note" means a Term Note or a Revolving Credit Note, as the context may
require.

                                       19

         "NPL" means the National Priorities List under CERCLA.

         "Obligations"   means   all   advances   to,  and  debts,  liabilities,
obligations, covenants  and duties  of, any  Loan Party  arising under  any Loan
Document or  otherwise with  respect to  any Loan  or Letter  of Credit, whether
direct  or  indirect  (including  those  acquired  by  assumption),  absolute or
contingent,  due  or  to  become  due,  now  existing  or  hereafter arising and
including interest and fees that accrue after the commencement by or against any
Loan Party of any proceeding under any Debtor Relief Laws naming such Person  as
the debtor in such proceeding, regardless of whether such interest and fees  are
allowed  claims  in  such  proceeding.    Without limiting the generality of the
foregoing, the Obligations of the Loan Parties under the Loan Documents  include
(a) the  obligation to  pay principal,  interest, Letter  of Credit commissions,
charges,  expenses,  fees,  attorneys'  fees  and disbursements, indemnities and
other amounts  payable by  any Loan  Party under  any Loan  Document and (b) the
obligation of any Loan  Party to reimburse any  amount in respect of  any of the
foregoing that any Lender, in its  sole discretion, may elect to pay  or advance
on behalf of such Loan Party.

         "Off-Balance Sheet Liabilities" means, with respect to any Person as of
any date  of determination  thereof, without  duplication and  to the extent not
included as a liability on the consolidated balance sheet of such Person and its
Subsidiaries  in  accordance  with  GAAP:    (a)  with  respect  to  any   asset
securitization transaction (including any accounts receivable purchase facility)
(i)  the  unrecovered  investment  of  purchasers  or  transferees  of assets so
transferred and  (ii) any  other payment,  recourse, repurchase,  hold harmless,
indemnity or similar  obligation of such  Person or any  of its Subsidiaries  in
respect of assets  transferred or payments  made in respect  thereof, other than
limited recourse provisions that are customary for transactions of such type and
that neither (x)  have the effect  of limiting the  loss or credit  risk of such
purchasers or transferees with respect to payment or performance by the obligors
of  the  assets  so  transferred  nor  (y)  impair  the  characterization of the
transaction as a true sale under applicable Laws (including Debtor Relief Laws);
(b) the monetary obligations under any sale and leaseback transaction which does
not create a liability on the consolidated balance sheet of such Person and  its
Subsidiaries; or (c) any other  monetary obligation arising with respect  to any
other transaction which  is characterized as  indebtedness for tax  purposes but
not for accounting purposes in accordance with GAAP.

         "Organization Documents"  means, (a)  with respect  to any corporation,
the certificate or  articles of incorporation  and the bylaws  (or equivalent or
comparable constitutive  documents with  respect to  any non-U.S. jurisdiction);
(b) with respect to any  limited liability company, the certificate  or articles
of formation or  organization and operating  agreement; and (c)  with respect to
any partnership,  joint venture,  trust or  other form  of business  entity, the
partnership,  joint  venture  or  other  applicable  agreement  of  formation or
organization  and  any  agreement,  instrument,  filing  or  notice with respect
thereto  filed  in  connection  with  its  formation  or  organization  with the
applicable  Governmental  Authority  in  the  jurisdiction  of  its formation or
organization and,  if applicable,  any certificate  or articles  of formation or
organization of such entity.

         "Other Taxes" has the meaning specified in Section 3.01(b).

         "Outstanding Amount" means  (i) with respect  to Term Loans,  Revolving
Credit  Loans  and  Swing  Line  Loans  on  any  date, the aggregate outstanding
principal amount thereof (based on the Equivalent in Dollars at such time) after
giving effect  to any  borrowings and  prepayments or  repayments of Term Loans,
Revolving Credit Loans and  Swing Line Loans, as  the case may be,  occurring on
such date; and (ii) with respect to any L/C Obligations on any date, the  amount
of such  L/C Obligations  on such  date after  giving effect  to any  L/C Credit
Extension occurring on such date and  any other changes in the aggregate  amount
of  the  L/C  Obligations  as  of  such  date,  including  as  a  result  of any
reimbursements of outstanding unpaid drawings under any Letters of Credit or any
reductions in the maximum amount  available for drawing under Letters  of Credit
taking effect on such date.

                                       20

         "Participant" has the meaning specified in Section 10.07(d).

         "Paying Agent" means  KeyBank in its  capacity as a  paying agent under
any of the Loan Documents, or any successor paying agent.

         "Paying  Agent's  Office"  means  the  Paying  Agent's  address and, as
appropriate, account as set  forth on Schedule 10.02,  or such other address  or
account as the Paying  Agent may from time  to time notify the  Borrower and the
Lenders.

         "Payment  Office"  means,  for  any  Committed Currency, such office of
KeyBank as shall be from time to time selected by the Paying Agent and  notified
by the Paying Agent to the Borrower and the Lenders.

         "PBGC" means the Pension Benefit Guaranty Corporation.

         "Pension Plan" means any "employee pension benefit plan" (as such  term
is defined in Section 3(2) of  ERISA), other than a Multiemployer Plan,  that is
subject to Title IV of ERISA and  is sponsored or maintained by the Borrower  or
any ERISA Affiliate or to which the Borrower or any ERISA Affiliate  contributes
or has an  obligation to contribute,  or in the  case of a  multiple employer or
other plan described in Section 4064(a) of ERISA, has made contributions at  any
time during the immediately preceding five plan years.

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

         "Plan" means any  "employee benefit plan"  (as such term  is defined in
Section 3(3) of ERISA) established by the Borrower or, with respect to any  such
plan that is subject to Section 412 of the Code or Title IV of ERISA, any  ERISA
Affiliate.

         "Primary Currency" has the meaning specified in Section 10.17(c).

         "Prime Rate" means the interest  rate established from time to  time by
the Paying Agent as the Paying Agent's  prime rate, whether or not such rate  is
publicly announced.  The Prime Rate may not be the lowest interest rate  charged
by the Paying Agent for commercial  or other extensions of credit.   Each change
in the Prime Rate shall be effective immediately from and after such change.

         "Pro Rata  Share" means,  with respect  to each  Lender at  any time, a
fraction (expressed as  a percentage, carried  out to the  ninth decimal place),
the numerator of which is the  amount of the Commitment(s) of such  Lender under
the applicable Facility or Facilities at such time and the denominator of  which
is the  amount of  the Aggregate  Commitments under  the applicable  Facility or
Facilities at such time; provided that if the commitment of each Lender to  make
Loans and  the obligation  of each  Appropriate L/C  Issuer to  make L/C  Credit
Extensions have  been terminated  pursuant to  Section 8.02,  then the  Pro Rata
Share of each  Lender shall be  determined based on  the Pro Rata  Share of such
Lender immediately  prior to  such termination  and after  giving effect  to any
subsequent assignments made pursuant to the terms hereof.  The initial Pro  Rata
Share of each Lender is set forth  opposite the name of such Lender on  Schedule
2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a
party hereto, as applicable.

         "Public Equity Issuance" has the meaning specified in Section 4.02(g).

                                       21

         "Purchase  Agreement"  has  the  meaning  specified  in the Preliminary
Statements to this Agreement.

         "Receivables Facility" has the meaning set forth in Section 7.05(g).

         "Receivables Subsidiary" has the meaning set forth in Section 6.12.

         "Reduction Amount" has the meaning set forth in Section 2.05(b)(vi).

         "Register" has the meaning set forth in Section 10.07(c).

         "Related  Documents"  means  the  Purchase  Agreement  and  the   other
documents effecting the Acquisition.

         "Reportable Event" means any of the events set forth in Section 4043(c)
of ERISA, other than events for which the 30 day notice period has been waived.

         "Request for Credit Extension" means  (a) with respect to a  Borrowing,
conversion or continuation of Term Loans or Revolving Credit Loans, a  Committed
Loan Notice, (b)  with respect to  an L/C Credit  Extension, a Letter  of Credit
Application,  and  (c)  with  respect  to  a  Swing Line Loan, a Swing Line Loan
Notice.

         "Required  Lenders"  means,  as  of  any date of determination, Lenders
having  more  than  50%  of  the  sum  of  the  (a) Total Outstandings (with the
aggregate amount of each Lender's risk participation and funded participation in
L/C Obligations  and Swing  Line Loans  being deemed  "held" by  such Lender for
purposes of  this definition),  (b) aggregate  unused Term  Commitments and  (c)
aggregate unused  Revolving Credit  Commitments; provided  that the  unused Term
Commitment, unused Revolving Credit Commitment of, and the portion of the  Total
Outstandings held or deemed held by, any Defaulting Lender shall be excluded for
purposes of making a determination of Required Lenders.

         "Responsible  Officer"  means  the  chief executive officer, president,
chief financial  officer, vice  president, corporate  controller, treasurer,  or
assistant treasurer  of a  Loan Party  and, with  respect to  certificates to be
delivered pursuant to Sections 4.01  and 4.02, notices to be  delivered pursuant
to Section 6.03 and the requirements of Section 8.01, the general counsel or the
secretary of the Borrower.  Any document delivered hereunder that is signed by a
Responsible Officer of a Loan Party shall be conclusively presumed to have  been
authorized by all  necessary corporate, partnership  and/or other action  on the
part  of  such  Loan  Party  and  such Responsible Officer shall be conclusively
presumed to have acted on behalf of such Loan Party.

         "Restricted Payment" means any dividend or other distribution  (whether
in cash,  securities or  other property)  with respect  to any  capital stock or
other Equity Interest of the Borrower or any Subsidiary, or any payment (whether
in cash, securities  or other property),  including any sinking  fund or similar
deposit,  on  account  of  the  purchase,  redemption,  retirement,  defeasance,
acquisition, cancellation  or termination  of any  such capital  stock or  other
Equity  Interest,  or  on  account  of  any  return of capital to the Borrower's
stockholders, partners or members (or the equivalent Persons thereof).

         "Revolving   Credit   Borrowing"   means   a  borrowing  consisting  of
simultaneous  Revolving  Credit  Loans  of  the  same  Type  and, in the case of
Eurocurrency Rate Loans,  having the same  Interest Period made  by each of  the
Revolving Credit Lenders pursuant to Section 2.01(b).

                                       22

         "Revolving Credit  Borrowing Minimum"  means, in  respect of  Revolving
Credit Loans denominated in Dollars, $5,000,000, and in respect of any Revolving
Credit  Loans  denominated  in   any  Committed  Currency,  the   Equivalent  of
$5,000,000.

         "Revolving Credit  Borrowing Multiple"  means, in  respect of Revolving
Credit Loans  denominated in  Dollars, $1,000,000,  and in  respect of Revolving
Credit  Loans  denominated  in   any  Committed  Currency,  the   Equivalent  of
$1,000,000.

         "Revolving  Credit  Commitment"  means,  as  to  each  Revolving Credit
Lender,  its  obligation  to  (a)  make  Revolving  Credit Loans to the Borrower
pursuant to Section 2.01(b), (b) purchase participations in L/C Obligations, and
(c)  purchase  participations  in  Swing  Line  Loans, in an aggregate principal
Dollar amount at  any one time  outstanding not to  exceed the amount  set forth
opposite such Lender's name on Schedule 2.01 under the caption "Revolving Credit
Commitment" or in  the Assignment and  Assumption pursuant to  which such Lender
becomes a party  hereto, as applicable,  as such Dollar  amount may be  adjusted
from time to time in accordance with this Agreement.

         "Revolving Credit Facility" means, at any time, the aggregate amount of
the Revolving Credit Lenders' Revolving Credit Commitments at such time.

         "Revolving Credit  Lender" means,  at any  time, any  Lender that has a
Revolving Credit Commitment at such time.

         "Revolving Credit Loan" has the meaning specified in Section 2.01(b).

         "Revolving Credit Note" means a promissory note of the Borrower payable
to  the  order  of  any  Revolving  Credit  Lender, in substantially the form of
Exhibit C-2  hereto, evidencing  the aggregate  indebtedness of  the Borrower to
such Revolving Credit Lender resulting  from the Revolving Credit Loans  made by
such Revolving Credit Lender.

         "S&P"  means  Standard  &  Poor's  Ratings  Services, a division of The
McGraw-Hill Companies, Inc. and any successor thereto.

         "SEC" means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.

         "Sellers" has the  meaning specified in  the Preliminary Statements  to
this Agreement.

         "Shareholders'  Equity"  means,  as  of  any  date  of   determination,
consolidated shareholders'  equity of  the Borrower  and its  Subsidiaries as of
that date determined in accordance with GAAP.

         "Solvent" and  "Solvency" mean,  with respect  to any  Person, and  its
Subsidiaries on a consolidated basis, on any date of determination, that on such
date (a) the fair value of the property of such Person, and its Subsidiaries  on
a  consolidated  basis,  is  greater  than  the  total  amount  of  liabilities,
including, without limitation, contingent  liabilities, of such Person,  and its
Subsidiaries on a consolidated basis, (b) the present fair salable value of  the
assets of such Person, and its Subsidiaries on a consolidated basis, is not less
than the  amount that  will be  required to  pay the  probable liability of such
Person, and  its Subsidiaries  on a  consolidated basis,  on its  debts as  they
become  absolute  and  matured,  (c)  such  Person,  and  its  Subsidiaries on a
consolidated basis, does not intend to, and does not believe that it will, incur
debts  or  liabilities  beyond  such  Person's  ability  to  pay  such debts and
liabilities  as  they  mature  and  (d)  such  Person, and its Subsidiaries on a
consolidated basis,  is not  engaged in  business or  a transaction,  and is not

                                       23

about to engage  in business or  a transaction, for  which the property  of such
Person,  and  its  Subsidiaries  on  a  consolidated  basis, would constitute an
unreasonably small capital.   The amount  of contingent liabilities  at any time
shall  be  computed  as  the  amount  that,  in  the  light of all the facts and
circumstances existing at such time,  represents the amount that can  reasonably
be expected to become an actual or matured liability.

         "SPC" has the meaning specified in Section 10.07(h).

         "Stock Sellers" has the meaning specified in the Preliminary Statements
to this Agreement.

         "Subsidiary"  of  a  Person  means  a  corporation,  partnership, joint
venture, limited liability company or other business entity of which a  majority
of the shares of securities or other interests having ordinary voting power  for
the election  of directors  or other  governing body  (other than  securities or
interests having such power  only by reason of  the happening of a  contingency)
are at  the time  beneficially owned,  or the  management of  which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by  such  Person.    Unless  otherwise  specified,  all  references  herein to a
"Subsidiary" or to "Subsidiaries" shall refer to a Subsidiary or Subsidiaries of
the Borrower.

         "Swap Contract"  means (a)  any and  all rate  swap transactions, basis
swaps,  credit  derivative  transactions,  forward  rate transactions, commodity
swaps, commodity options,  forward commodity contracts,  equity or equity  index
swaps or options, bond or bond price  or bond index swaps or options or  forward
bond or  forward bond  price or  forward bond  index transactions, interest rate
options,  forward  foreign   exchange  transactions,  cap   transactions,  floor
transactions, collar  transactions, currency  swap transactions,  cross-currency
rate swap transactions, currency options,  spot contracts, or any other  similar
transactions or any combination of  any of the foregoing (including  any options
to enter  into any  of the  foregoing), whether  or not  any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related  confirmations, which are subject to the  terms and
conditions of, or  governed by, any  form of master  agreement published by  the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange  Master  Agreement,  or  any  other  master  agreement (any such master
agreement, together with any related schedules, a "Master Agreement"), including
any such obligations or liabilities under any Master Agreement.

         "Swap Termination  Value" means,  in respect  of any  one or  more Swap
Contracts,  after  taking  into  account  the  effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or  after
the  date  such  Swap  Contracts  have  been closed out and termination value(s)
determined in accordance therewith, such  termination value(s), and (b) for  any
date prior to the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more  mid-  market  or  other  readily  available  quotations  provided  by  any
recognized dealer  in such  Swap Contracts  (which may  include a  Lender or any
Affiliate of a Lender).

         "Swing Line" means the revolving credit facility made available by  the
Swing Line Lender pursuant to Section 2.04.

         "Swing Line Borrowing" means a borrowing of a Swing Line Loan  pursuant
to Section 2.04.

         "Swing Line Lender" means KeyBank in its capacity as provider of  Swing
Line Loans, or any successor swing line lender hereunder.

                                       24

         "Swing Line Loan" has the meaning specified in Section 2.04(a).

         "Swing  Line  Loan  Notice"  means  a  notice of a Swing Line Borrowing
pursuant to Section 2.04(b), which, if in writing, shall be substantially in the
form of Exhibit B.

         "Swing  Line  Sublimit"  means  an  amount  equal  to the lesser of (a)
$15,000,000 and (b) the Revolving  Credit Commitments.  The Swing  Line Sublimit
is part of, and not in addition to, the Revolving Credit Facility.

         "Syndication Agent" means Merrill Lynch in its capacity as  syndication
agent under any of the Loan Documents, or any successor syndication agent.

         "Synthetic Lease Obligation" means the monetary obligation of a  Person
under (a) a so-called synthetic, off-  balance sheet or tax retention lease,  or
(b) an agreement for the use or possession of property creating obligations that
do not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).

         "Taxes" has the meaning specified in Section 3.01(a).

         "Term  Borrowing"  means  a  borrowing  consisting of simultaneous Term
Loans of the same Type and, in  the case of Eurocurrency Rate Loans, having  the
same  Interest  Period  made  by  each  of  the Term Lenders pursuant to Section
2.01(a).

         "Term Commitment" means, as to each Term Lender, its obligation to make
Term Loans to the Borrower pursuant to Section 2.01(a) in an aggregate principal
amount at any one time outstanding  not to exceed the amount set  forth opposite
such Lender's name on  Schedule 2.01 under the  caption "Term Commitment" or  in
the Assignment  and Assumption  pursuant to  which such  Lender becomes  a party
hereto, as  applicable, as  such amount  may be  adjusted from  time to  time in
accordance with this Agreement.

         "Term Facility"  means, at  any time,  the aggregate  Term Loans of all
Lenders at such time.

         "Term Lender" means, at any time, any Lender that has a Term Commitment
at such time.

         "Term  Loan"  means  an  advance  made  by  any  Lender  under the Term
Facility.

         "Term Note"  means a  promissory note  of the  Borrower payable  to the
order of  any Term  Lender, in  substantially the  form of  Exhibit C-1  hereto,
evidencing  the  aggregate  indebtedness  of  the  Borrower  to such Term Lender
resulting from the Term Loans made by such Term Lender.

         "Threshold Amount" means $35,000,000.

         "Total  Outstandings"  means  the  aggregate  Outstanding Amount of all
Loans and all L/C Obligations.

         "Transaction"  means,  collectively,   (a)  the  consummation   of  the
Acquisition, (b) to the extent issued,  the issuance and sale of the  High Grade
Notes, (c)  the IR  Equity Issuance,  (d) the  Public Equity  Issuance, (e)  the
entering into by the Loan Parties and their applicable Subsidiaries of the  Loan

                                       25

Documents, the High Grade Notes Documents, the Equity Documents and the  Related
Documents to which they are or are  intended to be a party, (f) the  refinancing
of certain outstanding Indebtedness of the Borrower and its Subsidiaries and the
termination of all commitments thereunder, and  (g) the payment of the fees  and
expenses incurred in connection with the consummation of the foregoing.

         "Type" means, with respect to a Loan, its character as a Base Rate Loan
or a Eurocurrency Rate Loan.

         "United States" and "U.S." mean the United States of America.

         "Unreimbursed Amount" has the meaning set forth in Section 2.03(c)(i).

         1.02 Other Interpretive Provisions.   With reference to  this Agreement
and each other Loan Document, unless otherwise specified herein or in such other
Loan Document:

         (a)  The  meanings  of  defined  terms  are  equally  applicable to the
    singular and plural forms of the defined terms.

         (b)   (i) The words "herein," "hereto," "hereof" and "hereunder" and
    words of similar import when used in any Loan Document shall refer to such
    Loan Document as a whole and not to any particular provision thereof.

         (ii)  Article, Section, Exhibit and Schedule references are to the
    Loan Document in which such reference appears.

         (iii) The term "including" is by way of example and not limitation.

         (iv)  The term "documents" includes any and all instruments,
    documents, agreements, certificates, notices, reports, financial statements
    and other writings, however evidenced, whether in physical or electronic
    form.

         (c)   In the computation of periods of time from a specified date to a
    later specified date, the word "from" means "from and including;" the words
    "to" and "until" each  mean  "to but excluding;" and the word "through"
    means "to and including."

         (d)   Section headings herein and in the other Loan Documents are
    included for convenience of reference only and shall not affect the
    interpretation of this Agreement or any other Loan Document.

         1.03 Accounting Terms.   (a) All  accounting terms not  specifically or
completely  defined  herein  shall  be  construed  in  conformity  with, and all
financial data  (including financial  ratios and  other financial  calculations)
required  to  be  submitted  pursuant  to  this  Agreement  shall be prepared in
conformity with, GAAP applied on a  consistent basis, as in effect from  time to
time, applied in  a manner consistent  with that used  in preparing the  Audited
Financial Statements, except as otherwise specifically prescribed herein.

         (b) If at any time any  change in GAAP would affect the  computation of
any financial ratio or  requirement set forth in  any Loan Document, and  either
the Borrower  or the  Required Lenders  shall so  request, the Co-Administrative
Agents, the Lenders and the Borrower shall negotiate in good faith to amend such
ratio or requirement to  preserve the original intent  thereof in light of  such
change in GAAP (subject to the approval of the Required Lenders); provided that,

                                       26

until so amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior  to such change therein  and (ii) the Borrower  shall
provide to the Co-Administrative Agents and the Lenders financial statements and
other  documents  required  under  this  Agreement  or  as  reasonably requested
hereunder setting forth a reconciliation  between calculations of such ratio  or
requirement made before and after giving effect to such change in GAAP.

         1.04 Rounding.  Any financial  ratios required to be maintained  by the
Borrower  pursuant  to  this  Agreement  shall  be  calculated  by  dividing the
appropriate component by the other  component, carrying the result to  one place
more than  the number  of places  by which  such ratio  is expressed  herein and
rounding the  result up  or down  to the  nearest number  (with a rounding-up if
there is no nearest number).

         1.05 References to Agreements and Laws.  Unless otherwise  expressly
provided  herein,  (a)  references  to
Organization  Documents,  agreements  (including  the  Loan Documents) and other
contractual instruments shall  be deemed to  include all subsequent  amendments,
restatements, extensions, supplements and other modifications thereto, but  only
to the extent  that such amendments,  restatements, extensions, supplements  and
other modifications are not prohibited by any Loan Document; and (b)  references
to any Law shall include all statutory and regulatory provisions  consolidating,
amending, replacing, supplementing or interpreting such Law.

         1.06 Times of Day.   Unless otherwise specified, all references  herein
to times of day  shall be references to  Eastern time (daylight or  standard, as
applicable).

         1.07  Letter  of  Credit  Amounts.    Unless  otherwise  specified, all
references herein  to the  amount of  a Letter  of Credit  at any  time shall be
deemed to mean  the maximum face  amount of such  Letter of Credit  at such time
after giving  effect to  all increases  thereof contemplated  by such  Letter of
Credit or the Letter of Credit Application therefor, whether or not such maximum
face amount is in effect at such time.

         1.08  Currency  Equivalents  Generally.    Any amount specified in this
Agreement  (other  than  in  Articles  II,  IX  and  X) or any of the other Loan
Documents to be in Dollars shall  also include the equivalent of such  amount in
any currency other than Dollars, such equivalent amount to be determined at  the
rate of exchange quoted by KeyBank  in Cleveland, Ohio at the close  of business
on the Business Day immediately preceding any date of determination thereof,  to
prime banks in New York, New York for the spot purchase in the New York  foreign
exchange market of such amount in Dollars with such other currency.

                                 ARTICLE II
                   THE COMMITMENTS AND CREDIT EXTENSIONS

         2.01 The Loans.   (a) The  Term Borrowings.   Subject to the  terms and
conditions set forth herein, each Term Lender severally agrees to make a  single
Term Loan in an amount equal to its  Pro Rata Share of the Term Facility to  the
Borrower on the Funding  Date.  The Term  Borrowing shall consist of  Term Loans
made simultaneously by the Term Lenders in accordance with their respective  Pro
Rata Share of the  Term Facility.  Amounts  borrowed under this Section  2.01(a)
and repaid or prepaid may not be reborrowed.  Term Loans may be Base Rate  Loans
or Eurocurrency Rate Loans, as further provided herein.

         (b)  The  Revolving  Credit  Borrowings.    Subject  to  the  terms and
conditions set forth  herein, each Revolving  Credit Lender severally  agrees to
make loans (each such loan, a "Revolving Credit Loan") to the Borrower from time
to time, on  any Business Day  during the Availability  Period, in an  aggregate

                                       27

amount (based in respect  of any Revolving Credit  Loans to be denominated  in a
Committed Currency by reference to the Equivalent thereof in Dollars  determined
on the date of delivery of  the applicable Committed Loan Notice) not  to exceed
at any time outstanding the amount of such Lender's Revolving Credit Commitment;
provided, however, that after giving  effect to any Revolving Credit  Borrowing,
(i) the Total Outstandings shall not exceed the Aggregate Commitments, (ii)  the
aggregate Outstanding Amount  of all Loans  denominated in a  Committed Currency
shall  not  exceed  the  Committed  Currency  Sublimit,  and (iii) the aggregate
Outstanding  Amount  of  the  Revolving  Credit  Loans  of any Lender, plus such
Lender's Pro Rata Share of the  Outstanding Amount of all L/C Obligations,  plus
such Lender's Pro Rata Share of  the Outstanding Amount of all Swing  Line Loans
shall not exceed such Lender's  Revolving Credit Commitment.  Within  the limits
of each Lender's Revolving Credit Commitment, and subject to the other terms and
conditions hereof, the  Borrower may borrow  under this Section  2.01(b), prepay
under Section 2.05, and reborrow  under this Section 2.01(b).   Revolving Credit
Loans may be  Base Rate Loans  or Eurocurrency Rate  Loans, as further  provided
herein.

         2.02 Borrowings, Conversions and Continuations of Loans.

         (a)  Each  Term  Borrowing,  each  Revolving  Credit  Borrowing,   each
conversion of Term Loans or Revolving  Credit Loans from one Type to  the other,
and  each  continuation  of  Eurocurrency  Rate  Loans  shall  be  made upon the
Borrower's  irrevocable  notice  to  the  Paying  Agent,  which  may be given by
telephone.  Each such notice must be received by the Paying Agent not later than
(i) 11:00 a.m. three Business Days prior to the requested date of any  Borrowing
of, conversion  to or  continuation of  Eurocurrency Rate  Loans denominated  in
Dollars or of any conversion  of Eurocurrency Rate Loans denominated  in Dollars
to Base Rate Loans  denominated in Dollars, (ii)  4:00 p.m. three Business  Days
prior to  the requested  date of  any Revolving  Credit Borrowing  consisting of
Eurocurrency Rate Loans denominated in  any Committed Currency, and (iii)  11:00
a.m. on the requested date of any Borrowing of Base Rate Loans.  Each telephonic
notice  by  the  Borrower  pursuant  to  this  Section 2.02(a) must be confirmed
promptly by delivery  to the Paying  Agent of a  written Committed Loan  Notice,
appropriately completed  and signed  by a  Responsible Officer  of the Borrower.
Each Borrowing  of, conversion  to or  continuation of  Eurocurrency Rate  Loans
shall be in a principal amount  of not less than the Revolving  Credit Borrowing
Minimum or the Revolving Credit Borrowing Multiple in excess thereof.  Except as
provided in  Sections 2.03(c)  and 2.04(c),  each Borrowing  of or conversion to
Base Rate Loans shall  be in a principal  amount of not less  than the Revolving
Credit Borrowing Minimum  or the Revolving  Credit Borrowing Multiple  in excess
thereof.    Each  Committed  Loan  Notice  (whether telephonic or written) shall
specify  (i)  whether  the  Borrower  is  requesting  a  Term  Loan Borrowing, a
Revolving Credit Borrowing, a conversion of Term Loans or Revolving Credit Loans
from one Type to the other,  or a continuation of Eurocurrency Rate  Loans, (ii)
the requested date of the Borrowing, conversion or continuation, as the case may
be (which shall be  a Business Day), (iii)  the principal amount of  Loans to be
borrowed, converted or continued,  (iv) the Type of  Loans to be borrowed  or to
which existing Term Loans or Revolving Credit Loans are to be converted, (v)  if
such Borrowing is a Revolving Credit Borrowing, the currency of such  Borrowing,
which shall  be Dollars  or a  Committed Currency  and (vi)  if applicable,  the
duration of the Interest Period with respect thereto.  If the Borrower fails  to
specify a Type of Loan  in a Committed Loan Notice  or if the Borrower fails  to
give  a  timely  notice  requesting  a  conversion  or  continuation,  then  the
applicable Term Loans or Revolving Credit  Loans shall be made as, or  converted
to, Base Rate Loans.  Any such automatic conversion to Base Rate Loans shall  be
effective as of the last day of the Interest Period then in effect with  respect
to the applicable Eurocurrency Rate Loans.  If the Borrower requests a Borrowing
of,  conversion  to,  or  continuation  of  Eurocurrency  Rate Loans in any such
Committed Loan  Notice, but  fails to  specify an  Interest Period,  it will  be
deemed to have specified an Interest Period of one month.

         (b) Following  receipt of  a Committed  Loan Notice,  the Paying  Agent
shall promptly notify  each Lender of  the amount of  its Pro Rata  Share of the

                                       28

applicable Term Loans or  Revolving Credit Loans, and  if no timely notice  of a
conversion or continuation is provided  by the Borrower, the Paying  Agent shall
notify each Lender of the details of any automatic conversion to Base Rate Loans
described  in  Section  2.02(a).    In  the  case  of a Term Loan Borrowing or a
Revolving Credit Borrowing, each Appropriate Lender shall make the amount of its
Loan available to the Paying Agent in immediately available funds at the  Paying
Agent's Office not  later than 1:00  p.m. on the  Business Day specified  in the
applicable Committed Loan  Notice, in the  case of a  Revolving Credit Borrowing
consisting of Loans denominated in Dollars, and before 5:00 p.m. on the date  of
such Revolving  Credit Borrowing,  in the  case of  a Revolving Credit Borrowing
consisting of  Eurocurrency Rate  Loans denominated  in any  Committed Currency.
Upon satisfaction of the applicable  conditions set forth in Section  4.03 (and,
if such  Borrowing is  the initial  Credit Extension,  Section 4.02), the Paying
Agent shall make all funds so  received available to the Borrower in  like funds
as received  by the  Paying Agent  either by  (i) crediting  the account  of the
Borrower on  the books  of KeyBank  with the  amount of  such funds or (ii) wire
transfer of such funds, in each case in accordance with instructions provided to
the Paying Agent by  the Borrower; provided, however,  that if, on the  date the
Committed Loan Notice with respect to  such Borrowing is given by the  Borrower,
there are Swing Line Loans or  L/C Borrowings outstanding, then the proceeds  of
such Borrowing shall be applied, first, to  the payment in full of any such  L/C
Borrowings, second, to  the payment in  full of any  such Swing Line  Loans, and
third, to  the Borrower  as provided  above.

         (c) Except as otherwise provided  herein, a Eurocurrency Rate Loan  may
be continued or converted  only on the last  day of an Interest  Period for such
Eurocurrency Rate  Loan.   During the  existence of  a Default,  no Loans may be
requested as, converted to or  continued as Eurocurrency Rate Loans  without the
consent of the Required Lenders.

         (d) The Paying Agent shall promptly notify the Borrower and the Lenders
of the  interest rate  applicable to  any Interest  Period for Eurocurrency Rate
Loans  upon  determination  of  such  interest  rate.   The determination of the
Eurocurrency Rate  by the  Paying Agent  shall be  conclusive in  the absence of
manifest error.  At  any time that Base  Rate Loans are outstanding,  the Paying
Agent shall notify the Borrower and the Lenders of any change in KeyBank's prime
rate  used  in  determining  the   Base  Rate  promptly  following  the   public
announcement of such change.

         (e) After giving  effect to all  Term Borrowings, all  Revolving Credit
Borrowings, all conversions of Term Loans or Revolving Credit Loans from one
Type to  the other,  and all  continuations of  Term Loans or  Revolving  Credit
Loans as the same Type, there  shall  not  be  more than ten Interest Periods in
effect.

         (f) The failure of any Lender to make the Loan to be made by it as part
of any Borrowing shall not relieve  any other Lender of its obligation,  if any,
hereunder to make its Loan on the date of such Borrowing, but no Lender shall be
responsible for the failure of any other  Lender to make the Loan to be  made by
such other Lender on the date of any Borrowing.

         2.03 Letters of Credit.

         (a)  The Letter of Credit Commitment.

         (i) On the Funding Date, each Existing Letter of Credit shall be deemed
    to have been issued hereunder by the Appropriate L/C  Issuer with respect to
    such Existing  Letter of Credit.   Subject  to  the terms and conditions set
    forth herein,  (A) each Appropriate L/C  Issuer agrees, in reliance upon the
    agreements of  the other Lenders set   forth in this Section 2.03,  (1) from
    time to time on  any Business Day  during the period  from the Funding  Date
    until the Letter of Credit Expiration  Date, to issue Letters  of Credit for
    the account of the  Borrower or any  Subsidiary  in Dollars or any Committed

                                       29

    Currency, and to amend or renew Letters of Credit  previously issued  by it,
    in accordance with Section 2.03(b),  and  (2)  to  honor  drafts  under  the
    Letters of Credit; and (B) the Revolving Credit  Lenders severally  agree to
    participate in Letters of Credit issued (or deemed to  have been issued) for
    the account of the Borrower; provided that no Appropriate L/C  Issuer  shall
    make any L/C Credit Extension with respect  to  any Letter of Credit, and no
    Lender shall be  obligated to  participate  in any Letter of Credit if as of
    the date of such L/C Credit  Extension,  (x) the  Total  Outstandings  would
    exceed the  Aggregate  Commitments, (y) the aggregate  Outstanding Amount of
    the  Loans of   any  Lender,  plus such   Lender's  Pro  Rata  Share  of the
    Outstanding  Amount  of  all L/C Obligations,  plus  such Lender's Pro  Rata
    Share of the Outstanding  Amount  of  all Swing Line Loans would exceed such
    Lender's  Revolving Credit  Commitment, or (z)the Outstanding Amount of  the
    L/C  Obligations  would exceed  the Letter of  Credit Sublimit.   Within the
    foregoing  limits,  and  subject to  the  terms  and  conditions hereof, the
    Borrower's ability to obtain Letters  of Credit  shall  be  fully revolving,
    and  accordingly the   Borrower may, during  the  foregoing   period, obtain
    Letters  of Credit to replace  Letters of Credit  that have  expired or that
    have been drawn upon and reimbursed.

         (ii) No Appropriate L/C Issuer  shall be under any obligation  to issue
    any Letter of Credit if:

              (A) any order,  judgment or  decree  of any Governmental Authority
         or  arbitrator shall  by its terms purport  to enjoin  or restrain such
         Appropriate L/C Issuer from issuing such Letter  of Credit, or  any Law
         applicable to such Appropriate L/C Issuer or  any  request or directive
         (whether  or  not having   the force  of  law)   from any  Governmental
         Authority  with  jurisdiction  over such  Appropriate L/C  Issuer shall
         prohibit, or request  that such  Appropriate   L/C Issuer refrain from,
         the issuance of letters of  credit  generally or such  Letter of Credit
         in particular  or  shall impose upon  such Appropriate L/C Issuer  with
         respect  to such Letter of Credit  any  restriction, reserve or capital
                                       33

         requirement (for which such  Appropriate L/C  Issuer  is not  otherwise
         compensated hereunder) not in effect on the Documentation Closing Date,
         or shall impose upon such Appropriate L/C Issuer any unreimbursed loss,
         cost or expense which was not applicable on  the Documentation  Closing
         Date and which such Appropriate L/C Issuer in good faith deems material
         to it;

              (B) subject  to  Section 2.03(b)(iii),  the  expiry  date  of such
         requested Letter  of Credit would  occur m ore than twelve months after
         the date of issuance or last renewal,  unless the Required Lenders have
         approved such expiry date;

              (C) the expiry date of such requested Letter of Credit would occur
         after the Letter of Credit Expiration Date, unless all the Lenders have
         approved such expiry date;

              (D) the  issuance  of such  Letter of  Credit would violate one or
         more  policies  of such  Appropriate L/C Issuer; or

              (E) such  Letter  of Credit  is in an  initial   amount less  than
         $100,000, in the case of a commercial Letter of Credit, or $500,000, in
         the case  of a standby Letter of Credit, or is to be  denominated  in a
         currency  other  than  Dollars  or a   Committed   Currency.

         (iii)  No Appropriate L/C Issuer shall be under any obligation to amend
    any Letter  of  Credit if (A) such  Appropriate  L/C Issuer  would   have no
    obligation at such time to issue such Letter of Credit in its  amended  form
    under the terms hereof, or (B) the beneficiary of such Letter of Credit does
    not accept the proposed amendment to such Letter of Credit.

                                       30

         (b) Procedures  for  Issuance  and  Amendment  of  Letters  of Credit;
    Auto-Renewal Letters of Credit.

         (i) Each Letter of Credit shall  be issued or amended, as the  case may
    be, upon  the  request of  the  Borrower  delivered to  the  Appropriate L/C
    Issuer (with a copy  to the  Paying Agent) in the form of a Letter of Credit
    Application, appropriately completed  and signed  by a   Responsible Officer
    of the Borrower.   Such Letter of Credit Application must be received by the
    Appropriate L/C Issuer  and the Paying  Agent  not later than 11:00  a.m. at
    least two Business Days (or such later date and  time  as  such  Appropriate
    L/C Issuer may agree in a  particular instance in its sole discretion) prior
    to the proposed issuance date or date   of amendment,  as the  case may  be.
    In the  case of a  request for  an  initial  issuance of a Letter of Credit,
    such  Letter  of   Credit Application  shall   specify in  form  and  detail
    satisfactory to the Appropriate L/C Issuer: (A) the proposed  issuance  date
    of the requested Letter of Credit (which  shall be a Business Day); (B)  the
    amount thereof; (C) the expiry date thereof; (D) the name and address of the
    beneficiary thereof; (E) the documents to be  presented by such  beneficiary
    in case of any drawing thereunder; (F) the full text of any  certificate  to
    be presented by such  beneficiary  in case  of any  drawing  thereunder; (G)
    whether such Letter of Credit is to be denominated in Dollars or a Committed
    Currency and in the absence of such  specification  shall be deemed to  be a
    request for  a Letter of  Credit denominated in Dollars; and (H) such  other
    matters  as such  Appropriate  L/C Issuer may require.   In  the  case  of a
    request for an amendment of  any outstanding  Letter of Credit, such  Letter
    of Credit  Application shall specify  in form and detail satisfactory to the
    Appropriate L/C  Issuer  (A)  the  Letter  of  Credit  to  be  amended;  (B)
    the proposed date of amendment thereof (which  shall  be  a  Business  Day);
    (C) the nature of the proposed amendment; and (D) such other matters as such
    Appropriate L/C Issuer may require.

         (ii) Promptly after  receipt of any  Letter of Credit  Application, the
    Appropriate L/C Issuer will  confirm with the Paying  Agent (by telephone or
    in writing) that  the Paying  Agent has  received a  copy of  such Letter of
    Credit  Application from  the Borrower  and,  if  not, such  Appropriate L/C
    Issuer will provide  the Paying Agent  with a copy thereof.  Upon receipt by
    such  Appropriate  L/C Issuer of confirmation from the Paying Agent that the
    requested issuance or  amendment is  permitted in  accordance with the terms
    hereof, then, subject to the  terms and conditions  hereof, such Appropriate
    L/C Issuer shall, on the requested  date, issue  a Letter of  Credit for the
    account of the Borrower or enter into the  applicable amendment, as the case
    may be,in each case in accordance with such  Appropriate L/C Issuer's  usual
    and customary  business practices. Immediately  upon the issuance (or deemed
    (issuance) of each Letter of Credit, each Revolving  Credit Lender  shall be
    deemed to, and hereby  irrevocably and unconditionally  agrees to,  purchase
    from the  Appropriate  L/C Issuer a risk  participation  in  such  Letter of
    Credit in an amount equal to the  product of  such  Lender's Pro  Rata Share
    times the amount of such Letter of Credit.

         (iii) If the Borrower so requests in  any applicable  Letter of  Credit
    Application, the Appropriate L/C Issuer shall  agree to  issue a  Letter  of
    Credit that has automatic renewal provisions (each, an  "Auto-Renewal Letter
    of Credit");  provided that  any such  Auto-Renewal  Letter   of Credit must
    permit such Appropriate L/C Issuer to prevent any such renewal at least once
    in each twelve-month period (commencing with the date  of issuance  of  such
    Letter of Credit)  by giving  prior  notice   to the beneficiary thereof not
    later than a day  (the "Nonrenewal  Notice Date") in each  such twelve-month
    period to be agreed upon at the time such Letter of Credit is issued. Unless
    otherwise directed by such Appropriate L/C Issuer, the Borrower shall not be
    required to make a specific request to such Appropriate L/C  Issuer  for any
    such renewal.  Once an  Auto-Renewal  Letter of Credit  has been issued, the
    Lenders   shall  be  deemed  to  have  authorized (but may not require) such
    Appropriate L/C Issuer  to permit the  renewal of such  Letter of Credit  at

                                       31

    any time to an expiry date not  later than  the Letter  of Credit Expiration
    Date; provided, however, that such Appropriate L/C  Issuer shall not  permit
    any such  renewal if (A) such Appropriate  L/C Issuer has determined that it
    would have no  obligation at such time to issue such Letter of Credit in its
    renewed form under  the  terms  hereof  (by  reason  of  the  provisions  of
    Section 2.03(a)(ii) or otherwise),  or   (B) it  has received  notice (which
    may be by telephone or in writing) on or before the day that is two Business
    Days before the Nonrenewal Notice Date from the Paying Agent,  any Revolving
    Credit Lender or the Borrower that one or more of the  applicable conditions
    specified in Section 4.03 is not then satisfied.

         (iv) Promptly  after its  delivery  of   any  Letter  of  Credit or any
    amendment to a Letter of Credit to  an advising bank with respect thereto or
    to the beneficiary  thereof, the  Appropriate L/C  Issuer will  also deliver
    to the Borrower and the Paying Agent a true and complete copy of such Letter
    of Credit or amendment.

     (c) Drawings and Reimbursements; Funding of Participations.

         (i) Upon receipt from the beneficiary of any Letter of  Credit of  any
    notice of a drawing under such Letter of Credit, the Appropriate L/C Issuer
    shall notify the Borrower  and the  Paying  Agent  thereof.  Not later than
    12:00 noon on the date of any payment by the Appropriate L/C Issuer under a
    Letter of  Credit  (each such  date, an  "Honor Date"),  the Borrower shall
    reimburse such Appropriate L/C Issuer through the Paying Agent in an amount
    equal to the amount of such drawing. If the Borrower fails to so  reimburse
    such Appropriate L/C Issuer by such time, the  Paying  Agent shall promptly
    notify each Revolving Credit Lender of the Honor  Date,  the  amount of the
    unreimbursed drawing (the "Unreimbursed Amount"), and the Equivalent amount
    of such Revolving Credit Lender's Pro Rata Share thereof. In such event,the
    Borrower shall be deemed to have requested a Revolving Credit  Borrowing in
    Dollars  of  Base Rate   Loans to be  disbursed on  the  Honor  Date  in an
    Equivalent amount equal to the Unreimbursed Amount,  without regard  to the
    minimum and multiples specified in Section 2.02 for the principal amount of
    Base Rate Loans, but subject to the amount of the unutilized portion of the
    Revolving Credit  Commitments and the  conditions set forth in Section 4.03
    (other than the delivery of a Committed Loan Notice). Any notice   given by
    an  Appropriate  L/C  Issuer or  the   Paying  Agent   pursuant   to   this
    Section 2.03(c)(i) may   be given by telephone if  immediately confirmed in
    writing; provided that the lack of such an immediate confirmation shall not
    affect the conclusiveness or binding effect of such notice.

         (ii) Each Revolving Credit Lender (including  any Lender acting as  an
    Appropriate   L/C   Issuer)   shall  upon    any   notice    pursuant    to
    Section 2.03(c)(i) make funds available to the Paying Agent for the account
    of the Appropriate L/C Issuer at the Paying Agent's Office in an Equivalent
    amount equal to its Pro Rata  Share of  the Unreimbursed  Amount not  later
    than 1:00 p.m. on the Business Day  specified in such  notice by the Paying
    Agent, whereupon, subject to the provisions of   Section 2.03(c)(iii), each
    Revolving Credit  Lender that  so makes funds  available shall be deemed to
    have made a Base Rate Loan in Dollars to the Borrower in such amount.   The
    Paying Agent shall   remit the funds  so received  to such  Appropriate L/C
    Issuer.

         (iii) With  respect to  any  Unreimbursed   Amount that  is not  fully
    refinanced by a Revolving Credit Borrowing of Base Rate  Loans  because the
    conditions  set forth in  Section 4.03 cannot be satisfied or for any other
    reason, the Borrower shall be deemed to have  incurred from the Appropriate
    L/C Issuer an L/C Borrowing  in the amount of the  Unreimbursed Amount that
    is not so   refinanced, which L/C  Borrowing  shall be due   and payable on
    demand  (together with interest)  and shall  bear interest  at the  Default
    Rate. In such event, each Revolving  Credit Lender's  payment to the Paying
    Agent   for the   account  of  the  Appropriate L/C   Issuer  pursuant   to

                                       32

    Section 2.03(c)(ii) shall be deemed payment in respect of its participation
    in such L/C Borrowing and  shall constitute an L/C Advance from such Lender
    in satisfaction of its participation obligation under this Section 2.03.

         (iv) Until each  Revolving  Credit Lender  funds its  Revolving Credit
    Loan or L/C Advance   pursuant to this  Section 2.03(c)  to  reimburse  the
    Appropriate L/C Issuer  for any  amount  drawn under any  Letter of Credit,
    interest in respect of such Lender's Pro Rata Share of such amount shall be
    solely for the account of such Appropriate L/C Issuer.

         (v) Each Revolving Credit Lender's obligation to make Revolving Credit
    Loans or L/C Advances  to reimburse an  Appropriate  L/C Issuer for amounts
    drawn under  Letters of Credit,  as  contemplated  by this Section 2.03(c),
    shall be   absolute and  unconditional  and shall  not be   affected by any
    circumstance,  including (A) any setoff,  counterclaim, recoupment, defense
    or other right  which such  Lender  may have   against such Appropriate L/C
    Issuer, the Borrower or any other Person for any reason whatsoever; (B) the
    occurrence or continuance of a Default, or (C) any other  occurrence, event
    or condition,  whether  or not similar  to any of  the foregoing; provided,
    however, that each Revolving Credit  Lender's obligation  to make Revolving
    Credit Loans pursuant to  this Section 2.03(c) is subject to the conditions
    set   forth in  Section 4.03  (other than   delivery by  the  Borrower of a
    Committed Loan Notice). No such making of an L/C  Advance shall  relieve or
    otherwise   impair  the  obligation  of   the Borrower  to   reimburse  any
    Appropriate   L/C   Issuer  for  the  amount  of  any  payment made by such
    Appropriate  L/C Issuer under any Letter of Credit, together with  interest
    as provided herein.

         (vi) If any  Revolving  Credit Lender  fails to make available to  the
    Paying Agent  for the account  of any Appropriate   L/C Issuer  any  amount
    required to be paid by such Lender pursuant to the  foregoing provisions of
    this Section 2.03(c) by the time  specified in   Section 2.03(c)(ii),  such
    Appropriate  L/C  Issuer  shall be   entitled to  recover  from such Lender
    (acting  through  the Paying Agent),  on demand, such amount  with interest
    thereon for the period from the date such payment is  required to the  date
    on which such  payment is  immediately  available to  such  Appropriate L/C
    Issuer at a rate per annum  equal to the  Federal Funds  Rate from  time to
    time in effect. A certificate  of such Appropriate  L/C Issuer submitted to
    any Revolving Credit Lender (through the  Paying Agent) with respect to any
    amounts owing  under this   Section 2.03(c)(vi)  shall be conclusive absent
    manifest error.

         (d)  Repayment of Participations.

         (i)  At any time after  any Appropriate  L/C Issuer has made a payment
    under any  Letter of Credit  and has   received from  any  Revolving Credit
    Lender such Lender's L/C Advance in respect of  such payment  in accordance
    with Section 2.03(c), if the Paying  Agent receives for the account of such
    Appropriate L/C  Issuer any  payment in respect of the related Unreimbursed
    Amount   or  interest  thereon   (whether directly  from  the   Borrower or
    otherwise, including proceeds  of  Cash   Collateral applied thereto by the
    Paying Agent), the Paying Agent will distribute to such Lender its Pro Rata
    Share thereof (appropriately adjusted, in the case of interest payments, to
    reflect   the period  of  time during  which such  Lender's L/C Advance was
    outstanding) in the same funds as those received by the Paying Agent.

         (ii) If any payment  received by the  Paying Agent for the  account of
    any Appropriate L/C Issuer pursuant to Section 2.03(c)(i) is required to be
    returned  under  any  of  the  circumstances   described in   Section 10.06
    (including pursuant to any settlement entered into by such Appropriate  L/C
    Issuer in its  discretion), each  Revolving Credit Lender  shall pay to the
    Paying Agent for the   account of such  Appropriate L/C Issuer its Pro Rata

                                       33

    Share thereof on demand of the Paying Agent, plus interest thereon from the
    date of such demand to the date such amount is returned by such Lender,  at
    a rate  per annum  equal to  the  Federal Funds  Rate  from time to time in
    effect.

         (e)  Obligations Absolute. The obligation of the Borrower to reimburse
    any Appropriate L/C Issuer for each drawing under each Letter of Credit and
    to repay   each  L/C  Borrowing   shall be  absolute,   unconditional   and
    irrevocable, and  shall be  paid  strictly in  accordance with the terms of
    this Agreement under all circumstances, including the following:

         (i)  any lack of validity or enforceability of  such Letter of Credit,
    this Agreement, or any other agreement or instrument relating thereto;

         (ii) the   existence of  any claim,  counterclaim, setoff,  defense or
    other right that the Borrower may have at any time against any  beneficiary
    or any transferee of such Letter of Credit (or any Person for whom any such
    beneficiary  or  any  such  transferee may be acting), any  Appropriate L/C
    Issuer or any other Person,  whether in connection with this Agreement, the
    transactions  contemplated   hereby  or  by  such  Letter of Credit  or any
    agreement or instrument relating thereto, or any unrelated transaction;

         (iii) any draft, demand, certificate or other document presented under
    such  Letter  of  Credit  proving  to  be forged,  fraudulent,   invalid or
    insufficient   in any  respect or  any  statement  therein  being untrue or
    inaccurate  in  any  respect;  or any loss or delay  in the transmission or
    otherwise of any   document required in order  to make a drawing under such
    Letter of Credit;

         (iv) any payment by the Appropriate L/C Issuer  under  such Letter  of
    Credit against  presentation  of  a  draft  or   certificate that  does not
    strictly  comply with  the terms  of such Letter of Credit;  or any payment
    made by such   Appropriate L/C Issuer  under  such  Letter of Credit to any
    Person purporting to  be a trustee  in  bankruptcy,   debtor-in-possession,
    assignee  for the  benefit  of  creditors,  liquidator,   receiver or other
    representative of or successor to any beneficiary or any transferee of such
    Letter of Credit, including any  arising in  connection with any proceeding
    under any Debtor Relief Law;

         (v)  any exchange, release or nonperfection  of any collateral, or any
    release or amendment or waiver of or consent to departure from the Guaranty
    or any other  guarantee,  for  all or any  of  the   L/C Obligations of the
    Borrower in respect of such Letter of Credit; or

         (vi) any other circumstance  or  happening whatsoever,  whether or not
    similar to  any  of  the   foregoing, including any other circumstance that
    might otherwise constitute a defense available  to, or a discharge of,  the
    Borrower.

         The Borrower shall promptly examine a copy of each Letter of Credit
and each amendment thereto that is delivered to it and, in the event of any
claim of noncompliance with the Borrower's instructions or other irregularity,
the Borrower will immediately notify the Appropriate L/C Issuer.  The Borrower
shall be conclusively deemed to have waived any such claim against such
Appropriate L/C Issuer and its correspondents unless such notice is given as
aforesaid.

         (f) Role of Appropriate L/C Issuer.  Each Lender and the Borrower agree
that, in paying any drawing under a Letter of Credit, the Appropriate L/C Issuer
shall not have any responsibility to  obtain any document (other than any  sight
draft, certificates and documents expressly required by the Letter of Credit) or
to ascertain or inquire as to the  validity or accuracy of any such document  or
the authority of the Person executing or delivering any such document.  None  of
any Appropriate L/C Issuer, any  Agent-Related Person nor any of  the respective

                                       34

correspondents, participants or assignees of any Appropriate L/C Issuer shall be
liable to any Lender for (i) any action taken or omitted in connection  herewith
at the request or  with the approval ofthe  Lenders or the Required  Lenders, as
applicable; (ii) any action taken or omitted in the absence of gross  negligence
or willful misconduct;  or (iii) the  due execution, effectiveness,  validity or
enforceability of any document or instrument related to any Letter of Credit  or
Letter of Credit Application.  The Borrower hereby assumes all risks of the acts
or omissions of  any beneficiary or  transferee with respect  to its use  of any
Letter of Credit;  provided, however, that  this assumption is  not intended to,
and shall not, preclude the Borrower's  pursuing such rights and remedies as  it
may  have  against  the  beneficiary  or  transferee  at  law or under any other
agreement.  None  of any Appropriate  L/C Issuer, any  Agent-Related Person, nor
any  of  the  respective  correspondents,  participants  or  assignees  of   any
Appropriate L/C Issuer, shall  be liable or responsible  for any of the  matters
described in clauses (i) through (v) of Section 2.03(e); provided,  however,that
anything in such clauses to the contrary notwithstanding, the Borrower may  have
a claim against an Appropriate L/C Issuer, and an Appropriate L/C Issuer may  be
liable to the Borrower, to the extent, but only to the extent, of any direct, as
opposed to consequential  or exemplary, damages  suffered by the  Borrower which
the  Borrower  proves  were  caused  by  such  Appropriate  L/C Issuer's willful
misconduct or gross negligence or such Appropriate L/C Issuer's willful  failure
to  pay  under  any  Letter  of  Credit  after  the  presentation  to  it by the
beneficiary of  a sight  draft and  certificate(s) strictly  complying with  the
terms  and  conditions  of  a  Letter  of  Credit.    In  furtherance and not in
limitation of  the foregoing,  any Appropriate  L/C Issuer  may accept documents
that appear on  their face to  be in order,  without responsibility for  further
investigation, regardless of any notice or information to the contrary, and such
Appropriate L/C Issuer shall not be responsible for the validity or  sufficiency
of any instrument transferring or assigning or purporting to transfer or  assign
a Letter of Credit or the rights or benefits thereunder or proceeds thereof,  in
whole or in part, which may prove to be invalid or ineffective for any reason.

         (g) Cash Collateral.  Upon the  request of the Paying Agent, (i)if  any
Appropriate L/C Issuer has honored any full or partial drawing request under any
Letter of Credit and such drawing has resulted in an L/C Borrowing, or (ii)  if,
as of the  Letter of Credit  Expiration Date, any  Letter of Credit  may for any
reason remain outstanding  and partially or  wholly undrawn, the  Borrower shall
immediately  Cash  Collateralize  the   then  Outstanding  Amount  of   all  L/C
Obligations (in an amount equal to such Outstanding Amount determined as of  the
date of such L/C Borrowing or the Letter of Credit Expiration Date, as the  case
may be).  For purposes hereof, "Cash Collateralize" means to pledge and  deposit
with or  deliver to  the Paying  Agent, for  the benefit  of the Appropriate L/C
Issuers and the Lenders, as collateral for the L/C Obligations, cash or  deposit
account balances pursuant to documentation in form and substance satisfactory to
the Paying  Agent and  the Appropriate  L/C Issuers  (which documents are hereby
consented  to  by  the  Lenders).    Derivatives of such term have corresponding
meanings.  The Borrower  hereby grants to the  Paying Agent, for the  benefit of
the L/C Issuers and the Lenders,  a security interest in all such  cash, deposit
accounts and  all balances  therein and  all proceeds  of the  foregoing.   Cash
collateral shall be maintained in blocked, non-interest bearing deposit accounts
at KeyBank.  If at any time  the Paying Agent determines that any funds  held as
Cash Collateral are subject to any right  or claim of any Person other than  the
Paying Agent or that the total amount  of such funds is less than the  aggregate
Outstanding Amount  of all  L/C Obligations,  the Borrower  will, forthwith upon
demand by the Paying Agent, pay to  the Paying Agent, as additional funds to  be
deposited and held in  the deposit accounts at  KeyBank as aforesaid, an  amount
equal to the excess of (a) such aggregate Outstanding Amount over (b) the  total
amount of  funds, if  any, then  held as  Cash Collateral  that the Paying Agent
determines to be free and clear of  any such right and claim.  Upon  the drawing
of any Letter of Credit for which funds are on deposit as Cash Collateral,  such
funds  shall  be  applied,  to  the  extent  permitted  under applicable law, to
reimburse  the  Appropriate  L/C  Issuer.

         (h) Applicability of ISP98 and UCP.  Unless otherwise expressly  agreed
by the Appropriate L/C Issuer and the Borrower when a Letter of Credit is issued
(or deemed issued), (i) the rules of the "International Standby Practices  1998"
published by  the Institute  of International  Banking Law  & Practice  (or such

                                       35

later version thereof as may be in  effect at the time of issuance) shall  apply
to each standby Letter of Credit, and (ii) the rules of the Uniform Customs  and
Practice  for   Documentary  Credits,   as  most   recently  published   by  the
International Chamber of Commerce (the "ICC") at the time of issuance (or deemed
issuance) (including  the ICC  decision published  by the  Commission on Banking
Technique and Practice on April  6, 1998 regarding the European  single currency
(euro)) shall apply to each commercial Letter of Credit.

         (i) Letter of Credit Fees.  The Borrower shall pay to the Paying  Agent
for the account of each Revolving Credit Lender in accordance with its Pro  Rata
Share a Letter of Credit fee for  each Letter of Credit equal to the  Applicable
Rate times the daily maximum amount  available to be drawn under such  Letter of
Credit (whether or not such maximum  amount is then in effect under  such Letter
of Credit).  Such letter of credit  fees shall be computed on a quarterly  basis
in arrears.  Such letter  of credit fees shall be  due and payable on the  first
Business  Day  after  the  end  of  each  March,  June,  September and December,
commencing with  the first  such date  to occur  after the  issuance (or  deemed
issuance) of such Letter of Credit, on the Letter of Credit Expiration Date  and
thereafter on demand.  If there is any change in the Applicable Rate during  any
quarter, the daily maximum amount of each Letter of Credit shall be computed and
multiplied by the Applicable Rate separately for each period during such quarter
that such Applicable Rate was in effect.

         (j)  Fronting  Fee  and  Documentary  and Processing Charges Payable to
Appropriate L/C Issuers.   The Borrower  shall pay directly  to each Appropriate
L/C Issuer for  its own account  a fronting fee  with respect to  each Letter of
Credit issued (or deemed issued) by such Appropriate L/C Issuer equal to  0.125%
times the daily maximum amount available to be drawn under such Letter of Credit
(whether or  not such  maximum amount  is then  in effect  under such  Letter of
Credit).  Such letter of credit fees  shall be computed on a quarterly basis  in
arrears.   Such letter  of credit  fees shall  be due  and payable  on the first
Business  Day  after  the  end  of  each  March,  June,  September and December,
commencing with  the first  such date  to occur  after the  issuance (or  deemed
issuance) of such Letter of Credit, on the Letter of Credit Expiration Date  and
thereafter on  demand.   In addition,  the Borrower  shall pay  directly to each
Appropriate L/C Issuer for its own account the customary issuance, presentation,
amendment and other  processing fees, and  other standard costs  and charges, of
such Appropriate L/C Issuer relating to  letters of credit as from time  to time
in effect.   Such  customary fees  and standard  costs and  charges are  due and
payable on demand and are nonrefundable.

         (k) Conflict with Letter  of Credit Application.   In the event of  any
conflict  between  the  terms  hereof  and  the  terms  of  any Letter of Credit
Application, the terms hereof shall control.

         2.04 Swing Line Loans

         (a) The  Swing Line.   Subject  to the  terms and  conditions set forth
herein, the Swing  Line Lender agrees  to make loans  (each such loan,  a "Swing
Line Loan") to  the Borrower from  time to time  on any Business  Day during the
Availability Period in an aggregate amount not to exceed at any time outstanding
the amount of the Swing Line Sublimit, notwithstanding the fact that such  Swing
Line Loans, when aggregated with the Pro Rata Share of the Outstanding Amount of
Loans and L/C Obligations of the Lender acting as Swing Line Lender, may  exceed
the amount  of such  Lender's Commitment;  provided, however,  that after giving
effect to any Swing Line Loan,  (i) the Total Outstandings shall not  exceed the
Aggregate  Commitments,  and  (ii)  the  aggregate  Outstanding  Amount  of  the
Revolving Credit Loans of any Lender,  plus such Lender's Pro Rata Share  of the
Outstanding Amount of all L/C Obligations, plus such Lender's Pro Rata Share  of
the Outstanding Amount of  all Swing Line Loans  shall not exceed such  Lender's
Revolving Credit Commitment,  and provided further  that the Borrower  shall not
use the proceeds of any Swing Line Loan to refinance any outstanding Swing  Line
Loan.    Within  the  foregoing  limits,  and  subject  to  the  other terms and
conditions hereof, the Borrower may borrow under this Section 2.04, prepay under

                                       36

Section 2.05, and reborrow under this Section 2.04.  Each Swing Line Loan  shall
be a Base Rate  Loan denominated in Dollars.   Immediately upon the  making of a
Swing Line Loan,  each Revolving Credit  Lender shall be  deemed to, and  hereby
irrevocably and unconditionally agrees to, purchase from the Swing Line Lender a
risk participation in such Swing Line Loan in an amount equal to the product  of
such Lender's Pro Rata Share times the amount of such Swing Line Loan.

         (b) Borrowing Procedures.  Each Swing Line Borrowing shall be made upon
the Borrower's irrevocable notice to the Swing Line Lender and the Paying Agent,
which may be given by telephone.  Each such notice must be received by the Swing
Line Lender  and the  Paying Agent  not later  than 1:00  p.m. on  the requested
borrowing date, and shall specify (i) the amount to be borrowed, which shall  be
a minimum of $100,000, and (ii)  the requested borrowing date, which shall  be a
Business  Day.    Each  such  telephonic  notice  must  be confirmed promptly by
delivery to the Swing Line Lender and  the Paying Agent of a written Swing  Line
Loan Notice, appropriately completed and signed by a Responsible Officer of  the
Borrower.  Promptly  after receipt by  the Swing Line  Lender of any  telephonic
Swing Line Loan Notice, the Swing Line Lender will confirm with the Paying Agent
(by telephone or in writing) that the Paying Agent has also received such  Swing
Line Loan Notice and, if not, the Swing Line Lender will notify the Paying Agent
(by telephone or  in writing) of  the contents thereof.   Unless the  Swing Line
Lender has received notice  (by telephone or in  writing) from the Paying  Agent
(including at the request of any Revolving Credit Lender) prior to 2:00 p.m.  on
the date  of the  proposed Swing  Line Borrowing  (A) directing  the Swing  Line
Lender not to make such Swing Line Loan as a result of the limitations set forth
in the proviso to the first sentence of Section 2.04(a), or (B) that one or more
of the applicable  conditions specified in  Section 4.03 is  not then satisfied,
then, subject to the  terms and conditions hereof,  the Swing Line Lender  will,
not later than 3:00 p.m. on the borrowing date specified in such Swing Line Loan
Notice, make the amount of its Swing Line Loan available to the Borrower at  its
office by crediting the account of the  Borrower on the books of the Swing  Line
Lender in immediately available funds.

         (c)  Refinancing of Swing Line Loans.

         (i)  The  Swing  Line  Lender  at  any  time  in  its sole and absolute
    discretion may request, on behalf of the Borrower (which hereby  irrevocably
    authorizes the Swing Line Lender  to  so  request  on its behalf), that each
    Revolving Credit Lender make a  Base  Rate  Loan  in an amount equal to such
    Lender's Pro Rata Share of the amount of Swing Line  Loans then outstanding.
    Such request shall be made in writing (which written request shall be deemed
    to be a Committed Loan Notice for  purposes hereof)  and in  accordance with
    the  requirements  of   Section  2.02,  without  regard  to  the minimum and
    multiples specified therein for the principal amount of Base Rate Loans, but
    subject to the  unutilized portion  of the Revolving  Credit Commitments and
    the  conditions  set forth in  Section 4.03.   The Swing Line   Lender shall
    furnish the Borrower  with a copy  of the applicable  Committed  Loan Notice
    promptly after delivering such notice to  the Paying Agent.   Each Revolving
    Credit  Lender shall   make an  amount equal  to its  Pro Rata  Share of the
    amount specified in such Committed Loan Notice available to the Paying Agent
    in immediately available funds for the account of the  Swing Line Lender  at
    the Paying Agent's Office not  later than 1:00 p.m. on  the day specified in
    such Committed Loan Notice, whereupon, subject to Section 2.04(c)(ii),  each
    Revolving  Credit Lender  that so makes  funds  available shall be deemed to
    have made a Base Rate Loan to the Borrower in such amount. The Paying  Agent
    shall remit the funds so received to the Swing Line Lender.

         (ii)  If for any reason any Swing Line  Loan cannot be refinanced  by a
    Revolving Credit Borrowing in accordance with Section 2.04(c)(i),the request
    for  Base Rate Loans submitted by  the Swing Line Lender as set forth herein
    shall  be deemed to be a  request by the Swing Line  Lender that each of the
    Revolving Credit Lenders  fund its risk participation  in the relevant Swing
    Line Loan and each  Revolving Credit  Lender's  payment to the Paying  Agent

                                       37

    for the  account of  the  Swing  Line  Lender pursuant to Section 2.04(c)(i)
    shall be deemed payment in respect of such participation.

         (iii) If any Revolving   Credit Lender fails to make available  to  the
    Paying Agent for the account of the Swing Line Lender any amount required to
    be paid by such Lender pursuant to the foregoing  provisions of this Section
    2.04(c) by the  time specified in Section 2.04(c)(i), the  Swing Line Lender
    shall be  entitled to  recover from  such Lender  (acting through the Paying
    Agent), on demand,  such  amount with  interest thereon for the period  from
    the date   such  payment  is required to the date  on which  such payment is
    immediately available to the Swing Line Lender at a  rate per annum equal to
    the Federal Funds Rate from time to  time in effect.    A certificate of the
    Swing Line Lender  submitted to any  Lender (through the Paying  Agent) with
    respect to any amounts  owing  under  this  Section  2.04(c)(iii)  shall  be
    conclusive absent manifest error.

         (iv)  Each  Revolving  Credit  Lender's   obligation to make  Revolving
    Credit Loans or to purchase and fund risk participations in Swing Line Loans
    pursuant to this   Section 2.04(c)  shall be  absolute and  unconditionaland
    shall   not  be   affected   by  any circumstance, including (A) any setoff,
    counterclaim, recoupment, defense or other right which such Lender may  have
    against  the Swing Line  Lender,  the  Borrower or any other Person for  any
    reason whatsoever, (B) the  occurrence or continuance  of a Default,  or (C)
    any other  occurrence, event or condition, whether  or not similar to any of
    the foregoing; provided,  however,  that   each  Revolving  Credit  Lender's
    obligation to make Revolving  Credit Loans pursuant to this Section  2.04(c)
    is subject to the conditions set forth in  Section 4.03. No  such funding of
    risk participations shall relieve  or otherwise impair the obligation of the
    Borrower to repay  Swing Line Loans,  together  with  interest  as  provided
    herein.

         (d)  Repayment of Participations.

         (i)  At any time after any  Revolving  Credit  Lender has purchased and
    funded a risk participation in a Swing Line Loan, if the   Swing Line Lender
    receives any payment  on account  of such  Swing Line  Loan,  the Swing Line
    Lender will  distribute  to such  Lender its  Pro Rata Share of such payment
    (appropriately adjusted,  in the case  of interest payments,  to reflect the
    period of time during which such Lender's risk participation was  funded) in
    the same funds as those received by the Swing Line Lender.

         (ii) If any payment  received by  the Swing  Line Lender in respect  of
    principal or interest on any Swing Line Loan is required to  be  returned by
    the   Swing Line Lender   under  any  of  the   circumstances   described in
    Section 10.06 (including pursuant  to any  settlement  entered  into by  the
    Swing Line Lender in its discretion), each Revolving Credit Lender shall pay
    to the Swing Line Lender its  Pro Rata Share thereof on demand of the Paying
    Agent, plus interest thereon from the date of  such demand to the  date such
    amount is returned, at a rate per annum equal to the Federal Funds Rate. The
    Paying Agent will make such demand upon the request of the Swing Line Lender.

         (e) Interest for Account of Swing  Line Lender.  The Swing Line  Lender
shall be responsible for invoicing the  Borrower for interest on the Swing  Line
Loans.   Until each  Revolving Credit  Lender funds  its Base  Rate Loan or risk
participation pursuant to this Section 2.04 to refinance such Lender's Pro  Rata
Share of any Swing Line Loan, interest  in respect of such Pro Rata Share  shall
be solely for the account of the Swing Line Lender.

         (f) Payments Directly  to Swing Line  Lender.  The  Borrower shall make
all  payments  of  principal  and  interest  in  respect of the Swing Line Loans
directly to the Swing Line Lender.

                                       38

         2.05 Prepayments.

         (a) Optional.  (i) The Borrower  may, upon notice to the Paying  Agent,
at any time or from  time to time voluntarily prepay  Loans in whole or in  part
without premium or penalty;  provided that (1) such  notice must be received  by
the Paying Agent not later than 11:00 a.m.  (A) three Business Days prior to any
date of prepayment of Eurocurrency Rate Loans and (B) on the date of  prepayment
of Base Rate Loans; (2) any  prepayment of Term Loans or Revolving  Credit Loans
shall be in a principal amount  of not less than the Revolving  Credit Borrowing
Minimum or the  Revolving Credit Borrowing  Multiple in excess  thereof; and (3)
any prepayment of Swing  Line Loans shall be  in a principal amount  of not less
than $100,000 or,  in each case,  if less, the  entire principal amount  thereof
then outstanding.  Each  such notice shall specify  the date and amount  of such
prepayment  and  the  Type(s)  of  Loans  to  be prepaid.  The Paying Agent will
promptly notify  each Lender  of its  receipt of  each such  notice, and  of the
amount of such Lender's  Pro Rata Share of  such prepayment.  If  such notice is
given by the Borrower, the Borrower  shall make such prepayment and the  payment
amount specified in such notice shall  be due and payable on the  date specified
therein.  Any prepayment of a Eurocurrency Rate Loan shall be accompanied by all
accrued interest thereon, together with any additional amounts required pursuant
to Section 3.05.  Each prepayment pursuant to this Section 2.05(a) shall be paid
to the Paying  Agent for distribution  to the Appropriate  Lenders in accordance
with their respective Pro Rata Shares.  Notwithstanding anything in this Section
2.05(a) to  the contrary,  the Borrower  shall not  be permitted  to prepay  any
Revolving Credit Loans at  any time prior to  the repayment in full  of all Term
Loans and the termination of all Term Commitments.

         (ii) The Borrower  may, upon notice  to the Swing  Line Lender (with  a
copy to the Paying Agent), at any time or from time to time, voluntarily  prepay
Swing Line Loans in whole or  in part without premium or penalty;  provided that
(1) such notice must be received by  the Swing Line Lender and the Paying  Agent
not  later  than  1:00  p.m.  on  the  date  of the prepayment, and (2) any such
prepayment shall be in a minimum principal amount of $100,000.  Each such notice
shall specify the date and amount of  such prepayment.  If such notice is  given
by the Borrower, the Borrower shall make such prepayment and the payment  amount
specified in such notice shall be due and payable on the date specified therein.

         (b) Mandatory.  (i) If the Borrower or any of its Subsidiaries Disposes
of any property or assets permitted by Section 7.05(a), (f), (i) or (j) which in
the aggregate results in the realization  by the Borrower or such Subsidiary  of
Net Cash Proceeds (determined as of the date of such Disposition, whether or not
such Net Cash Proceeds are then received by the Borrower or such Subsidiary), in
excess of $2,500,000 per annum, the Borrower shall prepay an aggregate principal
amount of Term  Loans and the  Revolving Credit Loans  equal to 100%  of all Net
Cash  Proceeds  received  therefrom  immediately  upon  receipt  thereof  by the
Borrower  or  such  Subsidiary;  provided,  however,  that the Borrower shall be
required to  prepay Revolving  Credit Loans  with the  Net Cash  Proceeds of any
Disposition of any property  or assets permitted by  (x) Section 7.05(f) or  (i)
only  to  the  extent  that  the  aggregate  Net  Cash  Proceeds  from  all such
Dispositions exceeds $150,000,000,  and (y) Section  7.05(j) only to  the extent
that  the  aggregate  Net  Cash  Proceeds  from  all  such  Dispositions exceeds
$120,000,000; provided  further, however,  that, with  respect to  any Net  Cash
Proceeds realized (I) under a  Disposition described in this Section  2.05(b)(i)
or  (II)  proceeds  of  insurance  and  condemnation awards described in Section
2.05(b)(iii), at any time after all Term Loans have been repaid in full and  all
Term Commitments have been terminated, at the option of the Borrower (as elected
by the Borrower in  writing to the Co-Administrative  Agents on or prior  to the
date  of  such  Disposition  or  the  receipt  of  such  insurance  proceeds  or
condemnation awards),  and so  long as  no Default  shall have  occurred and  be
continuing,  the  Borrower  may  reinvest  all  or  any portion of such Net Cash
Proceeds in operating  assets so long  as within 270  days after the  receipt of
such Net Cash Proceeds, the purchase of such assets shall have been  consummated
(as  certified  by  the  Borrower  in  writing to the Co-Administrative Agents);

                                       39

provided still further,  however, that any  Net Cash Proceeds  not so reinvested
shall be immediately applied to the prepayment of the Loans as set forth in this
Section 2.05.

         (ii) So long as any  Term Loan or Term Commitment  remains outstanding,
upon the incurrence or  issuance by the Borrower  or any of its  Subsidiaries of
any Indebtedness (other than Indebtedness expressly permitted to be incurred  or
issued pursuant to Section  7.03(a)(A), (b)(A), (c)(A), (c)(B),  (c)(C), (c)(D),
(c)(E), (c)(F)  or (c)(G)),  the Borrower  shall prepay  an aggregate  principal
amount of Term Loans equal to  100% of all Net Cash Proceeds  received therefrom
immediately upon receipt thereof by the Borrower or such Subsidiary.

         (iii) Upon any Extraordinary Receipt received by or paid to or for  the
account of the Borrower or any of its Subsidiaries and not otherwise included in
clause  (i)  or  (ii)  of  this  Section  2.05(b),  the Borrower shall prepay an
aggregate principal  amount of  Loans equal  to 100%  of all  Net Cash  Proceeds
received therefrom  immediately upon  receipt thereof  by the  Borrower or  such
Subsidiary.

         (iv) If for any  reason the Total Outstandings  at any time exceed  the
Aggregate  Commitments  then  in  effect,  the Borrower shall immediately prepay
Loans and/or Cash Collateralize the L/C Obligations in an aggregate amount equal
to such excess; provided,  however, that the Borrower  shall not be required  to
Cash  Collateralize  the  L/C  Obligations  pursuant to this Section 2.05(b)(iv)
unless after the prepayment in full of the Loans and Swing Line Loans the  Total
Outstandings exceed the Aggregate Commitments then in effect.

         (v) Each prepayment of Loans pursuant to this Section 2.05(b) shall  be
applied, first, to  the Term Facility  and, thereafter, to  the Revolving Credit
Facility in the manner set forth in clause (vi) of this Section 2.05(b).

         (vi)  Prepayments  of  the  Revolving  Credit Facility made pursuant to
clause (i), (ii), (iii),  (iv) or (v) of  this Section 2.05(b), first,  shall be
applied to prepay  L/C Borrowings outstanding  at such time  until all such  L/C
Borrowings are paid in full, second, shall be applied to prepay Swing Line Loans
outstanding at  such time  until all  such Swing  Line Loans  are paid  in full,
third, shall  be applied  to prepay  Revolving Credit  Loans outstanding at such
time until the Outstanding Amount of all such Revolving Credit Loans is  reduced
to  $350,000,000  and,  fourth,  shall  be  used  to  Cash Collateralize the L/C
Obligations; and, in  the case of  prepayments of the  Revolving Credit Facility
required pursuant  to clause  (i), (ii)  or (iii)  of this  Section 2.05(b), the
amount remaining,  if any,  after the  prepayment of  all Loans,  to the  extent
required under this Section 2.05(b)(vi), and L/C Borrowings outstanding at  such
time and the L/C Obligations have  been Cash Collateralized in full (the  sum of
such prepayment  amounts, cash  collateralization amounts  and remaining  amount
being, collectively, the "Reduction Amount") may be retained by the Borrower for
use in the ordinary  course of its business,  and the Revolving Credit  Facility
shall  be  automatically  and  permanently  reduced  as  set  forth  in  Section
2.06(b)(ii).   Upon the  drawing of  any Letter  of Credit  which has  been Cash
Collateralized, such funds  shall be applied  (without any further  action by or
notice  to  or  from  the  Borrower  or  any  other Loan Party) to reimburse the
Appropriate L/C Issuer or the Revolving Credit Lenders, as applicable.

         (c)  Prepayments  of   Committed  Currency  Loans.     If  as   of  any
Determination Date (i) the Equivalent of the Outstanding Amount of all Revolving
Credit Loans, all Swing Line Loans and all L/C Obligations exceeds the Revolving
Credit Facility then  in effect or  (ii) the Equivalent  of all L/C  Obligations
exceeds the Letter of Credit Sublimit, in each case, the Borrower shall, on such
Determination  Date,  prepay  Revolving  Credit  Loans  denominated in Committed
Currencies  and/or  Cash  Collateralize  Letters  of  Credit  denominated  in  a
Committed Currency in an  aggregate amount equal to  such excess.  If  as of any
Determination Date  the Equivalent  of the  Outstanding Amount  of all Revolving
Credit Loans denominated in a  Committed Currency exceeds 105% of  the Committed

                                       40

Currency Sublimit  then in  effect, the  Borrower shall,  on such  Determination
Date, prepay Revolving Credit  Loans denominated in Committed  Currencies and/or
Cash Collateralize Letters of Credit  denominated in a Committed Currency  in an
aggregate amount equal  to the amount  by which such  Outstanding Amount exceeds
the Committed Currency Sublimit.

         (d)  Prepayments  to  Include  Accrued  Interest, Etc.  All prepayments
under this  Section 2.05  shall be  made together  with (i)  accrued and  unpaid
interest to the date of such  prepayment on the principal amount so  prepaid and
(ii) in the case of  any such prepayment of a  Eurocurrency Rate Loan on a  date
other than the  last day of  an Interest Period  therefor, any amounts  owing in
respect  of  such  Eurocurrency  Rate  Loan  pursuant  to  Section  3.05.

         2.06 Termination or Reduction of Commitments.

         (a)  Optional.    The  Borrower  may,  upon notice to the Paying Agent,
terminate the  unused portions  of the  Term Commitments,  the Letter  of Credit
Sublimit,  the  Committed  Currency  Sublimit  or  the  unused  Revolving Credit
Commitments, or from time to time permanently reduce the unused portions of  the
Term Commitments, the Letter of Credit Sublimit, the Committed Currency Sublimit
or the unused  Revolving Credit Commitments;  provided that (i)  any such notice
shall be received by  the Paying Agent not  later than 11:00 a.m.  five Business
Days  prior  to  the  date  of  termination  or reduction, (ii) any such partial
reduction shall be in an aggregate  amount of $10,000,000 or any whole  multiple
of  $1,000,000  in  excess  thereof,  (iii)  the Borrower shall not terminate or
reduce  the  unused  portions  of  the  Term  Commitments,  the Letter of Credit
Sublimit,  the  Committed  Currency  Sublimit  or  the  unused  Revolving Credit
Commitments if, after  giving effect thereto  and to any  concurrent prepayments
hereunder, the Total  Outstandings would exceed  the Aggregate Commitments,  and
(iv) if, after giving effect to any reduction of the Revolving Credit  Facility,
the Letter of Credit Sublimit, the Swing line Sublimit or the Committed Currency
Sublimit exceeds  the amount  of the  Revolving Credit  Facility, such Letter of
Credit Sublimit,  Swing Line  Sublimit or  Committed Currency  Sublimit shall be
automatically reduced by the amount of such excess.  Notwithstanding anything in
this Section 2.06(a)  to the contrary,  the Borrower shall  not be permitted  to
terminate or reduce the unused Revolving Credit Commitments at any time prior to
the  repayment  in  full  of  all  Term  Loans  and  the termination of all Term
Commitments.

         (b)  Mandatory.    (i)  The  Term  Facility  shall be automatically and
permanently reduced on the  date of the Term  Borrowing (after giving effect  to
the Term Borrowing),  and from time  to time thereafter  upon each repayment  or
prepayment of the outstanding  Term Loans, by an  amount equal to the  amount by
which (A) the Term Facility immediately prior to such reduction exceeds (B)  the
aggregate principal amount of all Term  Loans outstanding at such time.   If the
High Grade  Notes are  issued on  or prior  to the  Funding Date,  then the Term
Facility shall  be automatically  and permanently  reduced on  the date  of such
issuance  in  an  amount  equal  to  the  aggregate  amount of Net Cash Proceeds
received in connection with such  issuance.

         (ii) The   Revolving  Credit    Facility shall  be  automatically   and
permanently   reduced on each date on which the  prepayment of Revolving  Credit
Loans   outstanding  thereunder is  required to be  made  pursuant  to   Section
2.05(b)(i), (ii) or (iii) by an amount equal to the applicable Reduction Amount;
provided, however, that notwithstanding the foregoing provisions of  this clause
(ii) and Section 2.05(b)(vi), in no event shall the Revolving Credit Facility be
reduced, pursuant to this clause (ii), to less than $350,000,000.

         (iii)If after giving effect to any reduction or termination of   unused
Commitments  under  this  Section  2.06,  the  Letter  of  Credit  Sublimit, the

                                       41

Committed Currency Sublimit or the Swing Line Sublimit exceeds the amount of the
Revolving Credit Commitments,  such Sublimit shall  be automatically reduced  by
the amount of such excess.

         (c)  Application of Commitment Reductions; Payment of Fees.  The Paying
Agent will promptly notify the Lenders of any termination or reduction of unused
portions of the Term Commitment, the Letter of Credit  Sublimit,  the  Committed
Currency Sublimit or the unused Revolving Credit  Commitment under this  Section
2.06. Upon any reduction of unused Commitments under a Facility,  the Commitment
of each Lender under  such Facility  shall be reduced by  such Lender's Pro Rata
Share of the amount by which such  Facility is reduced.    All  commitment  fees
accrued until the effective date of any termination of the Aggregate Commitments
shall be paid on the effective date of such termination.

         2.07 Repayment of Loans.

         (a) Term Loans.  The Borrower  shall repay to the Paying Agent  for the
ratable account of the Term Lenders on the Maturity Date the aggregate principal
amount of all Term Loans outstanding on such date.

         (b) Revolving  Credit Loans.   The  Borrower shall  repay to the Paying
Agent for the ratable  account of the Revolving  Credit Lenders on the  Maturity
Date the aggregate principal amount of all Revolving Credit Loans outstanding on
such date.  (c) Swing Line Loans.  The Borrower shall repay each Swing Line Loan
on the earlier to occur of (i)  the date agreed to between the Borrower  and the
Swing Line Lender, but in no event more than 30 days after such Loan is made and
(ii) the Maturity Date.

         2.08 Interest.

         (a) Subject to the provisions of Section 2.08(b), (i) each Eurocurrency
Rate Loan shall  bear interest on  the outstanding principal  amount thereof for
each  Interest  Period  at  a  rate  per  annum equal to the Applicable Rate for
Eurocurrency Rate Loans;  (ii) each Base  Rate Loan shall  bear interest on  the
outstanding principal  amount thereof  from the  applicable borrowing  date at a
rate per annum equal to the Applicable Rate for Base Rate Loans; and (iii)  each
Swing Line Loan shall bear interest on the outstanding principal amount  thereof
from the applicable borrowing date at  a rate per annum equal to  the Applicable
Rate for Base Rate Loans.

         (b)  If any amount of principal,  interest or fees payable under any  of
Sections 2.03(i), 2.03(j) or 2.09 are  not paid when due (without regard  to any
applicable  grace  periods),  whether  at  stated  maturity,  by acceleration or
otherwise, such amount shall thereafter bear interest at a fluctuating  interest
rate per  annum at  all times  equal to  the Default  Rate to the fullest extent
permitted by  applicable Laws.   Furthermore,  upon the  request of the Required
Lenders, while any Event of Default  exists, the Borrower shall pay interest  on
the principal amount of all  outstanding Obligations hereunder at a  fluctuating
interest rate per annum  at all times equal  to the Default Rate  to the fullest
extent permitted by applicable  Laws.  Accrued and  unpaid interest on past  due
amounts (including interest on past due interest) shall be due and payable  upon
demand.

         (c)  Interest on each Loan shall be due and payable in arrears  on each
Interest Payment  Date applicable  thereto and  at such  other times  as may  be
specified herein.   Interest  hereunder shall  be due  and payable in accordance
with  the  terms  hereof  before  and  after  judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.

                                       42

         2.09 Fees. In addition to certain fees  described  in  Sections 2.03(i)
and 2.03(j):

         (a)  Commitment Fee. The Borrower shall pay to the Paying Agent for the
account of  each Appropriate  Lender in  accordance with  its Pro  Rata Share, a
commitment fee  equal to  (x) from  the Documentation  Closing Date  through the
Funding Date,  0.250%, and  (y) thereafter,  the Applicable  Rate, in each case,
times  the  actual  daily  amount  by  which  the  aggregate  Revolving   Credit
Commitments exceed  the sum  of (i)  the Outstanding  Amount of Revolving Credit
Loans and  (ii) the  Outstanding Amount  of L/C  Obligations; provided, however,
that any  commitment fee  accrued with  respect to  any of  the Commitments of a
Defaulting Lender  during the  period prior  to the  time such  Lender became  a
Defaulting Lender and unpaid at such  time shall not be payable by  the Borrower
so long as such  Lender shall be a  Defaulting Lender except to  the extent that
such commitment fee shall  otherwise have been due  and payable by the  Borrower
prior to such time; and provided further that no commitment fee shall accrue  on
any of the Commitments of a Defaulting Lender so long as such Lender shall be  a
Defaulting  Lender.    The  commitment  fee  shall  accrue at all times from the
Documentation Closing  Date through  the Maturity  Date, including  at any  time
during which one or more of the  conditions in Article IV is not met,  and shall
be due and payable in arrears on  the earlier of (i) the Funding Date,  and (ii)
March 31, 2003,  and thereafter on  the last Business  Day of each  March, June,
September and December, and on the  Maturity Date.  The commitment fee  shall be
calculated quarterly in arrears,  and if there is  any change in the  Applicable
Rate  during  any  quarter,  the  actual  daily  amount  shall  be  computed and
multiplied by the Applicable Rate separately for each period during such quarter
that such Applicable Rate was in effect.

         (b)  Other Fees. (i) The Borrower shall pay to the Agents for their own
respective accounts fees in  the amounts and at  the times specified in  the Fee
Letter.  Such fees shall be fully  earned when paid and shall not be  refundable
for any reason whatsoever.

         (ii) The Borrower shall pay to the Agents such fees as shall have  been
separately agreed upon in writing in the  amounts and at the times so specified.
Such fees shall be fully earned  when paid  and  shall not be refundable for any
reason whatsoever.

         2.10 Computation of Interest and  Fees.  .All computations of  interest
for Base Rate Loans when the  Base Rate is determined by KeyBank's  "prime rate"
shall be made on the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed.  All other computations of fees and interest shall be  made
on the basis of  a 360-day year and  actual days elapsed (which  results in more
fees or interest, as applicable, being paid  than if computed on the basis of  a
365-day year).  Interest shall accrue on each Loan for the day on which the Loan
is made, and shall not accrue on a Loan, or any portion thereof, for the day  on
which the Loan or such portion is paid, provided that any Loan that is repaid on
the  same  day  on  which  it  is  made  shall, subject to Section 2.12(a), bear
interest for one  day.  Each  determination by the  Paying Agent of  an interest
rate or fee hereunder shall be  conclusive and binding for all purposes,  absent
manifest error.

         2.11 Evidence of Indebtedness.

         (a) The Credit Extensions made by each Lender shall be evidenced by one
or more accounts or records maintained by such Lender and by the Paying Agent in
the ordinary  course of  business.   The accounts  or records  maintained by the
Paying Agent and each  Lender shall be conclusive  absent manifest error of  the
amount of  the Credit  Extensions made  by the  Lenders to  the Borrower and the
interest and payments thereon.  Any failure  to so record or any error in  doing
so shall not, however, limit or otherwise affect the obligation of the  Borrower
hereunder to pay any amount owing with respect to the Obligations.  In the event
of any conflict between  the accounts and records  maintained by any Lender  and
the accounts and  records of the  Paying Agent in  respect of such  matters, the
accounts  and  records  of  the  Paying  Agent  shall  control in the absence of

                                       43

manifest error.  Upon the request  of any Lender made through the  Paying Agent,
the Borrower shall execute and deliver to such Lender (through the Paying Agent)
a Note, which shall evidence such Lender's Loans in addition to such accounts or
records.  Each Lender may attach  schedules to its Note and endorse  thereon the
date, Type (if applicable), amount and  maturity of its Loans and payments  with
respect thereto.

         (b)  In addition to  the accounts  and records  referred to  in Section
2.11(a), each Lender and the Paying Agent shall maintain in accordance with  its
usual practice accounts  or records evidencing  the purchases and  sales by such
Lender of  participations in  Letters of  Credit and  Swing Line  Loans.  In the
event of any conflict between the accounts and records maintained by the  Paying
Agent and the accounts and records of any Lender in respect of such matters, the
accounts  and  records  of  the  Paying  Agent  shall  control in the absence of
manifest error.

         (c)  Entries made in good  faith by the  Paying  Agent  in the Register
pursuant to   Section 2.11(b), and by each   Lender in its  account  or accounts
pursuant  to Section 2.11(a) above,  shall be prima facie evidence of the amount
of principal and interest due and payable  or to become due and payable from the
Borrower to, in the case of the Register, each Lender and,  in the  case of such
account  or accounts,  such  Lender,   under this  Agreement and  the other Loan
Documents, absent manifest error; provided  that the failure of the Paying Agent
or such Lender to make an entry, or any finding that an entry is  incorrect,  in
the Register or such account or accounts shall not limit or otherwise affect the
obligations of the Borrower under this Agreement and the other Loan Documents.

         2.12 Payments Generally

         (a) All  payments to  be made  by the  Borrower shall  be made  without
condition  or  deduction  for  any  counterclaim, defense, recoupment or setoff.
Except as  otherwise expressly  provided herein,  all payments  by the  Borrower
hereunder (except with respect to  principal of, interest on, and  other amounts
relating to, Loans  denominated in a  Committed Currency) shall  be made to  the
Paying Agent, for the account of the respective Lenders to which such payment is
owed, at the Paying Agent's Office in Dollars and in immediately available funds
not later  than 2:00  p.m. on  the date  specified herein.   Except as otherwise
expressly  provided  herein,  all  payments  by  the  Borrower  with  respect to
principal of, interest on, and other amounts relating to, Loans denominated in a
Committed Currency shall  be made to  the Paying Agent,  for the account  of the
respective Lenders to which such payment is owed, at the Payment Office in  such
Committed Currency and in immediately  available funds not later than  2:00 p.m.
on the date specified herein.  The Paying Agent will promptly distribute to each
Lender its Pro Rata Share (or other applicable share as provided herein) of such
payment in  like funds  as received  by wire  transfer to  such Lender's Lending
Office.   All payments  received by  the Paying  Agent after  2:00 p.m. shall be
deemed received on the next succeeding Business Day and any applicable  interest
or fee shall continue to accrue.

         (b) If any payment to be made  by the Borrower shall come due on  a day
other than a Business Day, payment shall be made on the next following  Business
Day, and  such extension  of time  shall be  reflected in  computing interest or
fees, as the case may be; provided, however, that, if such extension would cause
payment of interest on or principal of Eurocurrency Rate Loans to be made in the
next succeeding calendar  month, such payment  shall be made  on the immediately
preceding Business Day.

         (c) Unless the  Borrower or any  Lender has notified  the Paying Agent,
prior to the date any payment is required  to be made by it to the Paying  Agent
hereunder, that the Borrower or such Lender,  as the case may be, will not  make
such payment, the Paying Agent may  assume that the Borrower or such  Lender, as
the case  may be,  has timely  made such  payment and  may (but  shall not be so
required to), in reliance thereon, make available a corresponding amount to  the

                                       44

Person entitled thereto.  If and to the extent that such payment was not in fact
made to the Paying Agent in immediately available funds, then:

         (i) if  the Borrower  failed to  make such  payment, each  Lender shall
forthwith  on  demand  repay  to  the  Paying  Agent the portion of such assumed
payment that was made available  to such Lender in immediately  available funds,
together with interest  thereon in respect  of each day  from and including  the
date such amount was  made available by the  Paying Agent to such  Lender to the
date such amount is repaid to the Paying Agent in immediately available funds at
the higher of (A) Federal Funds Rate from time to time in effect in the case  of
Loans denominated in  Dollars or (B)  the cost of  funds incurred by  the Paying
Agent in respect of  such amount in the  case of Loans denominated  in Committed
Currencies; and

         (ii)  if  any  Lender  failed  to  make such payment, such Lender shall
forthwith on demand pay  to the Paying Agent  the amount thereof in  immediately
available funds,  together with  interest thereon  for the  period from the date
such amount was made available by the  Paying Agent to the Borrower to the  date
such amount is recovered  by the Paying Agent  (the "Compensation Period") at  a
rate per annum equal to the higher  of (A) Federal Funds Rate from time  to time
in effect in the case of Loans  denominated in Dollars or (B) the cost  of funds
incurred by  the Paying  Agent in  respect of  such amount  in the case of Loans
denominated in Committed  Currencies.  If  such Lender pays  such amount to  the
Paying Agent, then such amount  shall constitute such Lender's Loan  included in
the applicable Borrowing in the case of Loans denominated in Dollars or (B)  the
cost of funds incurred by the Paying Agent in respect of such amount in the case
of Loans denominated in Committed Currencies.  If such Lender does not pay  such
amount forthwith upon the Paying  Agent's demand therefor, the Paying  Agent may
make a demand therefor upon the Borrower, and the Borrower shall pay such amount
to the Paying Agent, together with interest thereon for the Compensation  Period
at a rate per annum equal to  the rate of interest applicable to the  applicable
Borrowing.    Nothing  herein  shall  be  deemed  to relieve any Lender from its
obligation to fulfill its Commitment or to prejudice any rights which the Paying
Agent or the Borrower may have against any Lender as a result of any default  by
such Lender hereunder.

         A notice of the Paying Agent to any Lender or the Borrower with respect
to any amount owing under this Section

         2.12(c) shall be conclusive, absent manifest error.

         (d) If any  Lender makes available  to the Paying  Agent funds for  any
Loan to be made by such Lender  as provided in the foregoing provisions of  this
Article II, and such funds are not made available to the Borrower by the  Paying
Agent because  the conditions  to the  applicable Credit  Extension set forth in
Article IV are not satisfied or waived in accordance with the terms hereof,  the
Paying  Agent  shall  return  such  funds  (in  like funds as received from such
Lender) to such Lender, without interest.

         (e) The obligations of the Lenders hereunder to make Loans and to  fund
participations in Letters  of Credit and  Swing Line Loans  are several and  not
joint.    The  failure  of  any  Lender  to  make  any  Loan or to fund any such
participation on any date required hereunder shall not relieve any other  Lender
of its corresponding obligation  to do so on  such date, and no  Lender shall be
responsible for the failure of any other Lender to so make its Loan or  purchase
its participation.

         (f) Nothing herein shall be deemed to obligate any Lender to obtain the
funds  for  any  Loan  in  any  particular  place  or  manner or to constitute a
representation by any Lender that it  has obtained or will obtain the  funds for
any Loan in any particular place or manner.

                                       45

         (g)  Whenever  any  payment  received  by  the  Paying Agent under this
Agreement or any of the other Loan Documents is insufficient to pay in full  all
amounts due and  payable to the  Agents and the  Lenders under or  in respect of
this Agreement and the other Loan  Documents on any date, such payment  shall be
distributed by the Paying Agent and applied by the Agents and the Lenders in the
order of priority set forth in Section 8.03.  If the Paying Agent receives funds
for application to the  Obligations of the Loan  Parties under or in  respect of
the  Loan  Documents  under  circumstances  for  which the Loan Documents do not
specify the manner in which such funds are to be applied, the Paying Agent  may,
but shall not  be obligated to,  elect to distribute  such funds to  each of the
Lenders in accordance with  such Lender's Pro Rata  Share of the sum  of (A) the
Outstanding Amount of all Loans outstanding at such time and (b) the Outstanding
Amount  of  all  L/C  Obligations  outstanding  at  such  time,  in repayment or
prepayment of such of the outstanding  Loans or other Obligations then owing  to
such Lender.

         (h) To the extent that the Paying Agent receives funds for  application
to the amounts owing  by the Borrower under  or in respect of  this Agreement or
any Note in currencies other than the currency or currencies required to  enable
the Paying Agent to distribute funds to the Lenders in accordance with the terms
of this Section 2.12, the Paying Agent shall be entitled to convert or  exchange
such  funds  into  Dollars  or  into  a  Committed Currency or from Dollars to a
Committed Currency or from a Committed Currency to Dollars, as the case may  be,
to the extent necessary to enable  the Paying Agent to distribute such  funds in
accordance with the terms of this  Section 2.12; provided that the Borrower  and
each of the Lenders  hereby agree that the  Paying Agent shall not  be liable or
responsible for  any loss,  cost or  expense suffered  by the  Borrower or  such
Lender as a result of any conversion or exchange of currencies affected pursuant
to this Section  2.12(h) or as  a result of  the failure of  the Paying Agent to
effect any such conversion or  exchange; and provided further that  the Borrower
agrees to indemnify the Paying Agent and each Lender, and hold the Paying  Agent
and each Lender harmless, for any and all losses, costs and expenses incurred by
the Paying Agent or any Lender for any conversion or exchange of currencies  (or
the  failure  to  convert  or  exchange  any currencies) in accordance with this
Section 2.12(h).

         2.13 Sharing  of  Payments.  If, other  than   as  expressly   provided
elsewhere  herein, any Lender shall obtain on account  of the Loans made  by it,
or the participations in L/C Obligations or in Swing Line Loans held by  it, any
payment (whether voluntary, involuntary,  through  the  exercise  of  any  right
of setoff,  or  otherwise) in  excess of  its  ratable  share   (or  other share
contemplated hereunder) thereof,  such Lender shall  immediately (a)  notify the
Paying   Agent of such  fact,  and (b) purchase  from  the  other   Lenders such
participations  in the Loans   made by them and/or such subparticipations in the
participations in L/C Obligations or Swing  Line Loans held by them, as the case
may be, as shall be   necessary to cause such   purchasing Lender  to  share the
excess payment in respect of such Loans or such participations, as the case  may
be, pro rata with each of them; provided, however, that if all  or  any  portion
of such excess payment is thereafter  recovered from the purchasing Lender under
any of the circumstances described in   Section  10.06  (including  pursuant  to
any settlement entered into by the  purchasing Lender  in its  discretion), such
purchase shall to that extent be rescinded and each  other  Lender  shall  repay
to the purchasing Lender the purchase  price  paid  therefor, together  with  an
amount equal to such paying Lender's ratable share (according  to the proportion
of (i) the amount of such paying Lender's required  repayment to (ii)  the total
amount so recovered from the purchasing Lender) of any interest or other  amount
paid or  payable by  the purchasing  Lender in  respect of  the  total amount so
recovered, without further interest thereon.  The   Borrower  agrees   that  any
Lender  so  purchasing a  participation from another Lender may,  to the fullest
extent permitted by law, exercise all its rights of payment (including the right
of setoff, but subject  to Section 10.09) with respect  to such participation as
fully as if such Lender were the direct creditor  of the Borrower in  the amount
of such   participation.  The Paying  Agent  will  keep  records (which shall be
conclusive  and binding in  the absence  of  manifest error)  of  participations
purchased under this Section  2.13 and will in  each  case  notify  the  Lenders
following  any  such  purchases  or repayments.   Each  Lender  that purchases a
participation pursuant to this Section 2.13 shall from and  after such  purchase
have the  right to  give  all notices,  requests, demands,  directions and other

                                       46

communications   under this   Agreement  with  respect   to the  portion  of the
Obligations purchased to the  same extent  as  though the purchasing Lender were
the original owner of the Obligations purchased.

         2.14 Committed Currency Borrowings.

         (a) Determination of Equivalents.  The Paying Agent will determine  the
Equivalent amount on each of the following dates:  (i) the last Business Day  of
each month, (ii)  the date a  Request for Credit  Extension is delivered  to the
Paying Agent with respect to each  Credit Extension with respect to each  Credit
Extension issued or advanced that  results in an Outstanding Amount  denominated
in a Committed Currency, (iii) each date on which any Outstanding Amount is due,
(iv) each  Interest Payment  Date applicable  thereto, (v)  the Honor  Date with
respect to each Letter of Credit denominated in a Committed Currency, (vi)  each
date of an  amendment of any  such Letter of  Credit denominated in  a Committed
Currency having the effect of increasing  the amount thereof, (vii) any date  on
which an L/C Borrowing is deemed to  have been made with respect to a  Letter of
Credit denominated in a Committed  Currency, and (viii) any additional  and more
frequent dates as  the Lead Arrangers  in their sole  discretion may, or  at the
direction of the  Required Lenders shall,  select from time  to time (each  such
date under clauses (i) through (viii), being a "Determination Date").

         (b) Notification of Availability.  If on any date on which a  Revolving
Credit Loan  denominated in  a Committed  Currency is  requested to  be made  or
continued, in the event that the Committed Currency requested or elected by  the
Borrower to be continued is not  available to the Paying Agent, then  the Paying
Agent shall notify  the Borrower no  later than 4:00  p.m., three Business  Days
prior to the proposed Borrowing or proposed continuation.

         (c) Consequences of Non-Availability.  If the Paying Agent notifies the
Borrower pursuant to  Section 2.14(b) that  the Committed Currency  requested or
elected by  the Borrower  to be  continued is  not available,  such notification
shall (i) in the  case of any request  for a Borrowing, revoke  such request and
(ii) in the case of any  continuation or conversion, result in the  Eurocurrency
Rate Loans denominated in such Committed Currency being automatically  converted
into Eurocurrency  Rate Loans  denominated in  Dollars for  a one month Interest
Period on the last day of the then current Interest Period with respect to  such
Eurocurrency Rate Loans denominated in such Committed Currency.

         (d)  Automatic  Conversions.    During  the  existence  of  an Event of
Default, all  outstanding Loans  denominated in  a Committed  Currency shall  be
redenominated and converted into their Equivalent of Base Rate Loans in  Dollars
on the last day of the Interest Period applicable to any such Loans.

                                  ARTICLE III
                     TAXES, YIELD PROTECTION AND ILLEGALITY

         3.01 Taxes.

         (a) Any and all payments by the  Borrower to or for the account of  any
Agent or any Lender under any Loan Document shall be made free and clear of  and
without  deduction  for  any  and  all  present or future taxes, duties, levies,
imposts, deductions, assessments, fees, withholdings or similar charges, and all
liabilities with respect thereto, excluding, in the case of each Agent and  each
Lender, taxes imposed on  or measured by its  overall net income, and  franchise
taxes imposed on it (in lieu of  net income taxes), by the jurisdiction (or  any
political  subdivision  thereof)  under  the  Laws  of  which such Agent or such
Lender, as the case  may be, is organized  or maintains a lending  office, or to
which such Agent  or such Lender  has a present  or former connection  (all such
non-excluded  taxes,  duties,  levies,  imposts,  deductions, assessments, fees,
withholdings or similar charges,  and liabilities being hereinafter  referred to

                                       47

as "Taxes").  If the Borrower shall be required by any Laws to deduct any  Taxes
from or in respect of  any sum payable under any  Loan Document to any Agent  or
any Lender, (i) the  sum payable shall be  increased as necessary so  that after
making all  required deductions  (including deductions  applicable to additional
sums  payable  under  this  Section  3.01),  each  of such Agent and such Lender
receives  an  amount  equal  to  the  sum  it  would  have  received had no such
deductions been made,  (ii) the Borrower  shall make such  deductions, (iii) the
Borrower shall pay the full  amount deducted to the relevant  taxation authority
or other authority in accordance with applicable Laws, and (iv) upon the request
of the Paying Agent, the Borrower shall furnish to the Paying Agent (which shall
forward the same to such Agent or such Lender, as the case may be) the  original
or a certified copy of a receipt evidencing payment thereof to the extent such a
receipt is issued therefor,  or other written proof  of payment thereof that  is
reasonably satisfactory to the Paying Agent.

         (b) In  addition, the  Borrower agrees  to pay  any and  all present or
future stamp, court or documentary taxes and any other excise or property  taxes
or charges or similar  levies which arise from  any payment made under  any Loan
Document  or   from  the   execution,  delivery,   performance,  enforcement  or
registration of, or  otherwise with respect  to, any Loan  Document (hereinafter
referred to as "Other Taxes").

         (c) If the  Borrower shall be  required to deduct  or pay any  Taxes or
Other Taxes from or in respect of any sum payable under any Loan Document to any
Agent or  any Lender,  the Borrower  shall also  pay to  such Agent  or to  such
Lender, as the case may be, at the time interest is paid, such additional amount
that such Agent or such Lender specifies is necessary to preserve the  after-tax
yield (after factoring in all taxes,  including taxes imposed on or measured  by
net income) that such Agent or such Lender would have received if such Taxes  or
Other Taxes had not been imposed.

         (d) The Borrower agrees to indemnify each Agent and each Lender for (i)
the full amount  of Taxes and  Other Taxes (including  any Taxes or  Other Taxes
imposed or asserted  by any jurisdiction  on amounts payable  under this Section
3.01) paid by  such Agent and  such Lender, (ii)  amounts payable under  Section
3.01(c) and (iii) any liability (including additions to tax, penalties, interest
and expenses)  arising therefrom  or with  respect thereto.   Payment under this
Section 3.01(d) shall be made within 30 days after the date such Lender or  such
Agent makes a demand therefor.

         3.02 Illegality.   If  any Lender  determines that  the introduction or
change in any Law after the Documentation Closing Date has made it unlawful,  or
that any Governmental Authority has asserted that it is unlawful, for any Lender
or its  applicable Lending  Office to  make, maintain  or fund Eurocurrency Rate
Loans in Dollars or any Committed  Currency, or to determine or charge  interest
rates based upon the Eurocurrency Rate,  then, on notice thereof by such  Lender
to the Borrower through the Paying Agent, any obligation of such Lender to  make
or  continue  Eurocurrency  Rate  Loans  or  to  convert  Base  Rate  Loans   to
Eurocurrency Rate Loans shall be suspended until such Lender notifies the Paying
Agent and the Borrower that the circumstances giving rise to such  determination
no longer exist.  Upon receipt  of such notice, the Borrower shall,  upon demand
from such Lender (with  a copy to the  Paying Agent), prepay or,  if applicable,
convert all Eurocurrency  Rate Loans of  such Lender to  Base Rate Loans  (or if
such  Eurocurrency  Rate  Loan  is  denominated  in  any  Committed Currency, be
exchanged into an Equivalent amount of Dollars and be Converted into a Base Rate
Loan), either on the  last day of the  Interest Period therefor, if  such Lender
may lawfully continue to maintain such  Eurocurrency Rate Loans to such day,  or
immediately,  if  such  Lender  may  not  lawfully  continue  to  maintain  such
Eurocurrency Rate Loans.  Upon  any such prepayment or conversion,  the Borrower
shall also pay  accrued interest on  the amount so  prepaid or converted.   Each
Lender agrees to designate a  different Lending Office if such  designation will
avoid the need for such notice and will not, in the good faith judgment of  such
Lender, otherwise be materially disadvantageous to such Lender.

                                       48

         3.03 Inability to Determine Rates.   If the Required Lenders  determine
that for any reason adequate and  reasonable means do not exist for  determining
the  Eurocurrency  Rate  for  any  requested  Interest  Period with respect to a
proposed Eurocurrency Rate Loan, or that the Eurocurrency Rate for any requested
Interest  Period  with  respect  to  a  proposed Eurocurrency Rate Loan does not
adequately and fairly reflect the cost to such Lenders of funding such Loan,  or
that Dollar or Committed Currency deposits are not being offered to banks in the
London interbank Eurocurrency market for the applicable amount and the  Interest
Period of such Eurocurrency Rate Loan, the Paying Agent will promptly so  notify
the Borrower and each Lender.  Thereafter, the obligation of the Lenders to make
or maintain Eurocurrency  Rate Loans shall  be suspended until  the Paying Agent
(upon  the  instruction  of  the  Required  Lenders)  revokes such notice.  Upon
receipt  of  such  notice,  the  Borrower  may  revoke any pending request for a
Borrowing  of,  conversion  to  or  continuation  of Eurocurrency Rate Loans or,
failing that, will be deemed to have converted such request into a request for a
Committed Borrowing of Base Rate Loans in the amount specified therein.

         3.04 Increased Cost and  Reduced Return; Capital Adequacy;  Reserves on
Eurocurrency Rate Loans.

         (a) If any Lender determines that as a result of the introduction of or
any change in or  in the interpretation of  any Law or such  Lender's compliance
therewith, there shall be any increase in the cost to such Lender of agreeing to
make or making, funding or maintaining  Eurocurrency Rate Loans or (as the  case
may be) issuing  or participating in  Letters of Credit,  or a reduction  in the
amount received  or receivable  by such  Lender in  connection with  any of  the
foregoing (excluding  for purposes  of this  Section 3.04(a)  any such increased
costs or  reduction in  amount resulting  from (i)  Taxes or  Other Taxes (as to
which Section  3.01 shall  govern), (ii)  changes in  the basis  of taxation  of
overall net income or overall gross  income by the United States or  any foreign
jurisdiction or any  political subdivision of  either thereof under  the Laws of
which such  Lender is  organized or  has its  Lending Office,  or to  which such
Lender  has  a  present  or  former  connection,  and (iii) reserve requirements
contemplated by Section  3.04(c)), then from  time to time  upon demand of  such
Lender (with a copy of such demand to the Paying Agent), the Borrower shall  pay
to such Lender such additional amounts  as will compensate such Lender for  such
increased cost or reduction.

         (b) If any Lender determines that the introduction of any Law regarding
capital adequacy  or any  change therein  or in  the interpretation  thereof, or
compliance by such Lender (or its  Lending Office) therewith, has the effect  of
reducing the rate  of return on  the capital of  such Lender or  any corporation
controlling such Lender as a consequence of such Lender's obligations  hereunder
(taking into  consideration its  policies with  respect to  capital adequacy and
such Lender's desired return on capital), then from time to time upon demand  of
such Lender (with a copy of such demand to the Paying Agent), the Borrower shall
pay to such Lender  such additional amounts as  will compensate such Lender  for
such reduction.

         (c) The Borrower shall pay to each Lender, as long as such Lender shall
be  required  to  maintain  reserves  with  respect  to  liabilities  or  assets
consisting of or  including Eurocurrency funds  or deposits (currently  known as
"Eurocurrency liabilities"), additional interest on the unpaid principal  amount
of  each  Eurocurrency  Rate  Loan  equal  to  the actual costs of such reserves
allocated to  such Loan  by such  Lender (as  determined by  such Lender in good
faith, which determination shall be conclusive), which shall be due and  payable
on each date on  which interest is payable  on such Loan, provided  the Borrower
shall have received at  least 15 days' prior  notice (with a copy  to the Paying
Agent) of such additional interest from such Lender.  If a Lender fails to  give
notice 15  days prior  to the  relevant Interest  Payment Date,  such additional
interest shall be due and payable 15 days from receipt of such notice.

                                       49

         3.05 Funding Losses.  (a) Upon demand of any Lender (with a copy to the
Paying Agent)  from time  to time,  the Borrower  shall promptly compensate such
Lender for and hold such Lender harmless from any loss, cost or expense incurred
by it as a result of:

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

         (ii) any failure by the Borrower  (for a reason other than  the failure
    of such Lender to make a Loan)  to prepay,  borrow, continue  or convert any
    Loan other than a Base Rate Loan on the date or  in the amount   notified by
    the Borrower; or

         (iii)any assignment of a Eurocurrency Rate Loan on a day other than the
    last day of the Interest  Period  therefor  as a  result of a request by the
    Borrower pursuant to Section 10.16;

         excluding any  loss of  anticipated profits  but including  any loss or
expense arising from the liquidation or reemployment of funds obtained by it  to
maintain such Loan  or from fees  payable to terminate  the deposits from  which
such  funds  were  obtained.    The  Borrower  shall  also  pay  any   customary
administrative fees charged by such Lender in connection with the foregoing.

         (b) In  addition to  the rights  of the  Lenders set  forth in  Section
3.05(a), at any time  on or prior to  the 180th day following  the Funding Date,
upon demand of the Paying Agent, from time to time, the Borrower shall  promptly
compensate the  Paying Agent  for and  hold the  Paying Agent  harmless from any
loss,  cost  or  expense  incurred  by  it  as  a  result of any assignment of a
Eurodollar Rate Loan  on a day  other than the  last day of  the Interest Period
therefor as a result of the syndication of the Facilities.

         (c) For purposes of calculating amounts payable by the Borrower to  the
Lenders or the Paying Agent under this Section 3.05, each Lender shall be deemed
to have funded each Eurocurrency Rate  Loan made by it at the  Eurocurrency Rate
for such Loan by a matching  deposit or other borrowing in the  London interbank
Eurocurrency market for a comparable amount and for a comparable period, whether
or not such Eurocurrency Rate Loan was in fact so funded.

         3.06 Matters Applicable to All Requests for Compensation .

         (a) A  certificate of  any Agent  or any  Lender claiming  compensation
under this Article III and setting forth the additional amount or amounts to  be
paid to  it hereunder  shall be  conclusive in  the absence  of manifest  error;
provided, however,  that no  Agent or  Lender may  seek compensation  under this
Article III more than  90 days after such  Agent or Lender had  actual knowledge
that such amount or amounts were payable under this Article III.  In determining
such amount,  such Agent  or such  Lender may  use any  reasonable averaging and
attribution methods.

         (b) Upon  any Lender's  making a  claim for  compensation under Section
3.01 or 3.04, the  Borrower may replace such  Lender in accordance with  Section
10.16.

         3.07 Survival.   All of the  Borrower's obligations under  this Article
III shall survive termination of the Aggregate Commitments and repayment of  all
other Obligations hereunder.

                                       50

                                  ARTICLE IV
                  CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

         4.01  Conditions  to  Documentation  Closing  Date.  The "Documentation
Closing Date"  shall be  the first  date on  which the  Co-Administrative Agents
shall have received each of the  following, each of which shall be  originals or
facsimiles (followed  promptly by  originals) unless  otherwise specified,  each
properly  executed  by  a  Responsible  Officer  of  the  signing Loan Party, if
applicable,  each  dated  such  date  (or,  in  the  case  of  certificates   of
governmental officials, a  recent date before  such date) and  each in form  and
substance  satisfactory  to  the  Lead  Arrangers,  the  Lenders and their legal
counsel:

         (a)  executed   counterparts  of  this   Agreement  and  the  Guaranty,
    sufficient in number for distribution  to each Agent,  each  Lender  and the
    Borrower;

         (b)  a Note executed by the Borrower in favor of each Lender requesting
    a Note;

         (c)  such  certificates  of   resolutions or  other action,  incumbency
    certificates and/or other certificates of Responsible Officers of  each Loan
    Party as the  Lead  Arrangers  and   the Lenders may require  evidencing the
    identity,  authority and   capacity of  each   Responsible  Officer  thereof
    authorized to act as a Responsible Officer in connection with this Agreement
    and the other Loan Documents to which such Loan Party is a party or is to be
    a party;

         (d)  such documents and certifications as  the Lead  Arrangers  and the
    Lenders may   reasonably  require  to  evidence that each Loan Party is duly
    organized or formed, and that each Loan Party is  validly  existing, in good
    standing and qualified to engage in  business in each jurisdiction where its
    ownership, lease or  operation of  properties or the conduct of its business
    requires such qualification,   except to the extent  that  failure  to do so
    could not reasonably be expected to have a Material Adverse Effect;

         (e)  a favorable opinion of Jones, Day, Reavis & Pogue, counsel  to the
    Loan Parties, addressed to each Agent and each Lender, as to the matters set
    forth in Exhibit G-1 and such other matters  concerning the Loan Parties and
    the Loan   Documents as the  Lead  Arrangers  and the Lenders may reasonably
    request;

         (f)  a favorable   opinion of William R. Burkhart, internal  counsel to
    the Loan Parties in Pennsylvania, as to the matters set forth in Exhibit G-2
    and such other matters concerning the Loan Parties and the Loan Documents as
    the Lead Arrangers and the Lenders may reasonably request;

         (g)  a certificate of a Responsible Officer of each  Loan Party  either
    (A) attaching copies of all  consents,   licenses and  approvals required in
    connection with the execution, delivery  and  performance by such Loan Party
    and the validity against such Loan  Party of the  Loan Documents to which it
    is a party, and such consents, licenses and approvals shall be in full force
    and effect, or (B) stating that no such consents, licenses or  approvals are
    so required;

         (h)  a certificate  signed  by  a  Responsible Officer of the  Borrower
    certifying (A) that there has been no event or  circumstance since  the date
    of the  Audited  Financial  Statements that has  had or  could be reasonably
    expected  to have, either   individually or  in  the aggregate,  a  Material
    Adverse Effect; and (B) the current Debt Ratings;

                                       51

         (i)  evidence that all insurance required to be maintained  pursuant to
    the Loan Documents has been obtained and is in effect;

         (j)  certified copies of each of the Related  Documents, duly  executed
    by the parties thereto and in form  and  substance satisfactory  to the Lead
    Arrangers and the Lenders, together with  such other agreements, instruments
    and other documents delivered  in connection therewith as the Lead Arrangers
    and the Lenders shall request;

         (k)  such   other  assurances,   certificates,  documents,  consents or
    opinions as the Co-Administrative Agents may reasonably require.

         4.02 Conditions of Initial Credit  Extensions.  The  obligation of each
Lender to make its initial Credit Extension hereunder is subject to satisfaction
of the following conditions precedent:

         (a)  The receipt by the Co-Administrative Agents of the following, each
of  which  shall  be  originals  or  facsimiles (followed promptly by originals)
unless otherwise specified, each properly  executed by a Responsible Officer  of
the signing Loan Party, if applicable,  each dated the Funding Date (or,  in the
case of certificates of governmental officials, a recent date before the Funding
Date)  and  each  in  form  and  substance satisfactory to the Co-Administrative
Agents and their legal counsel:

         (i)  a certificate   signed by a Responsible Officer  of the   Borrower
    certifying that the  conditions  specified  in Sections  4.03(a) and 4.03(b)
    have been satisfied;

         (ii) a certificate attesting  to the Solvency  of the Borrower  and its
    Subsidiaries on a consolidated basis  before and after giving  effect to the
    Transaction, from the Borrower's  Chief  Financial Officer or Executive Vice
    President-Finance and Administration;

         (iii)a   Notice  of  Borrowing  or Notice of  Issuance,  as applicable,
    relating to the initial Credit Extension;

         (iv) evidence   that  the   Existing  Credit   Agreements  have been or
    concurrently   with the Funding  Date are   being terminated   and all Liens
    securing obligations   under  the  Existing  Credit  Agreements have been or
    concurrently with the Funding Date are being released;

         (v)  evidence that all outstanding commercial paper of the Borrower and
    all outstanding commercial paper,  if any,  of the Business  shall each have
    been repaid in full; and

         (vi) such   other   assurances,  certificates,  documents,  consents or
    opinions not otherwise delivered on the Documentation  Closing  Date as  any
    Agent may reasonably require.

         (b) All  fees required  to be  paid by  the Borrower  on or  before the
Funding Date shall have been paid in full.

         (c) All  accrued reasonable  expenses of  the Agents  and the  Lenders,
including,  without  limitation,  Attorney  Costs  for  which  the  Borrower has
received a  reasonably detailed  invoice at  least 5  days prior  to the Funding
Date, shall have been paid in full.

         (d) The Documentation Closing Date shall have occurred, and the Funding
Date shall have occurred on or before March 31, 2003.

                                       52

         (e)  The  absence  of  any  action,  suit,  investigation or proceeding
pending or  threatened in  any court  or before  any arbitrator  or Governmental
Authority that  (a) could  reasonably be  expected to  materially and  adversely
affect the Borrower and its  Subsidiaries or the Business and  its Subsidiaries,
(b) purports to adversely affect the Transaction or the ability of the  Borrower
or any other Loan Party to  perform their respective obligations under the  Loan
Documents, or (c) purports to affect the legality, validity or enforceability of
any Loan Document.

         (f) All governmental, shareholder  and third party consents  (including
Hart-Scott Rodino, Council  Regulation (EEC 4064/89)  of the European  Community
and any  other competition  or investment  Law clearance  or approval) and other
approvals  necessary  to  consummate  the  Transaction shall have been obtained,
except for those consents (i) that the Lead Arrangers have agreed in writing may
be obtained  after the  Funding Date,  and (ii)  the failure  of which to obtain
would  not,  in  the  reasonable  discretion  of  the Lead Arrangers, materially
adversely affect the Lenders.  All such consents and approvals shall be in  full
force and effect, and all applicable waiting periods shall have expired  without
any  action  being  taken  by  any  Governmental  Authority that could restrain,
prevent or  impose any  material adverse  conditions on  the Transaction or that
could seek or threaten any of the  foregoing, and no law or regulation shall  be
applicable which  in the  reasonable judgment  of the  Lead Arrangers could have
such effect.

         (g) The completion of (i) the issuance to the Sellers of  approximately
$140,000,000 worth of shares  of common equity of  the Borrower (the "IR  Equity
Issuance") and (ii) a common equity offering by the Borrower to the public for a
price of not less than $14.75 per  share and resulting in gross proceeds to  the
Borrower of  not less  than $162,250,000  (the "Public  Equity Issuance").   The
Transaction shall have been  consummated, or shall be  consummated substantially
simultaneously with the initial Credit  Extension, in accordance with the  terms
of  the  Transaction  Documents  and  in  compliance  with  applicable  Law  and
regulatory approvals.  The Lenders  shall have received copies of  each proposed
alteration, amendment, change, supplement,  waiver or other modification  to the
Purchase Agreement,  and the  Purchase Agreement  shall not  have been  altered,
amended or otherwise changed or  supplemented or any material condition  therein
waived without the prior written consent of the Lead Arrangers to the extent any
such alteration, amendment or other  change would, in the reasonable  discretion
of the  Lead Arrangers,  materially adversely  affect the  Lenders.  The Lenders
shall  have  received  copies  of  each  amendment  or other modification to the
Related  Documents  (other  than  the  Purchase  Agreement),  and  such  Related
Documents shall  not have  been amended  or otherwise  modified or  any material
condition therein waived without the prior written consent of the Lead Arrangers
to  the  extent  any  such  amendment,  modification  or  waiver  would,  in the
reasonable discretion  of the  Lead Arrangers,  materially adversely  affect the
Lenders.

         (h)  After  giving  effect  to  the  Transaction,  including all Credit
Extensions  made  in  connection  therewith,  the  amount by which the aggregate
Revolving Credit Commitments  exceeds the sum  of (i) the  Outstanding Amount of
Revolving Credit Loans and (ii) the Outstanding Amount of L/C Obligations  shall
be no less than $125,000,000.

         (i) There  shall not  have occurred  a material  adverse change  in the
business,  assets,  liabilities  (actual  or  contingent), operations, condition
(financial or otherwise)  or prospects of  the Borrower and  its Subsidiaries or
the Business and its Subsidiaries taken as a whole since December 31, 2001 or  a
material adverse change in the facts and information regarding the Borrower, the
Business and their  respective Subsidiaries taken  as a whole  as represented to
the Agents and the Lenders on or prior to October 15, 2002.

         (j) None of Agents or the Lenders becoming aware after October 15, 2002
of any information relating to the Borrower and its Subsidiaries or the Business

                                       53

and its Subsidiaries not previously disclosed to the Agents and the Lenders  (or
of which the  Agents and the  Lenders were not  otherwise aware), or  any event,
development  or  change  relating  to  the  Borrower and its Subsidiaries or the
Business and its Subsidiaries after  such date that, in the  reasonable judgment
of the Agents and the Lenders, is inconsistent in a material and adverse  manner
with any information  or other matter  disclosed to the  Agents and the  Lenders
prior to such date.

         (k) Receipt by the Lead Arrangers of (i) consolidated and consolidating
monthly  financial  statements  of  the  Business  and its Subsidiaries for each
month,  beginning  with  the  month  ending  August  2002,  for  which financial
statements are  available, prepared  in a  manner consistent  with the financial
statements previously  delivered to  the Lead  Arrangers and  otherwise in  form
satisfactory  to  the  Lead  Arrangers,  (ii)  consolidated  and   consolidating
quarterly financial  statements of  the Business  and its  Subsidiaries for each
fiscal quarter,  beginning with  the fiscal  quarter ending  September 2002, for
which financial statements are available,  prepared in a manner consistent  with
the  financial  statements  previously  delivered  to  the  Lead  Arrangers  and
otherwise  in  form  satisfactory  to  the  Lead Arrangers, and (iii) either (A)
consolidated  year-to-date  financial  statements   of  the  Business  and   its
Subsidiaries as  of June  30, 2002  and as  of the  end of  each fiscal  quarter
thereafter for which financial statements are available, reviewed by independent
public accountants of  recognized national standing  and prepared in  accordance
with requirements of Regulation  S- X under the  Securities Act of 1933  and all
other accounting rules  and regulations of  the SEC promulgated  thereunder, and
otherwise in  form satisfactory  to the  Lead Arrangers,  or (ii)  if available,
consolidated  and  consolidating  financial  statements  of the Business and its
Subsidiaries  for  the  fiscal  year  ending  December  31,  2002,  audited   by
independent public accountants of  recognized national standing and  prepared in
conformity with GAAP.

         (l) If the condition in clause (iii) of Section 4.02(k) is satisfied by
providing the financial statements described in subclause (A) thereof, the  Lead
Arrangers shall have  received satisfactory evidence  that the underwriters  for
the Public Equity Issuance have received financial statements identical to those
described  in  such  subclause  (A)  accompanied  by  a customary comfort letter
addressed to such underwriters stating,  among other things, that the  financial
statements accompanying such comfort letter were reviewed in accordance with SAS
71.

         (m) The Borrower and its  Subsidiaries shall have a last  twelve months
pro forma Consolidated EBITDA (an "LTM EBITDA") (i) for the twelve-month  period
ended September 30, 2002 of at least $381,000,000, and (ii) for the twelve-month
period ending at the end of  each fiscal quarter thereafter for which  financial
statements (produced in  a manner consistent  with the financial  statements for
the period ended  September 30, 2002)  are available, of  not less than  the LTM
EBITDA for the immediately preceding fiscal quarter, in each case, calculated as
if the  Transaction had  occurred on  the first  day of  each such  twelve month
period.

         (n) All Loans to be made by the Lenders on the Funding Date shall be in
full compliance with Regulation U issued by the FRB.

         (o) The  Borrower shall  have delivered  to the  Lead Arrangers revised
Schedules 5.06, 5.08(b), 5.09, 5.12, 5.13, 7.02(f), 7.03, 7.08, 7.09 and  10.22,
such revisions to be  directly related to the  Acquisition and to be  reasonably
acceptable to the Lead Arrangers.

         4.03  Conditions  to  all  Credit  Extensions.   The obligation of each
Lender to honor any  Request for Credit Extension  (other than a Committed  Loan
Notice  requesting  only  a  conversion  of  Loans  to  the  other  Type,  or  a
continuation of Eurocurrency Rate Loans) is subject to the following  conditions
precedent:

                                       54

         (a)  The representations and warranties of the Borrower and each  other
    Loan Party contained in Article V or any other Loan  Document,  or which are
    contained in any document furnished by the Borrower  or any other Loan Party
    at any time under or in  connection herewith or therewith, shall be true and
    correct  in  all  material  respects  on  and as  of the date of such Credit
    Extension, except to the extent that such  representations  and   warranties
    specifically refer to an earlier date, in which case  they shall be true and
    correct in all material respects as of such earlier date.

         (b)  No Default shall exist, or would result from such proposed  Credit
    Extension or from the application of the proceeds therefrom.

         (c)  The Paying Agent and, if applicable, the Appropriate L/C Issuer or
    the Swing Line Lender shall have received a Request for Credit  Extension in
    accordance with the requirements hereof.

         Each Request for Credit Extension (other than a  Committed  Loan Notice
requesting only a conversion of Loans to  the  other  Type  or a continuation of
Eurocurrency  Rate Loans)  submitted  by  the  Borrower shall  be deemed to be a
representation and  warranty  that the conditions specified in Sections  4.03(a)
and 4.03(b)  have been satisfied on and as of the  date of the applicable Credit
Extension.

                                  ARTICLE V
                       REPRESENTATIONS AND WARRANTIES

         The Borrower  represents and  warrants to  the Agents  and the  Lenders
that:

         5.01 Existence, Qualification  and Power; Compliance  with Laws.   Each
Loan Party (a) is a  corporation, partnership or limited liability  company duly
organized or formed, validly existing and in good standing under the Laws of the
jurisdiction of its incorporation or  organization, (b) has all requisite  power
and authority and all requisite governmental licenses, authorizations,  consents
and approvals to (i) own or lease its assets and carry on its business and  (ii)
execute,  deliver  and  perform  its  obligations  under  the Loan Documents and
Related Documents to which it is a party, (c) is duly qualified and is  licensed
and in good standing  under the Laws of  each jurisdiction where its  ownership,
lease or operation of  properties or the conduct  of its business requires  such
qualification or  license, and  (d) is  in compliance  with all applicable Laws;
except in each case referred to in clause (b)(i), (c) or (d), to the extent that
failure to do  so could not  reasonably be expected  to have a  Material Adverse
Effect.

         5.02  Authorization;  No  Contravention.    The execution, delivery and
performance by each  Loan Party of  each Loan Document  and Related Document  to
which  such  Person  is  or  is  to  be  a  party,  and  the consummation of the
Transaction, are within such Loan  Party's corporate or other powers,  have been
duly authorized by all necessary  corporate or other organizational action,  and
do  not  and  will  not  (a)  contravene  the  terms  of  any  of  such Person's
Organization  Documents;  (b)  conflict  with   or  result  in  any  breach   or
contravention of, or the creation of  any Lien under, or require any  payment to
be made under (i) any Contractual Obligation to which such Person is a party  or
affecting  such  Person  or  the  properties  of  such  Person  or  any  of  its
Subsidiaries or (ii) except as would not be reasonably likely to have a Material
Adverse  Effect,  any  order,  injunction,  writ  or  decree of any Governmental
Authority or any arbitral award to which such Person or its property is subject;
or (c)  except as  would not  be reasonably  likely to  have a  Material Adverse
Effect,  violate  any  Law.    No  Loan  Party  or any of its Subsidiaries is in
violation of any Law, the violation of which could be reasonably likely to  have
a Material Adverse Effect.

                                       55

         5.03 Governmental Authorization; Other Consents.  No approval, consent,
exemption, authorization, or other action by, or notice to, or filing with,  any
Governmental  Authority  or  any  other  Person  is  necessary  or  required  in
connection with (i)  the execution, delivery  or performance by,  or enforcement
against, any Loan Party of this Agreement or any other Loan Document, or for the
consummation of the Transaction, or (ii) the exercise by any Agent or any Lender
of its rights under the Loan Documents, except for those that have already  been
obtained or have been determined by the Borrower as not necessary in  accordance
with Section 4.02(f).

         5.04 Binding  Effect.   This Agreement  has been,  and each  other Loan
Document, when delivered hereunder, will have been, duly executed and  delivered
by each Loan Party that is party thereto.  This Agreement constitutes, and  each
other  Loan  Document  when  so  delivered  will  constitute, a legal, valid and
binding obligation of  such Loan Party,  enforceable against such  Loan Party in
accordance with its terms, except as  such enforceability may be limited by  (a)
bankruptcy, insolvency, reorganization, moratorium or similar or laws of general
applicability  affecting  the  enforcement  of  creditors  rights  and  (b)  the
application of general principals of equity.

         5.05 Financial Statements; No Material Adverse Effect.

         (a) The Audited  Financial Statements (i)  were prepared in  accordance
with GAAP consistently applied throughout the period covered thereby, except  as
otherwise  expressly  noted  therein;  (ii)  fairly  present,  in  all  material
respects, the financial condition of the Borrower and its Subsidiaries as of the
date thereof and their results of  operations for the period covered thereby  in
accordance with GAAP consistently applied throughout the period covered thereby,
except  as  otherwise  expressly  noted  therein;  and  (iii)  show all material
Indebtedness and other  liabilities, direct or  contingent, of the  Borrower and
its  Subsidiaries  as  of  the  date  thereof,  including liabilities for taxes,
material commitments and Indebtedness.

         (b) The unaudited consolidated financial statements of the Borrower and
its  Subsidiaries  dated  September  30,  2002,  and  the  related  consolidated
statements of income or operations, shareholders' equity and cash flows for  the
fiscal quarter  ended on  that date  (i) were  prepared in  accordance with GAAP
consistently applied throughout the period covered thereby, except as  otherwise
expressly noted therein, and (ii) fairly present, in all material respects,  the
financial condition of the Borrower and its Subsidiaries as of the date  thereof
and their results of operations for the period covered thereby, subject, in  the
case of clauses (i) and (ii), to the absence of footnotes and to normal year-end
audit adjustments.

         (c) Since the date of the Audited Financial Statements, there has  been
no event or circumstance, either individually or in the aggregate, that has  had
or could reasonably be expected to have a Material Adverse Effect.

         5.06 Litigation.  There are  no actions, suits, proceedings, claims  or
disputes pending or,  to the knowledge  of the Borrower,  threatened at law,  in
equity, in arbitration or before  any Governmental Authority, by or  against the
Borrower  or  any  of  its  Subsidiaries  or  against any of their properties or
revenues that (a) purport to affect or pertain to this Agreement, any other Loan
Document, or any Related Document or the consummation of the Transaction, or (b)
except as  otherwise set  forth on  Schedule 5.06  (the "Disclosed Litigation"),
either individually or in the aggregate  could reasonably be expected to have  a
Material Adverse  Effect, and  there shall  have been  no adverse  change in the
status, or financial effect on any Loan Party or any of its Subsidiaries, of the
Disclosed Litigation from that described on Schedule 5.06.

                                       56

         5.07 No Default.  Neither the Borrower nor any Subsidiary is in default
under or with respect to, or a party to, any Contractual Obligation that  could,
either  individually  or  in  the  aggregate,  reasonably  be expected to have a
Material Adverse Effect.   No Default  has occurred and  is continuing or  would
result from the consummation of the transactions contemplated by this  Agreement
or any other Loan Document.

         5.08 Ownership of Property; Liens.

         (a) Each Loan Party  and each of its  Subsidiaries has good record  and
marketable title in  fee simple to,  or valid leasehold  interests in, all  real
property necessary or used in the  ordinary conduct of its business, except  for
such defects in title as could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.

         (b) Set  forth on  Schedule 5.08(b)  hereto is  a complete and accurate
list of all  Liens (other than  any Lien permitted  pursuant to Section  7.01(b)
through  (j))  on  the  property  or  assets  of  any  Loan  Party or any of its
Subsidiaries,  showing  as  of  each  of  the Documentation Closing Date and the
Funding Date  the lienholder  thereof, the  principal amount  of the obligations
secured thereby and the property or assets of such Loan Party or such Subsidiary
subject thereto.  The property of  the Borrower and its Subsidiaries is  subject
to no Liens, other  than Liens set forth  on Schedule 5.08(b), and  as otherwise
permitted by Section 7.01. 5.09  Environmental Compliance.  Except as  otherwise
set forth on Schedule 5.09:

         (a) The Borrower and its Subsidiaries conduct in the ordinary course of
business  a  review  of  the  effect  of  existing  Environmental Laws and known
Environmental  Liabilities  on  their  respective  businesses,  operations   and
properties, and as a result  thereof the Borrower has reasonably  concluded that
such  Environmental  Laws,  known  Environmental  Liabilities, and Environmental
Liabilities   that   would   be   known   based  upon  appropriate  inquiry  and
investigation,  could  not,  individually  or  in  the  aggregate, reasonably be
expected to have a Material Adverse Effect.

         (b)  The  Borrower  and  each  Loan  Party  are  in compliance with all
Environmental Laws governing  its business, except  to the extent  that any such
failure to comply (together with any resulting penalties, fines or  forfeitures)
would  not  reasonably  be  expected  to  have  a  Material Adverse Effect.  All
licenses, permits, registrations or approvals  required for the business of  the
Borrower and each Loan Party under  any Environmental Law have been secured  and
the Borrower and each such  Loan Party are in substantial  compliance therewith,
except for  such licenses,  permits, registrations  or approvals  the failure to
secure  or  to  comply  therewith  is  not  reasonably likely to have a Material
Adverse Effect.  Neither  the Borrower nor any  Loan Party has received  written
notice, or otherwise  knows, that it  is in any  respect in noncompliance  with,
breach of, or default  under any Environmental Laws,  and no event has  occurred
and is continuing  which, with the  passage of time  or the giving  of notice or
both, would constitute noncompliance,  breach of, or default  thereunder, except
in  each  such  case,  such  noncompliance,  breaches  or  defaults as would not
reasonably be expected to, in the aggregate, have a Material Adverse Effect.  No
property currently or  formerly owned or  operated by the  Borrower or any  Loan
Party existing as of the Documentation Closing Date and, to the knowledge of the
Borrower, no property currently or  formerly owned or operated by  the Business,
is listed on the NPL or any analogous foreign, state or local list, and, to  the
knowledge of the Borrower,  no such properties are  proposed for listing or  are
adjacent to a listed property.

         (c) Hazardous Materials have not at any time been (i) generated,  used,
treated or stored on, or transported to or from, any real property currently  or
formerly owned or operated by the Borrower  or by any Loan Party existing as  of
the Documentation Closing Date, or, to the knowledge of the Borrower, based upon

                                       57

appropriate inquiry and investigation,  any real property currently  or formerly
owned or operated by the Business,  or (ii) released, discharged or disposed  on
any such real property,  in each case where  such occurrence or event  is not in
compliance with Environmental Laws and  is reasonably likely to have  a Material
Adverse Effect.

         5.10 Insurance.   The properties of  the Borrower and  its Subsidiaries
are insured  with financially  sound and  reputable insurance  companies or  are
self-insured, in such amounts, with such deductibles and covering such risks  as
are customarily carried  by companies engaged  in similar businesses  and owning
similar properties in localities where the Borrower or the applicable Subsidiary
operates.

         5.11 Taxes.  The Borrower and its Subsidiaries have filed all  Federal,
state and other material tax returns and reports required to be filed, and  have
paid all Federal,  state and other  material taxes, assessments,  fees and other
governmental charges levied or imposed upon them or their properties, income  or
assets otherwise due and payable, except those which are being contested in good
faith by  appropriate proceedings  diligently conducted  and for  which adequate
reserves have been provided in accordance  with GAAP.  There is no  proposed tax
assessment against the Borrower  or any Subsidiary that  would, if made, have  a
Material Adverse Effect.  As of the Documentation Closing Date, neither any Loan
Party nor any of its Subsidiaries is party to any tax sharing agreement,  except
for tax sharing agreements among any of the Loan Parties.

         5.12 Pension Plans.

         (a) Except as set forth on Schedule 5.12 hereto, (i) each Plan has been
and will be funded in accordance with the terms of ERISA, (ii) there has been no
Reportable Event, (iii) no  Pension Plan has incurred  a liability to the  PBGC,
(iv) no Pension  Plan has incurred  a liability under  Title IV of  ERISA (other
than for  premiums due  and not  delinquent under  Section 4007  of ERISA),  (v)
neither the Borrower  nor any Loan  Party has incurred  any withdrawal liability
(within the meaning of Part 1 of Subtitle E of Title I of ERISA) with respect to
any Multiemployer Plan, (vi) neither the Borrower nor any Loan Party intends  to
withdraw  from  a  Multiemployer  Plan,  (vii)  no  Loan  Party has incurred any
liability under Section 502(i) of ERISA or Section 4975 of the Code with respect
to the  Plans, (viii)  no prohibited  transactions have  occurred, (ix) no ERISA
Event has occurred or is reasonably expected to occur, (x) the Borrower and each
ERISA Affiliate  have made  all required  contributions to  each Plan subject to
Section 412 of the Code in accordance  with Section 412 of the Code or  pursuant
to any binding agreement with the PBGC, and no application for a funding  waiver
or an extension of any amortization  period pursuant to Section 412 of  the Code
has been made with respect to any Plan, (xi) neither the Borrower nor any  ERISA
Affiliate has  incurred, or  reasonably expects  to incur,  any liability  under
Title IV of ERISA with respect to any Pension Plan (other than for premiums  due
and not delinquent under Section 4007 of ERISA), (xii) neither the Borrower  nor
any ERISA Affiliate has incurred, or reasonably expects to incur, any  liability
(and no event has occurred which,  with the giving of notice under  Section 4219
of ERISA, would result in such  liability) under Sections 4201 or 4243  of ERISA
with respect to a Multiemployer Plan, (xiii) neither the Borrower nor any  ERISA
Affiliate has engaged in a transaction that could be subject to Sections 4069 or
4212(c)  of  ERISA,  (xiv)  each  Plan  is  in  compliance  with  the applicable
provisions of ERISA,  the Code and  other Federal or  state Laws, and  (xv) each
Plan that is intended to qualify under Section 401(a) of the Code has received a
favorable determination letter from the IRS or an application for such a  letter
is  currently  being  processed  by  the  IRS  with  respect thereto and, to the
knowledge of the  Borrower, nothing has  occurred which would  prevent, or cause
the loss  of, such  qualification, and  which, with  respect to  subsections (i)
through (xv) above, in the aggregate, would not reasonably be expected to result
in a Material Adverse Effect.

                                       58

         (b)  There  are  no  pending  or,  to  the  knowledge  of the Borrower,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan that could be reasonably be expected to have a Material
Adverse Effect.  There  has been no prohibited  transaction or violation of  the
fiduciary responsibility  rules with  respect to  any Plan  that has resulted or
could reasonably be expected to result in a Material Adverse Effect.

         5.13 Subsidiaries; Equity Interests.   As of each of the  Documentation
Closing Date and the Funding Date, no Loan Party has any Subsidiaries other than
those  specifically  disclosed  in  Part  (a)  of  Schedule 5.13, and all of the
outstanding Equity Interests in such Subsidiaries have been validly issued,  are
fully paid  and non-assessable  and are  owned by  a Loan  Party in  the amounts
specified in Part (a)  of Schedule 5.13 free  and clear of all  Liens other than
those  permitted  pursuant  to  Section  7.01.    No  Loan  Party has any equity
Investments in any other Person  other than (i) those specifically  disclosed in
Part (b) of Schedule 5.13 and (ii) those Investments permitted by Section 7.02.

         5.14 Margin Regulations; Investment Company Act; Public Utility Holding
Company Act.

         (a) The Borrower is not engaged and will not engage, principally or  as
one  of  its  important  activities,  in  the business of purchasing or carrying
margin  stock  (within  the  meaning  of  Regulation  U  issued  by the FRB), or
extending credit for the purpose of  purchasing or carrying margin stock and  no
proceeds of any Borrowings or drawings  under any Letter of Credit will  be used
to purchase  or carry  any margin  stock or  to extend  credit to others for the
purpose of purchasing or carrying any margin stock.

         (b) None of the Borrower,  any Person Controlling the Borrower,  or any
Subsidiary (i) is a "holding company,"  or a "subsidiary company" of a  "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary  company"
of a "holding company," within the meaning of the Public Utility Holding Company
Act of  1935, or  (ii) is  or is  required to  be registered  as an  "investment
company" under the Investment  Company Act of 1940.   Neither the making  of any
Loan, nor the issuance  (or deemed issuance) of  any Letters of Credit,  nor the
application  of  the  proceeds  or  repayment  thereof  by the Borrower, nor the
consummation of the other transactions contemplated by the Loan Documents,  will
violate any provision of  any such Act or  any rule, regulation or  order of the
SEC thereunder.

         5.15 Disclosure.  No  written report, financial statement,  certificate
or other information furnished by or on behalf of any Loan Party to any Agent or
any  Lender  in  connection  with  the  transactions contemplated hereby and the
negotiation of this Agreement or delivered hereunder or any other Loan  Document
(as modified  or supplemented  by other  information so  furnished) contains any
material misstatement of fact or omits  to state any material fact necessary  to
make the statements therein, in the light of the circumstances under which  they
were made, not  misleading; provided that,  with respect to  projected financial
information provided by the Borrower or that is otherwise described on  Schedule
5.15, the Borrower  represents only that  such information was  prepared in good
faith based upon assumptions believed to be reasonable at the time.

         5.16 Compliance with Laws.  Each  Loan Party and each Subsidiary is  in
compliance in all material  respects with the requirements  of all Laws and  all
orders, writs, injunctions  and decrees applicable  to it or  to its properties,
except in such instances  in which (a) such  requirement of Law or  order, writ,
injunction or decree is being contested in good faith by appropriate proceedings
diligently conducted or (b) the failure to comply therewith, either individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.

                                       59

         5.17 Intellectual  Property; Licenses,  Etc.   Each Loan  Party and its
Subsidiaries own, or possess  the right to use,  all of the trademarks,  service
marks, trade names, copyrights, patents, patent rights, franchises, licenses and
other  intellectual  property  rights  (collectively,  "IP  Rights")  that   are
reasonably necessary for the  operation of their respective  businesses, without
conflict with the rights of any other Person, except where the failure to do so,
or for such conflicts that, could not reasonably be expected to have a  Material
Adverse Effect.   To  the best  knowledge of  the Borrower,  no slogan  or other
advertising device, product, process, method, substance, part or other  material
now employed,  or now  contemplated to  be employed,  by any  Loan Party  or any
Subsidiary infringes upon any rights held  by any other Person, except for  such
infringements that could not reasonably  be expected to have a  Material Adverse
Effect.  No claim  or litigation regarding any  IP Rights is pending  or, to the
knowledge of  the Borrower,  threatened, which,  either individually  or in  the
aggregate, could reasonably be expected to have a Material Adverse Effect.

         5.18  Solvency.    The  Borrower   and  its  Subsidiaries  are,  on   a
consolidated basis, Solvent.

                                  ARTICLE VI
                            AFFIRMATIVE COVENANTS

         So long as any Lender shall have any Commitment hereunder, any Loan  or
other Obligation hereunder which is  accrued and payable shall remain  unpaid or
unsatisfied, or  any Letter  of Credit  shall remain  outstanding, the  Borrower
shall, and  shall (except  in the  case of  the covenants  set forth in Sections
6.01, 6.02, 6.03 and 6.11) cause each Subsidiary to:

         6.01 Financial Statements.  Deliver  to each Agent and each  Lender, in
form and detail  satisfactory to the  Co-Administrative Agents and  the Required
Lenders:

         (a)  as soon as available, but in  any event  within  90 days after the
    end of each fiscal year of the Borrower, a consolidated balance sheet of the
    Borrower and  its Subsidiaries  as at  the end  of such fiscal year, and the
    related  consolidated  statements  of  income or   operations, shareholders'
    equity and cash flows for such fiscal year,  setting  forth  in each case in
    comparative form the figures for the previous fiscal year, all in reasonable
    detail and prepared in accordance with GAAP, audited and   accompanied  by a
    report and opinion  of  an   independent   certified public   accountant  of
    nationally  recognized   standing  reasonably   acceptable  to  the Required
    Lenders,  which  report and opinion   shall be  prepared  in accordance with
    generally accepted auditing standards and shall not be subject to any "going
    concern"   or  like   qualification or   exception or  any  qualification or
    exception as to the scope of such audit;

         (b)  as soon as available,  but in any event  within  45 days after the
    end of each of the first three fiscal  quarters  of  each fiscal year of the
    Borrower, a consolidated balance sheet of the Borrower  and its Subsidiaries
    as at the  end  of   such  fiscal   quarter, and the   related  consolidated
    statements of income or  operations, shareholders' equity and cash flows for
    such fiscal quarter and for the portion of the  Borrower's fiscal  year then
    ended, setting forth in each  case  in  comparative form the figures for the
    corresponding   fiscal  quarter  of   the   previous   fiscal  year  and the
    corresponding portion of the previous fiscal year, all in  reasonable detail
    and certified by a Responsible Officer of the  Borrower as fairly presenting
    the financial condition,  results of operations,  shareholders'  equity  and
    cash flows  of the  Borrower  and its  Subsidiaries in accordance with GAAP,
    subject   only to normal  year-end  audit   adjustments  and  the absence of
    footnotes; and

                                       60

         (c)  as soon as available, but in any event no later than February 15th
    of each year,  forecasts  prepared  by management of  the Borrower,  in form
    satisfactory  to the   Co-Administrative Agents,  of  consolidated   balance
    sheets, income statements and  cash  flow statements of the Borrower and its
    Subsidiaries  on a  monthly basis for the fiscal  year following such fiscal
    year  and  on  an  annual  basis  for each fiscal  year thereafter until the
    Maturity Date for the Revolving Credit Facility.

         As  to  any  information  contained  in materials furnished pursuant to
Section 6.02(d), the Borrower shall  not be separately required to  furnish such
information under Section 6.01(a) or 6.01(b), but the foregoing shall not be  in
derogation of  the obligation  of the  Borrower to  furnish the  information and
materials  described  in  Sections  6.01(a)  and  6.01(b) at the times specified
therein.

         6.02 Certificates; Other Information.   Deliver to each Agent and  each
Lender, in form and detail satisfactory to the Co-Administrative Agents and  the
Required Lenders:

         (a)  concurrently   with   the   delivery  of  the financial statements
    referred to in Section 6.01(a), a certificate of its independent   certified
    public accountants certifying such financial statements  and stating that in
    making the examination necessary therefor no  knowledge was  obtained of any
    Default or,  if any such  Default shall exist, stating the nature and status
    of such event;

         (b)  concurrently   with  the delivery  of  the  financial   statements
    referred to in Sections 6.01(a) and 6.01(b),   a duly  completed  Compliance
    Certificate signed  by a  Responsible  Officer  of  the Borrower, and in the
    event of any change in generally accepted  accounting principles used in the
    preparation of such financial  statements,  the Borrower shall also provide,
    if necessary  for  the   determination of  compliance  with  Section 7.11, a
    statement of reconciliation conforming such financial statements to GAAP;

         (c)  promptly  after  any  request by any Agent, copies of any detailed
    audit reports, management letters or recommendations  submitted to the board
    of directors  (or the  audit  committee of  the  board  of directors) of the
    Borrower by independent accountants in connection with the accounts or books
    of any Loan Party or any Subsidiary, or any audit of any of them;

         (d)  unless the same shall be publicly available,  promptly  after  the
    same are  available,   copies of each annual  report,   proxy or   financial
    statement or other report or communication sent to the  stockholders  of the
    Borrower, and copies  of all  annual,  regular, periodic and special reports
    and registration statements  which the  Borrower  may file or be required to
    file with  the SEC  under Section 13 or 15(d) of the Securities Exchange Act
    of 1934,  or  with  any   Governmental  Authority  that  may  be substituted
    therefor,   or with any  national  securities exchange, and in any case  not
    otherwise required to be delivered to the Agents pursuant hereto;

         (e)  promptly after the assertion or occurrence thereof, notice  of any
    Environmental Action against  or of  any  noncompliance by any Loan Party or
    any of its Subsidiaries with any Environmental  Law or  Environmental Permit
    that could reasonably be expected to have a Material Adverse Effect; and

         (f)  promptly,  such  additional  information  regarding  the business,
    financial or   corporate affairs  of  any  Loan  Party or any Subsidiary, or
    compliance with the terms of the Loan Documents,  as any Agent or any Lender
    may from time to time reasonably request.

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         Documents required to be delivered pursuant to Section 6.01(a), 6.01(b)
or 6.02(d) (to the extent any such documents are included in materials otherwise
filed with the SEC) may be  delivered electronically and if so delivered,  shall
be deemed to  have been delivered  on the date  (i) on which  the Borrower posts
such documents,  or provides  a link  thereto on  the Borrower's  website on the
Internet at the website address listed on Schedule 10.02; or (ii) on which  such
documents  are  posted  on  the  Borrower's  behalf on IntraLinks/IntraAgency or
another relevant  website, if  any, to  which each  Lender and  each Agent  have
access (whether a  commercial, third-party website  or whether sponsored  by the
Co-Administrative Agents); provided that:  (i) the Borrower shall deliver  paper
copies of such documents to any  Agent or any Lender that requests  the Borrower
to deliver such paper copies until  a written request to cease delivering  paper
copies is given by such Agent or such Lender and (ii) the Borrower shall  notify
(which may be by facsimile or electronic mail) each Agent and each Lender of the
posting of  any such  documents and  provide to  the Co-Administrative Agents by
electronic  mail  electronic  versions  (i.e.,  soft  copies) of such documents.
Notwithstanding anything contained herein, in every instance the Borrower  shall
be required to provide paper  copies of the Compliance Certificates  required by
Section 6.02(c) to each of the Agents and each of the Lenders.  Except for  such
Compliance Certificates, the Co-Administrative  Agents shall have no  obligation
to request  the delivery  or to  maintain copies  of the  documents referred  to
above, and in any  event shall have no  responsibility to monitor compliance  by
the Borrower with any such request for delivery, and each Lender shall be solely
responsible for  requesting delivery  to it  or maintaining  its copies  of such
documents.

         6.03  Notices.    Promptly  after  a  Responsible Officer has knowledge
thereof, notify each Agent and each Lender:

         (a)  of the occurrence of any Default;

         (b)  of any matter that has resulted or could  reasonably  be  expected
    to result in a Material Adverse Effect;

         (c)  of the occurrence of any ERISA Event;

         (d)  of any material change in accounting policies, financial reporting
    practices or fiscal year by the Borrower;

         (e)  of the (A) occurrence of any Disposition of property or assets for
    which the Borrower is   required to make a  mandatory  repayment pursuant to
    Section 2.06(b)(i), (B) incurrence or issuance of any Indebtedness for which
    the Borrower is required  to make  a mandatory repayment pursuant to Section
    2.06(b)(ii)  and  (C)  receipt  of  any  Extraordinary Receipt for which the
    Borrower is   required  to  make  a mandatory repayment  pursuant to Section
    2.06(b)(iii); and

         (f)  of any public announcement by Moody's or S&P of any  change  in  a
    Debt Rating.

         Each notice pursuant to subparts  (a) through (e) of this  Section 6.03
shall be accompanied  by a statement  of a Responsible  Officer of the  Borrower
setting forth  details of  the occurrence  referred to  therein and stating what
action the Borrower has taken and proposes to take with respect thereto.

         6.04  Payment  of  Obligations.    Pay  and discharge as the same shall
become due and payable, all its material obligations and liabilities,  including
(a) all tax liabilities, assessments and governmental charges or levies upon  it
or its properties or assets, unless  the same are being contested in  good faith
by  appropriate  proceedings  diligently  conducted  and  adequate  reserves  in
accordance with GAAP  are being maintained  by the Borrower  or such Subsidiary,

                                       62

(b) all  lawful claims  which, if  unpaid, would  by law  become a Lien upon its
property not permitted  pursuant to Section  7.01, and (c)  all Indebtedness, as
and when due and  payable unless the failure  to so pay would  not constitute an
Event of Default hereunder or would not be reasonably likely to cause a Material
Adverse Effect,  but subject  to any  subordination provisions  contained in any
instrument or agreement evidencing such Indebtedness.

         6.05 Preservation of Existence, Etc.  (a) Preserve, renew and  maintain
in full force and effect its legal existence and good standing under the Laws of
the  jurisdiction  of  its  organization  except  in  a transaction permitted by
Section 7.04 or  7.05; (b) take  all reasonable action  to maintain all  rights,
privileges,  permits,  licenses  and  franchises  necessary  or desirable in the
normal conduct of its business, except to the extent that failure to do so could
not reasonably be expected to have  a Material Adverse Effect; and (c)  preserve
or renew  all of  its registered  patents, trademarks,  trade names  and service
marks, the  non-preservation of  which could  reasonably be  expected to  have a
Material Adverse Effect.

         6.06 Maintenance of Properties.  (a) Maintain, preserve and protect all
of  its  material  properties  and  equipment  necessary in the operation of its
business in good working order  and condition, ordinary wear and  tear excepted,
except to  the extent  that the  continued maintenance  of such  property is  no
longer economically desirable as determined  in good faith by the  Borrower; (b)
make all necessary repairs thereto and renewals and replacements thereof  except
where the failure to do so could  not reasonably be expected to have a  Material
Adverse Effect; and (c) use the standard of care typical in the industry in  the
operation and maintenance of its facilities.

         6.07 Maintenance  of Insurance.   Maintain  insurance with  financially
sound and reputable insurance companies  or maintain a self- insurance  program,
with respect to its properties and business against loss or damage of the  kinds
customarily insured against by Persons engaged in the same or similar  business,
of such  types and  in such  amounts as  are customarily  carried under  similar
circumstances by such other Persons.

         6.08 Compliance with  Laws.  Comply  in all material  respects with the
requirements  of  all  Laws  and  all  orders,  writs,  injunctions  and decrees
applicable to it  or to its  business or property,  except in such  instances in
which (a) such requirement of Law or order, writ, injunction or decree is  being
contested in good faith by appropriate proceedings diligently conducted; or  (b)
the failure  to comply  therewith could  not reasonably  be expected  to have  a
Material Adverse Effect.

         6.09 Books and Records.   Maintain proper books of record  and account,
in which  full, true  and correct  entries in  conformity with GAAP consistently
applied shall be  made of all  financial transactions and  matters involving the
assets and business of the Borrower or such Subsidiary, as the case may be.

         6.10 Inspection Rights.  Within  five Business Days of delivery  of the
notice referred to below, permit representatives and independent contractors  of
each  Agent  and  each  Lender  to  visit  and inspect any of its properties, to
examine its corporate, financial and operating records, and make copies  thereof
or abstracts therefrom, and to  discuss its affairs, finances and  accounts with
its directors, officers, and independent public accountants, all at the  expense
of the Borrower and at such reasonable times during normal business hours and as
often  as  may  be  reasonably  desired,  upon  reasonable advance notice to the
Borrower; provided, however, that when an  Event of Default exists any Agent  or
any  Lender  (or  any   of  their  respective  representatives   or  independent
contractors) may do any of the foregoing  at the expense of the Borrower at  any
time during normal business hours and without advance notice.

                                       63

         6.11 Use of Proceeds.   Use the proceeds  of the Credit Extensions  (i)
for working capital, Capital  Expenditures and other lawful  corporate purposes,
and (ii) to finance the Acquisition,  in each case, not in contravention  of any
Law or of any Loan Document.

         6.12 Covenant to  Guarantee Obligations.   Upon (x) the  request of any
Co-Administrative Agent following the occurrence and during the continuance of a
Default, or  (y) the  formation or  acquisition of  any new  direct or  indirect
Domestic Subsidiaries by any Loan Party,  then the Borrower shall, in each  case
at the Borrower's expense:

         (i)  in  connection  with  the  formation  or acquisition of a Domestic
    Subsidiary   (other  than (A)   a  special  purpose  entity  established  to
    facilitate a   securitization or other  financing of  accounts receivable or
    other  assets   of  any  Loan  Party  otherwise  permitted   hereunder  (the
    "Receivables Subsidiary") or (B) PEL  Technologies, LLC, but  only  so  long
    as (x) the Borrower directly or indirectly owns less than 100% of the Equity
    Interests in PEL Technologies,  LLC  and (y) the  fair market value  of  the
    assets of PEL Technologies, LLC is less  than $75,000,000),  within 30  days
    after such formation or acquisition, cause  each such  Domestic  Subsidiary,
    and cause each direct and indirect parent of such Domestic Subsidiary (if it
    has  not   already   done so),   to  duly  execute  and  deliver  to     the
    Co-Administrative Agents a  guaranty or  guaranty  supplement, in   form and
    substance   satisfactory to  the Co- Administrative Agents, guaranteeing the
    other Loan Parties' obligations under the Loan Documents,

         (ii) within   60 days  after  such request,   formation or acquisition,
    deliver   to  the   Co-Administrative Agents,  upon  the  request  of   the
    Co-Administrative Agents  in  their  sole discretion, a  signed  copy  of a
    favorable opinion, addressed to the Agents and the other Lender Parties, of
    counsel for the Loan Parties acceptable to the  Co-Administrative Agents as
    to the  matters  contained in clause  (i) above, as to such  guaranties and
    guaranty supplements,  being legal,  valid and binding  obligations of each
    Loan   Party  party  thereto  enforceable  in  accordance with their terms;

provided, however, that, notwithstanding anything in any Loan Document  to  the
contrary, in no event will the stock or  assets  of  any  Foreign Subsidiary be
directly or indirectly pledged under  any Loan  Document,  nor will any Foreign
Subsidiary be required to provide a guaranty or  guaranty supplement  under any
Loan Document.

         6.13 Compliance with Environmental Laws.  Comply, and cause all lessees
and  other  Persons  operating  or  occupying  its  properties to comply, in all
material  respects,  with  all  applicable  Environmental Laws and Environmental
Permits; obtain and renew all Environmental Permits necessary for its operations
and properties; and conduct any investigation, study, sampling and testing,  and
undertake  any  cleanup,  removal,  remedial  or  other  action  to  address any
Hazardous Materials on or under any of its properties, to the extent required by
applicable Environmental Laws; provided, however, that neither the Borrower  nor
any  of  its  Subsidiaries  shall  be  required  to  undertake any such cleanup,
removal, remedial or other action to the extent that its obligation to do so  is
being contested in good faith and by proper proceedings and appropriate reserves
are being maintained with respect to such circumstances.

         6.14 Further Assurances.   Promptly upon  request by any  Agent, or any
Lender through any Co-Administrative Agent,  (i) correct any material defect  or
error  that  may  be  discovered  in  any  Loan  Document  or  in the execution,
acknowledgment,  filing   or  recordation   thereof,  and   (ii)  do,   execute,
acknowledge, deliver, record, re-record, file, re-file, register and re-register
any  and  all  such  further  acts,  deeds,  certificates,  assurances and other
instruments as any Agent, or any Lender through any Co-Administrative Agent, may
reasonably require from time to time in order to carry out more effectively  the
purposes of the Loan Documents.

                                       64

         6.15  High  Grade  Notes  Documents.    If  at  any  time  any covenant
(including, without  limitation, any  basket level)  or any  default (including,
without limitation, the Threshold Amount  or any grace period) contained  in any
High Grade Notes  Document shall be  more restrictive to  the Borrower than  the
comparable provision of Article VI, VII or VIII, then the Borrower shall, within
45  days  thereafter,  enter  into  such  agreements, documents and instruments,
including without limitation an amendment to the Loan Documents, such that after
giving effect to  such agreements, documents  and instruments, such  covenant or
event of  default is  no more  restrictive to  the Borrower  than the comparable
provision of Article VI, VII or VIII.

                                  ARTICLE VII
                              NEGATIVE COVENANTS

         So long as any Lender shall have any Commitment hereunder, any Loan  or
other Obligation hereunder which is  accrued and payable shall remain  unpaid or
unsatisfied, or  any Letter  of Credit  shall remain  outstanding, the  Borrower
shall not, nor shall it permit any Subsidiary to, directly or indirectly:

         7.01 Liens.  Create, incur, assume or suffer to exist any Lien upon any
of its property, assets or revenues, whether now owned or hereafter acquired, or
authorize the  filing under  the Uniform  Commercial Code  of any jurisdiction a
financing  statement  that  names  the  Borrower  or  any of its Subsidiaries as
debtor,  or  sign  or  suffer  to  exist  any security agreement authorizing any
secured  party  thereunder  to  file  such  financing  statement,  or assign any
accounts or other right to receive income, other than the following:

         (a)  Liens  existing  on  the  Documentation  Closing Date  and  on the
    Funding Date  that  are  listed  on  Schedule 5.08(b)  and  any  renewals or
    extensions thereof,  provided  that the property   covered thereby   is  not
    changed and the amount not increased or the direct or any contingent obligor

    changed and any renewal or extension of the obligations secured or benefited
    thereby is permitted by Section 7.03(c)(B);

         (b)  Liens for taxes not yet due or  which  are being contested in good
    faith and by  appropriate   proceedings  diligently conducted,  if  adequate
    reserves with respect thereto are maintained on the  books of the applicable
    Person in accordance with GAAP;

         (c)  carriers', warehousemen's, mechanics', materialmen's, repairmen's,
    landlord's or other like Liens arising  in the ordinary  course  of business
    which are not overdue for a period of  more than 30 days  or which are being
    contested in good faith and by appropriate proceedings diligently conducted,
    if adequate reserves with respect thereto are maintained on the books of the
    applicable Person;

         (d)  pledges  or   deposits  in   the  ordinary  course  of business in
    connection with  workers' compensation,  unemployment  insurance  and  other
    social security legislation, other than any Lien imposed by ERISA;

         (e)  deposits to secure  the performance of bids,  trade  contracts and
    leases (other than Indebtedness), statutory obligations, surety bonds (other
    than bonds related to judgments or  litigation), performance bonds and other
    obligations of a like nature incurred in the ordinary course of business;

         (f)  easements, rights-of-way, zoning restrictions, other  restrictions
    and other similar   encumbrances  affecting  real  property  which,   in the

                                       65

    aggregate, are not  substantial  in   amount,   and which do not in any case
    materially   detract from   the value of  the  property  subject  thereto or
    materially   interfere with  the ordinary conduct  of  the  business  of the
    applicable Person;

         (g)  Liens securing judgments for the payment of money not constituting
    an Event of Default under Section 8.01(h) or securing appeal or other surety
    bonds related to such judgments;

         (h)  Liens securing   Indebtedness permitted  under Section 7.03(c)(E);
    provided that (i) such Liens do not at any time  encumber any property other
    than the   property  financed  by such Indebtedness,  (ii) the  Indebtedness
    secured thereby does not  exceed the cost or fair market value, whichever is
    lower, of the   property being acquired on the date of acquisition and (iii)
    with respect to capital leases, such Liens do not at any time   extend to or
    cover any assets other than the assets subject to such capital leases;

         (i)  Liens on or transfers of accounts receivable and  contracts,   and
    instruments and other assets related thereto arising in  connection with the
    sale of such accounts receivable pursuant to Section 7.05(g);

         (j)  Liens  securing    Indebtedness  permitted  by Section 7.03(c)(H),
    provided that such Liens existed prior to such Person becoming a  Subsidiary
    of the Borrower, were not created in anticipation  thereof and do not extend
    to any assets other than those of such Subsidiary; and

         (k)  other   Liens  securing  Indebtedness  outstanding in an aggregate
    principal amount not to exceed $50,000,000.

         7.02 Investments.  Make or hold any Investments, except:

         (a)  Investments held by the Borrower or such Subsidiary in the form of
    Cash Equivalents;

         (b)  in addition to any such advances outstanding on the  Documentation
    Closing Date, advances to officers, directors and  employees of the Borrower
    and  Subsidiaries  made  in the   ordinary  course   of business for travel,
    entertainment, relocation and analogous ordinary business purposes;

         (c)  (i) equity   Investments  of   the  Borrower  in any Guarantor and
    Investments of any Guarantor in the Borrower or  in  another Guarantor, (ii)
    equity Investments of a Foreign Subsidiary in any other Subsidiary and (iii)
    equity   Investments of  a  Loan  Party  in  the  Receivables Subsidiary and
    Investments of the Receivables  Subsidiary  in any Loan Party, in each case,
    to the  extent  such  Investments pursuant  to this clause (iii) are limited
    solely  to  the   Receivables  Subsidiary's  acquisition of  receivables and
    related  assets  in   connection  with   the  Receivables  Facility  and for
    activities incidental to such acquisitions and the  Receivables Subsidiary's
    status as a special purpose vehicle;

         (d)  Investments consisting of extensions of credit  in the  nature  of
    accounts receivable  or  notes  receivable  arising  from the grant of trade
    credit in  the  ordinary   course  of  business, and Investments received in
    satisfaction or partial   satisfaction thereof  from   financially  troubled
    account debtors to the extent  reasonably  necessary  in order to prevent or
    limit loss;

         (e)  Guarantees permitted by Section 7.03;

                                       66

         (f)  Investments existing on the Documentation Closing Date and  on the
    Funding Date that are set forth on Schedule 7.02(f);

         (g)  Investments by the Borrower or any  Subsidiary  in  Swap Contracts
    permitted under Section 7.03(a)(A) or Section 7.03(c)(D);

         (h)  Investments   consisting   of   intercompany debt  permitted under
    Section 7.03(a)(C), 7.03(b)(A), 7.03(c)(F) or 7.03(d)(A); and

         (i)  the purchase or other acquisition of all of the  Equity  Interests
    in, or all or substantially all of the property  and  assets  of, any Person
    that, upon the consummation  thereof, will be  wholly  owned directly by the
    Borrower or one or more of its wholly owned Subsidiaries (including, without
    limitation, as a  result of a  merger or consolidation); provided that, with
    respect to each purchase or other acquisition made pursuant to this  Section
    7.02(i):

              (A)  any  such  newly created or  acquired Subsidiary shall comply
         with the requirements of Sections 6.12;

              (B)  the lines of business of the   Person to be  (or the property
         and assets of which are to be) so purchased or otherwise acquired shall
         not be substantially different  than  the lines  of  business currently
         conducted   by  the   Borrower  and its   Subsidiaries  or any business
         substantially related or incidental thereto;

              (C)  the total cash and noncash consideration (including,  without
         limitation, all indemnities, earnouts  and  other   contingent  payment
         obligations to, and the   aggregate  amounts  paid  or to be paid under
         noncompete,  consulting  and  other  affiliated  agreements  with,  the
         sellers thereof,  all  write-downs of  property and assets and reserves
         for  liabilities   with respect  thereto  and  all assumptions of debt,
         liabilities   and  other   obligations  in   connection  therewith, but
         specifically   excluding (x)  the  fair  market   value of  all  Equity
         Interests issued  or  transferred to  the sellers thereof,  (y) the Net
         Cash Proceeds from the issuance of any Equity Interests of the Borrower
         on or after the Funding Date,  and (z)  the Net  Cash Proceeds from the
         Disposition of any assets or property by the Borrower or any Subsidiary
         on or after  the Funding Date, which Net Cash Proceeds are not required
         to be used to prepay Loans pursuant to Section 2.05(b))  paid  by or on
         behalf of the  Borrower  and  its Subsidiaries for any such purchase or
         other acquisition, when  aggregated  with  the  total  cash and noncash
         consideration paid by or on behalf of the Borrower and its Subsidiaries
         for all other purchases and other acquisitions made by the Borrower and
         its Subsidiaries pursuant to this Section 7.02(i), shall not exceed (I)
         if, after  giving  effect to  such  purchase or other  acquisition, the
         Borrower  has  a   Debt  Rating  of BBB- by S&P   and  Baa3 by Moody's,
         $200,000,000 in any  fiscal year,  and (II) if,  after giving effect to
         such purchase or  other  acquisition, the Borrower has a Debt Rating of
         less than  BBB- by S&P or less than Baa3 by Moody's, $75,000,000 in any
         fiscal year,  it  being   understood that  the  aggregate consideration
         limits in  this  clause (C) shall   not be  applicable if, after giving
         effect to such purchase or other acquisition, the Borrower  has  a Debt
         Rating of at least BBB by S&P and at least Baa2 by Moody's;

              (D)  (1) immediately before and immediately after giving pro forma
         effect to any such purchase or other acquisition, no Default shall have
         occurred and be continuing and  (2) immediately  after giving effect to
         such purchase or other acquisition, the  Borrower  and its Subsidiaries
         shall be in pro forma compliance with all of the covenants set forth in
         Section 7.11,  such compliance  to be   determined on  the basis of the

                                       67

         financial  information  most  recently  delivered to the Agents and the
         Lenders pursuant to Section 6.01(a) or 6.01(b) as though such  purchase
         or other acquisition had been consummated as  of the  first day of  the
         fiscal period covered thereby; and

              (E)  if   the  acquisition  involves   consideration  in excess of
         $5,000,000, the Borrower shall have delivered to the  Co-Administrative
         Agents, on behalf of the Lenders, at least five  Business Days prior to
         the date on which   any  such  purchase  or  other acquisition is to be
         consummated,  a certificate  of  a  Responsible Officer,   in  form and
         substance  reasonably  satisfactory  to  the  Co-Administrative Agents,
         certifying   that all   of  the  requirements set forth in this Section
         7.02(i) have been   satisfied or   will be satisfied on or prior to the
         consummation of such purchase or other acquisition;

         (j)  Investments by the Borrower  and  its  Subsidiaries not  otherwise
    permitted  under this  Section 7.02 in Foreign Subsidiaries in an amount not
    to exceed the Adjusted Foreign Subsidiaries/Joint Venture Basket at the time
    of such Investment;  provided  that immediately before and immediately after
    giving  pro forma   effect  to any  such Investment, no Event of Default  or
    Default  under   Section 8.01(a), (f) or (g)   shall  have  occurred  and be
    continuing and (2) immediately after giving effect to such Investment,   the
    Borrower and its Subsidiaries shall be in   pro forma compliance with all of
    the covenants set forth in Section 7.11, such compliance to be determined on
    the basis of the financial information most recently delivered to the Agents
    and the  Lenders  pursuant  to   Section 6.01(a) or 6.01(b) as  though  such
    Investment had been consummated as  of  the  first day of the fiscal  period
    covered thereby;

         (k)  Investments by the  Borrower  and  its  Subsidiaries not otherwise
    permitted under this   Section 7.02 in joint  ventures  in an  amount not to
    exceed the Adjusted Foreign Subsidiaries/Joint Venture Basket at the time of
    such Investment; provided that  immediately  before and   immediately  after
    giving pro forma  effect to  any such   Investment,  no  Default  shall have
    occurred and be   continuing and (2) immediately after giving effect to such
    Investment,   the  Borrower  and  its Subsidiaries   shall  be  in pro forma
    compliance   with  all  of  the  covenants  set  forth in Section 7.11, such
    compliance to be determined on the basis of the   financial information most
    recently delivered to the Agents and the Lenders pursuant to Section 6.01(a)
    or 6.01(b) as though  such  Investment  had been consummated as of the first
    day of the fiscal period covered thereby; and

         (l)  other Investments not  exceeding $25,000,000  in the  aggregate in
    any fiscal year of the Borrower.

         7.03 Indebtedness.  Create,  incur,   assume  or  suffer  to  exist any
Indebtedness, except:

         (a)  in the case of the Borrower,

              (A)  Indebtedness in respect of Swap  Contracts  designed to hedge
         against  fluctuations   in  interest   rates or  foreign exchange rates
         incurred in the ordinary course of business and consistent with prudent
         business practice,

              (B)  Indebtedness evidenced by the High Grade Notes,

              (C)  Indebtedness   owed  to  a   wholly-owned   Subsidiary, which
         Indebtedness shall be unsecured and subordinated on terms acceptable to
         the Co-Administrative Agents, and

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              (D)  unsecured Indebtedness owed to a Person other than a  wholly-
         owned Subsidiary;

         (b)  in the case of the Guarantors,

              (A)  Indebtedness   owed  to   the Borrower  or  a    wholly-owned
         Subsidiary,  which Indebtedness shall be unsecured and  subordinated on
         terms acceptable to the Co-Administrative Agents, and

              (B)  unsecured   Indebtedness  owed  to   a  Person other than the
         Borrower or a wholly-owned Subsidiary;

         (c)  in the case of the Borrower and its Subsidiaries,

              (A)  Indebtedness under the Loan Documents;

              (B)  Indebtedness outstanding  on  the  Documentation Closing Date
         and  on  the   Funding  Date   that are listed on Schedule 7.03 and any
         refinancings, refundings, renewals or extensions thereof; provided that
         the amount of such Indebtedness  is not  increased at  the time of such
         refinancing, refunding, renewal or extension  except by an amount equal
         to a reasonable premium or  other  reasonable amount paid, and fees and
         expenses reasonably  incurred,  in connection with such refinancing and
         by an amount  equal to  any existing commitments unutilized thereunder,
         and the direct and contingent obligors  therefor  shall not be changed,
         as a result   of  or  in   connection with such refinancing, refunding,
         renewal or extension, unless such obligor is a Foreign Subsidiary,   in
         which case the   obligor  under  such  refinanced, refunded, renewed or
         extended Indebtedness may be another Foreign Subsidiary; provided still
         further that  the  terms  relating to principal  amount,  amortization,
         maturity, collateral  (if any) and  subordination (if any), and   other
         material terms taken as a  whole, of any such  extending,  refunding or
         refinancing  Indebtedness, and of any agreement entered into and of any
         instrument issued in connection therewith, are no less favorable in any
         material respect to the Loan Parties or the  Lenders  than the terms of
         any agreement or instrument governing the  Indebtedness being extended,
         refunded or  refinanced  and  the  interest rate applicable to any such
         extending, refunding or  refinancing  Indebtedness  does not exceed the
         then applicable market interest rate;

              (C)  Guarantees of the Borrower or any Guarantor (I) in respect of
         Indebtedness (other than intercompany Indebtedness) otherwise permitted
         hereunder of the Borrower or any  other Guarantor,  and (II) in respect
         of Indebtedness   (other  than  intercompany  Indebtedness)   otherwise
         permitted   hereunder of  a  Foreign   Subsidiary (x)   if such Foreign
         Subsidiary was acquired in   connection with the Acquisition and to the
         extent such Indebtedness was guaranteed by IR or any of its Affiliates,
         or (y) if such Indebtedness was assumed by such Foreign Subsidiary from
         another Foreign  Subsidiary  and  to  the extent  such Indebtedness was
         guaranteed by the Borrower or any Guarantor;

              (D)  obligations (contingent or otherwise) of the Borrower  or any
         Subsidiary existing or arising under any  Swap  Contract, provided that
         (i) such obligations are (or were) entered  into by  such Person in the
         ordinary course of  business  for  the  purpose  of directly mitigating
         risks associated with liabilities, commitments, investments, assets, or
         property held or reasonably  anticipated  by such Person, or changes in
         the value of securities issued by such  Person, and not for purposes of

                                       69

         speculation or taking a "market view;" and (ii) such Swap Contract does
         not contain any provision exonerating the non-defaulting party from its
         obligation  to  make   payments on  outstanding   transactions  to  the
         defaulting party;

              (E)  Indebtedness in respect  of  capital leases,  Synthetic Lease
         Obligations and purchase money obligations for fixed or  capital assets
         within the limitations set forth in Section 7.01(h);

              (F)  (i) Indebtedness   incurred   in  connection with the sale of
         accounts receivable and related assets  pursuant  to Section 7.05(g) so
         long as the amount of  the  facility   relating thereto does not exceed
         $125,000,000   at  any  time  and  (ii) Indebtedness of the Receivables
         Subsidiary to a Loan Party  incurred in connection with the Receivables
         Facility for the purchase of accounts receivable and related assets;

              (G)  secured Indebtedness so long as the  amount thereof is within
         the limitations set forth in Section 7.01(k); and

              (H)  Indebtedness   of  a  Person that becomes a Subsidiary of the
         Borrower as the result of an   Investment permitted by Section 7.02(i),
         provided that such Indebtedness existed at  the time such Person became
         a Subsidiary of the Borrower, and such Indebtedness was  not created in
         anticipation thereof; and

         (d)  in the case of Foreign Subsidiaries,

              (A)  Indebtedness  owed  to  a Loan  Party or  to  another Foreign
         Subsidiary that is  otherwise   permitted to be made by such Loan Party
         under Section 7.02(j); and

              (B)  unsecured Indebtedness  in  an  amount  not  to  exceed   the
         Adjusted Foreign Subsidiaries/Joint Venture Basket at the  time  of the
         incurrence of such Indebtedness.

         7.04 Fundamental Changes.  Merge, dissolve, liquidate, consolidate with
or into another Person, or Dispose of (whether in one transaction or in a series
of transactions) all or  substantially all of its  assets (whether now owned  or
hereafter acquired) to  or in favor  of any Person,  except that, so  long as no
Default exists or would result therefrom:

         (a)  any Subsidiary may merge with (i) the Borrower, provided  that the
    Borrower shall be the continuing or  surviving Person,  or  (ii) any  one or
    more other Subsidiaries,  provided  that  when any Guarantor is merging with
    another Subsidiary,   the  Guarantor shall  be  the continuing or  surviving
    Person or  the  continuing or surviving   Person shall   promptly thereafter
    become a Guarantor;

         (b)  any Subsidiary  may  Dispose  of  all  or substantially all of its
    assets (upon  voluntary  liquidation   or otherwise)  to  the Borrower or to
    another Subsidiary; provided that if the transferor in such a transaction is
    a Guarantor, then the  transferee must either be the Borrower or a Guarantor
    or the transferee shall promptly thereafter become a Guarantor; and

         (c)  in connection with any acquisition permitted under   Section 7.02,
    any Subsidiary of the Borrower may merge into or  consolidate with any other
    Person or permit   any other  Person to  merge into  or consolidate with it;
    provided  that  the Person  surviving  such  merger shall be a  wholly owned
    Subsidiary   of  the  Borrower;  provided,   however,   that  i n each case,
    immediately after giving effect thereto, in the case of any such  merger  to
    which the Borrower is a party, the Borrower is the surviving corporation.

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         7.05 Dispositions.  Make any Disposition or enter into any agreement to
make any Disposition, except:

         (a)  Dispositions of obsolete or worn out property,  whether now  owned
    or hereafter acquired, in the ordinary course of business;

         (b)  Dispositions of inventory in the ordinary course of business;

         (c)  Dispositions of equipment or real property to the extent that  (i)
    such property is exchanged for credit against the  purchase price of similar
    replacement property or (ii) the proceeds of such Disposition are reasonably
    promptly applied to the purchase price of such replacement property;

         (d)  Dispositions of property by any Subsidiary to the Borrower or to a
    wholly-owned Subsidiary; provided that if the transferor of such property is
    a Guarantor,  the  transferee  thereof  must  either  be  the  Borrower or a
    Guarantor;

         (e)  Dispositions permitted by Section 7.04;

         (f)  Dispositions by the  Borrower and its  Subsidiaries not  otherwise
    permitted under  this   Section 7.05; provided that (i)  at the time of such
    Disposition, no Default   shall exist or would result from such Disposition,
    (ii) immediately after giving  effect to  such Disposition, the Borrower and
    its Subsidiaries are  in pro forma  compliance with all of the covenants set
    forth in Section 7.11, such compliance to be determined on the basis of  the
    financial information most recently delivered to the Agents  and the Lenders
    pursuant to Section 6.01(a) or 6.01(b) as though   such Disposition had been
    consummated  as  of  the  first day of the fiscal period covered thereby and
    (iii) until the Term Loan   has been repaid  in full, the purchase price for
    such asset to be paid   to the Borrower or  such  Subsidiary is at least 80%
    cash;

         (g)  the  limited  recourse sale  of accounts   receivable and  related
    assets in connection  with  the  securitization  of  accounts  receivable or
    similar   rights  to payment,   which sale is  non-recourse   to  the extent
    customary in securitizations and consistent with past practice and which is,
    to the extent entered  into after the Documentation Closing Date, upon terms
    and conditions reasonably satisfactory to the Co-Administrative  Agents (the
    "Receivables Facility");

         (h)  Dispositions  of  cash  or   Cash  Equivalents  for   purposes not
    otherwise prohibited under this Agreement or under any other Loan  Document;

         (i)  so long as no Default shall occur and be continuing, the  grant of
    any option or other right to purchase any asset in a  transaction that would
    be permitted under the provisions of Section 7.05(f); and

         (j)  Dispositions by the Borrower and its  Subsidiaries   not otherwise
    permitted   under  this   Section 7.05 of property  acquired pursuant to the
    Acquisition; provided that (i) at the time of such  Disposition,  no Default
    shall exist or would result from  such Disposition,  (ii)  immediately after
    giving effect to such  Disposition, the Borrower and its Subsidiaries are in
    pro forma compliance  with  all  of the covenants set forth in Section 7.11,
    such compliance to be determined on the basis of the financial   information

                                       71

    most recently  delivered  to  the Agents and the Lenders pursuant to Section
    6.01(a) or 6.01(b) as though such Disposition had been consummated as of the
    first day of the fiscal period covered thereby and (iii) until the Term Loan
    has been repaid in full, the purchase price for such asset to be paid to the
    Borrower or such  Subsidiary is  at  least 80% cash; provided, however, that
    any   Disposition pursuant  to Section  7.05(a)  through  Section 7.05(h) or
    Section 7.05(j) shall be for fair market value.

         7.06 Restricted Payments.  Declare or make, directly or indirectly, any
Restricted Payment, or incur any obligation (contingent or otherwise) to do  so,
or, except with respect to the  Borrower, issue or sell any Equity  Interests to
any Person  other than  the Borrower  or a  wholly owned  Domestic Subsidiary or
accept any capital contributions, except that:

         (a)  each Subsidiary may make Restricted Payments to the   Borrower and
    to wholly-owned Subsidiaries (and, in the case of a  Restricted Payment by a
    non-wholly-owned Subsidiary, to the  Borrower and any Subsidiary and to each
    other owner of capital stock or other Equity Interests of such Subsidiary on
    a pro rata basis based on their relative ownership interests);

         (b)  the Borrower  and  each  Subsidiary may declare  and make dividend
    payments or other distributions payable solely in the  common stock or other
    common Equity Interests of such Person;

         (c)  the Borrower and each Subsidiary may purchase, redeem or otherwise
    acquire shares of its common stock or other common Equity Interests with the
    proceeds received from  the substantially  concurrent issue of new shares of
    its common stock or other common Equity Interests;

         (d)  so long as no Default shall then exist or would result  therefrom,
    the Borrower may (i) declare or pay cash dividends to   its stockholders and
    (ii) purchase, redeem or otherwise  acquire  shares of its  capital stock or
    warrants, rights or  options  to acquire  any  such  shares  for cash, in an
    aggregate amount for all  such purchases, redemptions and other acquisitions
    made under   this clause   (ii) on and  after the date  hereof not to exceed
    $20,000,000 in any fiscal year; and

         (e)  so long as no Default shall then exist or would result  therefrom,
    the Borrower may  acquire  common  stock  of  the Borrower from employees or
    former employees of the Borrower or any  Subsidiary in consideration for the
    exercise of stock options by  such employees or former employees and any tax
    obligations  incurred  by  such  employees or former employees in connection
    with such exercise; provided that no such exercise shall cause the  Borrower
    to make any cash payment to such employee or  former employee   or any other
    Person; provided further that the fair market value of all such common stock
    acquired by the Borrower shall not exceed $10,000,000 in any fiscal year.

         7.07 Change  in Nature  of Business.   Engage  in any  material line of
business substantially different from those  lines of business conducted by  the
Borrower and its Subsidiaries on  the date hereof or any  business substantially
related or incidental thereto.

         7.08 Transactions with Affiliates.   Enter into any transaction of  any
kind with any Affiliate of the  Borrower, whether or not in the  ordinary course
of business, other than on fair and reasonable terms substantially as  favorable
to the Borrower  or such Subsidiary  as would be  obtainable by the  Borrower or
such Subsidiary  at the  time in  a comparable  arm's length  transaction with a

                                       72

Person other  than an  Affiliate, except  (i) transactions  between or among the
Borrower  and  its  Subsidiaries  in  the  ordinary course of business, (ii) the
transactions identified on Schedule 7.08 and (iii) transactions relating to  the
Receivables Facility.

         7.09  Burdensome  Agreements.    Enter  into  or  permit  to  exist any
Contractual Obligation (other  than this Agreement,  any other Loan  Document or
any agreement relating to the Receivables Facility) that (a) limits the  ability
(i)  of  any  Subsidiary  to  make  Restricted  Payments  to the Borrower or any
Guarantor or to otherwise transfer property to or invest in the Borrower or  any
Guarantor, except for any agreement in effect  (A) on the date hereof or (B)  at
the time any Subsidiary  becomes a Subsidiary of  the Borrower, so long  as such
agreement was not entered into solely in contemplation of such Person becoming a
Subsidiary of the Borrower, (ii) of any Subsidiary to Guarantee the Indebtedness
of the Borrower, except for any document set forth on Schedule 7.09, or (iii) of
the Borrower or any Subsidiary to create, incur, assume or suffer to exist Liens
on property of such Person; provided, however, that this clause (iii) shall  not
prohibit (x) any negative pledge incurred or provided in favor of any holder  of
Indebtedness permitted under  Section 7.03(c)(E) solely  to the extent  any such
negative pledge  relates to  the property  financed by  or the  subject of  such
Indebtedness, (y) any provision contained  in any High Grade Notes  Document (or
any other document listed on Schedule 7.09) that provides that in the event  any
Loan Party grants any Lien on  such Loan Party's assets or properties  to secure
any Indebtedness, such Loan Party  secure the High Grade Notes  (or Indebtedness
in respect  of such  other document)  on an  equal and  ratable basis  with such
Indebtedness, or  (z) any  negative pledge  provision contained  in any document
listed on  Schedule 7.09;  or (b)  requires the  grant of  a Lien  to secure  an
obligation of such Person if a  Lien is granted to secure another  obligation of
such Person, other than any provision contained in any High Grade Notes Document
(or any other document listed on Schedule 7.09) that provides that in the  event
any Loan  Party grants  any Lien  on such  Loan Party's  assets or properties to
secure  any  Indebtedness,  such  Loan  Party  secure  the  High Grade Notes (or
Indebtedness in respect of  such other document) on  an equal and ratable  basis
with such Indebtedness.

         7.10  Use  of  Proceeds.    Use  the  proceeds of any Credit Extension,
whether  directly  or  indirectly,  and  whether  immediately,  incidentally  or
ultimately, to purchase or carry margin stock (within the meaning of  Regulation
U of the  FRB) or to  extend credit to  others for the  purpose of purchasing or
carrying margin  stock or  to refund  Indebtedness originally  incurred for such
purpose in any manner that would violate Regulation T, U, or X of the FRB.

         7.11 Financial Covenants.

         (a) Consolidated Net Worth.  Permit,  at any time on or after  June 30,
2003, Consolidated Net Worth at any time to  be less than the sum of (a) 80%  of
the sum of (i) Shareholders' Equity as of December 31, 2002, (ii) the  aggregate
increase  in  Shareholders'  Equity  of  the  Borrower and its Subsidiaries as a
result  of  the  IR  Equity  Issuance,  and  (iii)  the  aggregate  increase  in
Shareholders' Equity of  the Borrower and  its Subsidiaries as  a result of  the
Public Equity  Issuance, (b)  an amount  equal to  50% of  the Consolidated  Net
Income earned  in each  fiscal quarter  ending after  the Documentation  Closing
Date, beginning with the fiscal quarter ending March 31, 2003 (with no deduction
for a net loss in any such fiscal quarter) and (c) an amount equal to 50% of the
aggregate increases in Shareholders' Equity of the Borrower and its Subsidiaries
after the Funding Date  by reason of the  issuance and sale of  capital stock or
other Equity  Interests of  the Borrower  or any  Subsidiary, including upon any
conversion of debt securities of the  Borrower into such capital stock or  other
Equity Interests.

         (b)  Consolidated  Leverage  Ratio.    Permit the Consolidated Leverage
Ratio at any time during any period of four fiscal quarters of the Borrower  set
forth below to be greater than  the ratio set forth below opposite  such period:

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                                                          Maximum
                                                        Consolidated
         Period                                        Leverage Ratio

         June 30, 2003 through December 31, 2003           3.25:1
         January 1, 2004 through September 30, 2004        3.00:1
         October 1, 2004 and thereafter                    2.75:1

          (c)  Consolidated Fixed Charge Coverage Ratio. Permit the Consolidated
Fixed Charge Coverage Ratio at  any  time  to be less than  the  ratio set forth
below for each period set forth below:

                                                          Minimum
                                                           Fixed
                                                           Charge
         Period                                        Coverage Ratio

         June 30, 2003 through December 31, 2003           1.50:1
         January 1, 2004 through September 30, 2004        1.75:1
         October 1, 2004 and thereafter                    2.00:1

         7.12 Amendments of  Organization Documents.   With respect to  any Loan
Party, amend any of its Organization Documents in a manner that could reasonably
be expected to have a Material Adverse Effect.

         7.13 Prepayments,  Etc., of  Indebtedness.   At any  time that any Term
Loans or any Term Commitments are outstanding, prepay, redeem, purchase, defease
or otherwise satisfy prior to the  scheduled maturity thereof in any manner,  or
make any payment in violation of any subordination terms of, any Indebtedness in
an original principal amount greater  than $20,000,000 that is pari  passu with,
or  subordinated  to,  the  Loans,  except  (a)  the  prepayment  of  the Credit
Extensions in  accordance with  the terms  of this  Agreement and  (b) regularly
scheduled  or  required  repayments  or  redemptions  of  Indebtedness listed on
Schedule 7.03, or amend, modify or change in any manner any term or condition of
any such Indebtedness listed on Schedule 7.03.

                                  ARTICLE VIII
                        EVENTS OF DEFAULT AND REMEDIES

         8.01 Events of Default.  Any of the following shall constitute an Event
of Default:

         (a) Non-Payment.  The Borrower fails to pay (i) when and as required to
    be paid herein,  any  amount of principal of any Loan or any L/C Obligation,
    or (ii) within three Business Days  after the same becomes due, any interest
    on any  Loan or  on  any  L/C Obligation, or any commitment or other fee due
    hereunder; or

         (b)  Specific Covenants.  The Borrower fails to perform or  observe any
    term, covenant or agreement contained in (i) any of Section 6.03, 6.05, 6.11
    or 6.12, or Article VII or (ii)  any of Section 6.01(a) or (b) or 6.02(a) or
    (b) and such failure continues for 10 days after the earlier of the  date on
    which (i) a  Responsible  Officer   of  the Borrower  has  knowledge of such
    failure or (ii) notice is given from the Paying Agent to the Borrower at the
    request of the Required Lenders that the Borrower  is to remedy the same; or

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         (c)  Other Defaults.  Any  Loan Party  fails  to perform or observe any
    other covenant or  agreement  (not specified  in Section 8.01(a) or 8.01(b))
    contained in any  Loan Document on its part to be performed or  observed and
    such failure continues  for 30 days after the   earlier of the date on which
    (i) a Responsible  Officer of the Borrower  has knowledge of such failure or
    (ii) notice is given from the Paying Agent to the Borrower at the request of
    the Required Lenders that the Borrower is to remedy the same; or

         (d)  Representations and  Warranties.     Any representation, warranty,
    certification or statement of  fact made or deemed  made  by or on behalf of
    the Borrower or any other Loan Party herein,  in any other Loan Document, or
    in any  document  delivered in  connection  herewith or   therewith shall be
    incorrect or misleading in any material respect when made or deemed made; or

         (e)  Cross-Default.  (i) Any Loan Party or any Subsidiary (A)  fails to
    make any  payment   when due (whether  by   scheduled  maturity,    required
    prepayment,   acceleration,   demand, or   otherwise)  in   respect   of any
    Indebtedness   or   Guarantee    (other  than  Indebtedness    hereunder and
    Indebtedness under  Swap Contracts)   having an   aggregate principal amount
    (including   undrawn  committed  or  available amounts and including amounts
    owing to all creditors under any combined or syndicated credit  arrangement)
    of more than  the Threshold Amount,   or (B) fails to observe or perform any
    other agreement or condition relating to  any such Indebtedness or Guarantee
    or contained in any instrument or agreement evidencing, securing or relating
    thereto,  or any  other event occurs,  the  effect of which default or other
    event is to cause, or to permit  the holder or  holders of such Indebtedness
    or the beneficiary or beneficiaries of such Guarantee (or a trustee or agent
    on behalf of  such holder  or holders  or beneficiary or   beneficiaries) to
    cause,  with  the giving  of notice if  required,   such  Indebtedness to be
    demanded or  to  become  due  or  to  be repurchased,  prepaid,  defeased or
    redeemed  (automatically or otherwise),  or an offer  to repurchase, prepay,
    defease   or  redeem such   Indebtedness  to be made,   prior to its  stated
    maturity, or such Guarantee to become payable or cash collateral  in respect
    thereof to be  demanded; or   (ii) there occurs under  any Swap Contract  an
    Early Termination Date (as defined in such Swap Contract) resulting from (A)
    any event of  default  under such  Swap Contract as to which the Borrower or
    any Subsidiary is the Defaulting Party (as defined in such Swap Contract) or
    (B) any Termination Event (as defined in such Swap Contract) under such Swap
    Contract as to which the Borrower or any Subsidiary is an Affected Party (as
    defined in  such Swap  Contract) and, in either  event, the Swap Termination
    Value owed  by the  Loan  Party  or such  Subsidiary  as a result thereof is
    greater than the Threshold Amount; or

         (f)  Insolvency Proceedings, Etc. Any Loan Party or any of its Material
    Subsidiaries  institutes or  consents to  the institution  of any proceeding
    under any  Debtor  Relief  Law,  or makes  an  assignment for the benefit of
    creditors; or applies for or  consents to the   appointment of any receiver,
    trustee,  custodian,  conservator,  liquidator,   rehabilitator  or  similar
    officer  for  it  or  for all or  any  material part of its property; or any
    receiver,  trustee,  custodian,  conservator,  liquidator,  rehabilitator or
    similar officer is  appointed without  the application   or consent  of such
    Person and  the  appointment  continues  undischarged  or   unstayed  for 60
    calendar days; or any proceeding under any Debtor Relief Law relating to any
    such Person  or to  all or any  material part of  its property is instituted
    without the consent of such Person and continues undismissed or unstayed for
    60 calendar days, or an order for relief is entered in any such  proceeding;
    or

         (g)  Inability to Pay Debts; Attachment.  (i) Any Loan Party or  any of
    its Material Subsidiaries becomes unable or admits in  writing its inability
    or fails generally to pay its debts as they  become due, or (ii) any writ or
    warrant of  attachment or  execution or similar  process is issued or levied
    against all  or  any material part of the property of any such Person and is
    not released, vacated  or  fully  bonded  within  30 days after its issue or
    levy; or

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         (h)  Judgments. There is entered against any Loan Party or any Material
    Subsidiary  (i) a final  judgment  or order for  the  payment of money in an
    aggregate amount exceeding the   Threshold Amount,  or  (ii) any one or more
    non-monetary final judgments that have,  or could  reasonably be expected to
    have,  individually or in the aggregate,  a Material  Adverse Effect and, in
    either case, there  is a period of 45 consecutive days during which the same
    shall not  have  been  paid,  discharged,  vacated or stayed, by reason of a
    pending appeal or otherwise;  or

         (i)  ERISA.  Except  as  is  not  reasonably expected  to  result  in a
    Material Adverse Effect: (i) An ERISA Event occurs with respect to a Pension
    Plan or Multiemployer Plan which has  resulted or  is reasonably expected to
    result in  liability of  the Borrower under Title IV of ERISA to the Pension
    Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of the
    Threshold Amount, or  (ii) the Borrower or any  ERISA Affiliate fails to pay
    when due,   after  the   expiration  of  any   applicable grace  period, any
    installment payment with respect to its withdrawal liability   under Section
    4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of
    the Threshold Amount; or

         (j)  Invalidity of Loan Documents.  Any provision of any Loan Document,
    at any time after its execution and delivery and  for  any reason other than
    as expressly  permitted  hereunder  or thereunder or satisfaction in full of
    all the Obligations,  ceases to  be in  full  force and  effect; or any Loan
    Party or  any  other  Person   contests  in  any   manner the   validity  or
    enforceability  of  any  provision of any  Loan Document;  or any Loan Party
    denies  that  it  has  any or further liability or obligation under any Loan
    Document, or purports to revoke, terminate or rescind any Loan  Document; or

         (k)  Change of Control.  There occurs any Change of Control.

         8.02 Remedies upon Event of Default

         .   If   any   Event   of   Default   occurs  and  is  continuing,  the
Co-Administrative Agents shall, at the request of, or may, with the consent  of,
the Required Lenders, take any or all of the following actions:

         (a)  declare  the   commitment  of  each  Lender  to make Loans and any
    obligation of the Appropriate L/C Issuers to  make L/C Credit  Extensions to
    be  terminated,   whereupon  such  commitments  and   obligation   shall  be
    terminated;

         (b)  declare the unpaid principal amount of all outstanding  Loans, all
    interest accrued and unpaid thereon, and all other  amounts owing or payable
    hereunder  or  under  any  other   Loan Document  to be  immediately due and
    payable, without presentment,  demand,  protest or other notice of any kind,
    all of which are hereby expressly waived by the Borrower;

         (c)  require that the Borrower Cash Collateralize the L/C   Obligations
    (in an amount equal to the then Outstanding Amount thereof); and

         (d)  exercise on behalf of themselves, the other Agents and the Lenders
    all rights and remedies available to them, the other  Agents and the Lenders
    under the Loan Documents  or applicable Law;

         provided, however,  that upon  the occurrence  of an  actual or  deemed
entry of an order for relief  with respect to the Borrower under  the Bankruptcy
Code of the United States, the obligation  of each Lender to make Loans and  any
obligation of each  Appropriate L/C Issuer  to make L/C  Credit Extensions shall
automatically terminate, the  unpaid principal amount  of all outstanding  Loans
and all interest and other  amounts as aforesaid shall automatically  become due

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and payable, and the  obligation of the Borrower  to Cash Collateralize the  L/C
Obligations  as  aforesaid  shall  automatically  become effective, in each case
without further act of any Agent or any Lender.

         8.03 Application of Funds. After the exercise of remedies provided  for
in Section 8.02 (or after the Loans  have automatically  become immediately  due
and  payable and  the L/C Obligations  have  automatically  been required to  be
Cash Collateralized  as set forth in the proviso  to Section 8.02), any  amounts
received on account  of the Obligations shall  be applied by the Paying Agent in
the following order:

         First,  to  payment of  that  portion  of  the Obligations constituting
    fees, indemnities, expenses and other amounts  (including Attorney Costs and
    amounts payable under Article III) payable to the Agents in their capacities
    as such ratably among them in proportion to  the amounts  described in  this
    clause First payable to them;

         Second, to  payment  of  that  portion of  the Obligations constituting
    fees, indemnities  and  other  amounts (other than principal  and  interest)
    payable to the Lenders (including Attorney Costs and  amounts payable  under
    Article III), ratably among them in  proportion to the  amounts described in
    this clause Second payable to them;

         Third,  to  payment of  that portion  of the  Obligations  constituting
    accrued and unpaid interest on the  Loans and L/C  Borrowings, ratably among
    the Lenders  in proportion  to the  respective  amounts  described  in  this
    clause Third payable to them;

         Fourth, to  payment  of  that  portion of  the Obligations constituting
    unpaid principal of the Loans and L/C  Borrowings, ratably among the Lenders
    in proportion to the respective amounts described in this clause Fourth held
    by them;

         Fifth,  to the   Paying  Agent  for  the account of the Appropriate L/C
    Issuers, to Cash Collateralize that portion of  L/C Obligations comprised of
    the aggregate undrawn amount of Letters of Credit;

         Sixth,  to the payment  of all  other  Obligations  of the Loan Parties
    owing under or in respect of the Loan Documents that  are due and payable to
    the Agents and the Lenders on such  date, ratably based upon the  respective
    aggregate  amounts  of  all  such  Obligations   owing to the Agents and the
    Lenders on such date; and

         Last, the balance,  if any,  after  all  of the  Obligations have  been
    indefeasibly paid in full, to the Borrower or as otherwise required by Law.

         Subject  to  Section  2.03(c),  amounts  used to Cash Collateralize the
aggregate undrawn  amount of  Letters of  Credit pursuant  to clause Fifth above
shall be applied to satisfy drawings under such Letters of Credit as they occur.
If any amount remains on deposit as Cash Collateral after all Letters of  Credit
have either been fully drawn or expired, such remaining amount shall be  applied
to the other Obligations, if any, in the order set forth above.

                                  ARTICLE IX
                                    AGENTS

         9.01 Appointment and Authorization of Agents .

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         (a) Each Lender hereby irrevocably appoints, designates and  authorizes
each  Agent  to  take  such  action  on  its behalf under the provisions of this
Agreement and each other Loan Document  and to exercise such powers and  perform
such duties as are expressly delegated to  it by the terms of this Agreement  or
any other Loan Document, together with such powers as are reasonably  incidental
thereto.    Notwithstanding  any  provision  to the contrary contained elsewhere
herein  or  in  any  other  Loan  Document,  no  Agent  shall have any duties or
responsibilities, except those expressly set  forth herein, nor shall any  Agent
have  or  be  deemed  to  have  any  fiduciary  relationship  with any Lender or
participant,  and  no  implied  covenants,  functions, responsibilities, duties,
obligations or liabilities shall be read  into this Agreement or any other  Loan
Document or otherwise exist against any Agent.  Without limiting the  generality
of the foregoing sentence, the use of  the term "agent" herein and in the  other
Loan  Documents  with  reference  to  any  Agent  is not intended to connote any
fiduciary  or  other  implied  (or  express)  obligations  arising  under agency
doctrine of any applicable Law.  Instead,  such term is used merely as a  matter
of market custom, and  is intended to create  or reflect only an  administrative
relationship between independent contracting parties.

         (b) Each Appropriate L/C Issuer shall act on behalf of the Lenders with
respect to any Letters of Credit  issued (or deemed issued) by such  Appropriate
L/C Issuer  and the  documents associated  therewith, and  such Appropriate  L/C
Issuer shall have all of the benefits and immunities (i) provided to the  Agents
in this Article IX with respect to any acts taken or omissions suffered by  such
Appropriate L/C Issuer  in connection with  Letters of Credit  issued (or deemed
issued)  by  it  or  proposed  to  be  issued  (or  deemed issued) by it and the
applications and agreements for letters of credit pertaining to such Letters  of
Credit as fully as  if the term "Agent"  as used in this  Article IX and in  the
definition of "Agent-Related Person"  included such Appropriate L/C  Issuer with
respect to such acts or omissions, and (ii) as additionally provided herein with
respect to such Appropriate L/C Issuer.

         9.02 Delegation of  Duties.  Any  Agent may execute  any of its  duties
under this Agreement or any other Loan Document by or through agents,  employees
or  attorneys-in-fact  and  shall  be  entitled  to  advice of counsel and other
consultants or  experts concerning  all matters  pertaining to  such duties.  No
Agent shall  be responsible  for the  negligence or  misconduct of  any agent or
attorney-in-fact that it selects in  the absence of gross negligence  or willful
misconduct.

         9.03 Liability of Agents.  No Agent-Related Person shall (a) be  liable
for  any  action  taken  or  omitted  to  be  taken  by  any of them under or in
connection with this  Agreement or any  other Loan Document  or the transactions
contemplated hereby (except for its  own gross negligence or willful  misconduct
in connection with its duties expressly set forth herein), or (b) be responsible
in  any  manner  to  any  Lender  or  participant  for  any  recital, statement,
representation  or  warranty  made  by  any  Loan  Party or any officer thereof,
contained herein or in any other  Loan Document, or in any certificate,  report,
statement or other document referred to  or provided for in, or received  by any
Agent under or in connection with, this Agreement or any other Loan Document, or
the validity, effectiveness, genuineness, enforceability or sufficiency of  this
Agreement or any other  Loan Document, or for  any failure of any  Loan Party or
any other party  to any Loan  Document to perform  its obligations hereunder  or
thereunder.  No Agent-Related Person shall be under any obligation to any Lender
or participant to ascertain or to inquire as to the observance or performance of
any of  the agreements  contained in,  or conditions  of, this  Agreement or any
other Loan Document, or to inspect the properties, books or records of any  Loan
Party or any Affiliate thereof.

         9.04 Reliance by Agents.

         (a) Each Agent shall be entitled to rely, and shall be fully  protected
in   relying,   upon   any   writing,   communication,   signature,  resolution,
representation,  notice,  consent,  certificate,  affidavit,  letter,  telegram,
facsimile, telex  or telephone  message, electronic  mail message,  statement or

                                       78

other document or conversation believed by  it to be genuine and correct  and to
have been signed, sent or made by the proper Person or Persons, and upon  advice
and  statements  of  legal  counsel  (including  counsel  to  any  Loan  Party),
independent accountants and  other experts selected  by such Agent.   Each Agent
shall be fully  justified in failing  or refusing to  take any action  under any
Loan Document unless it  shall first receive such  advice or concurrence of  the
Required Lenders as it deems appropriate and, if it so requests, it shall  first
be indemnified to its satisfaction by the Lenders against any and all  liability
and expense which  may be incurred  by it by  reason of taking  or continuing to
take any  such action.   Each  Agent shall  in all  cases be  fully protected in
acting, or in  refraining from acting,  under this Agreement  or any other  Loan
Document in accordance  with a request  or consent of  the Required Lenders  (or
such  greater  number  of  Lenders  as  may  be expressly required hereby in any
instance) and  such request  and any  action taken  or failure  to act  pursuant
thereto shall be binding upon all the Lenders.

         (b)  For  purposes  of  determining  compliance  with  the   conditions
specified in Section 4.01, each Lender  that has signed this Agreement shall  be
deemed to have consented to, approved or accepted or to be satisfied with,  each
document or other matter required thereunder  to be consented to or approved  by
or acceptable or satisfactory to  a Lender unless the Co-  Administrative Agents
shall have received notice from such Lender prior to the proposed  Documentation
Closing Date specifying its objection thereto.

         9.05 Notice of Default.  No Agent shall be deemed to have knowledge  or
notice of the occurrence of any Default, except with respect to defaults in  the
payment of principal, interest and fees required to be paid to the Paying  Agent
for the account of  the Lenders, unless such  Agent shall have received  written
notice from  a Lender  or the  Borrower referring  to this Agreement, describing
such  Default  and  stating  that  such  notice  is  a "notice of default."  The
applicable Agent will notify the Lenders of its receipt of any such notice.  The
Co-Administrative Agents shall take such action with respect to such Default  as
may  be  directed  by  the  Required  Lenders  in  accordance with Article VIII;
provided,  however,  that  unless  and  until  the Co-Administrative Agents have
received any such direction, the Co-Administrative Agents may (but shall not  be
obligated to) take such action, or refrain from taking such action, with respect
to such  Default as  they shall  deem advisable  or in  the best interest of the
Lenders.

         9.06 Credit Decision; Disclosure of Information by Agents.  Each Lender
acknowledges  that  no  Agent-  Related  Person  has  made any representation or
warranty to  it, and  that no  act by  any Agent  hereafter taken, including any
consent to and acceptance of any assignment or review of the affairs of any Loan
Party or any Affiliate thereof, shall be deemed to constitute any representation
or  warranty  by  any  Agent-Related  Person  to  any  Lender  as to any matter,
including whether Agent-Related Persons  have disclosed material information  in
their  possession.    Each  Lender  represents  to  each  Agent  that  it   has,
independently and without  reliance upon any  Agent-Related Person and  based on
such  documents  and  information  as  it  has  deemed appropriate, made its own
appraisal  of  and  investigation  into  the  business,  prospects,  operations,
property, financial and other condition and creditworthiness of the Loan Parties
and their respective Subsidiaries, and  all applicable bank or other  regulatory
Laws relating to the transactions contemplated hereby, and made its own decision
to enter into  this Agreement and  to extend credit  to the Borrower  hereunder.
Each Lender  also represents  that it  will, independently  and without reliance
upon any Agent- Related Person and based on such documents and information as it
shall deem appropriate at  the time, continue to  make its own credit  analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it deems  necessary
to inform itself as to the business, prospects, operations, property,  financial
and other  condition and  creditworthiness of  the Borrower  and the  other Loan
Parties.  Except for notices, reports and other documents expressly required  to
be furnished to the Lenders by any  Agent herein, such Agent shall not have  any
duty  or  responsibility  to  provide  any  Lender  with  any  credit  or  other
information concerning the business, prospects, operations, property,  financial

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and other condition  or creditworthiness of  any of the  Loan Parties or  any of
their  respective  Affiliates  which  may  come  into  the  possession  of   any
Agent-Related Person.

         9.07  Indemnification  of  Agents.    Whether  or  not the transactions
contemplated hereby  are consummated,  the Lenders  shall indemnify  upon demand
each Agent-Related Person (to the extent  not reimbursed by or on behalf  of any
Loan Party and without limiting the obligation of any Loan Party to do so),  pro
rata, and hold harmless each Agent- Related Person from and against any and  all
Indemnified Liabilities incurred by it; provided, however, that no Lender  shall
be liable for  the payment to  any Agent-Related Person  of any portion  of such
Indemnified  Liabilities  to  the  extent  determined  in a final, nonappealable
judgment by a court of competent jurisdiction to have resulted from such  Agent-
Related Person's own gross negligence or willful misconduct; provided,  however,
that no action taken in accordance  with the directions of the Required  Lenders
shall  be  deemed  to  constitute  gross  negligence  or  willful misconduct for
purposes of this Section 9.07.  In the case of any investigation, litigation  or
proceeding giving rise to any Indemnified Liabilities, this Section 9.07 applies
whether  any  such  investigation,  litigation  or  proceeding is brought by any
Lender or any other  Person.  Without limitation  of the foregoing, each  Lender
shall reimburse each  Agent upon demand  for its ratable  share of any  costs or
out-of- pocket  expenses (including  Attorney Costs)  incurred by  such Agent in
connection   with   the   preparation,   execution,   delivery,  administration,
modification,  amendment  or  enforcement  (whether  through negotiations, legal
proceedings  or  otherwise)  of,  or  legal  advice  in  respect  of  rights  or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by  or referred  to herein,  to the  extent that  such Agent is not
reimbursed for such expenses by or  on behalf of the Borrower.   The undertaking
in this Section 9.07 shall survive termination of the Aggregate Commitments, the
payment of all other Obligations and the resignation of such Agent.

         9.08 Agents in Their Individual  Capacities.  Each of Bank  of America,
BAS, Key Bank, Merrill Lynch, Morgan Stanley and their respective Affiliates may
make loans to, issue letters of credit for the account of, accept deposits from,
acquire Equity Interests in and generally engage in any kind of banking,  trust,
financial advisory, underwriting or other business with each of the Loan Parties
and their respective  Affiliates as though  (i) Bank of  America were not  a Co-
Administrative Agent, (ii) BAS were not a Lead Arranger, (iii) KeyBank were  not
a Co-Administrative Agent, a Lead  Arranger, the Paying Agent or  an Appropriate
L/C Issuer, (iv) Merrill  Lynch were not the  Syndication Agent, and (v)  Morgan
Stanley were not the  Documentation Agent, and without  notice to or consent  of
the Lenders.  The Lenders acknowledge that, pursuant to such activities, each of
Bank  of  America,  BAS,  Key  Bank,  Merrill  Lynch,  Morgan  Stanley  or their
respective Affiliates may  receive information regarding  any Loan Party  or its
Affiliates  (including  information  that  may  be  subject  to  confidentiality
obligations in favor of such Loan Party or such Affiliate) and acknowledge  that
no Agent  shall be  under any  obligation to  provide such  information to them.
With respect  to its  Loans, each  of Bank  of America,  BAS, Key  Bank, Merrill
Lynch, Morgan Stanley and their respective Affiliates shall have the same rights
and powers under this Agreement as any other Lender and may exercise such rights
and powers as though it were not  an Agent or an Appropriate L/C Issuer,  as the
case may be, and the terms "Lender" and "Lenders" include Bank of America,  BAS,
Key Bank, Merrill Lynch, Morgan Stanley and their respective Affiliates in their
individual capacities.

         9.09 Successor Agents.   Any Agent  may resign as  Agent upon 30  days'
notice to the Lenders; provided that any such resignation by KeyBank shall  also
constitute its resignation as an  Appropriate L/C Issuer and Swing  Line Lender.
If any Agent  resigns under this  Agreement, the Required  Lenders shall appoint
from among the Lenders a successor agent for the Lenders, which successor  agent
shall  be  consented  to  by  the  Borrower  at  all times other than during the
existence of an  Event of Default  (which consent of  the Borrower shall  not be
unreasonably withheld or delayed).  If no successor agent is appointed prior  to
the effective date  of the resignation  of such Agent,  such Agent may  appoint,
after consulting with the Lenders and the Borrower, a successor agent from among

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the  Lenders.    Upon  the  acceptance  of  its  appointment  as successor agent
hereunder, the Person acting  as such successor agent  shall succeed to all  the
rights,  powers  and  duties  of  the  retiring  Agent  and,  if  applicable, an
Appropriate  L/C  Issuer  and  Swing  Line  Lender and the respective terms "Co-
Administrative  Agent",  "Paying  Agent",  "Documentation  Agent",  "Syndication
Agent", "Lead Arranger",  "Appropriate L/C Issuer"  and "Swing Line  Lender", as
applicable, shall mean such successor  agent, Letter of Credit issuer  and swing
line lender, the retiring Agent's appointment, powers and duties as Agent  shall
be terminated and the retiring Appropriate L/C Issuer's and Swing Line  Lender's
rights, powers  and duties  as such  shall be  terminated, without  any other or
further act or deed on the part of such retiring Appropriate L/C Issuer or Swing
Line Lender  or any  other Lender,  other than  the obligation  of the successor
Appropriate  L/C  Issuer  to  issue  letters  of  credit in substitution for the
Letters of Credit, if any, outstanding at the time of such succession or to make
other  arrangements  satisfactory  to  the  retiring  Appropriate  L/C Issuer to
effectively assume the obligations of  the retiring Appropriate L/C Issuer  with
respect  to  such  Letters  of  Credit.   After any retiring Agent's resignation
hereunder as Agent,  the provisions of  this Article IX  and Sections 10.04  and
10.05 shall inure to its benefit as to any actions taken or omitted to be  taken
by it while  it was an  Agent under this  Agreement.  If  no successor agent has
accepted appointment as Agent by the date which is 30 days following a  retiring
Agent's  notice   of  resignation,   the  retiring   Agent's  resignation  shall
nevertheless thereupon become effective and the Lenders shall perform all of the
duties of such Agent hereunder until such time, if any, as the Required  Lenders
appoint a successor  agent as provided  for above.   Upon the acceptance  of any
appointment  as  Agent  hereunder  by  a  successor,  such successor Agent shall
thereupon succeed to and become vested with all the rights, powers,  discretion,
privileges, and duties of  the retiring Agent, and  the retiring Agent shall  be
discharged from its duties and obligations under the Loan Documents.  After  any
retiring  Agent's  resignation  hereunder  as  an  Agent, the provisions of this
Article IX shall continue  in effect for its  benefit in respect of  any actions
taken or omitted to be taken by it while it was acting as an Agent.

         9.10 Co-Administrative Agents May File Proofs of Claim.  In case of the
pendency   of   any    receivership,   insolvency,   liquidation,    bankruptcy,
reorganization,   arrangement,   adjustment,   composition   or  other  judicial
proceeding   relative   to   any   Loan   Party,  the  Co-Administrative  Agents
(irrespective of whether the principal of any Loan or L/C Obligation shall  then
be  due  and  payable  as  herein  expressed  or by declaration or otherwise and
irrespective of whether the Co- Administrative Agents shall have made any demand
on  the  Borrower)  shall  be  entitled  and  empowered, by intervention in such
proceeding or otherwise

         (a)  to file  and prove  a claim for  the whole amount of the principal
    and interest owing and unpaid in respect of  the  Loans, L/C Obligations and
    all other  Obligations that  are owing  and unpaid  and   to file such other
    documents as may be  necessary or  advisable in order  to have the claims of
    the   Lenders  and  the  Agents   (including  any  claim  for the reasonable
    compensation, expenses,  disbursements  and  advances of the Lenders and the
    Agents and their respective agents and counsel and all other amounts due the
    Lenders and  the  Agents  under   Sections 2.03(i) and (j), 2.09  and 10.04)
    allowed in such judicial proceeding; and

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

         and   any   custodian,   receiver,   assignee,   trustee,   liquidator,
sequestrator or other similar official in any such judicial proceeding is hereby
authorized by each Lender to make such payments to the Paying Agent and, in  the
event  that  the  Paying  Agent  shall  consent  to  the making of such payments
directly to  the Lenders,  to pay  to the  Paying Agent  any amount  due for the
reasonable compensation, expenses, disbursements and advances of the Agents  and
their respective agents and counsel, and any other amounts due the Agents  under
Sections 2.09 and 10.04.

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         Nothing   contained   herein   shall   be   deemed   to  authorize  the
Co-Administrative Agents to authorize or consent to or accept or adopt on behalf
of any Lender any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or  the rights of any  Lender or to authorize  the Co-
Administrative Agents to vote in respect of the claim of any Lender in any  such
proceeding.

         9.11  Guaranty  Matters.    The  Lenders  irrevocably authorize the Co-
Administrative Agents, at their option  and in their discretion, to  release any
Guarantor from its obligations under the Guaranty if such Person ceases to be  a
Subsidiary as a result of a transaction permitted hereunder.

         Upon request by the Co-Administrative Agents at any time, the  Required
Lenders will  confirm in  writing the  Co- Administrative  Agents' authority  to
release any Guarantor from its obligations under the Guaranties pursuant to this
Section  9.11.    In  each  case  as  specified  in  this  Section 9.11, the Co-
Administrative Agents will,  at the Borrower's  expense, execute and  deliver to
the  applicable  Loan  Party  such  documents  as such Loan Party may reasonably
request to  release such  Guarantor from  its obligations  under the Guaranty in
accordance with the terms of the Loan Documents and this Section 9.11.

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

                                  ARTICLE X
                                MISCELLANEOUS

         10.01 Amendments, Etc.  No amendment or waiver of any provision of this
Agreement or any  other Loan Document,  and no consent  to any departure  by the
Borrower or any other Loan Party therefrom, shall be effective unless in writing
signed by  the Lead  Arrangers, the  Required Lenders  and the  Borrower or  the
applicable Loan Party, as the case may be, and each such waiver or consent shall
be effective  only in  the specific  instance and  for the  specific purpose for
which given; provided, however, that no such amendment, waiver or consent shall:

         (a)  extend or increase the Commitment of any Lender (or  reinstate any
    Commitment terminated  pursuant to Section 8.02) without the written consent
    of such Lender;

         (b)  postpone  any date  scheduled  for  any  payment   of principal or
    interest under   Section 2.07 or 2.08, or any date fixed  for the payment of
    fees or other amounts due to the Lenders (or any of them) hereunder or under
    any other Loan Document without the written consent of each  Lender directly
    affected thereby;

         (c)  reduce the principal of, or the rate of interest  specified herein
    on, any  Loan or  L/C Borrowing,  or   (subject to clause  (v) of the second
    proviso  to this  Section 10.01) any fees or other amounts payable hereunder
    or under any other Loan Document without the written  consent of each Lender
    directly affected thereby;  provided, however,  that only the consent of the
    Required Lenders shall  be  necessary  to amend  the  definition of "Default
    Rate" or  to  waive  any  obligation of  the Borrower to pay interest at the
    Default Rate;

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         (d)  change  the  order  of  application  of   any  reduction  in   the
    Commitments  or  any  prepayment of  Loans  between  the Facilities from the
    application  thereof  set  forth  in  the  applicable  provisions of Section
    2.05(b) or 2.06(b),  respectively,  in  any  manner  that   materially   and
    adversely  affects  the  Lenders  under  such   Facilities  or  requires the
    permanent reduction of the Revolving Credit Facility at any time when all or
    a  portion  of  the  Term  Facilities  remains in effect without the written
    consent of each such Lender directly affected thereby;

         (e)  change any  provision  of  this Section 10.01 or the definition of
    "Required Lenders"  or  any  other provision hereof specifying the number or
    percentage of  Lenders  required  to  amend,  waive  or otherwise modify any
    rights hereunder or make  any  determination or grant any consent hereunder,
    without the written consent of each Lender;

         (f)  release all or  substantially  all  of  the value of the Guaranty,
    without the written consent of each Lender;

         (g)  impose any  greater  restriction  on the ability of any Lender  to
    assign any of its rights or  obligations  hereunder, without such amendment,
    waiver or consent receiving the written  consent of Lenders having more than
    50% of the  Aggregate  Credit  Exposures  then  in effect within each of the
    following classes of Commitments, Loans and other Credit Extensions: (i) the
    class  consisting  of  the  Revolving  Credit Commitment, and (ii) the class
    consisting of the  Term  Commitment.   For  purposes  of  this   clause, the
    aggregate   amount  of  each   Lender's  risk   participation   and   funded
    participation in L/C Obligations and Swing Line Loans  shall be deemed to be
    held by such Lender; or

        (h)  amend Section 2.13 or 8.03,  without  the written   consent of each
    Lender directly affected thereby;

         and provided further  that (i) no  amendment, waiver or  consent shall,
unless in writing  and signed by  an Appropriate L/C  Issuer in addition  to the
Lenders required  above, affect  the rights  or duties  of such  Appropriate L/C
Issuer under this Agreement or any Letter of Credit Application relating to  any
Letter of Credit issued, deemed issued, or to be issued by such Appropriate  L/C
Issuer; (ii) no amendment, waiver or consent shall, unless in writing and signed
by the Swing Line Lender in  addition to the Lenders required above,  affect the
rights  or  duties  of  the  Swing  Line  Lender  under this Agreement; (iii) no
amendment, waiver or consent shall, unless in writing and signed by an Agent  in
addition to the Lenders required above,  affect the rights or duties of,  or any
fees or other amounts payable to,  such Agent under this Agreement or  any other
Loan Document;  (iv) Section  10.07(h) may  not be  amended, waived or otherwise
modified without the consent  of each Granting Lender  all or any part  of whose
Loans are being funded by an SPC at the time of such amendment, waiver or  other
modification; and (v)  the Fee Letter  may be amended,  or rights or  privileges
thereunder  waived,  in  a  writing  executed  only  by  the  parties   thereto.
Notwithstanding anything to the contrary herein, no Defaulting Lender shall have
any right to approve or  disapprove any amendment, waiver or  consent hereunder,
except that  the Commitment  of such  Lender may  not be  increased or  extended
without the consent of such Lender.

         10.02 Notices and Other Communications; Facsimile Copies.

         (a) General.  Unless  otherwise expressly provided herein,  all notices
and other communications  provided for hereunder  or in any  other Loan Document
shall be  in writing  (including by  facsimile transmission).   All such written
notices shall be mailed, faxed or delivered to the applicable address, facsimile
number or (subject to Section 10.02(c)) electronic mail address, and all notices
and other communications expressly permitted hereunder to be given by  telephone
shall be made to the applicable telephone number, as follows:

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         (i)  if to the Borrower, any Agent, any Appropriate L/C  Issuer  or the
    Swing Line Lender, to the address, facsimile number, electronic mail address
    or telephone number specified for  such Person  on Schedule 10.02 or to such
    other address, facsimile number, electronic mail address or telephone number
    as shall be designated by such party in a notice to the other parties; and

         (ii) if  to  any  other  Lender,  to  the  address,   facsimile number,
    electronic mail address or telephone number specified in its  Administrative
    Questionnaire or to such  other address,  facsimile number,  electronic mail
    address or telephone number as shall be designated by such party in a notice
    to the Borrower, the Agents, the Appropriate  L/C Issuers and the Swing Line
    Lender.

         All such notices and other  communications shall be deemed to  be given
or made upon the  earlier to occur of  (i) actual receipt by  the relevant party
hereto and (ii) (A) if delivered by hand or by courier, when signed for by or on
behalf of the  relevant party hereto;  (B) if delivered  by mail, four  Business
Days after deposit in the mails, postage prepaid; (C) if delivered by facsimile,
when sent and receipt has been  confirmed by telephone; and (D) if  delivered by
electronic mail (which form of delivery is subject to the provisions of  Section
10.02(c)),  when   delivered;  provided,   however,  that   notices  and   other
communications to  the Agents,  the Appropriate  L/C Issuers  and the Swing Line
Lender pursuant to Article II shall not be effective until actually received  by
such Person.  In  no event shall a  voicemail message be effective  as a notice,
communication or confirmation hereunder.

         (b)  Effectiveness  of  Facsimile  Documents  and  Signatures.     Loan
Documents may be transmitted and/or  signed by facsimile.  The  effectiveness of
any such  documents and  signatures shall,  subject to  applicable Law, have the
same force and effect as manually- signed originals and shall be binding on  all
Loan Parties, the Agents and the Lenders.  The Agents may also require that  any
such  documents  and  signatures  be  confirmed  by  a manually- signed original
thereof; provided,  however, that  the failure  to request  or deliver  the same
shall not limit the effectiveness of any facsimile document or signature.

         (c) Limited Use of Electronic  Mail.  Electronic mail and  Internet and
intranet websites may be used only to distribute routine communications, such as
financial statements and other information  as provided in Section 6.02,  and to
distribute Loan Documents for execution by  the parties thereto, and may not  be
used for any other purpose.

         (d) Reliance by Agents and Lenders.   The Agents and the Lenders  shall
be entitled  to rely  and act  upon any  notices (including telephonic Committed
Loan Notices and Swing Line Loan  Notices) purportedly given by or on  behalf of
the  Borrower  even  if  (i)  such  notices  were not made in a manner specified
herein, were incomplete or  were not preceded or  followed by any other  form of
notice  specified  herein,  or  (ii)  the  terms  thereof,  as understood by the
recipient, varied from any confirmation  thereof.  The Borrower shall  indemnify
each Agent-Related Person and each  Lender from all losses, costs,  expenses and
liabilities  resulting  from  the  reliance  by  such  Person  on  each   notice
purportedly given by or  on behalf of the  Borrower.  All telephonic  notices to
and other communications with any Agent may be recorded by such Agent, and  each
of the parties hereto hereby consents to such recording.

         10.03 No Waiver; Cumulative Remedies.  No failure by any Lender or  any
Agent to exercise,  and no delay  by any such  Person in exercising,  any right,
remedy, power or privilege hereunder or any other Loan Document shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude  any other or further exercise  thereof or
the  exercise  of  any  other  right,  remedy,  power or privilege.  The rights,

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remedies, powers and privileges herein  provided, and provided under each  other
Loan Document, are cumulative and not exclusive of any rights, remedies,  powers
and privileges provided by law.

         10.04 Attorney Costs, Expenses and  Taxes.  The Borrower agrees  (a) to
pay or reimburse each  Agent for all reasonable  costs and expenses incurred  in
connection  with  the  development,  preparation,  negotiation,  syndication and
execution of  this Agreement  and the  other Loan  Documents, and any amendment,
waiver,  consent  or  other  modification  of  the provisions hereof and thereof
(whether  or   not  the   transactions  contemplated   hereby  or   thereby  are
consummated),  and  the  consummation  and  administration  of  the transactions
contemplated hereby and thereby, including  all Attorney Costs incurred by  such
Agents,  and  (b)  to  pay  or  reimburse  each  Agent  and  each Lender for all
reasonable costs and expenses incurred in connection with the enforcement of any
rights or remedies under this  Agreement or the other Loan  Documents (including
all such costs and expenses incurred during any legal proceeding, including  any
proceeding under any Debtor Relief  Law), including all Attorney Costs  incurred
by each Agent and each Lender.   The foregoing costs and expenses  shall include
all search, filing,  recording, title insurance  and appraisal charges  and fees
and taxes  related thereto,  and other  out-of-pocket expenses  incurred by  the
Co-Administrative  Agents  and  the  cost  of independent public accountants and
other outside experts  retained by the  Co-Administrative Agents or  any Lender.
All amounts due under this Section  10.04 shall be payable within 30  days after
demand therefor, which  demand shall be  accompanied by an  appropriate invoice.
The  agreements  in  this  Section  10.04  shall  survive the termination of the
Aggregate Commitments and repayment of all other Obligations.  If any Loan Party
fails  to  pay  when  due  any  costs,  expenses  or other amounts payable by it
hereunder or under  any Loan Document,  including, without limitation,  Attorney
Costs and indemnities, such amount may be  paid on behalf of such Loan Party  by
any Agent or any Lender, in its sole discretion.

         10.05 Indemnification by the Borrower.  Whether or not the transactions
contemplated  hereby  are  consummated,  the  Borrower  shall indemnify and hold
harmless each Agent-Related Person, each Lender and their respective Affiliates,
directors,   officers,   employees,   counsel,   agents   and  attorneys-in-fact
(collectively  the  "Indemnitees")  from  and  against  any and all liabilities,
obligations, losses,  damages, penalties,  claims, demands,  actions, judgments,
suits, costs, expenses and disbursements (including Attorney Costs) of any  kind
or  nature  whatsoever  which  may  at  any  time  be imposed on, incurred by or
asserted against any such Indemnitee in any way relating to or arising out of or
in  connection  with  (a)  the  execution, delivery, enforcement, performance or
administration of any Loan Document or any other agreement, letter or instrument
delivered  in  connection  with  the  transactions  contemplated  thereby or the
consummation of the transactions contemplated thereby, (b) any Commitment,  Loan
or  Letter  of  Credit  or  the  use  or  proposed use of the proceeds therefrom
(including any  refusal by  any Appropriate  L/C Issuer  to honor  a demand  for
payment under a Letter of Credit  issued (or deemed issued) by such  Appropriate
L/C Issuer  if the  documents presented  in connection  with such  demand do not
strictly comply  with the  terms of  such Letter  of Credit),  (c) any actual or
alleged  presence  or  release  of  Hazardous  Materials on or from any property
currently or formerly owned or operated  by the Borrower, any Subsidiary or  any
other Loan  Party, or  any Environmental  Liability related  in any  way to  the
Borrower,  any  Subsidiary  or  any  other  Loan  Party,  or  (d)  any actual or
prospective claim, litigation,  investigation or proceeding  relating to any  of
the foregoing, whether  based on contract,  tort or any  other theory (including
any investigation of, preparation for,  or defense of any pending  or threatened
claim, investigation, litigation  or proceeding) and  regardless of whether  any
Indemnitee is a party thereto (all the foregoing, collectively, the "Indemnified
Liabilities"), in all cases, whether or not caused by or arising, in whole or in
part, out  of the  negligence of  the Indemnitee;  provided that  such indemnity
shall  not,  as  to  any  Indemnitee,  be  available  to  the  extent  that such
liabilities, obligations, losses, damages, penalties, claims, demands,  actions,
judgments, suits, costs, expenses or disbursements are determined by a court  of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence  or willful misconduct  of such Indemnitee.   No Indemnitee
shall  be  liable  for  any  damages  arising  from  the  use  by  others of any
information  or  other  materials  obtained  through IntraLinks or other similar

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information transmission systems  in connection with  this Agreement, nor  shall
any Indemnitee  have any  liability for  any indirect  or consequential  damages
relating to  this Agreement  or any  other Loan  Document or  arising out of its
activities in  connection herewith  or therewith  (whether before  or after  the
Documentation Closing  Date).   In the  case of  an investigation, litigation or
other proceeding  to which  the indemnity  in this  Section 10.05  applies, such
indemnity shall be  effective whether or  not such investigation,  litigation or
proceeding  is  brought  by  any  Loan  Party,  its  directors,  shareholders or
creditors or an Indemnitee or any other Person, whether or not any Indemnitee is
otherwise  a  party  thereto  and  whether  or  not  any  of  the   transactions
contemplated hereunder or under any of the other Loan Documents is  consummated.
All amounts due under this Section  10.05 shall be payable within 30  days after
demand therefor, which  demand shall be  accompanied by an  appropriate invoice.
The agreements in this Section 10.05 shall survive the resignation of any Agent,
the replacement of any Lender, the termination of the Aggregate Commitments  and
the repayment, satisfaction or discharge of all the other Obligations.

         10.06 Payments  Set Aside.   To  the extent  that any  payment by or on
behalf of the Borrower is made to any  Agent or any Lender, or any Agent or  any
Lender exercises its right of setoff,  and such payment or the proceeds  of such
setoff  or  any  part  thereof  is  subsequently  invalidated,  declared  to  be
fraudulent or  preferential, set  aside or  required (including  pursuant to any
settlement entered into by  such Agent or such  Lender in its discretion)  to be
repaid  to  a  trustee,  receiver  or  any  other  party, in connection with any
proceeding under any Debtor Relief Law  or otherwise, then (a) to the  extent of
such  recovery,  the  obligation  or  part  thereof  originally  intended  to be
satisfied shall be  revived and continued  in full force  and effect as  if such
payment had not been made or such  setoff had not occurred, and (b) each  Lender
severally agrees to pay to the Paying Agent upon demand its applicable share  of
any amount so recovered from or repaid by any Agent, plus interest thereon  from
the date of such  demand to the date  such payment is made  at a rate per  annum
equal to the Federal Funds Rate from time to time in effect.

         10.07 Successors and Assigns.

         (a) The provisions of this Agreement shall be binding upon and inure to
the benefit of  the parties hereto  and their respective  successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise  transfer
any of its rights or obligations hereunder without the prior written consent  of
each Lender and no Lender may assign or otherwise transfer any of its rights  or
obligations hereunder except (i) to an Eligible Assignee in accordance with  the
provisions of Section 10.07(b), (ii) by way of participation in accordance  with
the provisions of Section  10.07(d), (iii) by way  of pledge or assignment  of a
security interest subject to the  restrictions of Section 10.07(f) or  10.07(i),
or (iv) to an SPC in accordance with the provisions of Section 10.07(h) (and any
other attempted assignment  or transfer by  any party hereto  shall be null  and
void).  Nothing in this Agreement,  expressed or implied, shall be construed  to
confer  upon  any  Person  (other  than  the  parties  hereto,  their respective
successors and assigns permitted hereby, Participants to the extent provided  in
Section  10.07(d)  and,  to  the  extent  expressly  contemplated  hereby,   the
Indemnitees) any legal or equitable right, remedy or claim under or by reason of
this Agreement.

         (b) Any Lender may at any time assign to one or more Eligible Assignees
all or a portion of its  rights and obligations under this Agreement  (including
all or a portion of its Commitment and the Loans (including for purposes of this
Section 10.07(b), participations in L/C Obligations and in Swing Line Loans)  at
the time owing to it); provided that (i) except in the case of an assignment  of
the entire remaining amount of  the assigning Lender's Commitment and  the Loans
at the  time owing  to it  or in  the case  of an  assignment to  a Lender or an
Affiliate  of  a  Lender  or  an  Approved  Fund  with  respect to a Lender, the
aggregate  amount  of  the  Commitment  (which  for  this purpose includes Loans
outstanding thereunder) or, if the applicable Commitment is not then in  effect,
the principal outstanding balance of the Loan of the assigning Lender subject to
each such assignment,  determined as of  the date the  Assignment and Assumption
with respect to such assignment is  delivered to the Paying Agent or,  if "Trade

                                       86

Date" is specified in the Assignment and Assumption, as of the Trade Date, shall
not be less than  $10,000,000, in the case  of any assignment in  respect of the
Revolving  Credit  Facility,  or  $2,500,000,  in  the case of any assignment in
respect of the Term Facility, unless each of the Paying Agent and, so long as no
Event of Default has occurred and is continuing, the Borrower otherwise consents
(each  such  consent  not  to  be  unreasonably  withheld or delayed); (ii) each
partial assignment shall be made as an assignment of a proportionate part of all
the assigning Lender's rights and obligations under this Agreement with  respect
to the Loans or the Commitment assigned, except that this clause (ii) shall  not
(x) apply to rights  in respect of Swing  Line Loans or (y)  prohibit any Lender
from assigning all  or a portion  of its rights  and obligations among  separate
Facilities on a non- pro rata basis; (iii) any assignment of a Revolving  Credit
Commitment must be approved by the Paying Agent, each Appropriate L/C Issuer and
the Swing Line Lender unless the Person that is the proposed assignee is  itself
a Revolving Credit Lender, which approval shall not be unreasonably withheld  or
denied  (whether  or  not  the  proposed  assignee would otherwise qualify as an
Eligible Assignee); and  (iv) the parties  to each assignment  shall execute and
deliver  to  the  Paying  Agent  an  Assignment  and Assumption, together with a
processing and recordation fee of  $3,500.  Subject to acceptance  and recording
thereof by the  Paying Agent pursuant  to Section 10.07(c),  from and after  the
effective  date  specified  in  each  Assignment  and  Assumption,  the Eligible
Assignee thereunder shall be a party to this Agreement and, to the extent of the
interest  assigned  by  such  Assignment  and  Assumption,  have  the rights and
obligations  of  a  Lender  under  this  Agreement,  and  the  assigning  Lender
thereunder shall, to the extent of the interest assigned by such Assignment  and
Assumption, be released from its  obligations under this Agreement (and,  in the
case of  an Assignment  and Assumption  covering all  of the  assigning Lender's
rights and obligations  under this Agreement,  such Lender shall  cease to be  a
party hereto but shall continue to be entitled to the benefits of Sections 3.01,
3.04, 3.05, 10.04  and 10.05 with  respect to facts  and circumstances occurring
prior to the effective date of such assignment).  Upon request, the Borrower (at
its expense)  shall execute  and deliver  a Note  to the  assignee Lender.   Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this Section 10.07(b) shall be treated for purposes of
this Agreement as a  sale by such Lender  of a participation in  such rights and
obligations in accordance with Section 10.07(d).

         (c)  The Paying Agent,acting solely for this purpose as an agent of the
Borrower, shall maintain at the Paying Agent's Office a copy of each  Assignment
and Assumption delivered to it and  a register for the recordation of  the names
and addresses of the Lenders, and  the Commitments of, and principal amounts  of
the Loans and L/C Obligations owing to, each Lender pursuant to the terms hereof
from  time  to  time  (the  "Register").    The entries in the Register shall be
conclusive, and the Borrower, the Agents  and the Lenders may treat each  Person
whose name is recorded in the Register pursuant to the terms hereof as a  Lender
hereunder for  all purposes  of this  Agreement, notwithstanding  notice to  the
contrary.  The Register shall be  available for inspection by the Borrower,  any
Agent  and  any  Lender,  at  any  reasonable  time  and  from time to time upon
reasonable prior notice.

         (d)  Any Lender may at any  time, without the consent of, or notice to,
the Borrower or the Paying Agent, sell participations to any Person (other  than
a  natural  person  or  the  Borrower  or  any  of  the Borrower's Affiliates or
Subsidiaries)  (each,  a  "Participant")  in  all  or a portion of such Lender's
rights and/or obligations  under this Agreement  (including all or  a portion of
its Commitment and/or the Loans  (including such Lender's participations in  L/C
Obligations  and/or  Swing  Line  Loans)  owing  to  it); provided that (i) such
Lender's  obligations  under  this  Agreement  shall remain unchanged, (ii) such
Lender  shall  remain  solely  responsible  to  the other parties hereto for the
performance of such obligations and (iii) the Borrower, the Agents and the other
Lenders  shall  continue  to  deal  solely  and  directly  with  such  Lender in
connection with such Lender's rights and obligations under this Agreement.   Any
agreement or instrument  pursuant to which  a Lender sells  such a participation
shall provide  that such  Lender shall  retain the  sole right  to enforce  this
Agreement and to approve any amendment, modification or waiver of any  provision
of this Agreement; provided that  such agreement or instrument may  provide that
such Lender  will not,  without the  consent of  the Participant,  agree to  any

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amendment,  waiver  or  other  modification  described  in  the first proviso to
Section  10.01  that  directly  affects  such  Participant.   Subject to Section
10.07(e), the  Borrower agrees  that each  Participant shall  be entitled to the
benefits of Sections  3.01, 3.04 and  3.05 to the  same extent as  if it were  a
Lender and had acquired its interest by assignment pursuant to Section 10.07(b).
To the extent permitted by law,  each Participant also shall be entitled  to the
benefits of Section 10.09 as though it were a Lender, provided such  Participant
agrees to be subject to Section 2.13 as though it were a Lender.

         (e)  A Participant shall not be entitled to receive any greater payment
under Section 3.01 or 3.04 than  the applicable Lender would have been  entitled
to receive with  respect to the  participation sold to  such Participant, unless
the sale of the  participation to such Participant  is made with the  Borrower's
prior written consent.  A Participant that would be a Foreign Lender if it  were
a  Lender  shall  not  be  entitled  to  the benefits of Section 3.01 unless the
Borrower is  notified of  the participation  sold to  such Participant  and such
Participant agrees,  for the  benefit of  the Borrower,  to comply  with Section
10.15 as though it were a Lender.

         (f)  Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement (including under its Note,
if any) to secure obligations of such Lender, including any pledge or assignment
to secure obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release  such Lender from  any of its  obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.

         (g)  As used herein, the following terms have the following meanings:

         "Eligible  Assignee" means (a) a Lender; (b) an Affiliate  of a Lender;
    (c) an Approved Fund; and (d) any other Person (other than a natural person)
    approved by (i) the Paying Agent, (ii) in the case of  any  assignment of  a
    Revolving Credit Commitment, each Appropriate L/C Issuer and the  Swing Line
    Lender, and (iii) unless an Event of Default has occurred and is continuing,
    the Borrower   (each  such approval  not  to  be  unreasonably  withheld  or
    delayed); provided that notwithstanding the foregoing,  "Eligible  Assignee"
    shall  not  include  the  Borrower or  any of  the Borrower's  Affiliates or
    Subsidiaries or any Person if a payment hereunder to such  Person  would  be
    subject  to withholding under the Code, as the Code is in effect on the date
    on  which such Person is proposed to become a Lender hereunder.

         "Fund"  means any Person (other than a natural person) that is (or will
    be) engaged in making,  purchasing,  holding  or  otherwise    investing  in
    commercial loans and  similar extensions of credit in the ordinary course of
    its business.

         "Approved Fund" means any Fund that is administered or managed by (a) a
    Lender, (b) an Affiliate of a Lender or (c) an  entity or an Affiliate of an
    entity that administers or manages a Lender.

         (h)  Notwithstanding  anything  to  the  contrary contained herein, any
Lender (a  "Granting Lender")  may grant  to a  special purpose  funding vehicle
identified as such in  writing from time to  time by the Granting  Lender to the
Paying Agent and the Borrower (an "SPC")  the option to provide all or any  part
of any  Loan that  such Granting  Lender would  otherwise be  obligated to  make
pursuant to this Agreement; provided that (i) nothing herein shall constitute  a
commitment  by  any  SPC  to  fund  any  Loan,  and (ii) if an SPC elects not to
exercise such option or  otherwise fails to make  all or any part  of such Loan,
the Granting Lender shall be obligated  to make such Loan pursuant to  the terms
hereof.  Each party hereto hereby agrees  that (i) neither the grant to any  SPC
nor the exercise by any SPC of such option shall increase the costs or  expenses
or  otherwise  increase  or  change  the  obligations of the Borrower under this
Agreement (including its obligations under  Section 3.04), (ii) no SPC  shall be

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liable for any indemnity or similar payment obligation under this Agreement  for
which a  Lender would  be liable,  and (iii)  the Granting  Lender shall for all
purposes, including the approval of any amendment, waiver or other  modification
of any provision of  any Loan Document, remain  the lender of record  hereunder.
The making of  a Loan by  an SPC hereunder  shall utilize the  Commitment of the
Granting Lender  to the  same extent,  and as  if, such  Loan were  made by such
Granting Lender.   In  furtherance of  the foregoing,  each party  hereto hereby
agrees (which agreement shall survive  the termination of this Agreement)  that,
prior to the date that is one year and one day after the payment in full of  all
outstanding  commercial  paper  or  other  senior  debt  of any SPC, it will not
institute against, or join any other Person in instituting against, such SPC any
bankruptcy, reorganization, arrangement,  insolvency, or liquidation  proceeding
under the  Laws of  the United  States or  any State  thereof.   Notwithstanding
anything to the contrary contained herein,  any SPC may (i) with notice  to, but
without prior consent of the Borrower and the Paying Agent and with the  payment
of a processing fee of $3,500, assign all or any portion of its right to receive
payment with respect to any Loan to  the Granting Lender and (ii) disclose on  a
confidential basis any non-public information  relating to its funding of  Loans
to any  rating agency,  commercial paper  dealer or  provider of  any surety  or
Guarantee or credit or liquidity enhancement to such SPC.

         (i)  Notwithstanding  anything  to  the  contrary contained herein, any
Lender that is a Fund  may create a security interest  in all or any portion  of
the Loans  owing to  it and  the Note,  if any,  held by  it to  the trustee for
holders of obligations owed, or securities issued, by such Fund as security  for
such obligations  or securities,  provided that  unless and  until such  trustee
actually  becomes  a  Lender  in  compliance  with  the other provisions of this
Section 10.07, (i) no such pledge shall release the pledging Lender from any  of
its obligations  under the  Loan Documents  and (ii)  such trustee  shall not be
entitled to exercise any of the rights of a Lender under the Loan Documents even
though  such  trustee  may  have  acquired  ownership rights with respect to the
pledged interest through foreclosure or otherwise.

         (j) Notwithstanding anything  to the contrary  contained herein, if  at
any time KeyBank assigns  all of its Commitments  and Loans pursuant to  Section
10.07(b), KeyBank may,  upon 30 days'  notice to the  Borrower and the  Lenders,
resign as an Appropriate L/C Issuer and  as Swing Line Lender.  In the  event of
any such  resignation as  an Appropriate  L/C Issuer  or Swing  Line Lender, the
Borrower  shall  be  entitled  to  appoint  from  among  the Lenders a successor
Appropriate L/C Issuer or Swing  Line Lender hereunder; provided, however,  that
no  failure  by  the  Borrower  to  appoint  any such successor shall affect the
resignation of  KeyBank as  Swing Line  Lender; provided  further, however, that
KeyBank shall not be released from its obligations as an Appropriate L/C  Issuer
hereunder unless  and until  another Lender  assumes all  such obligations.   If
KeyBank resigns as an Appropriate L/C Issuer, it shall retain all the rights and
obligations of such Appropriate L/C Issuer hereunder with respect to all Letters
of  Credit  issued  by  it  and  outstanding  as  of  the  effective date of its
resignation as an  Appropriate L/C Issuer  and all L/C  Obligations with respect
thereto (including the right to require  the Lenders to make Base Rate  Loans or
fund risk participations in  Unreimbursed Amounts pursuant to  Section 2.03(c)).
If KeyBank resigns as Swing Line Lender,  it shall retain all the rights of  the
Swing Line Lender provided for hereunder  with respect to Swing Line Loans  made
by it and outstanding  as of the effective  date of such resignation,  including
the  right  to  require  the  Lenders  to  make  Base  Rate  Loans  or fund risk
participations in outstanding Swing Line Loans pursuant to Section 2.04(c).

         10.08 Confidentiality.   Each of the  Agents and the  Lenders agrees to
maintain the confidentiality of the Information, except that Information may  be
disclosed (a)  to its  and its  Affiliates' directors,  officers, employees  and
agents,  including  accountants,  legal  counsel  and  other  advisors (it being
understood that the Persons to whom such disclosure is made will be informed  of
the  confidential  nature  of  such  Information  and  instructed  to  keep such
Information  confidential);  (b)  to  the  extent  requested  by  any regulatory
authority; (c) to the  extent required by applicable  Laws or regulations or  by
any subpoena or similar legal process; (d) to any other party to this Agreement;
(e) in  connection with  the exercise  of any  remedies hereunder  or any  suit,
action or  proceeding relating  to this  Agreement or  the enforcement of rights

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hereunder;  (f)  to  (i)  any  Eligible  Assignee  of  or Participant in, or any
prospective  Eligible  Assignee  of  or  Participant  in,  any  of its rights or
obligations under  this Agreement  or (ii)  any direct  or indirect  contractual
counterparty or prospective counterparty (or such contractual counterparty's  or
prospective  counterparty's  professional  advisor)  to  any  credit  derivative
transaction relating to obligations of the Loan Parties; (g) with the consent of
the Borrower; (h) to the extent such Information (i) becomes publicly  available
other  than  as  a  result  of  a  breach  of this Section 10.08 or (ii) becomes
available to any Agent  or any Lender on  a nonconfidential basis from  a source
other than  the Borrower;  (i) to  any state,  Federal or  foreign authority  or
examiner (including the National  Association of Insurance Commissioners  or any
other similar organization) regulating any  Lender; or (j) to any  rating agency
when required by  it (it being  understood that, prior  to any such  disclosure,
such  rating  agency  shall  undertake  to  preserve  the confidentiality of any
Information relating to the Loan Parties  received by it from such Lender).   In
addition,  the  Agents  and  the  Lenders  may  disclose  the  existence of this
Agreement  and  information  about  this  Agreement  to  market data collectors,
similar service providers to the lending industry, and service providers to  the
Agents and the Lenders in  connection with the administration and  management of
this  Agreement,  the  other  Loan  Documents,  the  Commitments, and the Credit
Extensions.   For the  purposes of  this Section  10.08, "Information" means all
information received  from any  Loan Party  relating to  any Loan  Party or  its
business, other than any such information that is available to any Agent or  any
Lender on a nonconfidential  basis prior to disclosure  by any Loan Party.   Any
Person required to  maintain the confidentiality  of Information as  provided in
this Section 10.08 shall be considered  to have complied with its obligation  to
do so  if such  Person has  exercised the  same degree  of care  to maintain the
confidentiality  of  such  Information  as  such  Person would accord to its own
confidential information.

         10.09 Setoff.  In  addition to any rights  and remedies of the  Lenders
provided by law, upon the occurrence and during the continuance of any Event  of
Default, each Lender  and each of  their respective Affiliates  is authorized at
any time  and from  time to  time, without  prior notice  to the Borrower or any
other Loan  Party, any  such notice  being waived  by the  Borrower (on  its own
behalf and on behalf of each Loan Party) to the fullest extent permitted by law,
to set off and apply any and  all deposits (general or special, time or  demand,
provisional or final) at  any time held by,  and other Indebtedness at  any time
owing by, such Lender to or for the credit or the account of the respective Loan
Parties against any and all Obligations owing to such Lender hereunder or  under
any other Loan Document, now  or hereafter existing, irrespective of  whether or
not such Agent or such Lender shall have made demand under this Agreement or any
other Loan Document and although such Obligations may be contingent or unmatured
or denominated in a  currency different from that  of the applicable deposit  or
Indebtedness.  Each Lender agrees promptly to notify the Borrower and the Paying
Agent  after  any  such  setoff  and  application made by such Lender; provided,
however, that the failure to give  such notice shall not affect the  validity of
such setoff and application.  The rights of each Agent and each Lender and their
respective Affiliates under this Section  10.09 are in addition to  other rights
and remedies (including, without limitation,  other rights of setoff) that  such
Agent, such Lender and their respective Affiliates may have.

         10.10  Interest  Rate  Limitation.    Notwithstanding  anything  to the
contrary contained in any Loan Document, the interest paid or agreed to be  paid
under the  Loan Documents  shall not  exceed the  maximum rate  of non- usurious
interest permitted by applicable Law (the "Maximum Rate").  If any Agent or  any
Lender shall receive interest  in an amount that  exceeds the Maximum Rate,  the
excess interest shall be applied to the principal of the Loans or, if it exceeds
such unpaid  principal, refunded  to the  Borrower.   In determining whether the
interest contracted for, charged,  or received by an  Agent or a Lender  exceeds
the Maximum Rate, such  Person may, to the  extent permitted by applicable  Law,
(a)  characterize  any  payment  that  is  not  principal as an expense, fee, or
premium rather than interest, (b) exclude voluntary prepayments and the  effects
thereof, and  (c) amortize,  prorate, allocate,  and spread  in equal or unequal
parts  the  total  amount  of  interest  throughout the contemplated term of the
Obligations hereunder.

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         10.11 Counterparts.  This Agreement and each other Loan Document may be
executed in one or more counterparts, each of which shall be deemed an original,
but  all  of  which  together  shall  constitute  one  and  the same instrument.
Delivery by telecopier of  an executed counterpart of  a signature page to  this
Agreement and  each other  Loan Document  shall be  effective as  delivery of an
original executed counterpart  of this Agreement  and such other  Loan Document.
The  Co-Administrative  Agents  may  also  require  that  any such documents and
signatures delivered by  telecopier be confirmed  by a manually-signed  original
thereof; provided  that the  failure to  request or  deliver the  same shall not
limit the effectiveness of any document or signature delivered by telecopier.

         10.12  Integration.    This  Agreement,  together  with  the other Loan
Documents, comprises the complete and integrated agreement of the parties on the
subject matter hereof and thereof  and supersedes all prior agreements,  written
or oral,  on such  subject matter.   In  the event  of any  conflict between the
provisions  of  this  Agreement  and  those  of  any  other  Loan  Document, the
provisions  of  this  Agreement  shall  control;  provided that the inclusion of
supplemental rights or  remedies in favor  of the Agents  or the Lenders  in any
other Loan Document shall  not be deemed a  conflict with this Agreement.   Each
Loan Document was drafted with the joint participation of the respective parties
thereto and shall be  construed neither against nor  in favor of any  party, but
rather in accordance with the fair meaning thereof.

         10.13 Survival of Representations and Warranties.  All  representations
and warranties made hereunder and in  any other Loan Document or other  document
delivered pursuant  hereto or  thereto or  in connection  herewith or  therewith
shall  survive   the  execution   and  delivery   hereof  and   thereof.    Such
representations and warranties have  been or will be  relied upon by each  Agent
and each Lender, regardless of any investigation made by any Agent or any Lender
or on their behalf and notwithstanding that any Agent or any Lender may have had
notice or  knowledge of  any Default  at the  time of  any Credit Extension, and
shall  continue  in  full  force  and  effect  as  long as any Loan or any other
Obligation hereunder shall remain unpaid or unsatisfied or any Letter of  Credit
shall remain outstanding.

         10.14 Severability.   If any provision  of this Agreement  or the other
Loan  Documents  is  held  to  be  illegal,  invalid  or  unenforceable, (a) the
legality,  validity  and  enforceability  of  the  remaining  provisions of this
Agreement and the other Loan Documents shall not be affected or impaired thereby
and (b) the  parties shall endeavor  in good faith  negotiations to replace  the
illegal, invalid or unenforceable provisions with valid provisions the  economic
effect of which comes  as close as possible  to that of the  illegal, invalid or
unenforceable  provisions.    The  invalidity  of  a  provision  in a particular
jurisdiction shall not invalidate or render unenforceable such provision in  any
other jurisdiction.

         10.15 Tax  Forms.   (a) (i)  Each Lender  that is  not a "United States
person"  within  the  meaning  of  Section  7701(a)(30)  of the Code (a "Foreign
Lender") shall  deliver to  the Paying  Agent, prior  to receipt  of any payment
subject to withholding  under the Code  (or upon accepting  an assignment of  an
interest herein), two duly signed completed copies of either IRS Form W-8BEN  or
any successor thereto (relating  to such Foreign Lender  and entitling it to  an
exemption from, or reduction of, withholding  tax on all payments to be  made to
such Foreign  Lender by  the Borrower  pursuant to  this Agreement)  or IRS Form
W-8ECI or any  successor thereto (relating  to all payments  to be made  to such
Foreign  Lender  by  the  Borrower  pursuant  to  this  Agreement) or such other
evidence satisfactory  to the  Borrower and  the Paying  Agent that such Foreign
Lender is entitled to an exemption from, or reduction of, U.S. withholding  tax,
including any exemption pursuant to Section 881(c) of the Code.  Thereafter  and
from time to  time, each such  Foreign Lender shall  (A) promptly submit  to the
Paying Agent such  additional duly completed  and signed copies  of one of  such
forms (or  such successor  forms as  shall be  adopted from  time to time by the
relevant United States taxing authorities)  as may then be available  under then
current United  States laws  and regulations  to avoid,  or such  evidence as is
satisfactory to  the Borrower  and the  Paying Agent  of any available exemption
from or reduction of, United States withholding taxes in respect of all payments

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to be made to  such Foreign Lender by  the Borrower pursuant to  this Agreement,
(B) promptly notify the Paying Agent of any change in circumstances which  would
modify or render invalid any claimed  exemption or reduction, and (C) take  such
steps  as  shall  not  be  materially  disadvantageous  to it, in the reasonable
judgment of such Lender, and as  may be reasonably necessary (including the  re-
designation of its Lending Office)  to avoid any requirement of  applicable Laws
that  the  Borrower  make  any  deduction  or withholding for taxes from amounts
payable to such Foreign Lender.

         (ii) Each Foreign Lender,  to the extent it  does not act or  ceases to
act for its own account with respect to any portion of any sums paid or  payable
to such Lender under any  of the Loan Documents (for  example, in the case of  a
typical participation by such Lender), shall deliver to the Paying Agent on  the
date when such Foreign Lender ceases to act for its own account with respect  to
any portion of any such sums paid or payable, and at such other times as may  be
necessary in the determination of  the Paying Agent (in the  reasonable exercise
of  its  discretion),  (A)  two  duly  signed  completed  copies of the forms or
statements  required  to  be  provided  by  such  Lender  as set forth above, to
establish the portion  of any such  sums paid or  payable with respect  to which
such Lender acts  for its own  account that is  not subject to  U.S. withholding
tax,  and  (B)  two  duly  signed  completed  copies  of IRS Form W-8IMY (or any
successor  thereto),  together  with  any  information  such  Lender  chooses to
transmit with  such form,  and any  other certificate  or statement of exemption
required under the Code, to establish that such Lender is not acting for its own
account with respect to a portion of any such sums payable to such Lender.

         (iii) The Borrower shall not  be required to pay any  additional amount
to any Foreign Lender under Section 3.01 (A) with respect to any Taxes  required
to be  deducted or  withheld on  the basis  of the  information, certificates or
statements of exemption such Lender  transmits with an IRS Form  W-8IMY pursuant
to this Section 10.15(a) or (B) if such Lender shall have failed to satisfy  the
foregoing provisions  of this  Section 10.15(a);  provided that  if such  Lender
shall have satisfied the requirement of  this Section 10.15(a) on the date  such
Lender became a Lender or ceased to act for its own account with respect to  any
payment under any of the Loan Documents, nothing in this Section 10.15(a)  shall
relieve the Borrower of  its obligation to pay  any amounts pursuant to  Section
3.01 in the event that, as a result of any change in any applicable Law,  treaty
or governmental rule, regulation or order, or any change in the  interpretation,
administration  or  application  thereof,  such  Lender  is  no  longer properly
entitled to deliver forms, certificates  or other evidence at a  subsequent date
establishing the fact that such Lender or other Person for the account of  which
such Lender receives  any sums payable  under any of  the Loan Documents  is not
subject to withholding or is subject to withholding at a reduced rate.

         (iv)  The  Paying  Agent  may,  without  reduction,  withhold any Taxes
required to  be deducted  and withheld  from any  payment under  any of the Loan
Documents with respect to which the  Borrower is not required to pay  additional
amounts under this Section 10.15(a).

         (b) Upon the request of the Paying Agent, each Lender that is a "United
States  person"  within  the  meaning  of  Section 7701(a)(30) of the Code shall
deliver to the Paying  Agent two duly signed  completed copies of IRS  Form W-9.
If such Lender fails to deliver  such forms, then the Paying Agent  may withhold
from any interest payment to such Lender an amount equivalent to the  applicable
back-up withholding tax imposed by the Code, without reduction.

         (c) If any Governmental Authority asserts that the Paying Agent did not
properly withhold  or backup  withhold, as  the case  may be,  any tax  or other
amount from payments made to or for the account of any Lender, such Lender shall
indemnify the Paying Agent therefor,  including all penalties and interest,  any
taxes imposed by  any jurisdiction on  the amounts payable  to the Paying  Agent
under this Section 10.15, and  costs and expenses (including Attorney  Costs) of
the Paying Agent.  The obligation of the Lenders under this Section 10.15  shall
survive the  termination of  the Aggregate  Commitments, repayment  of all other
Obligations hereunder and the resignation of the Paying Agent.

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         10.16 Replacement of Lenders.  Under any circumstances set forth herein
providing that the Borrower shall have the right to replace a Lender as a  party
to this Agreement, the Borrower may,  upon notice to such Lender and  the Paying
Agent, replace such Lender by causing such Lender to assign its Commitment (with
the assignment  fee to  be paid  by the  Borrower in  such instance) pursuant to
Section 10.07(b) to one or more other Lenders or Eligible Assignees procured  by
the Borrower; provided,  however, that if  the Borrower elects  to exercise such
right  with  respect  to  any  Lender  pursuant  to Section 3.06(b), it shall be
obligated  to  replace  all  Lenders   that  have  made  similar  requests   for
compensation pursuant to Section  3.01 or 3.04.   The Borrower shall (x)  pay in
full all principal,  accrued interest, accrued  fees and other  amounts owing to
such  Lender  through  the  date  of  replacement (including any amounts payable
pursuant to Section  3.05), (y) provide  appropriate assurances and  indemnities
(which may include  letters of credit)  to the Appropriate  L/C Issuers and  the
Swing Line Lender as each may reasonably require with respect to any  continuing
obligation to fund participation interests  in any L/C Obligations or  any Swing
Line Loans then  outstanding, and (z)  release such Lender  from its obligations
under the Loan Documents.  Any  Lender being replaced shall execute and  deliver
an  Assignment  and  Assumption  with  respect  to  such Lender's Commitment and
outstanding Loans and participations in L/C Obligations and Swing Line Loans.

         10.17 Judgment.

         (a)  If  for  the  purposes  of  obtaining  judgment in any court it is
necessary to convert a sum due  hereunder in Dollars into another currency,  the
parties hereto agree,  to the fullest  extent that they  may effectively do  so,
that the rate of exchange used shall be that at which in accordance with  normal
banking  procedures  Bank  of  America  could  purchase  Dollars with such other
currency at Bank  of America's principal  office in London  at 5:00 p.m.  on the
Business Day preceding that on which final judgment is given.

         (b)  If  for  the  purposes  of  obtaining  judgment in any court it is
necessary to convert a sum due  hereunder in a Committed Currency into  Dollars,
                                      105

the parties agree to  the fullest extent that  they may effectively do  so, that
the rate  of exchange  used shall  be that  at which  in accordance  with normal
banking procedures Bank of America  could purchase such Committed Currency  with
Dollars at  Bank of  America's principal  office in  London at  5:00 p.m. on the
Business Day preceding that on which final judgment is given.

         (c) The obligation of the Borrower in respect of any sum due from it in
any  currency  (the  "Primary  Currency")  to  any Lender or any Agent hereunder
shall, notwithstanding any judgment in any other currency, be discharged only to
the extent that  on the Business  Day following receipt  by such Lender  or such
Agent (as  the case  may be),  of any  sum adjudged  to be  so due in such other
currency, such Lender or such Agent (as the case may be) may in accordance  with
normal banking  procedures purchase  the applicable  Primary Currency  with such
other currency.  If the amount  of the applicable Primary Currency so  purchased
is less than such sum due to such  Lender or such Agent (as the case may  be) in
the applicable Primary Currency, the  Borrower agrees, as a separate  obligation
and notwithstanding any  such judgment, to  indemnify such Lender  or such Agent
(as the  case may  be) against  such loss,  and if  the amount of the applicable
Primary Currency so purchased  exceeds such sum due  to any Lender or  any Agent
(as the case  may be) in  the applicable Primary  Currency, such Lender  or such
Agent (as the case may be) agrees to remit to the Borrower such excess.

         10.18 Substitution of Currency.  If a change in any Committed  Currency
occurs pursuant to any applicable  Law, rule or regulation of  any governmental,
monetary  or  multi-national  authority,  this  Agreement  (including,   without
limitation, the definition of Eurocurrency  Rate) will be amended to  the extent
determined by the Paying Agent  (acting reasonably and in consultation  with the
Borrower) to  be necessary  to reflect  the change  in currency  and to  put the

                                       93

Lenders and the  Borrower in the  same position, so  far as possible,  that they
would have been in if no change in such Committed Currency had occurred.

         10.19 Governing Law.

         (a) THIS AGREEMENT AND EACH  OTHER LOAN DOCUMENT SHALL BE  GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

         (b) ANY LEGAL  ACTION OR PROCEEDING  WITH RESPECT TO  THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY  BE BROUGHT IN THE COURTS  OF THE STATE OF NEW  YORK
SITTING IN NEW YORK  CITY OR OF THE  UNITED STATES FOR THE  SOUTHERN DISTRICT OF
SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER,  EACH
AGENT AND EACH LENDER  CONSENTS, FOR ITSELF AND  IN RESPECT OF ITS  PROPERTY, TO
THE NON-EXCLUSIVE JURISDICTION  OF THOSE COURTS.   THE BORROWER,  EACH AGENT AND
EACH LENDER  IRREVOCABLY WAIVES  ANY OBJECTION,  INCLUDING ANY  OBJECTION TO THE
LAYING OF VENUE OR  BASED ON THE GROUNDS  OF FORUM NON CONVENIENS,  WHICH IT MAY
NOW  OR  HEREAFTER  HAVE  TO  THE  BRINGING  OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED  THERETO.
THE BORROWER, EACH AGENT AND EACH LENDER WAIVES PERSONAL SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER PROCESS,  WHICH MAY BE MADE  BY ANY OTHER MEANS  PERMITTED BY
THE LAW OF SUCH STATE.

         10.20 Waiver of Right to Trial  by Jury.  EACH PARTY TO  THIS AGREEMENT
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND,  ACTION
OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED  WITH
OR RELATED OR INCIDENTAL  TO THE DEALINGS OF  THE PARTIES HERETO OR  ANY OF THEM
WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN  EACH
                                      106

CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN  CONTRACT
OR TORT OR OTHERWISE;  AND EACH PARTY HEREBY  AGREES AND CONSENTS THAT  ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION 10.20 WITH  ANY COURT AS WRITTEN EVIDENCE OF THE  CONSENT
OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

         10.21 Binding Effect.   This Agreement  shall become effective  when it
shall have been executed by the Borrower and the Co- Administrative Agents shall
have been notified by  each Lender, Swing Line  Lender and each Appropriate  L/C
Issuer that each  such Lender, the  Swing Line Lender  and each Appropriate  L/C
Issuer has executed  it and thereafter  shall be binding  upon and inure  to the
benefit  of  the  Borrower,  each  Agent  and  each  Lender and their respective
successors and assigns,  except that the  Borrower shall not  have the right  to
assign its  rights hereunder  or any  interest herein  without the prior written
consent of the Lenders.

         10.22  Post-Closing  Restructuring.    Notwithstanding anything in this
Agreement or in  any other Loan  Agreement to the  contrary, the parties  hereto
hereby agree that no transaction specifically described in Schedule 10.22 shall,
with respect to  any Loan Document,  (w) breach any  representation or warranty,
(x) breach any covenant, (y) result in a Default or (z) result in any prepayment
of the Loans or Cash Collateralization of Letters of Credit.

                                       94

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

                                       THE TIMKEN COMPANY

                                       By:   /s/ Sallie B. Bailey
                                       Name:     Sallie B. Bailey
                                       Title:  Corporate Controller

                                       95

                                       BANK OF AMERICA, N.A., as
                                       Co-Administrative Agent and Lender

                                       By:   /s/ Thomas R. Durham
                                       Name:     Thomas R. Durham
                                       Title:  Managing Director

                                       96

                                       BANC OF AMERICA SECURITIES LLC, as Lead
                                       Arranger

                                       By:   /s/ Joseph Siegel, Jr.
                                       Name:     Joseph Siegel, Jr.
                                       Title:  Managing Director

                                       97

                                       KEYBANK NATIONAL ASSOCIATION, as Co-
                                       Administrative Agent, Paying Agent, Lead
                                       Arranger, Lender,  Swing Line Lender and
                                       an Appropriate L/C Issuer

                                       By:   /s/ Marianne T. Meil
                                       Name:     Marianne T. Meil
                                       Title:  Vice President

                                       98

                                       MERRILL LYNCH & CO., MERRILL LYNCH,
                                       PIERCE, FENNER & SMITH INCORPORATED, as
                                       Syndication Agent

                                       By:   /s/ Sheila McGillicuddy
                                       Name:     Sheila McGillicuddy
                                       Title:  Director

                                       99

                                       MERRILL LYNCH CAPITAL CORPORATION, as
                                       Lender

                                       By:  /s/ Michael E. O'Brien
                                       Name:    Michael E. O'Brien
                                       Title:  Vice President

                                       100

                                       MORGAN STANLEY BANK, as Documentation
                                       Agent and Lender

                                       By:  /s/ Jaap L. Tonckens
                                       Name:    Jaap L. Tonckens
                                       Title:  Vice President

EX-4.6

                                  EXHIBIT 4.6

                           SECOND AMENDMENT AGREEMENT

     This SECOND AMENDMENT AGREEMENT (this "Amendment") is made as of the 7th
day of February, 2003, by and among THE TIMKEN COMPANY, an Ohio corporation
("Borrower"), the financial institutions listed on Schedule 1 to the Credit
Agreement, as hereinafter defined (collectively, the "Banks" and, individually,
each a "Bank"), and KEYBANK NATIONAL ASSOCIATION, as administrative agent
("Agent"):

     WHEREAS, Borrower, Agent and the Banks are parties to that certain Credit
Agreement, dated as of July 10, 1998, that provides, among other things, for
loans aggregating Three Hundred Million Dollars ($300,000,000), all upon
certain terms and conditions (as amended and as the same may from time to time
be further amended, restated or otherwise modified, the "Credit Agreement");

     WHEREAS, Borrower, Agent and the Banks desire to amend the Credit
Agreement to modify certain provisions thereof; and

     WHEREAS, each capitalized term used herein and defined in the Credit
Agreement, but not otherwise defined herein, shall have the meaning given such
term in the Credit Agreement;

     NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein and for other valuable considerations, Borrower, Agent and the
Banks agree as follows:

     1.   Amendment to Reduction of Commitment Provision.  Section 2.5(c) of
the Credit Agreement is hereby amended to delete the words "not fewer than five
(5) Business Days' notice" therefrom and to insert in place thereof the words
"not fewer than one (1) Business Day's notice".

     2.   Closing Item.  Concurrently with the execution of this Amendment,
Borrower shall pay all legal fees and expenses of Agent in connection with this
Amendment.

     3.   Representations and Warranties.  Borrower hereby represents and
warrants to Agent and the Banks that (a) Borrower has the legal power and
authority to execute and deliver this Amendment; (b) the officers executing
this Amendment have been duly authorized to execute and deliver the same and
bind Borrower with respect to the provisions hereof; (c) the execution and
delivery hereof by Borrower and the performance and observance by Borrower of
the provisions hereof do not violate or conflict with the organizational
agreements of Borrower or any law applicable to Borrower or result in a breach
of any provision of or constitute a default under any other agreement,
instrument or document binding upon or enforceable against Borrower; (d) no
Default or Event of Default exists under the Credit Agreement, nor will any
occur immediately after the execution and delivery of this Amendment or by the
performance or observance of any provision hereof; (e) Borrower is not aware
of any claim or offset against, or defense or counterclaim to, Borrower's
obligations or liabilities under the Credit Agreement or any Related Writing;


and (f) this Amendment constitutes a valid and binding obligation of Borrower
in every respect, enforceable in accordance with its terms.

     4.   Waiver.  Borrower hereby waives and releases Agent and each of the
Banks and their respective directors, officers, employees, attorneys,
affiliates and subsidiaries from any and all claims, offsets, defenses and
counterclaims of which Borrower is aware, such waiver and release being with
full knowledge and understanding of the circumstances and effect thereof and
after having consulted legal counsel with respect thereto.

     5.   References to Credit Agreement.  Each reference that is made in the
Credit Agreement or any Related Writing shall hereafter be construed as a
reference to the Credit Agreement as amended hereby.  Except as herein
otherwise specifically provided, all provisions of the Credit Agreement shall
remain in full force and effect and be unaffected hereby.  This Amendment
is a Related Writing.

     6.   Counterparts.  This Amendment may be executed in any number of
counterparts, by different parties hereto in separate counterparts and by
facsimile signature, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute but
one and the same agreement.

     7.   Governing Law.  The rights and obligations of all parties hereto
shall be governed by the laws of the State of Ohio, without regard to
principles of conflict of laws.

                  [Remainder of page intentionally left blank.]

                                       2


     8.   JURY TRIAL WAIVER.  BORROWER, AGENT AND THE BANKS, TO THE EXTENT
PERMITTED BY LAW, EACH HEREBY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG
BORROWER, AGENT AND THE BANKS, ARISING OUT OF, IN CONNECTION WITH, RELATED TO,
OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH
THIS AMENDMENT OR ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED
THERETO.

                                THE TIMKEN COMPANY

                                By: /s/ Sallie B. Bailey
                                ________________________
                                Name:  Sallie B. Bailey
                                Title:  Sr. Vice President-Finance & Controller

                                KEYBANK NATIONAL ASSOCIATION,
                                   as Agent and as a Bank

                                By:  /s/ Marianne T. Meil
                                _________________________
                                Name:  Marianne T. Meil
                                Title:  Vice President

                                THE BANK OF NEW YORK

                                By:  /s/ Kenneth R. McDonnell
                                _____________________________
                                Name:  Kenneth R. McDonnell
                                Title:  Vice President

                                BANK ONE, N.A.

                                By:  /s/ Wieslaw R. Sliwinski
                                _____________________________
                                Name:  Wieslaw R. Sliwinski
                                Title:  Associate Director

                                MELLON BANK, N.A.

                                By:  /s/ John R. Cooper
                                _______________________
                                Name:  John R. Cooper
                                Title:  Vice President

                                       3


                                HSBC BANK USA

                                By:  /s/ Christopher M. Samms
                                _____________________________
                                Name:  Christopher M. Samms
                                Title:  First Vice President

                                BANK OF AMERICA, N.A.

                                By:  /s/ Thomas R. Durham
                                _________________________
                                Name:  Thomas R. Durham
                                Title:  Managing Director

                                THE NORTHERN TRUST COMPANY

                                By:  /s/ Barbara B. Tuszynska
                                _____________________________
                                Name:  Barbara B. Tuszynska
                                Title:  Second Vice President

                                REVOLVING COMMITMENT VEHICLE
                                CORPORATION
                                By: J.P. Morgan Chase Bank, as
                                Attorney-in-Fact for Revolving
                                Commitment Vehicle Corporation

                                By:
                                Name:
                                Title:

                                SAN PAOLO IMI S.p.A.

                                By:
                                Name:
                                Title:

                                UNIZAN BANK, N.A., fka United
                                National Bank and Trust

                                By:  /s/ Richard F. Kress
                                _________________________
                                Name:  Richard F. Kress
                                Title:  Vice President

                                       4


EX-4.7

                                  Exhibit 4.7

                                                EXECUTION VERSION

                                THE TIMKEN COMPANY

                                       AND

                               THE BANK OF NEW YORK,
                                    AS TRUSTEE

                                    INDENTURE

                           DATED AS OF FEBRUARY 18, 2003

                            PROVIDING FOR ISSUANCE OF
                                  NOTES IN SERIES

NYDOCS01/905069.6


                          THE TIMKEN COMPANY INDENTURE
                         DETAILED CROSS-REFERENCE TABLE

Trust Indenture Act                                             Indenture
    Section                                                      Section

310 (a) (1).................................................       7.10
    (a) (2).................................................       7.10
    (a) (3).................................................       N.A.
    (a) (4).................................................       N.A.
    (a) (5).................................................       7.10
    (b) ....................................................       7.08
    (c) ....................................................       N.A.

311 (a) ....................................................       7.03
    (b) ....................................................       7.03
    (c) ....................................................       N.A.

312 (a) ....................................................       11.02
    (b) ....................................................       11.02
    (c) ....................................................       11.02

313 (a) ....................................................       7.06
    (b) ....................................................       7.06
    (c) ....................................................       7.06

314 (a) ....................................................       N.A.
    (b) (1).................................................       N.A.
    (b) (2).................................................       N.A.
    (c) (1).................................................       11.04
    (c) (2).................................................       11.04
    (c) (3).................................................       N.A.
    (d) ....................................................       N.A.
    (e) ....................................................       11.05
    (f) ....................................................       N.A.

315 (a) ....................................................       7.01, 7.02
    (b) ....................................................       7.02, 7.05
    (c) ....................................................       7.01
    (d) ....................................................       7.02
    (e) ....................................................       6.12, 7.02

316 (a) (last sentence).....................................       2.05
(a) (1) (A).................................................       6.05
(a) (1) (B).................................................       6.02, 6.04
(a) (2) ....................................................       N.A.
(b) ........................................................       6.06, 6.07

NYDOCS01/905069.6                      i


Trust Indenture Act                                             Indenture
    Section                                                      Section

317 (a) (1).................................................       6.08
    (a) (2) ................................................       6.09
    (b) ....................................................       2.03

318 (a) ....................................................       N.A.
(b) ........................................................       N.A.
(c) ........................................................       11.01

NYDOCS01/905069.6                     ii


                               TABLE OF CONTENTS

                                                                    Page

                                  ARTICLE I.
                    DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01. DEFINITIONS........................................      1
SECTION 1.02. RULES OF CONSTRUCTION..............................      7
SECTION 1.03. INCORPORATION BY REFERENCE OF THE TRUST INDENTURE
               ACT...............................................      7

                                  ARTICLE II.
                                   THE NOTES

SECTION 2.01. UNLIMITED IN AMOUNT, ISSUABLE IN SERIES, FORM
               AND DATING.......................................       8
SECTION 2.02. EXECUTION, AUTHENTICATION AND DENOMINATIONS ......      11
SECTION 2.03. REGISTRAR, PAYING AGENT AND AUTHENTICATING AGENT;
               PAYING AGENT TO HOLD MONEY IN TRUST..............      13
SECTION 2.04. REPLACEMENT NOTES.................................      13
SECTION 2.05. OUTSTANDING NOTES.................................      14
SECTION 2.06. TEMPORARY NOTES...................................      15
SECTION 2.07. CANCELLATION......................................      15
SECTION 2.08. CUSIP NUMBERS.....................................      15
SECTION 2.09. TRANSFER AND EXCHANGE.............................      15
SECTION 2.10. NOTEHOLDER LISTS..................................      18
SECTION 2.11. DEFAULTED INTEREST................................      18
SECTION 2.12. COMPUTATION OF INTEREST...........................      19

                                  ARTICLE III.
                                   REDEMPTION

SECTION 3.01. METHOD AND EFFECT OF REDEMPTION...................      19
SECTION 3.02. EXCLUSION OF CERTAIN NOTES FROM ELIGIBILITY FOR
               SELECTION FOR REDEMPTION.........................      20
SECTION 3.03. DEPOSIT OF REDEMPTION PRICE.......................      21

                                  ARTICLE IV.
                                   COVENANTS

SECTION 4.01. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST........      21
SECTION 4.02. OFFICES FOR PAYMENTS, ETC.........................      21
SECTION 4.03. APPOINTMENT TO FILL A VACANCY IN OFFICE OF
               TRUSTEE..........................................      22
SECTION 4.04. PAYING AGENTS.....................................      22
SECTION 4.05. WRITTEN STATEMENT TO TRUSTEE......................      23
SECTION 4.06. [RESERVED]........................................      23
SECTION 4.07. LIMITATION ON LIENS...............................      23
SECTION 4.08. LIMITATION ON SALE AND LEASEBACK..................      24
SECTION 4.09. CALCULATION OF ORIGINAL ISSUE DISCOUNT............      25

NYDOCS01/95069.6                      iii


                                  ARTICLE V.
                CONSOLIDATION, MERGER, SALE OR CONVEYANCE

SECTION 5.01. COMPANY MAY CONSOLIDATE, MERGE, ETC., ON CERTAIN
               TERMS............................................      25
SECTION 5.02. SUCCESSOR COMPANY SUBSTITUTED.....................      25
SECTION 5.03. OPINION OF COUNSEL TO TRUSTEE.....................      26

                                  ARTICLE VI.
                             DEFAULT AND REMEDIES

SECTION 6.01. EVENTS OF DEFAULT.................................      26
SECTION 6.02. ACCELERATION......................................      27
SECTION 6.03. OTHER REMEDIES....................................      28
SECTION 6.04. WAIVER OF PAST DEFAULTS...........................      28
SECTION 6.05. CONTROL BY MAJORITY...............................      28
SECTION 6.06. LIMITATION ON SUITS...............................      29
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT..............      29
SECTION 6.08. COLLECTION SUIT BY TRUSTEE........................      29
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM..................      30
SECTION 6.10. PRIORITIES........................................      30
SECTION 6.11. RESTORATION OF RIGHTS AND REMEDIES................      31
SECTION 6.12. UNDERTAKING FOR COSTS.............................      31
SECTION 6.13. RIGHTS AND REMEDIES CUMULATIVE....................      31
SECTION 6.14. DELAY OR OMISSION NOT WAIVER......................      32
SECTION 6.15. WAIVER OF STAY, EXTENSION OR USURY LAWS...........      32

                                  ARTICLE VII.
                                  THE TRUSTEE

SECTION 7.01. GENERAL...........................................      32
SECTION 7.02. CERTAIN RIGHTS OF TRUSTEE.........................      32
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE......................      34
SECTION 7.04. TRUSTEE'S DISCLAIMER..............................      34
SECTION 7.05. NOTICE OF DEFAULT.................................      34
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS.....................      35
SECTION 7.07. COMPENSATION AND INDEMNITY........................      35
SECTION 7.08. REPLACEMENT OF TRUSTEE............................      35
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER.......................      37
SECTION 7.10. ELIGIBILITY.......................................      37
SECTION 7.11. MONEY HELD IN TRUST...............................      37

                                  ARTICLE VIII.
                            DEFEASANCE AND DISCHARGE

SECTION 8.01. DISCHARGE OF COMPANY'S OBLIGATIONS................      37
SECTION 8.02. LEGAL DEFEASANCE..................................      38
SECTION 8.03. COVENANT DEFEASANCE...............................      39

NYDOCS01/905069.6                     iv


SECTION 8.04. APPLICATION OF TRUST MONEY........................      40
SECTION 8.05. REPAYMENT TO COMPANY..............................      40
SECTION 8.06. REINSTATEMENT.....................................      40

                                  ARTICLE IX.
                           SUPPLEMENTAL INDENTURES

SECTION 9.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
                HOLDERS.........................................      40
SECTION 9.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS...      42
SECTION 9.03. EXECUTION OF SUPPLEMENTAL INDENTURES..............      43
SECTION 9.04. EFFECT OF SUPPLEMENTAL INDENTURES.................      43
SECTION 9.05. CONFORMITY WITH TRUST INDENTURE ACT...............      44
SECTION 9.06. REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES.....      44

                                  ARTICLE X.
                                SINKING FUNDS

SECTION 10.01. APPLICABILITY OF ARTICLE.........................      44
SECTION 10.02. SATISFACTION OF SINKING FUND PAYMENTS WITH
                NOTES...........................................      44
SECTION 10.03. REDEMPTION OF NOTES FOR SINKING FUND.............      44

                                  ARTICLE XI.
                            SUBORDINATION OF NOTES

SECTION 11.01. APPLICABILITY OF ARTICLE; AGREEMENT TO
                SUBORDINATE.....................................      45
SECTION 11.02. RIGHTS OF HOLDERS OF SUBORDINATED INDEBTEDNESS...      45
SECTION 11.03. PAYMENTS AND DISTRIBUTIONS.......................      46
SECTION 11.04. PAYMENTS BY THE COMPANY..........................      47
SECTION 11.05. APPOINTMENT OF THE TRUSTEE BY HOLDERS............      48
SECTION 11.06. NOTICE TO TRUSTEE................................      48
SECTION 11.07. RIGHTS OF TRUSTEE................................      48
SECTION 11.08. PAYING AGENT.....................................      48

                                  ARTICLE XII.
                                 MISCELLANEOUS

SECTION 12.01. TRUST INDENTURE ACT OF 1939......................      49
SECTION 12.02. NOTEHOLDER COMMUNICATIONS; NOTEHOLDER ACTIONS....      49
SECTION 12.03. NOTICES..........................................      49
SECTION 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS
                PRECEDENT.......................................      50
SECTION 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION....      51
SECTION 12.06. PAYMENT DATE OTHER THAN A BUSINESS DAY...........      51
SECTION 12.07. GOVERNING LAW....................................      51
SECTION 12.08. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS....      51
SECTION 12.09. SUCCESSORS.......................................      51
SECTION 12.10. DUPLICATE ORIGINALS..............................      52
SECTION 12.11. SEPARABILITY.....................................      52
SECTION 12.12. TABLE OF CONTENTS AND HEADINGS...................      52

NYDOCS01/905069.6                      v

SECTION 12.13. NO LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES,
                INCORPORATORS AND STOCKHOLDERS.................       52

NYDOCS01/905069.6                     vi


                                    EXHIBIT

EXHIBIT A DTC LEGEND     A-1

NYDOCS01/905069.6                     vii


          INDENTURE, dated as of February 18, 2003, among The Timken Company,
an Ohio corporation (the "Company"), and The Bank of New York, a banking
corporation duly organized under the laws of New York, as Trustee ("Trustee").

                                    RECITALS

          The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its senior or
subordinated debentures, notes or other evidences of indebtedness, which may be
convertible into or exchangeable for any securities of any person (including ]
the Company), to be issued in one or more series (the "Notes"), as herein
provided, up to such principal amount as may from time to time be authorized in
or pursuant to one or more resolutions of the Board of Directors or by
supplemental indenture.

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

          This Indenture is subject to, and will be governed by, the provisions
of the Trust Indenture Act that are required to be a part of and govern
indentures qualified under the Trust Indenture Act.

                              THIS INDENTURE WITNESSETH

          For and in consideration of the premises and the purchase from time
to time of the Notes by the Holders thereof, the parties hereto covenant and
agree, for the equal and proportionate benefit of all Holders, as follows:

                                    ARTICLE I.
                    DEFINITIONS AND INCORPORATION BY REFERENCE

          Section 1.01. Definitions

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

          "Agent" means any Registrar, Paying Agent or Authenticating Agent.

          "Agent Member" means a member of, or a participant in, the
Depositary.

          "Attributable Debt" means, as to any particular lease under which
any Person is at the time liable, at any date as of which the amount thereof is
to be determined, the total net amount of rent required to be paid by such
Person under such lease during the remaining term thereof (after giving effect
to any extensions at the option of the lessee), discounted from the respective
due dates thereof to such date at the average rate per annum borne by the

NYDOCS01/905069.6


Notes for the preceding 365 days.  The net amount of rent required to be paid
under any such lease for any such period shall be the amount of the rent
payable by the lessee with respect to such period, after excluding amounts
required to be paid on account of maintenance and repairs, insurance, taxes,
assessments, water and utility rates and similar charges.  In the case of any
lease which is terminable by the lessee upon the payment of a penalty, such
net amount shall also include the amount of such penalty, but no rent shall be
considered as required to be paid under such lease subsequent to the first date
upon which it may be so terminated.

          "Authenticating Agent" refers to a Person engaged to authenticate the
Notes instead of the Trustee.

          "Authorized Agent" has the meaning assigned to such term in Section
12.07 hereof.

          "Bankruptcy Default" has the meaning assigned to such term in Section
6.01.

          "Board of Directors" means the board of directors or comparable
governing body of the Company, or any committee thereof duly authorized to act
on its behalf.

          "Board Resolution" means a resolution duly adopted by the Board of
Directors which is certified by the Secretary or an Assistant Secretary of the
Company and remains in full force and effect as of the date of its
certification.

          "Business Day" means any day except a Saturday, Sunday or other day
on which commercial banks in New York City or in the city where the Corporate
Trust Office of the Trustee is located are authorized by law to close.

          "Capital Stock" means with respect to any Person, any and all shares
of stock of a corporation, partnership interests or other equivalent interests
(however designated, whether voting or non-voting) in such Person's equity,
entitling the holder to receive a share of the profits and losses of, or
distributions of assets, after liabilities, of such Person.

          "Certificated Note" means a Note in fully-registered certificated
form without interest coupons.

          "Commission" means the Securities and Exchange Commission.

          "Company" means the party named as such in the first paragraph of the
Indenture or any successor obligor under the Indenture and the Notes pursuant
to Article Five.

          "Company Order" means a written request or order signed in the name
of the Company by two Officers of the Company or by an Officer and the
Controller, Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary, and delivered to the Trustee in respect of the series of Notes to
which the Company Order shall relate.  A Company Order shall specify the amount
of Notes to be authenticated and the date on which the original issue of Notes
is to be authenticated.

NYDOCS01/905069.6                      2


          "Consolidated Net Tangible Assets" means the aggregate amount of
assets (less applicable reserves and other properly deductible items) after
deducting therefrom (a) all current liabilities (excluding any constituting
Funded Debt by reason of being renewable or extendible) and (b) all goodwill,
trade names, trademarks, patents, unamortized debt discount and expense and
other intangibles, all as set forth on the most recent consolidated balance
sheet of the Company and its consolidated Subsidiaries and computed in
accordance with generally accepted accounting principles.

          "Corporate Trust Office" means the office of the Trustee, the
Registrar and any Paying Agent, the principal corporate trust office at which
at any particular time such respective entity's corporate trust business shall
be administered, which at the date of the Indenture is located at The Bank of
New York, 101 Barclay Street, Floor 8 West, New York, New York 10286.

          "Debt" has the meaning set forth in Section 4.07 hereof.

          "Default" means any event that is, or after notice or passage of
time or both would be, an Event of Default.

          "Depositary" means with respect to the Notes of any series issuable
or issued in whole or in part in the form of one or more Global Notes, the
Person designated as Depositary for such series by the Company, which
Depositary shall be a clearing agency registered under the Exchange Act; and
if at any time there is more than one such Person, "Depositary" as used with
respect to the Notes of any series shall mean the Depositary with respect to
the Notes of such series.  The initial Depositary shall be DTC.

          "Domestic Subsidiary" means a Subsidiary of the Company except a
Subsidiary (a) which neither transacts any substantial portion of its business
nor regularly maintains any substantial portion of its fixed assets within the
United States of America, or (b) which is engaged primarily in financing the
operation of the Company or its Subsidiaries, or both, outside the United
States of America.

          "DTC" means The Depository Trust Company, a New York corporation,
and its successors.

          "DTC Legend" means the legend set forth in Exhibit A.

          "Event of Default" has the meaning assigned to such term in Section
6.01 hereof.

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

          "Exempted Debt" means the sum of the following items outstanding as
of the date Exempted Debt is being determined:  (i) indebtedness of the Company
and its Subsidiaries incurred after the date of this Indenture and secured by
Mortgages created or assumed pursuant to Section 4.07(b) and (ii) Attributable
Debt of the Company and its Subsidiaries in respect of every Sale and Leaseback
Transaction entered into after the date of this Indenture and pursuant to
Section 4.08(b).

NYDOCS01/905069.6                      3


          "Funded Debt" means all indebtedness for money borrowed having a
maturity of more than 12 months from the date as of which the amount thereof
is to be determined or having a maturity of less than 12 months from the date
as of which the amount thereof is to be determined but by its terms being
renewable or extendible beyond 12 months from such date at the option of the
borrower.

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

          "Global Note" means a Note in registered global form without interest
coupons.

          "Holder" or "Noteholder" means the registered holder of any Note.

          "Indenture" means this indenture, as amended, supplemented or
restated from time to time and shall include the terms of the or those
particular series of Notes established as contemplated by Section 2.01;
provided, however, that, if at any time more than one Person is acting as
Trustee under this instrument, "Indenture" shall mean, with respect to any one
or more series of Notes for which a Person is Trustee, this  instrument as
originally executed or as it may from time to time be amended, supplemented or
restated by one or more indentures supplemental hereto entered into pursuant
to the applicable provisions hereof, and shall include the terms of the or
those particular series of Notes for which such Person is Trustee established
as contemplated by Section 2.01, exclusive, however, of any provisions or terms
which relate solely to other series of Notes for which such Person is not
Trustee, regardless of when such terms or provisions were adopted, and
exclusive of any provisions or terms adopted by means of one or more
indentures supplemental hereto executed and delivered after such Person had
become such Trustee but to which such Person, as such Trustee, was not a
party.

          "Interest", when used with respect to an Original Issue Discount Note
that by its terms bears interest only after maturity, means interest payable
after maturity.

          "Interest Payment Date" means, for any series of Notes issued and
outstanding hereunder, the date or dates in each year on which any interest on
such series is due and payable.

          "Mortgage" has the meaning assigned to such term in Section 4.07
hereof.
          "Notes" has the meaning assigned to such term in the recitals hereof
and more particularly means any Notes authenticated and delivered under this
Indenture; provided, however, that, if at any time there is more than one
Person acting as Trustee under this Indenture, "Notes" with respect to the
series as to which such Person is Trustee shall have the meaning stated in the
first recital of this Indenture and shall more particularly mean Notes
authenticated and delivered under this Indenture, exclusive, however, of Notes
of any series as to which such Person is not Trustee.

          "Officer" means the chairman of the Board of Directors, the president
or chief executive officer, any vice president, the chief financial officer,
the controller, the treasurer or any assistant treasurer, or the secretary or
any assistant secretary, of the Company.

NYDOCS01/905069.6                      4


          "Officers' Certificate" means a certificate signed in the name of the
Company (i) by the chairman of the Board of Directors, the president or any
vice president and (ii) by any executive vice president, controller, treasurer,
assistant treasurer or the secretary or any assistant secretary.

          "Opinion of Counsel" means a written opinion signed by legal counsel,
who may be an employee of or counsel to the Company, satisfactory in its
reasonable discretion to the Trustee.  Each opinion shall include the
statements provided for in Section 12.5 hereof.

          "Original Issue Discount Note" means any Note that provides that an
amount less than its principal amount is due and payable upon acceleration
after an Event of Default.

          "Paying Agent" has the meaning assigned to such term in Section
2.03(a) hereof.

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

          "Principal" of any indebtedness means the principal amount of such
indebtedness (or if such indebtedness was issued with original issue discount,
the face amount of such indebtedness less the remaining unamortized portion of
the original issue discount of such indebtedness), together with, unless the
context otherwise indicates, any premium then payable on such indebtedness.

          "Principal Manufacturing Property" means any building, structure or
other facility, together with the land upon which it is erected and fixtures
comprising a part thereof, used primarily for manufacturing or warehousing and
located in the United States of America, owned or leased by the Company or
any Subsidiary, other than any such building, structure or other facility or
portion thereof or any such land or fixture (i) which is financed by
obligations issued by a State, or a possession of the United States, or any
political subdivision of any of the foregoing, or the District of Columbia,
the interest on which is excludable from gross income of the holders thereof
pursuant to the provisions of Section 103(a)(1) of the Internal Revenue Code
(or any successor of such provision) as in effect at the time of the issuance
of such obligations, or (ii) which, in the opinion of the Board of Directors of
the Company, is not of material importance to the total business conducted by
the Company and its Subsidiaries as a whole.

          "Register" has the meaning assigned to such term in Section 2.03(a)
hereof.

          "Registrar" has the meaning assigned to such term in Section 2.03(a)
hereof.

          "Regular Record Date" means, for the interest payable on any Interest
Payment Date in respect of any series of Notes, except as provided in, or
pursuant to, Board Resolution and/or supplemental indenture (if any) relating
thereto, the day (whether or not a Business Day) that is fifteen days preceding
the applicable Interest Payment Date.

          "Responsible Officer" shall mean, when used with respect to the
Trustee, any officer within the corporate trust department of the Trustee,
including any vice president, assistant vice president, assistant secretary,

NYDOCS01/905069.6                      5


assistant treasurer, trust officer or any other officer of the Trustee who
customarily performs functions similar to those performed by the Persons who
at the time shall be such officers, respectively, or to whom any corporate
trust matter is referred because of such person's knowledge of and familiarity
with the particular subject and who shall have direct responsibility for the
administration of this Indenture.

          "Sale and Leaseback Transaction" has the meaning assigned to such
term in Section 4.08(a) hereof.

          "Senior Indebtedness" means (a) the principal of and premium, if any,
and interest on and fees, costs, enforcement expenses, collateral protection
expenses and other reimbursements or indemnity obligations relating to all
indebtedness, obligations and other liabilities, contingent or otherwise, of
the Company, whether outstanding on the date of this Indenture or thereafter
incurred or created, (i) for money borrowed by the Company that is evidenced
by a note, bond, debenture, loan agreement or similar instrument or agreement,
(ii) for money borrowed by, or non-contingent obligations of, others and either
assumed or guaranteed, directly or indirectly, by the Company, (iii) in respect
of letters of credit and banker's acceptances or similar transactions issued or
made by banks, or (iv) constituting purchase money indebtedness, (b) all
deferrals, renewals, extensions, refinancings, restructurings and refundings
of, and amendments, modifications and supplements to, any such indebtedness,
(c) all obligations of the Company for the payment of money relating to capital
lease obligations and (d) all other general unsecured obligations.  As used in
the preceding sentence the term "purchase money indebtedness" means
indebtedness, the proceeds of which are used, directly or indirectly, to
purchase property or which is evidenced by a note, debenture, bond or other
instrument (whether or not secured by any lien or other security interest)
issued or assumed as all or a part of the consideration for the acquisition
of property, whether by purchase, merger, consolidation or otherwise.
Notwithstanding anything to the contrary in this Indenture or the Notes, Senior
Indebtedness shall not include:  (i) indebtedness or other obligations owed by
the Company to any of its subsidiaries or Affiliates; (ii) any liabilities for
taxes owed or owing by the  Company; (iii) trade account payables incurred in
the ordinary course of business; or (iv) any other indebtedness of the Company
which, by its terms or the terms of the instrument creating or evidencing it,
is subordinate in right of payment to or pari passu with the Subordinated
Notes, as the case may be.

          "Special Record Date" has the meaning assigned to such term in
Section 2.11 hereof.

          "Stated Maturity" means with respect to any indebtedness, the date
specified as the fixed date on which the final installment of principal of
such indebtedness is due and payable.

          "Subordinated Notes" has the meaning assigned to such term in
Section 11.01 hereof.

          "Subsidiary" means a corporation at least a majority of the
outstanding Voting Stock of which is owned or controlled, directly or
indirectly, by the Company or by one or more Subsidiaries of the Company, or by
the Company and one or more Subsidiaries of the Company.

NYDOCS01/905069.6                      6


          "Trust Indenture Act" means the Trust Indenture Act of 1939 as in
effect on the date this Indenture was originally executed.

          "Trustee" means the party named as such in the first paragraph of the
Indenture or any successor trustee under the Indenture pursuant to Article
Seven.  If at any time there is more than one Person acting as Trustee
hereunder, "Trustee" as used with respect to the Notes of any series shall mean
the Trustee with respect to the Notes of that series.

          "U.S. Government Obligations" means (i) direct obligations of the
United States for which its full faith and credit are pledged for the full and
timely payment thereof, (ii) obligations of a person controlled or supervised
by and acting as an agency or instrumentality of the United States, the full
and timely payment of which is unconditionally guaranteed as a full faith and
credit obligation of the United States, or (iii) certificates or receipts
representing direct ownership interests in obligations or specified portions
(such as principal or interest) of obligations described in (i) or (ii), which
obligations are held by a custodian in safekeeping on behalf of such
certificates and receipts.

          "Voting Stock" means, with respect to any Person, Capital Stock of
any class or kind ordinarily having the power to vote for the election of
directors, managers or other voting members of the governing body of such
Person.

          Section 1.02. Rules of Construction.  Unless the context otherwise
requires or except as otherwise expressly provided,

          (1)  an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;

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

          (3)  all references to Sections or Articles or Exhibits refer to
Sections or Articles or Exhibits of or to the Indenture unless otherwise
indicated;

          (4)  references to agreements or instruments, or to statutes or
regulations, are to such agreements or instruments, or statutes or regulations,
as amended from time to time (or to successor statutes and regulations); and
(5)  in the event that a transaction meets the criteria of more than one
category of permitted transactions or listed exceptions the Company may
classify such transaction as it, in its sole discretion, determines.

          Section 1.03.  Incorporation by Reference of the Trust Indenture Act.
Whenever this Indenture refers to a provision of the Trust Indenture Act, the
provision is incorporated by reference in and made a part of this Indenture.
The following Trust Indenture Act terms used in this Indenture have the
following meanings:

          (1)  "indenture securities" means the Notes.

NYDOCS01/905069.6                      7


          (2)  "indenture securityholder" means a Noteholder.

          (3)  "indenture to be qualified" means this Indenture.

          (4)  "indenture trustee" or "institutional trustee" means the
Trustee.

          (5)  "obligor" on the Notes means the Company and any successor
obligor on the Notes.

          All other terms used in this Indenture that are defined by the Trust
Indenture Act, defined by Trust Indenture Act reference to another statute or
defined by Commission rule under the Trust Indenture Act have the meanings so
assigned to them.

                                   ARTICLE II.
                                    THE NOTES

          Section 2.01.  Unlimited in Amount, Issuable in Series, Form and
Dating.  The aggregate principal amount of Notes that may be authenticated and
delivered under this Indenture is unlimited.  The Notes may be issued in one or
more series.  The Notes may be subordinated in right of payment to Senior
Indebtedness as provided in Article Eleven.  There shall be established in or
pursuant to a Board Resolution or an Officers' Certificate pursuant to
authority granted under a Board Resolution or established in one or more
indentures supplemental hereto, prior to the issuance of Notes of any series,
any or all of the following, as applicable:

          (a)  the title of the Notes of the series (which shall distinguish
the Notes of the series from all other series of Notes);

          (b)  any limit upon the aggregate principal amount of Notes of the
series that may be authenticated and delivered under this Indenture (except for
Notes authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Notes of the series pursuant to this Article
Two);

          (c)  the price or prices (expressed as a percentage of the aggregate
principal amount thereof) at which the Notes of the series will be issued;

          (d)  the date or dates on which the principal of the Notes of the
series is payable or the manner in which such dates are  determined;

          (e)  the rate or rates that may be fixed or variable at which the
Notes of the series shall bear interest, if any, or the manner in which such
rate or rates shall be determined, the date or dates from which such interest
shall accrue, the Interest Payment Dates for the Notes of the series and the
Regular Record Dates for the determination of Holders to whom interest is
payable and the basis upon which interest shall be calculated, if other than on
the basis of a 360-day year of twelve 30-day months;

          (f)  the place or places where the principal of, premium, if any, and
any interest, if any, on Notes of the series shall be payable or the method of

NYDOCS01/905069.6                      8


such payment, if by wire transfer, mail or by other means; and the place or
places where notices or demands to or upon the Company in respect of the Notes
of the series and this Indenture may be served, if, in each case, other than as
provided herein;

          (g)  the obligation or right, if any, of the Company to redeem,
purchase or repay Notes of the series, in whole or in part, pursuant to any
redemption, any sinking fund or analogous provisions or at the option of a
Holder thereof and the price or prices at which and the period and periods
within which and the terms and conditions upon which Notes of the series shall
be redeemed, purchased or repaid, in whole or in part, pursuant to  such
obligation;

          (h)  the dates, if any, on which, and the price or prices at which,
the Notes of the series will be repurchased by the Company at the option of the
Holders thereof and other detailed terms and provisions of such repurchase
obligations;

          (i)  if other than the Trustee, the identity of the trustee,
Registrar and/or Paying Agent and, if applicable, the Authentication Agent for
the Notes of that series;

          (j)  if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Notes of the series shall be issuable;

          (k)  if other than the principal amount thereof, the portion of the
principal amount of Notes of the series which shall be payable upon declaration
of acceleration of the maturity thereof pursuant to Section 6.02 hereof or the
method by which such portion shall be determined;

          (l)  any addition to, change in, or deletion from the covenants set
forth in Articles Four, Five or Eight that applies to Notes of the series;

          (m)  any addition to, changes in or deletion from the Events of
Default with respect to the Notes of a particular series and any change in the
right of the Trustee or the requisite Holders of such Notes to declare the
principal amount thereof due and payable pursuant to Section 6.02 hereof;

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

          (o)  the terms and conditions of any warrants that may be offered
by the Company in connection with Notes of any series;

          (p)  the forms of the Notes of the series and whether the Notes will
be issuable, in whole or in part, as Global Notes;

NYDOCS01/905069.6                      9


          (q)  the terms and conditions, if any, upon which such Global Note or
Notes may be exchanged in whole or in part for other individual Notes, and the
Depositary for such Global Note and Notes, if other than as set forth herein;

          (r)  the provisions, if any, relating to any security provided for
the Notes of the series;

          (s)  the terms and conditions, if any, upon which additional interest
or amounts may be payable with respect to Notes of any series;

          (t)  any other terms of the series (which terms may modify,
supplement or delete any provision of this Indenture with respect to such
series; provided, however, that no such term may modify or delete any provision
hereof if imposed by the Trust Indenture Act; and provided, further, that any
modification or deletion of the rights, duties or immunities of the Trustee
hereunder shall have been consented to in writing by the Trustee);

          (u)  the terms and conditions, if any, upon which the Notes of the
series shall be exchanged for or converted into other securities of the Company
or securities of another person;

          (v)  any depositories, interest rate calculation agents or other
agents with respect to Notes of such series if other than those appointed
herein;

          (w)  whether the Notes of such series are subject to subordination
and any modification of, addition to or provision in lieu of any of the
provisions of Article Eleven hereof, and whether such Notes rank as senior
Subordinated Notes or Subordinated Notes or any combination thereof; and

          (x)  the securities exchange or quotation system, if any, upon which
Notes of any series will be listed or quoted and any CUSIP number, if any.

          All Notes of any one series shall be substantially identical except
as to denomination and except as may otherwise be provided in or pursuant to
such Board Resolution or Officers' Certificate or in any such indenture
supplemental hereto in each case, with appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture.  Not all Notes of any one series need be issued at the same time,
and, unless otherwise provided, a series may be reopened for issuance of
additional Notes of such series.  Notes may differ between series in respect
of any matters, provided that all series of Notes shall be equally and ratably
entitled to the benefits of this Indenture.

          The principal of, premium, if any and any interest on the Notes shall
be payable at the office or agency of the Company designated in the form of
Note for the series (if other than the office or agency designated in Section
4.02 hereof); provided, however, that payment of interest may be made at the
option of the Company by check mailed to the address of the Person entitled
thereto as such address shall appear in the Register of Notes referred to in
Section 2.03 hereof or by wire transfer to an account of the Person entitled
thereto as such account shall be provided to the Registrar and shall appear on
the Register.

NYDOCS01/905069.6                      10


          Each Note shall be in one of the forms approved from time to time by
or pursuant to a Board Resolution or Officers' Certificate, or established in
one or more indentures supplemental hereto.  Prior to the delivery of a Note to
the Trustee for authentication in any form approved by or pursuant to a Board
Resolution, Officers' Certificate or supplemental indenture hereto, the Company
shall deliver to the Trustee the Board Resolution, Officers' Certificate or
supplemental indenture hereto by or pursuant to which such form of Note has
been approved, which Board Resolution, Officers' Certificate or supplemental
indenture hereto shall have attached thereto a true and correct copy of the
form of Note that has been approved by or pursuant thereto.

          The Notes may have notations, legends or endorsements required by
law, stock exchange rule or usage.

          Section 2.02. Execution, Authentication and Denominations.

          (a)  Two Officers shall execute the Notes for the Company by
facsimile or manual signature in the name and on behalf of the Company.  Such
signature may be the manual or facsimile signature of such Officer.  If an
Officer whose signature is on a Note no longer holds that office at the time
the Note is authenticated, the Note will still be valid.

(b)  A Note will not be valid until the Trustee manually signs the certificate
of authentication on the Note, with the signature conclusive evidence that the
Note has been authenticated under the Indenture.  The form of the Trustee's
certificate of authentication to be borne by the Notes shall be substantially
as follows:
                  TRUSTEE'S CERTIFICATE OF AUTHENTICATION

          This is one of the Notes issued under the within-mentioned Indenture.

                                          [Trustee], as Trustee

                                           By:
                                           _________________________________
                                           Authorized Signatory

Dated: _____________

          (c)  At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Notes of any series
executed by the Company to the Trustee, together with a Company Order for the
authentication and delivery of such Notes.  The Company Order may provide that
the Notes that are the subject thereof shall be authenticated and delivered by
the Trustee upon the written order of Persons designated in the Company Order,
and that such Persons are authorized to specify the terms and conditions of
such Notes, to the extent permitted by the Board Resolutions, Officers'
Certificate and/or supplemental indenture (if any) relating thereto.  If not
all the Notes of any series are to be issued at one time and if the Board
Resolution, Officers' Certificate or supplemental indenture establishing such
series shall so permit, such Company Order may set forth procedures acceptable
to the Trustee for the issuance of such Notes and determination of the terms of
particular Notes of such series such as interest rate, maturity date, date of
issuance and date from which interest shall accrue.  The Trustee shall execute

NYDOCS01/905069.6                      11


and deliver the supplemental indenture (if any) relating to said Notes and the
Trustee shall authenticate and deliver said Notes as specified in such Company
Order; provided that, prior to authentication and delivery of the first Notes
of any Series, the Trustee shall have received:

          (1)  a copy of the Board Resolutions or Officers' Certificate, with a
     copy of (i) the form of Note approved thereby and (ii) with respect to an
     Officers' Certificate, the Board Resolution approving such series,
     attached thereto, or a supplemental indenture in respect of the issuance
     of the Notes of the series, executed on behalf of the Company;

          (2)  an Officers' Certificate to the effect that the Notes of such
     series comply or will comply with the requirements of this Indenture and
     the said Board Resolutions, Officer's Certificate and/or supplemental
     indenture (if any);

          (3)  an Opinion of Counsel:  (A) to the effect that (i) the Notes of
     such series, the Board Resolutions, Officers' Certificate and/or the
     supplemental indenture (if any) relating thereto comply or will comply
     with the requirements of this Indenture, and (ii) the Notes of such
     series, when authenticated and delivered by the Trustee in accordance
     with the said Company Order, will constitute valid, legal and binding
     obligations of the Company enforceable in accordance with their terms and
     will be entitled to the benefits of the Indenture, subject to
     (x) bankruptcy and other laws affecting creditors' rights generally as in
     effect from time to time, (y) limitations of generally applicable
     equitable principles and (z) other exceptions acceptable to the Trustee
     and its counsel; and (B) relating to such other matters as may reasonably
     be requested by the Trustee or its counsel; and

          (4)  if the Notes to be issued are Original Issue Discount Notes, an
     Officers' Certificate setting forth the yield to maturity for the Notes or
     other information sufficient to compute amounts due on acceleration, or
     specifying the manner in which such amounts are to be determined, if such
     yield to maturity and other facts are not specified in the form of the
     Notes.

          (d)  Subject to Section 7.02 hereof, the Trustee shall be fully
protected in relying upon the documents delivered to it as provided above in
connection with the issuance of any series of Notes.

          (e)  The Trustee shall have the right to decline to authenticate and
deliver any Notes under this Section 2.02 if the Trustee, being advised by
counsel, determines that such action may not lawfully be taken or the Trustee
in good faith shall determine that such action would expose the Trustee to
liability to Holders of previously issued and outstanding Notes.

          (f)  Each Note shall be dated the date of its authentication unless
otherwise specified in the Officers' Certificate, Board Resolutions and/or
supplemental indenture relating thereto.

          (g)  The Notes of each series shall be issuable in definitive
registered form without coupons and, except for any Global Note, in such
denominations as shall be specified as contemplated by Section 2.01.  In the
absence of any such provisions with respect to the Notes of any series, the

NYDOCS01/905069.6                      12


Notes of such series, other than a Global Note, shall be issuable in
denominations of $1,000 and any integral multiple thereof.

          Section 2.03. Registrar, Paying Agent and Authenticating Agent;
Paying Agent to Hold Money in Trust.

          (a)  The Company shall maintain an office or agency where Notes of a
particular series may be presented for registration of transfer or for exchange
(the "Registrar") and an office or agency where Securities of that series may
be presented for payment (a "Paying Agent").  The Registrar for a particular
series of Securities shall keep a register of the Notes of that series and of
their registration of transfer and exchange (the "Register").  The Company may
appoint one or more co-Registrars and one or more additional paying agents for
each series of Notes.  The term "Paying Agent" includes any additional paying
agent.  The Company may appoint an Authenticating Agent, in which case each
reference in the Indenture to the Trustee in respect of the obligations of the
Trustee to be performed by that Agent will be deemed to be references to the
Agent.  The Company may act as Registrar or (except for purposes of Article
Eight) Paying Agent.  In each case the Company and the Trustee will enter into
an appropriate agreement with the Agent implementing the provisions of the
Indenture relating to the obligations of the Trustee to be performed by the
Agent and the related rights.  The Company initially appoints the Trustee as
Registrar and Paying Agent.  The Company may change the Registrar or Paying
Agent without notice to any Holder; provided that upon any bankruptcy or
reorganization proceedings relating to the Company, the Trustee shall serve as
Paying Agent for the Notes.

          (b)  The Company will require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of the Holders or the Trustee all money held by the Paying Agent for
the payment of principal of, premium, if any and interest on the Notes and will
promptly notify the Trustee of any default by the Company in making any such
payment.  The Company at any time may require a Paying Agent to pay all money
held by it to the Trustee and account for any funds disbursed, and the Trustee
may at any time during the continuance of any payment default, upon written
request to a Paying Agent, require the Paying Agent to pay all money held by it
to the Trustee and to account for any funds disbursed.  Upon doing so, the
Paying Agent will have no further liability for the money so paid over to the
Trustee.

          Section 2.04. Replacement Notes.  If a mutilated Note is surrendered
to the Trustee or the Company or if a Holder claims that its Note has been
lost, destroyed or wrongfully taken, the Company will issue and the Trustee
will authenticate a replacement Note of like tenor and principal amount and
bearing a number not contemporaneously outstanding.  Every replacement Note is
an additional obligation of the Company and entitled to the benefits of the
Indenture.  An indemnity must be furnished by the Holder that is sufficient in
the judgment of both the Trustee and the Company to protect the Company and the
Trustee from any loss they may suffer if a Note is replaced.  The Company may
charge the Holder for the expenses of the Company and the Trustee in replacing
a Note.  In case the mutilated, lost, destroyed or wrongfully taken Note has
become or is about to become due and payable, the Company in its discretion may
pay the Note instead of issuing a replacement Note.  Upon the issuance of any
replacement Note under this Section, the Company may require the payment of a

NYDOCS01/905069.6                      13


sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee) connected therewith.

          Section 2.05. Outstanding Notes.

          (a)  Notes outstanding at any time are all Notes that have been
authenticated by the Trustee except for:

          (i)  Notes cancelled by the Trustee or delivered to it for
          cancellation;

          (ii) any Note which has been replaced pursuant to Section 2.04 unless
          and until the Trustee and the Company receive proof satisfactory to
          them that the replaced Note is held by a bona fide purchaser in whose
          hands such Note is a valid obligation of the Company; and

          (iii)     on or after the maturity date or any redemption date, those
          Notes payable or to be redeemed or purchased on that date for which
          the Trustee (or Paying Agent, other than the Company or an Affiliate
          of the Company) holds in trust money sufficient to pay all amounts
          then due; provided that if such Notes, or portions thereof, are to be
          redeemed prior to the maturity thereof, notice of such redemption
          shall have been given as herein provided, or provisions satisfactory
          to the Trustee shall have been made for giving such notice; and

          (iv) solely to the extent provided in Article VIII, Notes which are
          subject to legal defeasance or covenant defeasance as provided in
          Section 8.02 or 8.03.

          (b)  A Note does not cease to be outstanding because the Company or
one of its Affiliates holds the Note, provided that in determining whether the
Holders of the requisite principal amount of the outstanding Notes have given
or taken any request, demand, authorization, direction, notice, consent, waiver
or other action hereunder, Notes owned by the Company or any Affiliate of the
Company will be disregarded and deemed not to be outstanding (it being
understood that in determining whether the Trustee is protected in relying upon
any such request, demand, authorization, direction, notice, consent, waiver or
other action, only Notes which a Responsible Officer of the Trustee knows to be
so owned will be so disregarded).  Notes so owned which have been pledged in
good faith may be regarded as outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Notes and that the pledgee is not the Company or any Affiliate of the Company.

          (c)  In determining whether the holders of the requisite principal
amount of outstanding Notes of any or all series have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, (a) the
principal amount of an Original Issue Discount Note that shall be deemed to be
outstanding for such purposes shall be the amount of the principal thereof that
would be due and payable as of the date of such determination upon a
declaration of acceleration of the maturity thereof, and (b) Notes owned
beneficially by the Company or any other obligor on the Notes with respect to
which such determination is being made or any Person, directly or indirectly,
controlling or controlled by or under direct or indirect control with the
Company or any other obligor on the Notes with respect to which such
determination is being made shall be disregarded and deemed not to be

NYDOCS01/905069.6                      14


outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Notes which a Responsible Officer of the Trustee knows
to be so owned shall be so disregarded.  Notes so owned by the Company which
have been pledged in good faith may be regarded as outstanding for such purpose
if the pledgee establishes to the satisfaction of the Trustee the pledgee's
right so to act with respect to such Notes and that the pledgee is not the
Issuer.

          Section 2.06. Temporary Notes.  Until definitive Notes of any series
are ready for delivery, the Company may prepare and the Trustee will
authenticate temporary Notes upon a Company Order.  Temporary Notes will be
substantially in the form of definitive Notes of such series but may have
insertions, substitutions, omissions and other variations determined to be
appropriate by the Officers executing the temporary Notes, as evidenced by the
execution and authentication of the temporary Notes.  If temporary Notes are
issued, the Company will cause definitive Notes to be prepared without
unreasonable delay.  After the preparation of definitive Notes, the temporary
Notes will be exchangeable for definitive Notes upon surrender of the temporary
Notes at the office or agency of the Company designated for the purpose
pursuant to Section 4.02, without charge to the Holder.  Upon surrender for
cancellation of any temporary Notes, the Company will execute and the Trustee
will authenticate and deliver in exchange therefor a like principal amount of
definitive Notes of authorized denominations.  Until so exchanged, the
temporary Notes will be entitled to the same benefits under the Indenture as
definitive Notes.

          Section 2.07. Cancellation.  The Company at any time may deliver to
the Trustee for cancellation any Notes previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and may
deliver to the Trustee for cancellation any Notes previously authenticated
hereunder that the Company has not issued and sold.  Any Registrar or the
Paying Agent will forward to the Trustee any Notes surrendered to it for
transfer, exchange or payment.  The Trustee will cancel all Notes surrendered
for transfer, exchange, payment or cancellation and dispose of them in
accordance with its normal procedures or a Company Order.  The  Trustee shall
deliver certification of all cancelled Notes to the Company and shall return
cancelled Notes to the Company upon written request.  The Company may not issue
new Notes to replace Notes it has paid in full or delivered to the Trustee for
cancellation.  If the Company acquires any of the Notes, such acquisition shall
not operate as a redemption or satisfaction of indebtedness represented by such
Notes unless or until the same are delivered to the Trustee for cancellation.

          Section 2.08. CUSIP Numbers.  The Company in issuing the Notes may
use "CUSIP" numbers, and the Trustee will use CUSIP numbers in notices of
redemption or exchange as a convenience to Holders.  Any such notice may state
that no representation is made as to the correctness of such numbers either as
printed on the Notes or as contained in any notice of redemption or exchange
and reliance may be placed only on the identification number printed on the
Notes, and any such redemption or exchange shall not be affected by any defect
or omission in such numbers.  The Company will promptly notify the Trustee of
any change in the CUSIP numbers.

          Section 2.09. Transfer and Exchange.

NYDOCS01/905069.6                      15


          (a)  The Notes will be issued in registered form only, without
coupons, and the Company shall cause the Registrar to maintain the Register
for registering the record ownership of the Notes by the Holders and transfers
and exchanges of the Notes.

          (b)  (i)  Each Global Note will be registered in the name of the
Depositary or its nominee.  The Depositary shall be a clearing agency
registered under the Exchange Act.  The Company initially appoints DTC to act
as Depositary with respect to the Notes in global form.  Initially, the Global
Notes shall be issued to the Depositary, registered in the name of Cede & Co.,
as the nominee of the Depositary, and deposited with the Trustee as custodian
for Cede & Co.  So long as DTC is serving as the Depositary thereof, each
Global Note will bear the DTC Legend.

          (ii) Each Global Note will be delivered to the Trustee as custodian
for the Depositary.  Transfers of a Global Note (but not a beneficial interest
therein) will be limited to transfers thereof in whole, but not in part, by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary except as set forth in Section 2.09(b)(iv).

          (iii)     Agent Members will have no rights under the Indenture with
respect to any Global Note held on their behalf by the Depositary, and the
Depositary may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner and Holder of such Global Note
for all purposes whatsoever.  Notwithstanding the foregoing, the Depositary or
its nominee may grant proxies and otherwise authorize any Person (including any
Agent Member and any Person that holds a beneficial interest in a Global Note
through an Agent Member) to take any action which a Holder is entitled to take
under the Indenture or the Notes, and nothing herein will impair, as between
the Depositary and its Agent Members, the operation of customary practices
governing the exercise of the rights of a holder of any security.

          (iv) If (x) the Depositary notifies the Company that it is unwilling
or unable to continue as Depositary for a Global Note and a successor
depositary is not appointed by the Company within 90 days of the notice or
(y) the Company notifies the Trustee to effect such exchange, the Trustee will
promptly exchange each beneficial interest in the Global Note for one or more
Certificated Notes in authorized denominations having an equal aggregate
principal amount and registered in the name of the owner of such beneficial
interest, as identified to the Trustee by the Depositary, and thereupon the
Global Note will be deemed canceled.

          (v)  Unless otherwise provided herein or in a Board Resolution or
Officers' Certificate establishing a series of Notes or in an indenture
supplemental hereto, beneficial interests in a Global Note may not be exchanged
for Certificated Notes.

          (c)  Each Certificated Note will be registered in the name of the
Holder thereof or its nominee.

          (d)  A Holder may transfer a Note of any series (or a beneficial
interest therein) to another Person or exchange a Note of any series (or a
beneficial interest therein) for another Note or Notes of any authorized

NYDOCS01/905069.6                      16


denomination of the same series by presenting to the Trustee a written request
therefor stating the name of the proposed transferee or requesting such an
exchange, accompanied by any certification, opinion or other document
reasonably required by the Trustee.  The Trustee will promptly register any
transfer or exchange that meets the requirements of this Section by noting the
same in the register maintained by the Trustee for the purpose; provided that:

          (i)  no transfer or exchange will be effective until it is
     registered in such register, and

          (ii) the Trustee will not be required (x) to issue, register the
     transfer of or exchange any Note of any particular series for a period
     of 15 days before a selection of Notes of that series to be redeemed or
     purchased, (y) to register the transfer of or exchange any Note so
     selected for redemption or purchase in whole or in part, except, in the
     case of a partial redemption or purchase, that portion of any Note not
     being redeemed or purchased, or (z) if a redemption or a purchase is to
     occur after a Regular Record Date but on or before the corresponding
     Interest Payment Date, to register the transfer of or exchange such Note
     on or after the Regular Record Date and before the date of redemption or
     purchase.  Prior to the registration of any transfer, the Company, the
     Trustee and their agents will treat the Person in whose name the Note is
     registered as the owner and Holder thereof for all purposes (whether or
     not the Note is overdue) and will not be affected by notice to the
     contrary.

          From time to time the Company will execute and the Trustee will
authenticate additional Notes as necessary in order to permit the registration
of a transfer or exchange in accordance with this Section.

          No service charge will be imposed in connection with any transfer or
exchange of any Note, but the Company may require payment of a sum sufficient
to cover any transfer tax or similar governmental charge payable in connection
therewith (other than a transfer tax or other similar governmental charge
payable upon exchange pursuant to subsection (b)(iv)).

          (e)  (i)  Global Note to Global Note.  If a beneficial interest in a
Global Note of any particular series is transferred or exchanged for a
beneficial interest in another Global Note of the same series, the Trustee will
(x) record a decrease in the principal amount of the Global Note being
transferred or exchanged equal to the principal amount of such transfer or
exchange and (y) record a like increase in the principal amount of the other
Global Note.  Any beneficial interest in one Global Note that is so transferred
to a Person who takes delivery in the form of an interest in another Global
Note, or so exchanged for an interest in another Global Note, will, upon such
transfer or exchange, cease to be an interest in such Global Note and become
an interest in such other Global Note for as long as it remains such an
interest.

          (ii) Global Note to Certificated Note.  If a beneficial interest in a
Global Note of any particular series is transferred or exchanged for a
Certificated Note of the same series, the Trustee will (x) record a decrease in
the principal amount of such Global Note equal to the principal amount of such
transfer or exchange and (y) deliver one or more new Certificated Notes of such
series in authorized denominations having an equal aggregate principal amount to

NYDOCS01/905069.6                      17


the transferee (in the case of a transfer) or the owner of such beneficial
interest (in the case of an exchange), registered in the name of such
transferee or owner, as applicable.

          (iii)     Certificated Note to Global Note.  If a Certificated Note
of any particular series is transferred or exchanged for a beneficial interest
in a Global Note of the same series, the Trustee will (x) cancel such Certificated
Note, (y) record an increase in the principal amount of such Global Note equal
to the principal amount of such transfer or exchange and (z) in the event that
such transfer or exchange involves less than the entire principal amount of the
canceled Certificated Note, deliver to the Holder thereof one or more new
Certificated Notes of the same series in authorized denominations having an
aggregate principal amount equal to the untransferred or unexchanged portion of
the canceled Certificated Note, registered in the name of the Holder thereof.
(iv) Certificated Note to Certificated Note.  If a Certificated Note of any
particular series is transferred or exchanged for another Certificated Note of
the same series, the Trustee will (x) cancel the Certificated Note being
transferred or exchanged, (y) deliver one or more new Certificated Notes of
such series in authorized denominations having an aggregate principal amount
equal to the principal amount of such transfer or exchange to the transferee
(in the case of a transfer) or the Holder of the canceled Certificated Note (in
the case of an exchange), registered in the name of such transferee or Holder,
as applicable, and (z) if such transfer or exchange involves less than the
entire principal amount of the canceled Certificated Note, deliver to the
Holder thereof one or more Certificated Notes of such series in authorized
denominations having an aggregate principal amount equal to the untransferred
or unexchanged portion of the canceled Certificated Note, registered in the
name of the Holder thereof.

          Section 2.10. Noteholder Lists.  The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to
it of the names and addresses of Noteholders, separately by series, and shall
otherwise comply with Trust Indenture Act Section 312(a).  If the Trustee is
not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each Interest Payment Date and at such other times as
the Trustee may request in writing, a list in such form and as of such date as
the Trustee may reasonably require of the names and addresses of Noteholders,
separately by series, relating to such Interest Payment Date or request, as
the case may be.

          Section 2.11. Defaulted Interest.  If the Company defaults in a
payment of interest on the Notes of any series, such installment of interest
shall forthwith cease to be payable to the Holders in whose names the Notes
were registered on the Regular Record Date applicable to such installment of
interest.  Defaulted interest (including any interest on such defaulted
interest) may be paid by the Company, at its election, as provided in clause
(a) or (b) below.

          (a)  The Company may elect to make payment of any defaulted interest
     (including any interest on such defaulted interest) to the Holders in
     whose names the Notes are registered at the close of business on a special
     record date for the payment of such defaulted interest (a "Special Record
     Date"), which shall be fixed in the following manner.  The Company shall
     notify the Trustee in writing of the amount of defaulted interest proposed
     to be paid and the date of the proposed payment.  Thereupon the Trustee
     shall fix a Special Record Date for the payment of such defaulted

NYDOCS01/905069.6                      18


     interest, which shall not be more than 15 calendar days and not less than
     10 calendar days prior to the date of the proposed payment and not less
     than 10 calendar days after the receipt by the Trustee of the notice of
     the proposed payment.  The Trustee shall promptly notify the Company of
     such Special Record Date and, in the name and at the expense of the
     Company, shall cause notice of the proposed payments of such defaulted
     interest and the Special Record Date therefor to be sent, first-class
     mail, postage prepaid, to each Holder at such Holder's address as it
     appears in the registration books of the Registrar, at least 15 calendar
     days prior to such Special Record Date.  Notice of the proposed payment
     of such defaulted interest and the Special Record Date therefor having
     been mailed as aforesaid, such defaulted interest shall be paid to the
     Holders in whose names the Notes are registered at the close of business
     on such Special Record Date and shall no longer be payable pursuant to
     the following clause (b).

          (b)  Alternatively, the Company may make payment of any defaulted
     interest (including any interest on such defaulted interest) in any other
     lawful manner not inconsistent with the requirements of any securities
     exchange on which the Notes may be listed, and upon such notice as may be
     required by such exchange, if, after notice given by the Company to the
     Trustee of the proposed payment pursuant to this clause (b), such manner
     of payment shall be deemed practicable by the Trustee.

          Section 2.12. Computation of Interest.  Except as otherwise specified
as contemplated by Section 2.01 for Notes of any series, any interest on the
Notes of each series shall be computed on the basis of a 360-day year of twelve
30-day months.

                                  ARTICLE III.
                                   REDEMPTION

          Section 3.01. Method and Effect of Redemption.

          (a)  If the Company elects to redeem Notes of any series pursuant to
the optional redemption provisions (if any) thereof, it must notify the Trustee
of the redemption date, the redemption price and the principal amount of Notes
of that series to be redeemed by delivering written notice at least 45 days
before the redemption date (unless a shorter period is satisfactory to the
Trustee).  Any such notice may be cancelled at any time prior to notice of such
redemption being mailed to any Holder and shall thereby be void and of no
effect.  If fewer than all of the Notes of any series are being redeemed, the
particular Notes to be redeemed shall be selected not more than 60 days prior
to the redemption date by the Trustee, from the outstanding Notes of such
series not previously called for redemption, by such method as may be specified
by the terms of such Notes or, if no such method is so specified, by such
method as the Trustee shall deem fair and appropriate.  The Trustee shall
notify the Company promptly in writing of the Notes or portions of Notes to be
called for redemption and, in the case of any Notes selected for partial
redemption, the principal amount thereof to be redeemed.  Except as otherwise
provided as to any particular series of Notes, Notes and portions thereof that
the Trustee selects shall be in amounts equal to the minimum authorized
denomination for Notes of the series to be redeemed or any integral multiple
thereof, except that if all of the Notes of the series are to be redeemed, the
entire outstanding amount of the Notes of the series held by such Holder, even
if not equal to the minimum authorized denomination for the Notes of that

NYDOCS01/905069.6                      19


series, shall be redeemed.  Provisions of this Indenture that apply to Notes
called for redemption also apply to portions of Notes called for redemption.

          (b)  Notice of redemption must be mailed by first-class mail by the
Company or at the Company's request, by the Trustee in the name and at the
expense of the Company, to Holders at the address set forth in the most recent
noteholder list described in Section 2.10 hereof whose Notes are to be redeemed
at least 30 days but not more than 60 days before the redemption date.  The
notice of redemption will identify the Notes to be redeemed and will include or
state the following:

          (1)  the redemption date;

          (2)  the redemption price fixed in accordance with the terms of the
Notes of the series to be redeemed, plus accrued interest, if any, to the date
fixed for redemption (the "Redemption Price");

          (3)  the place or places where Notes are to be surrendered to the
Paying Agent for redemption;

          (4)  that Notes called for redemption must be so surrendered to the
Paying Agent in order to collect the Redemption Price;

          (5)  that, on the redemption date, the Redemption Price will become
due and payable on Notes called for redemption, and, unless the Company
defaults in payment of the Redemption Price, interest on Notes called for
redemption will cease to accrue on and after the redemption date;

          (6)  if less than all the outstanding Notes of any series are to be
redeemed, the identification (and, in the case of partial redemption, the
principal amounts) of the particular Notes to be redeemed;

          (7)  if any Note contains a CUSIP number, no representation is being
made as to the correctness of the CUSIP number either as printed on the Notes
or as contained in the notice of redemption and that the Holder should rely
only on the other identification numbers printed on the Notes; and

          (8)  that the redemption is for a sinking fund, if such is the case.

          (c)  Once notice of redemption is sent to the Holders, Notes called
for redemption become due and payable at the redemption price on the redemption
date, and upon surrender of the Notes called for redemption, the Company shall
redeem such Notes at the Redemption Price.  Commencing on the redemption date,
Notes redeemed will cease to accrue interest.  Upon surrender of any Note
redeemed in part, the Holder will receive a new Note equal in principal amount
to the unredeemed portion of the surrendered Note.

          Section 3.02. Exclusion of Certain Notes From Eligibility for
Selection for Redemption.  Notes shall be excluded from eligibility for
selection for redemption if they are identified by registration and certificate
number in an Officers' Certificate delivered to the Trustee at least 40 days

NYDOCS01/905069.6                      20


prior to the last date on which notice of redemption may be given as being
owned of record and beneficially by, and not pledged or hypothecated by either
(a) the Issuer or (b) an entity specifically identified in such written
statement as directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company.

          Section 3.03. Deposit of Redemption Price.  Prior to 10:00 a.m. on
any redemption date, the Company shall deposit with the Trustee or with a
Paying Agent (or, if the Company is acting as its own Paying Agent, segregate
and hold in trust as provided in Section 4.04) an amount of money sufficient
to pay the Redemption Price of, and (except if the redemption date shall be an
Interest Payment Date, unless otherwise specified in or pursuant to the Board
Resolutions or in the supplemental indenture executed in connection with the
particular series of Notes) any accrued interest on, all the Notes or portions
thereof which are to be redeemed on that date.

                                  ARTICLE IV.
                                   COVENANTS

          Section 4.01. Payment of Principal, Premium and Interest.  The
Company covenants and agrees for the benefit of each series of Notes that it
will duly and punctually pay or cause to be paid the principal of, and interest
on, each of the Notes of such series (together with any additional amounts
payable pursuant to the terms of such Notes) at the place or places, at the
respective times and in the manner provided in such Notes and in this
Indenture.  Each installment of interest on any Note may at the Company's
option be paid by mailing a check for such interest, payable to or upon the
written order of the Person entitled thereto pursuant to Section 2.03, to the
address of such Person as it appears on the Register or by wire transfer to an
account of the Person entitled thereto as such account shall be provided to the
Registrar and shall appear on the Register.  At the option of the Company, all
payments of principal may be paid by official bank check to the Holder of the
Note or other person entitled thereto against surrender of such Note.

          Section 4.02. Offices for Payments, Etc. The Company will maintain
in the Borough of Manhattan, The City of New York, an agency where the Notes of
each series may be presented for payment, an agency where the Notes of each
series may be presented for exchange as is provided in this Indenture and, if
applicable, pursuant to Section 2.03 an agency where the Notes of each series
may be presented for registration of transfer as is provided in this Indenture,
which, in each case, initially shall be the Corporate Trust Office of the
Trustee.

          The Company will give to the Trustee written notice of the location
of each such agency and of any change of location thereof.  In case the Company
shall fail to maintain any agency required by this Section to be located in the
Borough of Manhattan, The City of New York, or shall fail to give such notice
of the location or of any change in the location of any of the above agencies,
presentations and demands may be made and notices may be served at the
Corporate Trust Office of the Trustee.  The Company hereby initially appoints
the Trustee as its agency for each of said purposes.

          The Company may from time to time designate one or more additional
agencies where the Notes of a series may be presented for payment, where the

NYDOCS01/905069.6                      21


Notes of that series may be presented for exchange as provided in this
Indenture and pursuant to Section 2.03 and where the Notes of that series may
be presented for registration of transfer as provided in this Indenture, and
the Company may from time to time rescind any such designation, as the Company
may deem desirable or expedient; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to
maintain the agency provided for in the first paragraph of this Section 4.02.
The Company will give to the Trustee prompt written notice of any such
designation or rescission thereof.

          Section 4.03. Appointment to Fill a Vacancy in Office of Trustee.
The Company, whenever necessary to avoid or fill a vacancy in the office of
Trustee, will appoint, in the manner provided in Section 7.08, a Trustee, so
that there shall at all times be a Trustee with respect to each series of Notes
hereunder.

          Section 4.04. Paying Agents.  Whenever the Company shall appoint a
paying agent other than the Trustee with respect to the Notes of any series, it
will cause such paying agent to execute and deliver to the Trustee an
instrument in which such agent shall agree with the Trustee, subject to the
provisions of this Section,

          (a)  that it will hold all sums received by it as such agent for the
          payment of the principal of or interest on the Notes of such series
          in trust for the benefit of the holders of the Notes of such series
          or of the Trustee;

          (b)  that it will give the Trustee notice of any failure by the
          Company to make any payment of the principal of or interest on the
          Notes of such series when the same shall be due and payable; and

          (c)  that at any time during the continuance of any such failure,
          upon the written request of the Trustee it will forthwith pay to the
          Trustee all sums so held in trust by such paying agent.

          The Company will, prior to each due date of the principal of or
interest on the Notes of such series, deposit with the paying agent a sum
sufficient to pay such principal or interest so becoming due, and (unless such
paying agent is the Trustee) the Company will promptly notify the Trustee of
any failure to take such action.

          If the Company shall act as its own paying agent with respect to the
Notes of any series, it will, on or before each due date of the principal of or
interest on the Notes of such series, set aside, segregate and hold in trust
for the benefit of the holders of the Notes of such series a sum sufficient to
pay such principal or interest so becoming due.  The Company will promptly
notify the Trustee of any failure to take such action.

          Anything in this Section to the contrary notwithstanding, the Company
may, at any time, for the purpose of obtaining satisfaction and discharge of
one or more series of Notes, or for any other reason, pay, or cause to be paid,
to the Trustee all sums held in trust by the Company or any Paying Agent, such
sums to be held by the Trustee upon the same trusts as those upon which such
sums were held by the Company or such Paying Agent.

NYDOCS01/905069.6                      22
         Anything in this Section to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section is subject to the
provisions of Section 8.05.

          Section 4.05. Written Statement to Trustee.  The Company shall
deliver to the Trustee on or before May 15 in each year (beginning with May 15,
2003) a written statement, signed by two of its officers one of which shall be
the principal executive, principal financial or principal accounting officer
to the Company (which need not comply with Section 12.05 hereof), stating that
in the course of the performance of their duties as officers of the Company
they would normally have knowledge of any default by the Company in the
performance or fulfillment of any covenant, agreement or condition contained
in this Indenture, without regard to notice requirements or periods of grace,
stating whether or not they have knowledge of any such default and, if so,
specifying each such default of which the signers have knowledge and the nature
thereof.

          The Company shall deliver to the Trustee, as soon as possible and in
any event within five days after the Company becomes aware of the occurrence of
any Event of Default or an event which, with notice or the lapse of time or
both, would constitute an Event of Default, an Officers' Certificate setting
forth the details of such Event of Default or default and the action which the
Company proposes to take with respect thereto.

          Section 4.06. [Reserved].

          Section 4.07. Limitation on Liens.  (a)  The Company will not itself,
and will not permit any Domestic Subsidiary to, incur, issue, assume or
guarantee any indebtedness for money borrowed evidenced by notes, bonds,
debentures or other similar evidences of indebtedness ("Debt"), secured by a
mortgage or other encumbrance (a "Mortgage") on any Principal Manufacturing
Property of the Company or any Domestic Subsidiary, or any shares of stock or
Debt of any Domestic Subsidiary which owns a Principal Manufacturing Property,
without effectively providing that the Notes shall be secured equally and
ratably with (or prior to) such secured Debt, so long as such secured Debt
shall be so secured; provided, however, that this Section shall not apply to,
and there shall be excluded from secured Debt in any computation under this
Section, Debt secured by:

          (1)  Mortgages of the Company or its Domestic Subsidiaries existing
     at the time of this Indenture;

          (2)  Mortgages on property of, or on any shares of stock of, any
     corporation existing at the time such corporation becomes a Domestic
     Subsidiary;

          (3)  Mortgages on property or shares of stock of a Domestic
     Subsidiary existing at the time of acquisition thereof (including
     acquisitions through merger or consolidation) or to secure the payment
     of all or any part of the purchase price or construction cost thereof or
     to secure any Debt incurred prior to, at the time of, or within 180 days
     after, the acquisition of such property or shares or the completion of any
     such construction and commencement of full operation of such property for
     the purpose of financing all or any part of the purchase price or
     construction cost thereof;

          (4)  Mortgages in favor of the Company or any Domestic Subsidiary;

NYDOCS01/905069.6                      23


          (5)  Mortgages in favor of the United States of America, any State of
     the United States of America, or any subdivision, agency, department or
     other instrumentality thereof, to secure partial, progress, advance or
     other payments pursuant to any contract or provision of any statute; and

          (6)  any extension, renewal or replacement (or successive extensions,
     renewals or replacements), as a whole or in part, of any Debt secured by
     any Mortgage referred to in the foregoing clauses (1) to (5), inclusive;
     provided that (i) such extension, renewal or replacement Mortgage shall be
     limited to all or a part of the same property or shares of stock that
     secured the Mortgage extended, renewed or replaced (plus improvements on
     such property) and (ii) the Debt secured by such Mortgage at such time is
     not increased.

          (b)  Notwithstanding the limitations on liens described in Section
4.07(a), the Company or any Domestic Subsidiary may incur, issue, assume or
guarantee any Debt secured by a Mortgage on any Principal Manufacturing
Property of the Company or its Domestic Subsidiaries or any shares of stock or
Debt of any Domestic Subsidiary which owns a Principal Manufacturing Property,
in addition to that permitted above and without any obligation to secure the
Notes, provided that at the time of such incurrences, issuance, assumption or
guarantee of such Debt, and after giving effect thereto, Exempted Debt does not
exceed 15% of the Consolidated Net Tangible Assets of the Company and its
Subsidiaries, taken as a whole.

          Section 4.08. Limitation on Sale and Leaseback.  (a)  The Company
will not itself, and it will not permit any Domestic Subsidiary to, enter into
any arrangement with any bank, insurance company or other lender or investor
(not including the Company or any Domestic Subsidiary) or to which any such
lender or investor is a party, providing for the leasing by the Company or such
Subsidiary for a period, including renewals, in excess of three years of any
Principal Manufacturing Property of the Company or any Domestic Subsidiary
which has been or is to be sold or transferred, more than 180 days after the
later of (i) the acquisition thereof, (ii) the completion of construction
thereof or (iii) the commencement of full operation thereof, by the Company or
any such Subsidiary to such lender or investor or to any person to whom funds
have been or are to be advanced by such lender or investor on the security of
such Principal Manufacturing Property (herein referred to as a "Sale and
Leaseback Transaction") unless either:

          (1)  the Company or such Domestic Subsidiary could create Debt
     secured by a Mortgage pursuant to Section 4.07 on the Principal
     Manufacturing Property to be leased back in an amount equal to the
     Attributable Debt with respect to such Sale and Leaseback Transaction
     without equally and ratably securing the Notes, or

          (2)  the Company within 180 days after the sale or transfer shall
     have been made by the Company or by any such Subsidiary, applies an amount
     equal to the greater of (i) the net proceeds of the sale of the Principal
     Manufacturing Property sold and leased back pursuant to such arrangement
     or (ii) the fair market value of the Principal Manufacturing Property so
     sold and leased back at the time of entering into such arrangement (as
     determined by any two of the following:  the Chairman, President, any Vice
     President, Treasurer and Controller of the Company) to the retirement of
     Funded Debt of the Company or any Domestic Subsidiary; provided that the

NYDOCS01/905069.6                      24


     amount to be applied to the retirement of Funded Debt of the Company or
     any Domestic Subsidiary shall be reduced by (a) the principal amount of
     any Notes delivered within 180 days after such sale to the Trustee for
     retirement and cancellation, and (b) the principal amount of Funded Debt,
     other than Notes, voluntarily retired by the Company within 180 days after
     such sale.  Notwithstanding the foregoing, no retirement referred to in
     this clause may be effected by payment at maturity or pursuant to any
     mandatory sinking fund payment or any mandatory prepayment provision.

          (b)  Notwithstanding the provisions of paragraph (a) of this Section
     4.08, the Company or any Domestic Subsidiary may enter into a Sale and
     Leaseback Transaction in addition to that permitted by paragraph (a) of
     this Section 4.08 and without any obligation to retire any Notes or other
     indebtedness referred to in paragraph (a) of this Section 4.08, provided
     that at the time of entering into such Sale and Leaseback Transaction and
     after giving effect thereto, Exempted Debt does not exceed 15% of
     Consolidated Net Tangible Assets of the Company and its Subsidiaries,
     taken as a whole.

          Section 4.09. Calculation of Original Issue Discount.  The Company
shall file with the Trustee promptly at the end of each calendar year (i) a
written notice specifying the amount of original issue discount (including
daily rates and accrual periods) accrued on outstanding Notes as of the end of
such year and (ii) such other specific information relating to such original
issue discount as may then be relevant under the Internal Revenue Code of 1986,
as amended from time to time.

                                   ARTICLE V.
                   CONSOLIDATION, MERGER, SALE OR CONVEYANCE

          Section 5.01. Company May Consolidate, Merge, Etc., on Certain Terms.
The Company covenants that it will not merge or consolidate with any other
corporation or sell or convey (including by way of lease) all or substantially
all of its assets to any Person, unless (i) either the Company shall be the
continuing corporation, or the successor corporation or the Person which
acquires by sale or conveyance substantially all the assets of the Company
(if other than the Company) shall be a corporation or entity organized under
the laws of the United States of America, any state thereof or the District of
Columbia and shall expressly assume the due and punctual payment of the
principal of and interest on all the Notes of each series, according to their
tenor, and the due and punctual performance and observance of all of the
covenants and conditions of this Indenture to be performed or observed by the
Company, by supplemental indenture satisfactory to the Trustee, executed and
delivered to the Trustee by such corporation or Person, and (ii) the Company
or such successor corporation or Person, as the case may be, shall not,
immediately after such merger or consolidation, or such sale or conveyance,
be in Default in the performance of any such covenant or condition.

          Section 5.02. Successor Company Substituted.  In case of any such
consolidation, merger, sale or conveyance, and following such an assumption by
the successor corporation, such successor corporation shall succeed to and be
substituted for the Company, with the same effect as if it had been named
herein.  Such successor corporation may cause to be signed, and may issue
either in its own name or in the name of the Company prior to such succession
any or all of the Notes issuable hereunder, which theretofore shall not have

NYDOCS01/905069.6                      25


been signed by the Company and delivered to the Trustee; and, upon the order
of such successor corporation instead of the Company and subject to all the
terms, conditions and limitations in this Indenture prescribed, the Trustee
shall authenticate and shall deliver any Notes, which previously shall have
been signed and delivered by the Officers of the Company to the Trustee for
authentication, and any Notes, which such successor corporation thereafter
shall cause to be signed and delivered to the Trustee for that purpose.
All of the Notes so issued shall in all respects have the same legal rank and
benefit under this Indenture as the Notes theretofore or thereafter issued in
accordance with the terms of this Indenture as though all of such Notes had
been issued at the date of the execution hereof.

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

          In the event of any such sale or conveyance (other than a conveyance
by way of lease), the Company or any successor corporation which shall
theretofore have become such in the manner described in this Article shall be
discharged from all obligations and covenants under this Indenture and the
Notes and may be liquidated and dissolved.

          Section 5.03. Opinion of Counsel to Trustee.  The Trustee, subject to
the provisions of Sections 7.01 and 7.02, may receive an Opinion of Counsel,
prepared in accordance with Section 12.05, as conclusive evidence that any
such consolidation, merger, sale, lease or conveyance, and any such assumption,
and any such liquidation or dissolution, complies with the applicable
provisions of this Indenture.

                                  ARTICLE VI.
                            DEFAULT AND REMEDIES

          Section 6.01. Events of Default.  An "Event Of Default" occurs with
respect to Notes of any particular series, unless it is specifically deleted or
modified in the Officers' Certificate, Board Resolutions and/or supplemental
indenture (if any) in respect of such series, and in addition to any other
events which may be specified as Events of Default in the Officers'
Certificate, Board Resolutions and/or supplemental indenture (if any) in
respect of such series, if:

          (1)  the Company defaults in the payment of the principal (or
     premium, if any, on) any Note of such series when the same becomes due
     and payable at maturity, upon acceleration or redemption, or otherwise;

          (2)  the Company defaults in the payment of interest on any Note of
     such series when the same becomes due and payable, and the default
     continues for a period of 30 days;

          (3)  default in the payment of any sinking fund installment, when and
     as due by the terms of a Note of that series, and the default continues
     for a period of 30 days;

          (4)  the Company defaults in the performance of or breaches any other
     covenant or agreement of the Company contained in the Notes of such series
     or in this Indenture and the default or breach continues for a period of

NYDOCS01/905069.6                      26


     90 consecutive days after written notice to the Company by the Trustee or
     to the Company and the Trustee by the Holders of 25% or more in aggregate
     principal amount of the Notes of such affected series;

          (5)  an involuntary case or other proceeding is commenced against the
     Company with respect to it or its debts under any bankruptcy, insolvency
     or other similar law now or hereafter in effect seeking the appointment of
     a trustee, receiver, liquidator, custodian or other similar official of it
     or any substantial part of its property, and such involuntary case or
     other proceeding remains undismissed and unstayed for a period of 60
     consecutive days; or an order for relief is entered against the Company
     under the federal bankruptcy laws as now or hereafter in effect; or

          (6)  the Company (i) commences a voluntary case under any applicable
     bankruptcy, insolvency or other similar law now or hereafter in effect, or
     consents to the entry of an order for relief in an involuntary case under
     any such law, (ii) consents to the appointment of or taking possession by
     a receiver, liquidator, assignee, custodian, trustee, sequestrator or
     similar official of the Company or for all or substantially all of the
     property and assets of the Company or (iii) effects any general
     assignment for the benefit of creditors (an event of default specified in
     clause (5) or (6) a "Bankruptcy Default").

          Section 6.02. Acceleration.

          (a)  If an Event of Default with respect to the Notes of any series,
other than a Bankruptcy Default with respect to the Company, occurs and is
continuing under the Indenture, unless the principal of all the Notes of such
series have already become due and payable, the Trustee or the Holders of at
least 25% in aggregate principal amount of the Notes of such series then
outstanding (each such series voting as a separate class), by written notice
to the Company (and to the Trustee if the notice is given by the Holders), may,
and the Trustee at the request of such Holders shall, declare the principal of,
premium, if any and accrued interest on the Notes to be immediately due and
payable (or if the Notes of such series are Original Discount Notes, such
portion of the principal amount as may be specified in the terms of such
series).  Upon a declaration of acceleration, such principal and interest will
become immediately due and payable.  If a Bankruptcy Default occurs with
respect to the Company, the principal of, premium, if any and accrued interest
on all Notes of each series then outstanding (or if the Notes of such series
are Original Discount Notes, such portion of the principal amount as may be
specified in the terms of such series) will, unless the principal of all the
Notes of such series shall have already become due and payable, become
immediately due and payable without any declaration or other act on the part
of the Trustee or any Holder.

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

          (1)  the Company has paid or deposited with the Trustee a sum
     sufficient to pay:

NYDOCS01/905069.6                      27


               (i) all overdue interest on all the Notes of such series;

               (ii) the principal of any of the Notes of such series which has
          become due otherwise than by such declaration of acceleration, and
          interest thereon at the rate or rates prescribed therefor in such
          Notes; and

               (iii) to the extent that payment of such interest is lawful and
          applicable, interest upon overdue installments of interest at the
          rate or rates prescribed therefor in such Notes; and

          (2)  all Events of Default with respect to the Notes of such series,
     other than the non-payment of the principal of, and interest on, such
     Notes which have become due solely by such declaration of acceleration,
     have been cured or waived or otherwise remedied in accordance with the
     provisions of this Indenture.

          For all purposes under this Indenture, if a portion of the principal
of any Original Issue Discount Notes shall have been accelerated and declared
due and payable pursuant to the provisions hereof, then, from and after such
declaration, unless such declaration has been rescinded and annulled, the
principal amount of such Original Issue Discount Notes shall be deemed, for
all purposes hereunder, to be such portion of the principal thereof as shall
be due and payable as a result of such acceleration, and payment of such
portion of the principal thereof as shall be due and payable as a result of
such acceleration together with interest, if any, thereon and all other
amounts owing thereunder, shall constitute payment in full of such Original
Issue Discount Notes.

          Section 6.03. Other Remedies.  If an Event of Default occurs, has
not been waived, and is continuing with respect to the Notes of any series, the
Trustee may pursue, in its own name or as trustee of an express trust, any
available remedy by proceeding at law or in equity to collect the payment of
principal of, premium, if any and interest on the Notes of such series or to
enforce the performance of any provision of the Notes of such series or the
Indenture.  The Trustee may maintain a proceeding even if it does not possess
any of the Notes of such series or does not produce any of them in the
proceeding.

          Section 6.04. Waiver of Past Defaults.  Except as otherwise provided
in Sections 6.02, 6.07 and 9.02, the Holders of a majority in aggregate
principal amount of the outstanding Notes may, by notice to the Trustee, waive
an existing Default and its consequences.  Upon such waiver, the Default will
cease to exist, any Event of Default arising therefrom will be deemed to have
been cured and each of the Company, the Trustee and the Holders of the Notes
will be restored to their former positions and rights hereunder; provided,
however, that no such waiver will extend to any subsequent or other Default
or impair any right consequent thereon.

          Section 6.05. Control by Majority.  The Holders of a majority in
aggregate principal amount of the outstanding Notes of a particular series (or
if more than one series is affected, of all such series voting as a separate
class) may direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee or exercising any trust or power conferred
on the Trustee.  However, the Trustee may refuse to follow any such direction
that conflicts with law or this Indenture, that may involve the Trustee in

NYDOCS01/905069.6                      28


personal liability, or that the Trustee determines in good faith may be unduly
prejudicial to the rights of Holders of Notes of such series not joining in the
giving of such direction, and may take any other action it deems proper that is
not inconsistent with such direction.

          Section 6.06. Limitation on Suits.  A Holder may not pursue any
proceeding, judicial or otherwise, or the appointment of a receiver or trustee,
or any other remedy under the Indenture or the Notes of the applicable series,
unless:

          (1)  the Holder has previously given to the Trustee written notice of
     a continuing Event of Default;

          (2)  Holders of at least 25% in aggregate principal amount of then
     outstanding Notes of the series in respect of which the Event of Default
     has occurred have made written request to the Trustee to pursue a remedy
     in respect of the Event of Default;

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

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

          (5)  during such 60-day period, the Holders of a majority in
     aggregate principal amount of the outstanding Notes of such series have
     not given the Trustee a direction that is inconsistent with such written
     request.

          The foregoing limitations do not apply to any proceeding instituted
by a Holder with respect to a Default in the payment of principal, premium, if
any, or interest on any Series of Notes.

          No Holder of any series of Notes may use this Indenture to prejudice
the rights of another Holder of Notes of that series or to obtain a preference
or priority over another Holder of Notes of that series.

          Section 6.07. Rights of Holders to Receive Payment.  Notwithstanding
anything herein to the contrary, the right of any Holder to receive payment of
principal of and premium, if any, and interest on its Note on or after the
Stated Maturities thereof, or to bring suit for the enforcement of any such
payment on or after such respective dates, may not be impaired or affected
without the consent of that Holder.

          Section 6.08. Collection Suit by Trustee.  If an Event of Default in
payment of principal or interest specified in clause (1) or (2) of Section 6.01
occurs and is continuing with respect to the Notes of any series, upon the
demand of the Trustee the Company will pay to the Trustee for the benefit of
the Holders of any affected series of Notes the premium, if any, and interest
remaining unpaid on the Notes of that series then outstanding, together with
interest on overdue principal and, to the extent lawful, overdue installments
of interest, in each case at the rate specified in the Notes, and such further
amount as is sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of

NYDOCS01/905069.6                      29


the Trustee, its agents and counsel and any other amounts due the Trustee
hereunder.  If the Company fails to pay such amount upon demand by the Trustee,
the Trustee will be empowered to recover judgement in its own name and as
trustee of an express trust the sums so due and payable.

          Section 6.09. Trustee May File Proofs of Claim.  The Trustee may file
proofs of claim and other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and any other amounts due the Trustee hereunder) and
the Holders allowed in any judicial proceedings relating to the Company or
its respective creditors or property, and is entitled and empowered to collect,
receive and distribute any money, securities or other property payable or
deliverable upon any such claims.  Any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, if the Trustee consents to the making of such payments directly to
the Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agent
and counsel, and any other amounts due the Trustee hereunder.  Nothing in the
Indenture will be deemed to empower the Trustee to authorize or consent to,
or accept or adopt on behalf of any Holder, any plan of reorganization,
arrangement, adjustment or composition affecting the Notes or the rights of
any Holder thereof, or to authorize the Trustee to vote in respect of the claim
of any Holder in any such proceeding.

          Section 6.10. Priorities.  If the Trustee collects any money with
respect to Notes of any series pursuant to this Article, it shall pay out the
money in the following order:

          First:  to the payment of costs and expenses applicable to such
     series in respect of which monies have been collected, including
     reasonable compensation to the Trustee and each predecessor Trustee and
     their respective agents and attorneys and of all expenses and liabilities
     incurred, and all advances made, by the Trustee and each predecessor
     Trustee except as a result of negligence or bad faith, and all other
     amounts due to the Trustee or any predecessor Trustee pursuant to Section
     7.07;

          Second:  in accordance with the subordination provisions, if any, of
     the Notes of such series;

          Third:  in case the principal of the Notes of such series in respect
     of which monies have been collected shall not have become and be then due
     and payable, to the payment of interest on the Notes of such series in
     default in the order of the maturity of the installments of such interest,
     with interest (to the extent that such interest has been collected by the
     Trustee) upon the overdue installments of interest at the same rate as
     the rate of interest or yield to maturity (in the case of Original Issue
     Discount Notes) specified in such Notes, such payments to be made ratably
     to the persons entitled thereto, without discrimination or preference;

          Fourth:  in case the principal of the Notes of such series in respect
     of which monies have been collected shall have become and shall be then

NYDOCS01/905069.6                      30


     due and payable, to the payment of the whole amount then owing and unpaid
     upon all the Notes of such series for principal and interest, with
     interest upon the overdue principal, and (to the extent such interest has
     been collected by the Trustee) upon overdue installments of interest at
     the same rate as the rate of interest or yield to maturity (in the case of
     Original Issue Discount Notes) specified in the Notes of such series; and
     in case such monies shall be insufficient to pay in full the whole amount
     so due and unpaid upon the Notes of such series, then to the payment of
     such principal and interest, without preference or priority of principal
     over interest or yield to maturity, or of interest or yield to maturity
     over principal, or of any installment of interest over any other
     installment of interest, or of any Notes of such series over any other
     Notes of such series, ratably to the aggregate of such principal and
     accrued and unpaid interest or yield to maturity; and

          Fifth:  to the Company or such other Person as a court of competent
     jurisdiction may direct.

          The Trustee, upon written notice to the Company, may fix a record
date and payment date for any payment to Holders pursuant to this Section.

          Section 6.11. Restoration of Rights and Remedies.  If the Trustee
or any Holder has instituted a proceeding to enforce any right or remedy under
the Indenture and the proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Trustee or to the Holder, then,
subject to any determination in the proceeding, the Company, the Trustee and
the Holders will be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of the Company, the
Trustee and the Holders will continue as though no such proceeding had been
instituted.

          Section 6.12. Undertaking for Costs.  In any suit for the enforcement
of any right or remedy under the Indenture or in any suit against the Trustee
for any action taken or omitted to be taken by it as Trustee, all parties to
this Indenture agree, and each Holder shall be deemed to have agreed, that a
court may require any party litigant in such suit (other than the Trustee) to
file an undertaking to pay the costs of the suit, and the court may assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant (other than the Trustee) in the suit, having due regard to the merits
and good faith of the claims or defenses made by the party litigant.  This
Section does not apply to a suit by a Holder to enforce payment of principal,
premium, if any, and interest on any Note of any series on the respective due
dates, or a suit by Holders of more than 10% in principal amount of the
outstanding Notes of any series.

          Section 6.13. Rights and Remedies Cumulative.  Except as otherwise
provided with respect to the replacement of lost, destroyed or wrongfully taken
Notes of any series in Section 2.04, no right or remedy conferred or reserved
to the Trustee or to the Holders under this Indenture is intended to be
exclusive of any other right or remedy, and all such rights and remedies are,
to the extent permitted by law, cumulative and in addition to every other right
and remedy hereunder or now or hereafter existing at law or in equity or
otherwise.  The assertion or exercise of any right or remedy hereunder, or
otherwise, will not prevent the concurrent assertion or exercise of any other
right or remedy.

NYDOCS01/905069.6                      31


          Section 6.14. Delay or Omission Not Waiver.  No delay or omission of
the Trustee or of any Holder to exercise any right or remedy accruing upon any
Event of Default will impair the exercise of any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.

          Section 6.15. Waiver of Stay, Extension or Usury Laws.  The Company
covenants, to the extent that it may lawfully do so, that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury law or other
law that would prohibit or forgive the Company from paying all or any portion
of the principal of, premium, if any, or interest on the Notes of any series as
contemplated herein, wherever enacted, now or at any time hereafter in force,
or that may affect the covenants or the performance of the Indenture.  The
Company hereby expressly waives, to the extent that it may lawfully do so, all
benefit or advantage of any such law and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as if no such law had
been enacted.

                                  ARTICLE VII.
                                  THE TRUSTEE

          Section 7.01. General.

          (a)  The duties and responsibilities of the Trustee are as provided
by the Trust Indenture Act and as set forth herein.  Whether or not expressly
so provided, every provision of the Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee is subject to
this Article.

          (b)  Except during the continuance of an Event of Default with respect
to the Notes of any series, the Trustee need perform only those duties that are
specifically set forth in the Indenture and no others, and no implied covenants
or obligations will be read into the Indenture that are adverse to the Trustee.
In case an Event of Default has occurred and is continuing with respect to the
Notes of any series, the Trustee shall exercise those rights and powers vested
in it by the Indenture, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of his own affairs.

          (c)  No provision of the Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct.

          Section 7.02. Certain Rights of Trustee.  Subject to Trust Indenture
Act Section 315(a) through (d):

          (1)  In the absence of bad faith on its part, the Trustee may
     conclusively rely, and will be protected in acting or refraining from
     acting, upon any resolution, certificate, statement, instrument, opinion,
     report, notice, request, direction, consent, order, bond, debenture, note,

NYDOCS01/905069.6
                                      32


     other evidence of indebtedness or other paper or document believed by it
     to be genuine and to have been signed or presented by the proper Person.
     The Trustee need not investigate any fact or matter stated in the
     document, but, in the case of any document which is specifically required
     to be furnished to the Trustee pursuant to any provision hereof, the
     Trustee shall examine the document to determine whether it conforms to the
     requirements of the Indenture (but need not confirm or investigate the
     accuracy of mathematical calculations or other facts stated therein).  The
     Trustee, in its discretion, may make further inquiry or investigation into
     such facts or matters as it sees fit.

          (2)  Before the Trustee acts or refrains from acting, it may require
     an Officers' Certificate or an Opinion of Counsel conforming to Section
     12.05, and the Trustee will not be liable for any action it takes or omits
     to take in good faith in reliance on the certificate or opinion.

          (3)  The Trustee may act through its attorneys and agents and will not
     be responsible for the misconduct or negligence of any agent appointed with
     due care.

          (4)  The Trustee will be under no obligation to exercise any of the
     rights or powers vested in it by the Indenture at the request or direction
     of any of the Holders of any series of Notes, unless such Holders have
     offered to the Trustee reasonable security or indemnity against the costs,
     expenses and liabilities that might be incurred by it in compliance with
     such request or direction.

          (5)  The Trustee will not be liable for any action it takes or omits
     to take in good faith that it believes to be authorized or within its
     rights or powers or for any action it takes or omits to take in accordance
     with the direction of the Holders of any series of Notes in accordance
     with Section 6.05 relating to the time, method and place of conducting any
     proceeding for any remedy available to the Trustee, or exercising any
     trust or power conferred upon the Trustee, under this Indenture.

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

          (7)  No provision of this Indenture will require the Trustee to
     expend or risk its own funds or otherwise incur any financial liability
     in the performance of its duties hereunder, or in the exercise of its
     rights or powers, unless it receives indemnity satisfactory to it against
     any loss, liability or expense.

          (8)  The Trustee shall not be deemed to have notice of any default or
     Event of Default unless a Responsible Officer of the Trustee has actual
     knowledge thereof or unless written notice of any event which is in fact
     such a default is received by the Trustee at its Corporate Trust Office
     and such notice references the Notes and this Indenture.

NYDOCS01/905069.6                      33


          (9)  The rights, privileges, protections, immunities and benefits
     given to the Trustee, including, without limitation, its rights to be
     indemnified, are extended to, and shall be enforceable by, the Trustee
     in each of its capacities hereunder, and each agent, custodian and other
     Person employed to act hereunder.

          (10) The Trustee may request that the Company deliver an Officers'
     Certificate setting forth the names of individuals and/or titles of
     officers authorized at such time to take specified actions pursuant to
     this Indenture, which Officers' Certificate may be signed by any person
     authorized to sign an Officers' Certificate, including any person
     specified as so authorized in any such certificate previously delivered
     and not superseded.

          Section 7.03. Individual Rights of Trustee.  The Trustee, in its
individual or any other capacity, may become the owner or pledgee of Notes and
may otherwise deal with the Company or its Affiliates with the same rights it
would have if it were not the Trustee.  Any Agent may do the same with like
rights.  However, the Trustee is subject to Trust Indenture Act Section 311.
For purposes of Trust Indenture  Act Sections 311(b)(4) and (6):

          (a)  "Cash Transaction" means any transaction in which full payment
     for goods or securities sold is made within seven days after delivery of
     the goods or securities in currency or in checks or other orders drawn
     upon banks or bankers and payable upon demand; and

          (b)  "Self-Liquidating Paper" means any draft, bill of exchange,
     acceptance or obligation which is made, drawn, negotiated or incurred by
     the Company for the purpose of financing the purchase, processing,
     manufacturing, shipment, storage or sale of goods, wares or merchandise
     and which is secured by documents evidencing title to, possession of, or
     a lien upon, the goods, wares or merchandise or the receivables or
     proceeds arising from the sale of the goods, wares or merchandise
     previously constituting the security, provided the security is received
     by the Trustee simultaneously with the creation of the creditor
     relationship arising from the making, drawing, negotiating or incurring of
     the draft, bill of exchange, acceptance or obligation.

          Section 7.04. Trustee's Disclaimer.  The Trustee (i) makes no
representation as to the validity or adequacy of the Indenture or the Notes of
any series, (ii) is not accountable for the Company's use or application of the
proceeds from the Notes of any series and (iii) is not responsible for any
statement in the Notes of any series other than its certificate of
authentication.

          Section 7.05. Notice of Default.  If any Default or Event of Default
occurs and is continuing with respect to the Notes of any series, and if it is
known to the Trustee, the Trustee will send notice of the uncured Default to
each Holder of the Notes of such series within 90 days after it occurs, unless
the Default has been cured; provided that, except in the case of a default in
the payment of the principal of, premium, if any or interest on any such Note,
the Trustee may withhold the notice if and so long as the board of directors,
the executive committee or a trust committee of directors of the Trustee in
good faith determines that withholding the notice is in the interest of the
Holders.  Notice to Holders under this Section will be given in the manner and
to the extent provided in Trust Indenture Act Section 313(c).  Except in the

NYDOCS01/905069.6                      34


case of an Event of Default resulting from nonpayment on any Note, the Trustee
shall not be deemed to have notice of any Default or Event of Default unless an
officer of the Trustee has actual knowledge thereof or unless written notice
of any event which is in fact such a Default is received by the Trustee at the
Corporate Trust Office of the Trustee, and such notice references the Notes and
this Indenture.

          Section 7.06. Reports by Trustee to Holders.  The Trustee shall
transmit to each Holder such reports concerning, among other things, the
Trustee and its action under this Indenture as may be required pursuant to the
Trust Indenture Act at the time and in compliance with Section 313(a) of the
Trust Indenture Act.  The Trustee also shall comply with Sections 313(b)(2)
and 313(c) of the Trust Indenture Act.  A copy of each such report at the time
of its mailing to Noteholders shall be filed with the Commission and each stock
exchange, if any, on which the Notes of any series are listed.  The Company
shall notify the Trustee if the Notes of any series become listed on any stock
exchange.

          Section 7.07. Compensation and Indemnity.

          (a)  The Company will pay the Trustee from time to time such
compensation as shall be agreed upon in writing for its services.  The
compensation of the Trustee is not limited by any law on compensation of a
Trustee of an express trust.  The Company will reimburse the Trustee upon
request for all reasonable out-of-pocket expenses, disbursements and advances
incurred or made by the Trustee while acting as Trustee under this Indenture,
including the reasonable compensation and expenses of the Trustee's agents and
counsel, except any such expense as may arise from negligence or bad faith.

          (b)  The Company will indemnify the Trustee for, and hold it harmless
against, any and all loss or liability or expense (including the reasonable
fees and expenses of counsel and taxes other than those based upon the income
of the Trustee) incurred by it without negligence or bad faith on its part
arising out of or in connection with the acceptance or administration of the
Indenture and its duties under the Indenture and the Notes of each series,
including the costs and expenses of defending itself against any claim (whether
asserted by the Company, any Holder or any Person) or liability and of
complying with any process served upon it or any of its officers in connection
with the exercise or performance of any of its powers or duties under the
Indenture and any such Notes.  When the Trustee incurs expenses or renders
services after an Event of Default specified in Section 6.01(5) and (6) occurs,
the expenses and the compensation for the services are intended to constitute
expenses of administration under any bankruptcy law.

          (c)  The obligations of the Company under this Section shall not be
subordinated to the payment of Senior Indebtedness pursuant to Article Eleven
hereof and shall constitute additional indebtedness hereunder and shall survive
the satisfaction and discharge of this Indenture.  To secure the Company's
payment obligations in this Section, the Trustee will have a lien prior to the
Notes of each series on all money or property held or collected by the Trustee,
in its capacity as Trustee, except money or property held in trust to pay
principal of, premium, if any, and interest on particular Notes of any series.

          Section 7.08. Replacement of Trustee.

NYDOCS01/905069.6                      35


          (a)  (i)  The Trustee may resign at any time by written notice to
     the Company.

          (ii) The Holders of a majority in aggregate principal amount of the
     outstanding Notes of all series for which any one Trustee is acting as
     Trustee (voting as a single class) may remove such Trustee by written
     notice to the Company and the Trustee.

          (iii)     If the Trustee is no longer eligible under Section 7.10 or
     in the circumstances described in Trust Indenture Act Section 310(b), any
     Holder that satisfies the requirements of Trust Indenture Act Section
     310(b) may petition any court of competent jurisdiction for the removal of
     the Trustee and the appointment of a successor Trustee.

          (iv) The Company may remove the Trustee if:  (i) the Trustee is no
     longer eligible under Section 7.10; (ii) the Trustee is adjudged a bankrupt
     or an insolvent; (iii) a receiver or other public officer takes charge of
     the Trustee or its property; or (iv) the Trustee becomes incapable of
     acting.

          A resignation or removal of the Trustee and appointment of a successor
Trustee will become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.

          (b)  If the Trustee has been removed by the Holders, Holders of a
majority in principal amount of the outstanding Notes of all series for which
the Trustee was acting as Trustee (voting as a single class) may appoint a
successor Trustee for all such series with the consent of the Company.
Otherwise, if the Trustee resigns or is removed, or if a vacancy exists in
the office of Trustee for any reason, the Company will promptly appoint a
successor Trustee.  If the successor Trustee does not deliver its written
acceptance within 30 days after the retiring Trustee resigns or is removed,
the retiring Trustee, the Company or the Holders of a majority in aggregate
principal amount of the outstanding Notes of all series for which such Trustee
was acting as Trustee (voting as a single class) may petition any court of
competent jurisdiction for the appointment of a successor Trustee.

          (c)  Upon delivery by the successor Trustee of a written acceptance
of its appointment to the retiring Trustee and to the Company, (i) the retiring
Trustee will transfer all property held by it as Trustee to the successor
Trustee, subject to the lien provided for in Section 7.07, (ii) the resignation
or removal of the retiring Trustee will become effective, and (iii) the
successor Trustee will have all the rights, powers and duties of the Trustee
under the Indenture.  Upon request of any successor Trustee, the Company will
execute any and all instruments for fully and vesting in and confirming to the
successor Trustee all such rights, powers and trusts.  The successor Trustee
will mail notice of any resignation and any removal of the Trustee and its
appointment to all Holders, and include in the notice its name and the address
of its Corporate Trust Office.

          (d)  Notwithstanding replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.07 will continue for the
benefit of the retiring Trustee.

          (e)  The Trustee agrees to give the notices provided for in, and
otherwise comply with, Trust Indenture Act Section 310(b).

NYDOCS01/905069.6                      36


          Section 7.09. Successor Trustee by Merger.  If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust business to, another corporation or national banking
association, the resulting, surviving or transferee corporation or national
banking association without any further act will, if such resulting, surviving
or transferee corporation or national banking association is otherwise eligible
under the Indenture, be the successor Trustee with the same effect as if the
successor Trustee had been named as the Trustee in the Indenture.

          Section 7.10. Eligibility.  The Indenture must always have a Trustee
that satisfies the requirements of Trust Indenture Act Section 310(a) and (b)
and has a combined capital and surplus of at least $50,000,000 as set forth in
its most recent published annual report of condition.

          Section 7.11. Money Held in Trust.  The Trustee will not be liable
for interest on any money received by it except as it may agree with the
Company.  Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law and except for money held in trust
under Article Eleven.

                                 ARTICLE VIII.
                           DEFEASANCE AND DISCHARGE

          Section 8.01. Discharge of Company's Obligations.

          (a)  Subject to paragraph (b) of this Section 8.01, the Company's
obligations under any series of Notes and this Indenture will
terminate if:

          (1)  all Notes of such series previously authenticated and
     delivered (other than (i) destroyed, lost or stolen Notes of such
     series that have been replaced or (ii) Notes of such series that
     are paid pursuant to Section 4.01 or (iii) Notes of such series
     for whose payment money or U.S. Government Obligations have been
     held in trust and then repaid to the Company pursuant to Section
     8.05) have been delivered to the Trustee for cancellation and the
     Company has paid all sums payable by it hereunder; or

          (2)  (A)  the Notes of such series mature within one year, or all of
     them are to be called for redemption within one year under arrangements
     satisfactory to the Trustee for giving the notice of redemption;

               (B)  the Company irrevocably deposits in trust with the Trustee,
     as trust funds solely for the benefit of the Holders of such Notes, money
     or U.S. Government Obligations or a combination thereof sufficient, in the
     opinion of a nationally recognized firm of independent public accountants
     expressed in a written certificate delivered to the Trustee, without
     consideration of any reinvestment, to pay principal of, premium, if any,
     and each installment of interest on such Notes to maturity or redemption,
     as the case may be, and to pay all other sums payable by it hereunder;

          (C)  no Default or event that with the passage of time or the giving
     of notice, or both, will constitute an Event of Default has occurred and
     is continuing on the date of the deposit;

NYDOCS01/905069.6                      37


          (D)  the deposit will not result in a breach or violation of, or
     constitute a default under, this Indenture or any other agreement or
     instrument to which the Company is a party or by which it is bound;

          (E)  the Company delivers to the Trustee an Officers' Certificate and
     an Opinion of Counsel, in each case stating that all conditions precedent
     provided for herein relating to the satisfaction and discharge of the
     Indenture have been complied with;

          (F)  the Company has received from, or there has been published by,
     the Internal Revenue Service a ruling or there has been a change in law,
     which in the Opinion of Counsel provides that holders of such Notes will
     not recognize gain or loss for Federal income tax purposes as a result of
     such deposit, defeasance and discharge and will be subject to Federal
     income tax on the same amount, in the same manner and at the same times as
     would have been the case if such deposit, defeasance and discharge had not
     occurred; and

          (G)  the Company has delivered to the Trustee an Opinion of Counsel
     to the effect that such deposit shall not cause the Trustee or the trust
     so created to be subject to the Investment Company Act of 1940.

          (b)  After satisfying the conditions in clause (1), only the
Company's obligations under Section 7.07 will survive.  After satisfying the
conditions in clause (2), only the Company's obligations in Article Two and
Sections 4.01, 4.02, 7.07, 7.08, 8.05 and 8.06 will survive.  In either case,
the Trustee upon request will acknowledge in writing the discharge of the
Company's obligations under the Notes of such series and the Indenture other
than the surviving obligations.

          Section 8.02. Legal Defeasance.  Unless this Section 8.02 is
otherwise specified, pursuant to Section 2.01(l), to be inapplicable to Notes
of any Series, after the 91st day following the deposit referred to in clause
(1), the Company will be deemed to have paid and will be discharged from its
obligations in respect of the Notes of such series and the Indenture (as it
relates to the Notes of such series), other than its obligations in Article Two
and Sections 4.01, 4.02, 7.07, 7.08, 8.05 and 8.06, provided the following
conditions have been satisfied:

          (1)  The Company has irrevocably deposited in trust with the Trustee,
     as trust funds solely for the benefit of the Holders of Notes of such
     series, money or U.S. Government Obligations or a combination thereof
     sufficient, in the opinion of a nationally recognized firm of independent
     public accountants expressed in a written certificate thereof delivered to
     the Trustee, without consideration of any reinvestment, to pay principal
     of, premium, if any, and each installment of interest on the Notes of such
     series to maturity or redemption, as the case may be, provided that any
     redemption before maturity has been irrevocably provided for under
     arrangements satisfactory to the Trustee.

          (2)  No Default or event that with the passing of time or the giving
     of notice, or both, will constitute an Event of Default, has occurred and

NYDOCS01/905069.6                      38


     is continuing on the date of the deposit or occurs at any time during the
     91-day period following the deposit with respect to the Notes of such
     series.

          (3)  The deposit will not result in a breach or violation of, or
     constitute a default under, the Indenture or any other agreement or
     instrument to which the Company is a party or by which it is bound.

          (4)  The Company has delivered to the Trustee an Officers'
     Certificate and an Opinion of Counsel, in each case stating that all
     conditions precedent provided for herein relating to the defeasance have
     been complied with.

          (5)  The Company has delivered to the Trustee:

               (A)  an Opinion of Counsel stating either that (x) the Company
          has received from or there has been published by the Internal Revenue
          Service a ruling or (y) there has been a change in law after the date
          of this Indenture to the effect that the Holders of the Notes of such
          series will not recognize gain or loss for federal income tax
          purposes as a result of the deposit, defeasance and discharge and
          will be subject to federal income tax on the same amount and in the
          same manner and at the same times as would otherwise have been the
          case, and

               (B)  an Opinion of Counsel to the effect that (i) the creation
          of the defeasance trust does not violate or cause the Trustee or the
          trust so created to be subject to the Investment Company Act of 1940,
          (ii) the Holders of the Notes of such series have a valid first
          priority security interest in the trust funds (subject to customary
          exceptions), and (iii) after the passage of 91 days following the
          deposit, the trust funds will not be subject to the effect of Section
          547 of the United States Bankruptcy Code or Section 15 of the New
          York Debtor and Creditor Law.

          (6)  If the Notes of such series are listed on a national securities
     exchange, the Company has delivered to the Trustee an Opinion of Counsel
     to the effect that the deposit and defeasance will not cause such Notes to
     be delisted.

          Prior to the end of the 91-day period, none of the Company's
obligations under the Indenture will be discharged.  Thereafter, the Trustee
upon request will acknowledge in writing the discharge of the Company's
obligations under the Notes of such series and the Indenture (as it relates to
the Notes of such series) except for the surviving obligations specified above.

          Section 8.03. Covenant Defeasance.  Unless this Section 8.03 is
otherwise specified, pursuant to Section 2.01(l), to be inapplicable to the
Notes of any series, after the 91st day following the deposit referred to
in clause (1), the Company's obligations set forth in Sections 4.07 and 4.08,
Article Five will terminate, and clauses (3), (4), (5) and (6) of Section 6.01
will no longer constitute Events of Default, provided the following conditions
have been satisfied:

          (1)  The Company has complied with clauses (1), (2), (3), (4),
     (5)(B) and (6) of Section 8.02; and

NYDOCS01/905069.6                      39


          (2)  the Company has delivered to the Trustee an Opinion of Counsel
     to the effect that the Holders will not recognize gain or loss for federal
     income tax purposes as a result of the deposit and defeasance and will be
     subject to federal income tax on the same amount and in the same manner
     and at the same times as would otherwise have been the case.

          Except as specifically stated above, none of the Company's
obligations under the Indenture will be discharged as a result of covenant
defeasance pursuant to this Section 8.03.

          Section 8.04. Application of Trust Money.  Subject to Section 8.05,
the Trustee will hold in trust the money or U.S. Government Obligations
deposited with it pursuant to Section 8.01, 8.02 or 8.03, and apply the
deposited money and the proceeds from deposited U.S. Government Obligations
to the payment of principal of, premium, if any, and interest on the series of
Notes for which such deposit was made in accordance with the Notes of such
series and the Indenture.  Such money and U.S. Government Obligations need not
be segregated from other funds except to the extent required by law.

          Section 8.05. Repayment to Company.  Subject to Sections 7.07, 8.01,
8.02 or 8.03, the Trustee will promptly pay to the Company upon request any
excess money or U.S. Government Obligations held by the Trustee at any time and
thereupon be relieved from all liability with respect to such money.  The
Trustee will pay to the Company upon request any money or U.S. Government
Obligations held for payment with respect to the Notes of any series that
remains unclaimed for two years, provided that before making such payment the
Trustee may at the expense of the Company publish once in a newspaper of
general circulation in New York City, or send to each Holder entitled to such
money, notice that the money remains unclaimed and that after a date specified
in the notice (at least 30 days after the date of the publication or notice)
any remaining unclaimed balance of money will be repaid to the Company.  After
payment to the Company, Holders entitled to such money must look solely to the
 Company for payment, unless applicable law designates another Person, and all
liability of the Trustee with respect to such money will cease.

          Section 8.06. Reinstatement.  If and for so long as the Trustee is
unable to apply any money or U.S. Government Obligations held in trust pursuant
to Section 8.01, 8.02 or 8.03 by reason of any legal proceeding or by reason of
any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the Company's
obligations under the Indenture (with respect to the applicable series of
Notes) and the Notes of the applicable series will be reinstated as if no such
deposit in trust had been made.  If the Company makes any payment of principal
of, premium, if any, or interest on any Notes because of the reinstatement of
its obligations, it will be subrogated to the rights of the Holders of such
Notes to receive such payment from the money or U.S. Government obligations
held in trust.

                                  ARTICLE IX.
                            SUPPLEMENTAL INDENTURES

          Section 9.01. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a Board

NYDOCS01/905069.6                      40


Resolution, and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:

          (1)  to evidence the succession of another corporation to the Company
     and the assumption by such successor of the covenants of the Company
     herein and in the Notes;

          (2)  to add to the covenants of the Company for the benefit of the
     Holders of all or any series of Notes (and, if such covenants are to be
     for the benefit of less than all series of Notes, stating that such
     covenants are expressly being included solely for the benefit of such
     series), or to surrender any right or power herein conferred upon the
     Company;

          (3)  to add any additional Events of Default (and, if such Events of
     Default are to be applicable to less than all series of Notes, stating
     that such Events of Default are expressly being included solely to be
     applicable to such series); provided, however, that in respect of any such
     additional Events of Default such supplemental indenture may provide for a
     particular grace period after default (which period may be shorter or
     longer than that allowed in the case of other defaults) or may provide for
     an immediate enforcement upon such default or may limit the remedies
     available to the Trustee upon such default or may limit the right of the
     Holders of a majority in aggregate principal amount of the series of Notes
     to which such additional Events of Default apply to waive such default;

          (4)  to change or eliminate any restrictions on the payment of
     principal (or premium, if any) of Notes, provided that any such action
     shall not adversely affect the interests of the Holders of Notes of any
     series in any material respect;

          (5)  to change or eliminate any of the provisions of this Indenture,
     provided that any such change or elimination shall become effective only
     when there is no outstanding Note of any series created prior to the
     execution of such supplemental indenture that is entitled to the benefit
     of such provision;

          (6)  to establish the form or terms of Notes of any series as
     permitted by Section 2.01;

          (7)  to evidence and provide for the acceptance of appointment
     hereunder by a successor Trustee with respect to the Notes of one or more
     series and to add to or change any of the provisions of this Indenture as
     shall be necessary to provide for or facilitate the administration of the
     trusts hereunder by more than one Trustee;

          (8)  to add guarantees to the Notes;

          (9)  to supplement any of the provisions of the Indenture to such
     extent as shall be necessary to permit or facilitate the defeasance and
     discharge of any series of Notes pursuant to Sections 8.01, 8.02 or 8.03;
     provided that any such action shall not adversely affect the interests of
     the Holders of Notes of such series or any other series of Notes in any
     material respect;

NYDOCS01/905069.6                      41


          (10) to cure any ambiguity, to correct or supplement any provision
     herein that may be defective or inconsistent with any other provision
     herein, or to make any other provisions with respect to matters or
     questions arising under this Indenture that shall not be inconsistent
     with any provisions of this Indenture, provided such other provisions
     shall not adversely affect the interests of the Holders of Notes of any
     series in any material respect;

          (11) to secure the Notes;

          (12) to make any changes that would provide any additional rights or
     benefits to Holders of Notes or that do not adversely affect the legal
     rights under the Indenture of any such Holder;

          (13) to comply with the requirements of the Commission in order to
     effect or maintain the qualification of the Indenture under the Trust
     Indenture Act;

          (14) to provide for the conversion rights of Holders of Notes in
     certain events such as an amalgamation, consolidation, merger or sale of
     all or substantially all of the assets of the Company; or

          (15) to reduce the conversion price, if applicable, of any series of
     Notes.

          Section 9.02. Supplemental Indentures with Consent of Holders.  (a)
Except as provided in Section 9.01, with the consent of the Holders of not less
than a majority in principal amount of the outstanding Notes affected by such
supplemental indenture, by act of said Holders delivered to the Company and the
Trustee, the Company when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders under this Indenture of such Notes; provided, however, that no such
supplemental indenture shall, without the consent of the Holder of each
outstanding Note affected thereby:

          (1)  change the Stated Maturity of the principal of, or any
     installment of interest on, any Note, or reduce the principal amount
     thereof or the interest thereon or any premium payable upon redemption
     thereof, or reduce the amount of the principal of an Original Issue
     Discount Note that would be due and payable upon a declaration of
     acceleration of the Maturity thereof pursuant to Section 6.02, or change
     any place of payment, or change the currency in which any Note or
     interest thereon is payable, or impair the right to institute suit for the
     enforcement of any such payment on or after the Stated Maturity thereof
     (or, in the case of redemption, on or after the redemption date);

          (2)  reduce the percentage in principal amount of the outstanding
     Notes of any series, the consent of whose Holders is required for any such
     supplemental indenture, or the consent of whose Holders is required for
     any waiver (of compliance with certain provisions of this Indenture or
     certain Defaults hereunder and their consequences) provided for in this
     Indenture; or

NYDOCS01/905069.6                      42


          (3)  modify any of the provisions of this Section or Section 6.03,
     except to increase any such percentage or to provide that certain other
     provisions of this Indenture cannot be modified or waived without the
     consent of the Holder of each outstanding Notes affected thereby;
     provided, however, that this clause shall not be deemed to require the
     consent of any Holder with respect to changes in the references to "the
     Trustee" and concomitant changes in this Section, or the deletion of this
     proviso, in accordance with the requirements of Section 9.01(7).

          (b)  It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.

          (c)  A supplemental indenture that changes or eliminates any covenant
or other provisions of this Indenture that has expressly been included solely
for the benefit of one or more particular series of Notes, or that modifies the
rights of the Holders of Notes of such series with respect to such covenant or
other provision, shall be deemed not to affect the rights under this Indenture
of the Holders of Notes of any other series.

          (d)  After an amendment, modification or waiver under this Section
becomes effective, the Company will send to the Holders affected thereby a
notice briefly describing the amendments, modification or waiver.  The Company
will send supplemental indentures to Holders upon request.  Any failure of the
Company to send such notice, or any defect therein, will not, however, in any
way impair or affect the validity of any such amendment, modification,
supplemental indenture or waiver.

          Section 9.03. Execution of Supplemental Indentures.  In executing, or
accepting the additional trusts created by, any supplemental indenture
permitted by this Article (other than Section 9.01(6)) or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and, subject to Section 7.02, shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture, is not inconsistent
herewith, is a valid, legal and binding obligation of the Company enforceable
in accordance with its terms, subject to enforceability being limited by
bankruptcy, insolvency or other laws or foreign governmental actions affecting
the enforcement of creditors' rights generally and equitable remedies including
the remedies of specific performance and injunction being granted only in the
discretion of a court of competent jurisdiction and, in connection with a
supplemental indenture executed pursuant to Section 9.01, that the Trustee is
authorized to execute and deliver such supplemental indenture without the
consent of the Holders and, in connection with a supplemental indenture
executed pursuant to Section 9.02, that the requisite consents of the Holders
have been validly obtained in accordance with Section 9.02 hereof.  The Trustee
may, but shall not be obligated to, enter into any such supplemental indenture
that affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.

          Section 9.04. Effect of Supplemental Indentures.  Upon the execution
of any supplemental indenture under this Article, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form
a part of this Indenture for all purposes; and every Holder of Notes

NYDOCS01/905069.6                      43


theretofore or thereafter authenticated and delivered under this Indenture
shall be bound by the supplemental indenture.

          Section 9.05. Conformity with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall conform to the requirements
of the Trust Indenture Act as then in effect.

          Section 9.06. Reference in Notes to Supplemental Indentures.  Notes
of any series authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture.  If the Company shall so
determine, new Notes of any series so modified as to conform, in the opinion
of the Trustee and the Board of Directors, to any such supplemental indenture
may be prepared and executed by the Company and authenticated and delivered by
the Trustee in exchange for outstanding Notes of such series.

                                   ARTICLE X.
                                 SINKING FUNDS

          Section 10.01. Applicability of Article.  The provisions of this
Article shall be applicable to any sinking fund for the retirement of Notes of
a series except as otherwise specified pursuant to Section 2.01 for Notes of
such series.  The minimum amount of any sinking fund payment provided for by
the terms of Notes of any series is herein referred to as "mandatory sinking
fund payment", and any payment in excess of such minimum amount provided for
by the terms of Notes of any series is herein referred to as an "optional
sinking fund payment".  If provided for by the terms of Notes of any series,
the amount of any sinking fund payment may be subject to reduction as provided
in Section 10.02.  Each sinking fund payment shall be applied to the redemption
of Notes of any series as provided for by the terms of such Notes.

          Section 10.02. Satisfaction of Sinking Fund Payments with Notes.  In
lieu of making all or part or any mandatory sinking fund payment in cash, the
Company may deliver outstanding Notes of a series (other than any previously
called for redemption) and may apply as a credit Notes of a series that have
been redeemed either at the election of the Company pursuant to the terms of
such Notes or through the application of permitted optional sinking fund
payments pursuant to the terms of such Notes, in each case, in satisfaction of
all or any part of any sinking fund payment with respect to such Notes of such
series required to be made pursuant to, and as provided for by, their terms;
provided that such Notes have not been previously so credited.  Such Notes
shall be received and credited for such purpose by the Trustee at the
redemption price specified in such Notes for redemption through operation of
the sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.

          Section 10.03. Redemption of Notes for Sinking Fund.  Not less than
60 days prior to each sinking fund payment date for any series of Notes
(unless a shorter period shall be satisfactory to the Trustee), the Company
will deliver to the Trustee an Officers' Certificate of such entity specifying
the amount of the next sinking fund payment for that series pursuant to the
terms of that series, the portion thereof, if any, that is to be satisfied by

NYDOCS01/905069.6                      44


delivering and crediting Notes of that series pursuant to Section 10.02 and
the basis for any such credit and, prior to or concurrently with the delivery
of such Officers' Certificate, will also deliver to the Trustee any Notes to
be credited and not theretofore delivered to the Trustee.  Not less than 45
days (unless a shorter period shall be satisfactory to the Trustee) before
each sinking fund payment date the Trustee shall select the Notes to be
redeemed upon such sinking fund payment date in the manner specified in Section
3.01 and cause notice of the redemption thereof to be given in the name of and
at the expense of the Company in the manner provided in Section 3.01.  Such
notice having been duly given, the redemption of such Notes shall be made upon
the terms and in the manner stated in Sections 3.01 and 3.02.

                                  ARTICLE XI.
                           SUBORDINATION OF NOTES

          Section 11.01. Applicability of Article; Agreement to Subordinate.
In the event a series of Notes is designated as subordinated pursuant to
Section 2.01 ("Subordinated Notes") and except as otherwise provided in a
supplemental indenture or pursuant to Section 2.01, the Company, for itself,
its successors and assigns, covenants and agrees, and each Holder of
Subordinated Notes by his acceptance thereof, likewise covenants and agrees,
that the payment of the principal of (and premium, if any) and interest, if
any, on each and all of the Subordinated Notes is hereby expressly
subordinated, to the extent and in the manner set forth in this Article, in
right of payment to the prior payment in full of all Senior Indebtedness.

          Section 11.02. Rights of Holders of Subordinated Indebtedness.  (a)
In the event of any insolvency or bankruptcy proceedings, or any receivership,
liquidation, reorganization or other similar proceedings, relative to the
Company or to its creditors, as such, or to its property, and in the event of
any proceedings for voluntary liquidation, dissolution or other winding up of
the Company, whether or not involving insolvency or bankruptcy, and in the
event of any execution sale, then the holders of Senior Indebtedness shall be
entitled to receive payment in full of the principal and premium, if any,
thereof and interest due thereon (including without limitation, except to the
extent, if any prohibited by mandatory provisions of law, post petition
interest in any such proceedings) in money before the Holders of Subordinated
Notes are entitled to receive any payment on account of the principal of,
premium, if any, or interest on the indebtedness evidenced by the Subordinated
Notes, and to that end the holders of Senior Indebtedness shall be entitled to
receive for application in payment thereof any payment or distribution of any
kind or character, whether in cash or property or securities, which may be
payable or deliverable in connection with any such proceedings or sale in
respect of the principal of, premium, if any, or interest on the Subordinated
Notes other than securities of the Company as reorganized or readjusted or
securities of the Company or any other corporation provided for by a plan of
reorganization or readjustment the payment of which is subordinate, at least to
the extent provided in this Article Eleven with respect to the Subordinated
Notes, to the payment of all indebtedness of the nature of Senior Indebtedness,
provided that the rights of the holders of the Senior Indebtedness are not
altered by such reorganization or readjustment;

          (b)  In the event and during the continuation of any default in
payment of any Senior Indebtedness or if any event of default, as therein
defined, shall exist and all grace periods with respect thereto shall have
expired, under any Senior Indebtedness or any agreement pursuant to which any
Senior Indebtedness is issued, no payment of the principal of, premium, if any,

NYDOCS01/905069.6                      45


or interest on the Subordinated Notes shall be made and the Company covenants
that it will, upon ascertaining any such default or event of default, provide
written notice to the Trustee of such default or event of default, provided
that payment on the Subordinated Notes may and shall be resumed, in the case
of a notice relating to a payment default on such Senior Indebtedness, upon
the date on which it is cured or waived pursuant to the terms of such Senior
Indebtedness, and, in the case of a notice relating to a nonpayment default,
the earlier of the date on which it is cured or waived pursuant to the terms of
such Senior Indebtedness or 179 days after the date on which such notice is
received by the Trustee, unless the maturity of the relevant Senior
Indebtedness of the Company has been accelerated;

          (c)  In the event that the Subordinated Notes of any series are
declared due and payable before their expressed maturity because of the
occurrence of an Event of Default (under circumstances when the provisions of
subsection (a) of this Section 11.02 shall not be applicable), the holders of
all Senior Indebtedness shall be entitled to receive payment in full in money
of such Senior Indebtedness before such Holders of Subordinated Notes are
entitled to receive any payment on account of the principal of or interest on
the Subordinated Notes; and (d)  No holder of Senior Indebtedness shall be
prejudiced in his right to enforce subordination of the Subordinated Notes by
any act or failure to act on the part of the Company.

          Section 11.03. Payments and Distributions.  In the event that,
notwithstanding the provisions of Section 11.02, any payment or distribution
of assets of the Company of any kind or character, whether in cash, property or
securities (other than securities of the Company as reorganized or readjusted
or securities of the Company or any other corporation provided for by a plan of
reorganization or readjustment the payment of which is subordinate, at least to
the extent provided in this Article Eleven with respect to the Subordinated
Notes, to the payment of all indebtedness of the nature of Senior Indebtedness,
provided that the rights of the holders of the Senior Indebtedness are not
altered by such reorganization or readjustment) shall be received by the
Holders of Subordinated Notes or by the Trustee for their benefit in
connection with any proceedings or sale referred to in subsection (a) of
Section 11.02 before all Senior Indebtedness is paid in full in money, such
payment or distribution shall be paid over to the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee, agent or other Person
making payment or distribution of assets of the Company, if any, otherwise such
payment or distribution shall be paid over to the holders of such Senior
Indebtedness or their representative or representatives or to the trustee or
trustees under any indenture under which any instruments evidencing any of such
Senior Indebtedness may have been issued, ratably according to the aggregate
amounts remaining unpaid on account of the Senior Indebtedness held or
represented by each, for application to the payment of all Senior Indebtedness
remaining unpaid until all such Senior Indebtedness shall have been paid in
full in money, after giving effect to any concurrent payment or distribution to
the holders of such Senior Indebtedness.

          From and after the payment in full in money of all Senior
Indebtedness, the Holders of Subordinated Notes (together with the holders of
any other indebtedness of the Company which is subordinate in right of payment
to the payment in full of all Senior Indebtedness, which is not subordinate in
right of payment to the Subordinated Notes and which by its terms grants such
right of subrogation to the holder thereof) shall be subrogated to the rights

NYDOCS01/905069.6                      46


of the holders of Senior Indebtedness to receive payments or distributions of
assets or securities of the Company applicable to the Senior Indebtedness
until the Subordinated Notes shall be paid in full, and, for the purposes of
such subrogation, no such payments or distributions to the holders of Senior
Indebtedness of assets or securities, which otherwise would have been payable
or distributable to Holders of Subordinated Notes, shall, as between the
Company, its creditors other than the holders of Senior Indebtedness and the
Holders, be deemed to be a payment by the Company to or on account of the
Senior Indebtedness, it being understood that the provisions of this Article
Eleven are and are intended solely for the purpose of defining the relative
rights of the Holders, on the one hand, and the holders of the Senior
Indebtedness, on the other hand, and nothing contained in this Article Eleven
or elsewhere in this Indenture or in the Subordinated Notes is intended to or
shall impair as between the Company, its creditors other than the holders of
Senior Indebtedness and the Holders of Subordinated Notes, the obligation of
the Company, which is unconditional and absolute, to pay to the Holders of
Subordinated Notes the principal of and interest on the Subordinated Notes as
and when the same shall become due and payable in accordance with their terms,
or to affect the relative rights of the Holders of Subordinated Notes and
creditors of the Company other than the holders of the Senior Indebtedness,
nor shall anything herein or therein prevent the Trustee or the Holder of any
Subordinated Note from exercising all remedies otherwise permitted by
applicable law upon Default under this Indenture subject to the rights of the
holders of Senior Indebtedness, under Section 11.02, to receive cash, property
or securities of the Company otherwise payable or deliverable to the Holders of
the Subordinated Notes.

          Upon any distribution or payment in connection with any proceedings or
sale referred to in subsection (a) of Section 11.02, the Trustee, subject as
between the Trustee and the Holders of Subordinated Notes to the provisions of
Section 7.02 hereof, shall be entitled to rely upon a certificate of the
liquidating trustee or agent or other person making any distribution or payment
to the Trustee, the amount of such Senior Indebtedness or the amount payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article Eleven.  In the event that the Trustee
determines, in good faith, that further evidence is required with respect to
the right of any person as a holder of Senior Indebtedness to participate in
any payment or distribution pursuant to this Section 11.03, the Trustee may
request such person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of Senior Indebtedness held by such person, as to the
extent to which such person is entitled to participate in such payment or
distribution, and as to other facts pertinent to the rights of such person
under this Section 11.03, and if such evidence is not furnished, the Trustee
may defer any payment to such person pending judicial determination as to the
right of such person to receive such payment.

          The Trustee, however, shall not be deemed to owe any fiduciary duty
to the holders of Senior Indebtedness, and shall not be liable to any such
holders if it shall in good faith pay over or distribute to Holders of
Subordinated Notes or the Company or any other person moneys or assets to which
any holders of Senior Indebtedness shall be entitled by virtue of Article
Eleven of this Indenture or otherwise.

          Section 11.04. Payments by the Company.  Nothing contained in this
Article Eleven or elsewhere in this Indenture, or in any of the Subordinated
Notes, shall prevent at any time, (a) the Company from making payments at any
time of principal of or interest on the Subordinated Notes, except under the

NYDOCS01/905069.6                      47


conditions described in Section 11.02 or during the pendency of any proceedings
or sale therein referred to, provided, however, that payments of principal of,
premium, if any, or interest on the Subordinated Notes shall only be made by
the Company within three business days of the due dates for such payments or
(b) the application by the Trustee of any moneys deposited with it hereunder
to the payment of or on account of the principal of, premium, if any, or
interest on the Subordinated Notes, if all the time of such deposit the Trustee
did not have written notice in accordance with Section 11.06 of any event
prohibiting the making of such deposit by the Company or if in the event of
redemption, the Trustee did not have such written notice prior to the time that
the notice of redemption pursuant to Section 3.01 was given (which notice of
redemption shall in no event be given more than 60 days prior to the date
fixed for redemption).

          Section 11.05. Appointment of the Trustee by Holders.  Each Holder by
his acceptance of a Subordinated Note authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination as provided in this Article Eleven and appoints
the Trustee as attorney-in-fact for any and all such purposes, including, in
the event of any dissolution, winding up, liquidation or reorganization of the
Company (whether in bankruptcy, insolvency or receivership proceedings or upon
an assignment for the benefit of creditors or otherwise) tending towards
liquidation of the business and assets of the Company, the immediate filing of
a claim for the unpaid balance of such Holder's Subordinated Notes in the form
required in said proceedings and cause said claim to be approved.

          Section 11.06. Notice to Trustee.  Notwithstanding the provisions of
this Article Eleven or any other provisions of this Indenture, the Trustee
shall not be charged with the knowledge of the existence of any facts which
would prohibit the making of any payment of moneys to or by the Trustee, unless
and until the Trustee shall have received written notice thereof from the
Company or from the holder of, or the representative of any class of, Senior
Indebtedness, together with proof satisfactory to the Trustee of such holding
of Senior Indebtedness or of the authority of such representative; provided,
however, that if at least two business days prior to the date upon which by the
terms hereof any such monies may become payable for any purpose (including,
without limitation, the payment of either the cash amount payable at maturity
or interest on any Subordinated Note) the Trustee shall not have received with
respect to such monies the notice provided for in this Section 11.06, then,
anything herein contained to the contrary notwithstanding, the Trustee shall
have full power and authority to receive such monies and to apply the same to
the purpose for which they were received, and shall not be affected by any
notice to the contrary, which may be received by it on or after such three
business days prior to such date.

          Section 11.07. Rights of Trustee.  The Trustee shall be entitled to
all the rights set forth in this Article Eleven with respect to any Senior
Indebtedness which may at any time be held by it, to the same  extent as any
other holder of Senior Indebtedness.

          Section 11.08. Paying Agent.  In case at any time any paying agent
other than the Trustee shall be appointed by the Company and be then acting
hereunder, the term "Trustee" as used in this Article Eleven shall in such
case (unless the context shall otherwise require) be construed as extending
to and including such paying agent within its meaning as fully for all intents

NYDOCS01/905069.6                      48


and purposes as if such paying agent were named in this Article Eleven in
place of the Trustee.

                                  ARTICLE XII.
                                 MISCELLANEOUS

          Section 12.01. Trust Indenture Act of 1939.  The Indenture shall
incorporate and be governed by the provisions of the Trust Indenture Act that
are required to be part of and to govern indentures qualified under the Trust
Indenture Act.

          Section 12.02. Noteholder Communications; Noteholder Actions.

          (a)  The rights of Holders to communicate with other Holders with
respect to the Indenture or the Notes are as provided by the Trust Indenture
Act, and the Company and the Trustee shall comply with the requirements of
Trust Indenture Act Sections 312(a) and 312(b).  Neither the Company nor the
Trustee will be held accountable by reason of any disclosure of information as
to names and addresses of Holders made pursuant to the Trust Indenture Act.

          (b)  (1)  Any request, demand, authorization, direction, notice,
consent to amendment, modification or waiver or other action provided by this
Indenture to be given or taken by a Holder (an "Act") may be evidenced by an
instrument signed by the Holder delivered to the Trustee.  The fact and date
of the execution of the instrument, or the authority of the person executing
it, may be proved in any manner that the Trustee deems sufficient.

          (2)  The Trustee may make reasonable rules for action by or at a
meeting of Holders of any one or more series of Notes, which will be binding
on all the Holders of such Notes.

          (3)  The ownership of Notes shall be proved by the Register.

          (c)  Any Act by the Holder of any Note binds that Holder and every
subsequent Holder of a Note that evidences the same debt as the Note of the
acting Holder, even if no notation thereof appears on the Note.  Subject to
paragraph (d), a Holder may revoke an act as to its Notes, but only if the
Trustee receives the notice of revocation before the date the amendment or
waiver or other consequence of the act becomes effective.

          (d)  The Company may, but is not obligated to, fix a record date
(which need not be within the time limits otherwise prescribed by Trust
Indenture Act Section 316(c)) for the purpose of determining the Holders
entitled to act with respect to any amendment or waiver or in any other regard,
except that during the continuance of an Event of Default, only the Trustee may
set a record date as to notices of default, any declaration or acceleration or
any other remedies or other consequences of the Event of Default.  If a record
date is fixed, those Persons that were Holders at such record date and only
those Persons will be entitled to act, or to revoke any previous act, whether
or not those Persons continue to be Holders after the record date.  No act will
be valid or effective for more than 90 days after the record date.

          Section 12.03. Notices.

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          (a)  Any notice or communication to the Company will be deemed given
if in writing (i) when delivered in person or (ii) five days after mailing when
mailed by first class mail, or (iii) when sent by facsimile transmission, with
transmission confirmed.  Any notice or communication to the Trustee will be
deemed given if in writing (i) when delivered in person, or (ii) when sent by
facsimile transmission, with transmission confirmed.  In each case the notice
or communication should be addressed as follows:

          if to the Company:

          Scott A. Schreff
          Corporate Secretary and Assistant General Counsel
          The Timken Company
          Mail Code GNE 01
          1835 Dueber Avenue, S.W.
          Canton, Ohio 44706-0928
          FAX:  (330) 471-3541

          if to the Trustee:

          The Bank of New York
          Corporate Finance Unit
          101 Barclay Street, Floor 8 West
          New York, NY  10286
          FAX:  (212) 815-5704

          The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.

          (b)  Except as otherwise expressly provided with respect to published
notices, any notice or communication to a Holder will be deemed given when
mailed to the Holder at its last address as it appears on the Register by first
class mail or, as to any Global Note registered in the name of DTC or its
nominee, as agreed by the Company, the Trustee and DTC.  Copies of any notice
or communication to a Holder, if given by the Company, will be mailed to the
Trustee at the same time.  Defect in mailing a notice or communication to any
particular Holder will not affect its sufficiency with respect to other
Holders.

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

          Section 12.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any
action under the Indenture, the Company will furnish to the Trustee:

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          (1)  an Officers' Certificate stating that, in the opinion of the
     signers, all conditions precedent, if any, provided for in the Indenture
     relating to the proposed action have been complied with; and

          (2)  an Opinion of Counsel stating that all such conditions precedent
     have been complied with.

          Section 12.05. Statements Required in Certificate or Opinion.  Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in the Indenture must include:

          (1)  a statement that each Person signing the certificate or opinion
     has read the covenant or condition and the related definitions;

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

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

          (4)  a statement as to whether or not, in the opinion of each such
     Person, such condition or covenant has been complied with, provided that
     an Opinion of Counsel may rely on an Officers' Certificate or certificates
     of public officials with respect to matters of fact.

          Section 12.06. Payment Date Other Than a Business Day.  If any
payment with respect to a payment of any principal of, premium, if any, or
interest on any Note (including any payment to be made on any date fixed for
redemption or purchase of any Note) is due on a day which is not a Business
Day, then the payment need not be made on such date, but may be made on the
next Business Day with the same force and effect as if made on such date, and
no interest will accrue for the intervening period.

          Section 12.07. Governing Law.  This Indenture and the Notes shall be
governed by, and construed in accordance with, the laws of the State of New
York.

          Section 12.08. No Adverse Interpretation of Other Agreements.  The
Indenture may not be used to interpret another indenture or loan or debt
agreement of the Company or any Subsidiary of the Company, and no such
indenture or loan or debt agreement may be used to interpret the Indenture.

          Section 12.09. Successors.  All agreements of the Company in the
Indenture and the Notes will bind its successors.  All agreements of the
Trustee in the Indenture will bind its successor.

NYDOCS01/905069.6                      51


          Section 12.10. Duplicate Originals.  The parties may sign any number
of copies of the Indenture.  Each signed copy shall be an original, but all of
them together represent the same agreement.

          Section 12.11. Separability.  In case any provision in the Indenture
or in the Notes is invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions will not in any way be affected
or impaired thereby.

          Section 12.12. Table of Contents and Headings.  The Table of
Contents, Cross-Reference Table and headings of the Articles and Sections of
the Indenture have been inserted for convenience of reference only, are not to
be considered a part of the Indenture and in no way modify or restrict any of
the terms and provisions of the Indenture.

          Section 12.13. No Liability of Directors, Officers, Employees,
Incorporators and Stockholders.  No director, officer, employee, incorporator,
member or stockholder of the Company or any Subsidiary will have any liability
for any obligations of the Company under the Notes or the Indenture or for any
claim based on, in respect of, or by reason of, such obligations.  Each Holder
 of Notes by accepting a Note waives and releases all such liability.  The
waiver and release are part of the consideration for issuance of the Notes.

                              * * *

          This instrument may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.

NYDOCS01/905069.6                      52


                           SIGNATURES

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

                                       THE TIMKEN COMPANY
                                       as Issuer

                                       By:/s/  Glenn A. Eisenberg
                                       Name: Glenn A. Eisenberg
                                       Title: Executive Vice President
                                       - Finance and Administration

                                       By:/s/  William R. Burkhart
                                       Name: William R. Burkhart
                                       Title: Senior Vice President and
                                       General Counsel

                                       THE BANK OF NEW YORK
                                       as Trustee

                                       By:/s/  Joseph A. Lloret
                                       Name: Joseph A. Lloret
                                       Title: Assistant Treasurer

NYDOCS01/905069.6                      53


                                                        EXHIBIT A

For Global Note only:  UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE
"DEPOSITORY", WHICH TERM INCLUDES ANY SUCCESSOR DEPOSITORY FOR THE
CERTIFICATES) TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY (AND ANY PAYMENT HEREIN IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN  INTEREST HEREIN.

NYDOCS01/905069.6                     A-1


EX-10

                                   EXHIBIT 10

                                    January 1, 2003 (revised December 18, 2002)

                                THE TIMKEN COMPANY
                            MANAGEMENT PERFORMANCE PLAN

Purpose
_______

The purpose of The Timken Company (the "Company") Management Performance Plan
(the "Plan") is to promote the profitable growth of the Company by:

  *    Providing rewards for achieving increasing levels of return on capital.

  *    Recognizing corporate, business unit and individual performance
       achievement.

  *    Attracting, motivating and retaining superior executive talent.

Administration
______________

It is the responsibility of senior management of the Company to execute the
provisions of the Plan.  Based on senior management recommendations, the
Compensation Committee (the "Committee") approves financial goals, partici-
pation, target bonus awards, actual bonus awards, timing of payment and other
actions necessary to the administration of the Plan.

Participation
_____________

The participant group includes Company executive officers and other key
employees of the Company and its subsidiaries in positions assigned to Grades 7
or higher (i.e., 750 or more points) based on the Company's job evaluation
process.

Bonus Opportunity
_________________

Each position is assigned a target bonus expressed as a percentage of annual
base salary.  The targets are based on market data for companies that are
similar for compensation purposes, including companies of similar size and
similar industries.  The targets are reviewed annually by management, and the
Committee will approve all target bonuses for officers.

The full target bonus opportunity represents an appropriate bonus award if
performance standards are met for Corporate, Business Unit and Individual
results.

Bonus funds for the three components-Corporate, Business Unit and Individual-
will be developed independently based on performance achievement versus the
goal(s) for each component.  The actual value of each component can range from
0% to 200% of target based on performance.

                                                                           1


For most participants, the total bonus will be the sum of the amounts for
Corporate, Business Unit and Individual performance.  In general, the more
senior participants will have greater weight placed on corporate results, while
other participants will have a greater weight placed on business unit and
individual performance results.

The allocations to corporate, business unit and individual performance will be
reviewed annually and changes to the allocations will be determined by senior
management.

Performance Measures
____________________

Corporate/Business Unit Components

The primary Corporate and Business Unit performance measure is Return on
Invested Capital, one measure of which is Earnings Before Interest and Taxes
(EBIT) divided by Beginning Invested Capital (BIC).

At the beginning of each year, the Committee will specify the EBIT/BIC and
other financial or non-financial performance measures to be used to evaluate
Corporate and Business Unit performance for the coming year.  Potential
performance measures include, but are not limited to:

     *    Cash flow (including free cash flow)
     *    Continuous improvement
     *    Cost of capital
     *    Customer satisfaction
     *    Debt reduction
     *    Earnings growth (including earnings per share and earnings before
          interest and taxes)
     *    Financial performance exceeding that of peer/competitor companies
     *    Improvement of shareholder return
     *    Inventory management
     *    Net income
     *    Productivity improvement
     *    Profit after taxes
     *    Quality
     *    Recruitment and development of excellent associates with emphasis on
          diversity
     *    Reduction of fixed costs
     *    Return on assets
     *    Return on equity
     *    Return on invested capital (EBIT/BIC)
     *    Sales from new products
     *    Sales growth
     *    Successful start-up of new facility
     *    Successful acquisition/divestiture

                                                                           2


For the Corporate, Business Unit and Individual components of the Plan, the
size of the award will be determined by the degree to which targets are
achieved for each measure within that component.  Awards for performance that
falls between threshold, target and maximum will be interpolated.

Individual Component
____________________

Individual performance goals will be established for each participant
consistent with the Company's performance management process.  The
participant's supervisor will assess the participant's performance against
these goals and make a determination of the amount of bonus to be earned for
the individual component of the Plan.  While the value of the individual
component can range from 0% to 200% of target for a specific individual, the
sum of individual award components for all participants must not exceed 100% of
target.

Award Determination
___________________

A participant's bonus award will be determined by adding the value of each of
the applicable components (corporate, business unit, individual) once
performance is considered.  The sum of all participant bonus determinations
will equal the Total Fund.

Minimum Performance Requirement
_______________________________

For a payment to be earned for any portion of this Plan, the Company must
report a predetermined net profit for the Plan year after taking into account
all Plan payments for that year.  Once the predetermined profit level is
achieved, the Plan will function as outlined.  If the predetermined profit
level is not achieved, no awards will be paid under the Corporate, Business
Unit or Individual component of the Plan.

Bonus Payments
______________

At the end of the year, senior management will determine whether Corporate
performance has exceeded the minimum performance requirement for paying
bonuses.  Senior management will recommend to the Committee the Total Fund
based on its assessment of performance achievement at Corporate, Business Unit
and individual levels.  The Committee may make further adjustments to such
management recommendations based on its assessment of financial and non-
financial performance.

Awards under the Plan will be paid in cash.

One hundred percent of awards under the Plan will be included in pension
earnings and earnings for the purpose of calculating 401(k) plan benefits.
Awards will not be included for purposes of any other employee benefits plans,
except long term disability.

mpplan02revised12-18-2002 .doc
                                                                           3

EX-10.33

                                 EXHIBIT 10.33

                          EXECUTIVE SEVERANCE AGREEMENT

          This Executive Severance Agreement (this "Agreement") is dated as of
the 10th day of January, 2002, between The Timken Company, an Ohio corporation
(the "Company"), and Glenn A. Eisenberg (the "Executive").

          WHEREAS, the Executive is employed as Executive Vice President -
Finance and Administration of the Company, is a key employee of the Company and
is expected to make major contributions to the profitability, growth and
financial strength of the Company; and

          WHEREAS, the Company wishes to induce Executive to accept employment
with and to remain in the employment of the Company; and

          WHEREAS, the Company recognizes that a termination of employment may
occur in circumstances where the Executive should receive additional
compensation for services theretofore rendered and for other good
consideration.

          NOW, THEREFORE, in consideration of the premises, the Company and the
Executive hereby agree as follows:

          1.   Definitions:

               1.1  Company Termination Event:  The term "Company Termination
Event" shall mean the termination, prior to any Executive Termination Event, of
the employment of the Executive by the Company in any of the following events:

          (a)  The Executive's death;

          (b)  If the Executive shall become eligible to receive and begin to
               receive long-term disability benefits under The Long Term
               Disability Program of The Timken Company or any successor plan
               in an amount not less than the benefits provided by such plans
               as in effect as of such date; or

          (c)  For Cause.  Termination shall be deemed to have been for "Cause"
               if based on the fact that the Executive has (i) been convicted
               of or failed to contest charges of a felony; (ii) committed a
               material act of dishonesty or disloyalty with respect to the
               Company which is materially injurious to the Company, or (iii)
               willfully and deliberately refused to perform duties normally
               associated with the Executive's position or reasonable duties
               assigned by the Executive's supervisor consistent with the
               Executive's position, not remedied within 30 days after receipt
               of written notice by the Company.

               1.2  Executive Termination Event:  The term "Executive
Termination Event" shall mean the termination of the Executive's employment
(including a decision to retire if eligible under The 1984 Retirement Plan for
Salaried Employees of The Timken Company, or any successor plan (the "Retirement
Plan")) by the Executive in any of the following events:


          (a)  A significant reduction or other adverse change in the nature
               or scope of the responsibilities, authorities, duties, powers or
               functions (including status, offices, titles and reporting
               requirements) of the Executive, not effected at the request or
               with the consent of the Executive;

          (b)  A reduction by the Company in the Executive's annual base
               salary, as the same may be increased from time to time;

          (c)  The failure by the Company (i) to continue in effect without
               substantial change any compensation or benefit plan in which the
               Executive participates that is material to his total
               compensation, unless an equitable arrangement (embodied in an
               ongoing substitute or alternative plan) has been made with
               respect to such plan, or (ii) to continue the Executive's
               participation therein (or in such substitute or alternative
               plan) on a basis not materially less favorable, both in terms of
               the amount of benefits provided and the level of the Executive's
               participation relative to other participants;

          (d)  The material breach by the Company of any provision of any
               material agreement between the Executive and the Company,
               excluding for this purpose an isolated and inadvertent action
               not taken in bad faith and remedied by the Company within 30
               days after receipt of notice from the Executive.

          2.   Executive Severance Compensation:

               2.1  Severance Compensation:  If the Executive's employment is
terminated other than pursuant to a Company Termination Event, or if the
Executive voluntarily terminates his employment pursuant to an Executive
Termination Event, during the first three years, then the Company will:
(a) pay to the Executive a lump sum cash payment equal to two times the sum of
the Executive's base salary plus target bonus for the year in which the
Executive's employment is terminated, (b) pay for individual executive
outplacement services for the Executive for 12 months beginning on the
termination date (or until such earlier date upon which the Executive has
secured other full-time employment), and (c) provide to the Executive and his
eligible dependants coverage, at no cost to the Executive, under (or benefits
substantially similar to) the Company's medical and dental plans for 24 months
beginning on the termination date.  In the event the Executive's employment is
terminated after the end of the third year, the Company and the Executive will
negotiate in good faith an appropriate severance arrangement, taking into
consideration the Executive's position with the Company.

               2.2  Payment:  In the event the Executive receives compensation
under the Severance Agreement between the Executive and the Company (the
"Severance Agreement"), the Executive will no longer be entitled to the
severance compensation described in section 2.1 of this Executive Severance
Agreemennt.  In the event that the Executive becomes eligible to receive
compensation under the Severance Agreement after he has already received
compensation under this Executive Severance Agreement, all amounts received by

                                       2


the Executive under this Executive Severance Agreement shall be deducted from
the amount the Executive is entitled to under the Severance Agreement and the
Executive shall receive the remaining benefits under the Severance Agreement.

               2.3  Release:  Payment of the severance compensation described
section 2.1 of this Executive Severance Agreement is conditioned upon the
Executive executing and delivering a release reasonably satisfactory to the
Company releasing the Company from any and all claims, demands, damages,
actions and/or causes of action whatsoever, which the Executive may have on
account of the termination of his employment; provided, however, that such
release will not release the Company of its obligations to the Executive under
the preceding paragraph or any other contractual obligations between the
Company or its affiliates and the Executive, or any indemnification obligations
to the Executive under the Company's Regulations, Articles of Incorporation,
state law, or otherwise.

          3.   Employment Rights:  Either the Company or the Executive may
terminate the Executive's employment with the Company at any time.

          4.   Successors and Binding Agreement:  The obligations set forth in
this agreement shall inure to the benefit of and be enforceable by the
Executive's legal representatives and shall inure to the benefit of and be
binding upon the Company and its successors and assigns.

               IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the date first set forth above.

                                    /s/ Glenn A. Eisenberg
                                    ______________________
                                        Glenn A. Eisenberg

                                   THE TIMKEN COMPANY

                                   By:   /s/ William R. Burkhart
                                       __________________________________
                                       Name:  William R. Burkhart
                                       Title:    Sr. VP & General Counsel

                                       3

EX-12

                                  EXHIBIT 12

               COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

                                       Twelve Months Ended   Three Months Ended
                                       Dec. 31    Dec. 31   Dec. 31    Dec. 31
                                        2002       2001      2002       2001
                                      --------   --------  --------   --------
                                   (Thousands of Dollars, except ratio amounts)
Income (loss) before income taxes,
      extraordinary item and
      cumulative effect of
      accounting changes              $ 85,518   $(26,883) $ 58,173   $  8,643
Amortization of capitalized interest     2,872      2,810       708        800
Interest expense                        31,540     33,401     7,544      7,588
Interest portion of rental expense       1,391      2,585       278        975

                                      --------   --------  --------   --------
Earnings                              $121,321   $ 11,913  $ 66,703   $ 18,006
                                      ========   ========  ========   ========

Interest                              $ 31,975   $ 34,824  $  7,740   $  8,477
Interest portion of rental expense       1,391      2,585       278        975
                                      --------   --------  --------   --------
Fixed Charges                         $ 33,366   $ 37,409  $  8,018   $  9,452
                                      ========   ========  ========   ========

Ratio of Earnings to Fixed Charges        3.64       0.32      8.32       1.90
                                      ========   ========  ========   ========

EX-13

EXHIBIT 13

ANNUAL REPORT TO SHAREHOLDERS
FOR THE YEAR ENDED DECEMBER 31, 2002

FINANCIAL summary

2002		2001
(Thousands of dollars, except per share data)
Net sales Impairment and restructuring charges Income (loss) before income taxes and  cumulative effect of change in accounting principle Provision for income taxes Income (loss) before cumulative effect of  change in accounting principle Net income (loss) Earnings per share Earnings per share - assuming dilution Dividends per share	$ 2,550,075 32,143   85,518 34,067   $ 51,451 $ 38,749 $ .63 $ .62 $ .52	$ 2,447,178 54,689   (26,883) 14,783   (41,666) $ (41,666) $ (.69) $ (.69) $  .67

QUARTERLY financial data

2002	Net Sales	Gross Profit	Impairment & Restructuring	Net Income (Loss)	Earnings per Share(3)		Dividends per Share
					Basic	Diluted
(Thousands of dollars, except per share data)
Q1(1) Q2 Q3(3) Q4	$ 615,757 660,829 628,591 644,898	$ 118,642 124,301 111,262 115,372	$ 3,057 14,226 7,703 7,157	$ (3,514) 3,960 1,837 36,466(2)	$ (.06) .07 .03 .58	$ (.06) .07 .03 .57	$ .13 .13 .13 .13
	$ 2,550,075	$ 469,577	$ 32,143	$ 38,749	$ .63	$ .62	$ .52
2001
(Thousands of dollars, except per share data)
Q1 Q2 Q3 Q4	$ 661,516 634,389 577,698 573,575	$ 118,014 111,083 90,951 80,672	$ 7,907 16,859 24,639 5,284	$ 2,222 (14,574) (30,532) 1,218(2)	$ .04 (.24) (.51) .02	$ .04 (.24) (.51) .02	$ .18 .18 .18 .13
	$ 2,447,178	$ 400,720	$ 54,689	$ (41,666)	$ (.69)	$ (.69)	$ .67

(1) Net income (loss) and earnings per share for Q1 reflect the cumulative effect of change in accounting principle in accordance with the adoption of
Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets." The change reduced net income (loss) by $12.7 million or $.21 per share.
(2) Includes receipt (net of expenses) of $50.2 million and $29.6 million in 2002 and 2001 resulting from the U.S. Continued Dumping and Subsidy Offset Act.
(3) Annual earnings per share do not equal the sum of the individual quarters due to differences in the average number of shares outstanding during the respective periods.

2002 Stock Prices			2001 Stock Prices
	High	Low		High	Low
Q1 Q2 Q3 Q4	$ 24.50 27.41 24.00 20.27	$ 15.35 20.50 16.54 14.92	Q1 Q2 Q3 Q4	$ 17.38 18.65 17.16 16.49	$ 14.63 14.89 11.75 13.04

 

1

CONSOLIDATED statement of operations

	Year Ended December 31
2002		2001	2000
(Thousands of dollars, except per share data)
Net sales Cost of products sold	$ 2,550,075 2,080,498	$ 2,447,178 2,046,458	$ 2,643,008 2,142,135
Gross Profit   Selling, administrative and general expenses Impairment and restructuring charges	469,577   358,866 32,143	400,720   363,683 54,689	500,873   367,499 27,754
Operating Income (Loss)   Interest expense Interest income Receipt of Continued Dumping & Subsidy Offset Act (CDSOA) payment Other expense - net	78,568   (31,540) 1,676 50,202 (13,388)	(17,652)   (33,401) 2,109 29,555 (7,494)	105,620   (31,922) 3,479 - (6,580)
Income (Loss) Before Income Taxes and Cumulative Effect  of Change in Accounting Principle Provision for income taxes	85,518 34,067	(26,883) 14,783	70,597 24,709
Income (Loss) Before Cumulative Effect of Change   in Accounting Principle	$ 51,451	$ (41,666)	$ 45,888
Cumulative effect of change in accounting principle  (net of income tax benefit of $7,786)	(12,702)	-	-
Net Income (Loss)   Earnings Per Share:  Income (loss) before cumulative effect of change   in accounting principle  Cumulative effect of change in accounting principle	$ 38,749         $0.84 (0.21)	$ (41,666)         $(0.69) -	$ 45,888         $0.76 -
Earnings Per Share   Earnings Per Share - Assuming Dilution:  Income (loss) before cumulative effect of change   in accounting principle  Cumulative effect of change in accounting principle	$ 0.63         $ 0.83 (0.21)	$ (0.69)         $(0.69) -	$ 0.76         $(0.76) -
Earnings Per Share - Assuming Dilution	$ 0.62	$ (0.69)	$ 0.76

See accompanying Notes to Consolidated Financial Statements on pages 33 through 46.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF THE STATEMENT OF OPERATIONS

2002 compared to 2001

Net sales for 2002 were $2.550 billion, an increase of 4.2% from 2001's $2.447 billion. The company's 2002 results for both Automotive Bearings and Steel benefited from increased demand in the automotive industry. North American light truck production was strong throughout the year, and heavy truck demand remained strong throughout 2002 because of stricter emissions standards for heavy trucks enacted in the fourth quarter of 2002, which were anticipated by the market and its customers. However, industrial markets around the world showed few signs of recovery. Both rail and global aerospace demand remained weak. Gross profit in 2002 was $469.6 million (18.4% of net sales), an increase of 17.2% from $400.7 million (16.4% of net sales) in 2001. The improvement resulted from higher sales volume, higher productivity, cost containment and savings generated from the company's manufacturing strategy initiative (MSI). Partially offsetting these positive items were increased costs due to manufacturing inefficiencies caused by capacity constraints related to MSI equipment rationalization and higher raw material costs. In addition, the discontinuation of goodwill amortization, which had a pretax effect of $6.1 million in 2001, favorably impacted 2002 gross profit. Gross profit was reduced by $8.6 million and $7.7 million in reorganization expenses in 2002 and 2001, respectively. Selling, administrative and general expenses decreased to $358.9 million (14.1% of net sales) in 2002, compared to $363.7 million (14.9% of net sales) in 2001. Reorganization costs included in selling, administrative and general expenses were $9.9 million in 2002, compared to $4.9 million in 2001. Reorganization costs increased by $5.0 million in 2002, and employee performance-based compensation was higher in 2002 because of the company's improved performance. However, the increase was more than offset by the salaried headcount and business cost reductions achieved through the strategic manufacturing and salaried workforce reduction initiatives. Operating income for 2002 was

22

TIMKEN

 MANAGEMENT’S DISCUSSION AND ANALYSIS OF THE STATEMENT OF OPERATIONS (CONTINUED)

$78.6 million compared to a loss of $17.6 million in 2001. In 2002, the company recorded $32.1 million in restructuring costs and $18.5 million in reorganization costs, compared to $54.7 million in restructuring costs and $12.6 million in reorganization costs in 2001. In December 2002, the company completed the second phase of the strategic global refocusing of its manufacturing operations announced in April 2001 to enable the company to more profitably execute its business strategies. MSI included: creating focused factories for each product line or component; reducing fixed costs; increasing production at the company's lower-cost plants; and implementing more efficient, higher product quality manufacturing processes to continue to improve product quality and productivity. As part of MSI in 2001, the company announced its intention to close bearing plants in Columbus, Ohio, and Duston, England; to sell a tooling plant in Ashland, Ohio; and reduce employment by approximately 1,500 by the end of 2002. In August 2001, the company announced and implemented additional cost-saving actions by reducing capital spending, delaying or scaling back certain projects and reducing salaried employment. The reductions affected approximately 300 salaried associates concentrated in North America and Western Europe and were in addition to the 1,500 previously announced. These additional salaried associates exited the company by the end of 2001. Manufacturing operations at the Columbus and Duston bearing plants ceased in November 2001 and September 2002, respectively. Additionally, on June 30, 2002, the company sold its Ashland plant. As a result of MSI and the salaried workforce reduction, the company has targeted an annualized pretax rate of savings of approximately $120 million by the end of 2004. Attributable to MSI and the salaried workforce reduction, the company achieved an estimated annual pretax savings rate of $80 million through December 31, 2002. To implement the MSI and salaried workforce initiatives during 2001 and 2002, the company expected to take approximately $100-$110 million in restructuring, impairment and reorganization charges by December 31, 2002. In total for 2001 and 2002, the company actually incurred $107.4 million in cumulative restructuring, impairment and reorganization charges related to the MSI and salaried workforce reduction programs. MSI-related charges were completed in 2002. For the year ended December 31, 2002, the company incurred $50.6 million in restructuring and reorganization charges. A breakdown of these expenses is as follows (in millions of dollars): The $17.9 million in impairment expense and $4.0 million in exit costs are related to the Duston and Columbus plant closures. The severance and curtailment expenses incurred during 2002 primarily related to the salaried workforce reduction in Automotive, Industrial and corporate functions, as well as certain Ashland plant associates. Also, in late 2002, the Steel Business reduced its salaried workforce. These Steel associates exited the company prior to December 31, 2002, and their positions have been eliminated. From the announcement in April 2001 through the end of 2002, 1,824 associates left the company as a result of actions taken through MSI and the salaried workforce reduction initiatives. Of that number, 1,304 people were primarily associates from the Duston and Columbus plants, as well as associates included in the worldwide salaried workforce reduction program for whom severance has been paid. In addition, 99 associates left the company as a result of selling the Ashland plant. The remaining 421 associates retired or voluntarily left the company, and their positions have been eliminated. For additional information regarding impairment and restructuring, please refer to footnote 5 in the notes to consolidated financial statements. The company received gross amounts of approximately $54 million and $31 million in 2002 and 2001, respectively, from the U.S. Treasury Department under the U.S. Continued Dumping and Subsidy Offset Act (CDSOA), which requires that tariffs collected on dumped imports be directed to the industries harmed. CDSOA payments for 2002 and 2001, net of expenses, were $50.2 million and $29.6 million. In September 2002, the World Trade Organization (WTO) ruled that such payments violate international trade rules. The U.S. Trade Representative appealed this ruling; however, the WTO upheld the ruling on January 16, 2003. The company continues to believe the U.S. law is appropriate and justified; however, the company may not receive payments under the CDSOA in 2003 or future years, and the company cannot predict the amount of any such payments. Other expense increased in 2002 primarily as a result of the decrease in income from gains on sales of properties from 2001. Foreign currency translation losses related to non-hyperinflationary economies totaled $1.3 million in 2002, compared to $0.4 million in 2001. The company's subsidiary in Romania is considered to operate in a highly inflationary economy. In 2002, the company recorded unrealized exchange losses of $0.9 million related to the translation of Timken Romania's financial statements, compared to $2.3 million in 2001. The 2002 effective tax rate was higher than the statutory tax rate as a result of taxes paid to state and local jurisdictions, withholding taxes on foreign remittances, additional taxes on foreign income and the aggregate effect of other permanently non-deductible expenses. Although the company recorded a loss before income taxes for 2001, a consolidated tax provision was recorded because the company generated income in certain jurisdictions where taxes must be provided and, in other jurisdictions, losses which were not available to reduce overall tax expense. The 2002 income before cumulative effect of change in accounting principle was $51.4 million, compared to a loss in 2001 of $41.7 million for the reasons as described above. The diluted earnings per share for income before cumulative effect of change in accounting principle was $0.83, compared to a loss of $0.69 per diluted share in 2001. In accordance with the adoption of Statement of Financial Accounting Standards (SFAS) No. 142, "Goodwill and Other Intangible Assets," the company recorded a transitional impairment loss of $12.7 million, net of an income tax benefit of $7.8 million, which relates to the Specialty Steel business. This transitional impairment loss was recorded as a non-cash charge and is reflected as the cumulative effect of a change in accounting principle. Net income for 2002 was $38.7 million compared to a net loss of $41.7 million in 2001. The 2002 diluted earnings per share was $0.62, as compared to a loss of $0.69 per diluted share in 2001.

Impairment expense Severance expense Curtailment expense Exit costs Reorganization expense:   Cost of products sold   Selling, administrative and general expenses	$ 17.9 3.5 6.7 4.0   8.6 9.9
Total expenses	$ 50.6

23

 MANAGEMENT’S DISCUSSION AND ANALYSIS OF THE STATEMENT OF OPERATIONS (CONTINUED)

On October 16, 2002, the company announced an agreement with Ingersoll-Rand Company Limited to acquire its Engineered Solutions business, including certain operating assets and its subsidiary, The Torrington Company, a leading worldwide producer of needle roller, heavy-duty roller and ball bearings, and motion control components and assemblies, for cash and stock valued at approximately $840 million. Under terms of the agreement, Ingersoll-Rand received $700 million in cash, subject to post-closing adjustments, and $140 million worth of the company's common stock. Automotive Bearings
The Automotive Bearings segment manufactures and distributes products for passenger cars, light- and heavy-duty trucks and trailers. Automotive Bearings' sales for 2002 increased 11.9% to $840.8 million from $751.0 million in 2001. Widespread incentive programs on light-trucks and changing environmental regulations on heavy trucks drove North American demand in 2002. North American light-truck production was up 8.4% from 2001, medium- and heavy-duty truck production was up 1.9% and trailer production was down approximately 11% from 2001 levels. Seven new vehicle platform launches in 2002 increased sales by $67.6 million. The European automotive market was weak in 2002 and is not expected to show signs of improvement in 2003. The global automotive industry is expected to soften in 2003. However, this will not be uniform in all areas of the world. In North America, light truck production is projected to be flat from 2002's strong levels, and medium and heavy truck production is projected to be greater than 10%. Excluding $28.7 million in restructuring and reorganization charges and the $10.8 million allocated portion of the CDSOA payment, net of expenses, Automotive's EBIT was $32.6 million in 2002. Excluding $31.0 million in restructuring and reorganization charges and the $2.5 million allocated portion of the CDSOA payment, net of expenses, 2001 Automotive's EBIT was a loss of $11.4 million. Including these special charges and CDSOA payments in 2002 and 2001, Automotive's EBIT was $14.7 million, compared to a loss of $39.9 million in 2001. The improvement in EBIT resulted from: increased sales volume; increased savings enhanced by the manufacturing strategy and salaried cost reduction initiatives; aggressive business cost control; and a LIFO liquidation. These increases more than offset the adverse impact of operating inefficiencies resulting from capacity constraints caused by equipment rationalization related to MSI and costs incurred to meet higher-than-expected customer demand. Automotive's selling, administrative and general expenses were lower than a year ago, primarily due to salaried workforce and business cost reductions. Despite an increase in reorganization charges and employee performance-based compensation, Automotive was able to achieve significant cost savings in 2002. On April 8, 2002, the company announced an agreement with NSK Ltd. to form a joint venture to build a plant near Shanghai, China to manufacture certain tapered roller bearing product lines. Production is scheduled to start early in 2004. Ownership of this joint venture, Timken-NSK Bearings (Suzhou) Co. Ltd., is divided evenly between NSK Ltd. and the company. On June 27, 2002, the company announced an agreement with two Japan-based companies, Sanyo Special Steel Co., Ltd. and Showa Seiko Co., Ltd., to form a joint venture, Advanced Green Components, LLC, to supply forged and machined rings for bearing manufacture. The joint venture acquired the assets of the company's Winchester, Kentucky plant and commenced operations on November 1, 2002. Industrial Bearings
The Industrial Bearings Business provides products for general industrial, rail, aerospace and super precision applications as well as for emerging markets in China, India and Central and Eastern Europe. Industrial's 2002 net sales of $883.5 million were flat compared to net sales of $882.3 million in 2001. Soft markets and reduced demand created challenges for Industrial throughout 2002. Although general industrial demand strengthened modestly in 2002, this strength was offset by weaker demand from aerospace and rail customers. Rail demand is expected to remain depressed, and aerospace demand shows no near-term signs of improvement as customers reduce build rates. Industrial markets are showing limited signs of modest recovery. Excluding $18.0 million in restructuring and reorganization charges and the $39.4 million allocated portion of the CDSOA payment, net of expenses, EBIT for Industrial was $51.5 million in 2002. Excluding $33.5 million in restructuring and reorganization charges, the $27.0 million allocated portion of the CDSOA payment, net of expenses, and $4.8 million in goodwill amortization, 2001 Industrial EBIT was $43.4 million. Including these special charges, CDSOA payments in 2002 and 2001 and goodwill amortization, EBIT for Industrial was $72.9 million, compared to $32.1 million in 2001. The EBIT improvement, despite relatively flat volumes, resulted from: the improved sales mix; efficiency improvements from MSI and the salaried cost reduction initiative; discontinuation of goodwill amortization; and aggressive business cost control. This improvement was tempered by weakened demand in aerospace and super precision, which resulted in additional costs associated with surplus capacity, reduced work schedules and redundancy costs as operations were slowed. Industrial's selling, administrative and general expenses in 2002 were lower than 2001. This decrease was primarily due to salaried workforce reductions, which more than offset the increase in employee performance-based compensation. Steel
Steel net sales, including intersegment sales, increased 2.2% to $981.3 million in 2002, compared to $960.4 million in 2001. Sales to automotive and general industrial customers in 2002 increased 19.2% and 18.8%, respectively, compared to 2001. However, sales to other customers continued to be sluggish. Aerospace sales decreased 11.1%, compared to 2001. Additionally, sales to oil country and steel service center customers continued to be depressed. The company expects a slight softening in automotive markets with modest improvement in construction, mining and agriculture sectors. Although the company expects significant improvement for the energy sector, non-defense aerospace is expected to remain weak. Excluding Steel's portion of restructuring charges and reorganization charges of $3.8 million, Steel's 2002 EBIT more than doubled to $32.5 million, compared to 2001 EBIT of $13.4 million, which excluded $2.7 million in restructuring and reorganization charges and $1.2 million in goodwill amortization. Including these special charges, Steel's 2002 EBIT was $28.7 million, compared to $9.3 million in 2001. The EBIT increase

24

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resulted from continued cost-control actions and improved productivity. In 2002, Steel reduced operating costs through a combination of price reductions, product substitution and lower consumption. Although scrap and alloy costs in 2002 increased 8.1% from 2001 levels, electricity and natural gas costs were lower and contributed to the improved EBIT performance. Additionally, 2002 labor productivity increased compared to 2001 as a result of efficiency improvements and increased production levels. In 2002, plant capacity utilization was between 70% and 80%, varying by business and product, which was slightly better than 2001. Steel's selling, administrative and general expenses in 2002 were slightly higher than 2001 primarily due to the increase in employee performance-based compensation, which was partially offset by savings associated with the salaried workforce reductions. 2001 compared to 2000
Net sales of $2.4 billion decreased 7.4% from $2.6 billion in 2000. Continuing weakness in industrial demand and the U.S. manufacturing recession contributed to the decreased sales and profits for 2001. The strong U.S. dollar continued to hurt business competitiveness in global markets. The company experienced declining demand in key sectors, including North American heavy-duty truck and rail, as well as inventory balancing in the North American light-truck and SUV market. Globally, demand for industrial products decreased in 2001. Aerospace and super precision sales increased modestly over 2000 levels. Sales of steel products in all markets except aerospace were significantly lower. Gross profit in 2001 was $400.7 million, or 16.4% of net sales, down from $500.9 million, or 19.0% of net sales. The impact of the lower sales volume, fueled by weakened automotive and industrial product demand as well as reduced operating levels to control inventory, reduced profitability in 2001, compared to 2000. In 2001, gross profit included $7.7 million in reorganization costs compared to $4.1 million in 2000. In 2001, the economic downturn resulted in a reduction of 777 positions, and the company's restructuring efforts led to an additional 762 reductions. The operating loss of 2001 was $17.6 million, compared to income of $105.6 million in 2000. In 2001, the company recorded restructuring costs of $54.7 million and $12.6 million of reorganization costs, compared to $27.8 million in restructuring costs and $11.1 million in reorganization costs in 2000. Selling, administrative and general expenses decreased to $363.7 million, or 14.9% of net sales, in 2001, compared to $367.5 million, or 13.9% of net sales, in 2000. This decrease was primarily caused by reduced compensation expense. During 2001, the company had two active cost-reduction programs: an efficiency initiative announced in March 2000 and concluded during the first quarter of 2001, and the strategic manufacturing initiative announced in April 2001 to enable the company to more profitably execute business strategies. The efficiency initiative announced in March 2000 concluded during the first quarter of 2001, with total charges of $49.4 million, or $10.5 million in 2001, recorded for impairment, restructuring and reorganization. Of the $49.4 million total charges recorded between March 2000 and March 2001, $20.7 million were impairment expenses, $13.0 million related to restructuring expenses and $15.7 million were reorganization expenses. Total payments of $13.0 million were disbursed as of December 31, 2001. Estimated savings related to this program realized through the end of 2001 approximated $26 million before taxes. During 2001, 106 positions were eliminated due to the efficiency initiative. Combined with positions eliminated during 2000, the total elimination from this initiative was 694 positions. In August 2001, the company announced additional cost-saving actions under the strategic manufacturing initiative. The company took steps to further reduce capital spending, delay or scale back certain projects and reduce salaried employment. The reductions affected about 300 salaried associates concentrated in North America and Western Europe. These associates exited the company by the end of 2001. From the announcement of the strategic manufacturing initiative in April 2001 through the end of 2001, 856 associates left the company. Of that number, 618 people were from the Duston, and Columbus plants, Canadian Timken Ltd. and salaried associates included in the worldwide salaried workforce reduction for whom severance has been paid. The remaining 238 associates retired or voluntarily left the company by the end of the year, and their positions have been eliminated. From the strategic manufacturing initiative, the company had achieved estimated annualized pretax savings of $21.0 million as of the end of 2001. The charges incurred for this initiative through December 31, 2001 totaled $56.8 million. Of that amount, $15.1 million were curtailment charges, $1.5 million were related to impaired assets, $30.8 million were severance expenses, $1.4 million were exit costs and the remaining $8.0 million were reorganization charges classified as cost of products sold ($4.1 million) and selling, administrative and general expenses ($3.9 million). The curtailment charges of $15.1 million were for the pension and postretirement benefits related to the shutdown of the Columbus plant. The $30.8 million of severance costs and $1.4 million in exit costs were related to the shutdown of the Columbus and Duston plants as well as reductions in the salaried workforce. The company received a gross payment of $31.0 million from the U.S. Treasury Department under the CDSOA in the fourth quarter of 2001. This payment, net of expenses, was $29.6 million, and is reflected as a separate component on the consolidated statement of operations. Foreign currency translation losses related to non-hyperinflationary economies totaled $0.9 million in 2001, compared to income of $2.6 million in 2000. The increase in translation losses is related to the continued weakening of European currencies against a strong U.S. dollar and the devaluation of the Brazilian real during 2001. The company's subsidiary in Romania is considered to operate in a highly inflationary economy. In 2001, the company recorded unrealized exchange losses of $2.3 million related to the translation of Timken Romania's financial statements, compared to $4.0 million in 2000. The expense was impacted by the strength of the U.S. dollar. Although the company recorded a loss before income taxes for the twelve months ended December 31, 2001, a consolidated tax provision was recorded as a result of generating income in certain jurisdictions where taxes must be provided and losses in other jurisdictions, which are not available to reduce overall tax expense.

 

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CONSOLIDATED balance sheet

	December 31
2002		2001
(Thousands of dollars) ASSETS Current Assets    Cash and cash equivalents    Accounts receivable, less allowances: 2002–$14,386; 2001–$14,976    Deferred income taxes    Refundable income taxes    Inventories:       Manufacturing supplies       Work in process and raw materials       Finished products	$ 82,050 361,316 36,003 -   34,493 243,485 210,945	$ 33,392 307,759 42,895 15,103   36,658 212,040 180,533
Total Inventories	488,923	429,231
Total Current Assets   Property, Plant and Equipment    Land and buildings    Machinery and equipment	968,292     482,878 2,462,198	828,380     488,540 2,483,253
Less allowances for depreciation	2,945,076 1,718,832	2,971,793 1,666,448
Property, Plant and Equipment-Net   Other Assets    Goodwill    Intangible pension asset    Miscellaneous receivables and other assets    Deferred income taxes    Deferred charges and prepaid expenses	1,226,244     129,943 129,042 100,573 169,051 25,211	1,305,345     150,041 136,118 68,557 27,164 17,479
Total Other Assets	553,820	399,359
Total Assets	$ 2,748,356	$ 2,533,084

MANAGEMENT’S DISCUSSION AND ANALYSIS OF THE BALANCE SHEET

Total assets increased by $215.3 million, primarily because of increases in working capital and deferred income taxes. Accounts receivable increased by $53.6 million or 17.4% from December 31, 2001 as a result of higher sales in the fourth quarter of 2002. The company's consolidated number of days' sales in receivables at December 31, 2002 was 53 days, compared to 51 days as of December 31, 2001. The increase in inventories was $59.7 million. The company's consolidated number of days' supply in inventory at December 31, 2002 was 111 days, an increase of six days from December 31, 2001. Although the Automotive and Industrial Bearings' inventories increased only slightly, the Steel Business days' supply in inventory increased 10 days. The increase in Steel's inventories resulted primarily from the increase in operating levels to meet increased automotive customer demand. In addition, Steel's 2001 days' supply in inventory was extremely low as the result of depressed customer demand in the fourth quarter. The company uses the LIFO method of accounting for approximately 78% of its inventories. Goodwill decreased $20.1 million, primarily because of the impairment writedown of $20.5 million relating to the Specialty Steel business. The writedown was required in accordance with the adoption of SFAS No. 142, "Goodwill and Other Intangible Assets." The intangible pension asset decreased by $7.1 million from December 31, 2001. In 2002, the company recorded additional minimum pension liability of $394.7 million, which is included in accrued pension cost. This increase in the pension liability generated a non- cash aftertax charge to accumulated other comprehensive loss of $254.3 million in 2002. In 2001, the company took a non-cash aftertax charge to accumulated other comprehensive loss of $122.5 million. Lower investment performance in 2002, which reflected lower stock market returns, and lower interest rates reduced the company's pension fund asset values and contributed to an increase in the company's defined benefit pension liability. The lowering of the discount rate from 7.5% to 6.6% also contributed to the increased pension liability. The non-current deferred income tax asset increased at December 31, 2002 primarily due to the recognition of deferred taxes related to the higher pension liabilities and tax operating loss carryforwards. Based on future income projections, the company believes that these deferred income tax assets are realizable in future years. Losses incurred in tax jurisdictions outside of the U.S. during 2002 have been fully reserved by increasing the valuation allowance for deferred income tax assets. Miscellaneous receivables and other assets increased $32.0 million, primarily due to company investments in joint ventures such as Advanced Green Components, LLC and Timken-NSK Bearings (Suzhou)

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	December 31
2002		2001
(Thousands of dollars) LIABILITIES AND SHAREHOLDERS’ EQUITY Current Liabilities    Commercial paper    Short-term debt    Accounts payable and other liabilities    Salaries, wages and benefits    Income taxes    Current portion of long-term debt	$ 8,999 78,354 296,543 222,546 3,847 23,781	$ 1,962 84,468 258,001 254,291 - 42,434
Total Current Liabilities   Non-Current Liabilities    Long-term debt    Accrued pension cost    Accrued postretirement benefits cost    Other non-current liabilities	634,070     350,085 723,188 411,304 20,623	641,156     368,151 317,297 406,568 18,177
Total Non-Current Liabilities	1,505,200	1,110,193
Shareholders’ Equity    Class I and II Serial Preferred Stock without par value:       Authorized–10,000,000 shares each class, none issued    Common stock without par value:       Authorized–200,000,000 shares       Issued (including shares in treasury) (2002 – 63,451,916 shares;        2001 – 63,082,626 shares)       Stated capital       Other paid-in capital    Earnings invested in the business    Accumulated other comprehensive loss    Treasury shares at cost (2002 – 40,074 shares; 2001 – 3,226,544 shares)	-         53,064 257,992 764,446 (465,677) (739)	-         53,064 256,423 757,410 (224,538) (60,624)
Total Shareholders’ Equity	609,086	781,735
Total Liabilities and Shareholders’ Equity	$ 2,748,356	$ 2,533,084

See accompanying Notes to Consolidated Financial Statements on pages 33 through 46.

Co. Ltd., and assets related to the Columbus, Ohio plant which are being held for sale to third parties. In connection with the Advanced Green Components, LLC, joint venture, the company contributed the Winchester, Kentucky plant assets to the joint venture. Accounts payable and other liabilities increased by $38.5 million in 2002, primarily from the increase in purchasing volume to meet the higher production demand and the timing of payments to suppliers. Salaries, wages and benefits decreased by $31.7 million. Although the company increased its employee performance-based pay accruals as a result of the company's improved performance in 2002, the increase was more than offset by the decrease in the current portion of the pension liability. Debt decreased by $35.8 million, to $461.2 million at December 31, 2002 from $497.0 million at the end of 2001. The cash balance at December 31, 2002 was $82.0 million, compared to $33.4 million in 2001. Net debt at the end of 2002 was $379.2 million, down $84.4 million from $463.6 million at the end of 2001. The net-debt-to-capital ratio at December 31, 2002 was 38.4%, compared to 37.2% at the end of 2001. Capital spending in 2002 decreased 11.4% to $90.7 million from total 2001 capital spending of $102.3 million. The company focused on achieving manufacturing improvements by expanding facilities with a lower cost structure, improving quality and reducing labor costs, in accordance with MSI, and investing in new product programs. The reductions in capital spending reflect the company's drive for further efficiency and productivity. Nevertheless, the 43.1% total-debt-to-total-capital ratio was higher than the 38.9% at the end of 2001, due to the decrease in shareholders' equity. On December 19, 2002, the company entered into an agreement to sell, on an ongoing basis, certain domestic trade receivables to Timken Receivables Corporation, a wholly owned, on balance sheet, special- purpose subsidiary. As of December 31, 2002, no trade receivables had yet been sold under the facility. The company is permitted to securitize up to $125 million of accounts receivable under this agreement. The facility will terminate on December 16, 2003, unless extended. In connection with the Torrington acquisition, the company entered into new $875 million senior credit facilities on December 31, 2002, with a syndicate of financial institutions, comprised of a five-year revolving credit facility of up to $500 million and a one-year term loan facility of up to $375 million. The new revolving credit facility replaces the company's existing senior credit facility, and the term loan could have been used as a bridge facility in the Torrington acquisition if long-term senior notes

 

27

CONSOLIDATED statement of cash flows

	Year Ended December 31
2002		2001	2000
(Thousands of dollars) CASH PROVIDED (USED) Operating Activities    Net income (loss)    Adjustments to reconcile net income (loss) to net cash       provided by operating activities:          Cumulative effect of change in accounting principle          Depreciation and amortization          Loss (gain) on disposals of property, plant and equipment          Deferred income tax provision          Common stock issued in lieu of cash to benefit plans          Impairment and restructuring charges          Changes in operating assets and liabilities: Accounts receivable Inventories Other assets Accounts payable and accrued expenses Foreign currency translation loss(gain)	$ 38,749     12,702 146,535 5,904 17,250 5,217 (13,564)   (43,679) (50,611) (3,198) 80,761 10,037	$ (41,666)     - 152,467 (2,233) 23,013 1,441 41,832   44,803 51,247 (16,897) (72,483) (3,886)	$ 45,888     - 151,047 3,982 10,585 1,303 16,813   (22,536) (52,566) (172) 4,046 (1,296)
Net Cash Provided by Operating Activities   Investing Activities    Purchases of property, plant and equipment–net    Proceeds from disposals of property, plant and equipment    Acquisitions	206,103     (85,277) 12,616 (6,751)	177,638     (90,501) 6,357 (12,957)	157,094     (159,157) 2,669 -
Net Cash Used by Investing Activities   Financing Activities    Cash dividends paid to shareholders    Purchases of treasury shares    Proceeds from issuance of long-term debt    Payments on long-term debt    Short-term debt activity–net	(79,412)     (31,713) - - (37,296) (11,498)	(97,101)     (40,166) (2,931) 80,766 (2,176) (90,980)	(156,488)     (43,562) (24,149) 3,478 (3,595) 70,865
Net Cash (Used) Provided by Financing Activities Effect of exchange rate changes on cash	(80,507) 2,474	(55,487) (2,585)	3,037 (622)
Increase In Cash and Cash Equivalents Cash and cash equivalents at beginning of year	48,658 33,392	22,465 10,927	3,021 7,906
Cash and Cash Equivalents at End of Year	$ 82,050	$ 33,392	$ 10,927

See accompanying Notes to Consolidated Financial Statements on pages 33 through 46.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF THE BALANCE SHEET (CONTINUED)

had not been issued prior to closing the Torrington acquisition. Proceeds of the new senior credit facility must be used to repay any amounts outstanding under the existing credit facility, and the existing credit facility must be terminated. As of December 31, 2002, the company had $291.0 million available through its then existing $300.0 million senior credit facility. The company's then existing revolving credit facility and its new senior credit facility contain covenants requiring the company to comply with a maximum debt-to-capital ratio and a minimum fixed charge coverage ratio, and the new senior credit facility also requires the company to maintain a minimum consolidated net worth amount. The company is currently in compliance with the terms of these covenants. Effective February 16, 2003, the company acquired IR's Engineered Solutions business, which is comprised of certain operating assets and subsidiaries, including The Torrington Company. The company paid IR $700 million in cash, subject to post-closing purchase price adjustments, and issued $140 million of its common stock (9,395,973 shares) to Ingersoll-Rand Company, a subsidiary of IR. To finance the cash portion of the transaction the company utilized, in addition to cash on hand: $180 million, net of underwriting discounts and commissions, from a public offering of 12,650,000 shares of common stock at $14.90 per share; $246.9 million, net of underwriting discounts and commissions, from a public offering of $250 million of 5.75% senior unsecured notes due 2010; $125 million from its accounts receivable facility; and approximately $86 million from its new senior credit facility. In connection with the closing of the Torrington acquisition and the funding of its new senior credit facility, the company terminated its then existing $300 million revolving credit agreement. In addition, the company did not utilize the $375 million one-year term loan facility that was a part of the new senior credit facility.

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TIMKEN

MANAGEMENT’S DISCUSSION AND ANALYSIS OF THE BALANCE SHEET (CONTINUED)

On October 17, 2002, Standard & Poor's Rating Services (S&P) announced that it placed its rating with respect to the company on CreditWatch with negative implications. Additionally, Moody's Investors Service (Moody's) announced that it had placed the company's debt rating under review for possible downgrade. These announcements were in response to the company's announcement that it had reached an agreement with Ingersoll-Rand to purchase Torrington. On February 12, 2003, S&P and Moody's announced that each had lowered its respective ratings on the company's outstanding debt, with a stable outlook. The company believes that it has structured the financing of the Torrington acquisition in a manner that will enable it to maintain an investment grade rating, although the company cannot assure that the rating agencies will agree with its view. Ratings reflect the view of the applicable rating agency at the time a rating is issued, and any explanation of the significance of a rating may be obtained only from the rating agency itself. A credit rating is not a recommendation to buy, sell or hold securities. Further downgradings would result in an increase in the interest rate on the new senior credit facility, and could materially adversely affect the company's future ability to obtain funding or could materially increase the cost of any additional funding. Following the Torrington acquisition, to the extent possible, the company intends to continue its efforts to reduce debt. The company expects to satisfy any cash requirements in excess of cash generated from operating activities through drawings under the new revolving credit facility and the accounts receivable facility. The company's contractual debt obligations and contractual commitments outstanding as of December 31, 2002 are as follows (in millions): The company's capital lease obligations are immaterial. The company is the guarantor of $27.5 million in debt for Pel Technologies, LLC, an equity investment of the company. The company is the guarantor for a subsidiary's operating lease of its warehouse facility. This obligation is $16.8 million at December 31, 2002. In connection with the Ashland plant sale, the company entered into a four-year supply agreement. Shareholders' equity decreased $172.6 million in 2002 from 2001. The company recognized $38.7 million in net income, issuances of common stock of $61.4 million resulting from the stock contribution to the pension plan and other stock transactions, and a positive non-cash foreign currency translation adjustment of $14.0 million. However, these increases were more than offset by the minimum pension liability adjustment of $254.3 million and the payment of $31.7 million in dividends. On September 10, 2002, the company issued 3 million shares of its common stock to The Timken Company Collective Investment Trust for Retirement Trusts (Trust) as a contribution to certain company-sponsored pension plans. The value of the 3 million shares of common stock contributed to the Trust was approximately $54.5 million, which consisted of 2,766,955 shares of the company's treasury stock and 233,045 shares issued from authorized common stock.

		Payments Due by Period
	Total	Less than 1 year	1-3 years	4-5 years	After 5 years
Long-term debt Commercial paper Other lines of credit Operating leases Supply agreement	$ 373.9 $ 9.0 $ 78.4 $ 50.2 $ 25.9	$ 23.8 $ 9.0 $ 78.4 $ 12.1 $ 8.5	$ 8.4 - - $ 14.9 $ 12.8	$ 103.6 - - $ 7.0 $ 4.6	$ 238.1 - - $ 16.2 $ -

MANAGEMENT’S DISCUSSION AND ANALYSIS OF THE STATEMENT OF CASH FLOWS

Cash and cash equivalents increased $48.6 million in 2002. Net cash provided by operations in 2002 was $206.1 million, compared to $177.6 million in 2001, due solely to the impact of the increased CDSOA payment received in 2002. Cash generated from income in 2002 was used to fund working capital changes, MSI, capital expenditures, and to reduce debt. The increase in accounts receivable used $43.7 million in cash in 2002. The increase in inventories required $50.6 million of cash in 2002. Although other assets increased significantly in 2002, the cash flow effect was minimal as the increase related to the contribution of assets from property, plant and equipment invested in the Advanced Green Components, LLC joint venture as well as Columbus plant assets for sale, which are classified in 2002 as assets "held for sale." Cash was provided by an $80.8 million increase in accounts payable and accrued expenses due primarily to the increases in amounts reserved for employee performance-based compensation due to the company's improved performance in 2002, and amounts payable to suppliers. Purchases of property, plant and equipment-net were $85.3 million in 2002, compared to $90.5 million in 2001. During 2002, the company did not purchase any shares of its common stock under the company's 2000 common stock purchase plan. This plan authorizes the company to buy up to 4 million shares of common stock in the open market or in privately negotiated transactions, which are to be held as treasury shares and used for specified purposes. The company may exercise this authorization until December 31, 2006. The company does not expect to be active in repurchasing shares in the near-term. Under the company's new revolving credit facility, only $20 million in common shares may be repurchased in any one year.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF OTHER INFORMATION

Recent Accounting Pronouncements

In October 2001, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 144, "Accounting for Impairment or Disposal of Long-Lived Assets." SFAS No. 144 supersedes SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of." SFAS No. 144 retains the existing requirements for long-lived assets to be held and used, but it establishes one accounting model for long-lived assets to be disposed of by sale and revises guidance for assets to be disposed of other than by sale. Adoption of SFAS No. 144 did not have any effect on the company's financial position or results of operations. In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities," which addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies Emerging Issues Task Force (EITF) Issue

 

29

 MANAGEMENT’S DISCUSSION AND ANALYSIS OF OTHER INFORMATION (CONTINUED)

No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)." SFAS No. 146 requires that a liability for a cost associated with an exit or disposal activity be recognized and measured initially at fair value only when the liability is incurred. Under EITF Issue No. 94-3, a liability for an exit cost was recognized at the date of an entity's commitment to an exit plan. SFAS No. 146 is effective for exit and disposal activities that are initiated after December 31, 2002. SFAS No. 146 has no effect on charges recorded for exit activities begun prior to this date. As such, the company continues to recognize restructuring costs in connection with MSI in accordance with EITF Issue No. 94-3. The company does not expect the adoption of this statement to have a material effect on our financial position or results of operations. In November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others" (the Interpretation). The Interpretation's disclosure requirements are effective for financial statements of interim or annual periods ending after December 15, 2002. The initial recognition and initial measurement provisions are applicable on a prospective basis to guarantees issued or modified after December 31, 2002. The Interpretation requires certain guarantees to be recorded at fair value. The guarantor's previous accounting for guarantees issued prior to the date of initial application should not be revised or restated. On January 17, 2003, the FASB issued Interpretation No. 46, "Consolidation of Variable Interest Entities." In general, a variable interest entity is a corporation, partnership, trust or any other legal structure used for business purposes that either (a) does not have equity investors with voting rights or (b) has equity investors who do not provide sufficient financial resources for the entity to support its activities. Interpretation 46 requires a variable interest entity to be consolidated by a company if that company is subject to a majority of the risk of loss from the variable interest entity's activities or entitled to receive a majority of the entity's residual returns or both. The consolidation requirements of Interpretation 46 apply immediately to variable interest entities created after January 31, 2003. The consolidation requirements apply to pre-existing entities in the first fiscal year or interim period beginning after June 15, 2003. Certain of the disclosure requirements apply in all financial statements issued after January 31, 2003, regardless of when the variable interest entity was established. The company is currently evaluating the impact of Interpretation 46 on the financial position of the company. Critical Accounting Policies and Estimates
The company's financial statements are prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. The following paragraphs include a discussion of some critical areas that require a higher degree of judgment, estimates and complexity. The company's revenue recognition policy is to recognize revenue when title passes to the customer. This occurs generally at the shipping point, except for certain exported goods, for which it occurs when the goods reach their destination. Selling prices are fixed, based on purchase orders or contractual arrangements. Write-offs of accounts receivable historically have been low. As noted above, it is the company's policy to recognize restructuring costs in accordance with EITF 94-3 and the SEC Staff Accounting Bulletin No. 100, "Restructuring and Impairment Charges." Detailed contemporaneous documentation is maintained and updated on a monthly basis to ensure that accruals are properly supported. If management determines that there is a change in the estimate, the accruals are adjusted to reflect this change. The company sponsors a number of defined benefit pension plans, which cover most associates, except for those at certain international locations who are covered by government plans. The company also sponsors several unfunded postretirement plans that provide health care and life insurance benefits for eligible retirees and dependents. The measurement of liabilities related to these plans is based on management's assumptions related to future events, including return on pension plan assets, rate of compensation increases and health care cost trend rates. The discount rate is determined using a model that matches corporate bond securities against projected future pension and postretirement disbursements. Actual pension plan asset performance either reduces or increases net actuarial gains or losses in the current year, which ultimately affects net income in subsequent years. For expense purposes in 2002, the company applied a discount rate of 7.5% and an expected rate of return of 9.5% for the company's pension plan assets. For 2003 expense, the company reduced the discount rate to 6.6%. Also, the assumption for expected rate of return on plan assets was changed from 9.5% to 8.75% for 2003. This change, along with the lower discount rate, will result in an increase in 2003 pretax pension expense of approximately $25 million. A 0.25% reduction in the discount rate would increase pension expense by approximately $6 million for 2003. A 0.25% reduction in the expected rate of return would increase pension expense by approximately $3.4 million for 2003. For measurement purposes, the company assumed a weighted- average annual rate of increase in the per capita cost (health care cost trend rate) for medical benefits of 9.0% for 2003, declining gradually to 6.0% in 2006 and thereafter for pre-age 65 benefits; 6.0% for post-age 65 benefits for all years; and 15.0% for 2003, declining gradually to 6.0% in 2014 and thereafter for prescription drug benefits. The assumed health care cost trend rate has a significant effect on the amounts reported. A one-percentage-point increase in the assumed health care cost trend rate would have increased the 2002 total service and interest cost components by $2.1 million and would have increased the postretirement benefit obligation by $32.0 million. A one-percentage-point decrease would provide corresponding reductions of $1.9 million and $28.6 million, respectively. SFAS No. 109, "Accounting for Income Taxes," requires that a valuation allowance be established when it is more likely than not that all or a portion of a deferred tax asset will not be realized. The company estimates actual current tax due and assesses temporary differences resulting from the treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities that are

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included within the balance sheet. Based on known and projected earnings information and prudent tax planning strategies, the company then assesses the likelihood that the deferred tax assets will be recovered. To the extent that the company believes recovery is not likely, a valuation allowance is established. In the event that the company determines the realizability of deferred tax assets in the future is in excess of the net recorded amount, an adjustment to the deferred tax asset would increase income in the period in which such determination was made. Likewise, if the company determines that it is unlikely that all or part of the net deferred tax asset will be realized in the future, an adjustment to the deferred tax asset would be charged to expense in the period in which such determination was made. Net deferred tax assets relate primarily to pension and postretirement benefits, which the company believes will result in future tax benefits. Significant management judgment is required in determining the provision for income taxes, deferred tax assets and liabilities, and any valuation allowance recorded against net deferred tax assets. Historically, actual results have not differed significantly from those determined using the estimates described above. Other Matters
Changes in short-term interest rates related to three separate funding sources impact the company's earnings. These sources are commercial paper issued in the United States, floating rate tax-exempt U.S. municipal bonds with a weekly reset mode, and short-term bank borrowings at international subsidiaries. If the market rates for short-term borrowings increased by 1% around the globe, the impact would be an increase in interest expense of $1.3 million with a corresponding decrease in income before taxes of the same amount. The amount was determined by considering the impact of hypothetical interest rates on the company's borrowing cost, year-end debt balances by category and an estimated impact on the tax-exempt municipal bonds' interest rates. Fluctuations in the value of the U.S. dollar compared to foreign currencies, predominately in European countries, also impact the company's earnings. The greatest risk relates to products shipped between the company's European operations and the United States. Foreign currency forward contracts and options are used to hedge these intracompany transactions. Additionally, hedges are used to cover third-party purchases of product and equipment. As of December 31, 2002, there were $72.1 million hedges in place. A uniform 10% weakening of the dollar against all currencies would have resulted in a change of $6.5 million on these hedges. In addition to the direct impact of the hedged amounts, changes in exchange rates also affect the volume of sales or foreign currency sales price as competitors' products become more or less attractive. On March 5, 2002, pursuant to Section 201 of the U.S. Trade Act of 1974, President Bush signed a proclamation imposing increased tariffs for a three-year period on imports of hot-rolled and cold-finished steel bar imports, in response to the ITC finding that the U.S. steel industry was being injured as a result of excessive imports by international competitors. The remedy for these product categories is three years of tariffs at 30%, 24% and 18%. Rulings adverse to the United States or substantial political pressures could, however, result in the President changing the remedy, granting substantial exemptions from the remedy, or terminating the remedy entirely prior to the end of the three- year period. In November 2002, the U.S. government initiated additional consultations with U.S. steel consumers and international producers to discuss potential exemptions from the increased tariffs. Moreover, while the President's decision to implement a Section 201 remedy is not appealable to U.S. courts, foreign governments and other countries may appeal, and some have appealed to the World Trade Organization (WTO). The European Union, Japan and other countries are currently prosecuting these appeals. These dispute settlement proceedings at the WTO and further appeals to the Appellate Body of the WTO generally take 15 to 24 months. Additionally, a number of affected countries have imposed or threatened to impose various retaliatory tariffs on U.S. steel or other products or have sought various product exemptions from the imposition of the tariffs. On July 30, 2002, the board of directors elected James W. Griffith chief executive officer. He assumed primary and executive responsibility for the strategy and performance of the company. He continues to serve as president and as a director. In January 2003, the board of directors elected Sallie B. Bailey senior vice president - finance and controller. She continues to serve as an officer of the company. On January 31, 2003, the board of directors declared a quarterly cash dividend of $0.13 per share, payable on March 4, 2003 to shareholders of record as of February 14, 2003. This is the 323rd consecutive dividend paid on the common stock of the company. The company continues to protect the environment and comply with environmental protection laws. Additionally, it has invested in pollution control equipment and updated plant operational practices. The company is committed to implementing a documented environmental management system worldwide and to becoming certified under the ISO 14001 standard to meet or exceed customer requirements. By the end of 2002, eleven of the company's plants had obtained ISO 14001 certification. Six additional plants are on schedule to be certified by July 2003. The company believes it has established adequate reserves to cover its environmental expenses and has a well-established environmental compliance audit program, which includes a proactive approach to bringing its domestic and international units to higher standards of environmental performance. This program measures performance against local laws, as well as standards that have been established for all units worldwide. It is difficult to assess the possible effect of compliance with future requirements that differ from existing ones. As previously reported, the company is unsure of the future financial impact to the company that could result from the United States Environmental Protection Agency's (EPA's) final rules to tighten the National Ambient Air Quality Standards for fine particulate and ozone. The company and certain of its U.S. subsidiaries have been designated as potentially responsible parties by the United States EPA for site investigation and remediation at certain sites under the Comprehensive Environmental Response, Compensation and Liability Act (Superfund). The claims for remediation have been asserted against numerous other entities, which are believed to be financially solvent and are expected to fulfill their proportionate share of the obligation. Management believes any ultimate liability with respect to all pending actions will not materially affect the company's operations, cash flows or consolidated financial position.

 

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CONSOLIDATED statement of shareholders’ equity

		Common Stock		Earnings Invested in the Business	Accumulated Other Comprehensive Loss
	Total	Stated Capital	Other Paid-In Capital			Treasury Stock
(Thousands of dollars, except share data) Year Ended December 31, 2000 Balance at January 1, 2000 Net income Foreign currency translation adjustments   (net of income tax of $1,137) Minimum pension liability adjustment   (net of income tax of $301) Total comprehensive income Dividends–$0.72 per share Purchase of 1,354,000 shares for treasury Issuance of 123,068 shares from treasury(1)	$ 1,045,981 45,888   (21,293)           514 25,109 (43,562) (24,149) 1,303	$ 53,064	$ 258,287                  (1,414)	$ 836,916 45,888           (43,562)	$ (64,134)     (21,293)   514	$ (38,152)               (24,149) 2,717
Balance at December 31, 2000	$ 1,004,682	$ 53,064	$ 256,873	$ 839,242	$ (84,913)	$ (59,584)
Year Ended December 31, 2001 Net loss Foreign currency translation adjustments   (net of income tax of $963) Minimum pension liability adjustment   (net of income tax of $61,892) Cumulative effect of change in   method of accounting Change in fair value of derivative   financial instruments Reclassification adjustments -   contract settlements Total comprehensive loss Dividends–$0.67 per share Purchase of 206,300 shares for treasury Issuance of 97,225 shares from treasury(1)	(41,666)   (15,914)   (122,520)   (34)   (1,560)           403 (181,291) (40,166) (2,931) 1,441		(450)	(41,666)                       (40,166)	(15,914)   (122,520)   (34)   (1,560)   403	(2,931) 1,891
Balance at December 31, 2001	$ 781,735	$ 53,064	$ 256,423	$ 757,410	$ (224,538)	$ (60,624)
Year Ended December 31, 2002 Net income Foreign currency translation adjustments   (net of income tax of $2,843) Minimum pension liability adjustment   (net of income tax of $147,303) Change in fair value of derivative   financial instruments Reclassification adjustments -   contract settlements Total comprehensive loss Dividends–$0.52 per share Issuance of 3,186,470 shares from treasury(1) Issuance of 369,290 shares from authorized(1)	38,749   14,050   (254,318)   (2,320)           1,359 (202,390) (31,713) 57,747 3,707		(2,138) 3,707	38,749                   (31,713)	14,050   (254,318)   (2,320)           1,359	59,885
Balance at December 31, 2002	$ 609,086	$ 53,064	$ 257,992	$ 764,446	$ (465,677)	$ (739)

(1) Share activity was in conjunction with employee benefit and stock option plans. See accompanying Notes to Consolidated Financial Statements on pages 33 through 46.

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notes TO CONSOLIDATED FINANCIAL STATEMENTS

1 SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation: The consolidated financial statements include the accounts and operations of the company and its subsidiaries. All significant intercompany accounts and transactions are eliminated upon consolidation. Investments in affiliated companies are accounted for by the equity method. Revenue Recognition: The company recognizes revenue when title passes to the customer. This is generally FOB shipping point except for certain exported goods, which is FOB destination. Selling prices are fixed based on purchase orders or contractual arrangements. Write-offs of accounts receivable historically have been low. Cash Equivalents: The company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Inventories: Inventories are valued at the lower of cost or market, with 78% valued by the last-in, first-out (LIFO) method. If all inventories had been valued at current costs, inventories would have been $136,063,000 and $151,976,000 greater at December 31, 2002 and 2001, respectively. During 2002, inventory quantities were reduced as a result of ceasing manufacturing operations in Duston, England (see Note 5). This reduction resulted in a liquidation of LIFO inventory quantities carried at lower costs prevailing in prior years, compared to the cost of current purchases, the effect of which increased income (loss) before cumulative effect of change in accounting principle by approximately $5,700,000 or $0.09 per diluted share. Property, Plant and Equipment: Property, plant and equipment is valued at cost less accumulated depreciation. Maintenance and repairs are charged to expense as incurred. Provision for depreciation is computed principally by the straight-line method based upon the estimated useful lives of the assets. The useful lives are approximately 30 years for buildings, 5 to 7 years for computer software and 3 to 20 years for machinery and equipment. Income Taxes: Deferred income taxes are provided for the temporary differences between the financial reporting basis and tax basis of the company's assets and liabilities. The company plans to reinvest undistributed earnings of all non-U.S. subsidiaries. The amount of undistributed earnings that is considered to be indefinitely reinvested for this purpose was approximately $118,000,000 at December 31, 2002. Accordingly, U.S. income taxes have not been provided on such earnings. Based on financial information as of December 31, 2002, no additional U.S. income tax may be due if these earnings were distributed. However, such distributions would be subject to non-U.S. withholding taxes and secondary taxes on distributed profits totaling approximately $9,000,000. Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These estimates and assumptions are reviewed and updated regularly to reflect recent experience. Foreign Currency Translation: Assets and liabilities of subsidiaries, other than those located in highly inflationary countries, are translated at the rate of exchange in effect on the balance sheet date; income and expenses are translated at the average rates of exchange prevailing during the year. The related translation adjustments are reflected as a separate component of accumulated other comprehensive loss. Foreign currency gains and losses resulting from transactions and the translation of financial statements of subsidiaries in highly inflationary countries are included in results of operations. The company recorded foreign currency exchange losses of $5,143,000 in 2002, $3,211,000 in 2001 and $1,467,000 in 2000. Stock-Based Compensation: On December 31, 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure." SFAS No. 148 amends SFAS No. 123, "Accounting for Stock-Based Compensation," by providing alternative methods of transition to SFAS No. 123's fair value method of accounting for stock-based compensation. SFAS No. 148 also amends the disclosure requirements of SFAS No. 123. The company has elected to follow Accounting Principles Board (APB) Opinion No. 25, "Accounting for Stock Issued to Employees," and related interpretations in accounting for its stock options to key associates and directors. Under APB Opinion No. 25, because the exercise price of the company's stock options equals the market price of the underlying common stock on the date of grant, no compensation expense is required. The effect on net income (loss) and earnings per share as if the company had applied the fair value recognition provisions of SFAS No. 123 is as follows for the years ended December 31:

2002		2001	2000
(Thousands of dollars) Net income (loss), as reported Deduct: Total stock-based employee compensation expense determined under fair value based methods for all awards, net of related tax effects	$ 38,749           (5,439)	$ (41,666)           (5,731)	$ 45,888           (6,014)
Pro forma net income (loss)	$ 33,310	$ (47,397)	$ 39,874
Earnings per share:   Basic - as reported   Basic - pro forma   Diluted - as reported   Diluted - pro forma	$ 0.63 $ 0.54 $ 0.62 $ 0.54	$ (0.69) $ (0.79) $ (0.69) $ (0.79)	$ 0.76 $ 0.66 $ 0.76 $ 0.66

 

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notes TO CONSOLIDATED FINANCIAL STATEMENTS

1 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Earnings Per Share: Earnings per share are computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the year. Earnings per share - assuming dilution are computed by dividing net income (loss) by the weighted-average number of common shares outstanding adjusted for the dilutive impact of potential common shares for options. Derivative Instruments: In 2001, the company adopted SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," as amended. The statement required the company to recognize all derivatives on the balance sheet at fair value. Derivatives that are not designated as hedges must be adjusted to fair value through earnings. If the derivative is designated and qualifies as a hedge, depending on the nature of the hedge, changes in the fair value of the derivatives are either offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or recognized in other comprehensive income (loss) until the hedged item is recognized in earnings. Certain of the company's holdings of forward foreign exchange contracts have been deemed derivatives pursuant to the criteria established in SFAS No. 133, of which the company has designated certain of those derivatives as hedges. The critical terms, such as the notional amount and timing of the forward contract and forecasted transaction, coincide resulting in no hedge ineffectiveness. The adoption of SFAS No. 133 did not have a significant effect on the company's financial position or results of operations. Recent Accounting Pronouncements In October 2001, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 144, "Accounting for Impairment or Disposal of Long-Lived Assets." SFAS No. 144 supersedes SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of." SFAS No. 144 retains the existing requirements for long-lived assets to be held and used, but it establishes one accounting model for long-lived assets to be disposed of by sale and revises guidance for assets to be disposed of other than by sale. Adoption of SFAS No. 144 did not have an effect on the company's financial position or results of operations. In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities," which addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies Emerging Issues Task Force (EITF) Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)." SFAS No. 146 requires that a liability for a cost associated with an exit or disposal activity be recognized and measured initially at fair value only when the liability is incurred. Under EITF Issue No. 94-3, a liability for an exit cost was recognized at the date of an entity's commitment to an exit plan. SFAS No. 146 is effective for exit and disposal activities that are initiated after December 31, 2002. SFAS No. 146 has no effect on charges recorded for exit activities begun prior to this date. As such, the company continued to recognize restructuring costs in connection with the manufacturing strategy initiative (MSI) in accordance with EITF Issue No. 94-3. The company does not expect the adoption of this statement to have a material effect on our financial position or results of operations. In November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others" (the Interpretation). The Interpretation's disclosure requirements are effective for financial statements of interim or annual periods ending after December 15, 2002. The initial recognition and initial measurement provisions are applicable on a prospective basis to guarantees issued or modified after December 31, 2002. The Interpretation requires certain guarantees to be recorded at fair value. The guarantor's previous accounting for guarantees issued prior to the date of initial application should not be revised or restated. In January 2003, the FASB issued Interpretation No. 46, "Consolidation of Variable Interest Entities." In general, a variable interest entity is a corporation, partnership, trust or any other legal structure used for business purposes that either (a) does not have equity investors with voting rights or (b) has equity investors who do not provide sufficient financial resources for the entity to support its activities. Interpretation 46 requires a variable interest entity to be consolidated by a company if that company is subject to a majority of the risk of loss from the variable interest entity's activities or entitled to receive a majority of the entity's residual returns or both. The consolidation requirements of Interpretation 46 apply immediately to variable interest entities created after January 31, 2003. The consolidation requirements apply to pre-existing entities in the first fiscal year or interim period beginning after June 15, 2003. Certain of the disclosure requirements apply in all financial statements issued after January 31, 2003, regardless of when the variable interest entity was established. The company is currently evaluating the impact of Interpretation 46 on the financial statements of the company. Reclassifications: The CDSOA payments and certain minor amounts reported in the 2001 financial statements have been reclassified to conform to the 2002 presentation.

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2 COMPREHENSIVE LOSS

Accumulated other comprehensive loss consists of the following:

2002		2001	2000
(Thousands of dollars) Foreign currency translation adjustment Minimum pension liability adjustment Fair value of open foreign currency cash flow hedges	$ (80,520) (383,095) (2,062)	$ (94,570) (128,777) (1,191)	$ (78,656) (6,257) -
	$ (465,677)	$ (224,538)	$ (84,913)

3 ACQUISITIONS

In March 2002, the company purchased an industrial equipment repair facility in Niles, Ohio. In November 2001, the company purchased Lecheres Industries SAS, the parent company of Bamarec S.A., a precision component manufacturer based in France. In February 2001, the company completed the buyout of its Chinese joint venture partner in Yantai Timken Company Limited. Prior to the buyout, the company owned a 60% interest in Yantai Timken, and its financial results were consolidated into the company's financial statements, taking into account a minority interest. In January 2001, the company purchased the assets of Score International, Inc., a manufacturer of dental handpiece repair tools located in Sanford, Florida. The total cost of these acquisitions amounted to $6,751,000, and $12,957,000 in 2002 and 2001, respectively. The purchase price has been allocated to the assets and liabilities acquired, based on their fair values at the dates of acquisition. The fair value of the assets was $6,751,000 and $25,408,000 in 2002 and 2001; and the fair value of liabilities assumed was $6,751,000 and $16,396,000 in 2002 and 2001. The excess of the purchase price over the fair value of the net assets acquired has been allocated to goodwill. The acquisitions were accounted for as purchases in accordance with SFAS No. 141, "Business Combinations." The company's consolidated financial statements include the results of operations of the acquired businesses for the period subsequent to the effective date of this acquisition. Pro forma results of operations have not been presented because the effect of these acquisitions was not significant.

4 EARNINGS PER SHARE

The following table sets forth the reconciliation of the numerator and the denominator of earnings per share and earnings per share - assuming dilution for the years ended December 31:

2002		2001	2000
(Thousands of dollars, except per share data) Numerator:   Net income (loss) for earnings per share and earnings per share - assuming     dilution – income available to common shareholders Denominator:   Denominator for earnings per share – weighted-average shares   Effect of dilutive securities:     Stock options and awards – based on the treasury stock method	$ 38,749   61,128,005   507,334	$ (41,666)   59,947,568    (1)	$ 45,888   60,556,595   166,577
Denominator for earnings per share - assuming dilution – adjusted   weighted-average shares	61,635,339	59,947,568	60,723,172
Earnings per share	$ 0.63	$ (0.69)	$ 0.76
Earnings per share - assuming dilution	$ 0.62	$ (0.69)	$ 0.76

(1) Addition of 161,211 shares would result in antidilution.

 

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notes TO CONSOLIDATED FINANCIAL STATEMENTS

5 IMPAIRMENT AND RESTUCTURING CHARGES

It is the company's policy to recognize restructuring costs in accordance with Emerging Issues Task Force Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)" and SEC Staff Accounting Bulletin No. 100, "Restructuring and Impairment Charges." Impairment charges are recognized to write down assets to their fair value when it is probable that the undiscounted cash flows associated with an asset or group of assets are less than the current net book value. During 2001, the company had two active restructuring programs. In April 2001, the company announced a strategic refocusing of its manufacturing operations to establish a foundation for accelerating the company's growth initiatives. This second phase of the company's transformation included creating focused factories for each product line or component, replacing specific manufacturing processes with state-of-the-art processes through the company's global supply chain, rationalizing production to the lowest total cost plants and implementing lean manufacturing process redesign to continue to improve quality and productivity. As part of this manufacturing strategy initiative (MSI), the company announced its intention to close bearing plants in Columbus, Ohio, and Duston, England, to sell a tooling plant in Ashland, Ohio, and reduce employment by approximately 1,500 by the end of 2002. In August 2001, the company took steps to further reduce capital spending, delay or scale back certain projects and reduce salaried employment. The reductions affected about 300 salaried associates concentrated in North America and Western Europe and were in addition to the 1,500 previously announced. These additional associates exited the company by the end of 2001. Manufacturing operations at the Columbus and Duston bearing plants ceased on November 9, 2001, and September 30, 2002, respectively. Additionally, on June 30, 2002, the company sold its Ashland plant. As a result of MSI and the salaried workforce reduction, the company targeted an annualized pretax rate of savings of approximately $120 million by the end of 2004. Through December 31, 2002, the company achieved estimated annualized pretax savings of $80 million. To implement the MSI initiatives during 2001 and 2002, the company expected to take approximately $100 - $110 million in restructuring, impairment and reorganization charges by December 31, 2002. In total for 2001 and 2002, the company actually incurred $107.4 million in cumulative impairment, restructuring and reorganization charges related to MSI and salaried workforce reduction programs. The charges incurred for these programs for the years ended December 31, 2002 and 2001 totaled $50.6 million and $56.8 million, respectively. A breakdown of these charges is as follows:

2002		2001
(Millions of dollars) Impairment expense Severance expense Curtailment expense (Pension and postretirement benefits) Exit costs Reorganization expense:     Cost of products sold     Selling, administrative and general expenses	$ 17.9 3.5 6.7 4.0   8.6 9.9	$ 1.5 30.8 15.1 1.4   4.1 3.9
Total MSI program charges	$ 50.6	$ 56.8

In 2002, the $17.9 million in impairment expense and $4.0 million in exit costs are related to the Duston and Columbus plant closures. The severance and curtailment expenses for pension and postretirement benefits incurred during 2002 are primarily related to the salaried workforce reduction in Automotive, Industrial and corporate functions, as well as certain Ashland plant associates. Also, late in 2002, the Steel Business reduced its salaried workforce. These Steel associates exited the company prior to December 31, 2002, and their positions have been eliminated. In 2001, the $30.8 million in severance expense and $1.4 million in exit costs were related to the shutdown of the Columbus and Duston plants as well as reductions in the salaried workforce. The curtailment expense of $15.1 million was for the pension and postretirement benefits related to the shutdown of the Columbus bearing plant. As of December 31, 2002, the remaining severance and exit cost accrual balance was $6.0 million, including $5.1 million of expense incurred during the year, which was offset by an accrual reversal and foreign currency adjustments of $1.8 million. The restructuring accrual balance has been reduced for severance that was accrued, but not paid as a result of certain associates retiring or finding other employment. Total payments made during 2002 totaled $18.7 million. The remaining accrual balance is payable during the first half of 2003. As of December 31, 2001, cash payments of $9.1 million had been made for severance, resulting in a remaining accrual balance of $21.4 million. From the announcement in April 2001 through the end of 2002, 1,824 associates left the company as a result of actions taken through MSI and the salaried workforce reduction initiatives. Of that number, 1,304 people were primarily associates from the Duston and Columbus plants, as well as associates included in the worldwide salaried workforce for whom severance has been paid. In addition, 99 associates left the company as a result of selling the Ashland plant. The remaining 421 associates retired or voluntarily left the company and their positions have been eliminated.

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The key elements of the 2002 restructuring, impairment and reorganization expenses by segment for the year ended December 31, 2002 related to the MSI and salaried workforce reduction programs are as follows:

Auto		Industrial	Steel	Total
(Millions of dollars) Restructuring:    Severance expense    Exit costs	$ 0.1 3.9	$ 1.8 0.1	$ 1.6 -	$ 3.5 4.0
Impairment expense Pension and postretirement benefits	$ 4.0   $ 14.2 0.8	$ 1.9   $ 3.7 3.7	$ 1.6   $ - 2.2	$ 7.5   $ 17.9 6.7
Total restructuring and impairment expense   Reorganization expense	$ 19.0   9.8	$ 9.3   8.7	$ 3.8   -	$ 32.1   18.5
Total expenses	$ 28.8	$ 18.0	$ 3.8	$ 50.6

The key elements of the cumulative restructuring, impairment and reorganization expenses by segment related to the MSI and salaried workforce reduction programs through December 31, 2002 are as follows:

Auto		Industrial	Steel	Total
(Millions of dollars) Restructuring:    Severance expense    Exit costs	$ 26.0 4.3	$ 5.4 1.1	$ 2.9 -	$ 34.3 5.4
Impairment expense Pension and postretirement benefits	$ 30.3   $ 15.3 0.8	$ 6.5   $ 4.1 18.8	$ 2.9   $ - 2.2	$ 39.7   $ 19.4 21.8
Total restructuring and impairment expense   Reorganization expense	$ 46.4   13.2	$ 29.4   13.3	$ 5.1   -	$ 80.9   26.5
Total expenses	$ 59.6	$ 42.7	$ 5.1	$ 107.4

The company also undertook a $55 million efficiency initiative program announced in March 2000, which concluded during the first quarter of 2001. The company incurred $49.4 million ($10.5 million in 2001) in total impairment, restructuring and reorganization charges related to the program. Of the $49.4 million total charges recorded between March 2000 and March 2001, $20.7 million were impairment expenses, $13.0 million related to restructuring expenses and $15.7 million were reorganization expenses. In connection with this restructuring program, payments of $13.0 million have been disbursed through December 31, 2001. Estimated savings related to this first program realized through the end of 2001 approximated $26 million before taxes. During 2001, 106 positions were identified and exited the company due to the initial restructuring. Combined with positions eliminated during 2000, this resulted in a total elimination of 694 positions as part of this restructuring.

Key elements of the 2001 restructuring, impairment and reorganization expenses for this earlier restructuring program by segment are as follows:

Auto		Industrial	Steel	Total
(Millions of dollars) Restructuring:    Severance expense    Reversal of severance expense   Impairment expense	$ 0.1 (0.2)   -	$ 4.0 (1.8)   3.4	$ - -   0.4	$ 4.1 (2.0)   3.8
Total restructuring and impairment expense   Reorganization expense	$ (0.1)   0.3	$ 5.6   3.3	$ 0.4   1.0	$ 5.9   4.6
Total expenses	$ 0.2	$ 8.9	$ 1.4	$ 10.5

 

37

notes TO CONSOLIDATED FINANCIAL STATEMENTS

6 CHANGE IN METHOD OF ACCOUNTING

Effective January 2002, the company adopted SFAS No. 142, "Goodwill and Other Intangible Assets." In accordance with SFAS No. 142, goodwill and indefinite lived intangible assets are no longer amortized but are reviewed at least annually for impairment. The application of the nonamortization provisions resulted in an increase in annual pretax income of $6.1 million. Intangible assets that are separable and have a definite life continue to be amortized over the estimated useful lives. Changes in the estimated useful lives of identifiable intangible assets did not result in a material change to net income. As part of the adoption, the company evaluated the impairment of indefinite lived intangible assets and determined that none were impaired based on estimations in market value. Prior to testing goodwill for impairment, the company determined the fair value of each of its five reporting units using discounted cash flows and validation with various market-comparable approaches. The company completed the required transitional goodwill impairment analysis for SFAS No. 142 adoption purposes in the third quarter of 2002 and recorded a $12.7 million impairment loss, net of tax benefits of $7.8 million, relating to its Specialty Steel business, which was treated as a cumulative effect of a change in accounting principle. SFAS No. 142 does not permit restatement of previously issued financial statements. The following table sets forth reported operating results for the company for the preceding two years, and what net income and earnings per share would have been had SFAS No. 142 been applied in all years ended as of December 31 (with goodwill amortization ceasing on January 1, 2000):

2001		2000
(Thousands of dollars except per share data) Reported net (loss) income Add back: goodwill amortization, net of income taxes   of 2001-$1,278; 2000-$1,339 Add back: amortization of indefinite lived intangible assets,   net of income taxes of 2001-$28; 2000-$11	$ (41,666)   4,782   45	$ 45,888   5,010   18
Adjusted net (loss) income	$ (36,839)	$ 50,916
Reported earnings per share - basic and diluted Add back: goodwill amortization, net of income taxes Add back: amortization of indefinite lived intangible assets, net of income taxes	$ (0.69) 0.08 -	$ 0.76 0.08 -
Adjusted earnings per share - basic and diluted	$ (0.61)	$ 0.84

Changes in the carrying amount of goodwill for the year ended December 31, 2002 are as follows:

	Beginning Balance	Impairment	Other	Ending Balance
(Thousands of dollars) Goodwill:   Automotive   Industrial   Steel	$ 1,577 120,426 28,038	$ - - (20,488)	$ 56 (986) 1,320	$ 1,633 119,440 8,870
#160;	$ 150,041	$ (20,488)	$ 390	$ 129,943

Indefinite lived intangible assets are immaterial.

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The following table displays intangible assets as of December 31:

	2002			2001
	Gross Carrying Amount	Accumulated Amortization	Net Carrying Amount	Gross Carrying Amount	Accumulated Amortization	Net Carrying Amount
Intangible assets subject to amortization: Industrial trademarks Industrial land use rights Industrial know-how transfer	$ 712 4,484 417	$ 213 905 341	$ 499 3,579 76	$ 532 4,484 417	$ 289 798 341	$ 243 3,686 76
	$ 5,613	$ 1,459	$ 4,154	$ 5,433	$ 1,428	$ 4,005
Intangible assets not subject to amortization: Goodwill Automotive land use rights Industrial license agreements	$ 129,943 112 951	$ - - -	$ 129,943 112 951	$ 197,329 108 1,042	$ 47,288 - 97	$ 150,041 108 945
	$ 131,006	-	$ 131,006	$ 198,479	$ 47,385	$ 151,094
Total intangible assets	$ 136,619	$ 1,459	$ 135,160	$ 203,912	$ 48,813	$ 155,099

Amortization expense for intangible assets was approximately $288,000 and $273,000 for the years ended December 31, 2002 and 2001, and is estimated to be approximately $342,000 annually for the next five years.

7 CONTINGENCIES

The company and certain of its U.S. subsidiaries have been designated as potentially responsible parties (PRPs) by the United States Environmental Protection Agency for site investigation and remediation under the Comprehensive Environmental Response, Compensation and Liability Act (Superfund) with respect to certain sites. The claims for remediation have been asserted against numerous other entities which are believed to be financially solvent and are expected to fulfill their proportionate share of the obligation. In addition, the company is subject to various lawsuits, claims and proceedings which arise in the ordinary course of its business. The company accrues costs associated with environmental and legal matters when they become probable and reasonably estimable. Environmental costs include compensation and related benefit costs associated with associates expected to devote significant amounts of time to the remediation effort and post-monitoring costs. Accruals are established based on the estimated undiscounted cash flows to settle the obligations and are not reduced by any potential recoveries from insurance or other indemnification claims. Management believes that any ultimate liability with respect to these actions, in excess of amounts provided, will not materially affect the company's consolidated operations, cash flows or financial position. The company is the guarantor of $27,500,000 in debt for Pel Technologies, LLC, (Pel) an equity investment of the company. A $23,500,000 letter of credit was guaranteed by the company to secure payment on Ohio Water Development Authority revenue bonds held by Pel, as well as a guarantee for a $4,000,000 bank loan. In case of default by Pel on either obligation, the company agrees to pay existing balances due as of the date of default. The letter of credit expires on July 22, 2006. The bank loan obligation expires on the earlier of March 27, 2012 or on the date that Pel maintains a certain debt coverage ratio for a specified period. The company is a guarantor of an operating lease for a subsidiary located in Vienna, Ohio. In case of a default, the company is obligated to pay the remaining balance due. This guarantee expires on June 1, 2016. The total future lease payments related to this lease are $16,800,000 as of December 31, 2002. This amount has been included in the company's future minimum lease payment disclosure in Note 8 Financing Arrangements. In connection with the Ashland plant sale, the company entered into a four-year supply agreement with the buyer. The company agrees to purchase a fixed amount each year ranging from $8,500,000 in the first year to $4,650,000 in year four or an aggregate total of $25,900,000. The agreement also details the payment terms and penalties assessed if the buyer does not meet the company's performance standards as outlined. This agreement expires on June 30, 2006.

 

39

notes TO CONSOLIDATED FINANCIAL STATEMENTS

8 FINANCING ARRANGEMENTS

Long-term debt at December 31, 2002 and 2001 was as follows:

2001		2000
(Thousands of dollars) Fixed-rate Medium-Term Notes, Series A, due at various dates through   May 2028, with interest rates ranging from 6.20% to 7.76% Variable-rate State of Ohio Air Quality and Water Development   Revenue Refunding Bonds, maturing on November 1, 2025     (1.5% at December 31, 2002) Variable-rate State of Ohio Pollution Control Revenue Refunding   Bonds, maturing on July 1, 2003 (1.6% at December 31, 2002) Variable-rate State of Ohio Water Development Revenue   Refunding Bonds, maturing May 1, 2007 (1.6% at December 31, 2002) Variable-rate State of Ohio Water Development Authority Solid Waste   Revenue Bonds, maturing on July 1, 2032 (1.65% at December 31, 2002) Other	$ 292,000     21,700   17,000   8,000   24,000 11,166	$ 327,000     21,700   17,000   8,000   24,000 12,885
Less current maturities	373,866 23,781	410,585 42,434
Long-tem debt	$ 350,085	$ 368,151

The maturities of long-term debt for the five years subsequent to December 31, 2002, are as follows: 2003-$23,781,000; 2004-$7,518,000; 2005-$892,000; 2006-$95,335,000; and 2007- $8,228,000. Interest paid in 2002, 2001 and 2000 approximated $33,000,000 for all three years. This differs from interest expense due to timing of payments and interest capitalized of $436,000 in 2002; $1,400,000 in 2001; and $1,600,000 in 2000 as a part of major capital additions. The weighted-average interest rate on commercial paper borrowings during the year was 2.1% in 2002, 4.3% in 2001 and 6.5% in 2000. The weighted-average interest rate on short-term debt during the year was 4.8% in 2002, 5.8% in 2001 and 6.3% in 2000. At December 31, 2002, the company had available $291,000,000 through an unsecured $300,000,000 revolving credit agreement with a group of banks. The agreement, which expires in June 2003, bears interest based upon any one of four rates at the company's option-adjusted prime, Eurodollar, competitive bid Eurodollar or the competitive bid absolute rate. Also, the company has a shelf registration filed with the Securities and Exchange Commission which, as of December 31, 2002, enables the company to issue up to an additional $125,000,000 of long-term debt securities in the public markets. In connection with the Torrington acquisition, the company entered into new $875 million senior credit facilities on December 31, 2002, with a syndicate of financial institutions, comprised of a five-year revolving credit facility of up to $500 million and a one-year term loan facility of up to $375 million. The new revolving facility replaces the company's existing senior credit facility, and the term loan could have been used as a bridge facility in the Torrington acquisition if long-term senior notes had not been issued prior to closing. Pro- ceeds of the new senior credit facility must be used to repay any amounts outstanding under the existing credit facility, and the existing credit facility must be terminated. In connection with the closing of the Torrington acquisition and the funding of its new senior credit facility, the company terminated its then existing $300,000,000 revolving credit agreement. In addition the company did not utilize the $375,000,000 one-year term loan. On December 19, 2002, the company entered into an Accounts Receivable Securitization financing agreement (Asset Securitization), which provides for borrowings up to $125 million, limited to certain borrowing base calculations, and is secured by certain trade receivables. Under the terms of the Asset Securitization, the company sells, on an ongoing basis, certain domestic trade receivables to Timken Receivables Corporation, a wholly owned consolidated subsidiary, that in turn uses the trade receivables to secure the borrowings, which are funded through a vehicle that issues commercial paper in the short-term market. As of December 31, 2002, this subsidiary has been classified into the specific reportable segments for segment reporting based on the end customer. No trade receivables have yet been sold under the facility as of December 31, 2002. The yield on the commercial paper, which is commercial paper rate plus program fees, will be considered a financing cost and included in interest expense on the statement of operations. The company and its subsidiaries lease a variety of real property and equipment. Rent expense under operating leases amounted to $14,536,000, $16,799,000, and $14,719,000 in 2002, 2001 and 2000, respectively. At December 31, 2002, future minimum lease payments for noncancelable operating leases totaled $50,184,000 and are payable as follows: 2003-$12,147,000; 2004-$8,376,000; 2005-$6,474,000; 2006-$3,887,000; 2007-$3,112,000; and $16,188,000 thereafter.

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9 FINANCIAL INSTRUMENTS

As a result of the company's worldwide operating activities, it is exposed to changes in foreign currency exchange rates, which affect its results of operations and financial condition. The company and certain subsidiaries enter into forward exchange contracts to manage exposure to currency rate fluctuations, primarily related to anticipated purchases of inventory and equipment. At December 31, 2002 and 2001, the company had forward foreign exchange contracts, all having maturities of less than one year, with notional amounts of $72,070,000 and $19,507,000, respectively. The forward foreign exchange contracts were primarily entered into by the company's European subsidiaries to manage Euro and U.S. dollar exposures. The realized and unrealized gains and losses on these contracts are deferred and included in inventory or property, plant and equipment, depending on the transaction. These deferred gains and losses are reclassified from accumulated other comprehensive loss and recognized in earnings when the future transactions occur, or through depreciation expense. The carrying value of cash and cash equivalents, accounts receivable, commercial paper, short-term borrowings and accounts payable are a reasonable estimate of their fair value due to the short-term nature of these instruments. The fair value of the company's fixed-rate debt, based on quoted market prices, was $325,000,000 and $334,000,000 at December 31, 2002 and 2001, respectively. The carrying value of this debt was $308,000,000 and $346,000,000.

10 STOCK COMPENSATION PLANS

Under the company's stock option plans, shares of common stock have been made available to grant at the discretion of the Compensation Committee of the Board of Directors to officers and key associates in the form of stock options, stock appreciation rights, restricted shares and deferred shares. In addition, shares can be awarded to directors not employed by the company. The options have a ten-year term and vest in 25% increments annually beginning twelve months after the date of grant. Pro forma information regarding net income and earnings per share is required by SFAS No. 123, and has been determined as if the company had accounted for its associate stock options under the fair value method of SFAS No. 123. The fair value for these options was estimated at the date of grant using a Black-Scholes option pricing model. For purposes of pro forma disclosures, the estimated fair value of the options granted under the plan is amortized to expense over the options' vesting periods.

Following is the related assumptions under the Black-Scholes method:

2002		2001	2000
Assumptions: Risk-free interest rate Dividend yield Expected stock volatility Expected life - years	5.29% 3.57% 0.506 8	6.32% 3.36% 0.480 8	6.31% 3.01% 0.481 8

A summary of activity related to stock options for the above plans is as follows for the years ended December 31:

	2002		2001		2000
	Options	Weighted- Average Exercise Price	Options	Weighted- Average Exercise Price	Options	Weighted- Average Exercise Price
Outstanding - beginning of year Granted Exercised Canceled or expired	6,825,412 1,118,175 (499,372) (134,189)	$20.22 25.01 16.30 20.61	5,720,990 1,367,400 (54,528) (208,450)	$21.41 15.05 14.67 20.35	4,515,676 1,356,400 (88,761) (62,325)	$22.90 15.88 12.96 21.28
Outstanding - end of year	7,310,026	$21.21	6,825,412	$20.22	5,720,990	$21.41
Options exercisable	4,397,590		3,745,131		2,910,271

 

The company sponsors a performance target option plan that is contingent upon the company's common shares reaching specified fair market values. Under the plan, no awards were issued nor was compensation expense recognized during 2002, 2001 or 2000. Exercise prices for options outstanding as of December 31, 2002, range from $13.50 to $33.75; the weighted-average remain- ing contractual life of these options is six years. The estimated weighted-average fair values of stock options granted during 2002, 2001 and 2000 were $10.36, $6.36 and $7.01, respectively. At December 31, 2002, a total of 302,667 restricted stock rights, restricted shares or deferred shares have been awarded under the above plans and are not vested. The company distributed 100,947, 61,301 and 100,832 common shares in 2002, 2001 and 2000, respectively, as a result of awards of restricted stock rights, restricted shares and deferred shares. The number of shares available for future grants for all plans at December 31, 2002, including stock options, is 2,679,841.

 

41

notes TO CONSOLIDATED FINANCIAL STATEMENTS

11 RETIREMENT AND POSTRETIREMENT BENEFIT PLANS

The company sponsors defined contribution retirement and savings plans covering substantially all associates in the United States and certain salaried associates at non-U.S. locations. The company contributes Timken Company common stock to certain plans based on formulas established in the respective plan agreements. At December 31, 2002, the plans had 12,310,779 shares of Timken Company common stock with a fair value of $235,136,000. Company contributions to the plans, including performance sharing, amounted to $14,603,000 in 2002; $13,289,000 in 2001; and $14,384,000 in 2000. The company paid dividends totaling $6,407,000 in 2002; $8,192,000 in 2001; and $7,958,000 in 2000, to plans holding common shares. The company and its subsidiaries sponsor several unfunded postretirement plans that provide health care and life insurance benefits for eligible retirees and dependents. Depending on retirement date and associate classification, certain health care plans contain contributions and cost-sharing features such as deductibles and coinsurance. The remaining health care and life insurance plans are noncontributory. The company and its subsidiaries sponsor a number of defined benefit pension plans, which cover many of their associates except those at certain locations who are covered by government plans.

The following tables set forth the change in benefit obligation, change in plan assets, funded status and amounts recognized in the consolidated balance sheet of the defined benefit pension and postretirement benefits as of December 31, 2002 and 2001:

	Defined Benefit Pension Plans		Postretirement Plans
	2002	2001	2002	2001
(Thousands of dollars) Change in benefit obligation Benefit obligation at beginning of year Service cost Interest cost Amendments Actuarial losses Associate contributions International plan exchange rate change Curtailment loss Benefits paid	$ 1,825,602 36,115 132,846 4,165 223,763 936 20,791 6,706 (133,780)	$ 1,641,959 35,313 126,809 6,246 120,256 1,604 (5,416) 16,522 (117,691)	$ 640,701 4,357 47,505 - 77,224 - 29 980 (50,121)	$ 588,824 4,047 48,380 (33,413) 69,500 - (126) 9,109 (45,620)
Benefit obligation at end of year	$ 2,117,144	$ 1,825,602	$ 720,675	$ 640,701
Change in plan assets(1) Fair value of plan assets at beginning of year Actual return on plan assets Associate contributions Company contributions International plan exchange rate change Benefits paid	$ 1,295,214 (91,994) 936 112,297 15,678 (133,780)	$ 1,383,683 (51,608) 1,604 84,882 (5,656) (117,691)
Fair value of plan assets at end of year	$ 1,198,351	$ 1,295,214
Funded status Projected benefit obligation in excess of plan assets Unrecognized net actuarial loss Unrecognized net asset at transition dates, net of amortization Unrecognized prior service cost (benefit)	$ (918,793) 711,396 (1,102) 131,173	$ (530,388) 260,126 (2,246) 146,448	$ (720,675) 306,520 - (45,335)	$ (640,701) 241,018 - (51,743)
Accrued benefit cost	$ (77,326)	$ (126,060)	$ (459,490)	$ (451,426)
Amounts recognized in the consolidated balance sheet Accrued benefit liability Intangible asset Minimum pension liability included in accumulated other comprehensive income	$ (802,327) 129,042   595,959	$ (456,517) 136,118   194,339	$ (459,490) -   -	$ (451,426) -   -
Net amount recognized	$ (77,326)	$ (126,060)	$ (459,490)	$ (451,426)

(1) Plan assets are primarily invested in listed stocks and bonds and cash equivalents.

42

TIMKEN

On September 10, 2002, the company issued 3,000,000 shares of its common stock to The Timken Company Collective Investment Trust for Retirement Trusts (Trust) as a contribution to three company-sponsored pension plans. The fair market value of the 3,000,000 shares of common stock contributed to the Trust was approximately $54,500,000, which consisted of 2,766,955 shares of the company's treasury stock and 233,045 shares issued from authorized common stock. As of December 31, 2002, the company's defined benefit pension plans held 2,700,000 common shares with fair value of $51,570,000. In 2002, lower investment performance, which reflected lower stock market returns and lower interest rates, reduced the company's pension fund asset values and increased the company's defined benefit pension liability. The lowering of the discount rate from 7.5% to 6.6% also contributed to the increased pension liability. The accumulated benefit obligations at December 31, 2002 exceeded the market value of plan assets for the majority of the company's plans. For these plans, the projected benefit obligation was $2,097,000; the accumulated benefit obligation was $1,989,000; and the fair value of plan assets was $1,184,000 at December 31, 2002. The intangible pension asset decreased by $7,100,000 from December 31, 2001. In 2002, the company recorded additional minimum pension liability of $394,700,000, which is included in accrued pension cost. This increase in the pension liability generated a non-cash aftertax charge to accumulated other comprehensive loss of $254,300,000 in 2002. For 2003 expense, the company changed the expected rate of return on plan assets from 9.5% to 8.75%. This change, along with the lower discount rate, will result in an increase in 2003 pretax pension expense of approximately $25,000,000.

The following table summarizes the assumptions used by the consulting actuary and the related benefit cost information:

	Pension Benefits			Postretirement Benefits
	2002	2001	2000	2002	2001	2000
Assumptions Discount rate Future compensation assumption Expected long-term return on plan assets	6.6% 3% to 4% 9.5%	7.5% 3% to 4% 9.5%	8.0% 3% to 4% 9.5%	6.6%	7.5%	8.0%
Components of net periodic benefit cost (Thousands of dollars) Service cost Interest cost Expected return on plan assets Amortization of prior service cost Recognized net actuarial (gain) loss Curtailment loss Amortization of transition asset	$ 36,115 132,846 (135,179) 19,725 473 6,706 (1,143)	$ 35,313 126,809 (126,882) 19,919 (292) 6,333 (982)	$ 33,328 119,943 (116,302) 21,995 (556) - (1,002)	$ 4,357 47,505 - (6,408) 11,827 - 871	$ 4,047 48,380 - (4,376) 9,646 8,738 -	$ 4,309 40,043 - (3,730) 3,670 - -
Net periodic benefit cost	$ 59,543	$ 60,218	$ 57,396	$ 58,152	$ 66,435	$ 44,292

 

For measurement purposes, the company assumed a weighted-average annual rate of increase in the per capita cost (health care cost trend rate) for medical benefits of 9.0% for 2003; declining gradually to 6.0% in 2006 and thereafter for pre-age 65 benefits; 6.0% for post-age 65 benefits for all years; and 15.0% for 2003, declining gradually to 6.0% in 2014 and thereafter for prescription drug benefits. The assumed health care cost trend rate has a significant effect on the amounts reported. A one-percentage-point increase in the assumed health care cost trend rate would increase the 2002 total service and interest cost components by $2,107,000 and would increase the postretirement benefit obligation by $31,969,000. A one-percentage-point decrease would provide corresponding reductions of $1,878,000 and $28,567,000, respectively.

12 RESEARCH AND DEVELOPMENT

Expenditures committed to research and development amounted to approximately $53,000,000 in 2002; $54,000,000 in 2001; and $52,000,000 in 2000. Such expenditures may fluctuate from year to year depending on special projects and needs.

 

43

notes TO CONSOLIDATED FINANCIAL STATEMENTS

13 SUBSEQUENT EVENT - ACQUISITION

Effective February 16, 2003, the company acquired IR's Engineered Solutions business, a leading worldwide producer of needle roller, heavy-duty roller and ball bearings, and motion control components and assemblies. IR's Engineered Solutions business is comprised of certain operating assets and subsidiaries, including The Torrington Company. IR's Engineered Solutions business had sales of $1.2 billion in 2002. The company paid IR $700,000,000 in cash, subject to post- closing purchase price adjustments, and issued $140,000,000 of its common stock (9,395,973 shares) to Ingersoll-Rand Company, a subsidiary of IR. To finance the cash portion of the transaction the company utilized, in addition to cash on hand: $180,009,500, net of underwriting discounts and commissions, from a public offering of 12,650,000 shares of common stock at $14.90 per common share; $246,945,000, net of underwriting discounts and commissions, from a public offering of $250,000,000 of 5.75% senior unsecured notes due 2010; $125,000,000 from its Asset Securitization facility; and approximately $86,000,000 from its new senior credit facility. In connection with the closing of the Torrington acquisition and the funding of its new senior credit facility, the company terminated its then existing $300,000,000 revolving credit agreement. In addition, the company did not utilize the $375,000,000 one-year term loan facility that was a part of the new senior credit facility.

14 SEGMENT INFORMATION

Description of types of products and services from which each reportable segment derives its revenues The company's reportable segments are business units that target different industry segments. Each reportable segment is managed separately because of the need to specifically address customer needs in these different industries. The company has three reportable segments: Automotive Bearings, Industrial Bearings and Steel. Automotive Bearings include products for passenger cars, light and heavy trucks and trailers. Industrial Bearings include industrial, rail, aerospace and super precision products as well as emerging markets in China, India and Central and Eastern Europe. The company's bearing products are used in a wide variety of products including railroad cars and locomotives, machine tools, rolling mills and farm and construction equipment, in aircraft, missile guidance systems, computer peripherals and medical instruments. Steel products include steels of intermediate alloy, vacuum processed alloys, tool steel and some carbon grades. These are available in a wide range of solid and tubular sections with a variety of finishes. The company also manufactures custom-made steel products, including precision steel components. A significant portion of the company's steel is consumed in its bearing operations. In addition, sales are made to other anti-friction bearing companies and to aircraft, automotive, forging, tooling, oil and gas drilling industries and steel service centers. Tool steels are sold through the company's distribution facilities. Measurement of segment profit or loss and segment assets
The company evaluates performance and allocates resources based on return on capital and profitable growth. Specifically, the company measures segment profit or loss based on earnings before interest and income taxes (EBIT). The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies. Intersegment sales and transfers are recorded at values based on market prices, which creates intercompany profit on intersegment sales or transfers. Factors used by management to identify the enterprise's reportable segments
Geographical entities as defined here are not reflective of how the Automotive Bearings, Industrial Bearings and Steel businesses are operated by the company. Europe information presented reflects shipments from European locations. The information does not include product manufactured by facilities located outside Europe and shipped directly to customers located in Europe.

 

Geographic Financial Information	United States	Europe	Other Countries	Consolidated
(Thousands of dollars) 2002 Net sales Non-current assets	$ 1,987,499 1,472,680	$ 365,460 223,348	$ 197,116 84,036	$ 2,550,075 1,780,064
2001 Net sales Non-current assets	$ 1,906,823 1,402,780	$ 351,242 232,105	$ 189,113 69,819	$ 2,447,178 1,704,704
2000 Net sales Non-current assets	$ 2,062,306 1,391,080	$ 361,649 204,135	$ 219,053 70,348	$ 2,643,008 1,665,563

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Segment Financial Information	2002	2001	2000
(Thousands of dollars)Automotive Bearings Net sales to external customers Depreciation and amortization Impairment and restructuring charges Receipt of U.S. Continued Dumping and Subsidy Offset Act (CDSOA) payment   (net of expenses) Earnings (loss) before interest and taxes Capital expenditures Assets employed at year-end	$ 840,763 33,886 18,992   10,829 14,715 34,948 718,495	$ 751,029 36,381 27,270   2,501 (39,939) 36,427 661,514	$ 839,838 35,344 1,143   - 24,595 50,540 632,814
Industrial Bearings Net sales to external customers Depreciation and amortization Impairment and restructuring charges Receipt of CDSOA payment (net of expenses) Earnings before interest and taxes Capital expenditures Assets employed at year-end	$ 883,534 45,429 9,313 39,373 72,872 32,178 1,051,053	$ 882,279 48,314 25,671 27,054 32,144 34,646 966,647	$ 923,477 48,197 11,499 - 54,304 59,382 944,493
Steel Net sales to external customers Intersegment sales Depreciation and amortization Impairment and restructuring charges Earnings before interest and taxes Capital expenditures Assets employed at year-end	$ 825,778 155,500 67,240 3,838 28,682 23,547 978,808	$ 813,870 146,492 67,772 1,748 9,345 31,274 904,924	$ 879,693 196,500 67,506 15,112 19,349 52,795 986,798
Total Net sales to external customers Depreciation and amortization Impairment and restructuring charges Receipt of CDSOA payment (net of expenses) Earnings before interest and taxes Capital expenditures Assets employed at year-end	$ 2,550,075 146,535 32,143 50,202 116,269 90,673 2,748,356	$ 2,447,178 152,467 54,689 29,555 1,550 102,347 2,533,084	$ 2,643,008 151,047 27,754 - 98,248 162,717 2,564,105
Income Before Income Taxes Total EBIT for reportable segments Interest expense Interest income Intersegment adjustments	$ 116,269 (31,540) 1,676 (887)	$ 1,550 (33,401) 2,109 2,859	$ 98,248 (31,922) 3,479 792
Income (loss) before income taxes and cumulative effect of change   in accounting principle	$ 85,518	$ (26,883)	$ 70,597

The Company evaluates operating performance based on each segment's profit before interest and income taxes. Therefore, interest expense and interest income are maintained at a corporate level and are not shown on a segmented basis.

 

45

notes TO CONSOLIDATED FINANCIAL STATEMENTS

15 INCOME TAXES

The provision (credit) for income taxes consisted of the following:

	2002		2001		2000
	Current	Deferred	Current	Deferred	Current	Deferred
(Thousands of dollars) United States:    Federal    State and local Foreign	$ 5,220 3,936 7,661	$ 17,808 (1,682) 1,124	$ (18,523) 2,332 7,961	$ 22,620 (628) 1,021	$ (1,093) 1,775 13,442	$ 13,093 (995) (1,513)
	$ 16,817	$ 17,250	$ (8,230)	$ 23,013	$ 14,124	$ 10,585

The company received an income tax refund of approximately $27,000,000 in 2002 and made income tax payments of approximately $7,210,000 in 2001 and $17,520,000 in 2000. Taxes paid differ from current taxes provided, primarily due to the timing of payments.

The effect of temporary differences giving rise to deferred tax assets and liabilities at December 31, 2002 and 2001 was as follows:

2002		2001
(Thousands of dollars) Deferred tax assets:    Accrued postretirement benefits cost    Accrued pension cost    Benefit accruals    Tax loss and credit carryforwards    Other–net    Valuation allowance	$ 169,113 192,983 18,262 59,515 1,818 (18,124)	$ 170,975 67,571 18,473 33,787 12,754 (34,756)
Deferred tax liability–depreciation	423,562 (218,508)	268,804 (198,746)
Net deferred tax asset	$ 205,054	$ 70,058

The company has U.S. net operating losses from 2002 and 2001 with benefits totaling $29.5 million. These losses will start to expire in 2021. In addition, the company has loss carryforward benefits in various foreign jurisdictions of $4.7 million without expiration dates and state and local loss carryforward benefits of $2.5 million, which will begin to expire in 2014. These losses are fully reserved by the company.

The company has a research tax credit carryforward of $2.9 million, an AMT credit carryforward of $9.3 million and state income tax credits of $10.6 million. The research tax credits will expire annually between 2019 and 2022, and the AMT credits do not have any expiration date. The state income tax credits will expire at various intervals beginning in 2003 and are fully reserved by the company.

Following is the reconciliation between the provision for income taxes and the amount computed by applying U.S. federal income tax rate of 35% to income before taxes:

2002		2001	2000
(Thousands of dollars) Income tax (credit) at the statutory federal rate Adjustments:    State and local income taxes, net of federal tax benefit    Losses without current tax benefits    Settlements and claims for prior years    Adjustment of world-wide tax liabilities    Other items	$ 29,931   1,465 3,598 - (2,117) 1,190	$ (9,409)   1,107 20,854 - 532 1,699	$ 24,709   507 5,177 (5,125) (1,900) 1,341
Provision for income taxes	$ 34,067	$ 14,783	$ 24,709
Effective income tax rate	40%	N/A	35%

In 2001 and 2000, the company incurred losses without current tax benefits related to the United Kingdom, Brazil and China. In 2002, the company incurred losses without current tax benefits related to Brazil and China.

46

TIMKEN

REPORT OF INDEPENDENT AUDITORS

To the Board of Directors and Shareholders
The Timken Company

We have audited the consolidated balance sheets of The Timken Company and subsidiaries as of December 31, 2002 and 2001, and the related consolidated statements of operations, shareholders' equity, and cash flows for each of the three years in the period ended December 31, 2002. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of The Timken Company and subsidiaries at December 31, 2002 and 2001, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2002, in conformity with accounting principles generally accepted in the United States. As discussed in Note 6 to the consolidated financial statements, "Change in Method of Accounting," the company adopted Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets" effective January 1, 2002. Ernst & Young LLP
Canton, Ohio
February 18, 2003

FORWARD-LOOKING STATEMENTS

Certain statements set forth in this annual report (including the company's forecasts, beliefs and expectations) that are not historical in nature are "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. In particular the Corporate Profile on pages 18 through 20 and Management's Discussion and Analysis on pages 22 through 31 contain numerous forward-looking statements. The company cautions readers that actual results may differ materially from those expressed or implied in forward-looking statements made by or on behalf of the company due to a variety of important factors, such as: a) risks associated with the consummation of the acquisition of Torrington, including the uncertainties in both timing and amount of actual benefits, if any, that may be realized as a result of the integration of the Torrington business with the company's operations and the timing and amount of the resources required to achieve those benefits; risks associated with diversion of management's attention from routine operations during the integration process; and risks associated with the higher level of debt associated with the acquisition. b) changes in world economic conditions, including additional adverse effects from terrorism or hostilities. This includes, but is not limited to, political risks associated with the potential instability of governments and legal systems in countries in which the company or its customers conduct business and significant changes in currency valuations. c) the effects of changes in customer demand on sales, product mix and prices in the industries in which the company operates. This includes the effects of customer strikes, the impact of changes in industrial business cycles and whether conditions of fair trade continue in the U.S. market. d) competitive factors, including changes in market penetration, increasing price competition by existing or new foreign and domestic competitors, the introduction of new products by existing and new competitors and new technology that may impact the way the company's products are sold or distributed. e) changes in operating costs. This includes the effect of changes in the company's manufacturing processes; changes in costs associated with varying levels of operations; changes resulting from inventory management and cost reduction initiatives and different levels of customer demands; the effects of unplanned work stoppages; changes in the cost of labor and benefits; and the cost and availability of raw materials and energy. f) the success of the company's operating plans, including its ability to achieve the benefits from its global restructuring, manufacturing transformation, and administrative cost reduction initiatives as well as its ongoing continuous improvement and rationalization programs; the ability of acquired companies to achieve satisfactory operating results; and its ability to maintain appropriate relations with unions that represent company associates in certain locations in order to avoid disruptions of business. g) unanticipated litigation, claims or assessments. This includes, but is not limited to, claims or problems related to intellectual property, product liability or warranty and environmental issues. h) changes in worldwide financial markets, including interest rates to the extent they affect the company's ability to raise capital or increase the company's cost of funds, have an impact on the overall performance of the company's pension fund investments and/or cause changes in the economy which affect customer demand. Additional risks relating to the company's business, the industries in which the company operates or the company's common stock may be described from time to time in the company's filings with the SEC. All of these risk factors are difficult to predict, are subject to material uncertainties that may affect actual results and may be beyond the company's control. Except as required by the federal securities laws, the company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

 

47

summary of operations AND OTHER COMPARATIVE DATA

(Thousands of dollars, except per share data)

	2002	2001	2000	1999
Statements of Income Net sales:    Automotive Bearings    Industrial Bearings    Total Bearings    Steel	$ 840,763 883,534 1,724,297 825,778	$ 751,029 882,279 1,633,308 813,870	$ 839,838 923,477 1,763,315 879,693	(5) (5) 1,759,871 735,163
Total net sales	2,550,075	2,447,178	2,643,008	2,495,034
Cost of products sold Selling, administrative and general expenses Impairment and restructuring charges Operating income (loss) Earnings before interest and taxes (EBIT) Interest expense Income (loss) before income taxes Provision (credit) for income taxes Income (loss) before cumulative effect of    accounting changes Net income (loss)	2,080,498 358,866 32,143 78,568 115,382 31,540 85,518 34,067   51,451 $ 38,749	2,046,458 363,683 54,689 (17,652) 4,409 33,401 (26,883) 14,783   (41,666) $ (41,666)	2,142,135 367,499 27,754 105,620 99,040 31,922 70,597 24,709   45,888 $ 45,888	2,002,366 359,910 - 132,758 123,120 27,225 98,991 36,367   62,624 $ 62,624
Balance Sheets Inventory Current assets Working capital Property, plant and equipment - net Total assets Total debt Total liabilities Shareholders’ equity	$ 488,923 968,292 334,222 1,226,244 2,748,356 461,219 2,139,270 $ 609,086	$ 429,231 828,380 187,224 1,305,345 2,533,084 497,015 1,751,349 $ 781,735	$ 489,549 898,542 311,090 1,363,772 2,564,105 514,604 1,559,423 $ 1,004,682	$ 446,588 833,526 348,455 1,381,474 2,441,318 449,890 1,395,337 $ 1,045,981
Other Comparative Data Net income (loss)/Total assets Net income (loss)/Net sales EBIT/Beginning invested capital (1) Inventory days (FIFO) Net sales per associate (2) Capital expenditures Depreciation and amortization Capital expenditures/Depreciation Dividends per share Earnings per share (3) Earnings per share - assuming dilution (3) Debt to total capital Number of associates at year-end Number of shareholders (4)	1.4% 1.5% 5.6% 111.1 $ 139.0 $ 90,673 $ 146,535 61.9% $ 0.52 $ 0.63 $ 0.62 43.1% 17,963 44,057	(1.6)% (1.7)% 0.2% 104.8 $ 124.8 $ 102,347 $ 152,467 69.9% $ 0.67 $ (0.69) $ (0.69) 38.9% 18,735 39,919	1.8% 1.7% 4.7% 108.5 $ 127.9 $ 162,717 $ 151,047 112.4% $ 0.72 $ 0.76 $ 0.76 33.9% 20,474 42,661	2.6% 2.5% 5.6% 108.4 $ 119.1 $ 173,222 $ 149,949 120.3% $ 0.72 $ 1.01 $ 1.01 30.1% 20,856 42,907

48

TIMKEN

 

1998	1997	1996	1995	1994	1993
(5) (5) 1,797,745 882,096	(5) (5) 1,718,876 898,686	(5) (5) 1,598,040 796,717	(5) (5) 1,524,728 705,776	(5) (5) 1,312,323 618,028	(5) (5) 1,153,987 554,774
2,679,841	2,617,562	2,394,757	2,230,504	1,930,351	1,708,761
2,098,186 356,672 - 224,983 208,866 26,502 185,350 70,813   114,537 $ 114,537	2,005,374 332,419 - 279,769 286,766 21,432 266,592 95,173   171,419 $ 171,419	1,828,394 319,458 - 246,905 242,304 17,899 225,259 86,322   138,937 $ 138,937	1,723,463 304,046 - 202,995 197,957 19,813 180,174 67,824   112,350 $ 112,350	1,514,098 283,727 - 132,526 134,674 24,872 111,323 42,859   68,464 $ 68,464	1,369,711 276,928 48,000 14,122 7,843 29,619 (20,919) (3,250)   (17,669) $ (271,932)
$ 457,246 850,337 359,914 1,349,539 2,450,031 469,398 1,393,950 $ 1,056,081	$ 445,853 855,171 275,607 1,220,516 2,326,550 359,431 1,294,474 $ 1,032,076	$ 419,507 793,633 265,685 1,094,329 2,071,338 302,665 1,149,110 $ 922,228	$ 367,889 710,258 247,895 1,039,382 1,925,925 211,232 1,104,747 $ 821,178	$ 332,304 657,180 178,556 1,030,451 1,858,734 279,519 1,125,843 $ 732,891	$ 299,783 586,384 153,971 1,024,664 1,789,719 276,476 1,104,407 $ 685,312
4.7% 4.3% 10.5% 109.4 $ 127.5 $ 258,621 $ 139,833 192.5% $ 0.72 $ 1.84 $ 1.82 30.8% 21,046 45,942	7.4% 6.5% 16.1% 111.5 $ 130.5 $ 229,932 $ 134,431 177.3% $ 0.66 $ 2.73 $ 2.69 25.8% 20,994 46,394	6.7% 5.8% 15.1% 117.5 $ 132.4 $ 155,925 $ 126,457 127.0% $ 0.60 $ 2.21 $ 2.19 24.7% 19,130 31,813	5.8% 5.0% 12.6% 112.2 $ 134.2 $ 131,188 $ 123,409 109.1% $ 0.56 $ 1.80 $ 1.78 20.5% 17,034 26,792	3.7% 3.5% 9.0% 118.0 $ 119.9 $ 119,656 $ 119,255 102.6% $ 0.50 $ 1.11 $ 1.10 27.6% 16,202 49,968	(15.2)% (15.9)% 0.5% 122.5 $ 104.5 $ 92,940 $ 118,403 80.2% $ 0.50 $ (0.29) $ (0.29) 28.7% 15,985 28,767

(1)EBIT/Beginning invested capital, a type of return on asset ratio, is used internally to measure the company's performance.
In broad terms, invested capital is total assets minus non-interest-bearing current liabilities.
(2)Based on the average number of associates employed during the year.
(3)Based on the average number of shares outstanding during the year and excludes the cumulative effect of accounting changes in 1993,
which related to the adoption of FAS No. 106, 109 and 112.
(4)Includes an estimated count of shareholders having common stock held for their accounts by banks, brokers and trustees for benefit plans.
(5)It is impracticable for the company to restate prior year segment financial information into Automotive Bearings and Industrial Bearings
as this structure was not in place until 2000.

 

49

APPENDIX TO EXHIBIT 13

On inside cover of the printed document facing page 1, three bar charts were shown which contain the following information:

(1)	Net Sales ($ Millions)
	1998 1999 2000 2001 2002	2,680 2,495 2,643 2,447 2,550
(2)	Earnings Per Share - Diluted (dollars)
	1998 1999 2000 2001 2002	1.82 1.01 0.76 (0.69) 0.62
(3)	Dividends per Share (cents)
	1998 1999 2000 2001 2002	.72 .72 .72 .67 .52

On page 48 of the printed document, two bar charts were shown that contain the following information:

(1)	Total Net Sales to Customers (Billions of dollars)
		Automotive and Industrial Bearings	Steel
	1993 1994 1995 1996 1997 1998 1999 2000 2001 2002	1.154 1.312 1.525 1.598 1.719 1.798 1.760 1.763 1.633 1.724	0.555 0.618 0.706 0.797 0.899 0.882 0.735 0.880 0.814 0.826
(2)	EBIT/Beginning Invested Capital
	1993 1994 1995 1996 1997 1998 1999 2000 2001 2002	0.5% 9.0% 12.6% 15.1% 16.1% 10.5% 5.6% 4.7% 0.2% 5.6%

EX-21

     Exhibit 21.  Subsidiaries of the Registrant
     ___________________________________________

     The Timken Company has no parent company.

     The active subsidiaries of the Company (all of which are included
     in the consolidated financial statements of the Company and its
     subsidiaries) are as follows:
                                                     Percentage of
                                                     voting securities
                                 State or sovereign  owned directly
                                 power under laws    or indirectly
     Name                        of which organized  by Company
     __________________________________________________________________
     MBP Corporation                  Delaware              100%
     Timken Super Precision-
       Europa B.V.                    Netherlands           100%
     Timken Super Precision-
       Singapore Pte. Ltd.            Singapore             100%
     Timken UK, Ltd.                  England               100%
     Australian Timken Proprietary,
       Limited                        Victoria, Australia   100%
     Timken do Brasil
       Comercio e Industria, Ltda.    Sao Paulo, Brazil     100%
     British Timken Limited           England               100%
     Canadian Timken, Limited         Ontario, Canada       100%
     Timken Communications Company    Ohio                  100%
     Timken Alloy Steel Europe
       Limited                        England               100%
     EDC, Inc.                        Ohio                  100%
     Timken Engineering and Research -
       India Private Limited          India                 100%
     Timken Espana, S.L.              Spain                 100%
     Timken Germany GmbH              Germany               100%
     Timken Europe B.V.               Netherlands           100%
     Timken Finance Europe B.V.       Netherlands           100%
     Handpiece Headquarters Corp.     Delaware              100%
     Timken India Limited             India                  80%
     Timken Industrial Services       Delaware              100%
     Timken Italia, S.R.L.            Italy                 100%
     Timken Korea Limited Liability
       Corporation                    Korea                 100%
     Timken Latrobe Steel Company     Pennsylvania          100%
     OH&R Special Steels Company      Delaware              100%
     Timken Latrobe Steel-Europe Ltd. England               100%
     Timken de Mexico S.A. de C.V.    Mexico                100%
     MPB Export Corporation           Delaware              100%
     Nihon Timken K.K.                Japan                 100%
     Timken Precision Components,
       SAS                            France                100%
     Timken Polska Sp.z.o.o.          Poland                100%
     Rail Bearing Service Corporation Virginia              100%


     Exhibit 21.  Subsidiaries of the Registrant (cont).
     _______________________________________________

                                                     Percentage of
                                                     voting securities
                                 State or sovereign  owned directly
                                 power under laws    or indirectly
     Name                        of which organized  by Company
     __________________________________________________________________
     Timken Rail Service Company      Russia                100%
     Timken Receivables Corporation   Delaware              100%
     Timken Romania S.A.              Romania                96%
     The Timken Corporation           Ohio                  100%
     The Timken Service & Sales Co.   Ohio                  100%
     Timken Servicios Administrativos
       S.A. de C.V.                   Mexico                100%
     Timken Singapore Pte. Ltd.       Singapore             100%
     Timken South Africa (Pty.) Ltd.  South Africa          100%
     Timken de Venezuela C.A.         Venezuela             100%
     Yantai Timken Company Limited    China                 100%

     The Company also has a number of inactive subsidiaries which were
     incorporated for name-holding purposes and a foreign sales
     corporation subsidiary.

EX-23

                                Exhibit 23
                      Consent of Independent Auditors

We consent to the incorporation by reference of our report dated February 18,
2003, with respect to the consolidated financial statements and schedule of
The Timken Company included in this Annual Report (Form 10-K) for the year
ended December 31, 2002, in the following Registration Statements and in
the related Prospectuses:

Registration                                                       Filing
   Number           Description of Registration Statement           Date

  2-97340     1985 Incentive Plan of The Timken Company -     November 19, 1990
              Post-effective Amendment No. 1 to Form S-8

333-17503     The Timken Company Dividend Reinvestment         December 9, 1996
              Plan - Form S-3

333-41155     OH&R Investment Plan - Form S-8                 November 26, 1997

333-43847     The Timken Company International Stock            January 7, 1998
              Ownership Plan - Form S-8

333-45753     Rail Bearing Service Employee Savings            February 6, 1998
              Plan - Form S-8

333-45891     $300,000,000 Medium-Term Notes, Series             April 23, 1998
              A - Amendment No. 4 to Form S-3

333-66911     Voluntary Investment Program for Hourly          November 6, 1998
              Employees of Latrobe Steel Company - Form S-8

333-66907     The MPB Employees' Savings Plan - Form S-8       November 6, 1998

333-69129     The Timken Company - Latrobe Steel Company       December 17,1998
              Savings and Investment Pension Plan -
              Form S-8

333-35154     The Timken Company Long-Term Incentive Plan         April 19,2000
              - Form S-8

333-35152     The Hourly Pension Investment Plan - Form S-8       April 19,2000

333-52866     Voluntary Investment Pension Plan for Hourly    December 28, 2000
              Employees of The Timken Company - Form S-8

333-76062     The Company Savings Plan for the Employees of   December 28, 2001
              Timken France - Form S-8

333-86452     The Timken Company Long-Term Incentive Plan -      April 17, 2002
              Form S-8

333-86448     The Timken Company Collective Investment Trust     April 17, 2002
              for Retirement Trusts - Form S-3

333-100731    Prospectus Supplements - 11,000,000 shares of   February 11, 2003
              Timken Company Common Stock: $250,000,000 in
              Senior Notes - Form S-3

333-103753    The Timken Company Savings and Stock Investment    March 11, 2003
              Plan for Torrington Non-Bargaining Associates -
              Form S-8

333-103754    The Timken Company Savings Plan for Torrington     March 11, 2003
              Bargaining Associates - Form S-8

                                                 ERNST & YOUNG LLP
Canton, Ohio
March 26, 2003

EX-24

                                  EXHIBIT 24
                               POWER OF ATTORNEY

         KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors
     and officers of The Timken Company, an Ohio corporation (the "Company"),
     hereby (1) constitutes and appoints James W. Griffith, Glenn A. Eisenberg,
     and William R. Burkhart, collectively and individually, as his or her
     agent and attorney-in-fact, with full power of substitution and
     resubstitution, to (a) sign and file on his or her behalf and in his or
     her name, place and stead in any and all capacities (i) an Annual Report
     pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934,
     as amended, on Form 10-K for the fiscal year ended December 31, 2002, (ii)
     any and all amendments, including post-effective amendments, and exhibits
     to the Registration Statement and (iii) any and all applications or other
     documents to be filed with the Securities and Exchange Commission or any
     state securities commission or other regulatory authority with respect to
     the securities covered by the Registration Statement, and (b) do and
     perform any and all other acts and deeds whatsoever that may be necessary
     or required in the premises; and (2) ratifies and approves any and all
     actions that may be taken pursuant hereto by any of the above-named agents
     and attorneys-in-fact or their substitutes.

         IN WITNESS WHEREOF, the undersigned directors and officers of the
     Company have hereunto set their hands as of the 30th day of January, 2003.

          /s/ Glenn A. Eisenberg            /s/ Ward J. Timken
          _____________________________     ______________________________
          Glenn A. Eisenberg                Ward J. Timken
          (Principal Financial Officer)

          /s/ Stanley C. Gault              /s/ Ward J. Timken, Jr.
          _____________________________     ______________________________
          Stanley C. Gault                  Ward J. Timken, Jr.

          /s/ James W. Griffith             /s/ W.R. Timken, Jr.
          _____________________________     ______________________________
          James W. Griffith                 W.R. Timken, Jr.
          (Principal Executive Officer)

          /s/ John A. Luke, Jr.             /s/ Joseph F. Toot, Jr.
          _____________________________     ______________________________
          John A. Luke, Jr.                 Joseph F. Toot, Jr.

          /s/ Robert W. Mahoney             /s/ Martin D. Walker
          _____________________________     ______________________________
          Robert W. Mahoney                 Martin D. Walker

          /s/ Jay A. Precourt               /s/ Jacqueline F. Woods
          _____________________________     ______________________________
          Jay A. Precourt                   Jacqueline F. Woods

          /s/ John M. Timken, Jr.           /s/ Sallie B. Bailey
          _____________________________     ______________________________
          John M. Timken, Jr.               Sallie B. Bailey
                                            (Principal Accounting Officer)

EX-99.1

                                  EXHIBIT 99.1

                           CERTIFICATION PURSUANT TO
                            18 U.S.C. SECTION 1350,
                            AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     In connection with the Annual Report of The Timken Company (the "Company")
on Form 10-K for the period ended December 31, 2002, as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), each
of the undersigned officers of the Company certifies, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that, to such officer's knowledge:

     (1)  The Report fully complies with the requirements of Section 13(a)
          or 15(d) of the Securities Exchange Act of 1934; and

     (2)  The information contained in the Report fairly presents, in all
          material respects, the financial condition and results of operations
          of the Company.

March 27, 2003
                                /s/ James W. Griffith
                                _____________________________________________
                                Name:  James W. Griffith
                                Title: President and Chief Executive Officer

                                /s/ Glenn A. Eisenberg
                                _____________________________________________
                                Name:  Glenn A. Eisenberg
                                Title: Executive Vice President - Finance and
                                       Administration